RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/M/23
28 November 1997
(97-5234)
General Council
22 October 1997
MINUTES OF MEETING
Held in the Centre William Rappard
on 22 October 1997
Chairman:  Mr. C. Lafer (Brazil)
Subjects discussed: Page
1. Conditions of service of WTO staff ........................................................................   2
2. Accession of Andorra ..............................................................................................   4
- Communication from  Andorra ...................................................................   4
3. Ethiopia - Request for observer stat us ....................................................................   6
4. Accreditation of Permanent Repr esentatives to the WTO ......................................   8
5. Committee on Balance-of-Payme nts Restrictions ...................................................   8
(a) Consultation with Pakistan .........................................................................   8
(b) Simplified consultation with Bangladesh ...................................................   9
(c) Consultation with  India ..............................................................................   9
(d) Consultation with  Tunisia ..........................................................................  13
(e) Consultation with th e Czech Republic .......................................................  13
(f) Consultation with  Bulgaria .........................................................................  14
(g) Consultation with  Nigeria ..........................................................................  14
(h) Notes on the meetings of 21-22 April, 2 May and 10-11 June 1997 ..........  15
6. Committee on Budget, Finance and Administration ...............................................  15
- Report of the Committee ............................................................................  15
7. Waivers under Article IX of  the WTO Agreement .................................................  17
(a) Hungary - Agricultural  export subs idies ....................................................  17
- Request for a waiver ......................................................................  17
(b) Harmonized System - Requests fo r extensions of  waivers ........................  18
(i) Bangladesh .................................................................................... 18
(ii) Nicarag ua ....................................................................................... 18
(iii) Sri Lanka ....................................................................................... 18
(c) Zambia - Renegotiation of Schedule  LXXV III .......................................... 18
- Request for extensio n of waiver ....................................................  18WT/GC/M/23
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(d) Decision on the introduction of Harmonized System changes into WTO
schedules of tariff conc essions on 1 January 1996 ..................................... 19
- Extension of tim e-limit ..................................................................  19
(e) Review of waivers pursuant to Article IX:4 of the WTO Agreement ........  19
(i) Canada – CARIBCAN ..................................................................  19
(ii) Cuba - Article XV:6 ......................................................................  19(iii) EC - The fourth ACP-EC Convention of Lomé ............................  19
(iv) United States - Andean Trade Preference Act ...............................  19
(v) United States - Caribbean Basin Economic Recovery Act ............  19
(vi) United States - Former Trust Territory of the Pacific Islands .......  19
8. Arrangements for effective cooperation with other intergovernmental
organizati ons ...........................................................................................................  20
- Draft Agreement between the World Trade Organization and the
Office International des Epizooties ............................................................  20
9. Preparations for the 1998 Ministerial Conference and the commemoration of the
50th anniversary of the multilat eral trading system ................................................   20
- Statement by th e Chairman ........................................................................  20
10. Frequency of meetings of WTO bodies ..................................................................  2111. Observer status for international intergovernmental or ganizations ........................  23
12. United States - Recent action with regard to Korea under Section 301 of the
Omnibus Trade and Competi tiveness Act of 1988 .................................................  24
13. Accession of Seychelles ..........................................................................................  24
- Chairmanship of the Working Pa rty ...........................................................  24
14. Accession of Azerbaijan .........................................................................................  24
- Chairmanship of the Working Pa rty ...........................................................  24
15. Institutional reform and restruct uring of the Se cretaria t .........................................  25
16. Implementation of the Agreements between the WTO and the IMF and the
World Bank ............................................................................................................. 25
1. Conditions of service of WTO staff
The Chairman recalled that the General Council had decided on 1 July 1997 to request the
Director-General to complete, by 31 August, detailed consultations with the United Nations Joint
Staff Pension Fund concerning the determination of the amount of assets that the WTO could expect
to withdraw from the Fund in the event of termination of its membership (WT/L/223).  The GeneralCouncil had also decided that a second opinion on the calculations of the WTO consulting actuary
should be prepared by an actuary to be designated by its Chairman in consultation with the Chairman
of the Working Group on Conditions of Service, and submitted by 31 August 1997.  He recalled that
the United Kingdom Government Actuary had subsequently been designated for that purpose.
Finally, also at the General Council meeting  on 1 July, the Director-General had been requested to
contact the International Civil Service Commission as soon as possible to explore the possibilities for
implementing reforms in WTO conditions of service, taking into account the different options raisedWT/GC/M/23
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by Members.  The General Council had agreed that it would consider the matter of conditions of
service further not later than October 1997 and decide upon the appropriate action to be taken.
The General Council had thus been awaiting information on three items before resuming its
consideration of the conditions of service applicable to WTO staff.  Replies had since been received
on all three items, namely from the United Nations Joint Staff Pension Fund, the United Kingdom
Government Actuary and the International Civil Service Commission, and had been circulated toMembers.  Members had also received a copy of the letter addressed by the Director-General on
23 July 1997 to the Chairman of the ICSC.  He believed that the three texts provided all the necessary
information and answers requested by Members, while demonstrating the technical feasibility of the
proposed reforms.  It appeared that a large number of delegations supported the proposals on the table
for the reform of the WTO Secretariat and agreed that they constituted the best possible solution to the
needs of the WTO under the present circumstances.  Such a solution would be the logical
consequence of the decision taken at Marrakesh to establish the WTO as a sui generis  institution with
a distinct legal personality and not part of the UN family.  It also represented a much-deserved and
long overdue fulfilment of a commitment taken towards the Secretariat of the WTO.  He understood,
however, that certain governments were still considering the matter and were not yet in a position to
join in a consensus.  He therefore proposed that, notwithstanding the deadline of October 1997 set by
the General Council for a decision, the General Counci l defer further consideration of this matter until
a future meeting to be convened by the second week of November at the latest.
The General Council took note of the statement and so agreed
.
The Chairperson of the WTO Staff Council said that Members had been supposed to take a
decision at the present meeting on the establishment of an independent WTO Secretariat as required in
Article VI of the WTO Agreement.  However, th e decision had once again been postponed.  Members
would soon be celebrating fifty years of the GATT/WTO trading system, but the staff, the backbone
of this Organization, remained employed by the Interim Commission of an organization that never
existed.  The GATT as an institution had come and gone, and had never had its own secretariat.  She
wondered if that would be the fate also of the WTO.  Fifty years earlier, Members' predecessors had
decided, as a matter of convenience, to apply the UN Common System on a de facto  basis to the
interim Secretariat.  That was still the situation at present.  Perhaps the decision had been a good one
fifty years earlier, but for more than 15 years this decision of "convenience" had caused considerable
inefficiencies for  Members, and inequities for staff.  Over the years, numerous working groups had
examined the matter and had concluded that the best interests of both Members and staff would be
served by a Secretariat whose structure was tailored to the needs of this organization.  Proposals hadbeen made, and deadlines for decisions come and gone.  The background technical work had been
completed, and re-examined.  Expert opinions had all confirmed the advantages to  Members as well
as to staff, of an independent Secretariat.  Almost one year earlier, Members had formally set
themselves a deadline of 30 June 1997 for this decision (WT/L/197).  Yet, they were today missing
yet another deadline.  The basic principles of the GATT and the WTO were equitable, non-
discriminatory treatment and transparency.  Staff were asking the same for the Secretariat.  The
proposal before Members would establish a single, eq uitable system of salaries, benefits and pensions
for all staff.  It would end the discriminatory tr eatment between professional and general service staff,
make the Secretariat accountable only to WTO Members, and do this with no change in cost for
Members.
Some governments had taken the position that they wished to see the proposed system
implemented at the level of the United Nations.  However, the WTO was not and had never been partof the United Nations.  It was obvious that to change the structure of a 500-person, Geneva-based
organization was quite different from what would be  required to change a world-wide organization of
more than 60,000 staff members.  The United Nations itself had described the WTO staff as a drop of
water in the ocean of the UN.  What was required of Members was a straightforward, simple decision.WT/GC/M/23
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The staff urged Members to take that decision without further delay.  Over the years, staff had become
increasingly frustrated and demoralized.  Until now, they had resorted only to the more diplomatic
actions to express their dismay.  However, staff had earlier voted in favour of "work to rule", should
such action be necessary to secure a decision by Members.  The effects of such action on the work of
committees, on technical assistance, on dispute settlement, and on the preparations for the next
Ministerial Conference could be significant.  This was not what Members or the staff wanted.  Thestaff wanted a decision by Members before the end of October to establish an independent Secretariat.
Most Members had already recognized the benefits that such a decision would have for Members as
well as for staff.  Most had also been prepared to support a positive decision at the present meeting.
The staff appreciated this support, and urged Members to no longer accept the delaying tactics of the
few that had not yet joined in the consensus.  The staff asked Members to put this issue to a vote, as
provided in Article IX of the WTO Agreement, and to  finally fulfil their responsibilities and create an
independent, equitable Secretariat for the Organization.
The Director-General said he was proud of the responsible way in which staff had expressed
their point of view, and wished to confirm hi s full support to the commitment already taken by
Members to create an independent and equitable Secretariat.
The General Council took note of the statements.
2. Accession of Andorra
- Communication from Andorra (WT/ACC/AND/1)
The Chairman drew attention to the communication from Andorra (WT/ACC/AND/1)
concerning its interest in acceding to the WTO Agreement pursuant to Article XII.
The representative of Andorra, speaking as an observer, said that although Andorra's foreign
trade at the beginning of the century had been concentrated in exchanges with France and Spain, its
immediate neighbours, trade with the rest of Europe had intensified by the second half of the century.
The reach of Andorra's economy now extended beyond the European Community and, as a result of a
dynamic and entrepreneurial commercial sector, Andorra's interaction with the rest of the world had
increased.  Andorra believed it was time to join th e WTO so that its exchanges with all countries
would be based on the WTO framework.  Andorra str ongly believed in, and applied, the principles of
an open economy.  Since the 1930s, Andorra had progressively become a centre for trade,
demonstrating by its example the possibilities of economic development resulting from loyal and open
exchanges between sovereign States.  Andorra shar ed the WTO's goals of trade liberalization, and
wished to start the process to join the WTO in the near future.
The Uruguay Round had considerably modified the nature of liberalization undertaken by the
GATT since its creation.  Not only had the traditional area of trade seen its scope extended to
agriculture, textiles and clothing and trade-related investment measures, but new areas had come to
the forefront, including services, intellectual property and dispute settlement rules and procedures.
Andorra would refer essentially to three major st eps forward in the Uruguay Round to justify its
accession request.  First, the traditional system of economic development of Andorra based on
commercial tourism encountered limits.  The path of industrialization should be considered, but it
would seem that this would have to be circumscribed to the processing and assembly of products thathad a high value-added and were non-polluting.  The tertiary area other than tourism, as well as
international trade, therefore seemed to Andorra to be particularly interesting.  He noted that the
General Agreement on Trade in Services concluded in the Uruguay Round covered all the forms that
trade in services might take.  Second, Andorra had demonstrated the interest it attached to intellectual
property in becoming a member of the World Intellectual property Organization.  However, allWT/GC/M/23
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seemed to be agreed that the TRIPS Agreement of the WTO represented considerable progress over
existing international standards.  Third, Andorr a attached considerable importance to dispute
settlement as well.  The Dispute Settlement Understanding of the WTO represented a considerable
improvement over the status quo, and the first years of implementation of these provisions seemed to
reaffirm this view, which Andorra welcomed.  All these reasons, as well as Andorra's attachment to
the guiding principles of the WTO, had led his Government to formally request accession to the WTOAgreement at the present meeting.  Andorra wished to become a WTO Member and to contribute,
within its limits, to the new world economic order established by the WTO.
The representative of the European Communities welcomed Andorra's application.  Andorra
had close relations with the Community's member States across the whole field of government
activity, and had specific relations in the trade field.  It was clear from its statement that Andorra had
well understood what was happening in the WTO and the trends represented by the Uruguay Round.
He hoped that the General Council could establish a working party at the present meeting to examineAndorra's application, and perhaps then consider procedures to enable Andorra to move rapidly
towards membership.
The representative of Argentina welcomed and supported Andorra's request.
The representative of the United States said that his Government was gratified to see
Andorra's interest in joining the WTO.  However, the United States was not in favour of following
normal practice and deciding already at the present meeting to establish a working party with standard
terms of reference.  The United States questioned the desirability and appropriateness of Members
entering into full-scale Article XII negotiations with countries whose relative participation in trade
was of the order of Andorra's.  The United States believed that further consultations on this question
were warranted.
The representative of Brunei, speaking on behalf of the ASEAN Members , expressed support
for Andorra's request.  Andorra's participation in the WTO, along with that of others who had also
applied for membership, would benefit the WTO and give a further push to global trade.
The representative of Mexico welcomed Andorra's initiative and supported holding
negotiations on its accession as rapidly as possible.  Mexico would follow the process closely.
The representative of Paraguay expressed support for Andorra's request.  The participation
and cooperation of all was needed to create a global trading system under the WTO, and Paraguay
supported Andorra's accession to the WTO as soon as possible.
The representative of Venezuela expressed support for Andorra's request, and hoped that its
accession process would be completed expeditiously.
The representative of Tunisia expressed his Government's full support for Andorra's request.
Andorra's application, as that of any other country -- large or small -- which was ready to accept the
principles of free trade, as well as the question of the establishment of a working party or other
mechanism to examine the application, should be treated with the seriousness that was due.  Andorra's
accession would reinforce the universality of the WTO.
The representative of Chile supported Andorra's accession request, as also the establishment
of a working party to examine the request.
The representative of the Czech Republic expressed support for Andorra's accession at the
earliest possible opportunity.WT/GC/M/23
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The representative of the Slovak Republic supported Andorra's request, and said that his
delegation would act constructively with the aim of contributing to a smooth and quick accession
process.
The representative of Japan said he wished to raise a point of order.  It appeared that many
delegations, including his own, had instructions to support Andorra's application.  However, for each
delegation to repeat this at the meeting would take up too much of the General Council's time.  Hesuggested that the Chairman instead ask the delegatio ns in support of Andorra's application to raise
their nameplates for the record, so that this item could be disposed of quickly.
The Chairman said that as he had only a few more speakers on his list, he would offer them
the floor in the interests of non-discrimination.
The representative of Romania expressed support for the point of order raised by Japan.  His
delegation's intervention was also simply to join others in welcoming and supporting Andorra's
request.
The representative of Mauritius expressed support for the point of order raised by Japan, as
also his Government's support for Andorra's application.
The representative of Canada joined others in welcoming Andorra's application.  Having
listened to the discussion thus far, his delegation believed that this application should not present
particular difficulties, and that it could be dealt w ith expeditiously.  There appeared to be agreement
among delegations that Andorra's request was a welcome development, and that a way should be
found to allow it to be dealt with speedily.
The representative of Argentina associated his delegation with Japan's statement on the point
of order the latter had raised.  Argentina believed that in order to expedite the conduct of business in
such situations the General Council could more frequently apply Rule 24 of its Rules of Procedure(WT/L/161).
The representative of Cuba wished to be placed on record as welcoming and supporting
Andorra's request.
The Chairman proposed that the General Council agree to establish a working party to
examine Andorra's application, and authorize its Chairman to hold consultations on the procedures
and terms of reference of the Working Party.  He further proposed that the General Council agree to
revert to this matter after the consultations were concluded.
The General Council took note of the statements and of the expression of support, and so
agreed .
The Chairman then invited Andorra, on behalf of the General Council, to attend meetings of
the General Council and, as appropriate, meetings of other WTO bodies as an observer during the
period when the Working Party was carrying out its work.
3. Ethiopia - Request for observer status (WT/L/229)
The Chairman drew attention to the communicat ion from Ethiopia requesting observer status
in the General Council and its subsidiary bodies (WT/L/229).  In the same communication, Ethiopia
had also indicated its intention to apply for accession to the WTO Agreement and had provided a
description of its economy and foreign trade regime, in accordance with the guidelines for observerstatus for governments in the WTO (WT/L/161, Anne x 2).  He proposed that Ethiopia's request be
granted.WT/GC/M/23
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The General Council so agreed.
The representative of Ethiopia, speaking as an observer, said that Ethiopia was currently
undertaking a structural adjustment programme and had put in place macro-economic policies, and
sectoral strategies and programmes aimed at addressing the issue of poverty.  Given its limited
resources, Ethiopia believed that it had gone a long way in the past six years towards meeting its
objectives. It fully recognized the importance of the Uruguay Round Agreements in fostering
international trade, and was aware of the WTO' s role in implementing the Uruguay Round, and in
assisting the developing countries in general, and the least-developed countries such as Ethiopia in
particular, to be fully integrated into the internat ional market.  Ethiopia had been closely monitoring
the implementation of the Uruguay Round and its impact on developed and developing countries, and
had noted, for example the problem faced by some developing countries with regard to notification
requirements.  Ethiopia's observer status would enable it to study in detail the implications of the
WTO Agreement and the workings of the WTO, and help it to submit its application for membershipin due course.
The representatives of Morocco on behalf of the African Group, Egypt
,  Kenya , India , Brunei
on behalf of the ASEAN Members, and Bangladesh  welcomed the granting of observer status to
Ethiopia.  The representatives of Morocco on behalf of the African Group , Egypt , Kenya , and India
also welcomed Ethiopia's intention to become a Member of the WTO.
The representatives of Egypt, India  and Bangladesh  underlined the importance of their
respective historical and economic links with Ethiopia.
The representative of Morocco, speaking on behalf of the African Group , said that Ethiopia's
accession would strengthen Africa's voice in the Organization.  He assured Ethiopia that African
Members would give any assistance necessary to facilitate its accession to the WTO.
The representative of Egypt expressed appreciation for the statement by Ethiopia and for the
documentation which would facilitate Ethiopia's future accession procedure.
The representative of Kenya said that the presence of Ethiopia's Minister of Trade and
Industry at the meeting demonstrated that country's willingness and seriousness in participating in the
WTO.  As a neighbour, Ethiopia would contribute immensely in its sub-region and also, as a memberof Common Market for Eastern and Southern Africa (COMESA), would bring numerous valuable
ideas to the WTO.
The representative of India said that over centuries Ethiopia and India had worked together in
the field of economic cooperation and development especially with a view to enhancing capacity-
building in Ethiopia.  His Government was ready to participate  constructively in Ethiopia's accessionprocess.
The representative of Bangladesh said that Ethiopia and Bangladesh, as least-developed
countries, had interests in common, and that his de legation looked forward to working closely with
Ethiopia in the General Council and its subsidiary bodies.
The General Council took note of the statements.
4. Accreditation of Permanent Representatives to the WTO (WT/GC/W/61/Rev.2)
The Chairman recalled that following consultations on the basis of an initial paper prepared
by the Secretariat at his request, the General Council had considered this matter on 16 July, and hadWT/GC/M/23
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agreed to revert to it at the present meeting.  In the light of the views expressed since the 16 July
meeting, a revised text (WT/GC/W/61/Rev.2) had subsequently been considered at an informal
meeting on 2 October.  Following the comments made at that meeting, he had undertaken to circulate
a further revised text with a view to seeking agreement on accreditation procedures at the present
meeting.  Regrettably, however, it had not proved possible to reach a consensus on the text, and he
proposed therefore to pursue consultations with interested delegations on this matter beforesubmitting a further revised proposal.  He had, in the meantime, requested the WTO Secretariat to
circulate a note on the existing accreditation practices with regard to international intergovernmental
organizations.  He reiterated the importance of having a clear accreditation procedure for Permanent
Representatives to the WTO, since the WTO had been established by the Marrakesh Agreement as an
independent Organization that was not part of the UN system, and which therefore had an
independent Headquarters Agreement with the host country, Switzerland, according to which
Members had certain rights and obligations.  A standard procedure for accreditation would alsoeliminate the haphazard practice currently followed in this regard, which was not in keeping with the
present status of the Organization.  The purpose was to have a simple but clear, standard procedure for
accreditation which ensured transparency and clarity, and respected the legal nature of the
Organization as an independent entity in international relations.
The General Council took note of the statement and agreed
 to revert to this matter at a future
meeting.
5. Committee on Balance-of-Payments Restrictions
(a) Consultation with Pakistan (WT/BOP/R/27)
(b) Simplified consultation with Bangladesh (WT/BOP/R/28)
(c) Consultation with India  (WT/BOP/R/32)
(d) Consultation with Tunisia (WT/BOP/R/31)
(e) Consultation with the Czech Republic (WT/BOP/R/33)
(f) Consultation with Bulgaria (WT/BOP/R/34)
(g) Consultation with Nigeria (WT/BOP/R/35)
(h) Notes on the meetings of 21-22 April,  2 May and 10-11 June 1997 (WT/BOP/R/26,
WT/BOP/R/29 and WT/BOP/R/30)
(a) Consultation with Pakistan (WT/BOP/R/27)
Mr. Jenkins (United Kingdom), Chairman of the Committee on Balance-of-Payments
Restrictions, said that at the consultation with Pakistan on 21-22 April, Members had recognized that
Pakistan was facing a serious balance-of-payments (BOP) problem and had agreed that it was justified
in resorting to measures in accordance with Article XVIII:B of GATT 1994.  While Members had
appreciated the reduction of items on the Negative List from 214 to 68 since 1989, some had pointed
out that many of the items should more appropriately be justified under other WTO provisions, e.g. on
grounds of health, safety, public morals or security.  The Committee would meet again on 10
November 1997, with a view to concluding on the basis of (i) a clarification of Pakistan's notification
of items restricted on BOP grounds, as well as an explanation as to why quantitative restrictions were
preferred to price-based measures, and (ii) a short paper addressing the procedural requirements inparagraph 1 of the Understanding on the BOP Provisions of GATT 1994.
The General Council took note of the statement and adopted
 the report in WT/BOP/R/27.
(b) Simplified consultation with Bangladesh (WT/BOP/R/28)
Mr. Jenkins (United Kingdom), Chairman of the Committee on Balance-of-Payments
Restrictions, said that at the simplified consultation with Bangladesh on 2 May, Members hadWT/GC/M/23
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recognized that, since the previous consultati ons, the balance-of-payments (BOP) situation had
deteriorated and remained precarious.  Noting a reduction in the number of quantitative restrictions in
recent years, some Members had commended Bangladesh for not intensifying restrictions but
continuing with its programme of trade liberalization.  Members had called for further information
and clarification, in accordance with paragraph 11 of the Understanding on the BOP Provisions of
GATT 1994, regarding the legal basis, system and effects of restrictions, and had observed that, underparagraph 1 of the Understanding, Members were committed to announcing time schedules for the
removal of restrictions taken for BOP purposes.  Noting that full consultations had never been held
with Bangladesh, the Committee had determined that full consultations would be desirable, as a
means of clarifying the BOP situation and promoting greater transparency.  The  Committee had
invited Bangladesh to consider holding such full consultations in the autumn of 1998 or, in any case,
before May 1999.
The representative of Bangladesh thanked the Committee for the understanding it had shown
towards Bangladesh's situation, and assured Members that his Government continued to keep the
situation under observation and would take all necess ary measures to improve its BOP situation on a
long-term basis.
The General Council took note of the statements, and that it would be desirable to hold a full
consultation with Bangladesh in the autumn of 1998 or in any case before May 1999, and adopted the
report in WT/BOP/R/28.
(c) Consultation with India (WT/BOP/R/32)
Mr. Jenkins (United Kingdom), Chairman of the Committee on Balance-of-Payments
Restrictions, said that at the consultations with India on 10-11 June and 30 June-1 July, the
Committee had been unable to arrive at agreed conclusions.  Therefore, as required by the
Understanding on the Balance-of-Payments (BOP) Provisions of GATT 1994, a record of the
different views expressed had been produced and circulated to Members (WT/BOP/R/32).
The representative of the European Communities regretted that the consultations had not
resulted in a consensus on the phasing out of India's import restrictions under Article XVIII:B of
GATT 1994.  India's BOP situation was no longer such as to meet the conditions of Article XVIII:9,and it was therefore obliged to eliminate the restrictions pursuant to Article XVIII:11.  While the
WTO's BOP rules did not envisage a period of phasing out once the conditions of Article XVIII were
no longer met, the Community understood that India might require time for the gradual elimination of
restrictions.  India's import restrictions had been in force for a very long time and covered almost all
sectors of the economy.  A reasonable time for the phasing out of the restrictions might therefore beneeded to allow for the necessary restructuring of the economy and specific sectors of industry.  That
being said, it was essential that protection did not continue beyond what was strictly necessary.  Since
the consultations in the Committee had ended, the Community had held formal consultations with
India under Article XXII of GATT 1994 with a view to finding a mutually-satisfactory solution.  The
Community was continuing these consultations and was hopeful that a satisfactory and legally sound
agreement could be found in the near future.
The representative of the United States associated his delegation with the Community's
statement.  The United States expected India in its  consultations with its trading partners to try to
reach a settlement that reflected certainty, predictability and transparency in market access in the
Indian market.  The Untied States was also conti nuing consultations with India to this effect.
The representative of India regretted that the Committee had been unable to arrive at
conclusions incorporating proposals for recommendations by the General Council, and that it had
therefore submitted a report recording the different views expressed.  India believed this outcome wasWT/GC/M/23
Page 10
not in the interest of the multilateral trading system .  However, this situation had arisen in spite of
India's efforts to show flexibility and take into account comments by Committee Members.  India had
consulted regularly with the Committee, as required under Article XVIII:B of GATT 1994, ever since
the introduction of the measures justified under these provisions.  Although the measures had been in
existence for many years, the Committee had not once come to the conclusion that they were not
justified under Article XVIII:B. It was only in January 1997 that the Committee had for the first timeinvited India to present a phase-out plan.  He noted that the measures in question were justified under
GATT provisions entitled "Governmental Assistance to Economic Development".  Article XVIII:B
had been drafted solely to enable developing countries to embark on their respective roads to
economic development under the aegis of the multilateral trading system.  Article XVIII:B was a
distinct provision with a distinct objective, although there was already a provision in Article XII
relating to the more limited issue of import restrictions introduced for BOP purposes.  Obviously, the
distinct objective of Article XVIII:B was to suppo rt the aspirations of developing countries for
economic development.  It was clear that the primary beneficiary of such economic development was
the developing country concerned.  Nevertheless, it was also an acknowledged fact that the benefit of
economic development also flowed to the developing country's trading partners and, in this sense, the
provisions of Article XVIII:B had been of value to India's trading partners as well.
Article XVIII:B had several parameters, which were clearly spelt out in its provisions.  It was
India's conviction that in resorting to these provisions to justify its import restrictions, it had
conformed in letter and spirit with these parameters.  This had been acknowledged by the fact that
until the current consultations, the BOP Committee had always found India's measures to be justified
by these provisions.  India found it difficult to agree with the Community that under Article XVIII:B
or its related Understanding, there was no scope for a phase-out plan.  This matter had been discussedin the Committee, and India would not revisit the arguments at this stage.  While the report before the
General Council in WT/BOP/R/3 2 understandably indicated the divergence of opinion in the
Committee, there was no explicit or implicit finding by that Committee that India was in violation of
any of its obligations.
Outlining India's efforts to enable the Committ ee to arrive at proposals for recommendations
by the General Council, he recalled that India had been a party to the Committee's decision in January
to invite India to present a plan to eliminate the Article XVIII:B measures.  At the resumed
consultations on 10-11 June, the Committee had expressed its appreciation for India's timely and
comprehensive notification of this proposed phase-out schedule, and had recognized the considerable
effort involved in its preparation.  In submitting this plan, India had not only responded positively andresponsibly to the Committee's invitation, but had also acted consistently with the provisions of
Article XVIII:B and the related  Understanding.  I ndia's original phase-out plan had been for a period
of nine years with three phases of three years each.  After taking into consideration the comments by
Committee Members at the meeting held on 10-11 June, India had offered to reduce the phase-out
period to seven years at the meeting itself.  At the Committee's meeting on 30 June-1 July, India had
shown further flexibility in offering to reduce the period to six years with two phases of three years
each.  Following a suggestion by a major trading partner, India had then agreed, at the meeting, tosplit the six-year period into three phases of three,  two and one years instead of two phases of three
years each.  India had also expressed readiness to explore with its trading partners further adjustments
with regard to the products in each of the three phas es, to the extent feasible, in a last-minute effort to
ensure that the Committee was in a position to make an appropriate proposal for recommendation to
the General Council.  While the enormous sacrifice by India to arrive at a consensus in the Committeehad been recognized by many Members, some had expressed their inability to accept even its vastly
improved proposals.  The basic point of difference, when the Committee had had to face the situation
of no consensus, had been that India was agreeable to a six-year phase-out period while some of its
trading partners were insisting on limiting the phase-out period to five years.  India did not believe
that this difference was so great as to result in a situation of no proposals for recommendations beingsubmitted to the General Council.  However, to arrive at a successful conclusion to the consultationsWT/GC/M/23
Page 11
in the Committee, flexibility had to be shown not only by India, which it believed it had done in
ample measure, but also by some of its trading partners.  He did not believe it necessary at this stage
to go into various fundamental issues arising out of the report on the consultations with India.
However, he wished to reiterate that countries lik e India believed in the multilateral trading system
and were committed to following its rules.  It was necessary for the WTO to ensure that the rules and
the system provided a supportive environment to countries embarking on a path of trade liberalizationin spite of the challenges they faced on the domestic front, both social and economic.
India had fulfilled its obligations by presenting a phase-out plan to the BOP Committee as
directed by the Committee, and by showing responsi bility in modifying its phase-out plan to the
extent possible taking into consideration the views expressed by its trading partners.  It was well
known that six of India's trading partners had initiated Article XXII consultations after the BOP
Committee had concluded its consultations, and that one other trading partner had joined in these
consultations.  India was using the opportunity provided by these consultations to arrive at asatisfactory solution.  In India's assessment, it was cl ose to an understanding with the majority of the
Members it was consulting with, and consultations with the remaining Members appeared promising.
If India were able to arrive at an understanding with all these trading partners, it intended to submit a
revised six-year phase-out plan for multilateral endorsement which would provide, inter alia , the
same degree and quality of legal certainty to India as well as its trading partners.  India regretted thatin spite of the special efforts by the BOP Committee Chairman, it had not been possible to arrive at a
consensus decision in the Committee.  It was India's expectation and desire to find a solution
acceptable to the collective membership of the WTO.
The representative of Egypt  said his delegation had noted the Committee's report as well as
India's statement, and regretted the Committee's inability to reach a consensus on recommendations.
Egypt sympathized with the efforts made and the flexibility shown by India during the consultations.
The phase-out plan as reflected in the report and in  India's statement would help India, within the
framework of Article XVIII:B, to embark on its path toward economic development under the
multilateral trading system.  He believed that furthe r consultations would soon lead to a consensus on
this matter.
The representative of Pakistan associated his delegation with India's statement, and agreed
that the development dimensions of the issue should be given due weight in the BOP Committee's
deliberations.
The representative of Bangladesh said that India's statement had raised issues which
transcended India's particular situation in this matter, and related also to the predicament of other
countries at the lower end of the development scale.  He urged Members to give serious consideration
to India's statement with a view to arriving at a  successful conclusion to the consultations.
The representative of the United States said it was worth placing on record that the discussion
in the BOP Committee context with respect to I ndia was over and was no longer an issue for
consideration.  In that context, India was in clear contravention of its WTO obligations.  It was for this
reason that the United States and others had engaged the dispute settlement procedures with respect to
India.  The United States had tried to negotiate a solution to India's lack of compliance with its WTOobligations.  However, his delegation's understanding of where things stood in those discussions was
considerably different from the picture painted by India.  As he had stated earlier, any settlement
would need to be one that reflected certainty, predictability and transparency in respect of market
access.  None of those conditions had thus far been met in the United States' consultations with India.WT/GC/M/23
Page 12
The representative of Cuba expressed solidarity with India's statement.  Like Egypt and
Pakistan, his delegation regretted that the concept of development had not been kept in mind in India's
case, and that despite India's considerable efforts an agreement had not been obtained in the BOP
Committee.  He hoped that Article XVIII:B would be better complied with in future cases.
The representative of Sri Lanka said that his delegation had noted India's statement and
welcomed its desire to enter into further constructive engagement with the concerned trading partners
to resolve their outstanding differences and to arrive at a consensus soon on this matter.
The representative of Colombia said that India's statement was positive and showed a political
will to find a solution to this matter.  Although it was unfortunate that the Committee had been unable
to reach a solution, his delegation believed that effort and goodwill on all sides should make it
possible to reach a satisfactory solution.
The representative of Brazil also expressed regret that the BOP Committee had been unable to
reach an understanding on the conclusions of its report on the consultation with India.  Brazil had
been very active in the Committee's consultations and, in regard to the consultations with India, had
addressed the question of disinvokation of Article XVIII.  In Brazil's view, a phase-out plan was a
recognition that a Member faced a serious BOP situ ation and underlined that it could not immediately
do away with all restrictions without serious implicat ions for its BOP situation.  In its statement at the
present meeting, India had indicated its political de cision to seriously present a phase-out plan which
would not create difficulties for its BOP situation.  His delegation wished to stress its understanding
and support for India's statement.
The representative of Canada said he hoped that the General Council would not take over the
work of the BOP Committee.  The records of the Committee's various activities, including the report
on its consultations with India, spoke for themselves.  His delegation associated itself with theCommunity's statement.  Canada was one of the countries that had held consultations with India under
Article XXII, and was now engaged in trying to develop a mutually-agreed solution.  He was hopeful
that such a solution would be possible.
The representative of Japan said that his Government's position on the BOP consultations
with India had been stated on previous occasions.  Japan had been engaged in bilateral consultations
with India over the past several weeks in which some progress had been made, and he hoped that a
mutually-satisfactory solution would be reached as soon as possible.
The representative of Australia said that his delegation had hoped not to have had this
discussion in the General Council, because the discussion thus far seemed to indicate a confusion as to
whether India had a BOP problem.  In that context, Australia wished to associate itself with theremarks by others and to note simply that the BOP Committee had been unable to agree that India in
fact did have a BOP problem.  The consultations that were now taking place, and in which Australia
was involved, were designed to produce agreement on a satisfactory phase-out plan for India's
existing quantitative restrictions.  Australia, for its part, was satisfied with the progress of the
consultations.  He wished to place on record that Australia fully recognized that India was entitled to
generous arrangements for the phase out of its restrictions.
The representative of Switzerland associated his delegation with Canada's statement.
Switzerland had similar concerns, and was engaged in consultations with India under Article XXII.
The consultations had been progressing satisfactorily, and Switzerland was hopeful of reaching an
agreement as soon as possible.WT/GC/M/23
Page 13
The representative of Argentina said that a key point stressed by several delegations in this
discussion was the spirit of Article 3:7 of the Dispute Settlement Understanding, which stipulated that
before bringing  a case to the dispute settlement system, one should try to exhaust all constructive
solutions.  Argentina believed that India was opening the door to such a possibility, and that this
should be taken into account to try to resolve this matter in a constructive way.
The representative of New Zealand said that his Government had initiated
Article XXII consultations with India, and associated his delegation with the comments by Canada,
Switzerland, Australia and others in expressing th e hope that the consultations would result in a
mutually-satisfactory solution.
The General Council took note of the statements and adopted  the report in WT/BOP/R/32.
(d) Consultation with Tunisia (WT/BOP/R/31)
Mr. Jenkins (United Kingdom), Chairman of the Committee on Balance-of-Payments
Restrictions, said that at the resumed consultation with Tunisia on 23-24 June, the Committee had
commended the Tunisian authorities for their sound macro-economic policies which had led to an
improvement in the external situation.  Alt hough the balance-of-payments (BOP) position had
strengthened and there appeared to be no threat of a serious decline in the level of reserves, opinions
had differed as to whether the situation was stable or remained fragile.  According to the IMF, the
outlook was encouraging.  While acknowledging the residual nature of the remaining restrictions,
some Members had emphasized that sectoral measures were neither in accordance with the provisionsof the Understanding on the BOP Provisions of GA TT 1994 nor an appropriate way of addressing a
BOP problem.  Tunisia had undertaken to phase out the remaining restrictions in four steps from 1
July 1997, ending 1 July 2000.  The Committee had invited Tunisia to accelerate implementation of
this phase-out plan should circumstances permit.  On that basis, there had been a consensus to
conclude the consultations.  The Committee had recommended to the General Council that, inadhering to its phase-out plan, Tunisia be deemed to be in compliance with its GATT 1994
obligations.  In the event of a future threat to the balance-of-payments during this period, Tunisia
could seek recourse anew to Article XVIII:B.
The representative of the European Communitie s noted that, as set out in the Committee's
report, Tunisia's BOP situation had improved.  However, the BOP situation was not solid, and a
phasing out period of reasonable duration, taking into account all the circumstances, seemed justified.
The Community welcomed the efforts being made by Tunisia and encouraged it to continue in that
direction.
The General Council took note of the statements, agreed  that, in adhering to its phase-out
plan, Tunisia be deemed to be in compliance with its GATT 1994 obligations, and adopted the report
in WT/BOP/R/31.
(e) Consultation with the Czech Republic (WT/BOP/R/33)
Mr. Jenkins (United Kingdom), Chairman of the Committee on Balance-of-Payments
Restrictions, said that at the consultation with the Czech Republic on 14-15 July, the Committee had
considered a six-month, non interest bearing import deposit scheme introduced on 21 April 1997.  The
Committee had welcomed the macroeconomic reforms introduced by the Czech authorities since 1990
and had applauded the progress made towards an open, market-based economy.  The Committee had
expressed appreciation for the timely notification of the measure under consideration, while regrettingthe absence of any time-schedule for its elimination.  Some Committee Members had taken the view
that the Czech Republic's balance-of-payments (BOP) circumstances did not justify recourse to
Article XII of the GATT 1994.  The Czech delegation had reaffirmed its confidence that the measure
was a necessary response to circumstances corresponding to those set out in Article XII.  A majorityWT/GC/M/23
Page 14
of Members had argued that the measure was inappropriate, particularly in that its coverage of
imports was selective, and ill-designed to redress macroeconomic imbalances.  They had urged the
Czech authorities to eliminate it during or before a forthcoming review of the measure, or to present
to the Committee, before any resumption of the co nsultations, a time-schedule for its elimination
within 1997.  The Czech delegation had maintained  that the measure was in full conformity with
Czech obligations under Article XII and the Understanding on the BOP Provisions of GATT 1994,and had stressed that it was without protectionist intent.  Noting that the Czech authorities were
planning to carry out their review before mid-September, the Committee had agreed to suspend the
consultations and to resume in the week of 22 September.  The Committee had welcomed the Czech
authorities' readiness to take into account, during the review, the opinions expressed during the
meeting.  Subsequently, on 29 August, the Czech Republic had notified the WTO that it had abolished
the scheme on 21 August and was no longer applying Article XII.
The General Council took note of the statement and adopted
 the report in WT/BOP/R/33.
(f) Consultation with Bulgaria (WT/BOP/R/34)
Mr. Jenkins (United Kingdom), Chairman of the Committee on Balance-of-Payments
Restrictions, said that at the consultation with Bulgaria on 21-22 July, the Committee had considered
a 5 per cent import surcharge introduced to safeguard the balance-of-payments (BOP) on 4 June 1996,
which Bulgaria intended to reduce annually until elimination on 1 July 2000.  The Committee hadcommended Bulgaria for having maintained, during its recent difficulties, its commitment to reform
and liberalization.  It had recognized that, although Bulgaria's reserve position had improved recently,
its BOP situation was still delicate, and had noted, inter alia,  both the continuing importance of
market-oriented policies and Bulgaria's continuing reliance on the timely disbursement of official
external assistance.  The Committee had found that recourse to Article XII of GATT 1994 wasjustified.  The Committee had welcomed the fact that the import surcharge was transparent, non-
discriminatory and, as a price-based measure, least disruptive to trade;  it had appreciated the timely
notification of the measure to the Committee along with the announcement of a time schedule in
accordance with paragraph 1 of the Understanding on the BOP Provisions of GATT 1994.  Some
Committee members had urged Bulgaria to accelerate the elimination of this measure, asrecommended by the IMF in its statement, and had expressed their hope to see progress in this regard
by the next consultation.  Bulgaria had affirmed that it would keep under continuous review the
compatibility of this measure with its obligations under Article XII:2(b).  The Committee had decided
to recommend to the General Council that Bulgaria  be deemed to be in compliance with its WTO
obligations.
The General Council took note of the statement, agreed
 that Bulgaria be deemed to be in
compliance with its WTO obligations, and adopted the report in WT/BOP/R/34.
(g) Consultation with Nigeria (WT/BOP/R/35)
Mr. Jenkins (United Kingdom), Chairman of the Committee on Balance-of-Payments
Restrictions, said that at the Committee's resumed consultation with Nigeria on 30-31 July, the
Members had welcomed the submission of a time schedule for the phasing out of Nigeria's remaining
import prohibitions.  Although at least one Member had considered Nigeria's proposal acceptable,
most Members, recalling that the Committee had already concluded that these measures could nolonger be justified under Article XVIII:B and the Understanding on the BOP Provisions of the GATT
1994, had called for their elimination immediately or over a much shorter time-frame than that
proposed by Nigeria.  The Nigerian delegation had not been in a position to propose a shorter time
schedule at this meeting and had agreed to communicate the views expressed by Members to the
appropriate and competent authorities for their consideration, and to consult with interested Membersin November.  On that basis, the Committee had decided to suspend the consultations and resume,WT/GC/M/23
Page 15
with a view to concluding, in early February 1998.  As they had done during a previous phase of the
consultations in March, Members had reserved their rights under GATT 1994.
The General Council took note of the statement and adopted  the report in WT/BOP/R/35.
(h) Notes on the meetings of 21-22 Apr il, 2 May and 10-11 June 1997 (WT/BOP/R/26,
WT/BOP/R/29 and WT/BOP/R/30).
Mr. Jenkins (United Kingdom), Chairman of the Committee on Balance-of-Payments
Restrictions, drew attention to the Committee's disc ussion of its ongoing business at its meetings in
April, May and June (WT/BOP/R/26, WT/BOP/R /29-30).  At the meeting on 10-11 June, under
"Other Business", the Committee had noted that Turkey had disinvoked Article XVIII as of 1 January
1997, and that Nigeria had removed two product groups -- textiles and furniture -- from its import
prohibition list.
The General Council took note of the statement and of the information in WT/BOP/R/26 and
WT/BOP/R/29-30.
6. Committee on Budget, Finance and Administration
- Report of the Committee (WT/BFA/32)
Mr. Morjane (Tunisia), Chairman of the Committee on Budget, Finance and Administration,
introducing the Committee's report on its meetings of 23 and 29 September and 7 October 1997
(WT/BFA/32), said that the Committee had, inter alia , examined the Director-General's financial
report on the 1996 accounts of the GATT/WTO and the report of the External Auditor, and hadrecommended that the General Council approve the recommendation contained in paragraph 4 of its
report.  Given that the term of office of the Austrian Court of Audit with the WTO ended with the
audit of the 1996 accounts, the Committee had also recommended that the General Council request
the Director-General to communicate to the President of the Austrian Court of Audit Members'
gratitude for the valuable contribution since 1986 (paragraph 5 of the report).
The Committee had also examined a report on the Performance Against Budget as at
31 August 1997, in which an overall saving of appr oximately Sw F 490,000 by the end of the year had
been projected.  With regard to the 1998 budget estimates, after a detailed examination and in-depthdiscussions, the Committee, with the exception of one Member that had reserved its position, had
agreed to recommend a proposed 1998 budget for the WTO Secretariat of Sw F 114,399,250 -- which
included a contribution of Sw F 13,696,400 for the ITC -- and a budget for the permanent costs for the
Appellate Body and its Secretariat amounting to Sw F 1,579,600.  The Committee had recommended
approval of the draft resolution on the expenditure of the WTO and the ways and means to meet thatexpenditure, referred to in paragraph 19 of its report.
The Committee had also examined the ITC's report on Performance Against Budget as at
31 August 1997, in which an overall saving of appr oximately Sw F 1.2 million by the end of the year
had been projected.  The Committee had been informed that since the WTO and the UN had not been
able to agree on a single budgetary format, the ITC had been obliged to present its 1998 budget in
formats that would satisfy both the WTO and th e UN budgetary requirements.  This was a dual
accounting exercise that would inevitably lead to additional costs.  The Committee was concerned by
this matter, and believed that this was a question of coordination and cooperation betweeninternational organizations.  It also believed that WTO Members should inform their delegates at the
UN in New York of this problem so that they could intervene in the competent bodies in order to
identify a solution to the problem.  The Budget Committee Chairman, together with the WTO
Secretariat, should also engage a negotiation process with the Secretariat and the competent bodies of
the UN to find a solution.WT/GC/M/23
Page 16
Among other matters, the Committee had also discussed the utilization of the 1996 surplus,
and had recommended contributions to the 1997 budget and advances to the Working Capital fund to
be assessed on Mongolia and Panama upon their accession (paragraphs 32 and 33 of the report).  The
Committee had also recommended that, given that the High-Level Meeting for Least-Developed
Countries scheduled for 27-28 October was a Decision of the Ministerial Conference in Singapore, the
requirement for a 13 per cent overhead on the Trust Fund which would finance the meeting be waived(paragraph 38 of the report).  He added that the participation of least-developed countries in WTO
activities consisted of many facets, and should be approached with a global focus and a long-term
perspective.  He had taken the initiative to identi fy, with the Secretariat, measures to help these
countries be removed from Category IV of the administrative measures.  This required further
consultations and would be discussed at the next meeting of the Committee.  The Committee, at this
stage, had  considered the question of the access of least-developed countries in Category IV to
technical assistance, including training courses.  Most Members had considered that least-developedcountries which were WTO Members should be exempted from the application of the administrative
measure whereby Inactive Members were denied access to training or technical assistance. The
Committee had been unable to make a formal reco mmendation on this subject since two delegations
had had to refer the matter to their capitals.  Following the meeting, however, he had received
approval from the two Members concerned, and the Committee therefore submitted the contents ofparagraph 41 of its report as a recommendation for approval.
The representative of Morocco expressed satisfaction at the Committee's recommendation
that the General Council approve the contents of paragraph 41.  By taking this measure,
least-developed countries Members of the WTO would not be discriminated against by virtue of WTO
provisions. Such a discrimination would in fact constitute a contradiction with the IntegratedFramework for Trade-Related Technical Assistance to be endorsed by the High-Level Meeting.  It
was only right therefore that the General Council act rapidly in order to do away with this risk of
discrimination against WTO Members.  He believed that the WTO was heading in the right direction
in trying to solve the problem of arrears of the least-developed countries and wished to make an
appeal to all to continue to work in a constructive manner in finding a solution to this very importantproblem, in order to avoid the marginalization of these countries.
The representative of the United States said it was his delegation that was referred to in
paragraph 20 of the Committee's report and had reserved its position on the recommended 1998
budget for the WTO.  Having reached the conclusion that the proposed new third trade-policy training
course could not be funded by additional savings in other parts of the WTO budget, the United Statesagreed that the otherwise zero growth budget for the WTO in 1998 should be increased by the amount
necessary to fund this course, and therefore lifted its reservation on the budget for the WTO as
recommended in WT/BFA/32.
The General Council took note of the statements, approved
 the Committee's specific
recommendations in paragraphs 4, 5, 19, 32, 33 and 38 of its report in WT/BFA/32, as well as the
contents of paragraph 41, and further approved the draft Resolution referred to in paragraph 19.  The
General Council then adopted the Committee's report in WT/BFA/32, including the recommendations
contained therein and the Resolution on the revised expenditure of the WTO in 1998 and the ways andmeans to meet that expenditure.WT/GC/M/23
Page 17
7. Waivers under Article IX of the WTO Agreement
(a) Hungary - Agricultural export subsidies
- Request for a waiver (G/L/183, G/C/W/86)
(b) Harmonized system - Requests for extensions of waivers
(i) Bangladesh (G/L/186, G/C/W/89)
(ii) Nicaragua (G/L/187, G/C/W/87)
(iii) Sri Lanka (G/L/188, G/C/W/90)
(c) Zambia - Renegotiation of Schedule LXXVIII
- Request for extension of waiver (G/L/189, G/C/W/91)
(d) Decision on the introduction of Harmonized System changes into WTO schedules of
tariff concessions on 1 January 1996
- Extension of time-limit (G/C/W/93/Rev.1)
(e) Review of waivers pursuant to Article IX:4 of the WTO Agreement
(i) Canada - CARIBCAN (WT/L/185, WT/L/236)
(ii) Cuba - Article XV:6 (WT/L/182, WT/L/231)
(iii) EC - The fourth ACP-EC Conven tion of Lomé (WT/L/186, WT/L/235)
(iv) United States - Andean Trade Preference Act (WT/L/184, WT/L/232)
(v) United States - Caribbean Basin Economic Recovery Act (WT/L/104,
WT/L/233)
(vi) United States - Former Trust Territory of the Pacific Islands (WT/L/183,
WT/L/234)
Mr. Johannessen (Norway), Chairman of the C ouncil for Trade in Goods, addressing the
general question of requests for waivers submitted for initial consideration to the Goods Council, said
that he was pleased with the speed and efficiency with which the Council had handled these requests.
However, he would have been more pleased if the Council had not been obliged to recommend the
granting of so many waivers.  As he had stated on previous occasions, waivers were by definition
exceptions to the rule, and the collective aim should therefore be to reduce considerably the number of
these exceptions.
The General Council took note of the statement.
(a) Hungary - Agricultural export subsidies
- Request for a waiver (G/L/183, G/C/W86)
The Chairman drew attention to the request by Hungary (G/L/183) for a waiver from its
obligations under paragraph 3 of Article 3, Article 8, and paragraph 2 of Article 9 of the Agreement
on Agriculture, and to the related draft decision (G/C/W/86).
Mr. Johannessen (Norway), Chairman of the C ouncil for Trade in Goods, reporting on the
Council's consideration of this request, said that the Council had agreed to forward the draft decision
in G/C/W/86 to the General Council for adoption.
The representative of Mexico said that at the Goods Council meeting on 6 October, Hungary
had clarified some of Mexico's doubts with regard to certain terms in Annex D of the draft decision.
Hungary's statement would be reflected in the re cord of the Goods Council meeting, and Mexico
wished to see that statement reflected also in the record of the present meeting, at which the draft
decision was going to be adopted.
The Chairman said that a reference to the statement made by Hungary at the 6 October
meeting of the Goods Council would be included in the record of the present meeting.WT/GC/M/23
Page 18
The General Council took note of the statements1 and, in accordance with the Decison-
Making Procedures under Articles IX and XII of the WTO Agreement (WT/L/93), adopted the draft
decision (WT/L/238).
(b) Harmonized System - Requests for extensions of waivers
(i) Bangladesh (G/L/186, G/C/W/89)
(ii) Nicaragua (G/L/187, G/C/W/87)
(iii) Sri Lanka (G/L/188, G/C/W/90)
The Chairman drew attention to the requests by Bangladesh (G/L/186), Nicaragua (G/L/187)
and Sri Lanka (G/L/188) for extensions of waivers previously granted in connection with their
implementation of the Harmonized System, and to the related draft decisions (Bangladesh -
G/C/W/89, Nicaragua - G/C/W/87 and Sri Lanka - G/C/W/90).
Mr. Johannessen (Norway), Chairman of the C ouncil for Trade in Goods, reporting on the
Council's consideration of these requests, said th at the Council had agreed to forward the draft
decisions to the General Council for adoption.
The representative of Bangladesh,  referring to the Goods Council Chairman's remarks
reflected at the beginning of this item, said that  his Government recognized the extraordinary nature
of waivers and did not wish to continue requesting an extension for its HS-related waiver longer than
was necessary.  Negotiations remained pending only with Australia at this stage, and Bangladesh
hoped to conclude these soon.
The General Council took note of the statements and, in accordance with the Decision-
Making Procedures under Articles IX and XII of the WTO Agreement (WT/L/93), adopted the draft
decisions (Bangladesh  WT/L/239;  Nicaragua - WT/L/240;  and Sri Lanka - WT/L/241).
(c) Zambia - Renegotiation of Schedule LXXVIII
- Request for extension of waiver (G/L/189, G/C/W/91)
The Chairman drew attention to the request by  Zambia (G/L/189) for an extension of the
waiver previously granted in connection with its renegotiation of its schedule, and to the related draft
decision (G/C/W/91).
Mr. Johannessen (Norway), Chairman of the C ouncil for Trade in Goods, reporting on the
Council's consideration of this request, said that the Council had agreed to forward the draft decision
in G/C/W/91 to the General Council for adoption.
The General Council took note of the report and, in accordance with the Decision-Making
Procedures Under Articles IX and XII of the WT O Agreement (WT/L/93), adopted the draft decision
(WT/L/242).
(d) Decision on the introduction of Harmonized System changes into WTO schedules of
tariff concessions on 1 January 1996
- Extension of time-limit (G/C/W/93/Rev.1)
The Chairman drew attention to the draft decision regarding the introduction of Harmonized
System changes into WTO schedules on 1 January 1996 in G/C/W/93/Rev.1.
                                                     
1Including the statement by Hungary on this matter at the meeting of the Council for Trade in Goods on
6 October 1997 (G/C/M/23, item 4).WT/GC/M/23
Page 19
Mr. Johannessen (Norway), Chairman of the C ouncil for Trade in Goods, reporting on the
Council's consideration of this matter, said that the Council had agreed to forward the draft decision in
G/C/W/93/Rev.1 to the General Council for adoption.  In this connection, he wished to note that Cuba
had requested to be withdrawn from the list of Members annexed to the draft decision since it had
subsequently concluded its negotiations.
The General Council took note of the report and that Cuba had requested to be withdrawn
from the list of Members annexed to G/C/W/93/Rev.1 and, in accordance with the Decision-Making
Procedures Under Articles IX and XII of the WT O Agreement (WT/L/93), adopted the draft decision
as amended (WT/L/243).
The representative of Switzerland recalled his delegation's concerns regarding the
implementation of procedures for the verification and certification of schedules that were being
transposed.  Switzerland appreciated the consultations being held on this matter by the Goods Council
Chairman, and wished to inform Members that it had recently submitted for circulation a newcommunication with a view to contributing to the discussions under way.
2
The General Council took note of the statement.
(e) Review of waivers pursuant to Article IX:4 of the WTO Agreement
(i) Canada - CARIBCAN (WT/L/185, WT/L/236)
(ii) Cuba - Article XV:6 (WT/L/182, WT/L/231)
(iii) EC - The fourth ACP-EC Conven tion of Lomé (WT/L/186, WT/L/235)
(iv) United States - Andean Trade Preference Act (WT/L/184, WT/L/232)
(v) United States - Caribbean Basin Economic Recovery Act (WT/L/104,
WT/L/233)
(vi) United States - Former Trust Territory of the Pacific Islands (WT/L/183,
WT/L/234)
The Chairman recalled that this item was on the Agenda pursuant to the provisions of
Article IX:4 of the WTO Agreement.  Under these provisions, "Any waiver granted for a period of
more than one year shall be reviewed by the Ministerial Conference not later than one year after it is
granted, and thereafter annually until the waiver term inates."  The Article further provided that "In
each review, the Ministerial Conference shall examine whether the exceptional circumstances
justifying the waiver still exist and whether the term s and conditions attached to the waiver have been
met.  The Ministerial Conference, on the basis of the annual review, may extend, modify or terminate
the waiver".
In accordance with these provisions, the waivers listed under this Agenda item were before
the General Council for review.  Each of these waiv er decisions called upon the government or entity
granted the waiver to submit an annual report to the General Council on the operation or
implementation of the waiver or the measures thereunder, with a view to facilitating the annual review
provided for in Article IX:4.  In connection with the General Council's consideration of this item, he
drew attention to reports on the implementation of the waivers that had been received from the
following:  Canada (WT/L/236), Cuba (WT/L/231), the European Communities (WT/L/235), and the
United States (WT/L/232, 233 and 234).
The General Council took note of the reports submitted under the waivers under
consideration.
                                                     
2G/C/W/97.WT/GC/M/23
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8. Arrangements for effective cooperation with other intergovernmental organizations
- Draft Agreement between the World Trade Organization and the Office International
des Epizooties (G/SPS/W/61)
The Chairman drew attention to document G/ SPS/W/61 and to the draft exchange of letters
proposed therein as the basis for establishing rela tions between the WTO and the Office International
des Epizooties (OIE).  As Members were aware, the text of the Agreement on Sanitary andPhytosanitary Measures made explicit reference to the OIE, and it had been felt that a close working
relationship between the two organizations would enhance implementation of the SPS Agreement.  In
May 1997, the General Session of the OIE, for its part, had approved the draft texts of the letters.
These texts had also subsequently been approved by the WTO Committee on Sanitary and
Phytosanitary Measures and the Council for Trade in Goods in July.  It now remained for the General
Council to also approve these texts in order to permit the formal exchange of letters which would
form the basis for the collaboration between the two organizations.
The General Council approved the draft texts of the exchange of letters.
9. Preparations for the 1998 Ministerial Conference and the commemoration of the 50th
anniversary of the multilateral trading system
- Statement by the Chairman
The Chairman recalled that he had been holding informal consultations recently on the
question of the preparations for the Ministerial Conference and the commemoration of the 50th
anniversary of the multilateral trading system.  His intention had been to begin the process of
reflection among Members on the different issues which should be settled in due time to allow for the
necessary preparation for the two events.  At informal consultations held on 9 October, there had been
a broad measure of agreement that the Ministerial Conference should be held on 18-19 May, followedby the commemoration of the 50th anniversary on 20 May, and that the General Council should take a
decision to this effect at the present meeting. There had also been broad agreement among delegations
that the Director-General should be requested to prepare a paper on the organization of the
commemoration of the 50th anniversary.  At the consultations, delegations had also been invited to
reflect on what the outcome of the Ministerial Conference should be in order to establish the formatand begin preparatory work.  Differing views had been expressed as to whether the outcome should be
in the form of a Ministerial Declaration or a summing-up by the Chairman of the Ministerial
Conference.  Delegations had appeared to be agreed, however, that any declaration should be kept
short, and also that it would be premature to begi n intensive preparatory work now for the Ministerial
Conference.  He would continue consultations on these matters as appropriate.  He noted that, amongother things, the Ministerial Conference would have to review the implementation of the WTO
Agreements.  As Members were aware, at its meeting in December 1997, the General Council would
carry out its annual overview of WTO activities on the basis of reports from WTO bodies in
accordance with the procedures agreed in November 1995 (WT/L/105).  At its December meeting, the
General Council would also have to consider how it would report to the 1998 Ministerial Conference.
He then proposed that the General Council agree that the Ministerial Conference be held on 18-19
May, followed on 20 May by the commemoration of the 50th anniversary of the multilateral tradingsystem, and that it invite the Director-General to prepare a paper on the organization of the
commemoration of the 50th anniversary.
The General Council took note of the statement and so agreed
.WT/GC/M/23
Page 21
10. Frequency of meetings of WTO bodies
The Chairman said that this item was on the Agenda at Egypt's request.
The representative of Egypt said his delegation wished collective consideration to be given to
how delegations could cope with the frequency of meetings of WTO bodies.  The increasing number
of both formal and informal meetings was putting delegations, particularly those with limited human
resources, under considerable strain, requiring them to be selective in participating in the various
meetings.  This was not a new issue.  In November 1995, the General Council had adopted guidelines
on the arrangements for scheduling of meetings (WT/L/106), and the Singapore Ministerial
Declaration (WT/MIN(96)/DEC) had included a reference to this issue in paragraph 22.  His
delegation believed that neither the guidelines nor the provisions of paragraph 22 of the Ministerial
Declaration were consistently enforced, and that Members should ensure that both were strictly
implemented and that WTO meetings, both formal and informal, were kept within a reasonable
number.
As the General Council had been informed by its Chairman in February 1997, 2,340 meetings
had been held in the WTO building in 1996.  Factoring in the summer and the Christmas and New
Year breaks, as well as other holidays through the year, this implied more than 10 meetings a day,
which would require at least five persons per delegation to cover, not taking into account that most
WTO delegations had interests to follow and meetings to cover in other Geneva organizations. Asalso indicated by the General Council Chairman in February, cancelled or rescheduled meetings had
resulted in a cost of Sw F 90,000 in the first six months of 1996.  Egypt believed this to be a waste of
scarce resources that might be used more productively in other areas such as technical assistance.  For
these reasons, this issue was important, and its consideration now timely in order to ensure that the
1998 calendar of meetings strictly adhered to the guidelines and to paragraph 22 of the MinisterialDeclaration.
Egypt believed that to confront the issue, the Secretariat might be requested to present
periodic reports on the frequency of meetings.  The first report could be comprehensive, and provide
detailed statistics on the number of meetings since the adoption of the guidelines and the effort being
made to adhere to them, as well as the difficulties faced by the Secretariat in that regard.  The report
could also provide statistics to enable Members to monitor adherence to the guidelines and the
progress with regard to the number of meetings and their spread through the year, as well as to
monitor costs due to cancelled or rescheduled meetings.  An alternative approach would be to
establish a working group under the chairmanship of  the General Council Chairman to examine this
matter.
The Chairman said that in his coordination meetings with other Chairpersons the importance
of observing the guidelines for the scheduling of meetings had frequently been addressed.  There was
no doubt that the importance of these guidelines was fully recognized.  However, one had to keep in
mind that the WTO was an institution with a very broad scope.  As compared to 1986, when therewere 10 legal instruments under the GATT, the WTO now had under its purview 27 legal instruments,
excluding Decisions and Understandings.  During the same period, the number of standing bodies had
increased from 14 to 33, with the increase in the subject matter of the WTO.  The WTO membership
was also continuously increasing.  All these devel opments stemmed from the fact that Members had
agreed to establish an organization with a broad scope and of a different nature, whose functioningtherefore required more meetings.  He had seen the tentative programme of meetings for 1998 which,
in its present form, did not provide for more than two simultaneous formal meetings per day as
required by the guidelines.  This programme did not include informal meetings which, as all knew,
were part of the consensus-building process in this Organization and which contributed to greater
transparency.  He wished to note that the recent ly issued WTO Daily Bulletin was also an attempt to
alleviate the burden on smaller delegations which had difficulty in attending all meetings.  He
believed that the way to proceed on this matter was to hold consultations in which the two alternativeWT/GC/M/23
Page 22
suggestions made by Egypt could be addressed first.  This was an important issue for all delegations,
which should be addressed in a structured manner in consultations.
The representative of Jamaica said his delegation fully agreed with and supported Egypt's
statement, and agreed with the Chairman on the importance of this issue.  Jamaica would be willing to
support any initiative that would lead to the satisfactory resolution of this matter.
The representative of Brunei, speaking on behalf of the ASEAN Members , supported Egypt's
statement.  The increase in both formal and informal meetings in the WTO had put their delegations
in an untenable situation, leading them to prioritize their programme by attending selected meetings.
Ministers in Singapore had recognized the problem and had agreed to paragraph 22 of the Ministerial
Declaration.  The ASEAN Member countries called on the General Council to effectively implement
this provision.  In doing so, it should be borne in mind that the increased number of meetings was the
result of the increase in the number of WTO bodies.  He noted that many meetings also had to be
adjourned and rescheduled as a result of Members' inability to come to a consensus, mostly onprocedural rather than substantive issues.  If the WTO were to function effectively, a limit on the
number of meetings should be accompanied by more efficient proceedings and decision making.
The representative of India supported Egypt's statement and shared the concerns about the
difficulties encountered by small delegations in coping with the increased number of meetings.  That
being said, India recognized that there was an inev itable increase in the number of meetings resulting
from the increase in the number of legal instruments under the WTO and the consequential increase in
the number of standing bodies.  His delegation believed it was necessary for the Secretariat to keep
track of the formal and informal meetings held da ily, and to analyze after, say, 6 months, how the
guidelines on scheduling of meetings were working.  While he had no ready solution to the problem,
he believed that an analysis of the formal and informal meetings held over a period of 6 months to ayear would probably show that the meetings were not evenly spread over the available working days.
As a result, the time slots available for holding meetings were further reduced.  India supported the
Chairman's suggestion that informal consultations be held in a structured manner, to see whether all
could collectively arrive at a meaningful solution to the problem.
The representative of Cuba associated his delegation with Egypt's statement.  Small
delegations were overwhelmed by the number of formal and informal meetings, and this matter
required further consideration to ensure adherence to the decisions that had been taken earlier
regarding the scheduling of meetings.
The Chairman proposed that he hold structured consultations on this matter.  The
consultations, open to all, would be held as soon as possible and would take into account the
suggestions made by Egypt on how to address this  issue.  The Secretariat would be requested to
prepare some additional information for circulation to Members on this matter.
The General Council took note of the statements and so agreed .
11. Observer status for international intergovernmental organizations
The representative of Egypt, speaking under "Other Business", expressed concern at the
inconsistency in dealing with requests for observer status from certain international organizations in
various WTO bodies.  In some subsidiary bodies, some delegations had been eager to take a decisionon certain requests.  Other delegations had insisted, however, that no decisions be taken in the
subsidiary bodies until those requests had been discussed and settled at the level of the General
Council.  Egypt looked forward to dealing with th is issue more consistently with the cooperation ofWT/GC/M/23
Page 23
all.  His delegation had on several occasions supported the requests by the Organization of African
Unity (OAU), the Organization of the Islamic Conference (OIC) and the Islamic Development Bank
in various WTO bodies, bearing in mind the relevance of their activities to the WTO and the interests
of the countries members of these organizations.  He requested information from the Chairman on the
latter's efforts to find an acceptable solution soon to this issue.
The Chairman said that he had been talking a nd consulting informally with delegations on the
question of pending requests from international organizations for observer status in the General
Council.  Regrettably, the consultations, which he had been pursuing since the beginning of the year,
had thus far been inconclusive.  There were differing views concerning procedures and criteria for
examining these requests.  Some delegations favoured the establishment of across-the-board criteria to
examine specific requests, while others favoured a highly restrictive orientation whereby only
organizations with a close working relationship with the WTO should be given observer status.  It had
generally been recognized that the problem was complex, often coloured by political overtones.  Hehad also on several occasions discussed this question extensively with the chairpersons of other WTO
bodies subordinate to the General Council, from wh ich it appeared that the general view in most
bodies was not to rush into any decision but rather  to await developments in the General Council.
Certain bodies, such as the Committees on Trade and Development and Trade and Environment, had
moved forward and dealt independently with the reques ts addressed directly to them.  In the light of
this, he had come to the conclusion that the only way to move forward was through the adoption of a
pragmatic approach to requests on a case-by-case basis, based on the criteria already contained in
paragraph 4 of the guidelines on observer status for international intergovernmental organizations
(WT/L/161, Annex 3), without any additions or modifications.  At the same time, he would invite
chairpersons of the subsidiary bodies to proceed  in a similar manner at any time they considered
appropriate, either before or after the General C ouncil had concluded its consideration of the requests
before it.  He announced that he would reactivate broad informal consultations with interested
delegations on this matter as soon as possible.  This had not been done earlier because of the priority
attention that had had to be given to such questions as conditions of service of WTO staff and the
preparations for the 1998 Ministerial Conference and the 50th anniversary commemoration meeting.He drew attention, for the purpose of these consultations, to an updated list of requests for observer
status in the General Council that had recently been circulated (WT/GC/W/51/Rev.4).
The representative of Brunei, speaking on behalf of the ASEAN Members
, supported the
OIC's request for observer status.  The OIC had become increasingly involved over the years in
economic programmes beneficial to its members.  Its participation as an observer in the WTO wouldbe advantageous to both organizations, and enable the OIC to better fulfil its responsibilities.  The
OIC's request should be given rapid and positive consideration in the General Council.
The representative of Bangladesh strongly supported Egypt's statement.  Any perceived
inconsistency in Members' approach to the granting of observer status to international organizations
would be unfortunate.  Bangladesh supported the Chairman's intention to consult so that any
differences in approach could be resolved, and a fair, equitable, consistent and across-the-board policy
reached.  Bangladesh believed that the three organizations referred to by Egypt had the necessarymerit, institutional strength and the legal status to be observers in the General Council, and strongly
recommended positive and rapid consideration of their requests.
The representative of Argentina said that Egypt had raised a very substantive matter, and
noted that under Rule 25 of the General Council's Rules of Procedure (WT/L/161), substantive
discussions "shall be avoided" under "Other Busine ss".  He proposed therefore that the discussion on
this item be closed, in the light of the Chairman's intention to hold consultations on this matter.
The General Council took note of the statements.WT/GC/M/23
Page 24
12. United States - Recent action with regard to Korea under Section 301 of the Omnibus Trade
and Competitiveness Act of 1988
The representative of Korea, speaking under "Other Business", said that on 1 October, the
United States had identified Korea's automobile market practice as a "priority foreign country
practice" under Section 301 of the Omnibus Trade and Competitiveness Act of 1988.  Korea had
raised this matter at the 6 October meeting of the Council for Trade in Goods,3 and wished to draw
attention to it once again in the General Council in vi ew of its serious implications for the multilateral
trading system.  His Government believed that the current automobile market practice in Korea was in
conformity with its WTO obligations.  Nonetheless, Korea had made sincere efforts to resolve the
issue through consultations with the United States.  It was regrettable, therefore, that the United States
had decided to resort to its unilateral procedure at this stage.  Korea believed that such action by the
United States, which put undue pressure on its trading partners through unilateral domestic
procedures, ran counter to the spirit and principles of the WTO Agreements.  Korea reserved its rightsunder the WTO Agreements in this connection.  In particular, if the procedures initiated by the United
States resulted in nullifying or impairing Korea's legitimate interests in its export of goods and
services to the United States, Korea would take appropriate measures in response in accordance with
the relevant provisions of the WTO Agreements and through other legitimate means.
The General Council took note of the statement.
13. Accession of Seychelles
- Chairmanship of the Working Party
The Chairman, speaking under "Other Busine ss", informed the General Council that
following his consultations, Mr. Berthet (Uruguay) had agreed to replace, as Chairman of the
Working Party on the Accession of Seychelles, Mr. Ravaloson (Madagascar) who had left Geneva.
The General Council took note of this information.
14. Accession of Azerbaijan
- Chairmanship of the Working Party
The Chairman, speaking under "Other Business", informed the General Council that he was
still pursuing consultations concerning the designation of a Chairperson for the Working Party on the
Accession of Azerbaijan.
The representative of Azerbaijan, speaking as an observer, said that the economic reforms
begun in Azerbaijan four years earlier now appeared irreversible, and Azerbaijan was transforming
itself into a market-driven economy.  The country was globalizing rapidly, and a key indicator of its
efforts to integrate into the world economy was the reduction in import duties, which now stood at 15per cent.  All taxes on exports had also been eliminated, and Azerbaijan had begun the process of
privatization and the opening-up of industries to foreign investment.  The private sector was now
allowed to invest in former key state-industries.
                                                     
3See G/C/M/23, item 8.WT/GC/M/23
Page 25
In 1995, Azerbaijan had begun, in close cooperation with the IMF, the World Bank and the
European Bank for Reconstruction and Development, the systematic implementation of market
reforms in the financial sphere.  Azerbaijan was currently engaged in preparing a Memorandum on its
trade regime for submission to WTO Members.  Its decision to accede to the WTO stemmed from its
desire to use the wide opportunities of international markets to ensure the continuity of the process of
foreign trade liberalization.  Azerbaijan's deepening cooperation with the WTO had made it moreactive in its efforts to review its foreign trade practices and the reorganization of its institutions
according to WTO standards.  His Government was aware that the WTO accession process was
complex, and hoped that the assistance of the Secretariat, Members and the Accession Working Party
would help it to minimize the time period involved.
The General Council took note of the statements.
15. Institutional reform and restructuring of the Secretariat
The Chairman, speaking under "Other Business", recalled that at its meeting on
24 April 1997, the General Council had adopted a Decision on the WTO Secretariat and senior
management structure (WT/L/207) in which it had requested the Director-General to submit a report
with his recommendations on this matter to the General Council as soon as possible but not later than
October 1997.  This report had recently been circulated to delegations (document no. 5553) and he
intended to hold informal consultations thereon in the near future.
The General Council took note of this information.
16. Implementation of the Agreements between the WTO and the IMF and the World Bank
The Chairman, speaking under "Other Business", recalled that the Decision on the
Agreements between the WTO and the IMF and the World Bank (WT/L/194) provided, inter alia ,
that the Director-General hold consultations with Me mbers, under the auspices of the Chairman of the
General Council, and that these consultations should include reports on the coherence consultations
between the Director-General and the Managing Director of the IMF and the President of the World
Bank, as well as on other matters.  A first report was being prepared, and consultations with Members
would be held in the near future.
The General Council took note of this information.