RESTRICTED
WORLD TRADE WT/BFA/3
L/7628
ORGANIZATION 21April 1995
Limited Distribution
(95-1008)
REPORT ONTHE JOINT WTO/GATT COMMITTEE ONBUDGET,
FINANCE AND ADMINISTRATION
INTRODUCTION
1. TheWTO Committee onBudget, Finance andAdministration andtheGATT 1947Committee
onBudget, Finance andAdministration, hereafter referred tojointly astheCommittee, meton
16,22and27March 1995.
2. TheCommittee waschaired byMr.J.-M. Metzger ofFrance. Theterms ofreference and
composition oftheCommittee aresetoutindocuments L/5964/Rev.9 of15March 1995 and
PC/IPL/2 of28October 1994.
3. TheAgenda forthemeeting of16and22March 1995 indocument WTO/AIR/38,
GATT/AIR/3675 wasadopted withtheaddition oftherelationship between theUNandGATT/WTO
with regard totheInternational Trade Centre andadministrative measures ofcontracting
parties/members classified asInactive Members. TheChairman confirmed inhisintroduction the
establishment ofthetwoWorking Groups, thefirstonedealing withthepersonnel related questions
andthesecond onewiththenewassessment ofcontributions tothebudget. Hesaidthatthefirst
Working Group willbechaired byhimself andthesecond onebyMr.JunYokota oftheJapanese
Mission.
4. TheAgenda forthemeeting of27March 1995indocument WTO/AIR/50, GATT/AIR/3677
wasadopted.
MEETINGS OF16AND 22MARCH 1995
A.MANAGEMENT REVIEW
5. TheChairman recalled thattheManagement Review prepared byDeloitte andTouche had
beendistributed todelegations on19December 1994andthatithadalready beenthesubject ofafirst
informal meeting atthelevel ofHeads ofDelegations on6March 1995. Itwasnowuptothe
Committee totransmit thereport officially totheGeneral Council withitscomments. Asthe
Director-General indicated inthe6March meeting, theSecretariat hadprepared apaper onthe
subject which hadrecently beendistributed todelegations.WT/BFA/3
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6. Amember oftheSecretariat introduced thepaper byrecalling thattheSecretariat had
considered theManagement Review tobedesirable inthetransition from theGATT totheWTO.
Thereport itself hadbeenextensively discussed withdirectors andatthesenior management level.
TheSecretariat 'spaper wasnotintended tobeexhaustive buttoreflect some initial perceptions of
thereport within theSecretariat. Hesaidthatthere wasafeeling thattheconsultants didnot
completely succeed incoming togrips withthecoretasks theywereasked todoand,inthiscontext,
thequestion could beasked whether there hadreally beenvalue formoney. Thereport could serve
asabasisfordialogue ontheissues raised andthediscussion would undoubtedly beenhanced bythe
detailed information presented inthereport. TheSecretariat wasfullyprepared toparticipate inthe
dialogue inaconstructive spirit. Hesaidthatpublic opinion wasexpecting much fromtheWTO and
thatministers want theorganization tobedynamic andproactive. Inaddition, there were high
expectations onthepartofparliamentarians, NGOs, business andindustry.
7. TheChairman suggested thatthediscussion might focus onthefollowing areas: thestructural
organization oftheSecretariat, management ofhuman resources, themethod ofbudget preparation
andpublications.
8. TheCommittee hadextensive discussions withregard tothereport andtheSecretariat 'spaper.
There wasgeneral agreement thatbothdocuments provided aunique opportunity tohaveatimely and
useful dialogue onthepoints raised. Some delegates wereoftheopinion thattheprecise points raised
inthereport should beclosely examined toseewhether there wasaconsensus ontheirapplicability.
Others feltthatthereport should beusedmore asatoolwhich would engender discussions onthe
typeofSecretariat thatwould bestserve theinterests oftheMembers oftheWTO.
9. TheCommittee expressed support fortheideathat,inallareas, theWTO should move inthe
direction ofmanagement byobjectives, andthattools needed tobedeveloped which would provide
bothaquantitative andqualitative assessment ofmeeting suchobjectives.
Structural organization oftheSecretariat
10. Some Committee members expressed support forOption Ccontained inthemanagement
report andthought thatitwasappropriate thatthere beonlyonelevel between directors andthe
Director-General. Others preferred Option Borwere oftheopinion thattheclassic structure was
more appropriate where support divisions would come under oneDeputy andtheoperational divisions
would besplitbetween theremaining other twoDeputies. There waswide-spread acknowledgement
ofthenecessity tohavemore effective communication bothinside theSecretariat, horizontally and
vertically, andbetween theMembers andtheSecretariat.
Human resources management
11. Several issues were predominant inthediscussions relating tothemanagement ofhuman
resources. Members frequently raised thepoint that,intheiropinion, women wereunder-represented
inthehigher management levels oftheSecretariat, andsome feltthataplanshould beprepared to
rectify thesituation inthefuture. Others feltthatmore should bedonetoassure awider geographic
representation among thestaffoftheorganization. Withregard totheratioofsupport toprofessional
staff, itwaswidely feltthatthiswastoohigh. Inthiscontext, members oftheCommittee mentioned
thattheintroduction ofmodern office technology should result infewer support staffandquestioned
thecapacity oftheSecretariat toabsorb newtechnology. Some members saidthatprofessional staff
should beencouraged tomake greater useofmodern technology bywithdrawing theavailability of
some support staff.WT/BFA/3
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12. With regard totheproposal inthemanagement review toinstitute aYoung Professionals
Programme, therewasnoclearagreement: mostmembers oftheCommittee speaking infavour while
others doubted itsusefulness and/or applicability totheneeds oftheorganization. There wassupport
fortheannual evaluation ofstaffwhich some members saidshould beusednotonlyindeciding upon
promotions butshould eventually betiedtoamerit-based salary increase system.
13. Anumber ofmembers oftheCommittee expressed theview thatthepolicy withregard to
Temporary Assistance needed tobereviewed especially inlight ofthefactthatasignificant
proportion ofstaffwerecurrently under Temporary Assistance contracts. Itwasalsomentioned that
theuseofconsultants should bestrictly controlled.
Method ofBudget Preparation
14. There wasgeneral support fortheideathatthere should beageneral policy debate prior to
theformulation oftheannual budget estimates. Some members oftheCommittee feltthat,rather than
creating aspecific body where suchadebate could takeplace, thematter could beputtotheGeneral
Council, perhaps inspecial session. Thewasalsoconsiderable support foradevolution ofbudgetary
planning andaccountability atthedivisional level.
Publications
15. While theemphasis ofthediscussion wasprimarily ontheabove-mentioned three general
areas, several members oftheCommittee raised thepoint thatthere needed tobeadebate onthe
importance tobegiven tothecommercial sideofpublications, ashadbeen highlighted inthe
Management Review.
16. Inresponse tosome ofthepoints raised bymembers oftheCommittee, representatives ofthe
Secretariat commented thatthedebate ontheissues raised intheManagement Report wasindeed
proving useful asanumber ofideas werebeing putforward. Itwasemphasised thattheSecretariat
wasprepared tocontinue thedialogue inanopen andconstructive spirit. With regard totools for
themeasurement ofobjectives, theSecretariat shared thepoint ofview thatthere wasarealneed.
Itwasfelt,however, thatthesuggestions putforward intheManagement Report might notbethe
most appropriate foraninternational organization. Itwasfurther mentioned thatthenewbudget
structure introduced inthe1995 budget would lenditself toidentifying costs onadivisional basis.
TheSecretariat alsomentioned thatwithregard bothtotheratioofsupport stafftoprofessional staff
andtothepercentage ofwomen intheSecretariat, theGATT/WTO wasinabetter position thana
number ofother international organizations inGeneva.
B.SALARIES AND PENSIONS
C.WTO CONTRACT OFEMPLOYMENT POLICY
17. Amember oftheSecretariat introduced papers dealing withagenda points BandCconcerning
respectively Salaries andPensions andtheWTO Contract ofEmployment Policy. TheChairman
explained thatthese twopoints would betaken upindetail inthecontext ofaWorking Group to
discuss personnel-related questions. Theintroduction oftheitems inthecontext oftheBudget
Committee meeting would provide theopportunity forafirstexchange ofviews.WT/BFA/3
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18. With regard toSalaries andPensions, amember oftheSecretariat briefly traced thehistory
oftheproblems surrounding thequestion aswellastheinstances when theGATT Budget Committee,
theCouncil andtheMinisterial Conference haddealtwithit.Itwasmentioned thattheproblem of
theremuneration levelofprofessional staffwasaffecting theability oftheWTO toattract staffgiven
thefactthatother international organizations looking forsimilarly-qualified staffwere abletooffer
conditions ofservice more attractive thantheWTO. Thesame problem existed intheareaof
pensions.
19. Members oftheCommittee hadapreliminary exchange ofviews withregard tothetwo
agenda points dealing withsalary andpensions andtheWTO contract ofemployment policy. While
some delegations thought itnotillogical thattheWTO have astatus different from theUnited
Nations, others expressed andopposite viewastheywere notready toaccept adeparture from the
Common system andfinally anumber ofdelegations expressed theneedtohavemore information
before being abletopronounce themselves ontheissue ofsalaries andpensions. With regard tothe
contract ofemployment policy, anumber ofmembers oftheCommittee indicated thatthequestion
hadtobetreated asapackage inconjunction withsalaries andpensions.
D.STAFFING REQUIREMENTS
20. Thispoint oftheAgenda wasnotdiscussed during themeetings.
E.CONTRACTING PARTIES 'REPRESENTATIVE ONTHE ICITO/GATT
STAFF PENSION COMMITTEE
21. Itwasrecalled thatinMarch, 1993, Mr.Peter Cheung wasnamed tofilloutthethree-year
term ending 31December 1995 astheCONTRACTING PARTIES 'representative onthe
ICITO/GATT Staff Pension Committee. Mr.Cheung informed theCommittee thathewould
unfortunately beunable tocomplete histerm.
22. TheCommittee recommends totheGeneral Council thatMr.Jean-Daniel Reyreplace
Mr.Peter Cheung ontheStaff Pension Committee untiltheexpiration ofthepresent mandate on
31December 1995.
F.OTHER BUSINESS
INACTIVE MEMBERS -SITUATION ASAT15MARCH 1995
23. Following therecommendation ofthePreparatory Committee oftheWorld Trade
Organization, ontheissue ofInactive Members, theSecretariat prepared alistofMembers which
haveaccumulated more thanthree years ofarrears asat15March 1995 (seedocument CRP(95)1).WT/BFA/3
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24. Therefore, inaccordance withparagraph 7(b)ofdocument PC/7, L/7578, TheCommittee
recommends totheGeneral Council thatthefollowing contracting parties/Members classified in
Category IVofAdministrative Measures (Inactive Members) beurged toliquidate theirarrears:
Antigua andBarbuda Madagascar
Bolivia Mauritania
Burundi Nicaragua
Cameroon Niger
Central African Republic Rwanda
Chad Senegal
Congo Sierra Leone
Dominican Republic Suriname
Gambia Togo
Ghana Uganda
Guatemala Zaire
Haiti Zambia
Kenya
RELATIONSHIP BETWEEN THE UNAND GATT/WTO WITH REGARD
TOTHE INTERNATIONAL TRADE CENTRE
25. Apaper (CRP(95)2) onthebudgetary issue oftherelationship between theorganization and
theUnited Nations (UN) (which aretheparent bodies ofInternational Trade Centre (ITC)) was
distributed bytheSecretariat describing thehistory ofthisrelationship andunderlining theproblems
created withthepresent arrangement interms offinancial control oftheITCBudget, bytheBudget
Committee oftheOrganization. Inorder torestore thisfinancial control oftheBudget Committee
ontheregular budget oftheITCbutwithout changing theroleoftheJointAdvisory Group (JAG),
theCommittee proposed thattheWTO Secretariat begiven amandate tonegotiate anewfinancial
agreement withtheUnited Nations Secretariat
26. Therefore, TheCommittee recommends totheGeneral Council thefollowing:
A. Assuming thatthecurrent joint andequal partnership ofthetwosponsoring
organizations forthegeneral policy andorientation oftheITC'swork programme
willcontinue, theCommittee onBudget, Finance andAdministration recommends to
theGeneral Council thatamandate begiven totheSecretariat oftheWTO to
negotiate withtheSecretariat oftheUnited Nations anewarrangement onbudgetary
issues related tothefunctioning oftheITC.
B. Thecontrol function oftheGATT/WTO ontheITCbudgetary procedures should be
restored. Inthisrespect the1974 agreement between theGATT andtheUNshould
bemodified according towhatfollows.
C. TheITCbudget willbesubject tothesame preparation andreporting procedures as
theGATT/WTO budget itself.
D. Itwillcover acalendar yearperiod andwillbepresented inSwiss francs, the
currency inwhich thebulkofexpenditures ismade.WT/BFA/3
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E. Itwillbeformulated bytheITCsecretariat using exchange ratesandinflation factors
tobedecided upon jointly between theITCandGATT/WTO secretariats in
consultation withtheUnited Nations.
MEETING OF27MARCH 1995
A.ORAL DRAFT REPORT OFTHE CHAIRMAN TOTHE GENERAL COUNCIL
ONTHE MANAGEMENT REVIEW
27. TheChairman presented totheCommittee hisoralreport ontheManagement Review he
intended tomake atthenextsession oftheGeneral Council foreseen on3April 1995. TheChairman
reported thatthediscussion within theCommittee touched onthree main areas (i)thestructural
organization, (ii)thehuman resources management, (iii)thebudget preparation andfollow-up
procedure, whereas thefourth arearelated topublications willhavetobefurther debated.
28. Regarding structural organization, theChairman saidthatthethirdsolution proposed bythe
Deloitte andTouche andwhich mixhorizontal andvertical responsibilities foreachDeputy Director-
General, wasfavoured bymostofthedelegations. Although, itwasagreed thataplanning function
toreport totheDirector-General andtheManagement Committee wasneeded, itwasalsorecognized
thattheestablishment ofadivision pertaining tothistaskwasnotnecessary. Thisplanning function
should belinked toapolicy guidance which liesontheMembers.
29. Theproblem ofthemanagement ofhuman resources islinked totheestablishment ofthenew
WTO Secretariat which willbediscussed bytheBudget Committee inthecoming weeks. The
problem ofthebalanced representation ofvarious cultures within theSecretariat wasunderlined as
wellasamore balanced representation ofwomen atthetop-level. Theratiobetween General Service
andProfessional staffwasalsodiscussed bytheCommittee members whothink thisratioshould be
reduced withtheintroduction ofthenewoffice technology.
30. Forthebudget preparation itwasmentioned thatapolicy debate should takeplace atthevery
startofthebudget process. TheSecretariat wasinvited toreflect onnewmanagement toolsforthe
measurement ofactivity. Thedelegates stressed thatwhile theroleoftheMembers wastodefine the
Organization 'spolicy, theSecretariat wasresponsible forimplementing it.
31. Finally, theCommittee would liketoreceive concrete proposals from theSecretariat onthe
organization ofthesenior management, ona"young professionals scheme", onthemanagement tools
andmeasures ofactivity, finally onthedecentralization ofthebudget andtheintroduction ofa
performance budget.WT/BFA/3
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B.ASSESSMENTS ONNEW CONTRACTING PARTIES AND ADVANCES TO
THE WORKING CAPITAL FUND: DJIBOUTI, GUINEA,
PAPUA NEW GUINEA AND SOLOMON ISLANDS
(L/7620, L/7608, L/7619 andL/7622)
32. Consequent totheaccession totheGATT oftheGovernment ofDjibouti (document L/7609),
theCommittee recommends totheGeneral Council thatacontribution tothe1994budget amounting
toSwF27,870 andtothe1995 budget amounting toSwF31,320 beassessed onthisGovernment.
Thisassessment isbased onanannual contribution of0.03percent, taking intoaccount theforeign
trade figures ofDjibouti fortheyears 1989-1991. Further, onthebasis oftheleveloftheWorking
Capital Fund ofSwF6,192,149 on16December 1994, theCommittee recommends totheGeneral
Council toassess anamount ofSwF30,961 ontheGovernment ofDjibouti asanadvance tothe
Fund.
33. Consequent totheaccession totheGATT oftheGovernment ofGuinea (document L/7606),
theCommittee recommends totheGeneral Council thatacontribution tothe1994budget amounting
toSwF27,870 andtothe1995 budget amounting toSwF31,320 beassessed onthisGovernment.
Thisassessment isbased onanannual contribution of0.03percent, taking intoaccount theforeign
trade figures ofGuinea fortheyears 1988-1990. Further, onthebasis oftheleveloftheWorking
Capital Fund ofSwF6,192,149 on8December 1994, theCommittee recommends totheGeneral
Council toassess anamount ofSwF30,961 ontheGovernment ofGuinea asanadvance tothe
Fund.
34. Consequent totheaccession totheGATT oftheGovernment ofPapua New Guinea
(document L/7610), theCommittee recommends totheGeneral Council thatacontribution tothe
1994 budget amounting toSwF37,160 andtothe1995 budget amounting toSwF52,200 be
assessed onthisGovernment. Thisassessment isbased onanannual contribution of0.04percent,
forthe1994 budget and0.05percentforthe1995 budget, taking intoaccount theforeign trade
figures ofPapua NewGuinea fortheyears 1990-1992 and1991-1993 respectively. Further, onthe
basis ofthelevel oftheWorking Capital Fund ofSwF6,192,149 on16December 1994, the
Committee recommends totheGeneral Council toassess anamount ofSwF30,961 onthe
Government ofPapua NewGuinea asanadvance totheFund.
35. Consequent totheaccession totheGATT oftheGovernment ofSolomon Islands (document
L/7607), theCommittee recommends totheGeneral Council thatacontribution tothe1994 budget
amounting toSwF27,870 andtothe1995 budget amounting toSwF31,320 beassessed onthis
Government. Thisassessment isbased onanannual contribution of0.03percent,taking intoaccount
theforeign trade figures ofSolomon Islands fortheyears 1989-1991 .Further, onthebasis ofthe
level oftheWorking Capital Fund ofSwF6,192,149 on28December 1994, theCommittee
recommends totheGeneral Council toassess anamount ofSwF30,961 ontheGovernment of
Solomon Islands asanadvance totheFund.WT/BFA/3
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C.CASH SITUATION AND STATEMENT OFOUTSTANDING CONTRIBUTIONS
ASAT28FEBRUARY 1995
36. TheSecretariat prepared adocument onthecashsituation (CRP(95)3) asat28February 1995,
1994 and1993 andastatement ofoutstanding contributions (WT/BFA/CONT/2) asat
28February 1995.
37. Amember oftheSecretariat commented thatthelevel ofcontributions received was
substantially lessthanthose received intheprevious twoyears atthesame date. Herecalled thatin
1993 and1994 there weretheMinisterial meetings thatinaddition 1994 wastheendoftheUruguay
Round. Headded alsothatthepaper reflected thesituation asof28February butthatinMarch some
important payments hadbeenreceived.
38. TheCommittee tooknoteofthereports.
D.INSTALMENT PAYMENTS FOR COUNTRIES INARREARS (CONTRIBUTIONS
FROM 1987 AND EARLIER YEARS) -PROGRESS REPORT
ASAT28FEBRUARY 1995
39. TheSecretariat prepared thereport (CRP(95)4) asat28February 1995 onthepayment of
arrears bythethirty-two contracting parties assessed attheminimum andthesixcontracting parties
assessed above theminimum in1988.
40. TheCommittee tooknoteofthereport.
E.CONTRIBUTION OFOBSERVER COUNTRIES TOWARDS THE COST OF
DOCUMENTATION SERVICES PROVIDED BYTHE SECRETARIAT -
PROGRESS REPORT ASAT28FEBRUARY 1995
41. TheSecretariat prepared areport (CRP(95)5) asat28February 1995onthecontributions of
observer countries.
42. TheCommittee tooknoteofthereport.
POINTS FOR APPROVAL: Paragraph 22
Paragraph 24
Paragraph 26
Paragraph 32
Paragraph 33
Paragraph 34
Paragraph 35