RESTRICTEDWORLD TRADE
ORGANIZATIONTN/C/M/10
10 November 2003
(03-5977)
Trade Negotiations Committee
10-11 June 2003
MINUTES OF MEETING
Held in the Centre William Rappard
on 10-11 June 2003
Chairman: Dr. Supachai Panitchpakdi (Director-General)
Subjects discussed:
1. Reports by the Chairpersons of bodies established by the TNC
2. Statements by participants
(a) Statement by Burkina Faso on the Negotiations on Agriculture – Poverty Reduction:
Sectoral Initiative in favour of cotton.  Joint proposal by Benin, Burkina Faso, Chad
and Mali (TN/AG/GEN/4)
(b) Other statements
1. Reports by the Chairpersons of bodies established by the TNC
1. The Chairman introduced the reports by the Chairpersons of bodies established by the TNC.
Formal meetings had been held by four of these bodies since the last meeting in May, and written
reports had been circulated in the following official documents:
Special Session of the Dispute Settlement Body TN/DS/9
Negotiating Group on Market Access TN/MA/11Special Session of the Council for Trade in Service TN/S/9
Special Session of the Committee on Trade and Environment TN/TE/6
2. He said that, thinking back to the meeting in May, he remembered the very constructive
statements that had been heard and the definite political momentum which had been evident.  Sincethen, more encouraging signs had been witnessed of high-level political commitment to the Round
and to finishing it on schedule.  This had been made clear in recent days by the G-8 Heads of State in
Evian and by the other heads of state and governments present there.  This commitment had been also
clearly expressed by APEC Trade Ministers at their meeting in Thailand.  The importance of the
Round had been also recently underlined at the meeting with IMF Managing Director Horst Köhlerand World Bank President James Wolfensohn at the WTO.  He welcomed these pledges of support
and these reiterations of commitment to a successful and timely conclusion to the work.  But
participants should now transform these words into action.
3. Participants were all aware that, at the end of May, two more target dates had passed.
However, it was important to keep these in perspective, as he believed most delegations were doing.In non-agricultural market access, good work had been done and he believed that further progress
would be made before Cancún under the very able guidance of the Chairman of the Negotiating
Group on Market Access.  He said that the Negotiating Group Chairman's paper formed a good basisTN/C/M/10
Page 2
for this, and he believed it provided the right elem ents for reaching agreement in this vital area of the
work.
4. Much progress had also been made in the dispute settlement negotiations under the leadership
of the Special Session Chairman.  Once Members had heard the Special Session Chairman's report, he
would make some suggestions concerning possible ways to maintain the momentum in this area.
5. Since the last TNC meeting, Members had also moved ahead with another important aspect of
the work – Implementation-related issues.  Following an open-ended consultation at Heads of
Delegation level on 14 May, at which possible next steps on these issues had been discussed, he had
held another such consultation in his capacity as Director-General on one important issue under this
heading – issues related to the extension of the protection of geographical indications to products
other than wines and spirits.  He intended to convene further Heads of Delegations meetings shortly,
so that Members could take up all of the outstanding Implementation issues in line with paragraph12(b) of the Doha Declaration.  He would, of course , also take up the other areas of the TNC's work in
the same format and in close co-operation with the General Council Chairman.
6. However, time was running out.  The Cancún Conference started in a little over 90 days in
total, and participants were due to consider reports to Ministers at the next meeting in mid-July, a little
over a month away.  As he had said before, participants could not afford to transmit too manyunresolved issues to Ministers.  They now had to put every effort into reaching agreement wherever
possible.  And where this was not possible, participants had to be able to indicate to Ministers where
their attention was needed and to provide them with solid bases for their consideration.  If this was not
done, participants would be failing in their duty to them.
7. He would conclude by agreeing with the G-8 leaders that continued trade opening, combined
with stronger international trade rules and disciplines, represented the optimum path to global growth,
both in their countries and elsewhere, and particularly in developing countries.
8. Ambassador Balás (Hungary), Chairman of the Special Session of the Dispute Settlement
Body, adding to his written report in document TN/DS/9, said the Special Session had accomplished a
lot in a year and a half.  It had covered 5 stages of the negotiations during this relatively short time: a
general discussion on the issue, Members' general proposals, an issue-by-issue discussion in the
second half of last year, drafting proposals at the beginning of this year and, in the past two months,
an agreed outcome was discussed based on the Chairman's proposals.  The main challenge during the
discussions had been that the mandate gave no clear guidance on the scope of the negotiations, so a
shared understanding was difficult and there were different levels of ambition among Members.
9. He considered the large number of proposals put forward by Members to be a major success,
but the negotiating process had been slow.  Members had been forced to have detailed discussions,repeatedly going over the various proposals, and this made it more difficult to come to an agreed
drafting of some proposals.  Some pre-Seattle texts on the table were far from perfect and a number of
changes had been proposed to them.
10. He said his text could not include all the proposals because he felt there was an insufficient
level of support for many of them.  Based on his text, intensive discussions had been held resulting insome substantive progress.  Members had been able to clear up a number of issues and a higher level
of convergence had been achieved.  Still, despite this improvement, by the end of May consensus had
not been reached.
11. Despite the fact that his text did not reflect total consensus, he believed it might be a useful
tool for continued work, and it was his sense that there was a readiness on the part of all Members tolook into the exact format of this work.TN/C/M/10
Page 3
12. Ambassador Girard (Switzerland), Chairman of the Negotiating Group on Market Access,
said the Group's meeting at the end of May had been characterized by being the first time participants
had expressed their views on proposed elements of modalities in the non-agricultural products sector.
The meeting had been essentially one of clarification, but also understanding the modalities which had
been table, therefore he had little to add to the written report which had been circulated.
13. The discussion had been held on two levels.  First, discussions had been particularly intensive
on the specific and technical aspects of the elements of modalities.  Furthermore, a number of
comments had been made regarding the overall aspect of the modalities, namely the relationship
between the various headings, concerning the formula, the sectorial approach, and the additional
provisions for developing countries and Least-Developed Countries (LDCs) as well as the recently-
acceded Members.  On the formula itself, he had detected a confirmation of the participants' initial
wish to proceed with tariff cuts, which would be on the basis of a formula, but beyond this, the viewsthat had been expressed were numerous and diverse.  Therefore considerable work still needed to be
done.  On sectoral tariff elimination, there had been a number of critical comments.  Unfortunately
few concrete proposals had been made, so he sincerely hoped that this would not be the case at the
next meeting.
14. On Special and Differential (S&D) treatment and less than full reciprocity, including the
elements that had already been incorporated in the proposed formula and the sectoral aspect, there had
been two main points of view as he expected at this stage.  On the one hand that the provisions
suggested were too generous and, on the other, that the provisions were totally insufficient.  On
newly-acceded Members, as was pointed out in the written report, most participants had indicated a
preference for flexibility to be given to these countries by means of a longer implementation period,rather than by means of a special coefficient in the formula.
15. The discussions on non-tariff measures had been less intense than the discussions on other
elements of the modalities.  Participants had identified the fact that non-tariff measures did constitute
an integral part of the modalities for negotiations on non-agricultural products, and he believed this
was something that had been a basic assumption.  It had also been considered that the elements for thenon-tariff measures were the least ready in the total modalities text, and he would agree.  But he
wished to add that these comments were of limite d utility, insofar as a large number of participants
had not yet done their homework in this area and a good part of the Group's chances of progress
depended on input from Members.  He wished also to reiterate his appeal to all participants to provide
the Group with the necessary input to move ahead in this area.  Lacking such input, he would consider
developing personally a certain number of elements to push forward the work in this sector and he
hoped that participants would understand this.
16. The general feeling he had drawn from the meeting had been that delegations had yet been
entirely in a negotiating mode, and this had been understandable in that the modalities had been
provided very shortly before the meeting.  He sincerely hoped that at the July meeting, a more
substantial and a broader spectrum of engagement and participation would be seen.  It would be
regrettable if the Group was to see that the level of ambition of participants remained unclear orperhaps much lower than had been indicated by formal statements in meetings of other groups.  He
therefore believed that participants needed to reflect on the elements proposed, and determine their
own concrete proposals and what their level of ambition would be.  The time available until the next
meeting could be put to very constructive use in this direction.  In the meantime, as he had announced
in closing the Negotiating Group's meeting, he intended to hold a number of consultations on aninformal basis with Members and was available to any delegation who might wish to talk with him
about the continuation of the work and the clarification of any essential points contained in the
proposals.
17. Ambassador Jara (Chile), Chairman of the Special Session of the Council for Trade in
Services, said the last formal Special Session had been held on 19 and 22 May and the report was
contained in document TN/S/9.  This meeting had seen the presentation of the first initial offers.TN/C/M/10
Page 4
Overall, Members had noted that the negotiations in services were characterised by a positive and
constructive atmosphere.  On the assessment of trade in services, a growing number of Members had
stated that the exercise needed to become more focussed.  This work on the assessment, mandated in
Article XIX of the GATS, had entered its fifth year, with some 145 submissions having been made.
The view had been expressed that this was not an academic exercise, but had practical implication onthe negotiations.   He intended to undertake consultations on this standing item on the agenda, and
Members needed to exercise imagination to see to it that this item became more practical and focused
and had some meaning.
18. The Council had held a substantive discussion on the Modalities for the Special Treatment for
Least-Developed Country Members based a revise d draft prepared by the LDCs, which had been
much anticipated and Members had indicated their desire to proceed expeditiously on this matter,
particularly now that the negotiations were in the last phase of offers.  However, many Members hadindicated that the draft modalities contained language that was prescriptive or would prejudge the
outcome of the negotiations.  An informal meeting was to be held to consider the draft.
19. Under the item on Proposals relating to the Negotiations under Article XIX of the GATS, two
proposals for negotiations on energy services had been presented: the first by Chile, the European
Communities, Japan and the United States and the second by Venezuela.  This issue had a group offriends behind it – Members who were particularly interested in this sector – and they had provided a
good example of reporting their deliberations and exchanges to the Council.  He had encouraged other
groups of friends to do likewise because that enhanced not only transparency but helped the
negotiations.
20. An oral statement had been made by Mexico on cultural services – audio visual – and as all
Members knew, this sector was complex and sensitive.  Mexico's intervention had sought to bring
fresh elements to the Council's discussion by su ggesting possible appropriate avenues to deal with
these sensitivities and to solicit Members' views on suggestions advanced.  Responses had been
preliminary and had generally demonstrated op enness, and he thought a good debate could be
expected on this issue when Members next meet.
21. On the Review of Progress in the Negotiations, a number of delegations had taken the
opportunity to present their initial offers.  To date, 26 initial offers had been received, counting the
European Communities as one – 11 from developed economies, 13 from developing economies, and 2
from transition economies.  These offers contained improvements with regard to some 500 specific
commitments, and the Members which had made them represented over 75% of world trade in
services.
22. As he had mentioned to the TNC on 9 May in his oral report, only a qualitative appreciation
of the content of these offers, in conjunction with a quantitative analysis, could give an indication of
the level of ambition of Members, and only then would the Special Session be in a better position to
give an appropriate indication of the state of the negotiations.  Some Members had expressed
disappointment with some of the initial offers, while others highlighted that their offers were "front
loaded" reflecting their engagement in the process and a desire to establish positive linkages.  A fewdelegations alluded to the fact that in some sectors their offers went beyond their status quo.  He
wished to note that some delegations had indicated that their offers were in the final stages of
preparation, while a few indicated that a delay in circulating their initial offers had been because of
capacity constraints and should not be interpreted as a lack of interest on their part.
23. In general, the interventions had demonstrated that the negotiations had moved on to the next
level.  Members had reported that in their bilateral consultations, very often with capital-based
experts, that they had progressed beyond the mere clarification of requests and offers and had moved
to more substantive exchanges.  Furthermore, a proposal by a group of Latin American and Caribbean
Members on the implementation of paragraph 15 of the Negotiating Guidelines for the Services
Negotiations, which referred to the objectives of Ar ticle IV of the GATS, related to the participationTN/C/M/10
Page 5
of developing countries and had been approved as a standing sub-item in the review of the
negotiations.
24. On future work, various agreement-specific proposals on S&D treatment had been referred to
the Special Session in a letter from the Chairman of the General Council, and an informal meeting
would be held to start deliberations on those items.
25. Ambassador Biké (Gabon), Chairperson of th e Special Session of the Committee on Trade
and Environment, said her report was in the process of being circulated in document TN/TE/6.  At the
last TNC meeting in May, she had presented an oral report on the Special Session of the Committee
held on 30 April and 1 May.  Since then, she had held informal consultations on 22 May in
preparation for the July TNC meeting and on the question of invitations on an ad hoc basis to the
Special Session.  From these consultations, she could say that the report to the July TNC would be
under her own responsibility and would take the form of a compendium of the work accomplishedand the progress made in the Special Session.  The report, which would be brief and factual, would be
circulated to Members before the next meeting of the Special Session to be held 8 July.  Furthermore,
an invitation for the 8 July meeting would be sent  to the six MEA Secretariats and UNEP, who had
been present at the last meeting.
26. Ambassador Chung (Korea), Chairman of the Special Session of the Council for TRIPS, said
that, since his last report on the sixth Special Session held on 29 and 30 April, he had held open-ended
informal consultations on 6 June.  During these consultations, he had shared with participants his
assessment of the situation on the two of the most difficult and important issues in the negotiations:
legal effects and participation.  On legal effects, he had urged delegations to think about possible
options somewhere between the two ends of the spec trum of possibilities that had been put forward.
On participation, he had asked delegations to reflect upon whether there was a way of meeting the
concerns about sufficient coverage while avoiding a situation where the multilateral system would put
obligations on non-participating Members.
27. There had been a useful exchange of views on these questions, although differences remained
profound.  It was his intention to consult with delegations individually over the coming weeks, andfollow up with further open-ended consultations, with a view to assessing whether sufficient
flexibility could be found on these points for him to be able to prepare a new draft for the next formal
meeting of the Special Session, scheduled for 2-3 July.
28. Mr. Harbinson, Chairman of the Special Session of the Committee on Agriculture, said there
had been no meeting of the Special Session of the Committee on Agriculture since the last TNC but
Members had not been idle.  Informal open-ended consultations had been held on a number of days in
May as well as on 4, 5 and 6 June.  The subjects covered had been:  reductions in domestic support,tariff quota administration, the proposed special safeguard mechanism, export credits, recently-
acceded Members, special products, tariff reduction formulae, tariff quota access and complimentary
approaches for achieving substantial improvements in market access, preferential schemes, the
possible introduction of additional forms of flexibility for certain groupings of Members and other
market access issues, notably geographical indications.
29. He did not propose to go into detail on these consultations, but overall some worthwhile
progress continued to be made on some of the market access-related rules issues such as tariff quota
administration disciplines and the proposed special safeguard mechanism for developing countries.
Equally important was the work on special products, which would enable developing countries, under
conditions to be negotiated, to make only limited tariff reductions on such products.  This would be inaddition to the usual forms of S&D treatment such as lower tariff reduction targets and longer
implementation periods.  However, discussions on other central issues like reductions in domestic
support and the tariff reduction formulae to be adopted had not progressed.  This was despite repeated
calls for more flexibility and creativity.TN/C/M/10
Page 6
30. For example, on tariff reductions Members were still in opposing factions promoting the so-
called Swiss formula and the Uruguay Round formula as they had done more or less from the outset.
Only a few had so far rallied around the graduated simple average formula which he had put forward
as a compromise.  His impression was that all issues were linked so it would be difficult to make more
definite progress on a special safeguard mechanism for developing countries until Members knewwhat was likely to happen in terms of the tariff reduction formula.  This was the reality Members
faced.
31. As the TNC Chairman had emphasized, Members needed to develop positive momentum out
of Cancún in order to complete the Round on time.  It would be difficult to develop this momentum
unless Members could move in the agriculture negotiations.  Therefore, the coming weeks would be
vital.  The next Special Session would take place in late June to early July, and Members should aim
by then to see at least the beginnings of viable so lutions in areas such as substantial improvements in
market access and substantial reductions in trade distorting domestic support.  He therefore asked all
participants to look again at their instructions and to ask themselves what the prospects were for
achieving this aim if they continued to stick to the positions they had already repeatedly outlined.
32. He would continue to devise a balance work programme aimed at facilitating progress on all
fronts and included in this work would be attention to four S&D treatment issues which had beenreferred to the Special Session on Agriculture by the Chairman of the General Council.
33. The Chairman said that, as he had mentioned earlier, he wished to say a few words on the
situation concerning the Dispute Settlement Unde rstanding (DSU) negotiations.  The report by the
Chairman of the Special Session of the Dispute Se ttlement Body had shown that a significant amount
of progress had been made in this complex and vital area, even if it had not been possible to reachagreement by 31 May.  Clearly, the question Member s now faced was what should be the next steps
with respect to these negotiations.  He understood from the Special Session Chairman and from
consultations carried out on his behalf by Deputy Director-General Yerxa that there was general
support for continuing work towards an agreement, building upon the progress reflected in the
Chairman's draft text and in other submissions by Members.  However, there still remained somediffering views on the exact timeframe and scope of future work.
34. With respect to this latter point, it was clear that any decision about a new timeframe for the
negotiations was for the Ministerial Conference, or the General Council under its delegated authority,
to take.  He sensed it might well be possible to re solve this at the General Council level.  Accordingly,
with the TNC's agreement, he would plan to re commend to the General Council Chairman that he
undertake consultations with a view to addressing this issue as appropriate at the Council's July
meeting.
35. In the meantime, the consultations indicated an  acceptance that the Special Session Chairman
could hold a further informal meeting of a technical nature between the present meeting and the July
General Council.  Any continuing work of this nature should be undertaken in full respect of the
resource constraints and work pressure on delegations.  It would represent simply a pragmatic, interim
means to maintain momentum, and would be undertaken without prejudice to any delegation'sposition on the formal status of these negotiations.
36. He hoped that Members would be able to endorse this approach, which sought to safeguard
everyone's position while enabling Members to continue useful work in this negotiation of great
systemic importance.TN/C/M/10
Page 7
2. Statements by participants
(a) Statement by Burkina Faso on the Negotiatio ns on Agriculture – Poverty Reduction: Sectoral
Initiative in favour of cotton.  Joint proposal by Benin, Burkina Faso, Chad and Mali
(TN/AG/GEN/4)
37. The Chairman welcomed H. E. Mr. Blaise Compaoré, President of Burkina Faso, H. E.
Mr. Youssouf Ouedraogo, Minister for Foreign Affairs and Regional Cooperation of Burkina Faso,
and H. E. Mr. Choguel Kokalla Maïga, Minister of Industry and Trade for Mali.
38.  The statement made by H. E. Mr. Blaise Compaoré, President of Burkina Faso, is attached in
the Annex to the present document.
39. The Chairman, on behalf of the TNC, offered his thanks to the President of Burkina Faso for
his participation in the present meeting.  He was sure that his interesting contribution would help to
energise further discussion and negotiations, particularly in the area of agriculture.
40. All delegations who spoke thanked the President of Burkina Faso for presenting the joint
proposal on an initiative if favour of cotton.
41. The representative of Benin said the message by the President of Burkina Faso had accurately
described the situation of small economies in the global economic environment in general, and in the
international trading system in particular, with all the risks and challenges it involved.  Thenegotiations under the Millennium Round and the decisions from the Doha Ministerial Conference
had, among this category of country, and among developing countries in general, raised the hope that
Members would work together to remove the barriers  that remained in world trade and make its rules
and principles fairer and more equitable.
42. One of the important areas of the negotiations was agriculture.  This sector employed nearly
80 per cent of the population in developing countries, particularly in LDCs, and the export revenues
that these countries drew from activities in this sector represented an important budgetary source.
Some countries had developed certain agricultural sectors, which now constituted the backbone of
their economies.
43. This was the case of cotton produced in his country and in other African developing and least-
developed countries.  This raw material represented more than 50 per cent of the total export revenue
of many African cotton-producing countries and it had a strategic position in their development
policies and poverty reduction programmes, representing around 10 per cent of GDP.  However, a
difficult situation had arisen for these countries because of the inequalities between the treatment of
rural communities in developing countries, particularly LDCs, and cotton producers in certain
developed countries, stemming from the distortions provoked by the massive subsidies that these
developed countries granted to cotton production and exports.
44. In their sectoral policies, some rich countries had granted, in 2001 for example, around six
times more subsidies to their farmers than development aid – US$311 billion and US$55 billion,
respectively.  These subsidies had a direct impact on the major reduction of world cotton prices,
which today were at their lowest levels in nearly 20 years.  The cotton-producing populations in
developing countries were suffering from the negative effects of these practices.
45. The objective of the DDA was to develop an equitable, market access-based trading system,
comprising reforms to prevent and remedy distortions that affected world agricultural markets.  The
African LDCs that were most affected by these subsidies had decided to present this sectoral initiative
to the negotiating bodies in an attempt to find, in conjunction with the countries involved, just and
appropriate solutions to this problem.  This initiative had been raised in the context of the DDAagriculture negotiations and it sought to achieve appropriate measures for a substantial reduction andTN/C/M/10
Page 8
total elimination of border measures, domestic support and all forms of subsidies that distorted
production and exports of cotton from LDCs and other cotton-producing countries.
46. The countries concerned asked that, at the latest by Cancún, a decision with immediate effect
be taken to provide substantial, specific and accelerated reductions for each type of support given to
cotton production and export.  Being aware that total elimination of domestic support to cottonproduction would take time, and to prevent the dramatic consequences of these subsidies on their
economies and their rural communities, the sponsors of the initiative asked that financial
compensation be offered to the countries concerned, the amount of which would correspond to the
amount lost in revenue.
47. The adoption of such a trade regime on cotton subsidies would allow much sought-after
equity to be established in world trade, and to put an end to the losses suffered by developing
countries, particularly raw material-producing LDCs.  These were measures which would help toimprove persistent unfair trade practices and to ward off the economic and social crises that some
developing countries and their rural populations had experienced.  His country and the other co-
sponsors of this initiative counted on Members' precious support to achieve this end.  He wished to
recall that this initiative already had the support of the ACP countries and the LDC Ministers of Trade
who had met from 31 May to 2 June in Dhaka, Bangladesh.
48. H. E. Mr. Maïga, Minister of Trade for Mali, said his country, like Benin, Burkina Faso and
Chad, depended on cotton production to a high degree.  More than 2 million farmers in his country
worked actively in cotton production, and it was the first source of its exports.  It was a strategic crop,
which was the foundation of most of the country's economic activity.  Very often in Mali it was said
that cotton constituted the lungs and heart of its economy, so obviously his country would join this
initiative now and in the future, particularly the 30 May initiative which it had co-sponsored.
49. Mali strongly supported and endorsed the statement by the President of Burkina Faso, and it
asked the international organizations dealing with economic matters, particularly the WTO, to bring
their full weight to bear to ensure that justice was brought to its people.  Mali was a land-locked
country, with desert occupying two-thirds of its landmass, and was one of the world's poorestcountries.  All the aid supplied to his country would only be meaningful if the large part of its
population, which worked in this sector, would be able to benefit from it.
50. Poverty was endemic in rural areas, where cotton was largely produced.  All the efforts now
and in the future would be supported by Mali, and it asked all of its peace and justice-loving friends to
support fairness in international trade and to support the position taken by the President of Burkina
Faso.
51. The representative of Chad said his country was first and foremost an agricultural country, in
which cotton was very important, and it supported in full the statement by the President of Burkina
Faso.  The President of Chad, H. E. Idriss Deby, had stated that nothing would replace agriculture.
Chad would not be inebriated by the possibilities of oil drilling, and whatever it might gain as
additional earnings from energy production would be devoted to development and the
industrialization of agriculture in Chad.
52. Since 1926, cotton had become the main export for Chad.  It produced 165 thousand tons of
cotton seed on average each year and the price of 1 kg of cotton purchased from the producer was
CFA Fr 165, which was only € 0.25, compared to the international price.  However, Chad derived
80 per cent of its export earnings each year from cotton, with 300,000 planters employed in the sector,
ensuring the survival of 2.5 million people.  This clearly pointed to the strategic role of cotton in hiscountry.
53. Unfortunately, as stated by the President of Burkina Faso, the cotton sector was encountering
serious difficulties, which was why Chad had joined with others in making an appeal for a solution toTN/C/M/10
Page 9
be found at Cancún to allow cotton to play its proper role in poverty reduction efforts in these
countries.  Chad wished this role to be strengthen ed because it affected the majority of people living
in misery.  Chad requested the Chairman's support so that this appeal would be heard.
54. The representative of Morocco, speaking on behalf of the African Group  said that the
presence of the President of Burkina Faso showed the high political priority attached to the work
conducted in the WTO since the last Ministerial Conference in Doha.  There were high hopes that the
negotiations could lead to a rectification of the imperfections and imbalances in the multilateral
trading system, which was based on mercantilism.  His presence also showed the deep concern felt by
African countries, whose agricultural sectors, which were of strategic importance to their economies,
were threatened by the subsidizing policies put into place by industrialized counties.  Members had to
recognize that the development dimension, upon which the results of Doha were based, seemed to be
called into question.  On certain issues of major importance to their economies, the interests ofdeveloping countries had not been taken into consideration, as should have been the case, pursuant to
the letter and spirit of the Doha Declaration.  The ag ricultural sector was the best illustration of this.
55. Structural adjustment programs in sub-Saharan Africa and the momentum that liberalization
had shown since 1995 had brought about the substitution of state monopolies, which in the past had
financed production and controlled the purchase, processing and export of agricultural goods, by aprivate sector which was ill prepared to face compet ition in international markets.  This situation –
described in detail by organizations such as  FAO and UNCTAD – had brought about a decline in
production, where private merchants were not willing to provide farmers with the free farm inputs
they needed, as had been the case with the state earlier.
56. Studies by the  FAO had shown that the abolitio n of the old system of supply of farm inputs,
and the clear increased cost of these inputs due to the devaluation and elimination of subsidies, had
resulted in a decrease in consumption of farm inputs in most of these countries.  Some private
companies had tried to provide farm inputs on credit, but this presented risks, since government
marketing offices were reasonably sure of being able to purchase the harvest from producers supplied
with free or low cost inputs, but private merchant s did not have the same guarantee.  Under these
conditions, cotton had been at the centre of the changes for the last 10 years.  Enormous efforts had
been made to reform and liberalize the cotton sector and make it more competitive. Unfortunately
these efforts had been in vain due to the prices that had been unjustly imposed on an international
market dominated by products that were subsidized by developed countries and the inherent
distortions.
57. Cotton production represented a non-negligible part of GDP and had a predominant role in
the trade of West and Central African countries, which provided close to 15 per cent of world exportsin cotton.  This constituted the sole source of income to close to 10 million people.  In agriculture, the
objective of establishing a system of fair trade which was market-based could not be achieved if there
was no appropriate response to the main restrictions and distortions that affected world agricultural
markets.  Paragraph 13 of the Doha Declaration had set out the measures to be taken, but the critical
and urgent situation of West and Central African countries, for whom cotton was the main resource,called for urgent measures to be taken at Cancún.
58. This was why the African Group appealed to all Members to study these proposals closely.
The Group believed that the measures proposed by the sponsors fitted perfectly within the framework
of the present negotiations on agriculture.  The draft paper by the Chairman of the Agriculture Special
Sessions had recognized the principle of special products, which was presently limited to defensivemeasures, and the extension of this concept to include cotton in the list of special products, together
with the elimination of border measures, domestic support and all types of export subsidies on cotton,
would ensure that this product of vital importance to the countries concerned would be taken into
account.TN/C/M/10
Page 10
59. The African Group believed that, due to the urgency of this question and to ensure the
survival of this vital sector, it would be highly desirable that Members in Cancún took the urgent
measures set out in paragraph 36 of the proposal from the four African countries.  The position of the
cotton sector in these four countries was so preoccupying that it was not possible to wait until the end
of the negotiations on agriculture and the ensuing implementations period.
60. The representative of Mauritania supported the statement by Morocco on behalf of the
African Group.  He wished to underline the importance of the participation of an African Head of
State for the first time at a WTO meeting, which would make a significant contribution to ensuring
that the voice Africa was heard and that its interests, as well as those of the LDCs, were taken into
account in the WTO.  The important statement the President of Burkina Faso had made, also on behalf
of other West and Central African countries, sent a strong message to Members to consolidate the
multilateral trading system by making it fairer and more equitable, and to take into accountdevelopment-related concerns in the DDA.
61. The considerable prejudice suffered by millions of cotton producers in West and Central
African countries and beyond, due to the massive subsidies granted by some developed countries to
their producers, illustrated the inequity and injustice of the multilateral trading system, as well as the
gravity of certain trade practices which totally cancelled out efforts made by these countries tostrengthen and diversify their production bases to accelerate their development and fight poverty.
62. The ACP countries, like the LDCs, had looked into this situation and the negative
consequences of these distortions in the course of their recent meeting.  Mauritania, a member of both
of these groups, endorsed the resolution adopted by the ACP Ministerial meeting in May as well as
the Dhaka Declaration at the conference of the LDC countries.  It supported the statement made bythe President of Burkina Faso, and the sectoral initiative on cotton submitted by a number of
countries, which proposed a system for reducing co tton production support measures, with a view to
their phasing out, and transitional measures for LDCs through financial compensation for the losses
that had been suffered.  This should become an integral part of the rights and obligations resulting
from the Doha Round.  His delegation hoped that the appeal by the President of Burkina Faso wouldbe heard and would bring about awareness of the devastating consequences for millions of Africans of
the subsidies granted by some northern hemisphere producers and lead to the necessary corrective
action.
63. The representative of Bangladesh, speaking on behalf of the Least-Developed Countries
, said
that the fact that the President of Burkina Faso had come to the WTO marked a turning point in the
history of the Organization, and showed how importa nt the WTO was to Burkina Faso.  It was well
known that there had been a secular decline in the terms of trade of the primary commodity exporters.
Nearly fifty developing countries were dependent on primary commodities for their export earnings,
and if present trends continued, all these countries would continue to see instability of their export
earnings, apart from the secular decline.  They had to seek long term solutions to their problems.
64. The example of cotton illustrated, once again, what the LDCs had been saying about the
world trading system being unbalanced.  The statistics provided in the document submitted by thefour countries indicated abnormal levels of subsidies in cotton in some major industrialized countries,
which the LDCs did not have the luxury of bein g able to match.  The Doha Round was supposed to
put the needs and interests of the weakest countries at the forefront of the new negotiating Round.
Paragraph 13 of the Doha Ministerial Declaration reaffirmed that the long-term objective of the
Agreement of Agriculture was to establish a fair and market-oriented trading system through aprogramme of fundamental reform, encompassing strengthened rules and specific commitments on
support and protection to correct and prevent restrictions and distortions in world agricultural markets.
The Ministers had also committed to substantial reductions in trade-distorting domestic support.  It
was in this spirit that the issue of cotton subsidies deserved serious attention.TN/C/M/10
Page 11
65. Burkina Faso, and the associated Members that had submitted the proposal, were LDCs.
Cotton occupied a strategic position in these four countries and their ability to alleviate poverty and to
integrate themselves into the mu ltilateral trading system was greatly dependent on the price of the
cotton that they exported.  Their farmers had to receive incomes that would assure them a reasonable
standard of living.  The fall of export earnings heavily impinged on their livelihood, and clearly,cotton needed special treatment and their farmers needed fair access to global markets.
66. The proposal by Burkina Faso and the other three Members deserved Members' immediate
consideration, and the LDC Group strongly supported their call to establish a mechanism by or at
Cancún for phasing out support for cotton production, which distorted competition in world markets.
Trade Ministers of the LDCs had met in Dhaka, Bangladesh, from 31 May to 2 June, and one of the
important items in their Declaration was the plight faced by the cotton growers in the four African
LDCs.  The WTO had to act, and immediately.
67. The representative of Guinea supported the statement by the President of Burkina Faso also
on behalf of Benin, Chad and Mali.  Her delegation supported the statements by Morocco on behalf of
the African Group and Bangladesh on behalf of the LD Cs.  The presence of an African Head of State
at the TNC, especially one from an LDC, to speak about subsidies was unquestionably a very strong
signal and a mark of the importance that LDCs attached to the issues discussed in the WTO.
68. AS the President had said, commodities in general remained the foundation of African
countries' economies, particularly LDCs, where these products often represented more than 80 per
cent of their total goods exports.  In the rural areas of Guinea as well, a good part of the population
owed its means of subsistence, directly or indirectly, to the cotton sector and household earnings were
very often highly dependent on employment in the sector.  The viability of the cotton sector wastherefore closely linked with growth, employm ent creation prospects, and poverty reduction.
69. Trade liberalization, its impact on producers and world market forces had brought about great
volatility in production prices and had pulled them  down.  The main cause of this downward price
trend was frequently subsidies granted by developed countries in the sector, and this was a reason for
concern for her country.
70. Over the past years, the Republic of Guinea had also seen its export earnings from cotton
decrease due to the subsidies granted to farmers in the North.  It should be pointed out that the
volatility of cotton prices on the world market was a source of instability for earnings and this
jeopardized economic growth prospects for the most vulnerable countries in the world economy.  This
was something which had to be fought.
71. Guinea gave its full support to the initiative taken by Benin, Burkina Faso, Chad and Mali in
the Dispute Settlement Body and reserved the right to join this action in the future.  With a view tocompensating the losses caused by subsidies granted by developed countries in the cotton sector,
assistance would have to be provided which would be compatible with national development plans in
order to increase productivity and quality in the cotton sector.
72. The representative of India said his country could fully empathize with the proposal for the
elimination of export subsidies and domestic support in the cotton sector.  India had around nine
million hectares of land under cotton cultivation, with a total annual production of between 10 to 14
million tonnes.  His delegation fully shared the concern expressed by the President of Burkina Faso
that certain Members continued to apply support measures on agricultural products, which distorted
prices in the international market.  As a result, much lower returns accrued to producers in developing
countries, and not only cotton, but also sugar, dairy products, cereal and oil seeds were the obviousvictims of these policies.
73. India shared the views of Burkina Faso that if domestic support and export subsidies were
eliminated, agriculture production in developing countries would become economically viable andTN/C/M/10
Page 12
could act as an important catalyst to poverty reduction in these countries.  If the DDA was to
meaningfully foster economic growth in developi ng countries, Members needed to address this
important area.  A commitment to eliminate such support on cotton, as proposed by Benin, Burkina
Faso, Chad and Mali, would be an important first step in that direction.
74. The representative of Pakistan welcomed the initiatives of Benin, Burkina Faso, Chad and
Mali and fully supported their statements.  If Members believed that the objective of the Round was to
establish a fair and market-oriented trading system, if they were really keen on poverty reduction
through fair trade rather than handouts, and if they wanted to give a chance to poorer countries to have
better market access for goods where they had a natural advantage, then they had no choice but to
accept the recommendations of the demandeurs that there was an urgent need to establish a
mechanism to phase-out all kinds of support for cotton production with a view to their total
elimination including elimination of export subsidies.  There should be a binding time table to beannounced at Cancún.
75. Members often talk of early harvest, and there could be no better case than that made out by
these four countries.  He said that, as an example of what subsidies by one rich country could do to
many poor countries, since the level of subsidies had been increased in 1996, cotton prices in Pakistan
had fallen with a yearly loss of about US$350 million.  This sum might not be much to richercountries, but in Pakistan's case it would make a real change in the plight of many hundreds of
thousands of farmers and would be a major step to wards alleviation of poverty.  His delegation hoped
that some action was taken on this issue as this was an early harvest opportunity.
76. The representative of Nigeria supported the statement by Burkina Faso also on behalf Benin,
Chad and Mali on their agricultural negotiations initiative to reduce poverty with their sectoral
initiative in favour of cotton.  He also supported the statement of Morocco on behalf of the African
Group and those by Bangladesh, Benin, Chad, Guinea, India, Mali and Pakistan.  This was an
important initiative considering the vital role played by cotton in the economic development of these
countries and indeed for many others including Nigeria, which was a big producer of cotton with
millions of its people in its farming industry.  Cotton occupied a strategic position in the economicdevelopment policies and poverty reduction pr ogrammes of many developing countries.
77. Nigeria shared the concerns expressed in the proposal about the practices and support
measures by some Members that distorted global market prices of cotton and other primary
agricultural commodities, and it believed that the elimination of domestic support and export
subsidies would result in better competition on cotton prices in global markets.  The elimination of
subsidies would serve as an important catalyst for poverty reduction in many countries and result in
the emergence of a fair and market oriented trading system
78. The joint proposal had highlighted the role of cotton production in economic development
through employment, infrastructure creation and poverty reduction which could only be achieved and
sustained through eliminating domestic support and export subsidies.  There was a need to find an
urgent solution to this problem, and Nigeria shared the sentiments expressed and viewed the issue as
meriting action.
79. The representative of Australia said he could not speak on behalf of all members of the Cairns
Group, but he was sure that they would join in thanking Benin, Burkina Faso, Chad and Mali for
bringing to Members' attention the negative impact on their countries of the subsides maintained by
rich countries, and he very much welcomed their initiative.  This particular example was symptomatic
of the damaging effects on trade and development which resulted from subsidies, and it was damagethat in no way could be offset by any amount of multilateral or bilateral aid, technical assistance or
capacity building, or IMF and World Bank support.
80. Cotton was not the only agricultural commodity where subsidies distorted trade, depressed
prices and damaged the interests of suppliers who did not have the financial resources to engage inTN/C/M/10
Page 13
competitive subsidization.  Rice, sugar, oil seeds, meat, dairy, wheat and other grains were all sectors
which were similarly affected.  The inequity in the WTO rules was palpable.  Members had agreed 40
years ago to get rid of export subsidies on non-agricultural products, and here in the 21st century,
Members were still trying to get rid of agricultural subsidies.
81. Cotton was a particularly compelling case because the impact of subsidies fell on the most
disadvantaged.  The solution to the problem lay in the mandate which Ministers had agreed to 18
months previously in Doha – the elimination of export subsidies, the substantial reduction in domestic
support and the substantial expansion in market access.  This initiative today lent a degree of urgency
to the task of reaching agreement on modalities  on agricultural products and Members could only
hope that at the next meeting of the Special Session on Agriculture, at the end of the month, all
countries would come equipped with the necessary instructions to give effect to the political
commitment which their Heads of State had reiterated only a few days previously in Evian.
82. The representative of Brazil said that the President of Burkina Faso had provided Members
with a stern reminder of their responsibilities to carry out the Doha mandate.  The President's
statement had not only indicated the relevance of one particular agriculture commodity to a number of
Western Africa countries, but had also graphically indicated the extent of the damage brought to bear
on these economies as a consequence of agriculture subsidies.  His remarks should remind Membersof the grave consequences to developing countries of the failure to give effect to the agricultural
negotiating mandate.
83. Developing countries were seeking to be given a chance to compete on an equal footing in the
areas where they managed to have comparative advantages, which was what this organization was
supposed to ensure.  Cotton was produced in Africa very efficiently and at very low costs.  Well-to-dotreasuries distorted competition conditions, brought international and domestic prices down and, by so
doing, denied poor farmers in developing countries a chance of earning a decent living.  This also
curtailed governments' efforts to alleviate poverty, and Brazil was painfully aware of this situation.
84. Cotton was a text book case of the perverse effects of agricultural subsidies.  Brazil welcomed
the initiative taken by Benin, Burkina Faso, Chad and Mali, which was an innovative way of trying tofind a solution to the situation.  Going beyond the tradi tional sectoral initiative of eliminating tariffs, it
encompassed a triple zero approach:  zero tariffs, zero trade distorting domestic support and zero
export subsidies.  Brazilian farmers had also been badly affected by subsidies in cotton.  For that
reason, Brazil had engaged, along with a sizeable number of third parties, in a dispute settlement case
with the United States and expected the panel to rule in its favour.
85. Brazil agreed to the calls by the proponents of the initiative to the effect that a lasting and
immediate solution in conformity with the principles of the WTO was required and that such asolution should be applicable and applied by all Members of the WTO.  Such a solution was required
not only for cotton, but for all agriculture commoditie s.  Developed countries reluctance to engage in
the long overdue reform of their agriculture was worse.  The continuation of trade distorting policies
was damaging and the lack of results in the agricultural negotiations risked to compromise the overall
ambition of the Doha mandate.  Little time lay ahead for Members, and Brazil thanked the Presidentof Burkina Faso for his efforts to bring new momentum to this Round.
86. The representative of the United States said her delegation noted with interest the proposal for
a sectoral initiative on cotton as eloquently presented by the President of Burkina Faso, and would
study the specifics that he had presented.  The proposal helped to show how important it was to
developing countries to achieve meaningful results in agriculture and it demonstrated how important itwas to deal with all three pillars of the negotiations  since there were important issues in each of these
areas.
87. As she had made clear, there were a number of agricultural sectors for the United States,
which would also be proposing sectoral approaches to deliver more rapid and deeper reductions inTN/C/M/10
Page 14
protection and trade distorting support.  It was important however that Members' focus on particular
sectors not detract from efforts to establish ambitious modalities that reformed agricultural trade
across the board.  Cotton was not the only sector with distortions and it would be much easier to move
in individual sectors if Members had a broad-based reform effort underway in agriculture.
88. The representative of Argentina said the proposal in document TN/AG/GEN/4, as well as the
situation that had brought it about, was very relevant in the present agricultural negotiations.
Members had not agreed on modalities on 31 March, which would have given these four countries
and others hopes of finding a solution to the problem of subsidies granted by developed countries.  He
wished to highlight the concept of special products for exporting countries, which was present in the
proposal of the four countries.  The importance of the special products concept was rooted in the
danger that distortions represented, whether these be subsidies or domestic support measures, given
the need for developing countries to benefit from th eir competitive edge and increase their agricultural
exports.  His delegation shared the urgency of finding a solution that the proposal placed before
Members.  One had to remember that developed countries had stopped reducing tariffs and subsidies
since 2001, despite having committed themselves to an on-going reform process under Article 20 of
the Agreement on Agriculture.
89. For this reason the request made by these four African countries for something to be done
now, was not extemporaneous, but the natural result of a situation which was becoming less and less
acceptable.  Argentina had much empathy for the operative elements in the proposal, since it dealt
with the rapid elimination of domestic support in the production of cotton and the establishment of a
transitional financial mechanism for LDCs, which naturally should be exclusively funded by those
countries that had led to the suffering involved, as suggested by Australia.  He also wished to supportBrazil's statement that cotton was just the starting-point in Members' struggle against subsidies for all
agricultural products.
90. The representative of China said his capital attached great importance to the joint proposal by
Benin, Burkina Faso, Chad and Mali, and had sympathy with and gave its full support to the proposal
by the four cotton exporting countries, which had demonstrated the importance and urgency ofspeeding up the negotiations on agriculture.  However, some of the paper's contents concerned China
and needed further clarification.
91. The paper rightly pointed out that China was one of the largest producers of cotton in the
world, yet it referred to China along with the United and the European Union as a source for causing
the loss in export earnings for West and Central African countries.  This was not an accurate
statement, since in fact China was a net importer of cotton, and according to its customs statistics, it
had imported 110,000 tons of cotton with a value of US$84 million in 2001.  Its exports were no morethan 60,000 tons which only represented less than 1 per cent of the market, so China had very little
impact on the world cotton market.
92. In the first 4 months of the current year, Ch ina had imported more than 250,000 tons of cotton
and Benin and Burkina Faso had been among the major suppliers.  China was actually contributing to
the increase instead of loss of the earnings for these exporters.  China's cotton was mainly produced inXinjang, Hofer, and Shangdong provinces where farmers incomes were very low.  Due to financial
restraints, the government could not afford to give them more support and could never reach a small
fraction of the level of support given by OECD countries.
93. China supported the substantial reduction and phasing out of export subsidies and domestic
support as soon as possible.  As the paper had rightly stated, China had eliminated export subsidies tocotton since its accession to the WTO.  His delegation was making this statement so that delegations
would see this issue from the right perspective, but it fully supported the proposal for a systematic
solution to the cotton problem within the fr amework of the Doha Round negotiations.TN/C/M/10
Page 15
94. The representative of the European Communities said the presence of the President of
Burkina Faso highlighted the importance attached by LDCs and by Burkina Faso in particular to the
multilateral trading system.  The European Community attached the greatest importance to having the
developing countries and the LDCs in particular draw the maximum benefits from the world trading
system.  The Doha Round should be a development Round.
95. His delegation shared the concerns of Benin, Burkina Faso, Chad and Mali on the very low
global cotton prices.  Cotton production in the European Communities in the global context was very
low, with approximately two per cent, and thus it had a very small effect on world prices.  The
European Communities were the largest cotton importers in the world with 25 to 50 per cent of
Western Africa exporters supplying it.  Exporters from Africa had free access to European
Communities markets without tariffs or quotas and the Community did not have cotton export
subsidies.  More generally, like others, the Community was committed to the agricultural negotiationsand to substantially decreasing domestic distorting subsidies.  An agreement on agricultural
modalities should make it possible to resolve some of the problems highlighted in the statement by the
President of Burkina Faso.
96. The representative of the Côte d'Ivoire joined others in congratulating the West African
cotton-producing countries for their initiative.  It was the framers and other operators in the cotton
sector who were the main victims of the injustice due to domestic support from developed countries
and it was they who needed to be heard by the relevant authorities.  His delegation thanked Burkina
Faso for its pioneering role on this issue, in which many West African countries had placed their
hopes of survival.  His delegation hoped the WTO would contribute to establishing an equitable
trading system.
97. After having heard the President of Burkina Faso, his delegation was reassured that there
would be a successful outcome in this area.  The President had stated that he had not come to ask for
charity, but rather to ask the international commun ity to respect the commitments it had undertaken in
Doha in favour of developing countries and LDCs.
98. The representative of Paraguay thanked the President of  Burkina Faso, as well as Benin,
Chad and Mali, for their excellent initiative which illustrated the importance that these countries gave
to the multilateral trading system.  Paraguay applauded this initiative, because in Paragraph 5 of the
proposal, it reminded Members that the objective of the DDA was to establish an equitable trading
system that was market oriented, and that it encompassed reforms to eliminate restrictions and
distortions in agricultural markets world-wi de.  In the Doha Round, commitments had been
undertaken to take into account the needs and interests of developing countries, in particular the
poorest.  Paraguay believed nobody could deny this.
99. As Members were aware, Paraguay attached the highest priority to the agriculture
negotiations in the multilateral trading system.  It was a member of the Cairns Group, and would not
reiterate its position on this occasion, but it did wish to clarify that this position was not accidental.
The agriculture sector was fundamental for its economy, contributing 90 per cent of exports,
generating 35 per cent of employment, and representing 25 per cent of GDP.  The agriculturalindustry represented 11 per cent of GDP and 10 per cent of total employment.  In social terms, 47 per
cent of Paraguay's population was rural where the mo st important sub-sector was small agricultural
farms.  According to recent estimates, 261,000 families, totalling 1,700,000 people, were employed in
the agricultural sector.  This represented one-third of Paraguay's population.
100. Paraguay applauded this proposal because cotton cultivation was extremely important in its
economy, for it generated employment and investment in rural areas, especially in small farms.  The
decline in cotton cultivation had had an effect on the deterioration of the Paraguayan economy.  In
1991, cotton exports and its related products had brought in US$318,900,000 representing
approximately 43 per cent of total exports.  At that time, some 190,000 farmers had been cultivating
cotton on 30,000 farms.TN/C/M/10
Page 16
101. However, in 2001, export income had decreased to US$90.5 million, which was a 72 per cent
decline.  The number of cotton-producing farms had decreased to around 90,000 – a reduction of 52
per cent, also in terms of employment and revenues.  This had represented a descent into poverty.  In
Paraguay, 60 per cent of cotton was produced in farms of less than 10 hectares.  In these cases, it
represented the only income of small agricultural producers, and the main generator of employment inpoor rural areas.  The number of Paraguay's population that was directly connected with cotton
production numbered approximately 500,000, and this number increased to 1.5 million with the
addition of related industries, which represented approximately 30 per cent of the country's total
population.
102. For all these reasons, Paraguay agreed with the statements by Argentina, Australia and Brazil.
Paraguay hoped that, in these development negotiations, a systemic and definitive solution would be
found in agriculture, so as to put an end to measures which distorted world prices in contradictionwith the fundamental objectives of the WTO.
103. The representative of Cuba said that her country, as a member of the ACP Group, gave its full
support to the initiative by Benin, Burkina Faso, Chad and Mali, and hoped that urgent measures
would be adopted at the Cancún, as highlighted in their proposal.
104. The representative of Bolivia thanked the four African countries for their cotton initiative.  Its
merit was that it proposed concrete and timely measures intended to eliminate trade distortions
affecting several economies which were trying to achieve greater participation in the multilateral
trading system.  Bolivia believed that this initiative should be taken up by the membership in order to
comply with the Ministers' mandate in this area.
105. The representative of Senegal said the President of Burkina Faso had clearly set out the
problems relating to cotton, how it affected the lives of many people and jeopardized the future of
many vulnerable economies, and he had called upon Members act on this both individually and
collectively.  Senegal country fully supported the President's statement and those by Benin, Chad and
Mali, which were countries that it had a lot in common with.  His delegation also supported
Morocco's statement on behalf of the African Group.
106. While the problems related to cotton mostly affected the countries that had brought this joint
proposal to the WTO, many other African countries and in particular the LDCs in Africa suffered in
varying degrees from the economic and social consequences of all types of subsidies that were
granted in other parts of the world, as was the case of Senegal.  To illustrate this, he wished to quote a
study on cotton undertaken in Senegal in the context of its poverty reduction strategy under the
Integrated Framework:  "In the medium term, ther e are also growth opportunities, but more modest,
for other agricultural exports such as cotton, including long fibre high quality cotton grown withirrigation, although international cotton prices will probably remain at historically low levels in the
short term due to a global surplus and the high level of subsidies to production practiced in several
important countries".  This was why Senegal attached particular importance to the problem of cotton
subsidies.
107. The countries that were victims of these unfair practices provided the multilateral trading
system with a good opportunity to prove its raison d'être by finding appropriate solutions to the
problems that its weakest members faced.  The interest of such an effort had two levels.  First, it
would send a clear signal to the affected countries that they should be able to benefit from the
considerable sectoral adjustment measures that had brought about their ability to grow cotton
efficiently.  These countries also should be enco uraged to continue their commercial reforms to
progressively and effectively adapt their production structures to the requirements of international
trade in terms of competition and quality.
108. Secondly, the countries concerned were, for the most part, highly indebted LDCs, that were
making considerable efforts to lighten their debt burden and reduce their poverty.  They should beTN/C/M/10
Page 17
able to count on the real opportunities offered by fairly-remunerated cotton production.  This would
improve both their export earnings as well as the living conditions of millions of their people who
exclusively depended on this crop.  Senegal hoped that the message of the President of Burkina Faso
would be well received by all partners, and that justice and equity would triumph in the crucial sector
of cotton.
109. The Chairman reiterated his thanks to the Presid ent of Burkina Faso and also to the Ministers
from Burkina Faso and from Mali.  He also wished to thank Benin and Chad and Mali for their
participation in the present meeting.  This was a momentous occasion, showing the DDA in action.
Realistic statements had been made, with proposals that were of pragmatic value.  What was being
requested was essentially more market access.  As had been said, there was a compelling reason to
look closely at this initiative because it involved LDCs and such a joint initiative by LDC Members
should be welcomed.  This was the kind of participation that he believed should be encouraged, andhe hoped the discussion would have a motivating effect on the work in this area.  Agriculture was an
area where Members needed to achieve the objectives set out by Ministers at Doha, and he hoped that
efforts would not be limited to single commod ities, but rather encompass the whole sector.
110. The Trade Negotiations Committee took note of the statements.
(b) Other statements
111. The representative of Egypt said that, on the Negotiating Group on Market Access, she
wished to reiterate what she had said at the previous TNC meeting and in the Negotiating Group that a
tariff harmonization approach did not correspond to the mandate of these negotiations as provided in
paragraph 16 of the Doha Declaration.  This referred, inter alia , to the principle of less than full
reciprocity as well as the special needs and interests of developing countries in reduction
commitments.
112. Harmonization did not take into account the differences in production conditions and the
needs of infant industries in developing countries for the purpose of promoting trade and contributing
to growth and development.  The approach in developing the modalities needed to allow all Members,irrespective of production conditions and competitiveness, to address their own particular industrial
policy and development objectives with the necessary flexibility through a certain degree of policy
space and option.  Egypt would continue to pursue a formula that corresponded to the Doha mandate,
and it had proposed a linear reduction formula where all tariff lines above 50 per cent be reduced to
that level, and all other lines up to 50 per cent be reduced by 15 per cent.
113. In the Special Session on the Committee on Trade and Environment, the division between
Members still prevailed on the best way to tackle the issue of the relationship between WTO rules andspecific trade obligations in multilateral environmental agreements (MEAs).  This division was an
analytical approach versus a conceptual one and, like others, her delegation believed that a
combination of both approaches was necessary.
114. On the exchange of information between the WTO and MEAs, and the criteria for granting
observership, Egypt believed that the compromise arrived at by allowing MEAs to participate in themeetings of the Special Session had been satisfactory.  It did not see any need at this stage for further
action in Cancún such as agreeing to consolidate ad hoc invitations to various MEAs.  As for
information exchange, Egypt believed that it could be improved while maintaining a certain degree of
flexibility, so institutionalizing or formalizing th e information exchange did not seem to be the best
approach.  Developing countries had shown a great deal of commitment in fulfilling the Dohamandate on trade and environment, and this was reflected by the numerous submissions tabled by
those countries and the level of engagement in the discussions.TN/C/M/10
Page 18
115. Egypt took note of the DSU Special Session Chairman's statement that there was no
consensus on his text and could agree to extend the mandate of the DSU revision until the end of the
present year or until May 2004.  Egypt considered the Chairman's text as a working document for
future negotiation.
116. Due to the constraints on small delegations and the workload of negotiating tracks under the
Single Undertaking, the period until the Cancún Conference should be devoted to stock taking
reviews as there was little time left for technical work.
117. Egypt welcomed document TN/C/W/13 presented on behalf of a number of developing
countries and shared most of its elements,  particularly on the centrality of the development dimension
of the Work Programme and the need to fulfil this work in Members' work on modalities.  It also
agreed with the principle of seeking balance within the entire Work Programme, as well as within
each work area, and the need to ensure a transparen t process with all Members involved in the rules
and decision making process.
118. The representative of Ecuador said his country had been one of the proponents of negotiations
on changes to the DSU, and the mandate agreed by Ministers in Doha was aimed at making dispute
settlement procedures more effective and accessible.  His delegation had participated fully in the
Special Sessions of the DSB, making proposals of a systemic nature and changing them as moreMembers had made contributions.
119. His delegation appreciated the efforts of the Chairman to reach agreement in the prolonged
discussions when the meetings of the Special Session had concluded in May.  These discussions had
demonstrated the importance Members attached to this matter.  Ecuador believed the Chairman's
paper was an important basis for the necessary continuation and culmination of this worthy yetinconclusive effort.  It realized that the deadline established by the Ministers in Doha had expired and
that Members needed to work with the greatest amount of clarity and certainty.  However, reopening
discussions on possible interpretations of the mandate would not contribute to the real objective.  The
goal was to achieve consensus on the appropriate dispute settlement mechanism and to conclude the
exercise that had been initiated.  Ecuador believed that it was appropriate to extend the deadline untilDecember 2003 and that the General Council was capable of doing so.  This was why it had requested
that this be submitted to that body at its meeting in July.
120. The representative of the European Communities said the Chairman of the Negotiating Group
on Market Access deserved the prize for the most innovative proposal so far.  It was full of
imagination and creativity, but as was the case with modern paintings, it required a considerable effort
of interpretation.  The Community liked the basic colour of the overall painting:  the choice of base
rates for bound items, the choice of the base year, the harmonized system nomenclature, the referenceperiod, the line by line approach, and the LDC treatment.  The Community could also appreciate the
deep colours of sectoral tariff elimination, at least as a principle.  The painting as a whole, at least at
first glance, gave the impression of a single formula, but there were important variable elements
which would lead to a situation in which Members with a high tariff average would make less
substantial reductions than those with an already low average.  As a consequence, a number of stillvery high tariffs would remain in place.  This was a serious slip of the brush, not only in terms of
ambition but also in terms of equity between developing countries.  This was by no means S&D
treatment available to all.
121. The same inequity applied to the binding ratio.  About half of the membership had fully
bound its tariffs with over thirty Members having a binding coverage of about 95 per cent, includingmany developing countries.  Members should not forget that about 40 per cent of world trade took
place between developing countries and that the main beneficiaries of increased access in developed-
country markets were likely to be mainly other developed-country producers.  Effective participation
of developing countries in tariff reduction was therefore a key element in meeting the Doha
development objectives.  In a large number of cases the proposed formula did not even reduce boundTN/C/M/10
Page 19
tariffs to current applied rates, and the use of average bound tariff rates did little to reduce disparities
between Members, including those at similar levels of development.
122. The overall impression of the Negotiating Group Chairman's proposal was one of an
unfinished painting which needed further adjustment, completion, refining and deepening – similar
words used by the Chairman in his own wri tten report.  The Community would help him
constructively finish the job, adding its own colour s and images, with the determination to work hard
with partners to put Ministers in Cancún in a position to establish the core modalities for these
negotiations.
123. The Chairman of the General Council's process of consultations on Singapore issues to
prepare for modalities decisions for Cancún was both important and timely, and the Community were
confident that this process would allow Ministers in Cancún to adopt modalities for all four issues by
explicit consensus.  It remained convinced that the multilateral framework on all four issues was ofgreat systemic interest to the WTO, safeguarding the policy space for development in developing
countries, and accruing real benefits to them as well.
124. In the negotiations on the DSU, important and real progress had been achieved, but more
work remained to be done.  The negotiations should continue beyond Cancún as the Community
acknowledged that it would be difficult for many delegations to engage in intensive negotiations inthe next few months.  The Chairman's text constituted a useful basis, but not an exclusive one and
there were still important issues not covered by it or bracketed.  Members should continue to work
collectively for a lasting improvement of the DSU.  He could support the TNC Chairman's proposal
that the Chairman of the General Council proceed to consultations to obtain a clear go ahead from the
General Council and that in the meantime, technical consultations proceed under the guidance of theSpecial Session Chairman.
125. The representative of the Philippines supported the Chairman's proposed approach for the
extension of the mandate for the DSU negotiations, but his delegation would prefer an end of 2003
timetable.  A new deadline could only be respected if Members retained reasonable ambitions in the
review, which meant working on the basis of the text submitted by the Special Session Chairman.Any deviation from this might created problems as far as the ambition was concerned.
126. His delegation agreed with the European Communities on the paper by the Chairman of the
Negotiating Group on Market Access, which was acceptable as a basis for further work.  The
Philippines did not believe that tariff elimination was a general objective in the mandate, but there
were developed countries with low tariffs who might be prepared to eliminate them as nuisance
tariffs.  A highly ambitious tariff harmonization scheme was not an acceptable objective for all, so his
delegation advocated that the Chairman of the Negotiating Group should take a non-linear approach,with flexibility on the choice of coefficients, inte grating them into S&D treatment and less than full
reciprocity, which was very much possible under the current proposal.
127. By combining these variable elements into a si ngle formula, which seemed to be the general
consensus as presented by the Negotiating Group Chairman, Members might still arrive at a
satisfactory conclusion regarding the tariff cutting formula.  The draft did not address the question oftariff escalation, but the non-linear approach applied on a line-by-line basis would address high and
peak tariffs within the range of a national average.  Harmonising the national average by cutting high
tariffs would be a good basis for future reduction.
128. It would be necessary to address S&D treatment and less than full reciprocity in all the
elements and measures to be agreed upon, including those proposed by the Negotiating GroupChairman, like the 5 per cent exemption on unbound items provided they did not exceed 5 per cent of
the total trade.  This would be a good start.  Non-ta riff barriers were also important elements in the
negotiations. They should be related to the products on which tariff concessions were being discussed
and should probably be negotiated in parallel with the relevant product sectors.TN/C/M/10
Page 20
129. On the presentation of the formula within the draft, he believed Members could not yet
appreciate its full implication to individual tariff profiles unless they completed the work on non- ad
valorem  tariff rates – the conversion of non- ad valorem  tariff rates to ad valorem  was part of the
formula.  The Secretariat had been helpful to Members by disseminating a guide to understanding the
different formula proposals, especially the impact that the present one would have on individual tariffprofiles.
130. In July, Members should be able to complete their discussion on the implication of the
formulae and come up with a consensus on whether this should be the basic formula supplemented by
other formulas – sectoral and the request and offer lists – to be able to move the tariff negotiations
forward.  The consultation on non-tariff barriers would be important and Members still had
incomplete data on the modality that would enable negotiation on non-tariff barriers in the manner
just described.
131. On services, his delegation believed the Chairman of the Special Session was sympathetic to
the mandate as far as developing countries and LDCs were concerned, and it would like to see
advances in GATS rules and domestic regulation, and the completion of the proposals for the Special
Treatment for LDCs.  On trade and environment, Members had focussed on the specific trade
obligations (STOs) set out in multilateral envir onmental agreements (MEAs) and any deviation from
this towards theoretical concepts about criteria should be avoided.
132. The representative of Haiti, speaking on behalf of the Least-Developed Countries
, said the
Chairman of the Special Session of the DSB had made great efforts to maintain a balance of rights
and obligations benefiting all Members, including the LDCs, and for this they wished to thank him.
Like others, the LDCs wanted this process to lead to a successful conclusion, and agreed on the
importance of maintaining the impetus of these negotiations through consultations and informal
meetings within the context of the Dispute Settleme nt Body.  They thus supported the Special Session
Chairman's proposal to hold an informal meeting in July.
133. The LDCs welcomed the Special Session Chairman's explicit reference to LDCs in paragraph
2 of the Annex to his report on the proposed decision by the General Council.  However, it would behighly desirable that this same reference also be made in paragraph 1 of the decision, thus allowing
the General Council to instruct the Secretariat to maintain and administer a roster of qualified legal
experts whose services would be made available to developing countries, and in particular LDCs, in
dispute settlement matters.
134. This group of experts would be called upon to provide the necessary legal advice and
assistance to developing countries, particularly to  LDCs.  The LDCs constituted the most vulnerable
category of countries, and who were in most need advice and additional assistance in order to be ableto understand the dispute settlement mechanism and, when necessary, to be able to benefit from it.
135. The representative of Japan said that, since the last TNC meeting, the deadlines for non-
agricultural market access modalities and for the DSU review had been missed despite intensive
efforts by all involved.  Nobody should be too pessimistic, and the situation called for a redoubled
commitment to move forward for the timely conclusi on of the Doha Round.  If an inordinate burden
was imposed upon Ministers in Cancún, there was a greater risk for failure which Members could ill
afford.  Less than 100 days remained before Cancún and all Members should aim to seek a
convergence of views by adopting realism and flexibility in their respective negotiation positions
across the board.
136. His delegation had taken note of document TN/C/W/13 submitted by a number of developing
Members.  At first glace, the paper described the views of some developing Members in a
straightforward manner, yet in moderation, and Japan wished to commend the efforts made by the
Members who submitted it.  While there were elements in the paper that Japan did not necessarily
agree with, they warranted discussion in order to find ways toward convergence.TN/C/M/10
Page 21
137. On agriculture, his delegation welcomed the continued momentum of the negotiations as
reflected in the technical discussions which were progressing steadily, and it attached importance to
the establishment of agriculture modalities at an early stage.  The modalities should be balanced,
realistic and comprehensive, and they should incorporate the elements of rules.  On this issue, Japan's
basic position remained the same.  Modalities could be established only if those Members seekingoverly high level of ambition came down to earth and demonstrated realism.  Modalities could be
established only through a comprehensive agreement reflecting non-trade concerns, based on the
principles of product-specific flexibility, contin uous reform and balance between exporting and
importing countries.
138. While Japan welcomed Members' initial offers on services from, it had seen only 25 and,
since the submission of initial offers signified a first step in market access negotiations, it urged other
Members to submit their offers very soon.  For those Members that were in the process of preparingtheir offers, Japan would welcome indications at this stage of their views on issues of interest to them.
In the months ahead, it would be useful to achieve substantive progress in the negotiations based on
the requests and offers submitted, so that at Cancún, Members would be able to assess the progress
made until then and engage in discussions on the way forward post-Cancún.
139. While the end of May had not seen a successful agreement on the modalities for non-
agricultural market access, Members had been able to engage in a series of substantive discussions
and to address various issues in the Negotiating Group Chairman's draft elements for modalities.
Japan did not feel excessive pessimism was warranted on the status quo of the negotiations and was
heartened to note the many substantive positions presented at the last meeting of the Negotiating
Group.  Through July and August, Members should maintain and add to this momentum towardsagreement on the modalities in Cancún.
140. While experts engaged in addressing a number of issues, the highest priority for the WTO as a
whole should be placed on rectifying disparities between Members with high and those with low
average tariffs, and ways to contribute to world trade including South-South trade.  Members should
thoroughly discuss these points as well as specific issues contained in Japan's proposal so as toestablish the modalities as soon as possible.
141. Japan supported the continuation of the DSU negotiations under the Doha mandate, and was
flexible on the modalities, the time-period, the extension of the deadline, and the timing of the
resumption of work.  For the sake of efficiency, Members should focus their discussions on the
Chairman's text.  However, Japan also understood that many Members that had submitted proposals
were strongly attachment to them, and it would not wish to preclude any proposals from being
addressed.  Japan supported the TNC Chairman's suggestion on how to move the process forward.
142. Japan welcomed the General Council Chairman's leadership on Singapore issues  Based on
the Doha mandate, Members had held discussions to clarify substantive issues in the four working
groups.  A number of contributions had been submitted and a number of Members, including
developing Members, had engaged positively in constr uctive discussions.  It was time for Members to
consider the review process to be over and to move to the next stage.  Japan had been activelyengaged in capacity-building activities for developing countries and trusted that the developing
Members' understanding of Singapore issues had deepened.  Towards Cancún, Japan believed that the
issue of negotiating modalities needed to be dealt with in a process overseen by the General Council,
which was better able to command a broad oversight perspective.  Japan supported the General
Council Chairman's initiative which it believed was a good process towards the launching of thenegotiations in all four areas.
143. On trade and environment, while appreciating the work done so far, Japan believed that
Members needed to further energize the discussions in the coming months.  Under paragraph 31(ii) of
the Doha Declaration, in which information exchan ge and observer status was dealt with, Members
should aim to achieve substantial results by Cancún.  Under paragraph 31(i), on the relationshipTN/C/M/10
Page 22
between existing WTO rules and STOs set out in MEAs, Members should further engage themselves
and clarify the issues.  In paragraph 7 of the Chairperson's summary, where the notion of discretion
was discussed, Japan's view differed from that set out there, and it would submit its view in writing.
144. On development, Japan believed that improving market access overall as well as
strengthening trade rules were crucial, through enhanced trade and the growth of an economy.  Hisdelegation appreciated the pragmatic discussion initiated on S&D treatment by the General Council
Chairman, and it would be fully engaged.  On implementation-related issues, Japan supported the
Chairman's March TNC meeting proposal.  The issues should not be dealt with in a one-size-fits-all
manner, but work should be undertaken in areas where it seemed more promising in terms of
achieving results.
145. On the question of access to medicines, Japan believed that the issue related to paragraph 6 of
the Doha Declaration on TRIPS and Public Health required an expeditious resolution since it dealtwith humanitarian concerns while maintaining the commitment to the TRIPS regime.  To resolve this
issue, confidence among Members and the parties concerned needed to be restored and nurtured so as
to achieve an early multilateral resolution.
146. In the TRIPS Council Special Session, Japan supported a registry system that was not legally
binding and which did not place too much burden on Members.  On rules, Japan believed that abusiveanti-dumping practices seriously undermined the benefit attained through market access negotiations.
The abuse of anti-dumping measures against developing-country Members seriously hindered the
their economic development.  These concerns had been reflected in papers submitted to the
Negotiating Group on Rules by a group of Members sharing this view, and Japan would endeavour to
gain wider support among the Members for strengthening the disciplines governing the Anti-DumpingAgreement.  Japan believed the transition to the second phase should be seamless and at Cancún,
Members should take stock and demonstrate that a good basis for post-Cancún negotiations was in
place.
147. While none of the issues in the negotiations seemed easy to resolve and the task in the time
remaining until Cancún was daunting, Members should demonstrate their resolve to strengthen therules-based multilateral trade regime as the most effective vehicle for expanding trade and promoting
development and poverty reduction.  Japan would be seriously engaged in the work towards Cancún
by cooperating with the Chairmen of the TNC and General Council and with other Members, not only
in traditional areas of market access improvement, but also in new areas as Members strove for a
successful Cancún Ministerial.
148. The representative of Mexico recalled the importance of moving forward in all areas of the
negotiations in a coordinated way, because only this would achieve positive results.  In other words,
prospects for non-agriculture market access would undoubtedly be good if there were positive signals
coming from areas such as agriculture and the negotiation on rules, particularly anti-dumping, to
provide certainty that the result in market access would be truly effective.  His delegation thanked the
Chairman of the Negotiating Group on Market Access for his proposal on modalities.  Mexico was
aware of the difficulty in coordinating the interests of all Members and believed that the Chairman'sproposals would contribute to bringing Members closer to an agreement on modalities, which should
be achieved at the Cancún Ministerial at the latest.
149. To achieve an agreement, some modifications to the present proposal would be necessary.  In
particular, his delegation felt that Members should remedy the imbalance that was created between
different developing countries by proposing that up to 5 per cent of tariff lines could remain unbound.He did not deny the need to have space to accommodate the sensitivities of developing countries, but
this should not be through the punitive proposal which punished those countries who during the
Uruguay Round had bound the entirety of their tariffs.  As in many other areas, Members would in
fact be punishing those who should be rewarded.  If Members were to approve this proposal, they
would send a message that the fewer concessions a country had made in the past, the better results thatTN/C/M/10
Page 23
country would obtain in future negotiations and he was sure that these were not the incentives that
should be established in this organization.
150. Another of the Chairman's proposals to be modified was in the sectoral approach.  In the
discussion of the text, it had been evident that it would be very difficult to agree in the time remaining
until Cancún on a list of sectors to be included, and he thought it would be more logical to leave thisfor a second stage of the negotiations and to do this on a voluntary basis.  If these considerations were
included in the Chairman's proposal, unquestionably the discussion of the formula of tariff cuts would
be much more fruitful for this was a discussion Members had hardly begun.  His delegation was
willing to continue to work constructively with the Chairman and with the various delegations in this
group to reach an agreement on modalities as soon as possible.
151. Mexico supported the TNC Chairman's proposals that the question of an extension of the
deadline for the dispute settlement negotiations should go to the General Council and that technicaldiscussions continue in the DSB Special Session.  His delegation noted that the Special Session
Chairman's report had been submitted under his own responsibility, and believed discussing at his
stage would not be productive.  Instead, Members should ask themselves how they were going to
successfully conclude the review of the DSU.  He believed that everyone would agree that the DSU
worked reasonably well, and that the DSU had become one of the cornerstones of the multilateraltraining system.  However, this was not to say that the mechanism did not have problems and that
Members could rest on their laurels.  The importance of the DSU for the WTO entailed that Members
had an obligation to think towards the future and to take the review seriously.  The DSU was too
valuable to merit only minor adjustments, and if Members were going to amend it, this should involve
substantial improvements.
152. The DSU should not be allowed to continue to work only "reasonably well", for at the end of
the day, it would never be more than mediocre.  His delegation had proposed that in the time
remaining before Cancún, Members should conduct a di agnostic exercise to identify the two or three
major problems of the DSU, which should then be the focus of work following the Ministerial
Conference.  On the deadline to complete this work, Mexico was flexible.  It objected to continuingdiscussions without clearer guidelines on how to conduct them, which would not bring Members very
far and would lengthen the process interminably.
153. It was no mystery that for Mexico, the greatest problem in the DSU was the timeframe within
which a Member was free to maintain an illegal meas ure, but it was willing to discuss this problem or
others that Members might propose with an open mind.  Mexico did not believe in an extension which
would only be used to refine the Chairman's text, but rather it would like to solve the real problems in
the functioning of the DSU to guarantee that it would continue to serve as one of the pillars of thisorganization.
154. The representative of Malaysia expressed his delegation's appreciation to the Chairman of the
Special Session of the DSB for his untiring efforts to broker a deal to complete the review of the DSU
in the timeframe mandated by Ministers in Doha.  The Chairman's text had provided a useful basis for
the negotiations, but despite the intensity of the discussions, time had run out.  Clearly, a little moretime was needed to complete the review, but his delegation strongly believed that a new mandate was
not needed.  Malaysia would be amenable to a limited extension until the end of December 2003 to
complete the review on the basis of the Chairman's text.  The decision to extend the timeframe had to
be taken by the General Council, which he understood had a scheduled meeting on 24 July, and his
delegation agreed that the Chairman of the General Council should conduct informal consultations onthe matter.
155. On agriculture, Malaysia would like to see substantive market access in all markets and the
elimination of prohibitive tariffs.  On NAMA, it wa s important to ensure that the principle of equity
existed in the formula. Malaysia was vehemently opposed to sectoral negotiations, which according to
the Negotiating Group Chairman were to be part of the modalities.  There was a need to reflect fullyTN/C/M/10
Page 24
on the principle of S&D treatment and less than full reciprocity, both of which had been clearly
outlined in the Doha mandate.
156. The representative of Indonesia said the reports of the various Chairpersons once again
showed the slow progress of the negotiations.  As  Members neared the stock taking point of the
negotiations at the forthcoming Cancún Ministerial Conference, they needed to strive harder to ensurethat positive reports could be made to Ministers on some – if not all – of the areas of the negotiations.
157. His delegation welcomed the report by the Chairperson on the trade and environment
negotiations, particularly on paragraph 31(i) where some Members had shared their national
experiences on how they had implemented specific trade obligations in MEAs.  This sharing of
national experience had been a good way of understanding the use and purpose of trade measures in
MEAs in general, and STOs in particular, and his delegation encouraged other delegations to share
their national experiences, particularly the demandeurs.  Such sharing helped developing countrieslike Indonesia better understand the perceived problems faced by the demandeurs on the relationship
between existing WTO rules and specific trade obligations in MEAs.
158. On the negotiations on non-agricultural market access, his delegation appreciated the
Negotiating Group Chairman's efforts at putting forward draft elements of modalities and recognized
that it could serve as a basis for further work, yet certain improvements were required to reflect allMembers' interests.  On the proposed formula, Indonesia's position would largely depend on the
coefficient to be applied.  A higher coefficient was necessary for developing countries to implement
the concept of less than full reciprocity.  The proposed formula of using average bound tariffs merited
further consideration since it reflected the level of openness and liberalization of each Member.  His
delegation continued to believe that the proposed formula should only apply to bound tariff lines, andany application to the conversion from unbound lines to bound lines would certainly discourage
Members who wished to enhance their binding cove rage.  A certain flexibility to maintain unbound
lines was still necessary.  There was wide support to use the sectoral approach as supplementary
modalities in a voluntary manner.
159. In the light of the different levels of ambition among Members, Indonesia believed that the
concept of voluntary liberalization according to the level of development should be introduced.  Those
who wished to liberalize faster should not be prevented, but those who wanted to liberalize at a
moderate pace should be allowed to do so.  It should be noted that even among major developed
Members, the levels of ambition remained varied.  It was difficult to conceive that all Members
should agree on the high level of ambition set out by some Members.
160. Given the importance of the DSU for all Members, it was unfortunate that the deadline set by
Ministers for the negotiations in this area could not be met.  Indonesia had consistently stated that theDSU worked reasonably well and did not require any major restructuring.  Different interpretations of
the mandate for these negotiations had been introduced at the final stage, and it was regrettable that
these interpretations had not been set out at the beginning.  After Members had failed to reach an
agreement by the end of May, a pause might be needed to give certain time to all delegations to
reflect.  In considering the need to extend the DSU negotiation, Members should consider the burdenconfronted by many delegates in the current negotiations, and bear in mind that many or a majority of
Members were not users of the dispute settlement mechanism so their involvement was not based on
real experience.  Although his delegation felt that the extension of the negotiations, at this stage, was
not the best way to go, in the spirit of compromise and flexibility, it was willing to give positive
consideration to focusing further negotiation on the proposals in the Chairman's text.
161. On the multilateral system of the notification and registration for wines and spirits, his
delegation reaffirmed its position that a large number of developing-country Members which were
non-producers of wines would not benefit from such a system.  In this respect, the negotiations should
not deviate from the mandate in the TRIPS Agreement, and the issue of non-participation and the
legal effects on non-participating Members should be fully addressed.  Indonesia would not acceptTN/C/M/10
Page 25
anything less than clear language in the agreement to the effect that participation was voluntary and
that there were no legal effects on Members not participating in the system.
162. On services, his delegation reiterated the importance of the assessment for trade in services
for developing countries like Indonesia.  These negotiations were moving forward at a faster pace
than in other areas.  However, a lack of technical capacity and resource weaknesses to undertakeanalyses and assessments of national situations had long been critical for most developing countries to
identify their interests and evaluate the results of past liberalization.  According to paragraph 14 of the
Negotiating Guidelines, the Council for Trade in Serv ices had to continue to carry out an assessment
of trade in services in overall terms and on a sectoral basis with reference to the objectives of the
GATS and of Article IV, to increase the participation of developing countries.  Indonesia believed that
this should be an on-going activity of the Council and the negotiations should be adjusted in light of
the result of the assessment.
163. The representative of Korea said his delegation believed that the 28 May text by the Chairman
of the Special Session of the DSB, which was the result of one year and three months of intensive
negotiations, reflected the collective views of delegations in a balanced manner.  The text could serve
as a good basis for future work, and Korea endorsed the TNC Chairman's approach to the next stage
of the negotiations.  On the timeframe, it was unrealistic to complete the work within 2 to 3 monthsand Members needed to avoid overburdening the Cancún Ministerial, so a more practical and
achievable deadline had to be set.  The Malaysian proposal to set the new deadline at the end of the
year would be realistic.  On scope, if Members were to complete the negotiations within a reasonable
period of time, the negotiations should not be expanded beyond the current text put forward by the
Special Session Chairman, otherwise Members might return to square one and repeat what had beendone during the past 15 months.
164. On the non-agricultural market access negotiations, although many delegations expressed
dissatisfaction with the Negotiating Group Chairman's draft, his delegation noted that the draft had not
been rejected as a whole, which was a good sign.  His delegation believed Members could make
progress and build upon the draft.  To adopt the modalities in Cancún, it was necessary for everyMember to have a firm belief in the benefits of market liberalization and be willing to share some of
its burdens.  Considering the great importance of the NAMA negotiation in the overall outcome of the
DDA negotiations and its positive linkage to other areas, the modalities should be adopted at the
Cancún Ministerial.
165. To this end, mutual efforts and positive cooperation from both developed and developing
Members were required.  First, it was necessary to provide flexibility for the sensitive products of
each Member in the application of the tariff reduction formula.  This flexibility would contribute toexpediting the process of concluding the negotiations on the tariff reduction formula.  Second, it
would be more appropriate to discuss sectoral tariff elimination after Members agreed to a tariff
reduction formula.  There were many divergent views among Members on identifying what sectors
would be really effective in the context of enhancing export opportunities of developing countries and
LDCs.  In this regard, Members needed to consider the process of selecting sectors that had specificcharacteristics that bolstered sustainable development of exhaustible natural resources, like fishery
and forestry products, which had characteristics quite different from industrial products.
166. In the services negotiations, it was a very encouraging sign that 25 Members had so far tabled
their initial offers, with more countries intending to do so before Cancún.  Some Members had
expressed concern that the services negotiations were proceeding too fast, and that they should bebalanced with other areas.  However, the submission of initial offers was a mere basis for starting
negotiations and his delegation hoped all major trading countries submitted their offers as soon as
possible.
167. On agriculture, his delegation endorsed the statement by Japan and believed that the outcome
of the negotiations should be comprehensive and balanced, taking into account all aspects ofTN/C/M/10
Page 26
agriculture.  To conclude the DDA negotiations by 1 January 2005, substantial progress should be
made in agriculture and a clear-cut road map for future work should be decided on in Cancún.  To
achieve this, Korea believed that Members should harmonize their levels of ambition with a sense of
realism in some key areas.
168. On the tariff reduction formula, Korea believed that maintaining consistency was crucial to
the successful conclusion of the negotiations.  Article 20 of Agreement on Agriculture clearly
stipulated that the reform process would be a continuing one, and it was not realistic to try to reduce
the level of tariffs of agricultural products to the levels of industrial goods overnight.  The emergence
of so-called "tariff peaks" was a result of the tariffication process of converting import restriction
measures during the Uruguay Round negotiations, and Korea could not go along with an approach
that neglected this historical background and focused only on the mere existence of high tariffs.
169. Korea believed that the final bound level of the Uruguay Round commitments was a
reasonable basis for further commitments on tariff quota volumes.  Further increases of tariff rate
quotas would bring about additional burdens to importing countries, so a more flexible and gradual
approach was required.  For special products, due to the diverse agricultural situation of each country,
it was almost impossible to find a statistical criterion that was appropriate for all developing countries.
Therefore, Korea believed that self-declaration was the only plausible and effective way forward, asappropriately reflected in the Chairman's draft.  In addition, the number of special products should be
large enough to address concerns on food security, rural development and livelihood security in
developing countries.  Korea believed that it was very important to make the special product concept a
practical and effective tool for developing countries.
170. The representative of Uruguay said that from the outset of the negotiations on improvements
and clarifications to the DSU, his delegation had stated that the present DSU had generally worked
well.  For this reason, Members should concentrate on potential problems where there was greater
convergence of views and greater possibilities of achieving consensus.  Taking into account the
deadline of May 2003 set by Ministers in Doha, Members should act in a realistic manner and
Uruguay suggested starting as soon as possible to identify and discuss a possible list of issues.Members should take into account that the Doha mandate mentioned improvements and clarifications
to the present Understanding, not a radical change or invention of a new one.  Uruguay had stated this
several times during the negotiations, and although other delegations had stated this as well, it had not
been taken into account and another path had been chosen.  This was why Members had not been able
to conclude the negotiations at the final meeting of the DSB Special Session on 28 May.  At this
meeting, the Chairman had presented his text in document Job(03)/91/Rev.1, and Uruguay wished to
point out that this text was a working document, under the Chairman's own responsibility, and not atext that had been agreed upon by the Members.  At the meeting, Uruguay had also pointed out that
the Chairman's text contained some provisions where not enough discussion or clarifications had
taken place and, in some cases, where different positions had been stated.
171. However, his delegation could support the TNC Chairman's statement on the process and
future work of the DSU negotiations.  Uruguay believed that the extension of the timeframe for thesenegotiations should be based on the following elements:  first, the extension should be based on the
mandate established in paragraph 30 of the Doha Ministerial Declaration;  second, the negotiations
should continue to be outside of the framework of the Single Undertaking;  third, a precise and limited
deadline should be set to finalize these negotiations, leaving enough time after the Cancún Ministerial
Conference and be before finalization of the Doha negotiations; and fourth, it should be clearlyestablished that extending the deadline would be  to continue negotiations without prejudging the
results since the final result would depend on a consensus by Members.  If some Members could not
change their present approach of seeking substantia l changes to the present Understanding, for which
clearly there was no consensus, and if the present method of carrying out these negotiation could not
be changed, Uruguay believed that at the end of the new timeframe Members would be faced with thesame situation as the at the present – no consensus.  In that case, the present Understanding should
remain as it was.TN/C/M/10
Page 27
172. The representative of the United States said that at the last TNC meeting she had focused on
the six main areas of the negotiation that Ministers would need to give attention to at Cancún.  They
were: the three areas of market access, agriculture (including all three pillars), non-agricultural, and
services, the development-related issues, the Singapore issues and rules issues, broadly defined.
Using this framework, she wished to offer some thoughts about the progress made since then and thework participants needed to pursue in preparing for the Cancún Ministerial.
173. On a very favorable note, her delegation had been encouraged about the continuing efforts
that participants were making to engage on the substance and to press forward, picking up on what the
Chairman had called the positive linkages.  A renewed sense of common purpose among participants
needed to emerge even more strongly as they focused on developing a balanced overall package that
met their respective interests.
174. Put simply, a substantial result in agriculture was necessary to conclude the DDA
successfully, and it remained the key to progress on the broad and balanced agenda that Members had
agreed to pursue.  The United States appreciated the work that was continuing at the technical level on
all areas of the agriculture negotiation, and found encouraging the signals that at least some partners
were beginning to understand that without genuine attention to reform that dealt with each of the three
pillars – market access, export subsidies and domestic support – the Round would falter.
175. The United States wished its partners in the European Union well in their efforts to tackle two
of the three areas as part of the reform of the Common Agricultural Policy (CAP).  CAP reform was
good for its own sake, and the United States hoped it would ensure that the European Union had the
flexibility to proceed on all three pillars of the negotiations.
176. Eliminating the most trade-distorting policies – export subsidies – and substantially reducing
trade-distorting support were necessary elements of a meaningful reform package.  Since there
seemed to be some confusion, she wished to clarify that the United States, like other WTO Members,
had agreed to put its programmes on the table and reduce and eliminate them as others were being
asked to do.  However, as her delegation had stated many times, market access commitments would
determine the success or failure of the Doha negotiations, and it was as true now as it was over 50years ago when the GATT had been established.  Expanding market access had been the focus of
GATT and WTO activities and the central achievement of the world trading system.
177. The economic effect Members were all looking for – growth in trade and income – would
largely be a function of tariff reductions.  Studies by the IMF, the World Bank and others all
consistently brought home the same message: tariff reductions were critical to expand trade and
income.  The IMF had estimated that 91 per cent of the increase in global welfare from full
liberalization in developed countries resulted from the removal of agricultural tariffs, which wasunderstandable given that developed country tariffs averaged some 47 per cent, while only 9 per cent
of these benefits would result from subsidy removal.
178. For the United States, as with many other trading partners, subsidy reforms should be
matched by market access improvements in agriculture, which was imperative if Members were to
succeed.  Attention to the three pillars was the only means to create an equitable package that yieldedbenefits and concessions across all WTO Members.  The United States would continue to work with
other Members to improve the text that had been produced by the Chairman of the Special Session of
the Committee on Agriculture, and its ambitions remained clear: the negotiations should reduce
allowed levels of protection and trade-distorting support, including reducing the disparities in allowed
levels and should produce real improvements in market access in all countries, including developingcountries.
179. In the non-agricultural market access negotiations, her delegation appreciated the major effort
that the Chairman of the Negotiating Group was making to keep these critical negotiations moving.
As Members would recall, like agriculture, the United States believed a substantial level of ambitionTN/C/M/10
Page 28
was a sine qua non  for success.  The Negotiating Group Chairman's May 16 text had contained certain
aspects of the core concepts that the United States had thought necessary, including: 1) a single
progressive formula, applied to each tariff line; 2) complementary sectoral initiatives; 3) attention to
low tariffs; 4) the need to deal with special and di fferential treatment to ensure the integration of less
advanced trading partners, as well as recognize the contribution of newly acceded Members; 5) S&Dtreatment; and, 6) a process to address non-tariff barriers that delivered real market access while
avoiding a bureaucratic approach.
180. However, the United States had been disappointed not to see the inclusion of the vision of
zero duties to which it was committed.  Her delegation was willing to work on the basis of these core
concepts as a basic structure for discussions, but it had serious questions as to how effectively the
current expression of these concepts would achieve equity, ambition and genuine market access at the
end of the day, including real market access gains for North-North trade, North-South trade andSouth-South trade.
181. Not surprisingly, as currently written, the Negotiating Group Chairman's initial proposal had
not accomplished the United States' goals and it had several key concerns about the text.  First, both
the formula and coverage of sectors for zero tariffs or harmonization had to be dramatically improved
in order to achieve an adequate level of market liberalization.  For example, her delegation'sassessment had suggested that if one had applied the proposed formula to bound tariff rates, in a large
number of cases, the formula had not even reduced bound tariffs to current applied rates.  This did
nothing for the global economy or for United States traders.  Clearly, an outcome that permitted some
Members not to reduce tariffs even to currently applied rates made it virtually impossible for others to
put their most sensitive sectors on the table for substantial real reductions.
182. Her delegation also had concerns about the use of average bound rates as an indicator of the
level of development which was clearly not the case.  There were wide differences in average bound
rates among developing countries.  The use of average bound tariff rates did little to reduce disparities
between Members, including those at similar levels of development.  On sectors, while the United
States supported inclusion of the sectors listed, they did not represent key export interests of industrialcountries.  Thus, the list of sectors ultimately included for harmonization or zero initiatives would
have to be substantially expanded.
183. Second, like others, the United States was concerned that the approach rewarded those who
had not yet opened their markets.  Since many developed and developing countries had undertaken
significant liberalization commitments in the past by taking on significant binding obligations or by
reducing bound tariffs to levels that provide trade opportunities, her delegation did not believe this
approach was equitable.  This imbalance would have to be addressed, and her delegation lookedforward to finding a way to reward countries that had liberalized and bound a significant percentage
of their tariffs at low levels or zero and those that were prepared to do more in this Round.  Members
needed more incentives to liberalize in the text.
184. Despite these concerns, the United States believed it was possible to consider ways to mix
and match elements to achieve the right combination of a robust formula, a substantial sectoralcomponent, a low duty component and effective S&D provisions that could garner consensus, while
meeting the Doha goals.  It believed that such  an approach also would ensure the support of
constituents and keep the long term vision of a tariff free world in sight.  Together, Members could
ensure that the Round provided an effective, and much needed stimulus to the global economy.
185. On the services negotiations, the United States recognized that there were no specific
decisions needed in this area at Cancún, but as her delegation had remarked repeatedly, commitments
in services were essential to securing the ma rket access gains that all Members needed for
development and growth.  It would thus be nece ssary to give greater prominence to the services
negotiations at Cancún, and to confirm what the negotiations were about, given some of the confusion
in the public today.  In the coming weeks, Members would need to consider how work was takenTN/C/M/10
Page 29
forward post-Cancún, and how to bring a sense of  urgency to the negotiations, including bringing
developing Members along.
186. Like others, the United States believed that the negotiations held great potential for furthering
development and that it was essential to turn that potential into concrete results.  The G-8 Leaders
meeting in Evian had given special prominence to the DDA and its contribution to development.They had also recognized the importance of addressing the remaining issues on TRIPS and Public
Health, which the United States was continuing to pursue.
187. On S&D treatment and implementation-related issues, her delegation wished to extend its
appreciation to the TNC and General Council Chairmen for their good efforts in fostering substantive
engagement.  The United States had participated fully in these discussions and planned to continue its
engagement in order that Members could all make progress in these key areas.  At the same time, one
needed to bear in mind that the three market access areas were the most critical for development andgrowth of all Members, in particular, the less-advanced economies.  However, if Members were to
build the balanced package that contained benefits for all of them, all would need to contribute,
consistent with their individual trade, finance and development needs.
188. The United States understood that the DDA included terms that some Members were
particularly attached to and that "less than full re ciprocity" was one of them.  However, this term did
not establish a one size fit all approach and other elements of the NAMA mandate – the cross
references to the enabling clause and Article XXVIII bis in particular – clearly called for an approach
that reflected the differing trade, finance and de velopment needs of individual Members.  The key to
maximizing the development benefits of this Round would be to focus on creating and enhancing
opportunities, as opposed to focusing on minimizing obligations and maximizing exceptions toobligations.
189. With respect to preference erosion, her delegation understood the concerns raised by some
countries, but Members should all remember that the Enabling Clause clearly set out that preferences
were not to be an impediment to MFN liberalization.  In this connection, the efforts of the World
Bank and the IMF to provide objective analysis of possible impacts were welcomed as well as theirwillingness to help affected Members to address th ese issues in a way that fosters MFN liberalization.
All Members should maintain the sense of common purpose and mutual responsibility that they all
accepted at Doha.
190. For many countries, their ability to advance on the Singapore issues was directly related to the
gains that they might obtain in the traditional areas of the negotiation.  As she had stated at the last
meeting, the United States expected Ministers at Cancún to give direction on how the negotiations
should proceed individually on each of the four issues.  And as she had stated at the informal meetingof Heads of Delegation the previous week, the United Stated concurred with the General Council
Chairman's plan to begin consultations on modalit ies under the guidance of the General Council, and
with the assistance of the Friends of the Chair.
191. Each of these issues needed to be treated on its merits with the progress on each recorded to
date.  Modalities were to be agreed in all areas, but they need not necessarily be identical.  There weretwo parts to the guidance Ministers would need to approve.  There were the process elements, such as
a timetable for negotiations and the infrastructure to carry out the negotiations, and her delegation
agreed that the need to identify the elements of a wo rk plan was common to all four areas.  As all four
issues were at various stages of discussion and preparation, her delegation saw the need to customize
the approaches in all four areas, taking into account the progress that had been secured sincenegotiations began after Doha.  The issue would be how to do this in a way that did not pre-negotiate
issues, while at the same time forging common gr ound on substance in the time available between the
end of the meeting in Cancún, and the conclusion of the negotiations at the end of 2004.TN/C/M/10
Page 30
192. A major rules issue was in the area of dispute settlement.  At the outset of work to clarify and
improve the dispute settlement system, the United States stressed the challenge of aiming to complete
the negotiations by the end of May.  Members had made much progress, thanks to the hard work, long
hours of effort and perseverance of the Chairman of the Special Session of the DSB with the help of
the Secretariat.  While Members aimed for the end of May, it was clear that the work would need tocontinue.
193. It was understandable that Members had wanted sufficient time to discuss and understand the
various proposals made and to work through their potential implications.  Some of the proposals were
complex and far-reaching.  It was important to step back and look at proposals to see if at the end of
the day the DSU was in fact improved.  When it came to the DSU, it was more important to get it
right than to get it fast.  The objective was to clarify and improve the DSU, not to create more
confusion or problems through hasty drafting or changes that were not fully developed.
194. Her delegation believed that the Chairman's current text was an improvement over earlier
drafts.  However, while there were promising elements in the text, there were also elements that were
problematic even when taken alone, and a few additional components of the elements that were in the
text would need to be included if Members were to improve the DSU.  The United States accepted
that the work would require further discussions, both to continue discussions on elements included inthe draft text and to work on those additional components to improve the DSU.
195. The Ministerial Declaration had simply called on Members to aim to reach agreement by the
end of May, and they did not need a new mandate for their work.  However, her delegation could
accept that some delegations might find it helpful simply to set a new target date for the work.  It thus
agreed with the TNC Chairman and others that Members should find a pragmatic way forward andthat the intellectual energy contributed to this process should not be disregarded, including the work
that had been done before Seattle.
196. If a new target date was to be set, her delegation believed that it was not realistic to aim to
complete the work by the end of the year.  It would be more realistic to set one for the first half of
next year, and some had suggested simply setting a new target of next May, one year past the originaltarget which seemed realistic.  The United States was willing to meet to work between now and
Cancún, but it understood that this might be difficult for some delegations, it was sympathetic to the
multiple demands placed on other delegations, and it could wait to resume work until after Cancún if
that was desirable.  Her delegation looked forward to working with other Members in making further
progress in these negotiations.
197. On other rules issues, her delegation noted that there had been substantive engagement in the
last meeting of the Rules Negotiating Group, where the United States was an active participant.  Therewere no decisions needed at Cancún on this issue.  This had not been an easy issue for the United
States to include on the agenda, but having agreed, it was participating and it hoped that others would
take a similarly open stance in other areas, starting with agriculture.
198. On environment, the CTE and the Special Session of the CTE were nearing the completion of
their work schedules before Cancún and had done a good job in fulfilling the mandates.  Both seemedpoised to give a good factual account of work to date, and like others, her delegation did not expect to
have a major debate on this agenda point at Cancún.
199. Despite missed deadlines, it was noteworthy that Members had largely been able to avoid
negative linkages and maintained positive momentum.  However, Cancún was rapidly approaching
and Members needed to give even greater energy to the process.  The United States was prepared towork with other Members to make progress in all areas to set the stage for final negotiations that
would achieve the ambitious goals set out in the DDA.TN/C/M/10
Page 31
200. The representative of Colombia, speaking also on behalf of Argentina, Bangladesh, Bolivia,
Botswana, Brazil, Chile, China, Cuba, the Domi nican Republic, Ecuador, El Salvador, Gabon,
Guatemala, Honduras, India, Malaysia, Mexico, Mo rocco, Nicaragua, Pakistan, Paraguay, Peru, South
Africa, Thailand, Uruguay, Venezuela and Zimbabwe, said he wished to introduce a paper submitted
jointly by the Members on whose behalf he was speaking, entitled "The Doha Agenda: Towards
Cancún" which had been issued in document TN/C/W/13.
201. The document's special significance lay in it being subscribed to by a wide range of
developing countries, from different regions, various degrees of integration to the world economy,
and a different mix of offensive and defensive interests in this negotiation.  In the present stage of the
negotiations it was meaningful that such a high de gree of communality of interests in the multilateral
trading system was found among this group of developing countries.  The paper was important, both
because of the precise moment it was being presented, which allowed enough time to impact thepreparations for Cancún, and for its contents, which identified the areas of substance that had to be
properly addressed by the next Ministerial meeting.
202. The sponsors of the document, and others, were deeply committed to strengthen and further
consolidate the multilateral trading system.  This was not surprising.  As countries that were rapidly
increasing their participation in world trade flows,  they were more vulnerable to international
economic cycles and the instability that derived from them for global goods and services markets,
including financial markets.  Hence, a rules based organization that governed multilateral trade was
the best alternative to avoid protectionist policies that in the past deepened and prolonged recessions
and shielded trade policies reasonably well from other regional and world events.  Nevertheless, even
as the system had contributed significantly to the growth and development of some countries, it stillhad to deliver its full potential and promises.
203. During these past 18 months, Members had been unable to deliver results in crucial interest
areas for developing countries that were not part of the Single Undertaking and Members had missed
the deadlines to establish modalities in the market access area, in particular agriculture, that played a
central role in the success of the negotiations.  The preparations for the Fifth Ministerial were anopportunity that should not be missed to catch up with work and boost the momentum of the
negotiations with the view to successfully end this Round by December 2004, as had been set by
Ministers.  In this regard, the document was also a call to maintain an open, transparent and inclusive
process that created the needed trust among all Members.
204. This document would serve as a reference point to guide Members' efforts and work, and to
evaluate progress heading towards the Fifth Ministerial Conference.  These countries did not claim
that there might not be other issues that could be important in the road to Cancún, but the ones thedocument contained were the most important for the time being.  These countries hoped that this
document would be considered by all Members of the WTO as an essential part of the navigation
chart towards a sunny Cancún, and hopefully it would permit Members to avoid the hurricanes that
had sunk so many vessels in the Caribbean in past centuries.  There was a treasure on board and the
Members' duty was to safely dock the ship in the waiting port.
205. But to achieve this, the cargo had to be evenly distributed to ensure that the first winds did not
capsize the ship.  All the crew had to be well informed of its duties and participate in the decisions to
be able to work as a team.  The burden of the work assigned to every member of the crew had to take
into account the abilities and strengths of everyone.  Finally, the distribution of the benefits of the
treasure or the bounty had to be fair and functional to the announced criteria of favouring the poorestand neediest members of the crew.
206. The representative of Brazil said his delegation endorsed fully the document introduced by
Colombia, which was offered to delegations as a token of the commitment of this group of countries
to the Doha mandate and of their interest in energizing the negotiations so that the Round could live
up to the expectations it had created as an agenda for development.TN/C/M/10
Page 32
207. On the negotiations on the DSU, Brazil believed a formal decision to renew the mandate was
required and it supported the Chairman's proposal to refer this issue to the General Council.  Although
Members had gone as far as they could and no further progress could be envisaged in the short term,
Brazil would not object to the proposal to hold one more meeting of the DSB Special Session at the
technical level.  His delegation would have preferred a decision that allowed Members to concentratefully on the Cancún agenda, leaving DSU reform for after Cancún.  Under the current circumstances it
seemed uncertain – if not unlikely – that a few mo re weeks would suffice to reach a goal that had
eluded Members for more than one and a half years.  His delegation hoped that Cancún would
leverage this in other negotiation areas.  There had been not lack of technical debate, and the Special
Session Chairman's text was unlikely to produce a magic rally, so one should avoid piling more time
and resources into an effort which had ended in failure.
208.   Brazil believed that, once the General Council had agreed to extend the mandate, the
purpose and scope of these negotiations should be reconsidered, since the lack of common
understanding and the short deadline lay at the heart of the failure to fulfill the mandate.  Members
would benefit from a fresh conceptual discussion on the scope of the DSU review before embarking
on a new round of specific debates.  Perhaps what was needed was an effort to reach a consensus on
modalities, not merely procedure, before proceeding.  His delegation hoped that the technical meetingsuggested by the TNC Chairman could provide an occasion for a preliminary debate on this issue.
209. The representative of Nigeria said that his delegation believed that the pace of negotiations on
services did not seem to take into consideration the capacity constraints of African countries.  Most
developing countries were unable to meet the indicative deadlines, and it was quite clear that these
countries would require more time to catch up with the process.  However, there should be balancedprogress between the various components of the services negotiations, and equally, balance between
the negotiations on services and other issues.  His delegation called for a regular review and
evaluation of the results attained in terms of the objectives of Article IV of the GATS, in accordance
with paragraph 15 of the Guidelines and Procedures of the Negotiations on Trade in Services, as this
would make it possible to ensure that all Members derived maximum benefit from the results of thenegotiations on services.
210. The negotiations on agriculture should result in further reform of the sector by reducing
protection, promoting fairer agricultural trade, and improving market access opportunities for
developing countries.  The reform process should result in substantial reductions in the three pillars of
market access, export competition and domestic support, with a view to phasing out all forms of
supports that distorted agricultural trade.  In doing this, Nigeria called for greater flexibility and
understanding from the big players to ensure that developing countries were accorded effective,meaningful and operational S&D treatment as an integral part of the agreement.  Nigeria believed this
would impact positively in addressing its de velopment needs including food security, rural
development and poverty alleviation.  Progress needed to be made at this stage of the negotiations as
it was becoming much more difficult because of the wide range of views and interests among
Members.  This was particularly the case for many developing countries, such as Nigeria, whoseeconomies depended increasingly on a diverse range of primary and processed agricultural products.
211. Nigeria welcomed the draft elements paper by the Chairman of the Negotiating Group on
Market Access, particularly the Chairman's cautious approach to the sensitive subject of modalities,
for it gave Members the opportunity to further fine-tune the document by themselves.  However,
because of this cautious approach, a lot of gaps existed in the document leading to questions needingclarification.  In this regard, his delegation noted the intense level of exchanges among Members, at
the last meeting of the Negotiating Group on 26-28 May, which had given all Members the
opportunity to give their respective preliminary assessments.
212. Consensus was yet to emerge on any of the elements, the core modalities or sectoral tariff
elimination as noted in the summing up by the Negotiating Group Chairman at that meeting, and thisshowed that a lot of work was still required to bridge the divergent views.  This would requireTN/C/M/10
Page 33
patience and understanding of the difficulties and concerns of each Member, and Nigeria continued to
ask for greater understanding from developed Members by agreeing to modalities to ensure that the
objectives of the DDA in the area of non-agricultural market access were achieved.
213. On the dispute settlement negotiations, his delegation noted the efforts of the Special Session
Chairman in producing a text.  Al though most of Nigeria's concerns not having been taken on board, it
was ready to engage in discussing the text, especially on issues such as third party rights and funds for
dispute settlement.  Nigeria believed that discussion of the text, either formally or informally, could
only continue if the General Council granted an extension of the mandate which had expired at the
end of May.  This decision should give guidance on other proposals not contained in the Chairman's
text.
214. Nigeria wished to emphasise the importance of resolving as early as possible the problem
facing countries with insufficient or no manufacturing capacity in the pharmaceutical sector raised inparagraph 6 of the Declaration on TRIPS and Public Health, because it bordered on saving millions of
lives.  His delegation welcomed the two new submissions by the European Communities and the ACP
Group designed to move the process forward and achieve a solution, and called on other Members to
give these developments sympathetic or favorable consideration to resolve this humanitarian problem.
By resolving the issue before Cancún, the trip to Cancún would be made easier and the organisation'simage to the outside world would improve significantly.  It would also make a catalytic impact on
other issues slated for Cancún.
215. On the issue of the establishment of a multilateral register for wines and spirits, his delegation
noted the progress made so far as well as the significant differences remaining on a number of key
issues.  Nigeria believed that the system to emerge at the end of the process should be voluntary andonly facilitate levels of protection and not result in "TRIPS plus" obligations.
216. His delegation welcomed the report by the Chairperson of the Special Session of the CTE and
believed more work was needed to arrive at a common understanding of the issues.  Its preference
was a step-by-step approach which should be complemented by specific and effective technical
assistance to take care of the needs of developing countries to enable them to participate and benefitfrom the outcome of the negotiations.
217. His delegation wished to associate itself with the statement by Colombia.  His delegation
noted that several Chairpersons were preparing reports on their own responsibility, which was their
prerogative, but it requested that these reports should contain factual information that would indicate
progress made and areas requiring further work.  It would be best if the reports had the prior support
of the various bodies and the widest consultations  possible.  Any text going to Ministers on any
subject should carry the Members' mandate.
218. His delegation appreciated the efforts by some delegations to clarify the Singapore issues, but
draft modalities were not yet on the table, nor had they been debated.  It would be proper for the
General Council and the TNC to agree on a clear work programme to enable Members to follow the
Doha directives on the Singapore issues.  Nigeria supported the statement by the United States and
suggested that the Chairpersons of the various working groups should present their reports to theGeneral Council and the TNC.  Proposals for modali ties would follow and these modalities would be
examined in the usual manner.  It was based on this examination that a report would be presented to
Ministers in Cancún for a decision, based on the explicit consensus principle.  Nigeria would continue
to be engaged in the negotiations in a positive manner to ensure that the mandate given by the
Ministers was carried out.
219. The representative of Peru said that in the preparatory work for Cancún, the development
dimension needed to occupy the central role which corresponded to what had been set out by
Ministers in the Doha Declaration.  In this context, a group of Members had submitted document
TN/C/W/13 which had been introduced by Colombia.  This identified the key actions needed toTN/C/M/10
Page 34
incorporate the development dimension in each and every one of the areas of negotiation so as to
reach Cancún with a balanced package.
220. Peru felt that it was fundamental to establish and strengthen a form of political momentum,
which would promote the positive linkages between the various negotiating areas.  But to do so, it
would be necessary to make headway in key negotia ting areas such as agriculture, TRIPS and Public
Health and S&D treatment, which were all closely connected with development.  Similarly, Members
needed collective transparency and involvement in all stages of the negotiation and in the very process
of adopting decisions.
221. Peru shared the concerns of many developing countries about the lack of headway on the
horizontal issues in the services negotiations, particularly with respect to subsidies and emergency
safeguards.  This work had to make progress at the same pace as the bilateral market access
negotiations, in order to have consistency and coherence between higher levels of openness and therules and disciplines which would complement and guarantee that openness.  With respect to the
request/offer stage, Peru had made an effort to present requests and was now preparing an initial offer
which it hoped to present before Cancún.
222. Another important element, mentioned by the Sp ecial Session Chairman in his report, was the
approval of the proposal by a group of developing countries on the implementation of paragraph 15 ofthe Negotiating Guidelines for the Services Negotiations, which Colombia had coordinated together
with Peru.  This would complement the bilateral request/offer process by enabling Members to
identify the areas of negotiation which had a particular interest for developing countries, in line with
the provisions of GATS Article IV.
223. On the DSU review, his delegation wished to make four points:  1) The deadline set by
Ministers for these negotiations had been reached without agreement because of the many legal
complexities.  Peru supported the TNC Chairman's proposal that the Chairman of the General Council
should undertake informal consultations to determine future work, safeguarding the enormous efforts
that had been deployed up to now.  2) The DSU review was not part of the Single Undertaking, in line
with the Ministerial mandate, and this should be  maintained so that the DSU could keep its
independence due to the systemic nature of any change in this fundamental pillar of the multilateral
trading system.  3) The General Council should approve an extension of the timeframe, but this
should be as realistic as possible, taking into account the enormous complexities and implications of
any modification or interpretation of the DSU.  The negotiations should recommence after the Cancún
Ministerial, and be based strictly on the draft by  the Chairman of the DSB Special Session, which
constituted a good basis for the continuation of work with the submission of proposals by Members.
4) The scope of the mandate agreed to in Doha was very clear and specific.  The objective of the workunder way should be "to clarify and improve the provisions of the DSU" without prejudging the result
of the negotiations.  In other words, at least at this stage, Members had to agree to modifications to the
text of the DSU which clarified or improved existing provisions, but not incorporate new elements of
systemic importance.  For Peru, the priority in these negotiations was to perfect the dispute settlement
system, guaranteeing the balance of rights and obligations of Members, but also taking into accountthe urgent need to rectify the present asymmetries that existed between developed and developing
countries to enable all Members to effectively avail themselves of the dispute settlement system.
224. The representative of Canada said the reports by the Chairpersons had given a sense of
continuing momentum in the negotiations as a whole, but his delegation was disappointed and
dissatisfied with the lack of significant and necessary negotiation on agriculture.  His delegationwished to expressed appreciation for the clarity and persuasiveness of the statements of the President
of Burkina Faso and the other sponsors of the resolution on cotton.
225. On the non-agricultural market access negotiations, Canada regretted that the 31 May
deadline had not been met despite the creativity and hard work of the Chairman of the Negotiating
Group.  It was essential that Members took the time to work towards an ambitious result, and theTN/C/M/10
Page 35
Chairman's modalities paper would serve as a useful basis for that work.  Canada was in favor of a
higher level of ambition than could be seen in the current draft, particularly in addressing tariff peaks
and high tariffs.  Members needed significant liberalisation in both the reduction and elimination of
tariffs, while addressing the specific needs of developing countries, especially those at lower levels of
development.  Canada wanted to build on elements of the Chairman's paper and move towards a moreambitious and balanced outcome.
226. On the dispute settlement negotiations, like other Members, Canada saw value in continuing
work, and agreed with the TNC Chairman's proposal that the General Council address this issue at its
July meeting.  Canada noted that Ministers at Doha had set 31 May as a date to aim for the completion
of these negotiations, and considerable work had been accomplished to date and the mandate had not
expired.  The negotiations should continue on the basis of the existing mandate with a view of
concluding perhaps by May 2004.
227. Canada believed the paper by Colombia and its co-sponsors to be a forward looking and
constructive approach to the negotiations and welcom ed this reaffirmation of commitment to the Doha
agenda, in particular the need to integrate develo ping countries into the multilateral trading system
and to enable them to benefit from the opportunities provided from more open trade.  This could best
be achieved by making real progress in the core economic agenda of agricultural reform, marketaccess for goods and services, and strengthened rules for anti-dumping and subsidy disciplines.  This
was where the greatest potential gains lay, especially for developing countries.
228. By continuing the commitment to effective and targeted technical assistance and by finding
ways where effective S&D treatment could be applied in specific circumstances to help ease the
transition for those developing countries in most need of help, Canada looked forward to working
with the sponsors of this paper and other Member s and the Chairman to advance the Doha agenda
towards and beyond Cancún.
229. The representative of Hong Kong, China said that the Members' score-card in meeting
deadlines under the DDA was regrettably dismal, and it was disappointing that they had been unable
to meet the May deadlines for modalities on NAMA and for the DSU negotiations.  This wasworrying as there were just 10 working weeks before Cancún.  If Members could not narrow their
differences in these coming weeks so that Ministers could resolve the important outstanding issues
such as modalities on agriculture and non-agricultural market access at Cancún, there would be a risk
of losing the opportunity of re-energizing the global economy with a timely conclusion of the Round.
His delegation agreed with Japan that Members should not be too pessimistic, but should redouble
efforts to make as much progress as possible in the coming weeks.
230. On non-agricultural market access, his delegation believed that despite missing the deadline
and the differences on some key elements in the Negotiating Group Chairman's draft, there was a
silver lining in the cloud.  Many Members had accepted the Chairman's draft as a good basis or as a
useful tool kit for further discussion, and no delegation had been heard rejecting the draft out of hand.
While his delegation was somewhat disappointed that the draft had not set total tariff elimination, at
least by developed Members, as an ultimate target of the DDA, it welcomed many of the ideas in thedraft, including the formula approach with a non-linear line-by-line cut, the supplementary sectoral
elimination initiatives, the S&D provisions, and a modality for addressing NTBs.  Hong Kong, China
considered that the draft was on the whole balanced and there were good attempts to address the
major concerns of Members.  His delegation agreed that it was a good working basis and believed
Members should intensify their work and not lose momentum.  For the moment, as the formulasuggested in the Chairman's paper did not stipulate any number on the coefficient 'B', the exact level
of ambition that would derive from the formula reduction was not yet determined.  Hong Kong, China
advocated an ambitious formula, to be supplemented by other modalities such as sectoral tariff
elimination.  This was vital if the WTO was not to lose its relevance, in the face of the proliferation of
RTAs where tariffs were often reduced to zero.TN/C/M/10
Page 36
231. There were two remaining Negotiating Group meetings before Cancún, and he urged a
redoubling of efforts both in Geneva and in capitals in order to understand fully the Chairman's
suggestions, and to consider what further refine ments or elaborations could be made with the
implications of the various options for each country's trade regime.  Where necessary, technical
assistance in the analytical work could be sought from the Secretariat on, for example, simulation ofthe formula on a Member's own tariff schedule.  Me mbers should also intensify their dialogue with
one another with a view to coming up with suggestio ns to provide further guidance to the Chairman at
the coming meeting of the Negotiating Group in July.
232. Like many others, Hong Kong, China believed it was important to establish modalities by
Cancún, but it did not think it was realistic to expect Ministers to juggle figures or coefficients under a
formula approach at Cancún.  It was, therefore, important to narrow down the number of issues and
options to facilitate Ministers' decisions at Cancún.  Members should aim to agree on the necessaryadjustments and refinements to the Chairman's draft modalities for confirmation by Ministers at
Cancún.
233. On the DSU negotiations, his delegation agreed that the momentum should be kept up despite
missing the May deadline.  There were different views on whether a mandate existed to continue the
negotiations after May since the Doha Declaration was somewhat unclear on this aspect.  Yet it wasimportant that the past 15 months of work not be allowed to go down the drain.  This was a view
generally shared by Members and his delegation saw no objection from the membership to continuing
the negotiation itself.
234. The realistic way forward was to agree on a new deadline that was outside the Single
Undertaking as was originally intended by Ministers in Doha.  Members should settle this issue at theJuly General Council instead of leaving this question to Ministers and overburdening them in Cancún.
His delegation supported the TNC Chairman's proposal that the Chairman of the General Council
conduct consultation with a view to building a consensus by its July meeting.  Before a decision was
taken on the way forward, his delegation agreed that it would be sensible for technical consultations to
continue in the meantime under the Chairman's guidance.
235. His delegation wished to reiterate the merit of using the Chairman's text as a basis for further
work, since the issues had been considered by delegations for some time now and would stand a better
chance of being resolved by the next timeline for the exercise.  Bringing in new and unfamiliar items,
or items that clearly could not command majority support, would further complicate existing work
and would not be helpful to achieving the eventual objective of wrapping up this exercise before the
conclusion of the current Round.
236. On the services negotiations, his delegation was pleased to see that 26 Members had already
submitted their initial offers and that many had indicated that they were in the process of preparing
them.  This marked another milestone in the services negotiations.  However, the quality of some
offers left much to be desired, and his delegation would expect greater leadership from major trading
Members who had high ambitions in services, as reflected in the initial requests put forward by those
Members.  Apart from bilateral requests and offers, multilateral rule-making was also an importantcomponent to the services negotiations, and his delegation urged all Members to also pay attention to
the need for satisfactory outcomes in the negotiations on services rules.  His delegation urged
Members to redouble their efforts in submitting meaningful initial offers as early as possible, and to
build a significant number of substantive services offers by Cancún.  This was essential to reinforce
the positive linkages and bring about positive momentum not just in these services negotiations, butalso in other areas.
237. His delegation could share many of the points in the presentation by Colombia, since
development was a central theme in the negotiations and development-related issues should be
satisfactorily addressed so that the DDA could live up to its name.  It was highly desirable that the
outstanding issues on TRIPS and Public Health be resolved before Cancún.  On implementation-TN/C/M/10
Page 37
related issues and S&D treatment, his delegation appreciated the efforts undertaken by the TNC
Chairman and the Chairman of the General Council, and looked forward to seeing early substantive
progress before Cancún.
238. The representative of Argentina said that Members were in need of the positive words
expressed by the Chairman, particularly some delegations who quite often did not feel tempted to look
at the promising aspects of the negotiations.  Most Members would rather be positive than dwell on
the actual developments taking place in the organization.
239. Although his delegation appreciated the progress made in the DSU review, yet another Doha
mandate deadline had been missed, and this was disappointing.  There was a critical mass of
Members, including Argentina, who would have been in a position to come closer to an agreement on
the basis of the Chairman's text.  The DSU, as a key part of the multilateral trading system, was an
instrument that gave the system credibility and ensured the effective implementation of agreed rules.But beyond the relevance of this issue, there might arise a perception from the situation in the DSU
negotiations that it was a barometer of the overall political will for progress in the wider negotiations.
240. Following the expiry of the mandate in paragraph 30 of the Doha Declaration on 31 May,
Argentina was willing to continue working to clar ify this ambiguous situation.  Members needed to
extend the mandate with a new deadline for the negotiations, and his delegation was pleased by thediscussion at the present meeting.  His delegation did not agree with the interpretation that the date
contained in the mandate was simply an indicative one.  However, it was willing to go along with the
TNC Chairman's suggestion.  His delegation was flexible on the question of a new timeframe, but
with two conditions.  First, it would be inappropriate to have a negotiating process without a clear
deadline and second, as stated by many, it would be inconceivable to incorporate these negotiationsinto the Single Undertaking, a notion carefully rejected by Ministers in Doha.  The annex to document
TN/DS/9 and the work over the past year and a half were useful bases for future work on
improvements and clarifications to the DSU, and Argentina remained willing to work towards this.
241. Argentina attached great importance to the market access negotiations, and was willing to
have a high level of ambition in every part of the negotiations under the Single Undertaking, but
within the balance among the various issues set out in paragraph 49 of the Doha Declaration.
Argentina respected and valued the Chairman's in sistence on the need to strengthen the positive
linkages, and tried to take an active role in all the areas.  It agreed that only by making good progress
in all areas of the negotiations would movement be possible.
242.  The last meeting of the Negotiating Group on Market Access had revealed a high level of
opposition to the mandatory nature of the sectoral approach and doubts had been raised by several
Members on certain specific elements.  The elimination of tariffs could have negative effects on theindustrial structure and consequent development possibilities of developing-country Members.
Therefore, participation in any approach of this kind, involving tariff elimination, should be on a
voluntary basis to make it possible for Members to adapt it to their needs.
243. Provisions for S&D treatment should benefit all developing countries, and not exclude those
who, at great sacrifice, had already made a consider able contribution to the multilateral trading system
by binding 100 per cent of their tariffs.  With the exception of the obvious inclusion of differentiated
timeframes for implementation, the proposed modalities did not really contain elements for S&D
treatment that would be applicable to all developing countries.  Argentina would continue to work
constructively with the Chairman to determine the modalities for negotiation on non-agricultural
products.
244. On the services negotiations, Argentina was analyzing the offers that had been submitted, but
it was concerned to see the introduction of certain modifications and clarifications to the schedules of
commitments.  Argentina saw this as being a ro ll-back of commitments that had already been
assumed in the Uruguay Round, and it would be looking carefully at how this could affect the presentTN/C/M/10
Page 38
rights and obligations of Members.  The offers submitted by some Members did not reflect the level
of ambition shown in their requests, and were limited precisely to those sectors and those modes
which were of interest to developing countries.  Furthermore, it would be necessary to work harder to
maintain a balance between the negotiations on rules and domestic regulation on the one hand, and
bilateral negotiations on the other.  This was not a tactical or negotiating approach, but purelypractical, because Members needed to have a complete framework of rules before deciding on specific
commitments.
245. On the environment negotiations, the participation of certain MEA Secretariats as ad hoc
guests at the last meeting of the Special Session of the CTE had been a significant and important step
forward in the consideration of the issue in para graph 31(i) of the Doha Declaration.  It was also
important that other institutions be able to participate on the same footing in the other areas of this
negotiation.  This participation should be determined on the basis of modalities and criteria whichwould need to be defined to ensure greater transparency and objectivity in the selection and
participation of any such institutions.  The decision adopted by the Chairperson, following her
consultations, that modalities for participation be considered at the next regular Special Session in
July, as well as the criteria, was a positive step forward, which would avoid having Members consider
this item at each meeting.
246. Finally, he thought that any additional comment on the paper introduced by Colombia would
simply diminish Colombia's presentation of it, so he would only reiterate that Argentina was one of
the co-sponsors.
247.   The representative of Norway said his delegation welcomed the paper presented by
Colombia, on behalf of a number of developing countries. There were many points in this paper that
could be supported by his delegation and perhaps th e entire membership.  However, on some points
his delegation would have recommended a bit more caution, such as on non-agricultural market
access or the Singapore issues, but overall it was a very useful paper.
248. His delegation thanked the Chairman for the Checklist of Issue in JOB(03)/98, which would
serve Members well in ticking off the various issues to be discussed.  The TNC Chairman and theChairman of the General Council had started a very useful round of discussions in the informal Heads
of Delegations meetings, which had started well on the Singapore issues and his delegation was sure
Members would follow up on the various issues co ntained in the Checklist.  Members would then
have to come to the non-negotiating issues as the month of August approached.
249. His delegation believed that missing the deadline for the DSU negotiations was a serious
matter, and the systematic lack of progress in the negotiation on the DSU, which had been
incorporated into the Marrakesh Agreement in 1998, was a problem as well.  Members had to askthemselves why progress could not be made.  In the view of his delegation, it was the syndrome of
some not being willing to agree to some sensible  changes in the DSU unless they obtained all they
wanted.
250. The negotiating mandate in this area was a simple and efficient one, referring to improvement
and clarification and not the creation of a new DSU.  The DSU was working despite some flaws, soMembers needed to restrict themselves to what could be agreed upon collectively.  Norway agreed
with others that there were currently more pressing issues needing attention, and agreed to a pause for
reflection with work to be carried on in the future, but it cautioned that Members should have a sense
of what could be achieved when the General Council met on the topic.  The paper by the Chairman of
the DSB Special Session should be the basis for any future work, because the negotiations wouldnever conclude if they started again with new proposals.  Clarification by the General Council on this
issue would be important.
251. In the Doha mandate, like on other issues, there was clear guidance for the non-agricultural
market access negotiations, and the paper by the Chairman of the Negotiating Group reflected most, ifTN/C/M/10
Page 39
not all, of what was set out there, with the exception of nuisance tariffs.  His delegation was
concerned that many delegations had pinpointed items in the paper they wanted to take out rather than
add.  His delegation would favour adding to it, as suggested by Hong Kong, China and the United
States, which had pointed to constructive new items one could look at.  Hong Kong, China had
compared the paper to a toolbox, and if one wanted to fix something, it was wise not to start throwingaway tools, and better to fill up the toolbox.  A lot of work still needed to be done in this area, but the
Chairman of the Negotiating Group was very wise not to define the level of ambition, which should
be considered at the July meeting.
252. The representative of Mexico, referring to the document introduced by Colombia on behalf of
a group of developing countries including Mexico, said he wished to highlight three elements of the
paper – it presented a well balanced approach, it provided the required momentum for pushing the
negotiation forward in the right direction, and it emphasised the commitment of developing countriesto abiding by the Doha Declaration, as well as hi ghlighting their firm belief that all Members should
respect and abide by this Declaration.  This document showed the will of this group of developing
countries, which had varying characteristics, as they sought to make real progress in the Doha Round.
The outline in the document was balanced enough to lead to a concrete and sound foundation for the
entire negotiating process.
253. In the past few weeks, his delegation had noticed a new, more participative and constructive
attitude on the part of various Members, which was to be commended.  This was important, given that
the Cancún Ministerial was nearing and taking into account the important tasks needed to be carried
out to come well prepared for the Ministerial.  The greater momentum Members achieved, the better
the prospects would be for all.  But momentum was not only made up of positive attitudes and goodwill, it was also important to start providing results.  The constructive attitude of all Members should
take the form of specific progress in all the various areas of the negotiations.
254. The document listed the areas where it was necessary to focus during the few months before
the Ministerial, and this was not a spectacular or revolutionary discovery since all Members knew the
areas that required additional work, but it was important to reiterate them and to concentrate all effortson them.  Perhaps the most important message was that the developing countries concerned were
ready to take on their commitments and believed in the importance of being part of the multilateral
trading system.  But they were also ready to demand that those commitments made in Doha by all
Members be complied with.
255. If Cancún was to be a useful meeting, all Members – both developing and developed – had
get down to work and contribute, so that the package reached would be positive for all Members.
That was the only way to be able to positively conclude the Round and to continue consolidating themultilateral trade system.
256. The representative of the European Communities said development was at the center of the
DDA and its importance was felt in all areas of the negotiation.  Progress had been made, but not at
the pace initially envisaged in the deadlines set at Doha.  Members should not doubt that the European
Communities had fully engaged politically on the substance of developing countries' concerns.  TheEuropean Communities hoped it would be possible to agree on a substantial development package by
Cancún and that development concerns were  properly addressed throughout the Round.
257. The European Communities fully accepted the challenge contained in the paper presented by
a sizeable group of developing countries.  Development concerns cut through all areas of the DDA
and Members had to make sure that the commitments made at Doha helped developing countriesbetter integrate into the multilateral trading system and the benefits accruing from it.  Members had to
live up to their commitments in at least four area s: S&D treatment and implementation-related issues,
market access, rules and trade-related technical assistance (TRTA) and capacity building.TN/C/M/10
Page 40
258. On S&D treatment, he welcomed the resumption of work on agreement-specific proposals
under the General Council Chairman's guidance. The European Communities' objective was to reach
agreement on a substantial package by Cancún.  Such a package should include decisions that would
contain economic value-added elements to developing countries, especially to LDCs or apply
adjustments of rules.  Decisions should be trade-creating rather than trade-reducing and be combinedwith effective TRTA and capacity building.
259. At the same time, development aspects including S&D treatment were being taken up in the
relevant negotiating groups.  The negotiations on rules and market access would deliver clear benefits
to developing countries.  The European Communities had offered ambitious market openings to
developing countries, especially the LDCs, in all three areas of market access negotiations without
comparable requests for liberalization concessions in developing markets.
260. In rules and Singapore issues, his delegation's proposals had taken the development
dimension fully into account.  The European Communities recognized the importance of TRTA and
capacity building and acknowledged its responsibility to contribute.  The majority of its contribution
would be delivered through bilateral and regional programmes.  As of early 2003, the European
Communities had about 230 trade-related projects under way for a total value of € 1.6 billion, and it
had earmarked € 2 billion for TRTA for the next 5 years, a figure which might increase at the nextmid-term review.  Finally, the European Communities had repeatedly expressed its hope that a
multilateral agreement on TRIPS and Public Health could be reached before Cancún.
261. The representative of Tunisia said the Chairman's efforts to ensure the smooth running of the
Doha Work Programme was not an easy task, especially after the successive failures in respecting
deadlines set by the Ministers, the latest being that of 31 May for market access for non-agriculturalproducts and the DSU review.  The difficulties encountered in the negotiating process should not
prevent Members from continuing their efforts towards fully implementing the DDA.  Tunisia
reiterated its attachment to the multilateral trad e system and its total commitment in working together
with other Members so that the development programme established by Ministers in Doha became a
reality.
262. Her delegation thanked the Chairman of the Negotiating Group on Market Access for the
draft modalities text, however the proposed harmonization formula and additional approaches
proposed were far from responding to Tunisia's expectations, since this would not make it possible to
redress the imbalances that its small and medium-sized enterprises had undergone.
263. On the elimination and reduction of customs tariffs, Tunisia would advocate a sectoral
elimination of custom tariffs to avoid a total di smantling of tariffs.   Any important short-term
reduction of custom duties would stifle its indus try, and its economy depended broadly on commercial
trade preferences which contributed significantly to its exports.  Any substantive and sudden
reduction of tariffs would bring about an erosion of these preferences and would most likely cause
considerable damage to its economy.  Regarding the implementation period and the reference levels
for the tariffs, Tunisia supported the proposals which aimed to eliminate tariffs in stages on the basis
of rates that had been consolidated during the Uruguay Round, while also giving a longer period todeveloping countries for these tariff cuts depending on the nature of the products concerned.
264. Her delegation commended the efforts of the Chairman of the DSB Special Session, which
had led to the 28 May text representing the outcome of long and difficult negotiations.  Agreement
had not been reached on this text, and Tunisia was willing to continue discussions on this issue so as
to achieve positive results for all Members, but it wished to underline that, if the dispute settlementsystem was to be improved, it should be made more accessible to developing countries.
265. Finally, her delegation wished to express its full support for the TNC Chairman in his efforts
to carry out the process leading to Cancún and recalled that negotiations should be based on a well
balanced approach, fully taking into account the development dimension.TN/C/M/10
Page 41
266. The representative of Colombia said his dele gation recognized the valuable work by the
Chairman of the DSB Special Session and thanked him for his report and suggestions on the way
forward.  Colombia agreed with the TNC Chairman's  suggestions with respect to future action, and
that Members should build on the work that had already been done.  Colombia understood the Special
Session Chairman's reasons for defining the scope of topics in his report, and could have gone alongwith additional elements.  However, it believed that given the time limit inherent in the mandate, the
scope was correct, although it agreed with the Chairman that there was no agreement on the scope for
future work.  Colombia would prefer to limit future work to technical details of the topics set out in
the Special Session Chairman's document, but understood that some Members had an interest in
including additional topics.  Despite major limitations in human resources, Colombia could go along
with the initiative to ensure that work could continue after Cancún.
267. If the mandate were to be extended, his delegation would suggest holding a discussion on the
scope before trying to define a text.  His delegation believed it was essential to have a prior idea of the
views of various Members on the depth and scope of reform of the DSU which could make it easier to
put together a package agreeable to all Members.  Although Colombia remained a bit sceptical of the
role broadening the scope could play to help achieve consensus, it would be happy to be proved
wrong.  With respect to the time needed to conclude these negotiations, his delegation would prefer adate which would not in any way coincide with the end of the overall negotiations, and it was flexible
with respect to a date within the next year.
268. On the non-agricultural market access negotiations, Colombia believed that the document by
the Chairman of the Negotiating Group could serve as a basis for discussion, but, as it had made clear
at the Negotiating Group meeting, the proposal for an obligatory sectoral approach was unacceptable.It was also unacceptable to a broad majority of countries, although some were prepared to look at
various modalities for negotiations beyond the general formula on a voluntary basis.
269. On the agriculture negotiations, his delegation believed that progress had been made in the
consultations on various topics by identifying what Members would have to agree on.  However, it
was obvious that these technical consultations were coming to an end, and sooner or later Memberswould have to return to discussion of the modalities to be adopted.  Unfortunately, to date there was
no movement by those Members which had the lowest le vels of ambition in these negotiations.  At the
present meeting, the statements by Japan and Korea had been interesting.  In many meetings, it had
been said that members of the Cairns Group should lower their level of ambition if agreement was to
be reached.  However, this might be the time for some Members, such as Colombia, to start pointing
out that some Members had to raise their ambitions if the obligations of the mandate given by
Ministers in Doha were going to be met.  If Members really wanted to reach agreement, as they hadall stated repeatedly, what was set out in the document that Colombia had presented on behalf of a
number of developing countries could play a part.
270. Agriculture had a central role in the Doha negotiations, and Colombia did not think it was
appropriate that some Members were stating that different levels of ambition should exist in non-
agricultural market access and in agriculture.  Members had to go beyond this if they wanted to bringthis Round to a successful conclusion.
271. The representative of Hungary said one could feel enhanced activity in the run-up to Cancún
in all areas of the DDA negotiations, which did not necessary mean that there was progress.  On non-
agricultural market access, his delegation supported the major elements of the paper by the Chairman
of the Negotiating Group and its emphasis on a formula-based approach, covering all tariff lines andthe technical elements proposed.  However, it was concerned about the effect of the use of tariff
averages as an element to be taken into account when reducing tariffs, as this would involve higher
levels of protection and would not be equitable.  It was not conducive to development considerations
as there was no relationship between tariff averages and levels of development.  Developing countries
with quite low tariff averages would have to reduce their tariffs by a much higher percentage thandeveloping countries with higher tariff averages.TN/C/M/10
Page 42
272. His delegation welcomed the possibility of sectoral approaches related to sectors of export
interest to developing countries and expected that low or zero tariffs in these sectors would give a
major thrust to the exporting sectors of developing countries.  His delegation was also willing to
consider S&D through slower rates of reductions.  On non-tariff barriers, which was an indispensable
part of the NAMA negotiations, further discussion was needed on export taxes and restrictions.
273. In the agriculture negotiations, the technical consultations had been useful, but they could not
helped solve the major differences among participants.  However, by clarifying technical details on
various issues, Members would be able to progress faster towards the goals of the negotiations.
Hungary wished to reiterate its concern about the lack of progress in the area of geographical
indications, and welcomed the Chairman's initiative in this matter.  His delegation would note that the
opponents of any meaningful outcome on this issue made it difficult to see how it could be resolved
without blocking progress in other areas, especially agriculture.
274. Hungary's approach to the development dime nsion coincided with that of the European
Communities, and it commended the efforts of the General Council Chairman to give impetus to the
specific S&D issues.  His delegation supported Colombia's paper, which contained important issues
and which confirmed that developing countries saw themselves as being integrated by and benefiting
from the multilateral trading system.
275. On the Singapore issues, Hungary believed the technical elements could be treated together,
such as the timelines or the structure of negotiations.  However, it was difficult to understand the
intent behind the second sentence of paragraph 14 of the developing countries' paper, which read "in
several areas there is need for further analysis".  If this referred to the post-Cancún process, then there
was a major problem.  The mandate from Ministers was clear – negotiations should take place andagreeing to modalities was the issue.
276. Finally, on the DSU negotiations, Hungary considered it important to find an acceptable way
to improve the professionalism and expertise of panel members.  His delegation supported the TNC
Chairman's suggestion that the General Council Chairman undertake consultations before the July
General Council meeting, where hopefully an agreed outcome for further negotiations could be found.
277. The representative of China said, that as co-sponsor of document TN/C/W/13, his delegation
wished to support the comprehensive statement by Colombia.  China believed that in a time of
growing global uncertainty and profound challenges to multilateralism, a successful and timely
conclusion of the Doha negotiations would be beneficial for the healthy development of international
trade and would be in the interests of both developing and developed Members.
278. In launching the DDA, Ministers had placed development issues and the concerns of
developing Members at the heart of the negotiations.  It was crucial that all the development issues beproperly dealt with, which would eventually have a positive impact on negotiations on other issues.
While China was disappointed that Members had missed yet another two important deadlines, it
believed that Members were not discouraged and were ready to make further efforts for the success of
this Round.
279. Agriculture was the core of the new Round, and his delegation was pleased to note that the
Chairman of the Agriculture Special Session had organized a series of technical consultations on the
three pillars and S&D treatment for developing and newly-acceded Members.  China fully understood
the challenging task of bridging the widely divergent positions among Members.
280. China believed that the levels of ambition and the balance of the three pillars should be
addressed further, export subsidies should be eliminated as soon as possible, and the modalities to beadopted should substantially reduce all trade distorting domestic support.  It supported proposals to
ease the serious disparities in tariff levels, substantially reducing tariff peaks and tariff escalation, and
simplifying the tariff system.TN/C/M/10
Page 43
281. S&D schemes for developing Members should be established effectively as soon as possible,
and China was encouraged by the recent technical consultations on Strategic/Special Products (SP)
and a Special Safeguard Mechanism (SSM) for developing Members.  It was strongly against the idea
of dividing the developing Members into several different groups for qualification of applying SP and
SSM schemes.  The basic principle of the SP designating approach should be basic criteria, self-declaration and specific numbers.  The SSM should be applied only by developing Members and the
special safeguard under Article 5 of the Agriculture Agreement should be terminated.
282. On non-agricultural market access, his delegation believed the draft by the Chairman of the
Negotiating Group provided a good basis for future work.  China was in favour of the formula
approach, despite there being some uncertainty on wh at coefficient B would be, how to treat different
bound and applied rate among Members, how the principle of less than full reciprocity could be
reflected, and how non-tariff barriers were to be dealt with.  China supported the principle ofvoluntary participation for sectoral tariff elimination, which should only be supplementary to the
formula approach.  It welcomed the Chairman's proposal that a higher coefficient be applied for
newly-acceded Members since it was of great importance to give special consideration to their
extensive commitments which were still under implementation.
283. On the services negotiations, the 29 Members who had tabled their initial offers demonstrated
that the market access front of the service negotiations was proceeding steadily.  However, as stated
by many, not much progress had been seen on other fronts of the negotiations, such as the assessment
of trade in services, the establishment of an emergency safeguard mechanism, and domestic
regulations in which a great number of Members had an interest.  Such an asymmetry was not
conducive to future negotiations.
284. From the initial offers that had been tabled so far, his delegation was disappointed to see that
many of them represented a standstill on sectors and modes of supply of export interest to developing
Members such as mode 4.  China was still working on its initial offers which involved consultations
among many domestic agencies and stakeholders.  Since China was still implementing its accession
commitments, his delegation cautioned against any unrealistic expectations on its initial offers.  Hisdelegation appreciated that many Members had said that they would take into account China's
particular situation in the current negotiations, and it hoped they would translate this understanding
into concrete action when looking at its offers.
285. On the DSU review, it was unfortunate that no consensus had been achieved before the
deadline and Members were now faced with the questions of how to achieve the objectives of
paragraph 30 of the Doha Declaration and how to find an overall balance to reflect the different
interests and concerns of Members.  His delegation wished to emphasize that some useful andconstructive proposals not reflected in the Chairman's text were of equal importance, such as those on
S&D treatment submitted by developing and LDC Members, while other issues, such as sequencing,
which were already in the Chairman's text needed a far deeper and more intensive discussion.  The
objective of paragraph 30 was not to produce a partial outcome, but rather a comprehensive approach
addressing the concerns and interests of all the Members, particularly developing and LDC Members.China supported the proposal to continue the work and to request the General Council to extend the
deadline and was quite flexible on the specific date of the new deadline.
286. The representative of Chile endorsed the statement by Colombia introducing the joint paper
which was intended to be a positive contribution to the preparatory work for Cancún.  Chile was
grateful for the efforts of the Chairman of the Special Session of the DSB and agreed with the TNCChairman's suggestion on how to proceed.  It believed that the text that had been prepared by the
Special Session Chairman could be further improved and that additional efforts were needed to
achieve that, taking the required time.  In looking towards the future, he agreed with Brazil on better
defining the scope of future work and with Mexico on needing to have a more focussed approach on
the main and crucial questions covering the concerns raised by Members.  This meant addressing theissues raised in the area of dispute settlement, including those related to implementation, and theTN/C/M/10
Page 44
incentives or disincentives in the present DSU.  He hoped that through consultations it would be
possible to further analyze these questions and keep them at the heart of the discussions.
287. On geographical indications, Chile believed one could look at the present negotiations on this
issue of from two points of view.  First, it was valid to note that there were different positions and a
broad divergence of views and that it was quite difficult to move along in a negotiation when certainMembers wanted to go beyond the limits of existing legal obligations when it came to a multilateral
registry for wines and spirits.  This negotiation was aimed at implementing Article 23.4 of the TRIPS
Agreement and it did not seek to add new obligations.  The European Communities, Hungary and
other wanted to lead other Members along the path of adding obligations and that was not legally
correct.  They wanted a system that would impos e obligations on all, including those who would not
participate in the registration system.  That is , imposing obligations on a third party country that
would not have undertaken any obligations and therefore had no rights.  That was also not valid inlegal terms.
288. Another way of looking at these negotiations was to say that Members had a minimum
common denominator that was reflected in the positions of those who wanted a registry to be confined
to complying with current obligations.  His delegation believed it was perfectly reasonable to insist on
that approach and requested others to stop insisting on broadening the scope of the registry becauseChile – and the other Members which opposed this – would not accept it and did not feel that it was in
line with international legal standards.
289. This also violated the principle of territoriality on which all the protections of the system of
intellectual property were based and it seemed that these Members wanted to change this in a radical
manner, which was not possible.  Further, these countries were saying that they wanted to expand theregistry to other products which would bring about the problem of implementation.  The problem was
not knowing which products to implement when resp ect of the minimal obligations of this mandate
did not exist.  It was not a question of implementation, but would rather mean forcing Members to
negotiate through indirect means, which was unfair, inequitable, and did not seem to be in accordance
with legality.
290. Perhaps Members should seek a new mandate and then they could review their present
positions on geographic indications, and if the TRIPS Agreement were to be reopened, there would be
no reason to limit the scope to geographic indications.  One could review the entirety of the TRIPS
Agreement.
291. On market access in general, his delegation perceived that all Members had some resistance
when it came to liberalization, which had become part of the negotiating game, and all of these
reservations were becoming stronger, adding up to something that threatened the interests of all and
their support for liberalization.  His delegation believed that this was something that should concern
all Members collectively and had to be an item of political focus.
292. Members should be able to have a positive vision which would make it possible to move
beyond this resistance and their individual sensitivities and problems.  There could be many ways of
achieving this, but his delegation believed there we re two that were complimentary:  First, to have
greater time allowed for implementation so as to bring down the cost of adjustment.  Second, to have
a greater vision and clarity on the benefits of liberalization.  Before Cancún, if Members were to adopt
modalities for agricultural and non-agricultural products, all of them, and particularly developing
countries, should be able to assess approximately where they would benefit from liberalization of
goods and services in their markets, either through a formula approach or otherwise.
293. It was not easy to carry out this analysis, but his delegation believed Members had to carry
out this analytical work so as to reach the approximations that would make it possible to capture more
precisely where the benefits lay.  The Secretariat should use its analytical capacity to work out the
figures.  Such data would make it possible to face these barriers to liberalization and result inTN/C/M/10
Page 45
everyone embracing the benefits that liberalization had promised.  If this was not done, Members
would be carried along by mediocre results and the negotiations for liberalization would move
forward outside the WTO framework.
294. The representative of India said that all the work since Doha was unfinished and Members
were now required to complete it all in the 12 working weeks that remained before Cancún. At Doha,
Ministers, fully realising the time and resource constraints of delegations in Geneva, had carefully laid
down milestones for the phased completion of the Doha Work Programme.  Having breached all these
deadlines, Members had the unenviable task of trying to catch up with this accumulation of work over
the next few weeks.  His delegation urged the TNC Chairman to sit with the Chairman of the General
Council and the Chairpersons of the various bodies and determine how Members could most
productively use this time, keeping in mind the manpower and resource constraints of smaller
delegations.  Compared to previous Ministerial Conferences, his delegation believed that Memberswere considerably behind in the preparatory process for Cancún.
295. Some delegations had referred to their high levels of ambition on market access issues.  Some
had high ambitions while others limited their ambitions to non-agricultural market access alone.
India, and many other developing countries, had high levels of ambition with respect to S&D
treatment and implementation-related issues and was also looking for an early multilateral solution to
the problems of countries with low or insufficient manufacturing capacity in the pharmaceutical
sector.  Scanty results in this area would not be conducive to a soft landing at Cancún.
296. Like many others, India had apprehensions regarding the sectoral approach referred to in the
elements paper on non-agricultural market access, and it was examining the implications of the
formula suggested by the Chairman.  To India, a nd to many other Members, any formula should fully
incorporate the principle of less than full reciprocity and should take into account the financial and
development needs of developing countries.  Both with respect to non-agricultural and agricultural
market access, his delegation attached great importance to the manner in which non-tariff barriers
were addressed.  Low tariffs alone would not ensure market access.  There could be countries that had
relatively low tariffs but still effectively closed their markets to imports that posed a threat todomestic industry or domestic agriculture.  There could also be countries that had relatively high
tariffs but still were far more open to imports from other countries.  Market access was a function of a
number of factors, including tariffs, subsidies, sanitary and phytosanitary measures, technical barriers
to trade measures, border procedures and the like.  Members should attempt to address all these
elements effectively.
297. On the agriculture negotiations, India agreed completely with China on the questions of SP
and SSM in these negotiations.  Members had become accustomed to talking of three pillars inagriculture, but to India S&D issues, particularly SP and SSM, constituted a crucial fourth pillar
without which the edifice would be incomplete.
298. While the overall progress in the services negotiations had been relatively satisfactory, there
was an area of tremendous commercial value to India and various other developing countries where
they expected progress, namely the movement of natural persons, an area of comparative advantagefor developing countries.  These countries were particularly interested in commitments for categories
of movements delinked from commercial presence, such as independent professionals and contractual
service suppliers, but such delinking appeared to be absent in many of the initial offers.  Various
issues like economic needs test, wage parity, visa procedures and recognition of qualifications should
be addressed for providing effective market access in mode 4.  Substantial improvements wererequired in respect of notification requirements under Article VII of GATS, regarding mutual
recognition agreements and the need to provide opportunities to developing countries to enter into
such negotiations while they were being conducted.
299. Many delegations had pointed out in their interventions that much hard work had been done
with respect to the review of the DSU, and the Special Session Chairman’s text had some usefulTN/C/M/10
Page 46
proposals, but further work would be required.  India, as well as some other delegations, had serious
conceptual problems with some of the issues in th e Chairman’s text, and was also concerned that the
S&D element in the joint proposal on litigation costs had been changed in such a manner that it might
now be used against developing countries themselves.  India was flexible on further work on these
negotiations under the guidance of the General Council and it agreed with the TNC Chairman'ssuggestions in this regard.
300. It had not been India's practice to refer to the Singapore issues in the TNC deliberations
because these issues fell outside the mandate of the TNC, and the relevant Working Groups and the
Council for Trade in Goods reported to the General Council.  However, due to these issues being
raised in interventions at the present meeting in the context of development of issues relevant to
Cancún, he wished to make India's positions on these issues absolutely clear and reiterate some of the
points he had made at the informal meeting held by the Chairman of the General Council the previousFriday.
301. India had opposed the commencement of these negotiations at Doha.  However, some trading
partners had interests in these issues, and Members had decided to undertake a focussed clarification
process on them in order that a decision on the launching of negotiations might be taken at Cancún.
This was on the clear understanding, expressed in the Chairman’s statement at Doha, that a decisionby explicit consensus would be required before negotiations could proceed.  The Chairman’s
statement was in fact a reiteration of the decision at the Singapore Ministerial Conference to launch
negotiations only after an explicit consensus decision.  In order to take such a decision on any of the
Singapore issues, Members should have complete certainty regarding the substance of each of these
issues.  The clarification process was intended to ensure that the substance of the Singapore issueswas properly defined.  India had entered this process of clarification with a genuine desire to put
forward its concerns and hear the views of its trading partners.  On each of these issues, India had
submitted various papers and made interventions highlighting concerns and problems.
302. As he had indicated on Friday, the situation with respect to most issues was still unclear.  For
example, the scope and definition of investment wa s still unknown.  The question of whether it would
be confined to foreign direct investment leading to substantial expansion of trade or whether it
included portfolio investment and other short-term forms of capital flows was still not answered.  The
manner in which investor obligations and home country enforcement measures would be dealt with
was still unknown.
303. On transparency in government procurement, it was uncertain whether the “rule of reason”
approach would be applied with respect to international cartels or domestic cartels, or the kind of
hardcore cartels that would be banned and how they would be defined.  There were differences ofopinion between Members on whether co-operation between competition authorities would be
voluntary or mandatory.  The threshold levels of government procurement operations which would be
covered by the multilateral framework on transparency in government procurement was yet to be
determined or even whether it would apply to entities other than federal governments.  Members had
wide divergences in approaches to the principle of non-discrimination as it applied to investment andto competition policy and to government procurement.  Likewise, there were strong differences on
balance of payments provisions and the flexibility available to Member countries.  Different views
had also been expressed on whether the developed rules, if any, would be binding or non-binding.
304. The point could be raised that these issues could be determined through negotiations.
However, India had strong reservations about entering into negotiations without a full understandingof the nature and structure of the agreement that would emerge.  At present, it had only vague and
nebulous concepts and ideas on Singapore issues.  It was expected that the process of clarification
would flesh out these concepts.  Unfortunately, this had not happened.  The decision taken at Doha for
a clarificatory process was not a mere ritualistic exercise, intended to kill time until negotiations could
be launched at Cancún.  India's previous experien ce with the WTO did not give it the confidence to
enter the negotiations blindfolded.TN/C/M/10
Page 47
305. India did not believe that modalities consisted of procedures or a bare bone structure of issues
to be included in the negotiations.  Modalities gave the structure and pattern that determined the
direction and nature of commitments and obligations.  If it had been the intention of Ministers merely
to indicate the chapter headings of issues to be negotiated and to lay down a timetable, they could well
had done this at Doha.  The Chairman of the General Council had commenced another exercise onthese issues with the Chairpersons of the concerned bodies as his “friends” to assist him.  India would
participate constructively in this exercise also, as it had done in the deliberations in the Working
Groups and the CTG.   As Malaysia had mentioned on several occasions, India also had no linkages
of any kind so far as the Singapore issues were concerned.  They were stand alone issues to be dealt
with on their merits, but India had to be convinced of their merits.
306. The representative of the Czech Republic said it was obvious from the Chairpersons' reports
and the statements by Members that the state of play of the DDA negotiations and preparations for
Cancún did not leave any room for complacency.  Members should be concerned about a lack of
headway in a number of areas and a growing number of missed deadlines.  However, this was not to
imply that the situation was gloomy and that no effort had been made to break the key deadlocks
along the way.  Despite all the setbacks and missed deadlines, Members had refrained from
highlighting negative linkages, and remained engaged and committed to finishing the Round by theagreed deadline.  For success in Cancún and beyond, there should be more engagement and goodwill
from all to move the negotiations into a higher gear.  New political momentum was needed, and the
commitment by the G-8 and other countries the previ ous week in Evian to provide new impetus to the
Cancún process went in the right direction.
307. In the non-agricultural market access negotiations, notwithstanding the efforts of the
Chairman of the Negotiating Group, Members had not been able to arrive at an agreement on how to
reduce or, as appropriate, eliminate tariffs and non-tariff barriers on non-agricultural products.
However, a couple of points of convergence appeared to be emerging on which to build in the run-up
to Cancún.  Members were closer to a common understanding of the basic approach, at the heart of
which was a single formula aimed at reducing tariffs across the board and engaging all Members.
308. The one suggested by the Chairman had not attracted a general consensus given the large
number of concerns about its implications.  For the Czech Republic, the most worrying element
related to the suggested use of a country's average tariff rate as a formula variable, and it had serious
doubts about its potential of addressing the existing differences in the levels of effective market
openings and compressing tariffs into a flatter rang e, without forgetting about tariff peaks and high
tariffs.  While agreeing with the objective of su pplementing the formula through a sector elimination
approach, it would be difficult for his delegation to agree on any of the sectors identified to date whilenot having more clarity of the formula to be used.  For his delegation, the time was not yet ripe to
target any products or groups of products for tariff elimination.
309. Other elements in the Chairman's paper also worried his delegation, including those related to
low levels of ambition in the area of tariff bindings.  Nevertheless, he wished to assure the Chairman
of his delegation's full support of his endeavour to find an approach which struck a proper balancebetween the positions of Members, and he was confid ent that in searching for such an approach, all
Members had in mind reaching a high quality and ambitious market access deal.
310. The Chairman of the Special Session of the DSB had been entrusted with an extremely
challenging task, and should not be made accountable for a lack of an agreement by the mandated
deadline, but nor should the Members for it was simply the nature of the terrain which had proved tobe much more difficult than originally expected.  The Czech Republic was not a frequent user of the
dispute settlement system, but it had a major systemic interest in the proper functioning of the DSU
and the most important element in this ongoing rules setting exercise had always been the quality of
the changes to be made.  The Czech Republic had always been in favor of a comprehensive approach
and it was also how it understood the negotiations in which it had been engaged for some time.TN/C/M/10
Page 48
311. These negotiations were not just about what might appear to be doable or about issues with a
high probability of achieving consensus.  As in any other area, they were about specific proposals
tabled by various Members and their legal and proce dural right to pursue them with a view to finding
solutions which accommodated their various views and interests.  Given that a number of issues
required further attention, Members had no other choice but to continue their collective journey toreach an agreed outcome, and this was what Members seemed to be prepared to do.  The Czech
Republic encouraged all partners to show a sufficient level of pragmatism and understanding for the
positions of others when considering questions on how to proceed further.  This implied that all
delegations should refrain from attempts to limit the scope of the continued negotiations to the issues
contained in the Chairman's text.  Proposals wh ich had not yet found their place there should receive
equal treatment and attention.  The Czech Republic could go along with the TNC Chairman's
suggestions for the coming weeks and he was confid ent that it would result in something which was
acceptable to all.  The objective of a strengthened dispute settlement system was worth that additional
effort.
312. On agriculture, his delegation appreciated the useful technical work that had been
accomplished under the leadership of the Chairman of the Special Session. This work was needed to
enable Ministers to focus on issues requiring political  decisions, and any deal in this area would only
work if it took adequate account of the interests of all Members.  Moreover, one had to recognize that
if a change had to come, it had to come elsewhere.  On services, his delegation agreed with many who
had said the negotiations had proceeded smoothly, but Members should not lose sight that the most
difficult part of the exercise was still ahead.
313. On geographical indications, his delegation believed that this was an area where Ministers in
Cancún would have to take appropriate actions, both with regard to the register and to the extension of
protection.  For the Czech Republic, these two elements were integral parts of the Single Undertaking
and they represented essential ingredients for success in Mexico.  In response to the concerns
expressed by Chile on reopening the TRIPS Agreement on the issue of the scope of GIs, he said his
delegation did not agree.  Ministers, by endorsing the TRIPS Council 1996 report, had admitted thatthe Article 24.2 review also included the issue of the scope, and since then a group of countries
including his own was taking strides to advance negotiations in this area.
314. His delegation welcomed the paper introduced by Colombia on behalf of a number of
developing countries.  This paper provided a necessary boast to the ongoing process, and was
testament to these countries' concern for the multilateral trading system and success of the Cancún
Ministerial Conference.  His delegation agreed that Members had to deliver on their promises to place
the development dimension at the heart of the Round, and was appreciative of the objective of betterintegrating developing countries into the multilater al trading system as well as of the need for
transparency.  While supporting the concept of the overall balance of the package, his delegation
believed this balance had to be sought within the various issues.  His delegation might have doubts or
concerns about some aspects of the paper, but Members needed to strive for a proper balance between
the objective of providing S&D treatment to those in need, while also having meaningful
contributions from all Members to win the prize of success in Cancún.
315. The representative of Thailand said that her delegation associated itself with the presentation
by Colombia of the joint paper.  The key actions suggested by the paper needed to be taken seriously
at this stage in order to keep and enhance the momentum of the negotiations.  Based on the meeting of
APEC Ministers Responsible for Trade held in Thailand last week, Thailand had been encouraged bythe support of the APEC Minister s given to the DDA.  They had noted the need for progress on the
core economic agenda and that European Union action on common agricultural policy reform would
be a positive step in this process.  They had also affirmed that the success of the DDA would largely
depend on the progress made in agriculture, market access for goods and services and development-
related issues, and they had pledged to work to ensure the successful conclusion of the DDA by 1TN/C/M/10
Page 49
January 2005.  Her delegation had requested that the Statement of the Chair of the meeting be
circulated to all Members1.
316. On agriculture, while her delegation appreciated the consultations on technical work on
various items needed to complete the modalities , it agreed with the Agriculture Chairman that
Members needed to see signs of flexibility and development in these negotiations by the end of Juneor early July at the latest.  Members should be able to attain high levels of ambition in market access
for agriculture if they did not have trade-distorting subsidies and support.  Positive development in
these negotiations was imperative to the progress of negotiations in other areas, including non-
agricultural market access and services, and the level of ambition here would be the benchmark for
the level of ambition in the other areas.
317. On non-agricultural market access, the proposal by the Chairman of the Negotiating Group
could be used as a basis for continuing negotiations, even though S&D treatment and less than fullreciprocity for developing countries had not yet been reflected in the formula.  Her delegation was
prepared to work with the Chairman in refining  the formula to have it accepted by all Members.
However, if a positive outcome of these negotiations was to be achieved by Cancún, Members needed
to engage in serious and exhaustive discussions from now on, and should be willing to compromise
and make constructive contributions as necessary.  Negotiations on tariffs would not be completed ifthe negotiations on non-tariff barriers were left out.
318. On services, the negotiations thus far were progressing in a satisfactory manner judging from
the number of the offers that had been submitted and those under preparation for future submission.
However, the market access aspect of negotiations was only one side of the coin.  The other side, the
rule-making aspect of services negotiations, namely domestic regulation, safeguards and subsidies,was progressing very slowly.  Her delegation hoped that when the Ministers at Cancún took stock of
progress made so far in the services negotiations, the development should be balanced.  Developing
countries should also gain access in the areas of their exports such as tourism, construction and
mode 4, and negotiations on rules and regulations should also progress adequately with market access
negotiations.
319. On dispute settlement, her delegation recognized the difficulties in resolving differences
among Members by the May 2003 deadline and, in light of the substantial progress made in the
negotiations, supported continued negotiations beyond the May deadline with the scope of limiting
the proposals made until May 2003.  Finally, she wished to reiterate that the agreement on modalities
for further commitments in agriculture would be the key to a successful Cancún Ministerial
Conference as it would unlock the door for deals in other areas of the negotiations.
320. The representative of Switzerland said the joint paper introduced by Colombia touched upon a
number of important concepts, and his delegation agreed with many of its points, especially on the
principle of balance, which stipulated that no sector could be isolated from the others, both in the
assessment of results and in the negotiating process.  It would be a fatal mistake if the entire
negotiation depended on the progress in one or several areas.  This was what had doomed the Seattle
meeting, and his delegation hoped that Members would be able to be realistic and make progress onthe entire negotiations to bring all the subjects to a similar degree of maturity by Cancún.
321. In line with the Doha Declaration, Switzerland believed that the concerns of developing
countries were of vital importance, and it could never be underlined enough that the negotiations
launched in Doha, particularly on market access, had brought them a unique opportunity to promote
their integration into world trade.  The initiative by the Chairman of the General Council had given a
new impetus to the work on S&D treatment and his delegation hoped for progress in the coming
weeks.  On implementation-related issues, his delegation was determined to contribute to the
                                                     
1  Subsequently circulated in document WT/L/520.TN/C/M/10
Page 50
development of a mutually satisfactory solution and welcomed the TNC Chairman's work on the
extension of protection of GI's as a matter of interest to developing as well as developed countries.
322. During the past 18 months, the Special Session of the DSB and notably its Chairman had
made a major effort to reach agreement.  Unfortunately, Members had not yet reached a level of
common understanding which would allow a final text acceptable to all.  The Chairman's text was agood basis for future work, and Switzerland was prepared to work further on the basis of this text to
achieve a substantive result in these negotiations.  However, his delegation was convinced that the
mandate contained in paragraph 30 of the Doha Ministerial Declaration, however one read it,
contained a target date that did not restrict further negotiations after the end of May, so no new
mandate was needed to continue work clarifying and improving the DSU.  Given the differing views
on these questions, some had suggested that the TNC should decide on whether a new mandate was
needed or not.  However, in the intervals between  meetings of the Ministerial Conferences, it was up
to the General Council, not the TNC, to carry out functions assigned by Ministers, so the General
Council should make a decision on any extension issue.
323. The Ministerial Conference in Cancún was already burdened with a heavy workload on a
wide range of issues.  It was crucial not to over burden the agenda in Cancún, so Members were better
off solving this issue at the next meeting of the General Council.  On the future work in the DSU
review, his delegation shared the view of others that a fixed deadline for completion was necessary.
This deadline should ensure that the DSU review would not become part of the Single Undertaking
while leaving sufficient time to complete the task.  His delegation suggested a deadline of next spring,
but if more time was needed for a complete review, Members had to demonstrate the necessary
goodwill and faith and set a later deadline.
324. In the negotiations on services, fewer than 30 Members, of which many were from
developing countries, had made their offers known to partners.  This could be considered positive, and
the negotiations had entered into a new phase in the cluster of meetings which had concluded two
weeks previously.  His delegation would note that the levels of ambition in the offers was quite
unequal, and it believed that a reasonably high level of ambition should be the rule to ensure asuccessful conclusions of the negotiations.  Switzerland felt that the bilateral discussions had been, on
the whole, quite constructive.  This showed the seriousness and the understandable interest of all
Members in making progress on this key dossier for the Doha Round.  It was important to ensure that
the number of Members actively involved in discussions increased significantly before Cancún to
ensure that the GATS negotiations could reach an appropriate cruising speed leading to specific and
substantive results within the deadline of 2005.  The emphasis on bilateral negotiations at this stage
should not undermine the importance of the work at the multilateral level, especially modalities forLDCs.
325. Undoubtedly the agriculture negotiations were important for developing countries and also for
developed ones such as Switzerland.  These negotiations were on hold while some important
discussions took place, but his delegation believed that the result in Cancún should be balanced and be
part of the continuing process that had been started in the Uruguay Round, and a rupture to it.Switzerland was resolutely pursuing reform at a spee d and with instruments which, in line with the
Doha mandate, maintained the non-trade aspects of agriculture.  The text submitted by the Special
Session Chairman did not meet that criteria and Switzerland hoped that it would be possible to
rebalance it in order to reach an agreement at Cancún.
326. On non-agricultural market access, the discussions held the previous week on the Chairman's
document last week had enabled Members to look at a number of sensitive points where a
concentration of efforts was needed.  The time available before Cancún should be used to ensure that
Members could specify and improve these first elements of modalities to give Ministers a solid basis
for decisions.TN/C/M/10
Page 51
327. On the Singapore issues, the preparatory work being undertaken by the Chairmen of the
General Council and the TNC came at a proper time.  It was urgent that a political process took over
from the technical activities that had been carried out in the various working groups.  This objective
came from the Doha Declaration, and it was clear and indisputable that Members had to prepare
modalities for Ministers to take decisions on them.  His delegation believed that a number ofprinciples should guide this work:  1) Members should work within a coherent framework dealing
with all four issues;  2) It was not a matter of reinventing the wheel but rather using what had already
been agreed by Members;  3) Members should avoid pre-negotiating the results, and they would have
to find a balance in this third principle and the degree of precision of the negotiating mandate.  His
delegation had listened to the statement by India on certain specific matters arising from the
Singapore issues, and believed that the specific questions raised by India should be among the
subjects of the negotiations.
328. On the question of access to medicines, Switzerland would work towards finding a solution
before the Cancún Conference with two objectives in mind:  to improve accessibility to medicines in
poor countries and to ensure that patent protection continued to promote research and development of
new therapies.  The solution would depend on an effective market segmentation and would be based
on a system of solidarity between countries of high revenue and those of low income.
329. The issue of GIs was still a subject of major disagreement between Members, and the
approaches which had been proposed diverged diametrically with respect to the nature and legal steps
of the register.  This was a worrisome situation since the negotiations were supposed to be concluded
before Cancún.  For Switzerland, the resulting instrument should have obligatory force in order to
ensure effective legal protection of GI's for wines and spirits.
330. The representative of Costa Rica said that the text by the Chairman of the Special Session of
the DSB submitted to Members on 28 May was a good basis for reaching an agreement within the
deadline established in Doha.  It reflected the positions and interests of the majority of Members, and
Costa Rica believed it contained the necessary elements to allow consensus to be reached and to
comply with the Ministers' mandate.  For this re ason, his delegation hoped work would continue on
the basis of this text and that, in the near future, Members would be able to conclude the review of the
DSU.  His delegation was ready to consider the various options for continuing the work, as long as it
did not jeopardize the principle that these negotiations were outside of the Single Undertaking.
331. Costa Rica was expecting ambitious results in the market access negotiations because it
depended on the economic growth and development of all countries, and its government would not be
satisfied in this undertaking if it lacked ambitious re sults in all three pillars of agriculture as stated by
the Doha mandate.  The President of Burkina Faso had spoken of the devastating effect thatagricultural subsidies had on efficient producers from developing countries and LDCs.  His delegation
trusted that the negotiations underway would make  it possible to find a rapid solution to the serious
distortions caused by subsidies.
332. The negotiations on market access for non-agricultural products should also have a high level
of ambition, which would make it possible to substa ntially increase trade, including South-South
trade.  A study financed by the Government of the Netherlands, which had just recently been
presented during an informal meeting, stated that the global benefits of the Doha Round for
developing countries were mainly concentrated in improvements in agriculture and market access for
non-agricultural products, which were important conclusions.
333. The text by the Chairman of the Negotiating Group contained a number of elements which
would make it possible for Members to move in the right direction.  However, it also contained
components needing revision, some of which wo uld create wide differences among developing
countries which did not correspond to the different levels of development, such as the possibility of
not consolidating up to 5 per cent of tariffs.  His delegation wished to emphasize the importance of
moving in the right direction, rather than merely moving.  Efforts to seek the interests of all was valid,TN/C/M/10
Page 52
but should be taken within the context of respecting existing roles and based on long term objectives
of development.
334. The objective should be to reach higher levels  of development through international trade, so
his delegation was surprised when certain delegations said that preferences should not be eroded in
negotiations on market access.  The short term objective of reaching consensus should not make onelose sight of the ultimate objective of development, and that the important consideration which had
led to the Enabling Clause.  Paragraph 3(b) of the Enabling Clause set out that preferences should not
constitute an impediment to the reduction or elimination of tariffs and other restrictions to trade on a
most-favoured-nation basis.  This applied to both the negotiations on agriculture and on non-
agricultural products.  If a process of adjustment  was required by developing-country Members as a
result of erosion of preferences, Costa Rica would favour the World Bank and the IMF assisting these
Members to carry out their readjustment.  Costa Rica felt that the results of the negotiations on marketaccess should have a positive effect on all economies, and for this to occur, rules should be
strengthened, in particular anti-dumping.
335. On development-related issues, Costa Rica reiterated its support for the work by the
Chairmen of the General Council and TNC on S&D treatment and implementation-related issues,
which it was confident would lead to a fruitful harvest before the Fifth Ministerial Conference.  Onthe question of TRIPS and Public Health, it was crucial that a solution be found as soon as possible.
The development dimension was absolutely essential in the Doha package and his delegation agreed
with the assessment contained in the document submitted by Colombia and other countries.
336. Costa Rica was satisfied that a process of consultations on the Singapore issues had been
started by the Chairman of the General Council.  These issues had been part and parcel of the workprogramme during the past 8 years, and the study phase had been useful.  The four issues were now
ready to move on to the phase of negotiations.  In these consultations, it was important to achieve
progress that would make it possible to take decisions in Cancún on the modalities of negotiations for
the four issues.  Finally, Costa Rica wished to echo the statements by others on the need for overall
balance, in line with the Single Undertaking, in the Doha package.
337. The representative of Botswana, speaking on behalf of the ACP Group
, said that Cancún was
three months away and the ACP Group was concerned that progress on implementing some of the
major items in the Doha Work Programme remained limited.  The slow progress on some issues and a
series of missed deadlines were in danger of overloading the agenda in Cancún and exacerbating the
capacity constraints of small delegations both at the Ministerial and in the post-Cancún negotiations.
In the light of this difficult reality, the ACP Group called all delegations to make every effort in the
coming days to progress on as many outstanding issues as possible, particularly with regard to S&Dtreatment, implementation issues, agriculture, serv ices, rules, trade and environment, small economies
and TRIPS and Public Health, which were significant to developing countries generally.
338. The ACP Group called on fellow WTO Members to ensure that the issue of TRIPS and Public
Health was addressed satisfactorily before the Cancún Ministerial Conference.  It had stressed on
several occasions the importance of this issue to delegations as it had serious ramifications due to thesignificant loss of lives.  The ACP Group was ready to continue discussions to find a sustainable,
legally binding multilateral solution that did not in anyway limit the flexibility and breadth of the
Doha Declaration.
339. The ACP Group shared the disappointment of ot her WTO Members that the Special Session
of the DSB was unable to reach consensus on the proposals for the improvement and clarification ofthe DSU by the end of May 2003 deadline set in paragraph 30 of the Doha Declaration.  The Special
Session had begun to make some progress in its work, and not to lose the momentum that had
developed, the Group advocated the continuation of th e negotiations using the Chairman's text as a
working document.  This area was of particular concern to the Group as many of the proposals related
to needed improvements of the DSU that would make the dispute settlement system more accessibleTN/C/M/10
Page 53
for developing countries and more efficient overall.  The Group agreed with the TNC Chairman that
the mandate of the Special Session be extended to facilitate the completion of the important work that
it had begun.
340. The discussions on the Singapore issues confirmed that each had its own peculiar aspects and
complexities, and the ACP Group was yet to be convinced of the merits of elaborating multilateraldisciplines in these areas, at this time.  The ACP Group's focus on development prompted it to raise
the activities of the Working Group on Trade and the Transfer of Technology.  It was vital that this
work continue, given the importance of technology to the long-term development of countries, such as
those in the Group.  The Group supported the examinat ion of problems that hindered the transfer of
technology, as well as the high tariffs on technology products, among other things.
341. The Group was disappointed at the failure to meet the deadline on adopting modalities for
non-agricultural market access as set out in the Doha Declaration.  The draft modalities that werebeing discussed at present did not adequately address the realities of the ACP Group and other
developing countries.  The Group was particularly concerned that the draft did not take into account
possible liberalization effects on developing countries that were currently benefiting from preferences.
Severe and rapid reductions in tariffs would have a significant negative effect on the industrial
policies of these countries as well as impact on government revenues.  In order to develop consensus,the draft modalities should take into account these and other issues of importance to developing
countries.  It was the Group's hope that the Chairman of the Special Session would continue his
consultations with a view to developing a solution suitable to all.
342. Finally, she wished to underscore the firm commitment of the ACP Group to the negotiating
process and to working with other WTO Members to make solid achievements prior to Cancún.  Thispreparatory process should be undertaken in a transparent, balanced and all-inclusive manner to
ensure the success of the upcoming Ministerial.  It was essential that there be tangible evidence of the
WTO's commitment to the development aspects of the Doha Work Programme.
343. The representative of Kenya noted that many of the negotiating groups had been fairly active,
but despite these efforts, progress had not been made as had been anticipated.  Her delegation noted
with concern that the draft elements of modalities by the Chairman of the Negotiating Group on
Market Access did not take into account the legitimate concerns and substantive issues raised by most
developing countries.  The proposed formula would not achieve the less than full reciprocity mandate,
and its application would have disastrous results for the economies of these countries.
344. While the work of refining and adjusting the basic elements would be gigantic in view of the
divergent views expressed by Members, it was her delegation's expectation that the modalities should
incorporate effective S&D provisions.  These should include less than full reciprocity in the formula
approach, as well as mechanisms to address the loss of preferences in light of the envisaged tariff
liberalization.  Non-tariff barriers should also be effectively addressed, while the increased scope of
binding on unbound items should be treated as concessions and as such they should not be subjected
to any further disciplines.
345. On services, her delegation took note of the Special Session Chairman's report and the limited
number of Members who had so far submitted initial offers. The small number of offers was partly
due to difficulties that developing countries like hers faced in allocating adequate resources to
evaluate market access requests and in developing offers, as well as the fact that negotiations were
lagging in other important areas after important deadlines had been missed. Furthermore, examination
of some of the initial offers had revealed a tremendous imbalance with the demands that had been putforward to developing countries.  The offers circulated so far indicated insufficient market access
commitments, particularly in areas of interest to developing countries, and were confined to binding
status quo rather than offering real liberalization.TN/C/M/10
Page 54
346. The link that existed between the market access negotiations in services and the negotiations
currently underway on GATS rules and domestic regulation was an important one.  The latter should
be concluded before the completion of negotiations on specific commitments, as provided for in the
Guidelines and Procedures for the Negotiations in Services.  The slow progress, particularly on
safeguards and subsidies, needed to be discussed by Ministers at Cancún to ensure that a frameworkwas reached for addressing these issues as a matter of urgency.
347. On agriculture, it had been encouraging to hear from the Chairman of the Special Session that
some progress had been made on a number of technical issues in the consultations.  However, her
delegation was concerned that Members' positions were still far apart and that there was an urgent
need to bridge the differences in light of the approaching Cancún Ministerial Conference.  Flexibility
and sacrifice would be required from all Members, in particular the developed Members.  The
negotiations would have to take the special needs and interests of developing countries into account,and maintain and enhance the S&D provisions already identified in the revised modalities paper.
Kenya believed a major political impetus would be required to narrow the differences that still existed
in this area.
348. On trade and environment, Kenya noted that the negotiations were converging towards the
specific trade obligations (STOs) contained in a number of MEAs.  This was a good move as it wouldhelp Members focus on the relationship between ex isting WTO rules and STOs set out in MEAs, as
provided for in paragraph 31(i) of the Doha Declaration.  On environmental goods, although the
OECD and APEC list could be a good starting-point, th ere was a need to define or to come up with a
list of environmental goods of export interest to developing countries.  Kenya expected those
environmental goods identified by the CTE Special Session to be subjected to the same rulescontained in paragraph 16 of the Doha Declaration.
349. On Singapore issues, substantial discussions had taken place in the respective working
groups, however the level of progress was varied.  Kenya expected that each of the subjects would be
treated separately in accordance with their different mandates.  There was still a lack of sufficient
convergence on certain issues, so further technical work was necessary.  For Kenya, the level ofconvergence on the issues should determine the kind of modalities that Members should adopt on
each of the subjects.  With respect to the mandate for these issues, explicit consensus on the
modalities was a precondition for the negotiations to commence.  Finally, development issues were
core to the Doha Work Programme and Kenya shared many of the views expressed by Colombia on
behalf of a number of developing countries.
350. The representative of El Salvador endorsed the statement by Colombia introducing the joint
document which his country had co-sponsored.  With only 12 weeks until the Ministerial Conference,
he wished to set out the position of his country.  El Salvador believed it was necessary to recall the
serious commitment undertaken by all Member governments when they had adopted the Doha
Declaration.  It agreed with the statement by the United States at the last TNC meeting that it was
important that the level of ambition allow the negotiations to conclude within the timeframe set out.
For this to happen, El Salvador believed it was indispensable to take into account what had beenagreed by the Ministers in Doha with regard to  S&D treatment for developing countries and LDCs.
The multilateral trade system should be taken care of not in light of theoretical rules, but rather as a
tool for development which would make it possible to guarantee the well-being and dignity of each
and every human being in Member countries.  Hong Kong, China had used the analogy of a tool box
and while this was true, one had to be quite careful about what kind of tools one would end up with,and what kind of new tools were still needed to put into the box so that Members would be able to
carry out their work more effectively.
351. For El Salvador, trade policy played an important role in growth and it firmly believed that
increasing trade led to increased employment, which was an indispensable element for the
development of a prosperous country and a good societ y.  El Salvador was convinced that for a small
country, international trade represented the most important vehicle towards growth, development andTN/C/M/10
Page 55
integration in world trade.  But at the same time, El Salvador was aware that its benefits had not
always reached certain sectors of its population.  That was why it was important for Members to be
able to count on the WTO, with development tools that would make it possible to bring greater
dignity and well-being to the people of their countries, which would lead to sustainable democracies.
This was why the system had to be more inclusive and participatory in every possible way.
352. As the Cancún meeting neared, El Salvador wished to express its concern at the lack of
progress in the negotiations under the mandate from Ministers in Doha, particularly in the areas of
agriculture, non-agricultural market access, S&D treatment, and TRIPS issues, especially Public
Health.  However, these concerns would not prevent El Salvador from firmly supporting the
negotiations towards their conclusion in line with the parameters and guidelines set out by Ministers.
If a certain delay in the deadlines would bring about better results in sensitive areas of negotiation,
then this would be welcomed.
353. On intellectual property, El Salvador had made great progress and had taken the commitments
endorsed most seriously, but it was not in a position to take on board new obligations, especially if
these were not included in the negotiating mandate defined by the Ministers or within the agreements
governing these issues.
354. El Salvador, like many others in the Latin American region, depended on its agricultural
exports as a main source for foreign currencies, income and employment.  More than two-thirds of El
Salvador's population lived in rural agricultural areas and their great dependency on commodity prices
had been worsened by the decrease in international prices for coffee which had affected its trade
balance.
355. El Salvador was participating in the present negotiations because it was convinced that it was
necessary to continue the process of reform which would reduce or perhaps eliminate tariff duties.  It
was determined to work within this organization for a fair multilateral trading system, which would
ensure an efficient and fair trade flow and domestic  policies to help the rural sectors of its region.  El
Salvador hoped that modalities would be established before Cancún that would reflect the interests of
countries like it, and which would take into account the great sacrifices that they had already made inacceding to GATT and later on to the WTO.  El Salvador wished to recall that the Doha Declaration
gave specific instructions to improve market access, reduce export subsidies, and incorporate the
principle of S&D treatment for developing countries as an integral part of all of the elements of the
negotiations.
356. On non-agricultural market access, El Salvador was assessing the impact of the formula
presented by the Chairman of the Negotiating Group and the other elements contained in his
document, and it hoped that fair S&D treatment for developing countries would be taken into account.There were still a lot of points that needed to be clarified in the Chairman's approach, including the
need for a sectoral approach and how to ensure  the principle of less than full reciprocity.
357. On the dispute settlement negotiations, El Salvador hoped that the improvements to the DSU
would guarantee an adequate balance between the ri ghts and obligations of developing and developed
countries.  For this reason. despite the May deadline, El Salvador endorsed the TNC Chairman'sproposal for further work and the statements by others that this was not part of the Single
Undertaking.  El Salvador was flexible about the new deadline as long as the results achieved at the
end of the day were beneficial to all, in particular to developing countries and LDCs, and 2004 could
be acceptable.
358. On the services negotiations, El Salvador was analyzing the requests submitted by some
Members and hoped to be able to react soon.  It wished to reiterate that many of the final
commitments made in this field would depend on what was being done on the horizontal issues
related to GATS rules.TN/C/M/10
Page 56
359. The representative of Bangladesh, speaking on behalf the Least-Developed Countries , said he
wished to draw the attention of delegations to the recent Second LDC Trade Ministers' Meeting,
which had been held in Dhaka from 31 May to 2 June.  The purpose of the Meeting had been to
exchange views on the on-going negotiations and the Fifth Ministerial Conference.  Following the
exchange, the Ministers had unanimously adopted the Dhaka Declaration, which outlined the majorconcerns of LDCs and their negotiating positions in selected areas of the current negotiations.  He
would urge the membership to give full support to the Dhaka Declaration, as well as the appeal from
the LDC Ministers.
360. On the services negotiations, he said the LDCs had submitted a text of draft modalities that
would be applicable to their group of countries, and following discussions and comments received,
the Group had revised the draft modalities and had made a new submission.  As the Chairman of the
Special Session of the Council for Trade in Services had explained, there had been a first round ofdiscussions on the revised modalities, and many Members had provided full support to the LDCs'
proposals, which was appreciated.  Some questions had been raised, to which immediate responses
had been provided.  Several delegations had requested more time to examine the text and come up
with comments and he expected to re-engage on the draft text following the present meeting.
361. The LDCs attached a great deal of importance to these modalities, which should set the
framework for special treatment for the LDCs in the services negotiations on the basis of non-
reciprocity.  He wished to emphasize that the LD Cs did not want complete derogation from the WTO
disciplines, but rather a degree of flexibility in  undertaking commitments, and special treatment, to
enable their effective participation in the area of services.  Given the nature and level of LDC
development, this should not be difficult for the WTO membership to agree on.
362. A few Members had expressed the view that there should not be a pre-determined outcome,
and the LDCs agreed.  However, their experience from past negotiations had been that unless there
was specificity in the language, with a clear statement of the objectives, the outcome might be
uncertain.  The LDCs could not afford this, as it  was the only chance they had for negotiating the
modalities.  Members needed to be as specific as possible at this stage and not leave issues to a laterstage for interpretations and he hoped the membership would appreciate the Group's concerns.
363. Numerous studies had indicated the vast potential of liberalization in the area of movement of
natural persons under Mode 4, and within this sector the greatest potential seemed to be offered by the
temporary movement of unskilled and semi-skilled persons.  It had been estimated that the latent
benefits to the receiving and sending states would be far greater than the complete liberalization of
trade in goods.   The industrialized and developed countries were pursuing their own interests in the
services area and the LDCs were looking for the support of these countries when they advanced theirown proposals, particularly as they would be intended to benefit all.  The LDCs believed that no other
area had so much to offer to them and to other Members.  The Group requested the membership to
adopt the modalities before the Ministerial at Cancún.  Finally, the Group fully associated itself with
the statement by Colombia.
364. The representative of Panama said his capital was still studying the specific aspects of the
proposal presented by Colombia on behalf of a number of developing countries.  His delegation
wished to express its respect for this initiative whic h involved countries from all areas of the world.  It
believed that the relevant aspects of this proposal would guide Members towards consensus and
suggested that all Members look at it carefully.  Members should not lose site of the positive message
which was so important for the future of the organization.
365. The representative of Paraguay said his delegation believed that the text presented by the
Chairman of the DSB Special Session constituted a basis for work, however there were some
substantive elements that should be considered, such as improving developing countries' access to the
dispute settlement system.  His delegation had submitted a proposal in December 2002 which had yet
to be discussed substantively in the Special Session.  He wished to reiterate Paraguay's commitment toTN/C/M/10
Page 57
meeting the deadlines set by Ministers in Doha, and it s support for transparency in this process.  But
what interested it most of all was a dispute settlement system which was balanced in terms of rights
and obligations, and it was prepared to continue working on the basis of all the proposals that had
been tabled.
366. Turning to market access, he said that this ar ea was the highest priority for Paraguay because
it represented an opportunity for it to integrate itself into the multilateral trade system. For this reason,
Paraguay had a global view on the balance between access to markets for agricultural products, for
non-agricultural products and for services, seeing positive linkages among them, because it had a
coherent level of ambition in all three.
367. In the light of this, agriculture was the core of the negotiations for Paraguay.  In his statement
under agenda item 2(a), he had set out the reality of agriculture for his country.  Progress on the three
pillars was vital in agriculture.  His delegation thanked the Agriculture Special Session Chairman forhis effort in the technical work, but it was fundamental to keep in mind the ambition set out in the
Ministerial mandate from Doha and to set modalities as quickly as possible.  That was the substantive
element that was needed to move the negotiations forward and to generate credibility in the WTO
system.
368. Paraguay had been participating actively in the services negotiations. It had submitted its
initial requests, despite not being an exporter, and its initial offers, both within the deadlines.
Paraguay had assumed the challenges and was undertak ing reforms, with a view  to helping construct
fair and equitable trade which offered real opportunities to all.  This was the positive linkage that
Paraguay was making in the negotiations.  In services, Paraguay was concerned at the lack of progress
on horizontal rules, particularly on emergency safeguard measures and subsidies, where the lack ofclear and transparent mechanisms hindered free trade.
369. In the non-agricultural market access negotiations, his delegation welcomed the Chairman's
proposed elements for modalities.  His capital would evaluate the proposed formula, which was why
his delegation would not offer an opinion at this stage.  On the base rate, his delegation agreed that the
reduction criteria for developing countries and LDCs should not be same as for developed countries,taking fully into account what had been set out in paragraph 16 of the Doha Declaration.  Similarly,
his delegation believed that it was reasonable to use the level of the bound rates as a base.  For
unbound items, it considered that it would be appropriate, as in other areas of the negotiations, that
efforts be made to achieve a bound rate of 100 per cent for all tariffs as a basis for starting the
negotiations.  That would mean that Members would be avoiding differential treatment which would
prejudice a good result in this negotiating process and would above all penalize Members who had
actually undertaken and completed the exercise of binding.  Paraguay had done this with 100 per centof its tariffs and, like others, it would request that Members that did have unbound tariffs to undertake
the necessary efforts to bind them, so as to ensure that everybody was working on a equal footing.
370. For unbound rates, double the MFN rate applied to developed countries could be used for
developing countries and LDCs.  His delegation did not agree with increasing the MFN rate to 5 per
cent where applied tariffs had a level of 0 per cent at the start of the negotiations.  It agreed with usinga base year for MFN applied tariff rates of 2001, and the exclusive use of ad valorem  equivalents, to
which all other duties should be converted.  Equally, it supported starting the negotiations on the basis
of the Harmonized System (HS) 1996, so as to simplify the use of trade statistics for 1999-2001, and
then adjusting the results to the HS 2002 nomenclature.
371. His delegation had further comments, but in the interests of time it wished only to add that the
existing tariff preferential schemes were discriminatory and prejudicial to a number of developing
countries which were excluded from them, since part of the market access gained by the beneficiaries
of these schemes was obtained at the expense of the other developing countries.  The liberalization of
multilateral trade in the area of non-agricultural products being sought in these negotiations could
effectively reduce the preference margins for some beneficiaries, but it could also improve marketTN/C/M/10
Page 58
access opportunities for many other developing countries which were currently excluded from these
preferences.  This could concern the majority of developing countries, since this market access would
be permanent and unconditional.  His delegation recognized the need to find a balanced way to
resolve this question, taking into account the concerns of all developing countries.
372. Finally, his delegation supported the statement by Colombia introducing the joint paper, of
which Paraguay was a co-sponsor.  This paper showed that it was possible to reach consensus in the
multilateral system, because it was co-sponsored by Members from all the continents and
geographical regions of the world.
373. The representative of Israel said her delegation had allocated a large amount of its resources
to the DSU negotiations and was disappointed that the deadline given by Ministers in Doha had been
missed.  It would have preferred that the negotiations be concluded to be able to allocate its scarce
resources to other issues of no less importance, but it was still willing to allow one last opportunity to
complete the work that had progressed well.
374. Israel welcomed the TNC Chairman's proposal to request the Chairman of the General
Council to consult on an extension of the Mandate. This work should continue under the existing
mandate, and document Job(03)/91/Rev.1 was a good basis for this.  The work should be given a
specific time schedule, and 31 December was Israel's preferred deadline.  Israel shared the view ofUruguay, Brazil, Norway and others on the way needed to succeed in these negotiations.  As to the
Chairman's proposal on conducting a technical meeting in July, Israel believed that, until a decision
on timeframes and scope was reached, this would be futile, but it was flexible enough to go along
with the suggestion if Members so decided.
375. On agriculture, Israel hoped that Members would have the flexibility to take on board the
legitimate non-trade concerns of all Members.  On  market access for non-agriculture products, Israel
hoped to see a more flexible approach to the specific concerns of all Members, especially those of
developing countries.  In services, Israel had submitted its initial offer and welcomed those of the
other 25 Members submitted to date.  These negotiations were of high importance to the Israeli
market and her delegation was looking forward to further offers by Members as soon as possible.
376. Finally, her delegation particularly welcomed the submission in document TN/C/W/13 by
Colombia on behalf of a large group of developing countries.  Israel shared many of the issues and
concerns expressed in it, and saw it as a positive step towards achieving a successful and fair result in
the current round of negotiations.  Israel looked  forward to continue working with those Members
towards such an objective, in particular stressing the development dimension of the Round.
377. The representative of Indonesia expressed the appreciation of his delegation to the group
countries for submitting the joint paper which had been introduced by Colombia.  Indonesia
welcomed the initiative set out in a systematic and comprehensive manner in the paper, and believed
that the idea behind it would be important in setting the objectives of the Cancún Ministerial
Conference.  One of the most important features in the paper was these countries' common vision on
the development issues.  The paper stressed the essentiality of resolving implementation-related issues
and strengthening S&D treatment before Cancún, rather than calling into question the basic principlesunderlying them.  Concrete results on development issues would bolster developing countries'
confidence in the process and thus have a positive impact on work in other areas of the negotiations.
Indonesia supported the paper and urged that all the elements contained therein should be discussed
properly during the Conference.
378. The representative of the Philippines said when Members had labelled the Doha package as
the Development Round, they had been aware of the huge challenge it posed, particularly to
developed countries.  The WTO risked its credibility if Members failed to deliver on this promise, and
this challenge still remained unmet.  The risk of overburdening the Cancún Ministerial and
overloading the negotiations towards the end of 2004 deadline remained a reality.TN/C/M/10
Page 59
379. His delegation welcomed the paper by Colombia and 26 developing country co-sponsors,
which recalled the broad principles and objectives agreed to in these negotiations.  The paper sought
to present a sense of overall balance and to draw commitments and contributions of all Members
towards a successful outcome.  His delegation had been heartened by the participation and
contribution of the European Communities, including the commitments to technical assistance andcapacity building, which in some ways had moved the process forward.  However, the continued
silence of the European Communities on one of the most important development issues – agriculture –
remained a stumbling-block to progress.
380. His delegation supported Thailand's description of the present situation, and the statement by
the President of Burkina Faso had brought this into living reality in one sector.  Yet there were other
sectors such as staple crops, fisheries, livestock and poultry where widespread poverty and rural
deprivation provided living examples of the devastating impact of high subsidies and support policies.His delegation hoped that this would be taken into consideration by the European Communities when
it looked at its Common Agricultural Policy.
381. On the issue of balance, his delegation wished to stress that overall balance was a very
deceptive criteria.  The starting point was the inequities and imbalances which were due to an
historical legacy induced by several decades of uneven negotiating patterns, involving a large numberof developed countries versus a very small number of fledging developing economies.  However, as
three-quarters of the current membership of the WTO consisted of developing countries, there was a
need to rectify these historical imbalances and the overall balance should take care of the concerns
and priorities of developing countries.  There was a need for less than full reciprocity and S&D
treatment in all the elements of the negotiations.
382. The Philippines would remain engaged in the coming critical days before Cancún with the
aim of reaching consensus on modalities in the major sectors of concern, particularly market access in
agriculture, services and non-agriculture – all of which were core responsibilities of the WTO.   On
the Singapore issues, his delegation supported India, China, the ASEAN countries and the ACP,
African and Caribbean countries.  These issues were certainly separate from the developmentimperatives of the negotiations, were not part of the Single Undertaking and should not be linked to
other core development issues.  However, if consensus emerged on modalities for these issues, the
Philippines believed that this should not require Members to start negotiations after Cancún and to
finish them in the same timeframe as the Round.  Hi s delegation agreed with India and China that the
Singapore issues did not justifiably fit into the development imperatives of the Round.
383. The representative of New Zealand welcomed the paper introduced by Colombia, which was
positive and timely.  It was useful in drawing out the linkage between rules and market access and in
its treatment of Singapore issues, and helpful in underlining the importance for the development
agenda of reforming agriculture trade and the emphasis it placed on resolving the issue of TRIPS and
Public Health.  Of particular significance was the point made in the paper about the delicate overall
balance of the package set out in the Doha mandate, which was an important reference point for
Members in the weeks ahead.
384. One key issue that was treated perhaps a little lightly in the paper was non-agricultural market
access, which was all the more surprising given that industrials accounted for around 90 per cent of all
goods traded.  He noted the contrast between that section and the reformist language elsewhere in the
paper on agriculture.  The answer to this lay perhaps in an observation made by the Chairman of the
Negotiating Group on Market Access to the effect that the level of ambition on non-agriculturalmarket access remained far from clear.  The discussion at the last meeting of the Negotiating Group
and, to some extent, at the present meeting suggested that there was a large gap in perceptions on
what the mandate called for both in overall ambition and the contribution and participation of
different groups in the membership.  A number of developing countries had emphasized the need for
multiple provisions for less than full reciprocity in reduction commitments, for flexibility on bindingsand for treatment of sensitive sectors.  There was resistance to the idea of mandatory sectoralTN/C/M/10
Page 60
elimination.  Developed country participants, by contrast, had generally emphasized a need for a
result that delivered market access gains, not excluding from that the major developing-country
markets along with a high overall level of ambition.  This in turn reflected what was happening in the
real world where widespread tariff elimination could be seen under the RTAs that were now
proliferating.
385. He had highlighted the question of ambition in the non-agricultural negotiations because
Members were approaching the point where questions of ambition and the extent of participation in
these negotiations would have to be faced.  These issues went to the very heart of the political choices
that Ministers would have to wrestle with in Cancún, and New Zealand thought that the mandate, not
just paragraph 16 of the Declaration but also paragraph 1, required ambition.  Both those paragraphs
envisaged reform and liberalization of trade not, as had been heard, unilateral cuts by developed
countries.  Reform was what this organization and these negotiations was all about.
386. The bottom line was that it was politically unrealistic to expect developed countries to accept
a result that amounted to unilateral liberalization, including in sensitive sectors.  So the non-
agricultural market access negotiations would have to produce results that achieved significant
reduction in applied rates in the markets of major developing-country participants.  There were
various ways of modifying the Negotiating Group Chairman's sophisticated elements paper to achievethat purpose, and New Zealand would be exploring with other delegations and with the Chairman
those possibilities over the next few months.  He wished to emphasize the need for political guidance
on the overall level of ambition, and this implied some difficult political choices.  He expected that
Geneva negotiators would achieve only limited progress, until their Ministers came to terms with the
need to accept a degree of political pain in this ar ea and that might have implications for the timetable
for the modalities in this area.
387. He had focused on non-agricultural market access because he felt it was a priority for the next
couple of months, but it was obviously not an isolated issue.  Members would not get the desired
results on other market access issues, especially agriculture, without a big result here.  The same
applied to the rules issues that were usefully highlighted by India.  Notwithstanding a degree ofcoyness in the developing-country paper on this point, a genuinely trade liberalizing result on market
access lay at the very heart of the development agenda – a point Members should not lose sight of.
388. The representative of Pakistan said his delegation could support a further extension of the
deadline for the DSU negotiations, but due to resource limitations, it proposed postponement of
further work until after Cancún.  On non-agricultural market access, his delegation agreed with the
European Communities that the Negotiating Group Chairman's draft was quite innovative, and at least
there was considerable agreement on technical elements.  On the core issue of tariff reductions, theproposed formula represented a reasonable compromise, and along with the formula and customized
sector-by-sector reduction of tariffs, good progress could be made – taking account of S&D treatment.
On rules, his delegation would like to see rapid progress on strengthening disciplines in the area of
anti-dumping.
389. The presentation on cotton subsidies at the present meeting should have convinced Members
of the adverse consequences of subsidies on poor countries.  Members had been given to understand
that by June substantial progress would be made in  all three areas of agricultural reform, but now that
June had arrived, not much movement could be se en.  On TRIPS and Public Health also, Members
had been given to understand that a solution would be in sight and that the issue would be resolved
before Cancún.  There was not much time left, so Members needed to redouble their efforts in thisarea.  Finally, Pakistan fully endorsed the elements and recommendations in the paper introduced by
Colombia and hoped these would be taken on board while moving towards Cancún.
390. The representative of Barbados endorsed the statement by Botswana on behalf of the ACP
Group and strongly supported many elements of the paper introduced by Colombia, such as the
emphasis on the development dimension, and the priority which should be given to transparency andTN/C/M/10
Page 61
participation in the decision-making process.  On TRIPS and Public Health, Barbados agreed with
those urging Members to redouble their efforts to reach a solution for the operationalization of
paragraph 6 of the Doha Declaration on TRIPS and Public Health.  This measure to facilitate access to
more affordable medicines was of critical importance to Barbados and its regional partners, since the
Caribbean was the region with the second highest global incidence of HIV/AIDS after sub-Saharan
Africa.  Paragraph 6 should meet the needs of all developing countries with insufficient or no
manufacturing capacity in making effective use of the TRIPS compulsory licensing provisions with
regard to all relevant areas of public health.
391. On non-agriculture market access, her delegation shared the sentiments expressed by those
who had indicated that to achieve consensus, the final modalities should, inter alia , provide for
measures to mitigate the impact of the erosion of preferences as well as more substantively address
the concept of less than full reciprocity and S&D treatment.  On Singapore issues, Barbados, likeother ACP members, was not convinced that the tim e had come for multilateral disciplines in this
area.  While her delegation was cognizant of the terms of the Doha mandate in this area, as well as of
the Chairman’s clarification, it believed that the wide divergence of views clearly indicated a need for
further clarification and analysis.  Barbados fully s ubscribed to the points made in Colombia's paper
with regard to these issues.
392. The representative of Jamaica said her delegation viewed the paper introduced by Colombia
as a useful contribution to the preparations for Cancún because it accurately identified some of the
key issues affecting developing countries which would need satisfactory resolution.  These issues
needed to be fully taken into account to ensure that Cancún was the success all Members wished it to
be.  These issues included S&D treatment, implementation-related issues, TRIPS and Public Health,services, non-agricultural market access and appropriate treatment of the Singapore issues.  Jamaica
could give its support to this initiative aimed at fostering a convergence of views among WTO
Members.  Jamaica recognized that this document did not include all issues of importance to all
Members and that some nuances of position might not be captured, but it gave the document its full
support since it was without prejudice to the importance of these issues to Members.  Jamaicatherefore welcomed the document in this context as an important expression of common views on a
number of key issues of importan ce to many developing countries.
393. The Chairman thanked all delegations for their thoughtful remarks, which had been
constructive and very helpful.  He believed that this had been one of the most useful meetings of the
TNC.  It had been clear from the statements that a lot of work lay ahead, particularly at Cancún, and
Members had to be realistic.  In spite of all th e work that would be done in the intervening weeks,
Members had to brace themselves for a full and hard work programme at Cancún, with some harddecisions to be taken.  Nevertheless, he did not agree that Members had failed to make progress in the
negotiations.  He maintained that progress had been made, but what had been missed was a number of
decisions in key areas.   Members now expected the Ministerial to take these decisions, but he wished
to reiterate that delegations in Geneva had to do their best to pave the ground so that the issues were
fully understood by their Ministers, so that the right decisions could be taken at Cancún in theinterests of all.
394. Looking at different events held around the world, he believed that the DDA was receiving
support.  The G-8 meeting in Evian had not been about trade, but the signals that had been sent out by
the G-8 leaders and the leaders of developing countries they had invited had made him optimistic,
because of their commitment to the Round, and to achieving results in the areas of interest todeveloping countries.  The leaders had explicitly mentioned the need reach a multilateral solution to
bring essential medicines to the developing countries which lacked manufacturing capacities before
Cancún.  They had also highlighted the need to achieve ambitious goals in the areas of agriculture,
non-agricultural products and services, and to strengthen WTO rules to achieve a degree of fairness
for all.TN/C/M/10
Page 62
395. From the statements at the present meeting, he could conclude that Members were beginning
to concretize the Doha Work Programme.  The Quad countries had been clear about what they saw in
terms of key elements, and many delegations had emphasized the three market access areas,
development-related issues, rules and the Singapore issues.  Members had welcomed the effort by a
group of 26 developing countries in presenting a joint paper.  Although there might be somedifferences in views, he believed the paper would help Members in their collective efforts.  The paper
had a strong emphasis on the centrality of development issues, which had also been mentioned by the
Quad countries.
396. He had been encouraged, as had many delegations, by the participation of the LDCs at the
present meeting, with the presence of the President of Burkina Faso and his presentation of a joint
proposal by a group of LDCs.  This meeting had seen the full participation by countries from all
segments of the membership, from the more advanced to developing countries and to the least-developed ones.  All of them had touched upon the same fundamental principle, which was to
enhance trade, to make it as amenable as possible to solving poverty, and to use it to solve some of the
basic economic problems in their own regions.  He believed this demonstrated that Members were
joined in the goal of trying to make trade work for economic growth and to alleviate economic
problems.
397. He was grateful to delegations for their endorsement of his proposal to recommend to the
Chairman of the General Council to begin his consultation with the Members on how to proceed with
the DSU review and to hold a meeting of the DSB Special Session in July.
398. At the next TNC meeting in July, he hoped to see progress in a number of areas.  First, he
would expect to see, if Members were to have an y chance of success in Cancún, some flexibility in
the agriculture negotiations.  Second, as had been mentioned often at the present meeting, he expected
to see more flesh on the skeleton proposed by the Chairman of the Negotiating Group on Market
Access.  Third, many delegations had urged fellow Members to make more initial offers in the GATS
negotiations.  It might be ambitious, but he would expect between 30 to 40 initial offers by the July
TNC meeting.  This would provide a good foundation for the work on all market access issues  beforeCancún.  Fourth, certainly more progress was needed in the area of S&D treatment, and he was sure
that with the commitments made by the major countries, progress could also be made towards
agreement on TRIPS and Public Health.
399. Fifth, he expected to see progress in the consultations on implementation-related issues.  He
expected to call a Heads of Delegation meeting shortly on this matter.  Finally, the work needed to be
more concrete.  At the next TNC meeting, he hoped that the work would have progressed solidly in all
areas so that Members would be fully prepared for Cancún.
400. The Trade Negotiations Committee took note of the statements.
401.  In closing the meeting, the Chairman said the next meeting of the TNC would take place on
14-15 July 2003.TN/C/M/10
Page 63
Annex
Statement by H. E. Mr. Blaise Compaoré, President of Burkina Faso
The Cotton Submission by West and Central African Countries to the TNC
Honorable Director-General of the World Trade Organization, Chairman of the Trade
Negotiations Commission, Honorable Ministers, Your Excellencies the Ambassadors, Distinguished
Deputy Directors-General of WTO, Ladies and Gentlemen, Distinguished Representatives,
Today’s working session of the Trade Negotiations Committee offers me the welcome
opportunity to address your august organization and to speak about West and Central AfricanCountries concerns related to the Doha Round nego tiations as well as about their efforts towards
ensuring fairness and equity for millions of producers from our countries.
The multilateral trade rules, which you arbitrate, have been shaped and decreed according to
the fundamental principles of: transparency in trade transactions, national treatment and non-
discrimination among member States in trade relations.
It might be reminded that the “Washington Consensus”, whose underlying philosophy
includes market-based price determination of all goods, in addition to privatizations and capital
market liberalization, has reinforced these very principles.
The implementation of the WTO trade policy review mechanism led many member States to
bring their trade policies in line with the multila teral trade rules and helped improve their trade
performances.
Our countries, whose economies are yet very vulnerable, have undertaken adjustments to
become more competitive and increase their participation in global trade.
These reforms, conducted on the basis of structural adjustment programmes, brought about
macroeconomic and financial stabilization and created favorable internal conditions for thedevelopment of productive sectors promis ing with sustainable growth potential.
In line with these reforms, West and Central Af rican States gradually eliminated subsidies to
their agricultural sector.
However, the impact of these reforms on our countries’ development has to date been
nullified by the multiform subsidies still provided by some WTO member States to their agriculture,
which is in total contradiction with WTO basic principles.
Thus, for the year 2001 alone, rich countries provided subsidies to their farmers which
amounted to six times the amount of their development aid, respectively 311 and 55 billions of
dollars.
For example, a country like Mali, for the same year, received 37 millions of dollars in aid, but
lost 43 millions, due to lower export revenues as a consequence of other producer countries’ cotton
subsidies.
Moreover, subsidies provided to cotton farmers in rich countries are 60 per cent higher that
the overall gross domestic product (GDP) of Burkina Faso.
Ladies and Gentlemen, It goes without saying that such practices provide rich country
agriculture with an unfair competitive edge that works against developing countries like ours.TN/C/M/10
Page 64
Our farmers, who produce the kilogram of cotton 50 per cent cheaper than their competitors
from developed countries, ranking them amongst the most competitive in the world, suffer the
negative impact of cotton subsidies.
These subsidies have caused economic and social crises in African cotton producing
countries. As a consequence of cotton subsidies, in 2001, Burkina lost 1 per cent of its GDP and 12per cent of its export incomes, Mali 1.7 and 8 per cent, and Benin 1.4 and 9 per cent respectively.
The massive subsidies awarded to cotton farmers in some WTO member States are among the
most important and direct causes of the problems encountered on the international cotton market.
These subsidies artificially inflate the offer and depress export prices.
Ladies and Gentlemen, In 2001, cotton production in Benin, Burkina, Mali and Chad,
accounted for 5 to 10 per cent of gross domestic product and an average of about 30-40 per cent of
overall export revenues.
More than ten millions of people in West and Central Africa directly depend on cotton
production, and several other millions of people are indirectly affected by the distortion of world
market prices due to production and export subsidies to this agricultural product.
Cotton holds indisputably a strategic position in our countries’ development policies and
poverty reduction programmes.
While cotton accounts for only a small portion of economic activity in industrialized
countries, in all our States, it represents a determining and critical factor for poverty reduction policies
as well as for political and social stability. Through induced effects on infrastructure development,
education and basic health services, cotton production acts as an essential link within our countries’
development strategies.
Honourable Chairman, Distinguished Minister s, Your Excellencies the Ambassadors, Our
decision to submit jointly to the WTO, on 30th of April 2003, a sector-based initiative for cotton,
based on WTO principles supporting the development of a fair and market-oriented world trading
system, is legitimate.
From this platform, I am launching an appeal, in the name of several millions of women and
men, who live in least developed countries and for whom cotton is the main means of subsistence.
On their behalf, in the name of the Signatories to the cotton initiative and on behalf of all
those who support it, I ask the WTO and its member States to prevent that these populations, who are
victims of the negative impact of subsidies, be excluded from world trade.
The WTO, arbitrator and warrantor of international trade rules, is the most appropriate
multilateral forum to deal comprehensively with the issue of competition-distorting subsidies. The
ongoing Doha Round negotiations on agriculture mu st imperatively address distortions in cotton
trade.
Ladies and Gentlemen, The example of African cotton offers a conspicuous illustration for
the rare cases, where trade liberalization and respect of multilateral trade rules can provide substantial
and immediate trade benefits to African States belonging to the world’s poorest countries.
Arguments in favour of sector-based modalities for cotton are straightforward: our countries
are not asking for charity, neither are we requesting preferential treatment or additional aid. We solely
demand that, in conformity with WTO basic principles, the free market rule be applied. Our producers
are ready to face competition on the world cotton market – under the condition that it is not distorted
by subsidies. West and Central African cotton producing countries strongly hope that the DohaTN/C/M/10
Page 65
Development Agenda’s objectives, namely the establishment of fair and market-driven trade, will be
achieved.
In particular, they invite our partners from the Northern hemisphere to follow more coherent
trade and development policies, so as to not destroy what they themselves have contributed to build.
For instance, the positive effect of some twenty billions of CFA Francs, granted to Burkina
Faso under the HIPC Initiative, is practically annihilated as a consequence of cotton subsidies.
West and Central African cotton producing countries recommend that cotton’s strategic
importance for development and poverty reduction be fully recognised.
They suggest that, at the WTO Ministerial Conference to take place at Cancún, Mexico,
September 10-14, 2003, a mechanism be set up to progressively reduce support to cotton production
and export, with a view to fully suppressing all cotton subsidies at a defined deadline.
Also, they advocate that, as an immediate and transitory measure in favour of Least-
Developed Countries (LDCs), a mechanism be adopte d to compensate their farmers for the revenue
losses incurred because of cotton subsidies.
Ladies and Gentlemen, African countries share the opinion that a satisfactory settlement for
the cotton subsidy issue is both a must for the current negotiation round and a test that will allow
member States to prove their sincerity behind the commitments taken at Doha.
This is a suitable time and place, for me, to thank all the stakeholders who support our
struggle for fairness, equity and justice in international trade. I am referring to professional farmers’
and producers’ organizations and associations, non-governmental organizations, bilateral and
multilateral development institutions and the Authorities from countries favourable to our case.
I also extend my thanks to the WTO Secretar iat for the warm welcome extended to me and
my delegation.
Finally, I wish to congratulate and thank the Representatives of all WTO member States who
support our cotton initiative, in particular the Ambassadors of ECOWAS member countries, and I call
upon them to continue helping us defend our case.
To all of you assembled here today, I wish best success in your work and deliberations and
thank you for your attention.
__________