5:14 AM Jul 22, 1994


Geneva 22 July (Chakravarthi Raghavan) -- The Preparatory Committee for the World Trade Organization which is due to adjourn Friday for the summer recess has a number of substantive issues to address and resolve when it reassembles in September.

The Prepcom is set to endorse before adjourning the recommendation from its Sub-Committee on Administrative and budgetary questions on the choice of Geneva as the future WTO headquarters and name a committee to negotiate and draw up a detailed headquarters agreement.

But among the substantive questions that would need to be settled are those relating to the relationship of the WTO with other international organizations, and terms of reference and rules of procedure for WTO bodies.

On this last, when the Prepcom and its Subcommittees reconvene in September, a priority is expected to be to focus on the IMF and World Bank, the World Intellectual Property Organization (WIPO) and the United Nations and UN Conference on Trade and Development.

The Prepcom Subcommittee on Institutional, Procedural and Legal Matters, chaired by Amb. Kesavapani of Singapore is dealing with these issues, as well as issues of transition from GATT 1947 to GATT 1994 which is to be separate and distinct from GATT 1947.

The WTO is targeted to enter into force on 1 January 1995 or as soon as may be thereafter. All GATT 1947 contracting parties, eligible to be original members of the WTO (who have filed their schedules and have complied with other requirements), have in fact been provided a two-year time to complete their legal requirements to ratify or accept the WTO agreement.

Japan, for example, has indicated that its own Diet schedules might mean that it might not be able to complete all its formalities before 1 January 1995.

On the relationships with other intergovernmental organizations, there appears to be two tendencies within the WTO Prepcom.

One approach put forward by Australia was for WTO to have similar relations to other intergovernmental organizations as the present GATT, but expanding it to reflect WTO's wider responsibilities. Australia envisaged three categories of relationships: those international organizations which had a special role in the Uruguay Round, those that could supply information to the WTO (such as on service sectors) and those which simply wished to be informed about WTO's activities.

The United States also wanted exploration of the question of WTO's relationships with non-governmental organizations.

But many others took a more cautionary approach, as Argentina put it, a "minimalist approach".

The European Union suggesting a cautious approach wanted limiting relationships, at least initially, to mutual observer status, and making a distinction between formal observer status and ad hoc arrangements with relevant organizations.

Canada suggested concentration on those organizations with which relationships would be needed from day one of entry into force of WTO: limiting the relationship for the moment to the IMF, the World Bank, the United Nations and the WIPO.

India made a distinction between defining relationships between the secretariats and between intergovernmental bodies. On this last, India suggested the approach should be based on different functions of the WTO and the respective international organizations.

The principle of universal membership, India said, should be applied and WTO should establish relations only with "global organizations, not with regional organizations".

Also, relationship with the United Nations and in particular with UNCTAD should be considered separately in view of its importance.

Chairman Kesavapani is reported to have summed up the discussions in terms of an approach based on minimal relations and one based on functions. The IMF, the World Bank, WIPO and the United Nations and with the UN family as such, particularly with UNCTAD which he saw as one that would play an important role for developing countries and should have a substantive part in determining the degree of WTO's relationship with other intergovernmental organizations.

The WIPO and IMF would already appear to have requested some informal exchange of views on the relationships with them and Kesavapani is expected to undertake these consultations.

The issue of transition arrangements between the GATT 1947, the various Tokyo Round codes and agreements and the GATT 1994 could be more complicated, particularly since GATT 1947 and GATT 1994 would be distinct and separate, with differing rights and obligations.

The general expectation when the GATT 1994 was concluded, and termed a separate and distinct one, was that all WTO members at some point of time would withdraw from GATT 1947 and GATT 1947, and its protocol of provisional application envisage withdrawal after 60 days notice.

But there would still be some murky areas and issues: at least for the two-year transition envisaged, GATT 1947 and GATT 1994 might need to co-exist, with all GATT 1947 members continuing in it -- since otherwise those yet to ratify and join the WTO as original members would have no contractual rights and obligations visavis others.

There would also be questions relating to pending rights and obligations, and disputes and settlement processes already in play.

All these intricate legal questions are expected to figure in the Sub-committee discussions when it reassembles in September.