Discussion at the last session of the Working Party (taken from TRADE/WP.7/1999/7):

59. The Chairman gave an introduction into the background of this agenda item: At present, most of the work on the interpretation of UN/ECE standards is done in the framework of the OECD Scheme for the Application of International Standards for Fruit and Vegetables. Exceptions are the UN/ECE Standards on Meat (Poultry, Porc, Beef), Eggs and the color chart for Walnut Kernels.

60. Because of uncertainties concerning the future of the OECD Scheme, the European Commission had initiated a discussion on this question at the second session of the Committee for Trade, Industry and Enterprise Development (CTIED). At the third session of the Committee, the European Commission requested the secretariat to prepare a study on the modalities of preparing explanatory brochures to UN/ECE standards in the framework of WP.7 and its Specialized Sections. This request was supported by the United States and agreed by the Committee.

61. The Director of the UN/ECE Trade Division introduced document -/1999/5 containing the secretariat's understanding of the goals of the interpretative work and how this work could be integrated into current work programmes, describing also the costs for personnel and production of the brochures and how they could be financed.

62. The Director emphasized that UN/ECE highly valued the cooperation with the Organisation for Economic Co-operation and Development (OECD) in different areas (e.g. electronic commerce) and that UN/ECE is not looking for extra work or taking work away from other organizations. She stressed that it was in this spirit that the document had been prepared because of uncertainties about the future of the OECD Scheme.

63. The Director outlined the main results of the study: - work on explanatory brochures can be integrated into the framework of the existing specialized sections without any significant extension of the number of meeting days; - it will not be possible to do the additional work with the existing staff. It will be necessary to recruit an additional staff member at the junior professional level; - the additional costs including the new staff member, a contribution to travel costs, and printing of the brochures have been estimated as US$150,000.

64. She said further that taking into account that UN/ECE is working with a 0% growth budget in the next biennium (meaning in effect a 3% reduction of the budget), it will not be possible to include this amount into the regular budget of UN/ECE. This could be done only if member States decided to stop another activity taking place under the Committee for Trade, Industry and Enterprise Development and to transfer the resources to the agricultural standards unit. She said that this was not likely to happen in the near future.

65. She explained that a possibility to fund additional work was to create a trust fund. This trust fund would be managed under strict United Nations procedures and with complete transparency. The UN/ECE would launch an appeal for contributions and then every interested party (public or private) could decide to contribute. She said that there would have to be the expectation of regular contributions because otherwise the recruitment of a staff member to be financed by the trust fund would not be authorized.

66. The delegation of the European Community welcomed the study and the additional clarifications given by the Director. He said that in recent coordination meetings, the European Community and its Member States agreed that it would be useful to regroup the activities on explanatory material at the UN/ECE. He said that the same position would be kept at meetings of the OECD Scheme, where 13 EU Member States are contributing members.

67. He said that it is hoped that the regrouping of activities will lead to a reduction in travel costs and also to an increased efficiency of the work. He said that now that it was clear that the work could be done at at UN/ECE it was necessary to discuss in depth the modalities of financing. He informed that EU Member States had asked whether contributions to the trust fund could be financed out of the Community budget. He said that it was necessary to continue the discussions now so that the activity at the UN/ECE would be rapidly operational in the case that the work at the OECD Scheme should be discontinued.

68. The delegation of Finland fully supported the statement made by the European Community and said that it was important to have the work on brochures done somewhere because it was essential for the application of the standards but that the question of funding seems to require further study.

69. The Chairman said that in his view there would be a number of advantages if the interpretative work was done at UN/ECE because this would enable delegates to discuss both brochures and standards at the same time. There would be savings in money and time because of a reduction in travelling. He also said that the participation at the work of WP.7 and its specialized sections was open to all UN and UN/ECE Member States without any formalities.

70. The delegation of Greece recognized that there were problems at the OECD Scheme because several countries had decided to leave the scheme. He said that when discussing the regrouping of activities it should not be forgotten that the OECD Scheme has activities beyond the development of brochures (meeting of heads of control services, maturity requirements, quality assurance etc.). He asked whether the Scheme would continue with these activities if the work of brochures was transferred to UN/ECE or if this work would also be transferred. He further said that there were many open questions concerning the funding to be answered (Who would contribute? Would there be a scale of contributions? etc.).

71. The delegation of the OECD secretariat regretted the missing transparency under which the proposal for the transfer of the work on the interpretation of standards from OECD to UN/ECE had been developed especially because this proposal could have large implications on the work of the OECD Scheme for the Application of International Standards for Fruit and Vegetables. The OECD secretariat has never been informed of this proposal neither by the European Community nor by the UN/ECE. The Chairman of the OECD Scheme had also not been informed.

72. She said that the OECD secretariat was surprised about the proposal especially because it was developed while the Scheme was undergoing restructuring in which the European Commission had actively participated and which had resulted in a major revision of the mandate and functioning of the Scheme. One of the objectives of this revision was to reduce the uncertainties referred to in document -/1999/5 and one result of this revision has been to facilitate the participation which was now open to all UN Member States, the Specialized Agencies and WTO (see also TRADE/WP.7/1999/7/Add.1).

73. She said that in her view the best way to solve the problem of duplication of international standards for fruit and vegetables was not in making bilateral proposal which only take into account a part of the problem i.e. the interpretation of standards. She said it seemed more efficient to act together with all parties concerned in this work and to take the time to reflect on and study the problems globally.

74. She said that the member States of the OECD Scheme have given the mandate to the Scheme to encourage the establishment of a single international body for the development of grade standards. Beginning at its next session the Scheme will study the best way to reach a conclusion on this subject.

75. The Chairman said that in his opinion there was no lack of transparency. The study prepared by the UN/ECE secretariat was not a proposal but a working document that examined a possible solution for the case that the work on the interpretation of standards would be discontinued at OECD. He said that the report of the Committee for Trade, Industry and Enterprise development was very clear and open on this question. The document had been provided to all delegations through the usual distribution channels of the UN/ECE.

76. The delegation of the European Community said that it was his objective to be fully transparent in this matter and regretted if the information provided at the last plenary session of the Scheme had led to any misunderstanding.

77. The Chairman summarized the results of the discussion: - it is now known that the work can be done at the UN/ECE; - the creation of a trust fund will be necessary for this (the detailed modalities for contributions to this fund need to be examined) - it needs to be studied further how the work can be developed at the UN/ECE (organization, output, distribution)

78. He stressed that there would be no duplication of work: the Working Party is prepared to take on this work if the work at OECD (which is highly appreciated by WP.7 and its specialized sections) is disrupted and if the funding problem can be solved.

79. The Working Party decided to create a working group to further discuss these questions. The delegations from the European Community, Poland, Romania, Switzerland and the United States offered to participate in that group. The secretariat and the Chairman of the Working Party will also participate.