RESTRICTED
PREPARATORY COMMITTEE PC/IPL/M/3
FOR THE 1August 1994
WORLD TRADE ORGANIZATION
(94-1562)
SUB-COMMITTEE ONINSTITUTIONAL,
PROCEDURAL AND LEGAL MATTERS
MINUTES OFTHE MEETING HELD ON19JULY 1994
1. TheSub-Committee onInstitutional, Procedural andLegal Matters helditsthirdmeeting on
19July1994 under theChairmanship ofMr.K.Kesavapany (Singapore).
A. Paragraph 8(b)(ii) oftheDecision establishing thePreparatory Committee
(i) Terms ofreference forWTO bodies
2. TheChairman recalled thatatitsmeeting on4July,theSub-Committee hadhadafirstexchange
ofviews ontheSecretariat 'snon-paper onthissubject dated 28June. Following thediscussion at
thatmeeting, andfromhisinformal contacts since then, itappeared thatthere wasgeneral agreement
thatasetofgeneric terms ofreference forthebodies oftheWTO wasnotnecessary andthat,except
inoneortwoinstances,thetermsofreferencecontainedinthevariousWTOAgreementsweresufficient.
Work would continue, however, ontheterms ofreference fortheWTO Committees onBudget, Finance
andAdministration, Balance-of-Payments Restrictions, andTrade andDevelopment, which wasbeing
undertaken inthethreeexisting Committees. Accordingly, itcould beconcluded that,forthemoment,
theSub-Committee 'swork onthispartofitsmandate hadbeencompleted. Clearly, members could
revert tothismatter atanytimeiftheyhadanyparticular points toraise.
3. Therepresentative oftheUnited States saidthathisauthorities werecurrently examining the
textsoftheUruguay Round Agreements totrytoidentify whether specific terms ofreference were
needed toguide thework ofanyofthebodies established thereunder. Hisdelegation could therefore
goalong withtheChairman 'ssuggestion thatwork onthispartoftheSub-Committee 'smandate be
regarded ascompleted forthemoment, ontheunderstanding thatmembers could revert toitinthe
fall,asnecessary.
4. TheChairman saiditwashisunderstanding thattheSub-Committee didnotneedtorevert
tothequestion ofterms ofreference unless there werespecific reasons todoso.Theresponsibility
would therefore beonindividual delegations toraiseanyparticular issues onterms ofreference in
thefuture.
5. Therepresentative ofNewZealand saidthatanumber ofdelegations werereflecting onthe
question ofterms ofreference andwished tokeepopenthepossibility ofreverting tothisinduecourse.
Hehadnoted theChairman 'sstatement thatitwould betheresponsibility ofindividual delegations
toraiseanyparticular issues concerning thismatter iftheysowished.
6. TheChairman recalled hisopening statement inwhich hehadsaidthattheterms ofreference
containedinthevariousAgreementsweresufficient"withoneortwoexceptions".Amongtheexceptions
wastheAgreement onAgriculture. Delegations could, however, raiseanyother issues ofconcern
tothem, asnecessary.PC/IPL/M/3
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7. Therepresentative ofAustralia referred tothelackofanyprovision intheWTO Agreement
forasuccessor totheGATT Committee onTariff Concessions. Australia believed thatasimilar body
would continue tobeneeded intheWTO, andasked howthisquestion might behandled inthefuture.
8. TheChairman saidthatthissubject would needtobetaken upwiththeChairman ofthe
Preparatory Committee inthefirstinstance. IfthePreparatory Committee decided thatthismatter
should beaddressed intheSub-Committee, thelatter would doso.1
9. Therepresentative ofCanada noted thattheexisting Committees onBudget, Finance and
Administration, Balance-of-Payments Restrictions, andTrade andDevelopment wereconsidering the
terms ofreference fortheircounterpart bodies under theWTO, andthatthesewould bebrought before
theSub-Committeeforitsexaminationandapproval.Inhisunderstanding,therefore,whentheChairman
saidthatwork onthispartoftheSub-Committee 'smandate could beregarded ascompleted, itwas
tobesoregarded onlyuntilthework oftheabove-mentioned Committees wasbrought before the
Sub-Committee, oruntilanyother matters were raised.
10. TheChairman confirmed Canada 'sunderstanding.
11. TheSub-Committee tooknoteofthestatements.
(ii) Rules ofprocedure forthebodies oftheWTO
12. TheChairman recalled thatatitsmeeting on4July, theSub-Committee hadrequested the
Secretariat, inconsultation withdelegations, todraw updraftrules ofprocedure fortheMinisterial
Conference, theGeneral Council andsubsidiary bodies. TheSecretariat hadsince beenworking on
suchapaper andhadreceived inputs fromafewdelegations. Thematerial athandwasinsufficient,
however, andnotcomprehensive enough forapaper tobedrafted thatwould differ greatly from the
Annex tothenon-paper already before theSub-Committee. Moreover, some delegations hadindicated
thattheywould needmore timetoreflect onissues relating tocertain rules ofprocedure. Indeed,
itappeared thatcertain aspects oftherules needed tobeconsidered carefully before apaper could
befinalized. Hesuggested, therefore, thattheSub-Committee revert tothismatter immediately after
thesummer break. Meanwhile, theSecretariat would continue towork onthepaper, andhewould
urgedelegations thathadinputs toprovide tomake theseavailable assoonaspossible totheSecretariat.
13. Therepresentative ofNewZealand saidthattheSub-Committee should undertake continuous,
comprehensive workonrulesofprocedure which should keeppacewiththeworkintheSub-Committee
asawhole. Hisdelegation therefore welcomed theChairman 'ssuggestion thattheSub-Committee
revert tothismatter immediately afterthesummer break.
14. TheSub-Committee tooknoteofthestatements.
(iii) Contact Groups
(a) Review ofwork
15. TheChairman recalled thatcontact groups hadbeenestablished todealwithissues relating
toAgriculture,TRIPSandAnti-dumpingandSubsidies.Sincethe4JulymeetingoftheSub-Committee,
1Followingthemeeting,theChairmandiscussed thematterwiththeChairmanofthePreparatoryCommi ttee,whoconfirmed
thatthiswasamatter which could quite properly behandled bytheSub-Committee. TheChairman announced atthe
Preparatory Committee meeting on22Julythathe,therefore, proposed totakeupthissubject atthenextmeeting ofthe
Sub-Committee.PC/IPL/M/3
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theContact Group onAgriculture hadheldonemore meeting, essentially tobegin work onelaborating
notification requirements andformats under therelevant provisions oftheAgreement onAgriculture.
Forthispurpose, theContact Group hadhadbefore itaninformal background notebytheSecretariat.
Questions suchashowtheCommittee onAgriculture might bestructured tocarry outitsreview process
andother functions, aswellasrelated working procedures, weretobetaken upinmore detail atan
appropriate time. Views hadbeenexpressed atthatmeeting thattheContact Group should alsovisit
thequestion ofterms ofreference fortheCommittee. Thenextmeeting oftheGroup would beheld
inSeptember.
16. TheContact Group onTRIPS hadhelditsfirstmeeting thatmorning. Toaiditinitswork,
theContact Group hadhadbefore itaninformal notebytheSecretariat listing thenotification obligations
intheTRIPS Agreement. Thediscussion hadfocused onthese notification obligations, particularly
those inArticle 63.2onthenotification ofnational lawsandregulations. Inconnection withthis
provision, theneed toenter intoanearly dialogue withWIPO onthequestion ofthepossible
establishment ofacommon register containing suchlawsandregulations hadbeenwidely stressed.
Many participants hadalsospoken ofthedesirability oftheContact Group considering, inthefall,
other areas ofpossible cooperation between theWTO andWIPO asabasis fortheinitiation of
consultations withtheWIPO. Tofacilitate theContact Group 'sconsideration ofthese matters inthe
fall,theSecretariat hadbeenrequested toprepare, onthebasis ofthediscussions intheGroup and
inconsultation withinterested delegations, andinthelight ofinformal contacts withtheWIPO
Secretariat, achecklist ofpossible areas ofcooperation between theWIPO andtheWTO, specifying
anyrelevant WTO provisions. Inthecontext ofthispaper, theSecretariat hadbeenasked toprovide
information ontheexisting WIPO register ofnational legislation, including suchmatters asthenature
oftheobligation tonotify inWIPO, thecoverage oftheWIPO notification system inrelation tothe
TRIPS Agreement, thetiming anddistribution ofnotifications under it,andthelanguages inwhich
notifications were made andcirculated. TheContact Group would meet again inthefalltopursue
itswork, withtheaidbothofthenotealready distributed bytheSecretariat onnotification obligations
andtheadditional paper thatithadbeenrequested toprepare.
17. TheContact Group onAnti-dumping andSubsidies planned toholditsfirstmeeting on22July.
With regard tothesuggestion byEgypt atthe4Julymeeting oftheSub-Committee thattheissue of
Safeguards beincluded inthedeliberations ofthisContact Group, hesaidthatonthebasisofapproaches
bydelegations andviews which hadbeenexpressed tohimdirectly orthrough theSecretariat, there
appeared tobenoobjection toassigning theSafeguards issue tothisContact Group.
(b) Participation ofinternational organizations
18. TheChairman saidthatinthecourse oftheAgriculture Contact Group 'sinformal consultations
regarding theWTO Committee onSanitary andPhytosanitary Measures, many delegations hadbeen
oftheviewthatthere should bescope forrepresentatives fromtheCodex Alimentarius Commission,
theInternational Office ofEpizootics (IOE) andtheSecretariat oftheInternational Plant Protection
Convention (IPPC) toparticipate onanadhocbasis intheContact Group 'sinformal consultations
onrelevant issues. These specialized organizations hadbeenclosely associated withthenegotiations
inthisarea,andtheAgreement onSanitary andPhytosanitary Measures required thattheCommittee
cooperate closely withthese organizations onanumber ofmatters. Thedelegations involved inthese
informal consultations hadasked thatthismatter bebrought totheattention oftheSub-Committee.
Ithadbeensuggested thattheSub-Committee might draw adistinction between thistypeofadhoc
participation, which appeared necessary andwell-founded fortechnical reasons -firstandforemost
fortheAgriculture Contact Group, butalsoperhaps forothers -andtheissue ofobserver status in
theSub-Committee. Hehadbeen informed thatthistype ofsituation might arise inother
Sub-Committees aswell. Adhocparticipation might havetheadvantage ofhaving thesegroups benefit
fromwhatappeared tobenecessary expertise, without having toformalize therelationship atthisstage.PC/IPL/M/3
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19. Therepresentative oftheEuropean Communities recalled thatatthe4Julymeeting ofthe
Sub-Committee, hisdelegation hadexpressed doubts astotheappropriateness ofadmitting sectoral
organizations asobservers intheSub-Committee. Herecognized thatthequestion nowbefore the
Sub-Committee waswhether some oftheseorganizations should beinvited ontheinitiative ofmembers
ofthecontact groups tobepresent attheirdeliberations. Ifthecontact groups feltthatitwould be
appropriate tohavetheexpertise ofoneorother ofthese organizations, andthere wasconsensus on
that,theCommunity would nothaveanydifficulty although itwould notethatitmight thenbenecessary
toholdmeetings ofcontact groups intheCouncil Room toensure thatadequate seating space was
available. TheCommunity believed thatasimilar arrangement would beappropriate inrespect of
theFAO aswell.
20. TherepresentativeofArgentinasaidthattheparticipationofthethreeorganizationsonanadhoc
basis intheContact Group onAgriculture wasdesirable inviewoftheirexpertise inthesanitary and
phytosanitary area.
21. Therepresentative ofEgypt recalled thatthecontact groups wereinformal bodies. Asamatter
ofprinciple, Egypt would notbeateasespeaking inaninformal meeting inthepresence ofanother
international organization. However, ifanycontact group wanted theexpertise ofoneorganization
oranother during aparticular informal meeting, Egypt would notobject, ontheunderstanding that
thiswould beattherequest ofthemembers ofthecontact group andfollowing agreement among them
toinvite suchanorganization fordiscussions regarding aparticular matter.
22. TheChairman saidthatithadbeenmade clearthatorganizations would onlybeinvited atthe
request ofcontact groups andongrounds thattheorganization concerned hadspecific expertise which
could bemade useof.
23. Therepresentative ofIndia saiditwould bewrong togiveanyauthority tocontact groups to
decide which organizations should bepresent attheirmeetings. Contact groups werepurely informal
arrangements, andobservers were notinvited tomeetings ofaninformal nature. Onehadtomake
clear thatthecontact groups were intending toseektechnical advice from expert organizations, and
thatthiswasnotaquestion ofobservership. Adecision should betaken interms ofsaying thatif
relations withanytechnical organization wereenvisaged intheAgreement itself, thenthecontact group
could, byconsensus, decide toinvite experts fromthatorganization tobepresent andtoseekitsadvice,
butnotasanobserver. Onthesamebasis, theFAOcould alsobeinvited when issues relating tosome
ofthecommitments envisaged intheAgreement cameupfordiscussion, whether intheSub-Committee
orinacontact group.
24. TheChairman saidthattherequest fortheparticipation ofthethreeorganizations, onaccount
oftheirexpertise, hadbeenmade intheContact Group onAgriculture, andthathehadavoided any
decision untiltheSub-Committee hadconsidered thismatter. Thus, itwould notbethecontact groups
thatdecided ontheparticipation ofanyorganization, butrather theSub-Committee. Onewould thus
beabletoavoid straying unwittingly intothequestion ofobserver status forthese organizations in
thecontact groups.
25. Therepresentative ofUruguay supported thesuggestion toinvite thethree organizations
concerned toparticipate inthework oftheContact Group onAgriculture. Similar requests might be
made byother contact groups, suchasbytheTRIPS group toinvite WIPO toparticipate initswork
oncertain technical aspects, andUruguay believed thatsuchrequests should bedealtwithinaflexible
manner.
26. TheChairman saidthatinaddition toaflexible approach, hewould suggest apractical approach.PC/IPL/M/3
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27. Therepresentative ofAustralia saidthatthequestion ofparticipation ofthethreeorganizations
inthework oftheContact Group onAgriculture should beconsidered inapractical way, asthe
Chairman hadsuggested, andonitsownmerits without being linked toanybroader issues. There
wasclearly aperceived needintheContact Group fortheparticipation ofthese organizations, and
Australia believed thatauthority should begiven totheGroup toallow theirparticipation.
28. Therepresentative oftheUnited States associated hisdelegation withthestatement byAustralia,
andurged aflexible approach. Hisdelegation believed thatnolinkage should bemade withanybroader
issues atthisstage, andthatoneshould continue totakeacase-by-case approach onsuchrequests.
29. TheSub-Committee tooknoteofthestatements andagreed thattheCodex Alimentarius
Commission, theIOEandtheIPPC Secretariat beallowed toparticipate inthework oftheContact
Group onAgriculture onanadhocbasis, ontheunderstanding thatthisparticipation wasinterms
ofproviding expertise andinrelation totherelevant Agreement.
B. Paragraph 8(b)(iii) oftheDecision establishing thePreparatory Committee
30. TheChairman drew attention totheNotebytheSecretariat onthearrangements between the
GATT andUruguay Round bodies andinternational organizations (PC/IPL/W/3). Together withthe
earlier Note inPC/IPL/W/2, thiscould provide agood starting point forthediscussion onthispart
oftheSub-Committee 'smandate, which could laterbereflected inconcrete proposals andguidelines
fortheSub-Committee toexamine. ThenoteinPC/IPL/W/3 outlined, among other things, thecriteria
thathadbeenusedtoinvite international organizations toUruguay Round bodies aswellastothe
Marrakesh Ministerial meeting, which could provide useful guidelines andprecedents forthe
Sub-Committee 'swork. Henoted thatforcertain organizations suchastheCCC, ISO,IEC,andthe
IMFandWorld Bank, abasis fordrawing upguidelines foreffective cooperation already existed in
theUruguay Round Agreements.
31. Therepresentative ofAustralia saidthattherelationship between theWTO andother
intergovernmental organizations should besimilar tothose which theGATT presently had,although
withawider range ofcontacts totakeintoaccount theWTO 'sadditional obligations andresponsibilities
inareassuchasservices, intellectual property andagriculture, including inthesanitary andphytosanitary
area. Onecould thinkofthreecategories ofrelationships between theWTO andotherintergovernmental
organizations.
32. Thefirstcategory would bethose organizations which hadbeengiven aspecific rôleunder
particular WTO Agreements, orindeed intheGATT 1994, suchastheIMF, World Bank, CCC, Codex
Alimentarius Commission, theInternational Office ofEpizootics andtheInternational Organization
forStandardization. Therelationship between these organizations andtheWTO might beformalized
insome waythrough theestablishment ofmemoranda ofunderstandings between theheads ofthese
organizations and,ifappropriate oneachoccasion, theChairman oftheGeneral Council oftheWTO.
33. Thesecond category oforganizations would bethose thathadafunction tosupply information
regularly totheCommittees overseeing theindividual WTO Agreements, ortotheSecretariat, and
would include organizations suchastheUNEP andtheCSDintheenvironment area,aswellasthose
dealing withprofessional services, suchastheaccounting profession organizations. Inthiscategory
would beincluded those organizations thatregularly provided information totheSecretariat, asdistinct
from those thatparticipated insome form intheregular meetings ofWTO Committees. Onecould
think interms ofsome exchange ofletters being concluded between these organizations andthe
Secretariat setting outtheterms under which thisregular information should beprovided.PC/IPL/M/3
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34. Thethirdcategory oforganizations would bethose thatsimply wished tobekeptinformed
ofwhattheWTOwasdoinginitsvariousconstituentagreements,anditwasthiscategoryoforganization
which fellmorereadily intotheobserver category. Organizations thatcould beincluded inthiscategory
were, among others, theUnited Nations, FAO, andperhaps theOECD inparticular cases. Adecision
ontheparticipation ofthese organizations asobservers inWTO meetings could bedealtwithonthe
same kindofcase-by-case basis ashadbeenusedinthepast, without anyparticular needformore
formal arrangements.
35. Therepresentative oftheUnited States saidthatAustralia 'scategorization washelpful. He
would note, however, thatinthecaseofsome organizations, asinthecaseoftheWTO, there was
adistinction between thesecretariat andthemembership. Insuchcases, onemight wanttolookat
thekinds offunctions thatwere performed bythemembers asopposed tothose performed bythe
secretariats. Thiswould beuseful because onewould needtoknow withwhom theWTO should develop
relations inorder togetcertain information andinorder towork harmoniously withaparticular
organization. Hesuggested thatthisquestion might beanalyzed bytheSecretariat. Referring to
Australia 'sthirdcategory oforganizations, namely those thatmight wishtobekeptinformed about
thework oftheWTO, hesaidthatonemight alsowishtolookinthefuture atthequestion ofthose
organizations theactivities ofwhich theWTO would needtobekeptinformed of.Thisquestion need
notnecessarily beaddressed bytheSub-Committee, however, andcould belefttoalaterdate. Another
question thatmight belooked atinthefuture concerned those organizations thatdidnotfitinto
Australia 'sother categories, butwhose activities related tothose oftheWTO andabout which thelatter
might wishtobekeptinformed ofinsome formalized way. Finally, hereiterated hisdelegation 's
interest intheother organizations mentioned inArticle VoftheWTO Agreement, andhoped tobe
abletoprovide aninput inthisregard when theSub-Committee reverted tothispartofitsmandate
afterthesummer break.
36. Therepresentative oftheEuropean Communities agreed thatonecould categorize several types
ofarrangements withinternational organizations anddistinguish, inparticular, between aformal status
ofobservershipandsomeotheradhocarrangementwherebycertainorganizationswereinvitedatcertain
occasions only. TheSub-Committee should, however, avoid taking amaximalist approach. While
itwascertainly relatively easytodecide thatinternational organizations should begranted observer
status, itwould beextremely difficult towithdraw thatstatus atalaterstage. Oneshould therefore
identify which organizations needed tobepresent inthefuture work oftheWTO, andnothavea
maximalist listofthose thatmight haveaninterest, orthose thattheWTO might beinterested tosee
admitted atsome laterstage. Onemight alsowishtohavereciprocity, andtherefore should distinguish,
inthecategory ofthoseinternational organizations thatwould begranted formal observer status, between
those inwhich theWTO would havereciprocity andthose inwhich thatdidnotappear necessary.
Hisdelegation wished tocome back tothissubject afterthesummer break foramore thorough
discussion.
37. Therepresentative ofCanada saidthattheSub-Committee hadalotofwork todoandlittle
timetodoitin.Accordingly, onthequestion ofrelations withintergovernmental organizations, the
Sub-Committee should concentrate onthose withwhich relations would beneeded ondayoneofthe
WTO, suchastheIMF, World Bank, UNandWIPO, aswellasanyothers thattheSub-Committee
identified asfalling intothiscategory. Thequestion ofdeveloping relations withother organizations
could beputoffuntilaftertheentry intoforce oftheWTO. Onthequestion ofnon-governmental
organizations referred tobytheUnited States, theSub-Committee might wanttowaitfortheinput
expected from other groups before proceeding further.
38. TheChairman agreed thattheSub-Committee should concentrate ontheessentials first, and
consider onlywhatwasnecessary fortheWTO tobeoperational asofdayone.PC/IPL/M/3
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39. Therepresentative ofIndia saidthathisdelegation could, broadly speaking, goalong with
Australia 'scategorization inrespect ofthose organizations which would haveafunctional relationship
withtheWTO oranyofitsbodies. However, relations between theWTO andcertain organizations,
namely theIMFandtheWorld Bank, might havetobemore thanfunctional, andwould needtobe
considered separately. Thisrelationship might havetobemoreunique thanthatwithotherorganizations
andwould havetoconsider aspects suchasthenature ofcooperation between themembers oftheWTO
andthese institutions ontheonehand, andthatbetween thesecretariats ofthese organizations onthe
other.
40. Turning tointernational organizations intheareas ofTRIPS andservices, hesaidthatalthough
specific cooperation withthese organizations hadbeenenvisaged intheAgreements concerned, there
wastheadditional issue ofdeveloping more general cooperation inorder toensure thattheWTO did
notduplicate thefunctions ofthese organizations. Heunderlined thathewasreferring hereto
international inter-governmental organizations andnottotrade bodies orregional inter-governmental
organizations withlessthanuniversal membership. Another matter thatwould needtobeaddressed
separately wasthatofrelations withtheUNasawhole, including itssubsidiary organs suchasthe
UNCTAD. These organizations could notbeputintothecategory ofthose thatwereonlyinterested
inreceiving information from theWTO orinproviding itwithinformation. Astopriorities, his
delegation believed that,except insome verylimited cases, onedidnothavetobeready withtheexact
nature ofthese relationships inthegreatest ofdetail before theWTO Agreement came intoeffect.
What wasreally needed wasagreat dealofdeliberation, andoncemembers hadclarified theirown
ideas regarding thekinds ofmechanisms theywished toseeinplace, contact would needtobemade
withtheother organizations concerned toelicittheirviews onthenature oftherelationship which they
envisaged withtheWTO.
41. Therepresentative ofUruguay saidthattheSub-Committee would havetothink interms of
developing relations withtwobroad groups oforganizations. Thefirstgroup wasorganizations with
which some kindofspecial relationship hadtobeestablished, andwhich, asIndia hadstated, might
differ fromoneorganization toanother indetail. Clearly, thenumber ofsuchorganizations wasnot
particularly large, andwould include theWorld Bank, IMF, andperhaps alsotheCCC, theWIPO
andthethree organizations specifically mentioned intheAgreement onSanitary andPhytosanitary
Measures. There were other bodies which might beadded, butthatwould essentially bethelistof
thegroup withwhich special relationships would beestablished. Thedetailed nature oftherelationship
would varyfromoneorganization tothenext. Theotherbroad group would bethoseotherorganizations
which didnotfallintothefirstcategory. While there would bedifferences from oneorganization
tothenextinthiscategory, hebelieved thefirststepwould betoestablish thisgeneral chart ofthe
situation andthendecide ontheaction foreachofthese broad categories.
42. Therepresentative ofArgentina saidthatsome sortofmechanism forcontact between the
Preparatory Committee andtheorganizations defined ineachoftheUruguay Round Agreements, such
asforexample intheTRIPS Agreement, should beestablished urgently sothattherewasnoduplication
ofeffort andsothatitwould beabsolutely clearastohowthenotification procedures would function.
Thesecond andmore important taskwould betoestablish thecategories ofrelationship between the
WTOandotherorganizations,andtodeterminethetypesoflinkstobedevelopedwithotherinternational
organizations. There werecertain guidelines thatwereimplicit intheAgreements themselves. One
would thenbeabletohavesome ideaofhowtodealwiththesortofrange ofproblems thathadbeen
raised atthepresent meeting, suchasthenature oftherelationship between secretariats andbetween
members oforganizations. TheSub-Committee should nottrytoachieve anything tooambitious over
thenextfewmonths. Themosturgent taskwastoestablish sucharrangements aswerenecessary to
ensure thattheAgreements thathadbeenentered intowould beoperative asofdayone.PC/IPL/M/3
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43. TheChairman saidthattheSub-Committee should adopt aminimalist approach because itwould
beeasier toinvite other organizations inthantoterminate therelationship withthem onceitwas
established. TheSub-Committee would needtoelaborate thebasis oftherelations andthendecide
which organizations theWTO would wanttodevelop relations with. Amain consideration would be
thatanyrelationship should bedecided onthebasis offunctions. TheIMF, World Bank andWIPO
hadbeenmentioned inthediscussion, asalsoUNCTAD, withwhich relations would beimportant
fromadeveloping-country perspective. Onewould alsoneedtolookatbodies which handled specific
issues inthenewareas thattheWTO would bedealing with. Hewould endeavour tohaveapaper
before theSub-Committee following thesummer break which would provide guidelines thatwould
bebased onthecomments made, particularly byAustralia andIndia, among others.
44. With regard toorganizations thatmight beinvited asobservers totheWTO, itwashisview
thatsome broad guidelines should bedeveloped tofacilitate consideration ofthismatter. Among the
elements thatmight beincluded insuchguidelines were:
1. Should theapproach toobserver status intheWTO bodies begeneral orbody-specific?
a) Generally, should thepurpose ofobserver status intheWTO bodies for
international organizations betoenable themtofollow discussions therein on
matters ofdirect interest tothem ortofollow allmatters?
b) Towhich meetings ofwhich WTO bodies didobserver status confer aright?
c) What didobserver status entitle anorganization to:2
- therighttospeak?
- therighttocirculate documents?
- therighttoreceive documents -andifso,which ones?
2. Nature ofthework oftheorganization:
- Should theWTO, orWTO bodies individually, consider requests forobserver
status only bythose organizations which hadadeclared andrecognized
competence, orgenuine interest, intrade policy matters dealt withbyitor
itsbodies?
3. How global andopen-ended wastheorganization applying forobserver status?
4. Should organizations thathavehadobserver status inthepastinGATT 1947 bodies
andinUruguay Round bodies maintain thatstatus subject tonewWTO-specific
conditions tobeagreed?
5. Should theWTO oritsbodies consider requests forobserver status onacase-by-case
basis, taking intoaccount such factors asthenumber ofWTO Members inthe
organization concerned, andwhether theWTO hadreciprocity toattend meetings of
theother organization?
2Theright tovoteortoparticipate indecision-making didnotenter intoconsideration.PC/IPL/M/3
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6. Should there beaprovision forreviewing thestatus ofaparticular organization after
anumber ofyears ifthelatter hasnotattended WTO meetings, orhadnotcomplied
withother conditions agreed upon?
45. Therepresentative oftheUnited States wondered ifthenotion ofwhether ornotaparticular
organization wasglobal andopen-ended wasuseful asamatter ofprinciple. Iftherewasanorganization
thatrepresented governments whose countries produced themajority ofacommodity orofaparticular
goodorservice, thenthefactthatitwasregional asopposed toglobal would result intheWTO cutting
itself offfrom dialogue withthatorganization onthatbasis. Itwould seem useful thatifthenature
oftheorganization wassuchthatallwould benefit from arelationship, thenthisprinciple might be
getting inthewayofsomething useful andpotentially something thatwould facilitate thework ofthe
WTO. Hisdelegation offered thisasapreliminary comment, andlooked forward tocoming back
tothismatter atafuture meeting. Clearly, thenotion ofobserver status waspartofthelarger issue
ofhowtheWTO would relate tootherorganizations, andtheUnited States hoped tohaveanopportunity
tofollow through onthisquestion inthefall.
46. Therepresentative ofIndia saidthatthequestions raised bytheChairman wereveryrelevant,
andhisdelegation would revert tothematthetimeoftheSub-Committee 'snextsubstantive discussion
ontheWTO 'srelations withother organizations.
47. Therepresentative ofNewZealand saidthatthecriteria mentioned bytheChairman would
induecourse beveryuseful. Hisdelegation, likethatoftheUnited States, would wanttoreflect on
whetherornotopen-endedmembershipwasanessentialcriteriafordecidingthequestionofobservership.
Herecalled thatwhen observership fortheMarrakesh Ministerial meeting hadbeendecided, some
broad criteria hadbeenmentioned, asindicated inparagraph 16ofPC/IPL/W/3, andthatanumber
oftheorganizations invited asobservers didnotnecessarily haveopen-ended membership. Onewould
therefore wanttoreflect onthisissue induecourse.
48. TheChairman saidthatthere hadtobeacut-off point, otherwise itwould bedifficult to
accommodate allthebodies thatrequested observer status. Having saidthat,NewZealand 'scomment
wasonethatshould bedulyconsidered.
49. Therepresentative ofMorocco saidthatthecriteria suggested bytheChairman were useful
because theyoffered amixbetween ahorizontal approach andacase-by-case approach todeciding
onobserver status. Byfollowing suchanapproach, onecould havecertain well-defined criteria for
granting observer status onacase-by-case basis. Asregards thecriterion ofreciprocity, inhis
delegation 'sview, observer status waslimited forafixed period oftime. Committees, inanycase,
hadalimited duration, andhedidnotthink eveninternational organizations would begranted observer
status forever. Hisdelegation believed thatalluniversal orregional organizations which displayed
aninterest orwhich could provide useful input tothework oftheWTO should beinvited asobservers.
50. Therepresentative ofAustralia expressed support forthestatements bytheUnited States and
NewZealand totheeffect thattheWTO should notcutitselfofffromthebenefits andvalue ofhaving
organizations ofaregional nature participate asobservers inthework ofthevarious WTO Committees.
51. TheChairman saidthatwhen hehadmade thepoint about howglobal andopen-ended an
organization applying forobserver status was,hehadposed aquestion andhadnotindicated that
non-global organizations should necessarily bekeptout.Inthecaseofsuchorganizations, however,
itwouldcertainlyberelevanttoexaminehowwidetheirmembershipwas,whatfunctionstheyperformed
andsoon.PC/IPL/M/3
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52. Before concluding thediscussion, heinformed theSub-Committee thathehadreceived arequest
fromtheDirector-General ofWIPO tospeak withthelatter onaninformal basisregarding thenature
ofrelations between WIPO andWTO. Asimilar request hadbeenmade bytheIMF. Hebelieved
itwould beuseful forhimtohave aninitial non-committal exchange ofviews both with the
Director-General ofWIPO andtherelevant IMFofficials. Hehoped thattherewould benoobjection
tohisundertaking these consultations.
53. TheSub-Committee tooknoteofthestatements.
C. Transitional arrangements
54. TheChairman saidthattheissue oftransitional arrangements wasprobably among themost
complex andsensitive issues tobetackled bytheSub-Committee. Hehadapproached itwithagreat
dealofcaution andwould want tobeclosely guided bytheviews ofmembers astohowtheissues
should beaddressed. Anon-official, non-formal discussion paper ontheissues pertaining totransitional
arrangements hadbeen circulated tofacilitate discussion andtoprovide astarting point forthe
Sub-Committee 'ssubsequent work onthematter. Thepaper narrowed down theareas which hadto
belooked atbytheSub-Committee. Given therather latecirculation ofthepaper, hedidnotexpect
averysubstantial exchange atthepresent meeting onthebroad andcomplex issues raised init.
However, hesuggested thatthepaper beadded tothelistforvacation reading andreflection. Inthe
meantime, theSecretariat would continue work onapaper which would identify thetransitional issues
thatwere agreement-specific within thecontext oftheWTO Agreements. Henoted thatseveral of
theissues inthediscussion paper were notexclusive tooneortheother Agreement. Heproposed
thattheSub-Committee revert tothispartofitsmandate atitsnextmeeting when itcould havea
discussion withthebenefit ofthispaper andtheSecretariat Note. However, hedidnotwanttoprevent
anydelegation fromspeaking atthepresent timeifitsowished, particularly ifithaduseful suggestions
fortackling these issues.
55. Therepresentative ofCanada saidthatthediscussion paper raised anumber ofimportant
questions. Oneissuethathadtobekeptinmind wasthatsome issues would bedealtwithbytheWTO,
butsome ofthetransition issues would alsohavetobetaken upbytheGATT Council andTokyo
Round Code Committees. Thiswork needed tobecoordinated, andwithin averystrict time-limit.
InCanada 'sview, thetransition questions were thetoppriority ofthisSub-Committee.
56. TheChairman saidthathewasaware oftheparticular problem referred tobyCanada asit
hadalready beenencountered regarding Anti-Dumping andSubsidies.
57. Therepresentative oftheEuropean Communities saidthatashisdelegation hadreceived the
discussion paper rather late,itwasnotinaposition tocomment substantially onit.Thepaper raised
anumber ofimportant questions without attempting toprovide replies. While allthese matters were
important, some might needpriority treatment. TheSub-Committee should firstfocus onwhich of
these issues itshould dealwithbefore dayonebecause asolution wasneeded ondayone,andwhich
oftheissues could beputofftoalaterstage. Hisdelegation wished tocome backtothese matters.
TheCommunity agreed withCanada thattheSub-Committee 'swork hadtobecoordinated withwhat
wasgoing onelsewhere intheGATT andintheTokyo Round Code Committees, assimilar questions
hadbeenraised inthese other bodies andthere hadtobeconsistency inthesolutions found.
58. TheChairman agreed thatmany oftheissues inthepaper wereverycomplex andwould require
afull-scale discussion.
59. Therepresentative ofHong Kong saidthatthediscussion paper wasverythought-provoking.
Hong Kong looked forward tothecomprehensive paper tobeprepared bytheSecretariat afterthePC/IPL/M/3
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summer break. While hisdelegation would reserve itsdetailed comments onthepresent paper until
thenextmeeting, ithadsome general observations. First, itwasnotclearexactly whatatransitional
arrangement was,buttheideaseemed tobeatransition from theoldtothenew. Thisthenraised
thequestion ofwhether theSub-Committee wastalking onlyabout thegoods area,because forServices
orTRIPS there wasno"old" from which tomake atransition toa"new". Second, three principles
should bekeptinmind when theSub-Committee reconvened inthefall: (1)thejurisdiction ofthe
Sub-Committee, i.e.some oftheissues before theSub-Committee should bedealtwithbytheGATT
Council ortherespective Tokyo Round Code Committees; (2)existing rights andobligations of
contracting parties under theGATT andunder theTokyo Round Codes should notbeaffected unduly
byanytransitionalarrangementtobedecidedbythisSub-Committee;(3)nolegalresultsoftheUruguay
Round should beeither reopened oraffected; forexample, paragraph 11dealt withthetransition
provisionsintheAnti-DumpingandSubsidiesAgreements.Infact,thisissuehadalreadybeennegotiated
andsettled intheUruguay Round negotiations, andthere wasthusnopoint intheSub-Committee
discussing itfurther.
60. Thediscussion paper seemed tohavebasically three large categories ofissues. Thefirstwas
legal, thesecond wasinstitutional andthethirdwasprocedural. Probably themostcontroversial or
sensitive areawasthelegalone. Paragraphs 1to8ofthepaper dealtbasically withthequestion of
legaltransition -namely, therights andobligations ofMembers under theoldandthenewAgreements.
Itseemed thatthiswould bethemajor areaofwork. Fortheinstitutional part,thepaper pointed out
thatsome oftheexisting bodies might continue toexist, andtheSub-Committee would needtoconsider
whether bodies suchas,forexample, theCommittee onTariff Concessions should continue toexist.
While lesscontroversial thanother issues, theSub-Committee would alsotakeupthese questions.
Intheprocedural area,theremight betwoorthreecategories: onelargecategory wasdispute settlement
procedures. InHong Kong'sview, thetransitional arrangement fordispute settlement procedures both
intheDispute Settlement Understanding andintheMinisterial Decision wasquite clearalready, and
Hong Kong didnotseewhere itneeded tobesupplemented. Asecond category might relate to
notifications anditwashisunderstanding thatthethree Contact Groups would bedealing withthis
matter. Another procedural issue wasconsultation requirements, which could berelated tothelegal
aspects concerning substantive rights andobligations. Hisdelegation would revert tomany oftheissues
inthediscussion paper withdetailed comments afterthesummer break.
61. TheChairman saidthattheapproach taken inpreparing thediscussion paper hadbeentothrow
upasmany ideas aspossible fordelegations tothink about; itwasnotmeant tobeprescriptive in
anysense oftheword, butmerely thought-provoking. Heagreed thatthere were issues where, for
example inanti-dumping andsubsidies, thesystem should inasense alsocontinue intothefuture.
Hesuggested thattheHong Kong delegation outline some oftheissues onwhich ithadveryclear
views andconvey these totheSecretariat.
62. TherepresentativeofMexicosaidherdelegationbelievedthatthiswasoneofthemostimportant
issues theSub-Committee would discuss andthatforthisreason itshould begiven priority. Her
delegation hadafewpreliminary comments onanumber ofpoints identified inthediscussion paper.
Onerelated tothesituation ofrights andobligations ofcontracting parties intheGATT 1947andthe
Tokyo Round Agreements. Thepaper dealtwiththisproblem verysummarily anddidnottouch on
theimportant issues Mexico hadinmind. Paragraph 7referred totherulesofinternational lawwhereby
theearlier Agreements would continue toapply totheextent thattheywerenotincompatible withthe
newAgreement. Mexico hadnoproblem withthisassertion, norwiththerecommendations made
totheSub-Committee withaviewtoreviewing thecompatibility ofrelations between WTO Members
thatremained contracting parties totheGATT ortotheTokyo Round Agreements. Thequestion that
wasnotdealt withinthepaper wasthatoftherights andobligations between twoparties ifoneof
theparties withdrew fromtheAgreement inquestion. Howwould pending rights andobligations be
dealtwith,especiallywithregardtothesettlementofdisputes?InSectionIII,institutionalandproceduralPC/IPL/M/3
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matters weredealtwith, butincompletely. There wasnoreference totheMinisterial Decision onthe
settlement ofdisputes, inwhich theCommittees andCouncils wereinvited toremain operational until
pending disputes hadbeensettled. There would obviously bealegal gaptotheextent thatWTO
provisions would notapply immediately. Asrecommended intheDecision, herdelegation believed
thatacting bodies should bekeptoperational, withpossibly anumber ofprevious procedural measures.
Nothing wassaidinthepaper about thetransfer ofprevious rights andobligations established inearlier
agreements. Thiswasarealproblem which theSecretariat should takeupinitsforthcoming Note.
63. TheChairmanstressedthattheintentofthediscussionpaperwastoelicittheviewsofdelegations
ontheissues raised andthisexplained whyitwasataverytentative summary level. Hesuggested
thatdelegations thinkdeeply onthesubjects raised andthatthosedelegations whohadalready formulated
some veryclear views, likeHong Kong andMexico, might wishtoconsider giving those views to
theSecretariat foritsconsideration inthepreparation ofitsNote. Inputs fromother delegations would
alsobemost welcome inthisexercise.
64. TheSub-Committee tooknoteofthestatements.
D. Paragraph 8(c)(iv) oftheDecision establishing thePreparatory Committee
65. TheChairman saidthathehadnotyetbegun anyconsultations withregard tothecomposition
oftheTextiles Monitoring Body. Itwashisintention totakeupthematter again inthefall.
66. TheSub-Committee tooknoteofthisinformation.
E. Observer status
— Request bytheFAO
67. TheChairman recalled thattheSub-Committee hadconsidered thismatter atitsmeeting on
4July, andhadagreed torevert toitatthepresent meeting. Forthebenefit ofmembers, heread
outtheoperative partoftheFAO'scommunication, asfollows: "AstheSub-Committee willbe
considering thequestion ofthe‘appropriate arrangements with respect torelations with other
organizations referred toinArticle VoftheWTO Agreement ’which includes ‘intergovernmental
organizations thathaveresponsibilities related tothose oftheWTO ’,andgiven thatFAO doeshave
aseries ofimportant responsibilities related totheWTO, Iwould hopethattheSub-Committee will
invite FAO tobeanobserver toitsproceedings. Theareas ofFAO responsibility related tothose
ofWTO include closeworking relationships onsanitary andphytosanitary matters, especially inrelation
tothenewCommittee onSanitary andPhytosanitary Measures which expressly mentions collaboration
withFAO/WHO Codex Alimentarius Commission andtheInternational Plant Protection Convention,
theSecretariats ofwhich aremainly inFAO. These responsibilities alsoinclude collaboration onfood
aidissues, especially theinvolvement ofourConsultative Sub-Committee onSurplus Disposal, which
oversees theapplication ofFAO'sPrinciples onSurplus Disposal andtheSystem ofUsual Marketing
Requirements, alsocitedintheAgreement onAgriculture. There areinaddition areasofmutual interest
onfoodsecurity andenvironmental measures. Inviewofthis,itisclear thatFAO doeshaveareas
ofresponsibility closely related tothose ofWTO, andtherefore, Ihopethatthisrequest forobserver
status willbefavourably received bytheSub-Committee."
68. Therepresentative oftheEuropean Communities saidthatintheCommunity 'sview, there
wasnoreason whytheFAO should bedealtwithinadifferent manner thanthethree organizations
thathadbeeninvited toparticipate inthework oftheContact Group onAgriculture onanadhocbasis.
Thecommunication fromtheFAO hadinfactunderlined thatitsinterests layintheAgriculture area.
There wasnojustification forgranting theFAOobserver status intheSub-Committee simply becausePC/IPL/M/3
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ithadmade aformal request therefor. There wasnorealreason tohavetheFAO sitthrough allthe
meetings oftheSub-Committee orofthePreparatory Committee sincethesebodies normally discussed
matters thathadlittleornothing todowithagriculture. Agricultural discussions tookplace inthe
Contact Group onAgriculture, andtheCommunity would notobject ifthatGroup feltituseful tohave
theFAO present forreasons ofthelatter'sexpertise onanyparticular matter. Accordingly, theFAO
should notbegranted formal observer status, although itcould bepresent oninvitation atmeetings
oftheContact Group onAgriculture ifthelatter sodecided.
69. Therepresentative ofArgentina saidthatinprinciple, therequest seemed tobeavery
straightforward one. However, ithadtobeconsidered inthecontext oftheUNsystem. Ifother
specializedagencieshadbeengrantedobserverstatus,onewasfacedwiththequestionofwhatdistinction
tomake regarding theFAO.
70. Therepresentative oftheUnited States saidthatitwasnotreally clear whytheFAO would
beexcluded simply because itwasinterested insitting intheSub-Committee. Itseemed from the
comments oftheCommunity thattheproblem wasthattheFAOhadidentified aspecific interest, and
thatitwastobepenalized forthis,which seemed verystrange. Hisdelegation hadnotheard any
compelling reasons orindication ofthedanger thathaving theFAO present, forwhatever meetings
itwanted toattend, would introduce totheSub-Committee 'sdeliberations ortotheefficiency with
which itconducted business. TheUnited States continued tothink thattheFAO'srequest wassound;
ithadidentified itsinterest, which seemed relatively specific andwhich seemed toindicate thatitwould
notattend ameeting inwhich itwasnotinterested. IntheUnited States 'view, thisdidnotseem to
beabasis fordenying theFAO observer status.
71. Therepresentative ofEgypt supported therequest forobserver status bytheFAO inthe
Sub-Committee andinwhatever Committee would bedealing withagriculture andsanitary and
phytosanitary regulations. TheFAOhadacloserelationship withwhattheSub-Committee wasdoing,
especially inthefieldofagriculture, andtherewasnoreason whyitshould notbeincluded, especially
asobservers remained silent except when invited tospeak.
72. Therepresentative ofMexico saidthatherdelegation considered theFAO tobeanimportant
agency which would doubtless helptheSub-Committee initsproceedings, especially withregard to
matters specific totheFAO'scompetence. Inprinciple, Mexico would notobject togranting observer
status totheFAOintheSub-Committee. However, asamatter ofprinciple, Mexico wondered whether
theissueofobserver status should notbedecided uponacross-the-board rather thanonacase-by-case
basiswithout having defined thebasicprinciples governing observer status. Under thecircumstances,
perhapstheFAOshouldbegiventhesortofstatuswhichhadbeengiventootherbodies,i.e.consultative
status. Forreasons ofpracticality, theSub-Committee should givetheFAOthesame treatment given
toother organizations without thisaffecting thework oftheSub-Committee. Theoverall issue of
observer status should bedealtwithonahorizontal, across-the-board manner.
73. Therepresentative ofAustralia saidthathisdelegation supported acceptance oftherequest
from theFAO toobserve theproceedings ofthework oftheSub-Committee.
74. Therepresentative ofIndiaexpressed surprise thattherewasanyobjection totheFAObecoming
anobserver, given thatitwasanorganization withuniversal membership andthatithadidentified
itsareas ofcompetence relevant totheresponsibilities oftheAgriculture Agreement. Attheveryleast,
since theFAO hadbeenreferred tointheAgriculture Agreement andintheAgreement onSanitary
andPhytosanitary Measures, itshould beinvited tothemeetings oftheContact Group onAgriculture.
Furthermore, because itsareaofcompetence wentbeyond whatwasbeing considered inthatContact
Group, theFAO should begranted observer status intheSub-Committee. Atthesame time, India
agreed ontheneedtotakeahorizontal approach onthequestion ofobserver status. However, inviewPC/IPL/M/3
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ofthefactthatdelegations appeared tobetaking different positions asregards observer status indifferent
bodies, Indiabelieved thattheoverall issueonahorizontal levelshould beaddressed inthePreparatory
Committee andnottheSub-Committee.
75. Therepresentative ofMorocco saidthathisdelegation hadalways adopted aposition ofprinciple
ontheissue ofobserver status, which wastotakeabroadly inclusive approach. Allorganizations
thatexpressed aspecific interest, andthisapplied inthecaseoftheFAO, should beinvited asobservers.
Inparticular, inthework oftheContact Group onAgriculture, theFAO would havemuch tooffer.
Morocco didnotseewhatcould beachieved byexcluding theFAO, andfullysupported theFAO's
request.
76. Therepresentative ofEuropean Communities reiterated thattheFAOhadnoparticular expertise
toofferinthework ofthisSub-Committee. While theFAO wasclearly averyuseful andimportant
organization, andhaduniversal membership, thisdidnotchange thefactthatitwasanorganization
thatdealtwithsectoral aspects, namely agriculture anddevelopment. Before deciding onamoregeneral
horizontal approach withregard toobservers, itwould inawayprejudge theSub-Committee 'sposition
ifitweretoadmit theFAO now. Thisdidnotmean thattheCommunity disagreed withtheFAO's
assertion, initsletter, thatithadexpertise intheareas mentioned therein. TheCommunity would
bewilling toinvite theFAO totheSub-Committee 'smeetings when there wasdiscussion onmatters
inwhich theFAO hadexpertise. Thatwasnotareason togivetheFAO, andthereby topractically
allother sectoral organizations thatsorequested, observer status intheSub-Committee. The
Community 'sviewwasindependent ofthefactthatitwould bedifficult toarrange seating forallif
similar requests from, say,WIPO, UNEP andother sectoral organizations, were granted. Aslong
astheSub-Committee hadnotdecided ontheapproach totakevis-à-vis requests ofthiskind, itshould
notprejudge itsposition bygranting observer status totheFAO atthistime.
77. TheChairman saidthatthereappeared tobenoobjection totheFAObeing invited toparticipate
inthework oftheContact Group onAgriculture. Nottodosowould, infact,beananomaly because
subsidiary bodies oftheFAOhadbeeninvited toparticipate. Asregards theFAO'srequest forobserver
status, there appeared tobeoverwhelming support fortheFAO tobeadmitted. However, inlight
oftheCommunity 'sreservations, hewould wanttoholdconsultations onthismatter.
78. TheSub-Committee tooknoteofthestatements andagreed thattheFAO should beallowed
toparticipate inthework oftheContact Group onAgriculture onanadhocbasis.