RESTRICTED
PREPARATORY COMMITTEE PC/M/2
FOR THE 2June1994
WORLD TRADE ORGANIZATION Limited Distribution
(94-0980)
PREPARATORY COMMITTEE FOR THE
WORLD TRADE ORGANIZATION
MINUTES OFMEETING
Held on31May1994
1. ThePreparatory Committee fortheWorld Trade Organization (WTO) helditssecond meeting
atthelevelofHeads ofDelegations under theChairmanship ofMr.Peter D.Sutherland. Observers
fromthenineteen associated governments andthefollowing fourorganizations -UN,UNCTAD, IMF,
World Bank -attended themeeting inaccordance withtheCommittee 'sdecision atitsfirstmeeting
(PC/M/1, paragraphs 14-15).
Sub-Committee onInstitutional, Procedural andLegal Matters
(a) Chairmanship
2. TheChairman recalled thatatitsmeeting on29April, theCommittee hadagreed toestablish
afourth Sub-Committee onInstitutional, Procedural andLegal Matters, inaddition tothethree-namely
onBudget, Finance andAdministration, onServices andonTrade andEnvironment -specified inthe
Ministerial Decisions of14April 1994, andwhose Chairmen hadalready beendesignated. Herecalled
thatfurther consultations hadbeennecessary before theChairman ofthefourth Sub-Committee could
bedesignated, anditwashisunderstanding thattheconsultations, which hadbeenconducted bythe
Chairman oftheCONTRACTING PARTIES, were nowconcluded.
3. TheChairman oftheCONTRACTING PARTIES saidthathehadhadaseries ofinformal
contacts withdelegations, onthebasis ofwhich heproposed thatMr.Kesavapany (Singapore) be
nominated asChairman oftheSub-Committee onInstitutional, Procedural andLegal Matters.
4. TheCommittee approved theproposed nomination.
5. Therepresentative ofIndia saidthathehadbeenasked bythenewly nominated Chairman of
theSub-Committee onInstitutional, Procedural andLegal Matters toexpress thelatter'sappreciation
fortheconfidence allhadshown inappointing himtothisposition, andfortheir assistance and
co-operation inhelping himdischarge thetasksassigned totheSub-Committee. TheChairman hoped
toconvene thefirstmeeting oftheSub-Committee within aweek orso,atwhich hewould present
itswork programme forconsideration.
(b) Transitional arrangements
6. TheChairman saidhewished torefertotheimportant matter ofputting inplace transitional
arrangements todealwithongoing activities under theGATT 1947, including theTokyo Round
Agreements, aftertheentry intoforceoftheWTO Agreement. Aspecific example waspending dispute
settlement cases when theparties concerned withdrew from anyofthese instruments. There were,
ofcourse, other institutional questions thatwould alsoneedtobeaddressed. Accordingly, heproposedPC/M/2
Page2
thattheSub-Committee begiven thetaskofmaking specific proposals inthese areas forconsideration
bythePreparatory Committee.
7. TheCommittee soagreed.
Review ofWork doneunder theSub-Committees
8. TheChairman saidthatthethree Sub-Committees dealing with Budget, Finance and
Administration, Services andTrade andEnvironment hadallhadtheirfirstmeetings.
9. TheSub-Committee onTrade andEnvironment hadmeton11May. ItsChairman would now
beholding informal consultations onadetailed work programme fortheperiod leading uptothefirst
Ministerial meeting oftheWTO. Thenextformal meeting oftheSub-Committee wasplanned for
lateJuneorearlyJuly.ThismeetingwouldconsidertheresultsoftheChairman'sinformalconsultations,
andalsotakedecisions onthequestions ofobserver participation andthetypeofrecords tobemaintained
oftheSub-Committee 'sproceedings. More meetings would bescheduled intheautumn.
10. TheSub-Committee onBudget, Finance andAdministration hadmeton16May, andhad
considered issues related toitswork programme fortheimmediate future. TheSub-Committee had
agreed toitsChairman 'ssuggestion todealinitially withthefollowing among thesubjects included
initsterms ofreference asdefined bytherelevant Ministerial Decisions:
- theseatoftheWTO, adecision onwhich wasneeded sothattheheadquarters agreement could
bedrafted;
- guidelines fortheassessment ofbudgetary contributions oftheWTO Members; and
- organizational structure andstaffing requirements oftheWTO.
11. Following adiscussion onthequestion oftheseatand,inparticular, theprocedures tobe
followed inselecting theseat,theSub-Committee hadagreed tostarttheexamination ofproposals
byGovernments received atthelatest by15June. Participants hadalsoagreed thattheSub-Committee
should aimtocomplete itsexamination intimetoenable thePreparatory Committee totakeadecision
regarding theseatbefore thesummer break. TheSub-Committee 'sChairman would beholding informal
consultations ontheappropriate procedures. Inrespect oftheassessment ofbudgetary contributions
andtheorganizational structure andstaffing requirements oftheWTO, theSecretariat wasintheprocess
offinalizing background notes together withproposals designed toassist thedeliberations.
12. TheSub-Committee onServices hadmeton19May, andhadfocused essentially onthe
organization offuture work. Thework programme hadbeen described inaSecretariat Noteentitled
"Functions oftheSub-Committee onServices" (PC/SCS/W/1), which hadserved asthebasisforthe
discussions. TheSub-Committee hadagreed togivepriority attention tothefollowing areas:
- overseeing thenegotiations thathadalready begun inrelation totheMovement ofNatural
Persons, Maritime Transport, Basic Telecommunications andFinancial Services;
- discussing outstanding issues relating tothescope oftheGATS, withaviewtomaking afinal
report tothePreparatory Committee before theendoftheyear; and
- developing guidelines forthenotifications required under certain Articles oftheGATS.PC/M/2
Page3
13. TheSub-Committee would alsoundertake preparatory work onthemodalities forfurther
negotiations mandated bytheGATS, contribute tothedevelopment ofterms ofreference fortheGATS
Council anditssubsidiary bodies, andbeinvolved intheverification ofallschedules ofcommitments
inservices.
14. Ascould beseen, thework programme fortheSub-Committee, evenforthecurrent year,
wasaheavy one. TheSub-Committee 'snextmeeting would beheldon12July.
Work under thePreparatory Committee
15. TheChairman saidthattherewereimportant areas ofwork which hadtobeaddressed directly
bythePreparatory Committee. Themostimmediate wastheimplementation ofthemandate contained
inparagraph 8(b)(i) oftheMinisterial Decision Establishing thePreparatory Committee
(MTN.TNC/45(MIN), Annex IV).Based onconsultations withdelegations andtheSecretariat 'sown
thinking, hewasnowinaposition toputforward certain specific proposals onhowthiswork might
beconducted pragmatically andexpeditiously.
16. Tocomplement bilateral negotiations ontheschedules ingoods andservices, amultilateral
processwasneededtoenablethePreparatoryCommitteetofulfilitsmandateofexaminingandapproving
schedules ofconcessions andcommitments totheGATT 1994andschedules ofspecific commitments
totheGATS inrespect ofsignatories oftheFinalActlisted inparagraph 1(a)oftheMinisterial Decision
onAcceptance ofandAccession totheWTO (MTN.TNC/45(MIN), Annex I).
17. Itwasproposed that,under theoverall authority ofthePreparatory Committee, theSecretariat
would organize amultilateral process similar totheoneleading uptotheMarrakesh Ministerial meeting.
Thiswould ensure periodic monitoring ofprogress andmaximum transparency.
18. Themultilateral process ongoods would beconducted bytheSecretariat andwould focus on
thefollowing matters:
- Theverification ofschedules ofLLDCs thatmight besubmitted, following theconclusion of
bilateral negotiations, between nowandtheentry intoforce oftheWTO. Itshould bekept
inmindthatinaccordance withparagraph 1oftheMinisterial Decision onMeasures inFavour
ofLeast-Developed Countries, countries inthiscategory could submit theirschedules until
April 1995 andstillbeoriginal members oftheWTO.
- Theverification, following theconclusion ofbilateral negotiations, ofschedules ofStates or
separate customs territories which hadacceded toGATT 1947 under Article XXVI:5(c) but
were notinaposition toestablish schedules toGATT 1994, andtheschedules ofStates or
separate customs territories which became contracting parties totheGATT 1947between now
andtheentry intoforce oftheWTO. Itshould bekeptinmind thattheirGATT 1994 and
GATS schedules would havetobeapproved bythePreparatory Committee before theentry
intoforce oftheWTO ifthese States andseparate customs territories were tobeoriginal
members oftheWTO.
- Theverification oftheschedules ofparticipants thatwereeither least-developed countries or
countries thathadbecome contracting parties under Article XXVI:5(c) oftheGATT 1947,
which hadbeenprovisionally attached totheMarrakesh Protocol.
19. Inrespect ofgoods, heproposed thattheprocess beconducted, asbefore, under thesupervision
ofMr.Hoda, Deputy Director-General ofGATT.PC/M/2
Page4
20. Intheareaofservices, following theconclusion ofbilateral negotiations, theverification of
GATS schedules ofanysignatory oftheFinal Acttowhich paragraph 1oftheDecision onMeasures
inFavour oftheLeast-Developed Countries applied, orwhich became acontracting party under
Article XXVI:5(c) oftheGATT 1947 before 15April 1994 andwasnotinaposition toestablish a
schedule totheGATS forinclusion intheFinal Act,should becarried outbytheSub-Committee on
Services andprocedures should beputinplace forthispurpose.
21. ThePreparatory Committee would receive regular reports onprogress inboththeareas that
hehadjustoutlined, andwould takeaccount oftheresults achieved indeciding whether toapprove
theGATT 1994 andtheGATS schedules oftheparticipants concerned. Thematter would therefore
ultimately come before thePreparatory Committee inthisway.
22. Afurther element ofworkunder paragraph 8(b)(i) dealtwithgovernments thatweresignatories
totheFinal Actandtowhom paragraph 5oftheFinal Actapplied, namely those thatwished tojoin
theWTO andthatwere intheprocess ofjoining GATT 1947. China hadschedules ongoods and
services attached totheMarrakesh Protocol onaprovisional basis. Butthere were alsoothers that
had,asyet,noschedules ongoods andservices andwhose requests tojoinGATT 1947werecurrently
under examination inworking parties established bytheCouncil.
23. ItwasrelevanttorecallherethattheMinisterialDecisionregardingAcceptanceofandAccession
totheAgreement Establishing theWorld Trade Organization asked, interalia,thatthePreparatory
Committee work jointly, totheextent practicable, withtheWorking Parties established bythe
CONTRACTING PARTIES toGATT 1947. Inthespirit ofthisDecision, andinorder tominimize
duplication ofeffort, hewould askthePreparatory Committee toagree:
(a) thatinpursuance ofparagraph 1(b)oftheDecision onAcceptance ofandAccession tothe
Agreement Establishing theWTO, thePreparatory Committee request theexisting GATT
working parties alsotoexamine onitsbehalf, forcases ofStates orseparate customs territories
which would beinaposition tojointheGATT 1947 before theentry intoforce oftheWTO
AgreementandwhichalsowishedtoaccepttheWTOAgreementinaccordancewithArticleXIV
ofthatAgreement, theirschedules ofconcessions andcommitments toGATT 1994 andthe
schedules ofspecific commitments totheGATS. Inother words, theWorking Parties would
takeonthislarger responsibility. ThePreparatory Committee, when deciding whether to
approve suchschedules, would takeintoaccount theresults oftheexamination oftheGATT
workingpartiesandthetechnicalverificationoftheseschedulesintheprocessongoodsproposed
tobeconducted under Mr.Hoda andonservices intended tobeconducted under the
Sub-Committee onServices; and
(b) thatinpursuance ofparagraph 2oftheDecision onAcceptance ofandAccession tothe
Agreement Establishing theWTO, thePreparatory Committee, upon request byanyStateor
separate customs territory toaccede totheWTO inaccordance withArticle XIIoftheWTO
Agreement, initiate theprocess ofaccession. Ifsucharequest weremade byaStateorseparate
customs territory forwhich aGATT working partyalready existed, theworking partyconcerned
should berequested toexamine itonbehalf ofthePreparatory Committee andreport tothe
Preparatory Committee.
24. TheCommittee agreed tothese proposals.
25. TheChairman saidthatthese arrangements would nowbecommunicated totheChairman of
theGATT Council, tothechairmen ofthetwenty-one GATT working parties concerned, andtothe
Sub-Committee onServices foraction, asappropriate. Consultations wiould beheldshortly tofleshPC/M/2
Page5
outfurther details regarding theorganization ofwork inalloftheseareas. ThePreparatory Committee
would maintain itsoverall supervisory rôleandwould receive periodic reports onprogress.
26. Onegeneral point needed tobemade regarding thework programme hehadjustoutlined and,
inparticular, theperspective withwhich, hebelieved, thePreparatory Committee should approach
it.Asthemandate suggested, allactivity under theCommittee should begeared totwocrucially
important objectives: first,tofacilitate maximum possible participation intheWTO anditsentry into
force asscheduled; andsecond, toensure thattheWTO andallitssubordinate bodies were fully
operational fromdayone. Beyond these goals, hewould suggest thattheWTO anditsbodies beleft
withalltheflexibility theywould needtodevelop further working procedures andtosetpriorities.
27. Inthissame context, hewished tomake afinalpoint regarding theratification oftheWTO
byparticipants. Thesituation today hadnotchanged substantially since theMarrakesh Ministerial
meeting. Asallwerenodoubt aware, therewereaverylargenumber ofgovernments thathadsigned
subject toratification ornotyetsigned theWTO. Thefeedback hehadfrommostcapitals wasthat
governments remained entirely committed tocompleting theirratification processes bytheendofthe
year, andhewasconstantly incontact withthem inthisregard. Inmostcases, theweeks before the
summer break inGeneva would beofspecial importance totheefforts being made incapitals. The
Preparatory Committee should monitor progress inthisareaatperiodic intervals.
28. Stillonratification, hesaidthatamong the125Uruguay Round participants there were, of
course, alargenumber thatwished tojointheWTO assoonaspossible andforwhom effective technical
assistance fromtheSecretariat wascrucial towards completing therequirements forratification and,
thereby, facilitating ratification. Hehadinmind, inparticular, theassistance needed bygovernments
inthepreparation andsubmission ofdraftschedules ingoods andservices which could thereafter be
finalized following bilateral negotiations. TheSecretariat wasinregular contact withmostgovernments
inthisposition. Inhiscapacity asChairman, hehadbrought thismatter totheattention ofthecapitals
concerned. Allinall,theSecretariat wasproceeding withitstechnical cooperation programme on
apriority basis, under theoverall responsibility ofMr.Seade, Deputy Director-General ofGATT.
29. Therepresentative ofIndia sought confirmation thattheSub-Committee onServices would
beinvolved intheoverall verification oftheservices schedules notonlyofLLDCs andthose states
andcustoms territories thathad,orwould, become contracting parties under Article XXVI:5(c), but
alsoofthose thatsought accession under Article XXXIII.
30. TheChairman confirmed thattheprocedures assuggested byhimandagreed bytheCommittee
provided fortheverification ofGATS schedules being carried outbytheSub-Committee onServices
inallcases.
31. TheCommittee tooknoteofthestatements.