5:13 AM Aug 2, 1994


Geneva 29 July (TWN) -- The differences over the cost sharing of the budget of the future World Trade Organization appears nearer solution, participants in an informal consultation on the issue reported Friday.

The differences have been on whether and how the shares of countries are to be apportioned: on the basis of continuing the current shares based upon country-shares of trade in goods, or also one reflecting the trade in intellectual property and services.

Initially the United States had problems with a formula reflecting all the three areas of the WTO, and discussions had centred on when the new formula -- based on country share of merchandise trade, intellectual property registrations and share in services trade as reflected in the IMF balance of payments statistics -- should begin to apply.

A compromise decision for introducing it 'if appropriate' after two years was opposed by Germany and India, but favoured by the US, Italy and Singapore. India was agreeable to a two-year phasing-in period, but not with an 'if appropriate' qualification. Germany wanted the new formula to apply from the day the WTO comes into being.

However, on Friday, the US removed its objections and said as a beneficiary it was willing to pay according to the new formula from 1 January 1996 and pressed Singapore and Italy too to agree.

Singapore whose share would go up (because of its higher share in the services trade -- tourism, offshore banking and financial services etc) by about 500,000 dollars and Italy whose share would go up by 300,000 dollars were to convey their position on Tuesday.

The deadlock on the budget sharing formula was reportedly holding up other key decisions on the staffing -- creation of new posts and their levels -- to reflect the new responsibilities that the WTO would be undertaking in addition to the areas now covered by GATT.