RESTRICTED
PREPARATORY COMMITTEE PC/IPL/M/4
FOR THE 23September 1994
WORLD TRADE ORGANIZATION
(94-1904)
SUB-COMMITTEE ONINSTITUTIONAL ,
PROCEDURAL AND LEGAL MATTERS
MINUTES OFTHE MEETING HELD ON14SEPTEMBER 1994
1. TheSub-Committee onInstitutional, Procedural andLegal Matters helditsfourth meeting on
14September 1994 under theChairmanship ofMr.K.Kesavapany (Singapore).
2. TheChairman saidthatthismeeting, thefirstsince thesummer break, marked thebeginning
ofaveryintensive period ofwork leading totheImplementation Conference. Hewished toimpart
asense ofurgency toall,considering thatonlyabout nineweeks remained untilmid-November, which
helooked upon asatarget forthecompletion ofallthework thatcould reasonably beachieved in
thecontext oftheSub-Committee.
A. Paragraph 8(b)(ii) oftheDecision establishing thePreparatory Committee
(i) Terms ofreference forWTO bodies
3. TheChairman recalled thatatthemeeting oftheSub-Committee on19July, hehadstated
thatitwould betheresponsibility ofindividual delegations toraiseanyparticular issues concerning
thismatter iftheysowished. Itwasunderstood, ofcourse, thattheterms ofreference forthe
Committees onBudget, Finance andAdministration, Balance-of-Payments Restrictions andTrade and
Development would bebrought before theSub-Committee oncetheywere ready forconsideration.
Asallwereaware, theSub-Committee hadrequested theChairmen oftheexisting GATT Committees
toundertake thetaskofdrawing uptheterms ofreference ofthese Committees. Hehadhadarecent
discussion withthese Chairmen withaviewtosetting atarget datefortheircontribution totheSub-
Committee. Itappeared thatterms ofreference fortheBudget Committee might befinalized soonbut
thatthefinalization ofterms ofreference fortheother twoCommittees stillneeded some more time.
4. Alsoatthemeeting oftheSub-Committee on19July, thequestion ofthestatus intheWTO
oftheGATT 1947 Committee onTariff Concessions hadbeenraised byonedelegation. Inthis
connection, herecalled thatatthemeeting ofthePreparatory Committee on22July,hehadexpressed
hisintention todiscuss thismatter atthenextmeeting oftheSub-Committee. Anumber ofideas had
beenputforward informally concerning boththeCommittee onTariff Concessions andtheTechnical
Group onQuantitative Restrictions andOther Non-Tariff Measures. Oneoftheseideaswasthepossible
merger oftheseCommittees intheWTO tofulfilthefunctions ofboththesebodies, aswellastocontinue
work ontheIntegrated DataBase. Hewould welcome views onthissuggestion asalsoanyother
proposals thatmembers wished tomake inthisrespect. Herecalled thatthere were other bodies
mentioned inSection VoftheSecretariat 'snoteindocument PC/IPL/W/1 onwhich hewished tohave
members 'views. Itwashisunderstanding thatthecaseoftheJointAdvisory Group oftheInternational
Trade Centre could beexamined bytheSub-Committee onBudget, Finance andAdministration in
thecontext ofitswork onparagraph 8(a)(vi) oftheDecision establishing thePreparatory Committee.
Thatwould leave thequestion oftheConsultative Group of18tobedecided upon.
5. Related tothequestion ofterms ofreference wasthatoftheformat ofnotifications required
tobemade under various agreements. Thethree contact groups thathadbeencreated intheareasPC/IPL/M/4
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ofrules, agriculture andTRIPS were planning further work, andsome meetings hadalready been
convened. Ithadbeensuggested thatsome work might beneeded onTRIMs notifications, which could
beundertaken bytheContact Group onTRIPS. Hewasintouch withtheChairmen ofthethreeContact
Groups withaviewtosetting atarget dateforsubmitting theresults oftheirwork.
6. Therepresentative ofAustralia saidthatherdelegation hadbeenworking onterms ofreference
fortheWTO Committee onAgriculture, within theframework oftheContact Group onAgriculture,
andhoped tocome upwithaproposal intimeforthenextmeeting oftheSub-Committee. Onamore
general level, shewished tonotethatdelegations hadsometimes suggested forinclusion under terms
ofreference concepts which shebelieved belonged more appropriately torules ofprocedure. Her
delegation therefore urged thatprogress onrules ofprocedure notfallbehind, asthisresulted in
delegations which sought tohavecertain concerns covered, todealwiththemunder terms ofreference.
7. Therepresentative ofArgentina saidthattheproposed terms ofreference onAgriculture referred
tobyAustralia hadmetwithalargedegree ofsupport, andthatthedelegations concerned werewaiting
fortherighttimetosubmit them totheSub-Committee.
8. Therepresentative oftheEuropean Communities saidthatitwould beofuseforthe
Sub-Committee tosetpriorities. AstheChairman hadstated, nineweeks remained, andthemainaim
oftheSub-Committee wastoensure thattheWTO waseffective asof1January 1995. Clearly,
therefore, some elements weremore essential thanothers. Foritsownpart,theCommunity considered
terms ofreference andrulesofprocedure, aswellastransitional arrangements, tobeapriority. The
Community recognized theimportance oftheother topics thatneeded tobeaddressed, butbelieved
thattheSub-Committee should organize itswork insuchawaythatthetwopriority issues could be
dealtwith.
9. TheChairman saidthattheCommunity hadreiterated apoint hehadmade inthepast,namely
thattheSub-Committee'smainaimshouldbetoensurethattheWTOwasoperationalon1January1995.
Heagreed thattheSub-Committee should trytoprioritize itswork.
10. TherepresentativeofNewZealandagreedthatworkontermsofreferenceandrulesofprocedure
wasapriority fortheSub-Committee.
11. TheSub-Committee tooknoteofthestatements.
(ii) Rules ofprocedure forWTO bodies
12. TheChairman recalled thatinthecourse ofprevious discussion onthismatter, somedelegations
hadsuggestedthatrulesofproceduresshouldbeenvisagedatthreelevels,namelythoseoftheMinisterial
Conference, General Council andsubsidiary bodies. Itappeared thatthisviewwaswidely shared.
Atthemeeting oftheSub-Committee on19July, hehadsuggested reverting tothequestion ofrules
ofprocedure immediately afterthesummer break andthattheSecretariat should, inthemeantime,
continue towork ondrawing updraftrulesofprocedure fortheMinisterial Conference, theGeneral
Council andsubsidiary bodies.
13. Onthebasisofinputs received fromsome delegations aswellasearlier discussion onthisissue
intheSub-Committee, theSecretariat hadrecently circulated twonon-papers suggesting draftrules
ofprocedure for the Ministerial Conference (document No.2028) and the General
Council (document No.2029). Assuggested bysome delegations atearlier meetings oftheSub-
Committee, thedraftrules ofprocedure fortheMinisterial Conference hadbeenadapted fromthose
forSessions oftheCONTRACTING PARTIES toGATT 1947. Thechanges therefrom hadbeen
indicated inthetext. Thedraftrules fortheGeneral Council hadbeenbased bothontherules forPC/IPL/M/4
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Sessions oftheCONTRACTING PARTIES aswellasonexisting practice withregard tomeetings
oftheGATT 1947 Council, abrief description ofwhich hadbeen provided asanAnnex tothat
non-paper. Hesuggested thattheSub-Committee trytomake progress onthese. Withregard torules
ofprocedure forsubsidiary bodies, heinvited delegations toprovide inputs, asappropriate, tothe
Secretariat. Thetwonon-papers provided thebasic structure oftherules andcontained most ifnot
alltheelements thatneeded tobeaddressed. They were intended toserve asabasis forfurther
discussion intheSub-Committee. Aswould benoted from thetwonon-papers, anumber ofissues
hadbeenflagged bytheSecretariat, bymeans offootnotes tothesuggested rules, forconsideration
bytheSub-Committee. Since delegations hadonlyrecently received these papers, hedidnotintend
tohaveevenapreliminary exchange ofviews onthem atthepresent time. However, following the
suggestion made byNewZealand attheSub-Committee 'smeeting on19Julythatwork onrules of
procedure should keeppacewithwork intheSub-Committee asawhole, itwould behisintention
toholdasubstantive discussion onthequestion ofrulesofprocedure, onthebasis ofthenon-papers
bytheSecretariat, atthenextmeeting oftheSub-Committee. Heurged delegations tocome prepared
forsuchadiscussion atthattime, onthebasis ofwhich theSecretariat would berequested torevise
thesuggested rules forfurther consideration bytheSub-Committee.
14. Therepresentative oftheUnited States saidthathisdelegation, asothers, would review the
Secretariat 'snon-papers onthesuggested rules ofprocedure fortheMinisterial Conference andthe
General Council inpreparation forsubstantive discussion thereon atthenextmeeting. Hewished to
emphasize atthepresent time, however, thatregardless ofwhether therules ofprocedure thatthe
Sub-Committee proposed werestandard orspecific toeachbody, andregardless ofwhether itfollowed
theapproach suggested inthenon-papers, onehadtoprovide forincreased transparency withrespect
toallWTO bodies. Forexample, theUnited States would suggest, ataminimum, unrestricted access
tominutes offormal meetings ofWTO bodies. Asallwereaware, hisdelegation hadbeenpursuing,
intheGATTcontext,improvedproceduresoncirculationandderestrictionofdocuments.Hisdelegation
would keeptheChairman informed ofdevelopments inthatforum sothattheSub-Committee could
address thesubject indetail atsome point thattheChairman deemed appropriate.
15. Therepresentative ofNewZealand saidthattheSub-Committee needed alsotodevelop rules
ofprocedure forthethird-level bodies, namely thesubsidiary bodies. Itwasimportant tostartwork
onthisareasoonaswelltoensure thatitwasconcluded ingood time.
16. TherepresentativeofMoroccoagreedwiththeCommunity'sstatementontheprevioussub-item,
namelythattheSub-Committeeneededtotacklepriorityissuesfirst,andsaidthatdraftrulesofprocedure
were onesuchissue.
17. TheSub-Committee tooknoteofthestatements.1
B. Paragraph 8(b)(iii) oftheDecision establishing thePreparatory Committee
(i) Appropriate arrangements foreffective cooperation withother inter-governmental
organizations
18. TheChairmansaidthatitwouldappearnecessaryfortheWTOtohavearrangementsforeffective
cooperation withthose international organizations specifically mentioned intheWTO Agreement and
withwhich theWTO Agreements envisaged cooperation inspecific areas. These organizations were
theIMF, World Bank, WIPO, CCC, ISOandthethree specialized organizations mentioned inthe
Agreement onSanitary andPhytosanitary Measures, i.e.,theCodex Alimentarius Commission, the
International Office ofEpizootics andtheSecretariat oftheInternational Plant Protection Convention.
1Seealsothestatements byAustralia, theEuropean Communities andNew Zealand under sub-item (i)above.PC/IPL/M/4
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Although theISOwasnotaninter-governmental organization assuch, inmany casesthenational bodies
dealing withitwerequasi- orsemi-governmental. Hehadtherefore, subject totheSub-Committee 's
approval, included itinthelistoforganizations withwhich arrangements forcooperation withtheWTO
needed tobedrawn up.TheWTO Agreement envisaged thattheWTO should cooperate withtheIMF
andwiththeWorld Bankanditsaffiliated agencies withaviewtoachieving greater coherence inglobal
economic policy-making. Moreover, specific functions were envisaged fortheIMFin,interalia,
Article XVofGATT 1994. Clearly, therefore, cooperative arrangements withthese organizations
were apriority.
19. Inaddition, itwould benecessary, foroperational reasons, fortheWTO tohaveunderstandings
withtheotherorganizationsthathehadjustmentioned.AMinisterialDecisionatMarrakeshhadalready
recommended thattheWTO Secretariat reach anunderstanding withtheISOwithaviewtoestablishing
aninformation system. TheSecretariat hadmade progress ondrafting suchanunderstanding in
consultation withtheISO. Furthermore, theCustoms Valuation Agreement andtheAgreement on
Rules ofOrigin envisaged thatspecific tasks related tothese Agreements would beperformed bythe
CCC, andtwoTechnical Committees under theauspices oftheCCC hadbeenestablished under these
Agreements. Therefore, forthepurpose offulfilling thesetasksandensuring thatwork could betaken
upimmediately aftertheWTO entered intoforce, anagreement withtheCCC would alsobeneeded.
TheTRIPS Agreement envisaged that,inconsultation withWIPO, theTRIPS Council oftheWTO
should seektoestablish, within oneyearofitsfirstmeeting, appropriate arrangements forcooperation
withbodies oftheWIPO. Itfurther called forconsultation withWIPO regarding thepossible
establishment ofacommon register ofnational legislations andregulations. Contacts wereunder way
inthisrespect. TheSub-Committee would trytomake maximum progress within thetimethatremained
atitsdisposal. Again, apolicy discussion ontherelationship theWTO would havewithWIPO would
benecessary. AstotheAgreement onSanitary andPhytosantitary Measures, itcalled forcooperation
withtheCodex Alimentarius Commission, theInternational Office ofEpizootics andtheSecretariat
oftheInternational Plant Protection Convention. Here also,more timewould beneeded todevelop
theelements thatshould gointotherespective understandings.
20. Asforrelations withother organizations, many delegations hademphasized, inthecourse of
earlier discussion, theneedforeffective cooperation between theWTO andUNCTAD. Heandthe
Secretariat hadhadapreliminary discussion withUNCTAD officials. However, inorder toproceed
further inthisrespect, more inputfromdelegations wasneeded onthespecific aspects andthepractical
ways thatthiscooperation might take.
21. TheSub-Committee tooknoteofthestatements.
(ii) Observer status forinternational organizations
22. TheChairman saidthatsince onestilldidnotknow, apart from twoorthree cases, which
organizations would berequesting observer status intheWTO, itseemed tohimthatallthatcould
usefully bedoneatthisstagewastodevelop criteria orconditions, including procedures, forconsidering
future requests forobserver status. Herecalled thatatthemeeting oftheSub-Committee on19July,
during thediscussion onthispartofthemandate, hehadsuggested thatbroad guidelines bedeveloped
tofacilitate consideration ofthisquestion, andhadoutlined some elements thatmight beincluded in
suchguidelines. Inthisconnection, hedrew attention toanon-paper recently circulated bythe
Secretariat (document No.2035), inwhich ithadbuiltuponthose elements andhadsuggested criteria
andconditions forthegranting ofobserver status tointernational organizations intheWTO. These
wereintended toserve asabasisforfurther discussion intheSub-Committee. Hebelieved thatsuch
guidelines would beaveryuseful contribution bytheSub-Committee within itsbroader mandate in
thisarea, namely tomake recommendations totheGeneral Council oftheWTO concerning the
appropriatearrangementswithrespecttorelationswithotherorganizations.HesuggestedthatdelegationsPC/IPL/M/4
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notaddressthisnon-paperatthepresentmeeting,butthattheycomepreparedforasubstantivediscussion
thereon atthenextmeeting oftheSub-Committee.
23. Therepresentative oftheUnited States saidthatoneofthemost significant ways inwhich
toimprove thetransparency ofthework oftheWTO andtoderive thebenefits from suchopenness
would betoensure observership andmeaningful participation byinterested groups. TheUnited States
hoped thattheSub-Committee would accelerate itswork regarding observer status orparticipation
byinternational organizations inWTO proceedings, andinthatregard would study carefully thenon-
paper before thenextmeeting. Inprinciple, theUnited States believed thatallinterested international
organizations should beconsidered forobservership onthebasis ofreciprocity andtherelevance of
theirexpertise.Althoughonepossibilitywastoconcludeagreements,whethertheybeformalagreements
orinformal, withspecific organizations ontheterms ofobservership, theSub-Committee should guard
against aprocess which would bedifficult andtimeconsuming given thenineweeks inwhich ithad
towork. Notonlywould anysuchMemorandum ofUnderstanding need toaccommodate WTO
requirements,butotherinternationalorganizationsmightbeconstrainedbytheirownrulesfromentering
intolong-term agreements. Some organizations hadatwo-year requirement, forexample. Moreover,
theterms ofeachagreement might vary. Forexample, aninternational organization suchasWIPO
might haverelatively limited observership based onitsspecific responsibilities.
24. With respect toobserver status fornon-governmental organizations, theUnited States noted
thattheSub-CommitteeonTradeandEnvironmenthadbeengivenaspecifictasktoexamineparticipation
bythose groups. Rather thanduplicating efforts, itmight beuseful forthisSub-Committee towatch
thedevelopmentofthediscussioninthatforumsothatviewsexpressedtherecouldbetakenintoaccount.
Indesigning procedures forobservership andparticipation, onemight alsomake adistinction between
formal andinformal meetings. Generally, formal meetings should beopentodesignated observers
andinformal meetings should remain closed except byspecific invitation oftheChairman made at
therequest ofthemembers. Therightofaparticular observer toparticipate inmeetings ofvarious
bodies probably should becircumscribed toensure thattechnical expertise wasprovided when requested
andthatanobserver didnothave ageneral right toparticipate. Inthisregard, current
GATT 1947 Council practice wasagood model. Additionally, designated observers should beable
toattend meetings oftheGeneral Council butparticipation inmeetings ofmore specific Committees,
suchastheCommittee onTechnical Barriers toTrade, might bemore limited.
25. TheSub-Committee tooknoteofthestatements.
C. Transitional arrangements
26. TheChairman drew attention toabackground notebytheSecretariat (PC/IPL/W/5), which
provided anoverall conceptual framework forapproaching thissubject. Herecalled thatatthe19July
meeting oftheSub-Committee, adiscussion paper hadbeencirculated onthesame subject, andthat
some delegations hadoffered preliminary comments onit.Mexico andAustria hadfollowed upsince
thenwithwritten submissions (PC/IPL/W/4 andW/6, respectively). Delegations would notethatthe
recent Secretariat notecontained certain elements which hadbeenaddressed intheearlier discussion
paper. Thiswasnoaccident because these ideas hadbeendiscussed forsome time. Since thenote
hadbeenwithdelegations foronlyaveryshort while, heproposed thatasubstantive discussion be
heldonitatthenextmeeting, adding thatthenoteraised verycomplex issues which deserved close
attention.
27. Therepresentative oftheUnited States saidthatitwasclearfromthepapers circulated onthis
issue thusfarthatmuch work needed tobedone ontheimplications ofthetransition from the
GATT 1947 totheWTO Agreement. Hisdelegation looked forward toafullconsideration ofthese
issues intheSub-Committee andhoped thatdiscussions ontransitional arrangements would focus onPC/IPL/M/4
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simplifying thecoexistence ofthetwoagreements andthetransition from onetotheother. The
UnitedStateswasparticularlyconcernedwithproblemsassociatedwiththetreatmentofdisputesettlement
proceedings thatwereongoing atthetimetheWTO Agreement entered intoforce andthepossibility
ofconflicting jurisprudence because ofthecoexistence oftheGATT 1947 andtheGATT 1994 for
anyparticular period oftime. Thought should begiven bytheSub-Committee toarrangements related
togovernments withdrawing from theGATT 1947 andthepossibility ultimately ofterminating the
GATT 1947 andassociated bodies attheappropriate time. These were preliminary views andhis
delegation looked forward toamore substantive discussion atthenextmeeting.
28. Therepresentative ofNewZealand saidthatthepapers recently circulated made clearthatthere
wererealanddifficult issues thatneeded tobeaddressed. Atthesametime, however, itwasimportant
nottogenerate orsearch forproblems which maynotinpractice prove toberealproblems. Onewould
needtogooverpotential problems toseewhether whatwasalready inplaceintheWTO, andparticularly
intheDispute Settlement Understanding, would besufficient toresolve some ofthese issues.
29. Therepresentative ofMexico saidthatthebestwaytotackle theamount ofwork before the
Sub-Committee wasperhaps togettowork right away. Hisdelegation wasready tointroduce its
communication inPC/IPL/W/4, andtorespond toanyqueries from other delegations atthepresent
meeting.
30. Therepresentative ofMorocco saidthatallhadunderlined theimportance ofthelegalissues
thatthequestion oftransition fromtheGATT 1947 totheWTO gaveriseto.Inparallel tothelegal
arrangements which theSub-Committee could outline ontheissue oftransition, onealsohadtogive
consideration tothewhole issue oftheduration oftheGATT 1947. Inthesame waythatonespoke
ofacritical mass ofratifications toenable theWTO tocome intoeffect, onecould alsospeak ofa
threshold, alimit, beyond which theGATT 1947would nolonger exist. Theoretically, itwassufficient
foronecontracting party toexistwithin GATT 1947forittocontinue toexist. While thiswasperhaps
anextreme example, hisdelegation believed alimitshould besetbeyond which theGATT 1947would
nolonger exist. Clearly, thiswasamatter fortheCONTRACTING PARTIES toGATT 1947todeal
with. TheSub-Committee could, however, invite theCONTRACTING PARTIES toconsider this
matter, which would simplify thetransitional arrangements thatonemight envisage andmight bring
some pressure tobearandencourage governments toratify more rapidly theWTO Agreement.
31. Therepresentative ofHong Kong saidthatthedocuments recently circulated offered agood
basistoatleaststarttheanalysis onwhatwasaverydifficult andurgent issue. Hisdelegation hoped
tocontribute tothesubstantive debate induecourse, andsuggested thatoneaimforaformula that
hadneutrality asoneoftheessential elements andwaseffective. Hong Kong believed thatthereshould
benodisincentive tojoining theWTO early. Itwasimportant thatoneshould notbeseentobedelaying
theprocess inanyway, andalsototryandfindaformula thatwassimple toadminister, although
thatmight notbesoeasytoachieve given theissues raised intheSecretariat paper.
32. Therepresentative ofAustralia saidthatconsideration needed tobegiven totheissue of
withdrawal from theGATT 1947, although thiswasrather alatestage tobegin suchconsideration.
Furthermore, more attention needed tobegiven towhatonemeant bytheterm"transitional period",
inthatthere were anumber ofkeytimeperiods, suchastheperiod forleast-developed countries to
submit schedules, theperiod forpre-existing disputes toruntheircourse, andsoon.
33. TheSub-Committee tooknoteofthestatements.PC/IPL/M/4
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D. Paragraph 8(c)(iv) oftheDecision establishing thePreparatory Committee
(Composition oftheTextiles Monitoring Body)
34. TheChairman recalled thattheSub-Committee hadpostponed consideration ofthissubject
earlier. However, hebelieved itwastimetotakeitupinduecourse. Inthemeantime, hewelcomed
members 'views onhowtoproceed, bearing inmind thatthere would beconsiderable work involved
indealing withtheTMB'smembership andother related questions.
35. Therepresentative oftheEuropean Communities saidthatthebestmeans ofdealing withthis
matter would betofollow theexample oftheestablishment ofthethree contact groups onother areas
oftheSub-Committee 'swork. There should beaforum inwhich textiles experts would beableto
meetandsettle problems withaviewto1January 1995.
36. Therepresentative ofNewZealand expressed interest inthecomment bytheCommunity, and
flagged theinterests ofsmall suppliers, suchasNewZealand, inthisquestion inthecontext ofthe
transition from theMFA toanewrégime intextiles.
37. Therepresentative ofHong Kong echoed theCommunity 'sviewthatacontact group ofexperts
might benecessary tocarry thework onthisdifficult subject forward.
38. TheChairman, responding tothesuggestions forthesetting upofabodytodiscuss theTMB
issue, saidhewasalittlereluctant todosogiven thatthere were already three contact groups and
thatmanydelegations,particularlythesmallones,hadexpressedreservationstohimonthemultiplication
ofbodies. Hewould, therefore, holdconsultations onthismatter andwould come backtoitatthe
nextmeeting toseekadvice astohowthismatter could bestbepursued.
39. TheSub-Committee tooknoteofthestatements.