RESTRICTED
WORLD TRADE WT/COMTD/M/9
14October 1996
ORGANIZATION(96-4257)
Committee onTrade andDevelopment
Ninth Session
NOTE ONTHE MEETING OF12SEPTEMBER 1996
Chairman: Mr.Nacer Benjelloun-Touimi (Morocco)
A. Adoption oftheAgenda
1. TheCommittee adopted thefollowing agenda:
A. Adoption oftheAgenda
B. Implementation ofUruguay Round Provisions inFavour ofDeveloping Country
Members
C. Provision ofGuidelines forWTO Technical Cooperation
D. ReviewoftheParticipationofDevelopingCountryMembersintheMultilateralTrading
System, including theReview oftheImpact oftheResults oftheUruguay Round on
Developing Country Members
E. Other Business
2. TheChairman suggested taking upthequestion ofobserver status atafuture meeting, noting
theadoption bytheGeneral Council ofguidelines ontheattendance ofinternational organizations.
Forthetimebeing, heintended tofollow theCommittee 'sadhocprocedure ofinviting thesame
organizations forthenextmeeting which were invited tothismeeting.
3. TheCommittee soagreed.
B. Implementation ofUruguay Round Provisions inFavour ofDeveloping Country Members
4. TheChairman recalled thatthework programme oftheCTD for1996wasdirected atmaking
asignificant inputintotheMinisterial meeting andthatreview oftheimplementation ofUruguay Round
provisions infavour ofdeveloping countries wasoneofitspriorities. Hedrew delegations 'attention
tothefollowing documents: WT/COMTD/W/16, containing responses received sofarfrom the
ChairpersonsofthesubsidiarybodiesoftheGeneralCouncilresponsibleforWTOAgreementscontaining
provisions infavour ofdeveloping countries; WT/COMTD/W/17, containing aspecific response from
theTextiles Monitoring Body ontheimplementation oftheAgreement onTextiles andClothing with
particular reference toaspects ofdirect relevance todeveloping andleast-developed country members;WT/COMTD/M/9
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WT/COMTD/W10, distributed lastyear, andcontaining acompilation ofallprovisions inWTO
Agreements infavour ofdeveloping countries.
5. TheChairman urged delegations toinform theCommittee oftheir experience withthe
implementation ofthose provisions, since some ofthemwereonlytriggered ifspecific requests were
made. Unless information based onindividual experience ofcountries wasreceived, anyevaluation
oftheimplementation risked being incomplete. Thedebate served toevaluate theextent towhich,
andhow, thedifferent provisions were applied orusedbydeveloping countries since theentry into
forceoftheWTO inJanuary 1995, andtohelpprovide aninputintotheCommittee 'sreport toMinisters
withappropriate recommendations onthismatter.
6. Therepresentative oftheEuropean Communities welcomed document WT/COMTD/W/16
asthefirstdocument toshow theextent towhich provisions infavour ofdeveloping countries had
beenimplemented aswellastheextent towhich developing countries hadbeenabletotakeadvantage
ofthem.Thoughincomplete,itneverthelessshowedpositiveevidenceoftheflexibilityofthemultilateral
trading system anditsability totakeintoconsideration thespecial needs ofdeveloping countries. He
hoped thatincoordination withother WTO Bodies further information intheformofaddenda tothe
document would become available.
7. Therepresentative ofCanada suggested thattheCommittee request theSecretariat toprepare
anoutline ofthose provisions which would onlybetriggered upon request. Healsoreferred tothe
Questionnaire onTechnical Assistance Needs, which hadbeencirculated earlier todelegations, and
suggested thatreplies toitwould beauseful input todetermine theextent towhich theprovisions in
favour ofdeveloping countries relating totheneeds fortechnical assistance wereconsidered effective.
This, inturn,would enable technical cooperation agencies incountries suchashistoputtogether an
effective technical assistance package.
8. TherepresentativeofNorwaysaidthatdocumentWT/COMTD/W/16tookasystematicapproach
tosurvey thepractical application oftheconcessionary provisions andlooked forward toreceiving
inputs fromdelegations ontheirindividual experiences, aswellasfurther information fromotherWTO
Bodies. Since these provisions wereintended tofacilitate theintegration ofdeveloping countries into
thelegal framework ofthemultilateral trading system, theCommittee 'sreport totheMinisters in
Singapore hadtoreflect theiruse. Itwaspossible toconclude, evenatthisstage, thatdeveloping
countries hadmade useofthese special provisions.
9. Therepresentative ofKorea underlined theimportance ofthespecial provisions intheWTO
Agreements fortheintegration ofdeveloping countries, particularly theleast-developed, intothe
multilateral trading system. Thesurvey setoutindocument WT/COMTD/W/16 wasanimportant
input intotheCommittee 'sreport totheMinisterial Meeting. There wasroom toelaborate thenote
withsupplementary information; thedevelopment perspectives oftheimplementation oftheWTO
Agreements merited examination onaregular basis.
10. Therepresentative ofIndia, supported bytherepresentative ofPakistan, saidthatthe
implementation ofthespecial provisions ought nottobeviewed inaformalistic way,interms ofthe
legalprovisions, butrather atasubstantive level. Anevaluation oftheprovision allowing fortransitional
periods wasdesirable since theyconstituted themajority oftheprovisions. Additional substantive
information wasuseful, forexample onsafeguard actions involving developing countries 'exports under
theprovisions oftheAgreement onTextiles andClothing. Although thiswasnotlegally included
intherealm ofspecial provision listed infavour ofdeveloping countries, these types ofaction
nevertheless hadanimpact ontheexport performance ofdeveloping countries. Likewise, evenifthere
werenospecific provision intheAnti-Dumping Agreement relating todeveloping countries, alargeWT/COMTD/M/9
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number ofproducts exported bydeveloping countries hadbeensubject toanti-dumping actions. Actions
taken resulting innegative effects formarket access forproducts exported bydeveloping countries
should alsobelisted inthedocument withaviewtopresenting Ministers withacomplete picture.
11. Therepresentative ofCanada saidthatthesuggestion made bytherepresentative ofIndiawent
beyond theCommittee 'smandate. TheSecretariat hadbeenrequested toprovide aclear picture of
theimplementation oftheprovisions infavour ofdeveloping countries, rather thanevaluate such
implementation. Document WT/COMTD/W/16 gavesuchapicture. TheCommittee onTrade and
Development wasnottheproper forum toevaluate suchelements.
12. Therepresentative ofTanzania saidthatdelegations suchashisattributed great significance
toprovisions contained inthepreamble paragraphs ofthevarious agreements andintheDecision on
Measures inFavour ofLeast-Developed Countries inassisting theircountries toexpand theirexport
baseandescape theconstraints ontheireconomies. Hetherefore questioned theirexclusion fromthe
information contained indocument WT/COMTD/W/16. Heasked howtheSecretariat intended to
evaluate theimplementation oftheDecision onMeasures inFavour ofLeast-Developed Countries.
13. Arepresentative oftheSecretariat recalled thattheCommittee hadrequested theSecretariat
tocompile theresponses received fromtheChairpersons ofother WTO Bodies ontheimplementation
ofthemeasures infavour ofdeveloping andleast-developed countries. TheSecretariat hadnotbeen
requested toevaluate theimplementation.
14. Therepresentative ofIndia, inhiscapacity asChairman oftheCouncil onTrade inGoods,
saidthathewould ensure theprompt dispatch totheSecretariat ofalladditional responses fromWTO
Bodies withaviewtocomplement information indocument WT/COMTD/W/16.
15. Therepresentative ofUruguay saidthatitwould beuseful toanalyse whether thespecial and
differential provisions infavour ofdeveloping countries, which werecontained intheagreements, were
actually ofusetodeveloping countries. Thiswould beuseful indeciding initiatives infuture rounds
ofnegotiations.
16. TheChairman saidthatitwasuptotheCommittee, rather thantheSecretariat, todiscuss and
evaluate theimplementation against thebackground ofthedocument. Hesaidthatheintended toconduct
private consultations withaview toidentifying points tobeincluded inanyrecommendation on
implementation toMinisters.
17. TheCommittee tooknoteofthestatements made andagreed torevert tothisitematafuture
meeting.
C. Provisions ofGuidelines forWTO Technical Cooperation
18. TheChairman recalled that,atitsJulymeeting, theCommittee hadacomprehensive andfruitful
discussion onthisitemonthebasis ofanon-paper from thedelegation ofSwitzerland, anInformal
Note bytheChairman containing achecklist ofpoints related toGuidelines forWTO Technical
Cooperation, andaSecretariat 'sstatus report ontechnical cooperation activities contained indocument
WT/COMTD/W/14/Add.1. Based ontheoutcome ofthatdiscussion andcomments received from
delegations, theCommittee hadagreed thathecome forward witharevised version ofDraft Guidelines
forWTO Technical Cooperation fordiscussion attoday'smeeting. Suchguidelines hadbeencirculated
todelegations andincorporated comments received fromthem. Therevised draftguidelines contained
aframework forconsidering specific action aswellasthespecific matters addressed. HealsorecalledWT/COMTD/M/9
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that,attheCommittee 'slastmeeting, hehadnoted thatanumber ofreplies hadbeenreceived from
Members tothequestionnaire which hehadsentinMayofthisyeartoascertain theoverall needs for
assistance intrade-related matters. Heurged those Members whohadnotyetdone sotoprovide
comments, since acritical massofreplies wasneeded before anauthoritative picture could bedrawn.
Heinvited comments withaviewtotheCommittee agreeing onasetofguidelines assoonaspossible.
19. Therepresentative ofSwitzerland saidthatthepractical modalities forproviding technical
assistance stillhadtobedefined. Referring toherdelegation 'sproposal thatanannual review be
conducted bytheCTD, shesuggested thatthisreview would bebased onthese guidelines. Itwas
notcleartoherdelegation whatabalanced relationship between tradeanddevelopment signified. Her
delegation continued toquestion theappropriateness ofincluding representatives oftheprivate sector
incapacity building activities. Representation attheWTO wasatgovernmental level andgiven its
limited resources, activities directed attheprivate sector should belefttoorganizations suchasthe
ITC.
20. Therepresentative ofEgypt thanked theChairman forhisefforts indrawing uptherevised
guidelines andsaidthattheyshould note, ashadbeendone intheinformal notepresented bythe
delegation ofSwitzerland, thattheentry intoforce oftheUruguay Agreements hadincreased theneed
fortechnical assistance. ThePreamble totheAgreement establishing theWTO noted theneedtoensure
thatdeveloping countries, specially theleast-developed, secured ashare inthegrowth ofinternational
trade commensurate withtheneeds ofeconomic development. Theguidelines needed tounderline
boththeimportance oftechnical assistance andthevitalimportance ofimplementing thecommitments
ontechnical assistance. Shequestioned whether theaimofmaintaining geographic balance was
compatible withthepriorities implied inthedraftguidelines andthedesignation ofAfrican countries
aspriority countries. Shefurthermore recalled thattheGeneral Council 'sDecision of31January 1995
relating totechnical cooperation activities referred onlytodeveloping countries. Additional funds would
therefore needtobesecured forassistance toeconomies intransition. Thesection headed "Principles
andObjectives"ratherthan"SubjectMatter"shouldmentionthatincreasedknowledgeofthemultilateral
trading rules wasvitalforthefullintegration ofdeveloping countries inthetrading system. She
furthermore suggested toinclude thesupply ofdatabases andtraining intheir effective useand
information technology ingeneral asoneoftheprinciples andobjectives.
21. Therepresentative ofTanzania saidthatheagreed withtherepresentative ofEgypt, butthat
hewould refrain from further elaboration indeference totheChairman 'sremarks. Heagreed that
technical assistance should beabove alldemand-driven, butnevertheless called ontheSecretariat to
alsoengage inaproactive roleinthisrespect, withaviewtoassisting developing countries inidentifying
theirtechnical assistance needs.
22. Therepresentative ofNorway clarified thatthesubject matter oftechnical assistance activities
wasalsoofrelevance toMembers otherthandeveloping countries, andwelcomed thefactthatNorway 's
comments made atprevious meetings hadbeentaken intoaccount intherevised draftwhich hecould
agree towiththeexception ofitsreference totheprivate sector asbeneficiary ofWTO technical
assistance. Technical assistance activities ofeachorganization should berestricted toareas oftheir
competence. Heagreed withtheChairman thatthiswasneither thestagenortheforum tomake general
declarations ortoaskforadditional funds. Anagreement ontheguidelines could however actasa
spurforincreased funding.WT/COMTD/M/9
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23. Therepresentative ofIndia suggested thatthefirstinsetshould beredrafted tosay"contribute
toexpansion oftrade anddevelopment". Aspresently drafted itcould beinterpreted tomean that
technical assistance wasconditional onfullintegration intheglobal system. Healsoasked thatpriorities
notexclude other developing countries thanthose specified. Hehaddoubts whether theguidelines
needed toinclude principles fortechnical assistance andsuggested thatSection 1beentitled simply
"Objectives", rather than"Principles, Objectives andPriorities".
24. Therepresentative ofJapan thanked theChairman fortherevised guidelines andsuggested
thefollowing wording tobeincluded among objectives: "Address thedifficulties developing countries
mayfaceinimplementing theWTO Agreements withaview toensuring asteady implementation
thereof". Hesaidthat,inaddition tocoordination, cooperation among international organizations would
sometimes benecessary andsuggested thattherelevant itemberedrafted asfollows: "Beinfull
cooperation andcoordination withother assistance provided bymultilateral andbilateral institutions".
25. Therepresentative ofPakistan stressed thatneeds, rather thangeographical considerations,
should bethebasis fordetermining priorities.
26. Therepresentative ofAustralia supported theobjective thattechnical assistance bedemand
driven andresponded tospecific needs. Itwasherunderstanding thattheUNlistofleast-developed
countries andtheWorld Bank definition oflow-income countries would beused andthat
Papua-New Guinea andsome Pacific Island countries would beamong countries inthepriority groups.
27. Therepresentative ofCuba thanked theChairman forhisenthusiastic efforts inestablishing
thedraftguidelines. Hesuggested theaddition ofthewords "entrepreneurial sector" totheconcept
of"private sector", referring tojointventures between thepublic andprivate sectors. Heemphasized
theimportance, particularly forsmaller developing countries, oftechnical assistance intheareaof
information technology withaviewtoenhancing theircapacity foranalysis anddecision making, and
toproviding them access toinformation onongoing programmes.
28. Therepresentative oftheEuropean Communities saidthat,atthisstage ofthediscussions,
theCommittee should befinalizing thedocument. Theguidelines wereoperational rather thanpolitical
andshould setanoperational framework fortechnical assistance activities. Hisdelegation wassatisfied
withthebroad principles underlying therevised version ofthedraftguidelines. Heacknowledged
thattherecould bedisagreement ondetails; suchastowhom, inaddition tothepublic sector, activities
should beextended, andonthemodalities fortheirreview. While agreeing thatbeneficiaries should
beprimarily those countries ingreatest need, others should notbeexcluded. Technical assistance
activities should remain asflexible aspossible. Hewarned thatatightdefinition ofimplementation
modalities would givetheprogrammes notenough flexibility torespond tofuture needs. While he
didnotthinkitwasreasonable toexclude economies intransition fromtheprogrammes, hewaswilling
todiscuss thisfurther.
29. Therepresentative ofParaguay thanked theChairman forhisefforts andcommitment. He
questioned whether theaimofmaintaining geographic balance wascompatible withthepriorities implied
inthedraftguidelines andthedesignation ofAfrican countries aspriority countries, unless referring
specifically toAfrican least-developed countries. What were thecriteria fordefining low-income
countries? While heagreed thattheprivate sector should notbetheprincipal beneficiary ofWTO 's
technical assistance activities, theirtotalexclusion wasnotacceptable.WT/COMTD/M/9
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30. TherepresentativeofElSalvadorsupportedtheinterventionmadebytheEgyptianrepresentative
anddisagreed thatitwastoolatetoopenupdiscussion onsuchanissue. Shedidnotagree withthe
representative ofNorway thatarapid finalising oftheguidelines would result inanincrease offunds
forsuchactivities. Sheasked thattraineeships within theWTO Secretariat beincluded aspartof
technical assistance provided bytheWTO. Shestressed theimportance oftheprivate sector andagreed
thatparticipationoftheprivatesectorintechnicalassistanceactivitiesshouldbeorganizedinconsultation
withthegovernment. Criteria forevaluation werenecessary. There seemed tobeaconflict between
theobjective ofkeeping ageographical balance andgiving priority toageographical region.
31. TherepresentativeofHungarysaidthatitwasinappropriatetoquestiontheextensionoftechnical
assistance toeconomies intransition. Thebroadest participation ofthese countries inthemultilateral
trading system wasinthecommon interest ofallMembers, andtechnical assistance wasofvital
importance.
32. Therepresentative ofThailand welcomed theChairman 'slatest draftandsuggested thatthe
inclusion oftheprivate sector should beconsidered onacase-by-case basis. Heagreed thatthe
establishment ofpriorities mustnothavetheeffect ofdenying technical assistance toanydeveloping
country.
33. Therepresentative ofBrazil saidthatthecriteria usedbytheSecretariat inselecting officials
toparticipate inseminars should beclear, since thiswould helpgovernments intheirnomination of
candidates.
34. Therepresentative ofArgentina expressed concerned thatpriority tolow-income countries could
deprive countries suchashisfrom access toactivities suchastrade policy courses andnational and
regional seminars inwhich hiscountry hadaparticular interest. Hesuggested thatreference bemade
to"other developing countries".
35. Therepresentative ofRomania agreed withtheChairman that,atthisstage, theCommittee 's
workshould notbeconcerned withoperational details andthatworkonevaluation criteria andmodalities
would continue. Asaneconomy intransition, hiscountry looked forward tocontinuing tobenefit
from WTO technical assistance activities.
36. TherepresentativeoftheUnitedStatesconsideredtheguidelinesbalanced.Theyweresufficiently
flexible topermit ageographical balance andyetnottoexclude anydeveloping country. Hewasof
theview thatWTO should beinvolved, incollaboration withITC, intechnical assistance activities
including theprivate sector.
37. Therepresentative oftheCzech Republic saidthattheexclusion ofeconomies intransition
from thetechnical assistance activities would diminish WTO 'sroleinthisarea.
38. Therepresentative ofSwitzerland saidthatshehadtaken noteoftheChairman 'sassurance
thatthepriorities established would notexclude anydeveloping country noranyeconomy intransition.
Shesuggested thattheguidelines beclearer ontheconcept oflow-income countries andinthatcontext
supported thedefinition bytheWorld Bank which wasonthebasisofprecise criteria. Shewondered
whether, inaddition tothesubjects listed under "Priorities", there would beother subject priorities.
Herdelegation wasoftheopinion that,rather thanatnational level, trade policy courses conducted
ataregional levelorconducted onthebasisoflanguage would bemore cost-effective. Shewondered
whether theresources ofamultilateral institution suchasWTO should beusedforbilateral assistance
programmes. Ifthiswerethecase,whattypes ofprogrammes would theybefunding? Would finances
come from theregular budget? Herdelegation placed particular importance ontheDecision oftheWT/COMTD/M/9
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General Council establishing certain modalities formanaging trustfunds. Sheproposed thattherelevant
language inthedraftguidelines beredrafted asfollows: "The WTO Trust Fund shallbemanaged
inconformity withtheDecision adopted bytheGeneral Council on18July1996." Inall,sheconsidered
thedraftagood basis.
39. Therepresentative ofElSalvador suggested that,ifcategorization ofpriority countries were
tobemaintained, thesection on"Priorities" beredrafted asfollows: "least-developed countries, in
particular African countries, low-income developing countries andsmall economies". Shefurthermore
suggested thedeletion of"andatthenational andregional level" inrelation tothecomprehensive trade
policy courses inGeneva. Shesuggested thatshort courses begiven forofficials coming toGeneva,
since courses inGeneva gavecandidates thewidest possible exposure toexperts andofficials.
40. Therepresentative ofJapan suggested thatnon-Member countries intheaccession process be
included inthelistofcountries eligible fortechnical assistance asademonstration ofgoodwill. He
alsorecalled thatthemodes ofdelivery inthedraftwere notexhaustive. Inhisdelegation 'sview,
national andregional seminars were more cost-effective.
41. Therepresentative ofEgypt saidthatthedifference between technical missions andtechnical
seminars assetoutunder "Modes ofDelivery" wasunclear. Themodes ofdelivery depended onthe
requirements andnoattempt should therefore bemade toestablish priorities. Sheproposed thefollowing
reformulation oftheitemoncoordination: coordination andcooperation withrelevant international
organizations, withaviewtoensuring coordination andthecomplementing ofvarious programmes
aswellastoavoiding duplication. Shealsosuggested thatspecific reference bemade tojointefforts
withtheITCandUNCTAD, particularly inestablishing acentral inventory ofprogrammes. She
suggested toaddtheexchange ofinformation withrecipient countries soastoattain amore complete
picture ofdifferent technical assistance programmes. Sheproposed, formanagement purposes, a
two-year, rather thanathree-year plantocoincide withthecycle ofMinisterial conferences, with
adjustments onanannual basis. Sheagreed thattheplanbesubmitted toappropriate bodies ofWTO.
TheroleoftheGeneral Council andtheBudget Committee should befurther elaborated. Theconcept
ofnational costsharing should beclarified: itshould notbecome aprecondition fortechnical assistance,
particularly toleast-developed countries. Shesuggested thatdispute settlement bespecified asanarea
eligible fortechnical assistance. Shewould sentherobservations inwriting.
42. Therepresentative ofTanzania recalled anearlier statement thatcountries suchashisneeded
muchwider,muchmoretargetedandcoordinatedtechnicalassistancewhichwouldleadtoimprovements
intheireconomies andmake them viable trading partners. Measures suchasseminars andtechnical
missions didnotsuffice.
43. Therepresentative ofParaguay shared theconcerns ofthedelegation ofElSalvador concerning
theneedtomaintain geographical balance inestablishing priorities. Technical assistance could be
directed towards assessing theweaknesses andstrengths ofnational trade andeconomic policy: this
would increase theinterest ofhiscountry intechnical assistance. Anintegrated approach withother
international organizations wasessential fortechnical assistance activities tobearresults. Inthiscontext
herecalled theDirector-General 'sobservation thatprogrammes needed tobetailored tomeetthespecific
circumstances ofacountry, andthattheynotberestricted toanyoneactivity.WT/COMTD/M/9
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44. Therepresentative ofAustralia recalled thatthedraftguidelines under discussion could not
extend tocountries intheprocess ofaccession: theDecision oftheGeneral Council ofJanuary 1995
specifically excluded technical assistance foracceding governments. Suchassistance wasbestleftto
therelevant Working Party. Sherequested specific information ontheresource implications ofthe
proposal toprovide specialized advisory services incapitals andinGeneva. Therelationship between
WTO andITCwarranted areference tojointtechnical cooperation activities withITC.
45. Therepresentative ofNewZealand recognized theguidelines asanappropriate tooltofoster
development andtrade. Shesuggested toaddregional institutions dealing withtrade matters inthe
Sectiondealingwithinternationalcoordination.TheSouthPacificForumSecretariatwasakeyinstitution
fordiscussing andcoordinating trade policy issues inthatarea. Shesupported Australia 'ssuggestion
toinclude areference totheITCinthesection oninternational coordination. Herdelegation wasof
theviewthataregular schedule beestablished foraSecretariat 'sstatus report. Herdelegation was
supportive oftheestablishment ofanindependent oversight mechanism andsuggested thatanexternal
review becarried outatappropriate times.
46. Therepresentative ofIndia agreed withtherepresentative ofEgypt thatnational costsharing
notbecome aprecondition forreceiving technical assistance. Itwashisunderstanding thatthemain
sources offunding would betheregular WTO Budget andTrust Funds. Hesuggested toaddinternships
intheWTO Secretariat under Modes ofdelivery, asthiswould provide hands-on experience.
47. TheChairman invited Members toworkwithhimtoprepare afurther revision oftheguidelines.
Suchguidelineswerenotdesignedtobeapoliticalstatementbutratheraninstrumenttomanageresources
efficiently, equitably andwithflexibility. After theCommittee hadfinalized theguidelines, itwould
bethetimetoconsider thecriteria onwhich toevaluate technical assistance. Apolitical statement
ontheimportance oftechnical assistance would becontained intheCTD'sreport toMinisters. In
response tocomments made bydelegations, hedrew attention totheheadnote inthedraftguidelines
which referred onlytodeveloping countries asbeneficiaries ofWTO technical assistance andnotto
economiesintransition.However,hepointedoutthattheperiodicreviewbyMinistersoftheoperational
directives andimplementation modalities would provide anopportunity tomodify thepriorities. While
itwascleartowhich countries inAfrica thedraftguidelines referred, hewould nevertheless consult
withMembers whether more precision wasneeded. Heclarified thatthedraftguidelines innoway
intendedtointerferewithnationalpolicy,butthatrather,theyintendedtofullyacquaintofficialsinvolved
intheshaping ofnational policy withWTO rules. Healsonoted thattheWTO wasayoung organization
andthatpriorities could beadjusted asexperience wasgained inimplementing theguidelines. The
more fundamental concerns ofcapacity building could beaddressed incollaboration withother
institutions.
D. Review oftheParticipation ofDeveloping Country Members intheMultilateral Trading
System, including theReview oftheImpact oftheResults oftheUruguay Round on
Developing Country Members
48. TheChairman recalled thattheCommittee hadrequested theSecretariat toprepare astudy
onthesubject ofthereview oftheparticipation ofdeveloping country members inthemultilateral
trading system, including thereview oftheimpact oftheresults oftheUruguay Round ondeveloping
country Members, inaccordance withanoutline agreed bytheCommittee atitsJune1996 meeting.
Thisstudy wasnowavailable andhadbeencirculated todelegation indocument WT/COMTD/W/15.WT/COMTD/M/9
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49. Therepresentative oftheUnited States noted thattheanalysis contained indocument
WT/COMTD/W/15 confirmed thatbothdomestic andexternal factors, many inter-related, influenced
theperformance oflowandmedium-income countries inworld trade, anddidsoindifferent ways.
Thefirstconclusion hedrewfromthereport wasthataliberal traderegime wasgoodfortheeconomy;
lowerimportprotectiongavestrongerexportgrowth.Second,stabledomesticeconomicpoliciesattracted
investment. Third, access toforeign markets wasnotthesingle determinant ofexport performances:
some countries withpoorexport performance hadbetter access toindustrial country markets thansome
whose exports expanded rapidly. Many industrialized countries gavepreferential access tolowand
medium-income developing countries, which wasnotfullyutilized duetodomestic reasons. Evidence
ofthebenefits from theresults oftheUruguay Round already existed, which would increase as
implementation advanced. Developing countries should adopt liberal trade andinvestment regimes
andfoster strong vibrant andstable economies. Thiswould permit themtotakefulladvantage ofthe
multilateral trading system.
50. Therepresentative ofNorway saidthattheanalysis indocument WT/COMTD/W/15 confirmed
thattradestimulated growth andwasameans toreduce poverty. Thereport noted that,withappropriate
policies, commodity poorcountries could achieve highgrowth. Trade wasmore important thanaid
andeconomic growth inthepoorer andmostaid-dependent countries needed thebestpossible climate
fortrade. Stimulating tradeamong developing countries andwithindustrialized countries wasapriority
andhiscountry supported WTO 'sefforts toincrease developing countries 'understanding ofthe
multilateral trading framework inorder tobenefit from it.
51. Therepresentative ofJapan saidthattheintegration intotheglobal economy ofdeveloping
countries wasameans ofencouraging sustainable development. Economic development depended
toalarge extent ondeveloping countries 'ability topromote institutional andhuman development.
Itwasuseful tonotethecontrast ineconomic policies adopted bycertain fastgrowing Asian economies
andthose adopted bycertain least-developed countries, particularly those inAfrica, which werebeing
marginalized intheworld economy. Suchsuccessful policies promoted agriculture, promoted small
andmedium-sized industries, increased productivity intheagricultural sector andencouraged the
production ofvalue-added products inagriculture-based industries. Domestic competition among small
andmedium-sized industries hadthepotential ofraising productivity.
52. Therepresentative ofIndiasaidthatthestudy contained indocument WT/COMTD/W/15 was
auseful attempt taking intoconsideration theconstraints under which theSecretariat worked. Hecould
notconclude from thedocument, astherepresentative oftheUnited States haddone, thatdomestic
policies wereprimarily responsible forpooreconomic growth. Thisappeared anover-simplification
ofacomplex situation. Henoted aheavy reliance onIMFandWorld Bank documentation andwas
oftheviewthatmore usecould havebeenmade ofinformation from other sources which werealso
inthepublic domain. While heacknowledged theroleofforeign investment, thedocument 'semphasis
ontheimportance offoreign investment seemed tooverlook thefactthatdomestic investment was
critical foreconomic growth. Theanalysis seemed totakelittleaccount oftheimportance ofdomestic
saving ratios. Inthatcontext, henoted thattheobservation thatthelackofnational saving wasamong
thefactors thataccounted forthelion'sshare ofresponsibility forthelackofeconomic growth, as
quoted inafootnote, should havereceived more prominence inthebodyofthereport. Theobservation
thatAsian countries wereincreasing theirparticipation intheglobalization process should havebeen
made atalessaggregate level: itwasnotapplicable toacountry suchashis.Thedocument pointed
tothestrong investment performance ofAsian countries. However, figures inUNCTAD 'sWorld
Investment Report showed that,ifthefigures relating toChina were excluded, nodramatic changes
inthetrends ofinvestment flows todeveloping countries hadtaken place. Hewelcomed the
acknowledgement ofthepoorquality ofinternational statistics onforeign direct investment. Hewas
alsopleased toseespecific reference made totheeffect ofanti-dumping measures ontheexportWT/COMTD/M/9
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performance ofdeveloping andleast-developed countries. Theobservation thatUruguay Round tariff
reduction hadlimited effect onpreferences wasfollowed byastatement thatalarge share ofexports
totheEuropean Communities byAfrican countries consisted ofpetroleum products atzeroduty.
Countries imported products atzerodutyfordomestic reasons, ashiscountry didinthecaseof
foodgrains attimes offoodshortage. Were there other measures which improved market access for
petroleum products exported byAfrican countries totheEuropean Communities? Henoted thattariff
escalation hadasignificant effect onthecapability ofdeveloping countries toexport, unlike the
conclusions inthestudy, supported byaquote fromaWorld Bank Report. Thestudy should perhaps
more appropriately havehighlighted products affected bytariffescalation rather thanthose which were
not.Theconstraints onforeign investment asdescribed inthestudy supported hisearlier observation
ontheroleofdomestic saving. Thedescription ofthedifficulties facing African countries illustrated
thecomplexity oftheissue. Given thestudy'sWTO origin, disapproval ofprotectionist policies was
tobeexpected. Hetookitthatboththeprotectionist policy adopted bydeveloped anddeveloping
countries weredisapproved of.Hewondered howtheidentification ofdomestic protection asthemain
source ofdistortion could bereconciled withevidence thatfastgrowing eastAsian economies hadhigh
ratesofprotection intheinitial years. Thecauses andeffects relation ofthemacroeconomic policies
mentioned inparagraph 60(trade performance, exchange rates, budget deficits), could perhaps be
clarified. Moreover, there wasenough research available onthepositive andthenegative effects of
FDIandcommenting onlyonthepositive aspects, asinparagraph 70,distorted reality.
53. Therepresentative ofBrazil drew attention tothepenultimate paragraph ofdocument
WT/COMTD/W/15, which referred totheinterdependence ofexternal anddomestic factors.
Paragraph 29noted theobstacles faced byexports ofdeveloping countries.
54. Therepresentative ofCanada saidthatthestudy indocument WT/COMTD/W/15 hadstruck
agood balance between external andinternal factors which affected theparticipation ofdeveloping
countries inthemultilateral trading system. Domestic factors weretheprime determinant ofthelevel
ofparticipationinthemultilateraltradingsystem.TheSecretariathadbeenfairlyrigorousinitsanalysis.
Theinability ofleast-developed countries tobenefit fromthemarket opening opportunities following
theUruguay Round illustrated thatinthecaseofsuchcountries capacity building wasmore important
thanmarket access. Thepaper could perhaps havedealtmore withtheinter-linkages between domestic
trade policy anddomestic investment policy. Heagreed withtherepresentative ofIndia thatdomestic
savings wereimportant, butwasoftheviewthatthereport dealtwithitadequately. Hewould have
preferred thatthestudy alsoincluded trade inservices. Developing countries hadmade significant
progress intrade inthissector andtheopportunities forgreater participation contributing togrowth
anddevelopment were significant.
55. Therepresentative ofCuba agreed withtherepresentative ofIndia thatthereport attributed
lackofgrowth unduly tonational policies. Thedistortion ofthesugar trade duetoforeign subsidies
andimport quotas wasaclearexample oftheadverse effect ofsuchpolicies ondeveloping countries.
Arecent seminar hadhighlighted thenegative andpositive aspects offoreign investment. While he
agreed thatFDIcould havepositive effects, hewasnevertheless oftheviewthatcommitments inthe
areaoftransfer oftechnology andtheemployment ofnationals would ensure thatFDIwould promote
national economic policy.WT/COMTD/M/9
Page11
56. Therepresentative oftheEuropean Communities noted thatdocument WT/COMTD/W/15
dealtinawell-balanced manner withacomplex subject. Hewasoftheviewthatthetwoconcluding
paragraphs should havebeendeveloped inmore detail. Asnoted inthereport, market access was
onlyonefactor affecting theexport performance ofdeveloping countries. There werereports which
demonstrated thattheeffect oftariffescalation ontheexport capabilities wassometimes exaggerated.
Heagreed thatdomestic savings represented animportant factor ineconomic growth andsuggested
thatastudy onincome distribution policies waswarranted aswell.
57. The representative ofSwitzerland welcomed theSecretariat 'sstudy indocument
WT/COMTD/W/15, which hadfully usedavailable information. Thecomplexity ofthesituation
analysed inthedocument pointed tomeasures which hadtobetaken. Itwasclear thatformany it
wasnotthelackofmarket access butthelackofcapacity thatstopped them benefiting fullyfromthe
results oftheUruguay Round. Thiswasaproblem which could bemetprimarily atthenational level
butcould besupplemented bytechnical assistance todevelop human capacity andtomake fulluse
ofresources.
58. Therepresentative ofNewZealand saidthattheSecretariat 'spaper provided agoodbackground
andhaddistilled previous studies onsimilar issues. Thediverse experience among developing countries
didnotlenditselftoeasyexplanations. Some common factors werethehighcorrelation between the
share ofmanufactured goods inmerchandise export andexport performance aswellasthepositive
correlation between exports andshare ofinvestment inGDP. Itwasnoteworthy thatcountries with
strong export growth hadlower levels ofprotection andlessexchange ratevolatility. Insome sectors
suchasagriculture, textiles, clothing, fishandfishproducts problems ofmarket access persisted.
Herdelegation wasoftheviewthatmultilateral liberalization efforts needed totackle tariff peaks and
tariffescalation sincethesediscouraged further processing ofbasiccommodities indeveloping countries.
Thestudy alsoclearly pointed outtheneedforanappropriate domestic economic andtrade policy
environment. Thedynamic linkages between suchapolicy environment andeconomic andtradegrowth
wasclearly demonstrated byhercountry 'sownexperience, which wasofparticular relevance, given
thehighshareofproductionofagricultural,forestryandotherprimaryproducts.Alongwithappropriate
domesticpoliciesandimprovedmarketaccessandahospitableandfacilitatingenvironment,development
assistance andtechnical assistance wererequired tostrengthen theinfrastructure andtheinstitutional
andhuman resource capacities, particularly inleast-developed countries. Sheurged cooperation with
UNCTAD andITCintheareaoftechnical assistance.
59. Arepresentative fromtheSecretariat saidthat,first,theperceived lackofemphasis inthestudy
ontheimportance ofdomestic savings simply resulted fromthefactthatitsimportance wassoevident
thatithadbeentaken forgranted asabasic assumption: itwasclear thatforeign direct investment
could innowaytaketheplace ofahighrateofdomestic savings. Though certainly macroeconomic
stability, exchange ratevariability andexport growth were interlinked, thedominant direction was
frombetter macroeconomic policies tobetter export performance andbetter flows ofFDI. Inthestudy,
theSecretariat hadattempted toprovide abalanced andobjective reflection oftheviews which were
available intheexisting literature onthesubject, rather thantocome toanyconclusion ortoadvance
solutions.
60. TheCommittee tooknoteofthestatements made andagreed tocontinue itsdiscussion onthe
basis ofdocument WT/COMTD/W/15 atafollowing meeting with aview toidentifying any
recommendations fortheMinisterial Conference inSingapore.WT/COMTD/M/9
Page12
E. Other Business
61. TheChairman recalled thattheSub-Committee onLeast-Developed Countries would meeton
13September totakeupconsideration ofspecific measures toassist andfacilitate theexpansion of
theleast-developed countries 'trade andinvestment opportunities withaview toenabling them to
achieving theirdevelopment objectives. Asubsequent meeting oftheSub-Committee wasscheduled
for23September, following theTenth Session oftheCommittee onTrade andDevelopment. Atthat
meeting, theCTD intended tocontinue itsfruitful dialogue withother international institutions, which
ithadstarted atitsSeventh Session. Herecalled that,withthatobjective inmind, hehadinvited
H.E. Mr.Mohammed ElKabbaj, Chairman oftheJointIMF/World Bank Development Committee
toaddress theCommittee on23September. TheDirector-General oftheWTO would alsojointhe
meeting. Asubsequent meeting oftheSub-Committee would follow on.TheTrust Fund, setupby
theGovernment ofNorway, would beusedtobring representatives ofleast-developed countries, who
werenotrepresented inGeneva, fromother European cities tothismeeting. Briefing sessions would
beorganized forthem on24September. Representatives would begiven question andanswer
opportunitiesfollowingpresentationsonvariousareasoftheWTOworkandontheSingaporeMinisterial
Conference.
62. TheCommittee tooknoteofthestatement made.