Australia-China Chamber of Commerce and Industry of
New South Wales
Comment on WTO Related Issues
1. Introductory Comments
The
Australia-China Chamber of Commerce and Industry of New South Wales (ACCCI) is
responding to the request issued on 3 April 2001 by the Minister for Trade, the
Hon Mark Vaile MP, for public comment on WTO related issues. The Chamber’s response is the result of the
Chamber’s increasing concern over the following events and circumstances:
v
the delay over the accession of China to the World
Trade Organisation (WTO);
v
the failure in December 1999 to initiate a new round
of multilateral trade negotiations;
v
the apparent inability since December 1999 to resolve
the differences between the industrial countries that were pressing for a broadly
based agenda for negotiations to be concluded within three years and several
developing countries that sought to concentrate on problems arising from
agreements reached in the last phase of the Uruguay Round of negotiations; and
v
the increased opposition in Australia and elsewhere
to further WTO initiatives and to the globalisation process generally.
This
commentary was drafted by the Executive Committee of the Chamber and circulated
to Chamber members and to friendly organisations that expressed an interest in
the recommendations contained herein.
The sections of this submission are
as follows:
Executive Summary:
brief statements of the principal recommendations about the WTO agenda for
further work and of additional recommendations about the Australian WTO
Advisory Panel.
Globalisation
Challenges: a statement of ACCCI views regarding the major difficulties in
achieving continuing benefits from a global trading system.
Current Support for
Institutional Development: comments on the lack of progress in evolving a
satisfactory process for developing institutions that influence
and contribute to a more complete integration into the global trading system.
Common Need for
Institutional Development: states the view that institutional development
is as important for industrial countries as it is for developing countries.
Australia’s
Contribution: gives an overall statement of the contribution Australia
should make in strengthening trade-related institutions.
Importance of China:
highlights two areas in which China occupies a special position in the
globalisation process.
Further Comment on
the Australian WTO Advisory Panel
Annex A:
Objectives of the Australia-China Chamber of Commerce and Industry of New South
Wales
Annex B: WTO
Documentation on the Advisory Centre on WTO Law
Principal
Recommendations
It is
urgently recommended that the WTO substantially increases its commitment,
contained in the Ministerial Declaration that was adopted at the Marrakesh Ministerial
Meeting in April 1994 and subsequently reiterated in various documents, to
achieve greater coherence in global economic policy making and to assist
developing countries to create the capacity to build the necessary institutions
to operate successfully in the multilateral trading system.
In March 1999, the then chairman of
the WTO’s General Council, Ambassador Ali Mchumo, identified the following as
important objectives (from Opening Statements, “Report on the WTO’s High Level
Symposium on Trade and Development”, 17-18 March 1999, International Institute
for Sustainable Development, available at: http://www.wto.org/wto/english/tratop_e/devel_e/summhl_e.htm):
v
facilitating the integration of developing countries in the multilateral
trading system;
v
building coherence among trade, finance and development policies and
institutions;
v
improving the participation and reducing the vulnerability of LDCs [less
developed countries] in the trading system; and
v developing the role of
the WTO in supporting the developmental objectives identified in the Marrakesh
Agreement.
The summary of the discussion at the
High Level Symposium indicates that there is no shortage of opinion as to what
is needed in relation to trade and development. We suspect the diversity of opinion is a major reason for the lack
of observable progress. A set of
priorities with a clear objective is missing.
Accordingly, we recommend the
following:
v
The establishment of an Advisory Centre on Adjustment to the Global
Trading System as an independent governmental organisation that is similar
in structure to the Advisory Centre on WTO Law (refer to Annex
B for WTO statements about the latter).
v
The Advisory Centre should be available to all WTO members who seek
assistance in developing the institutions that are necessary to operate
successfully in the global trading system.
v
The Advisory Centre should monitor, evaluate and report in publicly
available documents all trade-related, institutional-strengthening projects
that are funded and administered by multilateral agencies or through official
development assistance. The objective
of the monitoring, evaluating and reporting should be to achieve greater consistency
in the process of improving the ability of member countries to adapt to the
global trading system.
v
The Advisory Centre should offer financial grants to supplement donor
contributions for bilateral exchanges of personnel for which the specific
purpose is to strengthen the recipient country’s institutions for trade-related
matters. The grants should require full
reporting and disclosure of these exchanges, including the benefits derived and
process of achieving the benefits.
v
The Management Board should reflect diversity in its membership and
should be formally linked to an external advisory board that consists of
persons nominated by the Signatories to the Centre.
Additional Recommendations
The Chamber supports the establishment
of a new consultative body to the Australian Government on multilateral trade
policy, which is to be called the WTO Advisory Panel, and we strongly support
the intention of broad representation on the panel.
In view of
the principal recommendation for a WTO Advisory Centre for Adjustment to the
Global Trading System, we suggest that a national advisory panel should reflect
similar objectives and should be organised and structured in an exemplary
manner.
We
recognise that the main purpose of advisory panels is to supply information and
opinions to the relevant ministers. We
nevertheless suggest that fostering two-way flows of information and opinions
between the public sector and the private sector, as well as monitoring,
evaluating and reporting in publicly available documents, would substantially
increase the value of such panels.
Specific recommendations for the WTO
Advisory Panel are contained in section 8 of this
submission.
Convincing
evidence is available to indicate that economic growth rates are higher for
nations that are in the process of becoming more fully integrated into the
global trading system. This arises
principally from the following contributions of an open trading regime:
v
It allows a nation’s resources to be used more
effectively through greater specialisation in the production of goods and
services.
v
It facilitates the flow of financial capital and
intermediate products that contribute to long-run growth through continuous
improvements in productivity.
v
It encourages competition between domestic and
foreign enterprises and thereby raises the level of efficiency of domestic
enterprises.
Evidence
is also available to indicate that greater integration into the global trading
system contributes to a reduction in poverty by increasing the demand for
relatively abundant factors of production, a portion of which may be unemployed
(or underemployed) in a closed trading regime.
Additionally, evidence suggests that nations with higher rates of
economic growth are relatively more successful in reducing the level of
poverty.
However,
the process of achieving these benefits is associated with difficulties that
include the following:
v
The transfer of resources away from activities that
decline as a result of greater integration into the global trading system, and
toward activities that follow specialisation and trade, carries a cost that is
unequally borne within the integrating nation and may differ from one
integrating nation to another.
v
Policies and institutions that were developed prior
to greater integration may have become “locked in”, and therefore tend to
create obstacles to an effective transition into the global trading system.
v
The skills and experience acquired by a portion of
the work force in an integrating nation may be unsuitable for productive use in
a more fully integrated environment, and such a portion of the work force may
be unable to alter, on its own, the lack of suitability.
It is
suggested that these challenges become more formidable as globalisation
accelerates. This arises from an
increasingly shorter adjustment period and from greater unevenness in the
adjustment process.
It is
therefore suggested that a procedure to alleviate these difficulties is
urgently needed.
4. current support for institutional
development
We believe
that widespread participation in the development of institutions that
influence and contribute to a more complete integration into the global trading
system is a necessary condition for the alleviation of the difficulties
mentioned in the preceding section.
We note
that programs for institutional strengthening have been initiated by various
multilateral and bilateral agencies but we have seen no evidence that
participation is widening significantly or that the programs are either
consistent or coordinated.
We believe
that the basic building blocks for greater integration occur at the district or
precinct level in urban areas and at the village level in rural areas. We have seen no evidence that multilateral
or bilateral support for institutional development has reached that level.
We also
believe that bilateral relationships are of fundamental importance to
institutional development among trading nations. A comprehensive program for the exchange of personnel is
essential for the purpose of (a) understanding the institutions that currently
exist in other nations, within their respective cultural settings, and (b)
assisting in improving those institutions for mutual benefit through increased
trade.
Bilateral
exchange programs should also include trade-related communications between
non-government organisations, especially with developing nations whose
political institutions have not yet achieved complete acceptance either
internally or externally.
However,
if such a program were undertaken by each pair of trading nations on an
independent basis, with little or no coordination, then the potential benefits
are likely to be significantly diminished through duplicated efforts,
inconsistency and probable confusion.
We believe
that efforts to avoid the duplicated effort, inconsistency and probable
confusion should appropriately be assigned to an agency that is in some way
attached to the WTO.
5. cOMMON NEED for institutional
development
We believe
that the need for institutional development is common to both industrial and
developing members of the WTO. Although
industrial countries were the principal architects of the present multilateral
trading regime, they should not become complacent in believing, either
individually or jointly, that their trade-related institutions are beyond
reproach, or that these institutions can meet the continuing challenges of
globalisation without further adjustment.
A major
objective of multilateral trade organisations such as the WTO is to encourage a
convergence of trading policies and standards in order to reduce the
tensions that might otherwise arise from different policies and standards. Convergence implies a mutual adjustment, not
conformity to pre-determined policies and standards.
It is
generally recognised that the inherent conflict between buyers and sellers is
reconciled in a market system if all participants have an adequate set of
choices and if the system is characterised by “fair play”. Neither of these can be assured by proclamation. They must be assessed by the market
participants on the basis of observation and experience.
Since the
end of the Second World War, market participation has become increasingly
centralised. This occurred first with
greater concentration at the state or provincial level, then at the national
level and more recently at the international level. The correlation between globalisation and increased
centralisation in market participation is not coincidental. It is a necessary consequence of economic
integration.
The effect
of this centralisation is to alter substantially the capacity of market
participants to observe and to acquire experience. Social and political institutions were created to facilitate this
assessment, but they have generally evolved into legal or quasi-legal entities
to resolve disputes and to adjudicate “fair play”.
It would
be impractical to reverse the integration of markets in order to allow local
area “observation and experience”. It
is nevertheless possible to expand the capacity of both buyers and sellers to
participate in the institutional arrangements that have become substitutes for
“observation and experience”.
There is
an apparently natural tendency for the relevant social and political
institutions to acquire exclusivity.
“Information loops” fail to expand, not necessarily by design, but
through expediency and the desire for organisational stability. This growing exclusivity not only limits the
perceived value of the institutions, it also acts as a disincentive for the
excluded groups to seek influence through constructive means.
We believe
that the way the relevant institutions need to be adjusted and strengthened
will differ substantially among individual WTO members, so that no formula or
model will be appropriate for all integrating nations. This arises from different experiences and
from the associated differences in the evolution of existing institutions.
We
nevertheless believe that there is likely to be common features in the process
of redeveloping the existing institutions and in creating new institutions. We believe that this process should be the
principal focus of an advisory centre that is in some way attached to the WTO.
We note
from the table below, showing exports, imports and total trade by value in
1999, that Australia was the 13th largest trading nation in 1999 (treating the
European Union as a single entity and including only extra-EU trade).
We
recognise that Australia, through AusAID and through participation in APEC, has
already contributed to the strengthening of institutions in the Asian region
following the East Asian crisis that occurred from July 1997 to (approximately)
December 1998.
We believe
this experience should be useful in recommending a greater amount of attention
to these matters within the WTO.
Table
1: Exports, Imports and Total Trade by Value (in US$ billions) and Share – 1999
Country
|
Exports |
Imports |
Total |
||||
|
|
|
Value
|
Share |
Value |
Share |
Value |
Share |
|
1 |
United States |
695.2 |
16.39% |
1059.1 |
23.58% |
1754.3 |
20.09% |
|
2 |
Extra-EU trade |
795.6 |
18.76% |
843.4 |
18.78% |
1639.0 |
18.77% |
|
3 |
Japan |
419.4 |
9.89% |
311.3 |
6.93% |
730.6 |
8.37% |
|
4 |
Canada |
238.4 |
5.62% |
220.2 |
4.90% |
458.6 |
5.25% |
|
5 |
China |
195.2 |
4.60% |
165.8 |
3.69% |
360.9 |
4.13% |
|
6 |
Hong Kong |
174.4 |
4.11% |
180.7 |
4.02% |
355.1 |
4.07% |
|
7 |
Korea |
144.7 |
3.41% |
119.8 |
2.67% |
264.5 |
3.03% |
|
8 |
Mexico |
136.7 |
3.22% |
148.7 |
3.31% |
285.4 |
3.27% |
|
9 |
Taiwan |
121.6 |
2.87% |
110.7 |
2.46% |
232.3 |
2.66% |
|
10 |
Singapore |
114.7 |
2.70% |
111.1 |
2.47% |
225.7 |
2.59% |
|
11 |
Switzerland |
80.4 |
1.89% |
79.9 |
1.78% |
160.3 |
1.84% |
|
12 |
Malaysia |
84.5 |
1.99% |
65.0 |
1.45% |
149.4 |
1.71% |
|
13 |
Australia |
56.1 |
1.32% |
69.1 |
1.54% |
125.2 |
1.43% |
|
14 |
Russian Fed. |
74.3 |
1.75% |
41.1 |
0.91% |
115.4 |
1.32% |
|
15 |
Thailand |
58.4 |
1.38% |
50.3 |
1.12% |
108.7 |
1.24% |
|
|
|||||||
It should
also be noted that although Australia ranks 13th in terms of the total volume
of trade, the portion of total trade that we account for is less than 1.5 per
cent. Our bilateral influence on
matters relating to trade is therefore relatively small.
This
underscores the importance to Australia of maintaining the integrity of
multilateral trade organisations such as the WTO.
The table
above indicates that China ranked 5th in the world in terms of total trade in
1999. That ranking is likely to
increase in the near future since China also has one of the world’s fastest
growing trading sectors.
It is
therefore essential to the multilateral trading system that China be
incorporated in it with a minimum of tension and conflict. The accession process has already tested the
capacity of the WTO to achieve a convergence of trading policies and standards,
but even more strain will be placed on it during China’s phasing-in period.
Although
China has made considerable progress in adjusting to the multilateral trading
system, continuing pressure will be placed on its institutional development,
especially in view of the relatively recent opening of its trading sector. As noted above, convergence will require
mutual adjustment, and the future credibility of the WTO will depend to a
considerable extent on its capacity to administer that adjustment.
We note
that informal guidelines for China’s implementation period have been
circulated, but they originated from a chamber of commerce, not from the
WTO. Specifically, the American Chamber
of Commerce in China’s 2001 White Paper (http://www.amcham-china.org.cn)
stated the following:
As
China's WTO performance is judged over the coming months and years, care should
be taken to distinguish between: (1) legitimate (though unwelcome)
exploitations of loopholes; (2) aggressive interpretations of ambiguous
language; (3) imperfections and delays resulting from practical difficulties
despite good-faith efforts; (4) imperfections and delays resulting from
inadequate resources devoted to the problem by the Chinese government; and (5)
problems resulting from a blatant disregard for clear-cut obligations.
In
addition, we should remember that disputes are a normal and inevitable
by-product of trade relations between nations, and the WTO is not necessarily
the right forum for addressing every problem.
We recognise that our companies must still exercise due diligence when
contemplating specific transactions, and that they should generally rely upon
the courts to resolve contractual disputes.
China is
also important to capacity building in the multilateral trading system since
social cohesion has been an important objective in China for the past 3,000
years (selecting the Zhou Dynasty, from 1027 to 221 BC, as the one that
initiated the principle that social order is effectively maintained more from
familial ties than from feudal bonds).
China is
likely to experience difficulties with a globalisation process that highlights
and exacerbates tensions among those who are integrated into the system and
those who are unable to benefit from it.
If these difficulties cannot be obviated for China, they are likely to
persist for the global trading system generally.
8. FURTHER COMMENT
ON THE aUSTRALIAN wto aDVISORY pANEL
The
principal objective of this submission is to emphasise the need to achieve greater coherence
in global economic policy making and to assist developing countries to create
the capacity to build the necessary institutions to operate successfully in the
multilateral trading system.
This need will exist for
some time, even with substantial contributions from the WTO and other
multilateral organisations. Australia
should therefore be in a position to participate in whatever initiatives arise. A sensible place to begin is a commitment to
continue developing our own trade-related institutions, and the newly
established Australian WTO Advisory Panel would seem to be an appropriate body
to express such a commitment.
In giving specific
recommendations to facilitate that commitment, we make use of comments that
Chamber members and other organisations expressed in the recent past.
Avoid the constraints
that are sometimes imposed by patron-client relations between appointed members
of advisory groups and the organisations that were instrumental in acquiring
the respective appointments.
Appointed
members have a natural alliance with the organisations that assisted them. This alliance acts as a reward for
participation, and generally contributes to friendly rivalry among the participating
organisations. That rivalry can
nevertheless become counterproductive if the alliances are associated with
exclusivity.
Ways
of overcoming that tendency include: (a) publishing short biographies of the
appointed members with a view to establishing a wider constituency of similarly
interested people and organisations for each appointed member, (b) seeking
regular reports for the members of the panel as to individuals or groups that
were informed and consulted with in matters relating to the advisory panel, and
(c) distributing information widely.
Prepare
a list of perceived inefficiencies and sources of ineffectiveness arising from
specific aspects of trade-related institutions in Australia, and seek comments
on specific items from both the private sector and the public sector.
The
invitations to comment should be directed toward specific issues or problems in
order to keep the evaluation focused, but the list of priorities should kept
flexible. This suggestion is intended
for the purpose of developing a more continuous process for identifying
institutional weaknesses.
Should
the WTO Advisory Panel develop according to these suggestions, the Chamber
would be most willing to be a cooperating and participating organisation.
The
Australia-China Chamber of Commerce and Industry
of New South Wales
ACN 002 816
622.
Internet
site: www.accci.com.au
The Chamber is a
non-government association that is registered in New South Wales as a
non-profit organisation. Membership
consists of companies that have a trade and investment interest in China.
Secretariat and agents national and international is ACCCI
Pty Ltd ACN 008 613 590.
Governor: The Lord Mayor of Sydney.
Patron: The Consul General of the People's Republic of China.
Correspondence to:
GPO Box 3671
Sydney NSW 1044
Telephone: 61 2 9451 3130
Facsimile: 61 2 9451 3575
E-mail: chamber@accci.com.au
Executive Committee:
Michael C. H. Jones, President: m.jones@accci.com.au
John Zerby, Vice President: j.zerby@accci.com.au
Marilyn Walker, Vice President: m.walker@accci.com.au
OBJECTIVES
OF THE AUSTRALIA-CHINA CHAMBER OF COMMERCE AND INDUSTRY OF NEW SOUTH WALES
The
Chamber was founded in 1976 and has adhered consistently to three basic
objectives:
v
To promote Australian business, in general, within
the context of two-way trade and investment with China.
v
To promote the Chamber and the business of its member
companies with businesses and organisations in China.
v
To promote Chamber projects of a cultural or sporting
nature which have the principal purpose of bringing the business communities together.
The basic
strategy of the Chamber has focused on the following:
v
in-depth analysis of particular commercial sectors
and industries in China, with a view to determining what China needs and what
can be supplied from Australia;
v
specific information about business prospects in
China, including exports, imports and joint-venture investment opportunities,
especially on a regional basis;
v
reliable contacts in China from whom information can
be obtained and, if desirable, introductions can be made; and
v
knowledge as to where to begin to seek joint-venture
partners and how to insure that the “appropriate” partner is found.
In-depth
analyses are obtained mainly through workshops and seminars in the following
four areas:
v
urban services in China
v
rural industries in China
v
infrastructural needs in China
v
commercial culture activities between Australia and
China.
The
Chamber also produces two sets of newsletters that are sent by e-mail to
members and other interested individuals.
Documents are available from the Chamber’s Web site www.accci.com.au on the following issues
(select “Online Publications” in the home page):
The Need to Re-examine Business-Government Relations After China’s Enterprise Restructuring and Entry into WTO, ARIACO Conference, Beijing, 9 - 12 October 1999.
Suggestions
for Improvements in the Supervision of Law Enforcement in China, International
Seminar on the Environment of Law Enforcement Supervision, Mianyang City,
Sichuan Province
27-29 June 2000.
ACCCI
Roundtable Discussion on Australia’s Trade and Aid Policies with China,
Sydney, 24 November 2000
Specific
information about business prospects in China and reliable contacts in China is
managed through the Chamber’s “Key City” strategy. This began in 1995 with a target of 25 Chinese cities with which
the Chamber intended to establish cooperative arrangements. The arrangements include contact with:
v
Mayors and senior government officials,
v
Heads of the China Chamber for the Promotion of
International Trade (CCPIT) sub-branches,
v
Communist Party Secretaries and related committee
personnel, and
v
Managers of major industrial enterprises and
subsidiaries.
A total of
34 such agreements were entered into at the end of 2000. During the next three-year planning period,
the Chamber intends to enlarge this number by targeting the cities shown in the
following scheme, with provincial capitals listed first under the province name
and cities for which cooperative agreements have already been signed shown in
red (also bold).
Note that
the Chinese names (for some of the cities) are in MingLiU typeface (also called
“Traditional Chinese”) and this may not be available as a screen font or a
printer font. Note also that the
provinces are in alphabetical order from Anhui Province to Inner Mongolia
Autonomous Region running continuously in the left-hand panel and Jiangsu
Province to Zhijiang Province in the right-hand panel.
|
1. Anhui Province 2. Beijing Municipality 3. Chongqing Municipality 4. Fujian Province 5. Gansu Province 6. Guangdong Province 7. Guangxi Zhuang Autonomous Region 8. Guizhou Province 9.
Hainan Province 10. Hebei Province 11. Heilongjiang Province 12.
Henan Province 13. Hong Kong, SAR 14. Hubei Province 15.
Hunan Province 16. Inner Mongolia Autonomous Region |
17. Jiangsu Province 18. Jiangxi Province 19. Jilin Province 20.
Liaoning Province 21. Ningxia Hui Autonomous Region 22.
Qinghai Province 23.
Shaanxi Province 24. Shandong Province 25. Shanghai Municipality 26. Shanxi Province 27. Sichuan Province 28. Taiwan Region 29. Tianjin Municipality 30. Tibet Autonomous Region 31. Xinjiang Uygur Autonomous Region 32. Yunnan Province 33. Zhijiang Province |
WTO
DOCUMENTATION ON THE ADVISORY CENTRE ON WTO LAW
The
following is reproduced from http://www.wto.org
Advisory
Centre on WTO Law
In parallel with the third
Ministerial Conference of the WTO in Seattle, on 1 December 1999, the Ministers
of Bolivia, Canada, Colombia, Denmark, Dominican Republic, Ecuador, Egypt,
Finland, Guatemala, Honduras, Hong Kong China, Ireland, Italy, Kenya,
Netherlands, Nicaragua, Norway, Pakistan, Panama, Paraguay, Peru, Philippines,
Sweden, Thailand, Tunisia, United Kingdom, Uruguay, Venezuela and Zimbabwe
signed the "Agreement establishing the Advisory Centre on WTO Law".
Thereafter India, Latvia and Senegal made use of the temporary option to join
the Centre by signing the Agreement before 31 March 2000.
The Centre will soon be established
in Geneva as an independent intergovernmental organisation. At present the Agreement
has thirty-two Signatories: nine developed countries, twenty-two developing
countries and one economy in transition. All Least Developed Countries are
beneficiaries of the Centre by definition. Membership of the Centre remains
open to all WTO Members and those in the process of accession to WTO through an
accession procedure.
The Centre
almost established and operational
Since Seattle a Preparatory
Committee in which all Signatories and representatives of the Least Developed
Countries are assembled has been working actively on various basic documents.
These documents elaborate certain provisions of the Agreement while other
activities of the Preparatory Committee attempt to prepare a smooth start of
the Centre. These documents include, amongst others, the Seat Agreement with
the Swiss authorities, financial regulations, the conditions of service for the
Staff, the rules of procedure and a preliminary budget for 2001.
For the Agreement to enter into
force, two conditions have to be met. They are: the deposit of the legal
instrument of ratification/acceptance by at least twenty Signatories and the
presence of $ 12 million of financial contributions reflected in these
deposits, consisting of $ 6 million for the endowment fund and $ 6 million of
multiyear contributions by developed country Signatories (see also the table
below). Thirty days thereafter the Agreement enters into force. This moment is
very close now. It is expected that the entry into force of the Agreement may
occur in May 2001 and that a constituent General Assembly could be convened
shortly thereafter to adopt all basic documents that have been and are being
prepared by the Preparatory Committee by consensus.
The Preparatory Committee has also
agreed on 21 March 2001 on the following nominations for the Management Board
of the Centre: Dr. Said El-Naggar (former Appellate Body Member from Egypt);
Mr. Stuart Harbinson (current Chairperson of the General Council of the WTO and
Ambassador of Hong Kong, China); Mrs. Marithza Ruiz de Vielman (Ambassador of
Guatemala in the United Kingdom); Mr. Renato Ruggiero (former Director General
of the WTO from Italy); Mr. John Weekes (former Chairperson of the General
Council of the WTO from Canada); and Mr. Ali Said Mchumo (Ambassador of
Tanzania and former Chairperson of the General Council of the WTO) as the
Representative of the Least Developed Countries. The Chairman of the
Preparatory Committee, Mr. Otto Genee of the Netherlands, has been nominated as
the Chairperson of the General Assembly. The constituent General Assembly will
formally approve the above mentioned nominations for the Management Board and
the Chairperson of the General Assembly.
In the Agreement the selection and
appointment of the Executive Director has been delegated to the Management Board.
The Preparatory Committee has recently invited the Management Board to start
already a transparent and open process to recruit the Executive Director in
consultation with the Signatories while we are awaiting the deposit of the few
remaining instruments of ratification. The agreed objective is to appoint the
selected candidate for the post of the Executive Director in the joint meeting
of constituent General Assembly and the Management Board so that the Director
could start up the office immediately afterwards.
Management
of the Centre
The institutions of the Centre are
the General Assembly, the Management Board and the Executive Director. The
General Assembly is the highest decision-making body of the Centre that brings
together all Members and the Least Developed Countries. It shall meet twice a
year to oversee the functioning of the Centre and to adopt the annual budget.
The Management Board takes the decisions necessary to ensure efficient an
effective operation of the Centre and reports to the General Assembly. The
Board consists of four members, serving in their personal capacity, selected on
the basis of their professional qualifications and nominated by the four
"constituencies" (developed countries, group A, B and C), a
representative from the least developed countries and the Executive Director ex
officio. In the transition period of the first five years there are two members
from developed countries. The Executive Director manages the Centre’s
day-to-day operations.
Services
of the Centre
The Centre functions essentially as
a law office specialised in WTO law, providing legal services and training
exclusively to developing-country and economy-in-transition Members of the
Centre and all Least Developed Countries. Its mandate and modest size (one Executive
Director, four experienced lawyers and support staff) require the Centre to
stay within its own niche, to avoid overlap and to complement the training and
technical co-operation provided by the WTO Secretariat and other relevant
institutions. The Centre will organise seminars on WTO jurisprudence and
provide legal advice. Internships will be opened for government officials from
developing country Members and Least Developed Countries. The Centre will also
provide support throughout dispute settlement proceedings in the WTO at
discounted rates for its Members and Least Developed Countries in accordance
with the terms set out in annex IV of the Agreement.
The Executive Director will be
invited to present detailed proposals for trainee and internships programmes.
Further the General Assembly will be requested to approve as part of the
financial regulations the opening of a Technical Expertise Trust Fund. This
Trust Fund would be available for developing country and economy in
transition Members to (partly) finance technical expertise for the preparation
of an underlying technical dossier in fact-intensive dispute settlement
proceedings, both in the exploratory and panel phase. The Trust Fund is to be
funded by donor governments and intergovernmental organisations only.
Financing
the Centre’s activities
Members from developing countries
and economies in transition pay a one-time financial contribution (in
accordance with their capacity to pay) to an endowment fund that forms the
financial core of the Centre. Least Developed Countries are not required to
make such payments to enjoy all the benefits and will furthermore receive
priority in the provision of the Centre’s services. Developed countries can
become Members by making a minimum contribution of US$ 1,000,000 to the
endowment fund and/or by donating multiyear funds of US$ 1,250,000. Developed
countries have no access to the legal services in dispute settlement
proceedings. The table below provides details of the contributions of the
Members.
To finance its regular activities
after the first five years, the Centre will draw on revenue generated by its
endowment fund and user fees charged for the legal services in dispute
settlement proceedings. Multiyear contributions from developed country Members
will finance the first five years of operation as user fees and earnings flow
into the endowment fund to allow its build-up.. The current thirty-two founding
members have pledged in total US$ 9.8 million for the endowment fund and US$ 6
million for the multiyear contributions. From the sixth year onwards the Centre
is expected to be financially self-sustainable. The Centre will be able - under
strict conditions - to attract voluntary contributions from governmental and
non-governmental donors for specific purposes that are not related to actual
dispute settlement cases such as training and internships programmes.
Membership
of the Centre
|
WTO Member |
Endowment
Fund |
Multiyear contributions |
Total
contribution |
|
Developed countries |
|||
|
Canada |
US$ 1,000,000 |
|
US$ 1,000,000 |
|
Denmark |
US$ 1,000,000 |
|
US$ 1,000,000 |
|
Finland |
US$ 1,000,000 |
|
US$ 1,000,000 |
|
Ireland |
US$ 1,000,000 |
US$ 1,250,000 |
US$ 2,250,000 |
|
Italy |
US$ 1,000,000 |
|
US$ 1,000,000 |
|
Netherlands |
US$ 1,000,000 |
US$ 1,250,000 |
US$ 2,250,000 |
|
Norway |
US$ 1,000,000 |
US$ 1,250,000 |
US$ 2,250,000 |
|
Sweden |
US$ 1,000,000 |
US$ 400,000 |
US$ 1,400,000 |
|
United Kingdom |
|
US$ 1,850,000 |
US$ 1,850,000 |
|
Developing countries and economies
in transition (payable in 4 years)* |
|||
|
Category A |
|
|
|
|
Hong Kong,
China |
US$ 300,000 |
Dominican Rep. |
US$ 50,000 |
|
|
|
Ecuador |
US$ 50,000 |
|
Category B |
|
Guatemala |
US$ 50,000 |
|
Colombia |
US$ 100,000 |
Honduras |
US$ 50,000 |
|
Egypt |
US$ 100,000 |
Kenya |
US$ 50,000 |
|
India |
US$ 100,000 |
Latvia |
US$ 50,000 |
|
Pakistan |
US$ 100,000 |
Nicaragua |
US$ 50,000 |
|
Philippines |
US$ 100,000 |
Panama |
US$ 50,000 |
|
Thailand |
US$ 100,000 |
Paraguay |
US$ 50,000 |
|
Uruguay |
US$ 100,000 |
Peru |
US$ 50,000 |
|
Venezuela |
US$ 100,000 |
Senegal |
US$ 50,000 |
|
|
|
Tunisia |
US$ 50,000 |
|
Category C |
|
Zimbabwe |
US$ 50,000 |
|
Bolivia |
US$ 50,000 |
|
|
*Instalments as indicated are possible if the Member finds
this necessary.