RESTRICTED
PREPARATORY COMMITTEE PC/IPL/M/11
FOR THE 31December 1994
WORLD TRADE ORGANIZATION
(94-2946)
SUB-COMMITTEE ONINSTITUTIONAL ,
PROCEDURAL AND LEGAL MATTERS
MINUTES OFTHE MEETING HELD ON6DECEMBER 1994
1. TheSub-Committee onInstitutional, Procedural andLegal Matters helditseleventh meeting
on6December 1994 under theChairmanship ofMr.K.Kesavapany (Singapore).
A. Transitional Arrangements
2. TheChairman drewattention tonon-paper number 3044onthetransitional coexistence ofthe
GATT 1947andtheWTO Agreement. Ithadbeenunderstood thatthedraftdecision proposed inthis
non-paper would form partofapackage thatwould include theresults oftheongoing consultations
ontheissue oftheTokyo Round Codes. Heproposed thatthismatter therefore betaken upwhen
theconsultations onthelatter issue hadbeenconcluded.
3. TheSub-Committee soagreed.
4. TheChairmanthendrewattentiontonon-paper3042concerningadraftdecisionontheavoidance
ofprocedural andinstitutional duplication. IftheGATT 1947wastoco-exist withtheWTO Agreement
forastipulated period, WTO members would havetomake thesamenotifications twice, onceasWTO
members andagain asGATT 1947contracting parties. Theneedtomake notifications asGATT 1947
contracting parties arose from theobligations thatthecontracting parties hadwithrespect toother
contracting parties thatwerenotmembers oftheWTO. Having tomake duplicate notifications would
beawaste ofresources, bothforgovernments andtheSecretariat. Inviewofthis,ithadbeenproposed
thatnotifications made under theWTO should bedeemed alsotobenotifications under GATT 1947.
Thesame applied tothose cases inwhich agovernment wassubject tonotification obligations under
boththeWTO andtheGATT 1947 Agreements. Twoexceptions hadbeenprovided for.First, if
agovernment wished tomake anotification separately tothetwobodies, itmight doso.Second, if
inspecific areas, separate notification procedures wereagreed to,thesewould beapplicable. Similarly,
acasecould bemade fortheavoidance ofseparate meetings ofbodies under theGATT 1947 andthe
WTO toconsider thesame measures. Insome cases theremight beaproblem asdifferent procedures
might apply. However, inmany cases itmight beadvantageous toholdthemeetings jointly or
consecutively. Theproposal, therefore, wasthatthebodies identified inparagraph 2ofdocument 3042
might meetjointly orconsecutively asappropriate. Before submitting thetextofthedraftdecision
forapproval, heproposed thatinthefirstparagraph following thepreambular paragraph, afterthe
firstmention ofGATT 1947 thefollowing words beadded: "andoftheTokyo Round Agreements".
Healsoproposed thatthefollowing beadded attheendofthefirstsentence ofnumbered paragraph 3:
",withthecorresponding WTO bodies". Theproposed changes wereintended tomake thetextmore
consistent, anddidnotimply changes insubstance. Heproposed thatthetextofthedraftdecision
indocument 3042 beapproved withtheamendments proposed.
5. TheSub-Committee soagreed.PC/IPL/M/11
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6. TheChairman thendrew attention tonon-paper number 3043onparticipation inmeetings of
WTO bodies bycertain signatories oftheFinal Act. Asrecognized inthepreambular section ofthis
paper, some signatories oftheFinal Actthatwereeligible tobecome original Members oftheWTO
hadnotbeenabletocomplete theirdomestic procedures fortheapproval oftheWTO Agreement before
itsentry intoforce. Italsorecognized thatsome oftheMinisterial Decisions included intheFinal
Actalready envisaged theparticipation ofnon-members innegotiations initiated under them. Signatories
thatwereunable toaccept theWTO Agreement witheffect fromthedateofitsentry intoforce would
havetoaccept theAgreement eventually withwhatever changes were made between theentry into
force andthetimeatwhich theyfinally accepted theAgreement. Itseemed onlyright, therefore, that
theyshould begiven avoice inthedeliberations ofWTO bodies before theyfinally accepted the
Agreement. However, tosafeguard thedecision-making rights ofWTO members, suchsignatories
werebeing excluded fromparticipation indecision making itself. They would nothavearighttovote
andtheirviews would notbetaken intoaccount when deciding onwhether there wasaconsensus on
aparticular matter. Theproposed decision, therefore, struck abalance between theconcerns ofWTO
members ontheonehandandthesignatories oftheFinal Actthatwereunable toaccept theAgreement
before theentryintoforceontheother. Before submitting thetextoftheproposed decision forapproval,
heproposed thatinthetitleandinthesecond lastparagraph ofthepreambular text"signatories of
theFinal Act"bechanged toread"certain signatories oftheFinal Act". Also, inthefirstparagraph
following thepreambular text,thesquare brackets inthefirstlineshould bereplaced bythewords
"seven months". Inthethirdlineofthesame paragraph, afterthewords "Uruguay Round thatare",
thefollowing textshould beadded: "contracting parties totheGATT 1947asofthedateofthisDecision
andare". Hethenproposed thatthetextbeapproved withtheamendments proposed.
7. TheSub-Committee soagreed.
B. Appointment ofofficers toWTO bodies
8. TheChairman drew attention toacommunication from theChairman oftheGATT 1947
CONTRACTING PARTIES onproposed guidelines forappointment ofofficers toWTO
bodies (document 3014), which hadbeenagreed toininformal consultations conducted bythelatter.
9. Mr.Szepesi (Hungary), Chairman oftheGATT 1947 CONTRACTING PARTIES saidhe
wished tomake some clarifications fortherecord withrespect tocertain elements contained inthe
guidelines. First, itwastheunderstanding ofdelegations thattheoverall balance ofrepresentation
referred toinsection 2oftheguidelines should beinterpreted toreflect abalance between developed
anddeveloping countries. Second, onsection 3,while keeping inmind theprovisions inArticle IV:3
and4oftheWTO Agreement, itwasconsidered preferable during theinitial stage ofoperation of
theWTO tohaveadifferent chairperson fortheGeneral Council, theDispute Settlement Body and
theTrade Policy Review Body, respectively, ontheunderstanding thattheoptions provided forin
Article IVoftheWTO Agreement were preserved. Third, while section 4oftheguidelines stated
thatWTO bodies under Groups 1and2should bechaired byGeneva-based heads ofdelegations, it
wasagreedthattheCommitteeonTradeandDevelopmentandtheCommitteeonTradeandEnvironment
should continue tobechaired alsobyGeneva-based heads ofdelegations. Finally, onsection 5,given
thelargenumber ofbodies forwhich chairpersons hadtobeappointed, itwasfeltthatvice-chairpersons
should onlybeappointed incircumstances requiring suchapostandonthepresumption thatifthe
chairperson suffered animpediment orrelinquished apost,thevice-chairperson would succeed tothat
post.
10. Therepresentative ofChile saidthathisdelegation hadseentheproposed guidelines onlythe
daybefore, andwished, ifthiswereacceptable toothers, topropose anamendment tothetextinthe
firstsentence ofsection 4concerning thelevelofrepresentation soastoprovide thatchairpersons forPC/IPL/M/11
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bodies under Group 2would beappointed from among Geneva-based heads ofdelegations only"in
sofaraspossible". Group 2contained some veryspecialized bodies, anditwaspossible thatpersons
withtherequired degree oftechnical expertise might notnecessarily befound fromamong theheads
ofGeneva-based delegations, inparticular fromamong delegations thatwererelatively small insize,
suchaswasthecasesometimes fordeveloping country delegations inGeneva.
11. TheChairman oftheGATT 1947 CONTRACTING PARTIES regretted thatChile hadbeen
unable toindicate itsconcern earlier. Thetextinsection 4hadbeencarefully negotiated andintended
toreflect abalance between different interests. Hedrew attention tothelastsentence ofthattext,
whichread:"Non-residentsmaybeappointedinexceptionalcircumstanceswherethenecessaryexpertise
canonlybefound incapitals." Hewasconfident thatthissentence would meettheconcern raised
byChile, andthatChile might therefore reconsider itsposition andaccept thetextasitstood.
12. Therepresentative ofChile saiditwasprecisely thesentence referred tobytheChairman of
theGATT 1947 CONTRACTING PARTIES thatwascausing hisdelegation some concern, inthat
while itprovided fornon-residents tobeappointed inexceptional circumstances, itdidnotallow for
non-heads ofdelegations tobeappointed insuchcases.
13. TheChairman asked ifChile hadsome draftlanguage tosuggest.
14. Therepresentative ofChile suggested thatthewords "ifpossible", separated bycommas, be
added tothefirstsentence ofthetextinsection 4,between thewords "appointed" and"from".
15. TheChairman oftheGATT 1947CONTRACTING PARTIES reiterated thatthepresent text
ofsection 4represented averydelicate balance ofcertain concepts. Ithadbeenmade clearbyeach
delegation inhisconsultations thatforbodies under Groups 1and2themain ruleshould bethat
chairpersons should beappointed fromamong Geneva-based heads ofdelegations. Hewould therefore
suggest thatthisbasicconcept bekeptuntouched. Thelastsentence insection 4should givesatisfaction,
although admittedly partial, toChile. Hewould notethatanumber ofother delegations werenotfully
satisfied withthepresent formulation forjusttheopposite reasons, andhewould therefore urgeonce
again thattheverydelicate balance bepreserved.
16. TheChairman saidthattheChairman oftheGATT 1947 CONTRACTING PARTIES had
consulted anumber oftimes onthismatter, andthattheresulting texthadhadtobeverydelicately
drafted. Tampering withanypartofitrantheriskofunravelling thewhole text,andtherewerebarely
twenty-four hours leftinwhich tocomplete allthework under theSub-Committee. Hetherefore urged
Chile toreconsider itsposition and,ifatallpossible, toagree tothepresent formulation, keeping in
mind thatthelastsentence ofsection 4could takeaccount ofitsconcerns.
17. Therepresentative ofChile saidthat,asafinaleffort, hewould urgethatareference bemade
tonon-heads ofdelegations inthelastsentence ofsection 4,which would permit, inexceptional
circumstances, either non-residents orpersons whowerenotheads ofdelegations tobeappointed as
chairpersons. Hehoped thattheChairman oftheGATT 1947 CONTRACTING PARTIES would
notconsider thischange asaltering significantly thebalance ofthetext.Ifthiswerenotthecase,Chile
would goalong withthepresent textinlight oftheclarification given bytheChairman ofthe
CONTRACTING PARTIES.
18. Therepresentative ofIndiajoined theChairman inappealing toChile toreconsider itsposition,
inviewoftheheavily negotiated nature ofthetextinquestion. India hadhadserious problems with
thelastsentence ofsection 4because ithadconsidered itinconceivable thatwiththeexpected WTO
membership ofmore thanahundred governments, itwould stillbepossible thatexpertise could not
befound among Geneva-based heads ofdelegations. India hadtherefore notwished toseethistextPC/IPL/M/11
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included atall.Ithad,however, accepted thetextinaspirit ofconsensus andcompromise andin
viewofthefactthattheremight besome bodies under theWTO which might callforhighly technical
expertise. Forthisreason, India attached importance totheterm"inexceptional circumstances" in
thepresent text.
19. TheChairman oftheGATT 1947 CONTRACTING PARTIES saidhewished tojoinagain
intheappeal toChile toreconsider itsposition. Asregards Chile'smostrecent proposal, hewould
notethatwhile thefirstsentence ofsection 4referred onlytoheads ofdelegations, thesecond sentence,
inrespect ofbodies under Groups 4,5,6and8,referred toeither heads ofdelegations orofficials
ofdelegations. Ifonedeparted, inthelastsentence, fromthemainrulethatonlyheads ofdelegations
beappointed, thenitwould create aslightly confusing situation. Therefore, theaddition proposed
byChile inthegiven specific context would impart further confusion toatextthatwasalready kept
intentionally ambiguous.
20. TheChairman saidthatsince Chile hadgraciously indicated thatifitsfinaleffort didnotfind
favour itwould goalong withthepresent text,hewould nowpropose thatthetextindocument 3014
beapproved.
21. TheSub-Committee soagreed andtooknoteofthestatements.
C. Issues relating totheStanding Appellate Body
22. TheChairman saidthatagreement hadbeenreached ininformal consultations onasetof
recommendations totheWTO onissues relating totheAppellate Body, which hadbeencirculated in
document PC/IPL/W/15. Ithadbeenbrought tohisattention thatcertain rectifications should bemade
tothattextinorder toensure thatthelanguage agreed atthemost recent informal consultation was
dulyreflected. Accordingly, inparagraph 13,third sentence, thephrase which read"forwarded to
theDirector-General" should bemodified toread"forwarded bydelegations totheDirector-General".
Also, inparagraph 14,thesecond sentence should bemodified toreadasfollows: "Matters suchas
guaranteeing therotation required bytheDSU andfacilitating, ifnecessary, communications within
theAppellate Body should form partoftheworking procedures."
23. Therepresentative oftheUnited States saidhisrecords showed thatithadbeenagreed inthe
consultations thatthewords "ifnecessary" inthesecond sentence ofparagraph 14should beinserted
afterthewords "facilitating communications".
24. Therepresentative ofNorway saidthatwhile hisdelegation didnothaveafirmopinion as
towhere thewords "ifnecessary" should beplaced inthissentence, itwondered iftheirplacement
before oraftertheword "communications" would make adifference.
25. Therepresentative oftheUnited States saidthatthiswould indeed make adifference inthe
text.
26. Therepresentative ofJapan saidthathisrecords confirmed theUnited States 'view ofthe
agreement onthistext.
27. TheChairman proposed thatthetextinthesecond sentence inparagraph 14befurther amended
asindicated bytheUnited States, andthattherecommendations inPC/W/15, asamended atthepresent
meeting, beapproved.
28. TheSub-Committee soagreed andtooknoteofthestatements.PC/IPL/M/11
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D. Rules ofethical conduct forthesettlement ofdisputes
29. TheChairman noted thatMr.Armstrong (New Zealand) hadreported ataninformal meeting
thedaybefore thathisconsultations onthissubject hadbeenprogressing well. Ashehadstated on
previous occasions, work onthissubject would betaken asfarasitcould inthetimethatremained
forthePreparatory Committee toconclude itswork. Anarrangement would havetobefound toreflect
thework thathadbeendonethusfarinthefinalreport ofthePreparatory Committee totheWTO.
Inthemeantime, Mr.Armstrong would continue hisinformal consultations suchthatbythetimeof
theWTO 'sentry intoforce, work onthissubject would havebeenadvanced further.
30. TheSub-Committee tooknoteofthestatement.
E. Paragraph 8(b)(iii) oftheDecision establishing thePreparatory Committee
-Observer status forinternational intergovernmental organizations
31. TheChairman recalled thatattheSub-Committee 'smeeting on18November, ithadbeen
mentioned thatuntilguidelines forobserver status forinternational intergovernmental organizations
wereagreed upon, theGeneral Council oftheWTO might invite asobservers toitsmeetings thefour
organizations -namely, theIMF, World Bank, UNandUNCTAD -thatwerepresently invited inthat
capacity tomeetings ofthePreparatory Committee. Hehadgiven thismatter some consideration,
andwished topropose thatpending theadoption ofagreed guidelines bytheWTO, theSub-Committee
recommend thatrepresentatives ofthefourabove-mentioned international organizations beinvited as
observers tothefirstmeeting oftheGeneral Council oftheWTO.
32. TheSub-Committee soagreed.
F. Outstanding Issues
33. TheChairman noted thattwoissues stillremained outstanding. Thefirstwastheissueofthe
Textiles Monitoring Body. Ithadbeenhisimpression thataproposal putforward bytheChairman
oftheContact Group onTextiles hadreceived agreat degree ofsupport, andthatsome further work
would haveensured afinalsatisfactory result bythetimeofthepresent meeting. However, his
consultations thatmorning hadindicated thatthegapwasstillquitewide, andbothheandtheChairman
ofthePreparatory Committee, whom hehadconsulted earlier thatevening, were deeply concerned
atthisstateofaffairs which could haveserious implications fortheImplementation Conference. They
bothintended tointensify theirconsultations between thenandthemeeting ofthePreparatory Committee
thefollowing daytoseeifanagreement acceptable toallcould bereached. Heurged alldelegations
toviewthismatter veryseriously, andsaidthatwhatever itsmerits ordemerits, apackage acceptable
toalldelegations would havetobefound. Thesecond outstanding issuewasthequestion oftransitional
arrangementsrelatingtotheTokyoRoundCodes,onwhichhehopedtobeabletoconcludeconsultations
thefollowing dayonthebasis ofcertain responses thathewaswaiting for.
34. TheSub-Committee tooknoteofthestatement.