WORLD TRADE WT/BFA/31
9July1997
ORGANIZATION(97-2861)
Committee onBudget, Finance andAdministration
REPORT OFTHE MEETING HELD ON27MAY 1997
Introduction
1. TheWTO Committee onBudget, Finance andAdministration meton27May1997under the
chairmanship ofAmbassador K.Morjane ofTunisia, andadopted theAgenda contained indocument
WTO/AIR/592. Theterms ofreference andcomposition oftheCommittee aresetoutindocument
WT/L/44/Rev.1.
INTERNATIONAL TRADE CENTRE UNCTAD/WTO
I. AUDITEDFINANCIALSTATEMENTSFORTHEBIENNIUMENDED31DECEMBER1995
AND REPORT OFTHE BOARD OFAUDITORS (A/51/5)
2. TheExecutive Director oftheInternational Trade Centre (ITC) presented thereport A/51/5
andindicated thattheGeneral Fund showed apositive balance ofUSD 346,000 attheendofthe
biennium 1994-1995. Thesurplus wasreflected asmiscellaneous income inthe1996 Performance
Report oftheRegular Programme Budget, andthereby reduced thecontributions required from the
WTO andtheUnited Nations tofinance ITC'sapproved 1996Regular Programme budget. Hefurther
indicated thatITCacted ontherecommendations oftheBoard ofAuditors relating tomanagement
issues. TheITCcomplied withtherecommendation relating toitstraditional practice ofmaking
allotments tocertain trustfunds financed projects prior toreceipt ofthedonor 'scontribution when
thelatter didnotcreate major project implementation problems, suchassuspension ofproject activities
involving repatriation ofproject staffandsubsequently recruiting themagain lateruponreceipt ofcash
from donors.
3. TheCommittee tooknoteofthereport.
II. ITCPROPOSED BUDGET FOR 1998: INITIAL OUTLINE
4. TheExecutive Director oftheITCgaveanoralpresentation oftheinitial outline ofITC's
proposed budget for1998 andindicated thatadetailed presentation would bemade inOctober 1997.
Theproposed budget estimated atCHF 29,093,000 showed azerogrowth budget compared withan
approved1997budgetofCHF29,126,000,assuminganexchangerateofUSD1/CHF1.30andincluding
aninflation factor ofonepercent. Noincrease ofposts isforeseen. Theoverall 0.1percentreduction
intheproposed maintenance budget hasbeenmade possible duetoareduction inthecostofrenting
theITCbuilding. WTO 'sshare ofthenetamount tobefunded, aftertaking intoaccount theestimated
miscellaneous income ofCHF 335,000 fortheyear,amounted toCHF 14,379,000. Hefurther pointed
outthat,among thevarious documents thatITCdistributed forthemeeting, theinternal working
document entitled "TheMedium-Term Planfor1997-1999 andAnnual Operations Planfor1997",
wasprepared inanattempt tobetter define thebasicoptions andspecific targets ofeachdivision, section
andunitandtobring themtogether inanoverall corporate vision. TheAnnual Operations Planprovided
details onthework programme forthefirstyearofthePlanandhighlighted outputs. ItalsoservedWT/BFA/31
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toestablish individual work plans under thenewPerformance Appraisal System foreachmember of
theITCstaff.
5. Members congratulated theITConitspresentation. Some Members, while noting thatmore
details would beavailable inOctober, expressed thewishthatin1998, when theinitial outline ofthe
1999budget would bepresented, thereshould bemore details inbudgetary terms. Inreply toaquery,
theITCindicated thattheSecretary-General intended topropose themaintenance oftheITC'sbudget
for1998-99 despite areduction of4.7percenttobeapplied totheoverall programme budget ofthe
UN.
6. TheCommittee tooknoteofthepresentation andthecomments from theMembers.
WORLD TRADE ORGANIZATION
III. ADMINISTRATIVE UPDATES AND PROGRESS REPORTS
A. Cash situation andstatement ofoutstanding contributions asat30April 1997 (CRP(97)06,
WT/BFA/SPEC/7)
B. Instalment payments forcountries inarrears (contributions from 1987 andearlier years) -
Progress report asat30April 1997 (CRP(97)07)
C. Contributions ofobserver countries towards thecostofservices provided bytheSecretariat
-Progress report asat30April 1997 (CRP(97)08
7. TheSecretariat presented thereports onthecashsituation andstatement ofoutstanding
contributionsasat30April1997,theinstalmentspaymentsforcountriesinarrears,andthecontributions
ofObserver countries towards thecostofservices provided bytheSecretariat. Thetotalcontributions
received amounted toCHF 65,964,445, andtheWorking Capital Fund stood atCHF 7,129,584. Since
theendofApril 1997, several Members made payments, namely, Argentina, Cuba, Ecuador, Guyana,
Israel, Korea, Madagascar, Norway, Saint Vincent andtheGrenadines, Singapore andTunisia. Two
Members, namely, Bolivia andtheDominican Republic made payments inFebruary 1997 andwere
nolonger listed under Category IVoftheadministrative measures. With regard toWTO Members
withoutstanding contributions assessed above theminimum in1988, Cuba andRomania made payments
andwereup-to-date. Members congratulated Bolivia andtheDominican Republic forbeing nolonger
listed under Category IVoftheadministrative measures andCuba andRomania forbeing up-to-date
withregard totheirinstalment planforpre-1988 outstanding contributions.
8. Since theendofApril 1997, China discharged allitsoutstanding financial obligations asan
Observer. Since thelastmeeting oftheCommittee, other Observers, namely, Cambodia, Kazakstan,
Latvia, Oman, Saudi Arabia, Seychelles, Tonga, Ukraine, Uzbekistan andVietNam, alsomade
payments. Thepoint thatObservers should discharge fullytheirfinancial obligations prior totheir
accessions toWTO wasagain stressed.
9. TheChairman briefed theMembers ontheconsultations onways andmeans toresolve the
issue ofleastdeveloped countries 'arrears thatheundertook attherequest oftheCommittee during
itslastmeeting. Hethanked theRepresentative ofNetherlands forherefforts toseekasolution to
theproblem within thecontext oftheSub-Committee onLeast Developed Countries. Although he
wasnotinaposition togivedetails ontheresult oftheconsultations thathehadwiththeChairmen
oftheGeneral Council, theCommittee onTrade andDevelopment andtheSub-Committee onLeast
Developed Countries, andtheDirector-General, heinformed theMembers thatideas hadbeenputWT/BFA/31
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forward andareunder consideration. Guidelines onthematter, suchastogivecredit tothose least
developed countries which hadmade efforts tohonour theirfinancial obligations werebeing discussed.
TheChairman wasconfident thatasolution within WTO rules would befound soasnottoexclude
countries thatneeded theWTO.
10. TheRepresentative oftheNetherlands thentookthefloor andindicated thattheproblem of
leastdeveloped countries notdischarging theirfinancial obligations wasalsolinked tothefactthat
thelatter were often notaware ofthebenefits ofWTO membership. Shealsoreferred tothe
contradiction thatcountries which werenotWTO Members could benefit fromcourses andseminars,
while countries intheCategory IVoftheadministrative measures, which atapoint intimecontributed
totheOrganization, wereexcluded. Thatapplied alsototheinvitation totheforthcoming high-level
meeting oftheleastdeveloped countries. Shehoped thattheclimate around theissuewould improve
withtheapproach ofthehigh-level meeting. OneMember queried onthepossibility ofhaving the
participating countries assuming thecosts ofthecourse.
IV. ACCESSION OFCONGO AND ZAIRE (WT/BFA/W/17 and16)
11. TheChairman drew theattention oftheMembers that,according totheinformation inthe
media, Zaire hadbeenre-named theDemocratic Republic ofCongo. TheSecretariat indicated that
theLegal Division advised thatWTO should sendtheletter indicating theamount oftheassessed
contribution tothecountry upon receipt ofitsofficial notification ofchange ofgovernment andits
interest toparticipate intheWTO. TheSecretariat alsopointed outthattheDemocratic Republic of
Congo andCongo haveacceded totheWTO asoriginal Members inaccordance toparagraph 1of
Article XIoftheAgreement establishing theWTO.
12. TheCommittee agreed thataletter should beaddressed totheDemocratic Republic ofCongo
withregard totheirassessed contribution upon receipt ofanofficial notification from thelatter on
itschange ofGovernment thusindicating itsinterest toparticipate intheWTO. Pending theabove,
andconsequent totheaccession totheWTO oftheGovernment oftheDemocratic Republic ofCongo
on1January 1997(document WT/BFA/W/16), theCommittee recommends thataproratacontribution
tothe1997 budget amounting toCHF 56,944 beassessed onthisGovernment. Thisassessment,
calculated asfrom 1January 1997, isbased onanannual contribution of0.05percent, taking into
account theinternational tradefigures (imports plusexports ingoods, services andintellectual property
rights) ofthecountry fortheyears 1988 -1990. Furthermore, onthebasisoftheleveloftheWorking
Capital FundofCHF 7,129,584 on1January 1997, theCommittee recommends totheGeneral Council
toassess anamount ofCHF 35,648 ontheGovernment oftheDemocratic Republic ofCongo asan
advance totheFund.
13. Consequent totheaccession totheWTO oftheGovernment ofCongo on27March 1997
(documentWT/BFA/W/17),theCommitteerecommendsthataproratacontributionstothe1997budget
amounting toCHF 26,188 beassessed onthisGovernment. Thisassessment, calculated asfrom
27March 1997, isbased onanannual contribution of0.03percent,taking intoaccount theinternational
trade figures (imports plusexports ingoods, services andintellectual property rights) ofCongo for
theyears 1992 -1994. Furthermore, onthebasis ofthelevel oftheWorking Capital Fund of
CHF 7,129,584 on27March 1997, theCommittee recommends totheGeneral Council toassess an
amount ofCHF 35,648 ontheGovernment ofCongo asanadvance totheFund.
V. FINAL POSITION OFTHE 1996 BUDGET (WT/BFA/W/15)
14. Amember oftheSecretariat presented thereport (document WT/BFA/W/15) andindicated
that,forthefirsttime, theFinal Position ofthe1996 Budget waspresented withafunctional budget.
Hethendrew theattention oftheMembers toAnnex Bwhich showed anaccumulated surplus ofWT/BFA/31
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CHF 10,127,456. Obligations incurred in1996 under thebudget amounted toCHF 112,058,635,
leaving apositive balance ofCHF 3.6million. Thispositive balance wasthenetresult ofsavings
ofCHF 5.7million onpersonnel-related costsreduced bythenetexcess expenditure ofCHF 2.1million
against theapproved appropriation oftheregular budget inadministrative andother costs. Thisnet
excess expenditure included, interalia,theamount ofCHF 2.5million allocated, asdecided bythe
Committee, fortheestablishment oftheAppellate Body Operating Fund referred toinparagraph 10
ofthereport. Hefurther drew theattention oftheMembers toparagraph 23ofthereport which
indicated thatatransfer ofCHF 4.6million between budgetary sections wasnecessary. Theexcess
ofincome amounted toCHF 109,862. Theprincipal oftheWorking Capital Fundamounted toCHF 7.1
million asat31December 1996.
15. Members expressed satisfaction ontheprogress made inthepresentation ofthereport and,
inparticular, onthefunctional budget. OneMember oftheCommittee expressed areservation on
thefactthatsome missions undertaken bytheDirector-General andtheOffice oftheDirector-General
werecharged against technical missions. TheSecretariat explained thatgiven thenature ofsome of
themissions, itwasfeltmore appropriate tohavethem recorded under technical missions. Inreply
toqueries ontheuseofthecredit balance oftheSurplus Account, theSecretariat indicated thatthe
Director-General would make aproposal, asstipulated intheWTO Financial Regulation Article 26:3.
Theproposals would bepresented totheCommittee atthetimewhen the1998budget estimates would
bediscussed. AMember oftheCommittee indicated that,inhisview, thesurplus should beused
toreduce assessed contributions onWTO Members.
16. Inreply toaquery onthesaving made inpersonnel costs, theSecretariat explained thatitwas
mainlyduetothedelayinrecruitmentofthe37newprofessionalpostscreatedin1995for1996onwards.
17. TheCommittee tooknoteofthecomments fromtheMembers, andrecommends theapproval
oftransfers between budgetary sections ofCHF 4,628,194 which arenecessary inorder tocover excess
expenditure overapproved appropriations onthesections mentioned inparagraph 23ofdocument
WT/BFA/W/15 bysavings onother sections.
VI. FINANCIAL CONSEQUENCES OFCANCELLATION OFWTO BODIES 'MEETINGS
ATSHORT NOTICE (WT/BFA/W/18)
18. Amember oftheSecretariat presented document WT/BFA/W/18 andindicated thatatotal
of2,340 meetings were foreseen in1996. Outofthe2,340 meetings planned, atotalof349were
cancelled. Recruitment offreelance interpreters hadalready beenhired for40ofthose cancelled
meetings. TheSecretariat drew theattention oftheMembers thatwhen freelance interpreters were
hired theyhadtobepaidwhether ornottheywere used.
19. Members expressed theopinion thatthere wasaneedforbetter planning andco-ordination
inthisrespect. Inreply toqueries theSecretariat explained thatitwould notalways bepossible to
make lastminute recruitment ofinterpreters andthat,given thefluctuations inneeds overtheyear,
apermanent second teamofinterpreters would costtheOrganization more andwould notentirely solve
theproblem.
20. TheCommittee tooknoteofthereport andthecomments fromtheMembers. TheChairman
would consult withtheSecretariat inorder toseekasolution totheproblem. TheCommittee
recommends totheGeneral Council torequest thechairmen oftheWTO 'sbodies totakeintoaccount
ofthefinancial consequences ofthecancellation ofmeetings atshort notice.WT/BFA/31
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VII. REVIEWOFTHEAPPLICATIONOFTHEHEADQUARTERSAGREEMENT(CRP(97)05)
21. TheChairman recalled thatduring thelastmeeting, theMembers were informed thatthe
Headquarters Agreement, signed withtheSwiss authorities, foresaw anevaluation oftheimplementation
totakeplace 18months afterthesignature oftheagreement. Apreliminary meeting wasorganized
andaquestionnaire wassenttoalltheMembers. Some Members havealready sentintheircomments
andtheSecretariat hadprepared adocument compiling allthecomments oftheMembers aswellas
those fromtheSecretariat. TheChairman undertook initial informal contacts withsome delegates in
order toidentify some whowould beavailable forthework.
22. TheSecretariat suggested thattheprocedure ofreview ontheapplication oftheHeadquarters
Agreement would be:(i)finalization ofthedocument compiling comments fromtheMembers aswell
asofthose from theSecretariat; (ii)submission ofthedocument totheSwiss authorities; and
(iii)organization ofoneortwomeetings between theSwiss authorities, ontheonehand, andagroup
consisting ofdelegates from Members aswellasrepresentatives from theSecretariat ontheother.
Hefurther indicated thatthemeetings would beheldinthesecond halfofJune. Areport onthe
discussions would besubmitted totheCommittee inSeptember 1997.
23. Some Members indicated thattheexercise wastoreview theapplication oftheHeadquarters
Agreement, andnotanoccasion forre-negotiation oftheformer. Itinvolved reviewing themodality
ofapplying theHeadquarters Agreement.
24. TheCommittee noted thecomment thattheexercise wasanevaluation oftheapplication of
theHeadquarters Agreement.
VIII. OTHER BUSINESS
25. AMember oftheCommittee expressed theconcern thattheuseofmobile telephones inmeetings
causes disturbances. Heproposed thefollowing guidelines: (i)mobile telephones should beputin
apassive mode during meetings, and(ii)delegates should notengage intelephone conversations on
mobile telephones inconference rooms during meetings.
26. TheCommittee tooknoteofthestatement andindicated thatenquiries would bemade tosee
whatwasthepractice inother organizations onthisissue.
27. TheChairman informed theMembers thattheWorking Group ontheCondition ofServices
Applicable totheStaffoftheWTO Secretariat hadmetregularly. Areport withproposals would be
submitted totheGeneral Council taking intoaccount theconcerns andcomments expressed inthe
Working Group. TheWTO StaffCouncil hadbeenkeptregularly informed oftheevolution ofthe
discussions. Afurther meeting oftheWorking Group would beorganized before 10June1997 in
order toheartheSecretary oftheUNJoint StaffPension Fund.
POINTS FOR DECISION: Paragraph 12
Paragraph 13
Paragraph 17
Paragraph 20