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MAI DRAFT TEXT OF 1997: XI. IMPLEMENTATION AND OPERATION

CONFIDENTIAL DAFFEIMAI(97)1/REV2

THE PREPARATORY GROUP

(Text to be included in the Final Act)

1. There shall be a Preparatory Group comprised of the Signatories to the Final Act and the Signatories to the Agreement. A Signatory to the Final Act shall cease to be a member if it fails to become a Signatory to the Agreement by the closing date for signature of the Agreement.

2.The Preparatory Group shall:

(a) prepare for entry into force of the Agreement and the establishment of the Parties Group;

(b) conduct discussions with non-signatories to the Final Act;

(c) conduct negotiations with interested non-signatories to the Final Act and make decisions on their eligibility to become a Signatory to the Agreement; and

(d) ...(1)

3. The Preparatory Group shall elect a Chair, who shall serve in a personal capacity. Meetings shall be held at intervals to be determined by the Preparatory Group. The Preparatory Group shall establish its rules and procedures.

88

CONFIDENTIAL DAFEE[MAl(97)IREV2

4. The Preparatory Group shall make decisions by consensus. Such decisions may include a decision to adopt a different voting rule for a particular question or category of questions. A Signatory may abstain and express a differing view without barring consensus

5. [However, except as otherwise provided, where a decision cannot be made by consensus, the decision shall be made by a majority comprising [two thirds] of the Signatories.](2)

89

CONFIDENTIAL DAFFEIMAI(97) 1/REV2 l

THE PARTIES GROUP

1. There shall be a Parties Group comprised of the Contracting Parties.

2. The Parties Group shall facilitate the operation of this Agreement. To this end, it shall:

(a)carry out the functions assigned to it under this Agreement;

(b)[at the request of a Contracting Pany, clarify [by consensus] the interpretation or application of this Agreement]3;

(c) consider any matter that may affect the operation of this Agreement; and

(d) take such other actions as it deems necessary to fulfil its mandate.

3. In carrying out the functions specified in paragraph 2, the Parties Group may consult governmental and non-governmental organizations or persons.

4. The Panies Group shall elect a Chair, who shall serve in a personal capacity. Meetings shall be held at intervals to be determined by the Parties Group. The Parties Group shall establish its rules and procedures.

5. The Parties Group shall make decisions by consensus. Such decisions may include a decision to adopt a different voting rule for a particular question or category of questions. A Contracting Party may abstain and express a differing view without barring consensus.

6. [However, except as otherwise provided, where a decision cannot be reached by consensus, the decision shall be made by a majority comprising [two thirds] of the Contracting Parties.]4

3. Expen Group No. l is considering the role of the Parties Group with respect to Dispute Settlement; this sub-paragraph would address clarification of interpretation and application outside the Dispute Settlement context. Delegations have varying views on the question of whether it is appropriate that the Parties Group expressly be given a formal role in clarifying the interpretation or application of the MAI. On a point of detail, one delegation has expressed the view that the Parties Group should have such authority, but only if more than one Contracting Party makes a request.

4. See footnote 5. Further consideration needs to be given to the question of an appropriate rule for voting by the European Communities. In addition, some delegations propose that the Parties Group have authority to make decisions on budgetary matters by a majority (perhaps two thirds) vote of delegations whose assessed contributions represent, in combination, at least two thirds of the total assessed contributions. Consideration also needs to be given to the question of whether failure to pay budgetary contributions should lead to suspension of the right of a Contracting Party to participate in making decisions.

90

CONFIDENTIAL DAFFE/M/AI(97)1/REV2

1. The Parties Group shall be assisted by a Secretariat.

2. [Parties Group and Secretariat costs shall be borne by the Contracting Parties as approved and apportioned by the Parties Group.]

3. Further work is required on paragraphs 7 and 8. Some delegations noted that funding of the MAI will need to be addressed by delegations in advance of ratification and that there may be a need to include a formula in the Agreement. Apart from a paragraph on costs of the Parties Group, there may be a need for a paragraph in the Final Act on payment of the costs of the Preparatory Group.

91

1. This and any subsequent subparagraphs would be necessary only if there is business that remains unfinished at the conclusion of the negotiations that the negotiators consider should be completed by the Preparatory Group; the further subparagraphs would itemize the clean-up tasks to be undertaken by the Preparatory Group.

2. Delegations agree in principle that some decisions should be made by consensus and that it should be possible to make some decisions by majority vote. Some delegations take the view that the previous paragraph provides sufficient flexibility to accommodate this principle. However, many delegations believe that the MAI should state that, failing consensus, decisions may be made by a majority vote. The present paragraph is modeled on Article IX of the Marrakech Agreement, which provides that the WTO shall continue the GATT practice of decision-making by consensus with the proviso that, except as shall otherwise provided in the WTO Agreements, where a decision cannot be arrived at by consensus, the matter at issue shall be decided by voting. Delegations hold varying views on whether the MAI should provide that certain decisions, such as Preparatory Group decisions on the eligibility of non-Signatories to the Final Act to sign the Agreement and Parties Group decisions on accession, must be made by consensus. The phrase "except as otherwise provided" contemplates that the MAI might require some decision to be made by consensus or by a majority voting rule different from a standard rule that would be set out in the paragraph. There are a number of possible formulas for a majority voting rule, including consensus minus one (or some larger number), three quarters and two thirds. As an alternative approach, some delegations propose that the Agreement distinguish between substantive and procedural matters through inclusion of a paragraph along the following lines: "Decisions on procedural matters shall be made by a [two-thirds] majority of the Signatories. Where there are differing views, the decision as to whether a matter is procedural shall be made by [consensus][ a two thirds majority of the Signatories]."

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