RESTRICTEDWORLD TRADE
ORGANIZATIONTN/CTD/M/9
20 December 2002
(02-7041)
Committee on Trade and Development
Ninth Special Session
NOTE ON THE MEETING OF 21 AND 23 OCTOBER 2002
Chairman:  H.E. Mr Ransford Smith (Jamaica)
A. ADOPTION OF THE DRAFT AGENDA
1. The Chairman indicated that the draft agenda for the meeting was contained in airgram
WTO/AIR/1931/Rev.1 of 14 October 2002.  With these remarks he proposed the agenda for adoption.
The agenda was so adopted.
B. AGREEMENT SPECIFIC PROPOSALS
2. The Chairman said that as indicated in the Agenda, it was proposed to take up proposals
relating to the Agreement on Implementation of Article VI of the GATT 1994 (Anti-Dumping) and
proposals relating to the Agreement on Subsidies and Countervailing Measures in the meeting.  He
suggested that the proposal on Article 15 of the Agreement on Implementation of Article VI of the
GATT 1994 (Anti-Dumping), which was made by the African Group and which was contained in
TN/CTD/3/Rev.2 be taken up first.
3. The representative of Kenya briefly re-introduced the African Group proposal contained in
TN/CTD/3/Rev.2.  He emphasised that Article 15 of the Anti-Dumping Agreement mandated that
special regard should be given to the special interests of developing countries and that this should be
understood to require that developed countries should take into account the development needs of
developing countries during all stages of any anti-dumping investigation.  He added that developing
countries were usually competitive in only a few products and when these very products were subject
to anti-dumping action, their export potential got impaired.  He also stressed the need to make theprovisions relating to constructive remedies in Article 15, more effective and operational.  It was his
view that developed countries should explore these constructive remedies, examples of which had
been given in their proposal, instead of levying anti-dumping duties against developing countries.
4. The representative of Pakistan, while supporting the proposal made by the African Group, said
that the obligation to give special regard to the special situation of developing countries existed for all
stages of any anti-dumping investigation initiated by a developed country.  Highlighting the lack of
clarity in this special and differential (S&D) treatment provision as to what constituted a constructive
remedy, he stated that this should be clarified, specially since the Ministers at Doha had mandated
Members to make the S&D provisions clear and precise.  He also referred to two proposals made by
the delegations of Brazil and India, contained in documents G/ADP/AHG/W/127 andG/ADP/AHG/W/128 respect ively, in the Committee on Anti-Dumping Practices and said that these
submissions also contained specific proposals to make Article 15 of the Anti-Dumping Agreement
operational.TN/CTD/M/9
Page 2
5. The representative of Chile, whilst supporting the general idea expressed in the African Group
proposal mentioned that Brazil, India and Indonesia had also circulated a non-paper in the Committee
on Anti-Dumping Practices highlighting the need to ensure that constructive remedies were explored
by developed countries before taking anti-dumping action against developing countries.
6. The representative of the European Communities, while making some general observations,
stated that the EC reflects upon the basic objectives of S&D treatment when considering any anti-
dumping action against developing countries.  In fact, the EC had not taken any anti-dumping action
against least-developed countries (LDCs) in the past. He also mentioned that account should be taken
of the work being done in the Committee on Anti-Dumping Practices, so that duplication of the same
work and debate in the Committee on Trade and Development (CTD) in Special Session could be
avoided.  He also said that in view of the fact that an increasing number of anti-dumping cases were
being initiated by developing countries against other developing countries, the introduction of aprovision similar to Article 15 of the Agreement should be considered to take into account such cases
of anti-dumping action.  He said that this was possible since, the mandate on S&D treatment
contained in the Doha Ministerial Declaration was broader than the mandate on implementation
issues.  Commenting on the specific proposals which had been made, he said that the interpretation
sought to be provided in the proposal to the causal link between dumping and injury went much
beyond what existed in the Agreement, apart fro m the fact that it would deviate from the
jurisprudence that now existed because of various pa nel and Appellate Body rulings in this regard.  As
for the second part of the proposal relating to the need for coherence between the Anti-Dumping
Agreement and the Agreement on Subsidies and Countervailing Measures, he stated that his
delegation would like to have some more clarity from the proponents about the objectives sought tobe achieved, especially since Article VI of GATT already provided for such coherence.  He also
mentioned that the Committee on Anti-Dumping Practices was already considering the matter relating
to constructive remedies as this had been one of the issues specifically mandated for consideration by
the Ministers at Doha as part of the implementation work programme.  For this reason, the primary
focus of consideration of this issue should re main in that Committee, where voluntary price
undertakings and the lesser duty rule had already been discussed as part of alternate constructive
remedies.  He added that the United States had made an important submission to the debate in that
Committee.  He also mentioned the decision taken earlier at the LDC Conference in Brussels to
exercise a moratorium or self restraint in taking anti-dumping action against the LDCs.
7. The representative of Switzerland, while expressing an understanding for certain aspects of the
problems expressed in the proposal, stated that th e arguments put forward by the proponents were not
very clear, especially the benefit that may accrue by incorporating the suggested changes.  He saidthat anti-dumping action should not act as a substitute  for lack of structural changes in a country and
emphasised that anti-dumping measures should not start acting as a barrier to South-South trade.
8. The representative of Colombia said that there was an inherent element of both process and
substance in the proposal made by the African Group.  She said that this was in fact a market access
issue since market access got impeded because of frequent or unwarranted anti-dumping action.  Shesupported the mention made by Chile of the submissions and debate in the Committee on
Anti-Dumping Practices and said that it was important to define what was meant by constructive
remedies.
9. The representative of Mexico supported the interventions made by both Chile and Colombia
and said that it would be useful to look at some of the discussions that had taken place in the
Committee on Anti-Dumping Practices.  He also said that the mandate was not to look at the
implications of anti-dumping action on South-South trade but to make the S&D provisions more
meaningful and operational for developing countries.  In this context he also commented on EC's
statement relating to the moratorium on anti-dumping action against LDCs and said that the present
proposal and debate covered all developing countries.TN/CTD/M/9
Page 3
10. The representative of Pakistan agreed with the point made by some delegations that some good
ideas had been presented in the Committee on Anti-Dumping Practices and that the CTD in Special
Session could benefit form the debate that had taken place in that Committee.  However, his
delegation could not agree to the focus of the work shifting to that Committee.  He mentioned that
talking of South-South trade in the context of anti-dumping actions initiated by developing countrieswas out of the context of the discussion. He also supported Mexico that the objective was to ensure
meaningful S&D treatment for all developing countries.
11. The representative of United States said that these issues were being discussed in the
Committee on Anti-Dumping Practices and in the Negotiating Group on Rules.  He said that the
Committee was specifically considering how to make Article 15 more operational.  In the context of
the mention made by one delegation of the proposal submitted by the United States in that Committee
he said that this proposal was contained in G/ADP/AHG/W/138.  He also made a reference to thecomments made by the EC on the implications of anti-dumping action on South-South trade and the
response of some Members to these comments.
12. The representative of Kenya stressed that they did not agree with those delegates that had said
that this discussion on this issue should be primarily focused in the Committee on Anti-Dumping
Practices.  He said that this was the right forum, especially since the Ministers had mandated the CTDto carry out this work.  He also requested that Members who had asked for certain clarification with
respect to the African Group proposal should do so in writing so that they could respond to them
appropriately.
13. At the end of the discussion on the proposal on Article 15 of the Agreement on Implementation
of Article VI of the GATT 1994 the representative of Kenya asked the Chair as to how he intended to
take the discussion forward so as to fulfill the mandate given by the Ministers.  He also mentioned
that he did not have anything positive to report to the LDCs since the debate appeared to be rather
inconclusive.  These views were supported by Venezuela who said that they had a feeling of déjà-vu
since a lot of the discussion had been a repetition of what had been said at the time that the proposalshad been first considered.
14. The Chairman said that while he understood the concerns of Members, he did not think that he
could take any other action oriented decision at this stage.  He felt that the discussions had been useful
and the exchange of views would help take the process forward.
15. The Chairman then opened the floor for discussions on the proposals made in relation to the
Agreement on Subsidies and Countervailing Measures.  He said that the first such proposal had been
submitted by Cuba, Dominican Republic, Honduras, India, Indonesia, Kenya, Pakistan, Sri Lanka,
Tanzania and Zimbabwe, on Article 27.1 of the Agreement, and which could be found indocument TN/CTD/W/1.  Six proposals had been submitted by the African Group, which addressed
paragraphs 1, 4, 8, 9, 13 and 15 of Article 27 and could be found in  TN/CTD/W/3/Rev.2.  The LDCs
had also made a proposal, in relation to Articles 3.1(b) and 27.3 of the Subsidies Agreement, which
could be found in TN/CTD/W/4.  He suggested that Members provide comments on all these
submissions relating to the Subsidies and Countervailing Measures Agreement, together.
16. The representative of India briefly reintroduced the proposal contained in TN/CTD/W/1.
Similarly the representatives of Kenya on behalf of the Africa Group and the representative of Zambia
on behalf of the LDCs reintroduced their pr oposals contained in TN/CTD/W/3/Rev.2 and
TN/CTD/W/4 respectively.
17. The representative of Venezuela said they considered subsidies to be a part of developing
countries' programmes and that there was no intention whatsoever to distort trade when developing
countries sought to provide such support.  Instead these were instruments for development.  SheTN/CTD/M/9
Page 4
agreed with the views expressed by the delegate of Kenya with respect to all paragraphs, particularly
the proposal on Article 27.8 on the question of serious prejudice and with the lack of clarity to the
mention of limited period in Article 27.  She also agreed with what had been said on Article 27.15 and
emphasized that it was not just one country that was concerned, but all.  She also expressed support
for the proposal made by the LDCs.
18. The representative of Haiti indicated that subsidies played an important role in the economic
development programmes of developing countries, especially when viewed in the global context and
accordingly supported by the proposal made by India and the African Group.
19. Commenting on the African Group proposal the representative of Australia said that in relation
to Article 27.1, they wanted to put some preliminary questions that would assist her delegation in
working through the proposal.  She wanted to know whether the proponents considered that the
proposed amendment of the text of Article 27.1 would change the overall obligations contained inArticle 27 of the Agreement.  This was related to the question whether the obligations in Article 27.1
were to be considered in isolation to the rights and obligations contained in Article 27.  In relation to
Article 27.4 she said that the provision was clear with relation to the time frames for seeking
extensions, as were the requirements under the so called fast-track processes as set out in
document G/SCM/N/39.  To that end her delegation di d not consider that developing countries needed
further flexibility in seeking extensions.  In relation to Article 27.8 and Article 27.9 she wanted
further clarifications from the proponents to help understand the objectives behind the proposals,
specially since Article 6.1 relating to the de minimis  levels for the presumption of serious prejudice
had lapsed at the end of 1999.  In relation to Article 27.13, her delegation would like to have further
justification about the need to continue with certain subsidy programmes.  She said that in their view"limited period" was intended to convey precisely that.  Thus an interpretation of eight years did seem
long. Moreover any time-period would need to be examined in the context of the programme and the
specific product for which the subsidy was intended to be provided.  She said that in some sectors a
developing country may be highly competitive and technologically advanced and may not need this
flexibility.  For this reason a specific interpretation may undermine the intent of this provision.  Inrelation to the proposal on Article 27.15 too, they sought further clarification, though one said that it
could be argued that an "interested developing country member" within the meaning of Article 27.15
should mean a developing country Member which was the subject of a countervailing duty
investigation and not any developing country that has only a systemic interest in the use and operation
of subsidies.
20. The representative of the United States, commenting on the proposal made with reference to
Article 27.1 of the Agreement on Subsidies and Countervailing Measures, said that the assumption
behind this proposal was that subsidies were a necessary and appropriate development tool.  However,
in their view the academic literature in support of this proposition was far from unambiguous, since
subsidies may very well be harmful to the economic development process, and could lead to the
misallocation of resources.  As to specific provisions of Article 27.4, which allow for the extension of
the transition period for export subsidy programmes, the Subsidies Committee had received requestsfrom 24 countries for the  extension of these programmes by the end of last year, which was the
deadline established in Article 27.  He said that most of these requests were made under the special
procedures developed by the Subsidies Committee last year and adopted at Doha.  Under these special
procedures, small-exporter developing countries were, in effect, eligible for a multi-year extension,
provided certain standstill and transparency provisions were met.  Therefore, in a sense, the provisionsof Article 27.4 had already been made more effective and assistance to developing countries had
already been provided to make the best use of the provisions of Article 27.4.  He indicated that the
Subsidies Committee was currently examining all the requests for extension of the transition periods
and his delegation had already stated its position that nearly all of the requests made under the small-
exporter procedures should be approved.  As for the remaining requests made pursuant to the normalArticle 27.4 procedures, these were currently being examined in detail and his delegation hoped that aTN/CTD/M/9
Page 5
consensus could be reached on these in a timely manner.  Turning to the proposal made on
Article 27.1 he said that, as with the previous proposal, they did not necessarily agree with the
underlying assumption of the proposal; namely, that subsidies were a necessary and appropriate
development tool.  It was also not clear as to us how this proposal fitted into the CTD mandate.  He
also said that to the extent that the proposal was seeking a revision of the text of the SubsidiesAgreement, it was best made in the Rules Negotiating Group.  With respect to the proposal on
Article 27.3 he said that, as noted previously, it was not clear to them that subsidies were an
appropriate development tool.  In addition, his delegation would be extremely reluctant to consider
the allowance or extension of subsidy programmes that were widely accepted as being trade-
distortive, including those described in Article 3.1(b) of the Subsidies Agreement.  It was also not
clear to them as to how this proposal fitted into the CTD mandate.  He added that, to the extent that
the proposal was seeking the revision of the text of the Subsidies Agreement, it was best pursued inthe Rules Negotiating Group.  With respect to the proposal on Article 27.4 he said that the first part of
this proposal referred to a time period which would c onclude at the end of the year.  Therefore, further
discussion of it would seem an inefficient use of the Committee’s time.  He said that the fact that the
export subsidy extension requests were currently under review by the Subsidies Committee had
already been mentioned.  That process effectively addressed the concerns of developing countries andwas proceeding relatively smoothly.  He added that, to the extent that the second part of this proposal
was seeking to nullify the deadline established in Article 27.4, it was best made in the Rules
Negotiating Group.  Commenting on Article 27.8 of the SCM Agreement, he said that because the
provisions of Article 6.1 - which presumed, or de emed, serious prejudice under certain circumstances
- had lapsed under the terms of Article 31 of the Subsidies Agreement, further discussion of thisproposal would not be an efficient use of the Committee’s time.  As for the proposal on Article 27.9
he sought an explanation of the reason for the proposal and a description of precisely how its
provisions substantively differed from the existing provisions of article 27.9.  Similarly, for the
proposal on Article 27.13, he requested an explanation of the reasoning behind the proposal,
particularly, the specific basis for proposing that a 'limited period' be defined as not less than eightyears.  He also asked the extent to which existing, or on-going privatization programmes of
developing countries had been notified to the Subsidies Committee.  He added that, to the extent that
the proposal was effectively seeking the revision of the text of the Subsidies Agreement, it was best
made in the Rules Negotiating Group.  Finally, on Article 27.15, he said that his delegation would
appreciate an explanation of the reasons for making this proposal and a description of precisely how
its provisions were substantively different from the existing provisions of Article 27.15.  He also said
that, to the extent that this proposal is seeking to expand the group of developing countries able torequest a Subsidies Committee review of a countervailing duty measure taken against a developing
country, his delegation was willing to continue further discussion on the proposal.
21. The representative of Switzerland said that they shared many of the comments made by
Australia and the United States.  He said that the Ministers at Doha had already taken a number of
decisions to strengthen the provisions of the Subsidies and Countervailing Measures Agreement.These included the expansion and clarification of Annex VII of that Agreement as well as the due
restraint against specific subsidies used by developing countries.  He also mentioned the decision
taken at Doha to extend the transition period for certain countries and providing a similar avenue for
seeking extension for other countries.  Commenting on some of the specific proposals, he said that the
proposal relating to Article 27.4 would change the very  structure of the provision and should therefore
be pursued in the Negotiating Group on Rules.  As for the proposal on Article 27.1 he said that while
subsidies could play a role in economic development, their use should not be, even implicitly, made
mandatory.  He supported the comments made by the United States regarding the proposal on
Article 27.8 and sought clarification on the proposal on Article 27.9 whose objectives they did not
fully understand.  As for the proposal to clarify the phrase "limited period" in Article 27.13, he saidthat even though the interpretation of eight years proposed was too long, his delegation was open to
further discussions on this issue.  Finally on Article 27.15 he wanted to know the reason for seeking
flexibility for any developing country other than the developing country affected by the measure.TN/CTD/M/9
Page 6
22. The representative of the European Communitie s while supporting the interventions made by
Australia, United States and Switzerland, said that a number of proposals needed clarification,
especially where these had been made with respect to deadlines that were about to expire or with
reference to provisions that had lapsed.  He, however, did mention that his delegation could look at
the proposal to clarify the phrase "limited period" in Article 27.13, although like Switzerland they too
felt that eight years was far too long a period to be accepted.  Moreover, as stated by Australia, it may
not be possible to grant a blanket extension for the use of all kinds of subsidies and the time period in
Article 27.13 would depend on the kind of product and the programme for which it was proposed to
provide the subsidy.
23. The representative of Haiti opposed any move to refer these proposals to the Negotiating Group
on Rules and said that they should be considered in the Special Session of the CTD.  He said that the
main objective should be to make the S&D provisions more effective and operational and while therespondents could no doubt seek clarifications, they should also make suggestions as to how to fulfill
this objective.  He also said that if necessary the text of the existing provisions could be amended to
make them effective and operational.
24. The representative of Zambia supported the point made by Haiti that it was the collective
responsibility of all Members to ensure that the mandate on African Group specific proposals was
fulfilled.  He also said that since no one had commented on the LDC proposal, it should be assumed
that that proposal was acceptable to the Membership.
25. The representative of Pakistan, while appreciating some of the remarks made by the EC, said
that his delegation was somewhat discouraged by the interventions made by some of the other
developed countries, including the fact that a number of them had indicated that these proposalsshould be considered in the Negotiating Group on Rules.  He associated his delegation with the
remarks made by Haiti and Zambia and said that the mandate given by the Ministers at Doha was to
consider these issues in the CTD.  He also made a reference to the remarks made by some delegations
that subsidies distort trade and lead to misallocation of resources.  He indicated that he would like to
hear the same arguments being made by these very delegations in the Committee on Agriculture.
26. The representative of Japan, while supporting the interventions made by Australia,
United States, Switzerland and the EC said that though they agreed that the mandate in paragraph 44
of the Doha Ministerial Declaration was for this issue to be considered in the CTD, but if some
Members wanted to amend some of the provisions in order to make them mandatory, then this could
only be done in the Negotiating Group on Rules.
27. The representative of the United States supported the views expressed by Japan and said that
there was nothing in the mandate that necessarily required an amendment of the provisions and
agreements.  He said that in the context of the LDC proposal, he had already expressed his delegations
views on Article 27.13.  However, he reiterated that it was not clear to his delegation that subsidies
were an appropriate developmental tool.  In addition, his delegation would be reluctant to consider the
allowance or extension of subsidy programmes that  were widely accepted to be the most trade
distortive, such as those described in Article 3.1(b) of the Subsidies Agreement.  It was also not clearas to how this proposal fitted into the CTD mandate, and as said by him earlier, to the extent that the
proposal was seeking a revision of the text of the Subsidies Agreement, it was best made in the
Negotiating Group on Rules.
28. The representative of India said that the discussions had focussed on two issues, namely the
mandate of the work and the implications of the proposals on the existing obligations.  He said that his
delegation agreed with the remarks made by Haiti and felt that it would not be possible to make the
S&D provisions meaningful without making the necessary changes in the language of the provisions.TN/CTD/M/9
Page 7
29. The representative of Kenya said that he was somewhat disappointed with the apparent lack of
commitment to fulfill the mandate.  He also requeste d delegations to provide their questions in writing
so that the Africa Group could respond to them.
30. The Chairman, while summing-up the discussions on the proposals relating to the
Anti-Dumping Agreement said that these had been useful and there had been a substantive exchange
of views.  He said that there had also been a preliminary intimation of receptivity in some areas.  He
indicated that he would need to hold plurilateral consultations at an appropriate stage to take the
process forward.  He suggested that the meeting next consider the proposal addressing the Agreement
on Safeguards, which had been tabled by the Af rican Group with respect to Article 9 of the
Agreement, and was contained in TN/CTD/W/3/Rev.2.
31. The representative of the United States noted that the language contained in the African Group's
proposal in fact already existed in Article 9 of the Agreement.  He therefore sought clarification as to
whether the proposal was aiming to go beyond the existing flexibilities in Article 9, by eliminating
some of the in-built conditions, including the stip ulation that a product from a developing country
Member, if individually accounting for no more than 3 per cent of the product concerned would be
excluded from the application of a safeguard measure, provides all developing country Members
below that threshold did not collectively account for more than 9 per cent of those imports.  He wenton to ask whether the proposal sought to similarly, exempt developing countries from the conditions
laid out with respect to fresh safeguard measures taken under the latter clause of Article 9.2, as well as
from the limitations that apply to reinitiating a fresh safeguard measure against a product which had
already been subject to such a measure.  He said th at if that was the intent of the proposal, then his
delegation could not agree with the proponents.  Eliminating the condition relating to cumulationwould diminish the effectiveness of safeguard measures in general, including those taken by
developing countries;  excluding safeguard measures applied by developing countries from the
stipulated maximum period of the application entail ed the risk of unbalancing the Agreement, and,
eliminating the time restrictions set out in the latter clause of Article 9.2 - therefore allowing
safeguard measures to be applied in perpetuity - could affect not only developed country Members butother developing country Members as well.
32. In response, the representative of Kenya, speaking on behalf of the African Group, said that the
aim of the proposal was to only obtain a confirmation from Members about the binding nature of
paragraphs 1 and 2 of Article 9 of the Agreement on Safeguards.
33. The representative of the European Communities shared some of the concerns expressed by the
representative of the United States, and said that they were therefore grateful for the clarification
provided by the delegation of Kenya.  He also pointed out that no conclusion had been reached in theSafeguard Committee on the proposal to increase the de minimis  threshold in Article 9.1, particularly
because of the concern that such an increase could adversely affect trade between developing
countries as well.  His delegation did not see a problem in confirming the binding nature of Article 9.
34. The representative of Japan shared the comments made by previous speakers and took note of
the clarification provided by the representative of Kenya.  He, however, sought clarification as to the
meaning of the expression "binding right".
35. The representative of Australia joined those delegations that had noted that many of the issues
to which the proposal referred, including that of the de minimis  threshold, were being discussed in
other WTO fora..  His delegation wished the de minimis threshold issue to be examined more
thoroughly, since any increase of it would also have an impact on trade between developing countries.His delegation saw the said provision as already being binding, and therefore sought clarification
whether the proponents were in fact suggesting that the cumulation provision in Article 9.1 should no
longer apply.TN/CTD/M/9
Page 8
36. The representative of Mexico associated himself with the views expressed by other delegations
and with their requests for clarifications, and concurred with the delegation of Japan that a
clarification was also necessary as to what "binding right" meant.
37. The representative of Norway associated herself with the questions asked by the previous
speakers.
38. The representative of Malaysia noted the general agreement as to the binding nature of
Article 9, and therefore urged delegations to agree to confirm it.
39. The representative of Kenya said that the m eaning of their proposal was that a developing
country "shall have a right to" extend the period of application of a safeguard measure for a period of
up to three years, and that the exercise of that right would depend on the circumstances, and would
not be automatic.
40. In view of the clarification provided by Keny a, the Chairman suggested that the meeting move
on from the Agreement on Safeguards and take up the proposals made on the General Agreement on
Trade in Services (GATS), three of which had been made by the African Group on Articles IV, V.3
and XXV, and were contained in TN/CTD/W/3/Rev.2, whilst five had been made by the least-
developed countries (LDCs) relating to Article IV.1-3, and paragraph 6 of the Annex on
Telecommunications, and were contained in TN/CTD/W/4/Add.1.
41. The representative of the European Communities said that her delegation had always
interpreted the GATS as not containing S&D provisions in a "traditional" sense, but rather as having,
by its very structure, an in-built mechanism which provided flexibility to all Members, especially to
developing country Members, in making commitments.  The same interpretation of the nature of the
GATS could be found in the Secretariat document WT/COMTD/W/77/Rev.1/Add.4.  The GATSprovided for flexibility on a more individual basis, and that was reflected in a number of provisions as
well as in the bottom-up structure of the Agreement.  In connection with the LDCs' proposal on
Article IV, she said that the process of exchanging market access requests had begun in July 2002,
and that was the time for LDCs – and developing countries in general - to indicate the sectors of
particular interest to them by making requests to their developed partners.  That would be the bestway to operationalize Article IV.  With respect to the proposal on Article IV of the GATS by the
African Group, her delegation had the impression that it sought to rewrite Article IV, and was,
therefore, sceptical about it.  In relation to the establishment of quotas proposed therein, she indicated
that that was not foreseen in the structure of the GATS, and it would clash with the MFN principle
which underlay the Agreement.  She also sought clar ification as to the actual meaning of the figures
of "40" and "60" referred to in paragraph 79(d) of TN/CTD/W/3/Rev.2.
42. The representative of the United States, commenting on the first part of the proposal on
Article IV of the GATS by the African Group, stresse d that Article IV.1 described steps that all WTO
Members could take to increase developing country Members' participation in world trade.  Her
delegation did not want to engage in any discussion that would change that broad and flexible
approach to GATS.  The proposal by the African Group suggested that developed country Members
commit to a common approach to the treatment of developing country Members in GATSnegotiations.  That kind of a formula approach had been specifically questioned by developing
country Members in the discussions which had led to the conclusion of the Guidelines and Procedures
for the Negotiations on Trade in Services, in March 2001 (S/L/93).  Her delegation was therefore
somewhat perplexed and sought clarification on this account from the proponents.  She urged for the
incorporation of elements of interest to developing countries, and especially to LDCs, in the servicesnegotiating exercise.  Noting that the first part of the African's Group proposal on Article IV was
drafted in terms of technical and financial cooperation, she drew Members' attention to Article XXV.2
of the GATS, and highlighted the lack of proposals in that regard in the Council for Trade in ServicesTN/CTD/M/9
Page 9
(CTS), or even in the CTD.  Her delegation could not support mandatory benchmarks, but was
interested in discussing ways to make technical cooperation in relation to the GATS more effective.
As to movement of natural persons and other issues related to mode 4, she said that even though they
were part of the negotiations under way in the Special Session of the CTS, her delegation was open to
take into the negotiating process any thoughts that may evolve in this regard in the Special Session ofCTD.  With respect to the LDCs' proposal on Article IV of the GATS, her delegation understood the
resource constraints of LDCs and was working with  them to draft proposals on modalities for special
treatment to LDCs, in the Special Session of the CTS.  In that connection she urged referral to the
CTS of the ideas discussed in the Special Session of the CTD.  Her delegation believed that Members
should be responsive to the stated export interests of LDCs, and that the best approach to that end
would be to identify such interests in the negoti ations process.  With respect to the LDCs' proposed
addition to Article IV.2, her delegation felt that the LDCs should focus instead on Article IV.3.  Shealso noted that Article XIX called for the establis hment of modalities for special treatment to LDCs
under Article IV.3, and that it was being effectuated by the ongoing exercise.  She asked the
proponents whether they considered that the items under discussion were being adequately covered in
the modalities exercise, and said that if that were not the case then they should work towards ensuring
that.  She also referred to the discussions on modalities, and reiterated that her delegation was open toworking with the LDCs in that re gard.  With respect to the African Group's proposal on Article V.3 of
GATS (paragraph 80 of TN/CTD/W/3/Rev.2) and the authoritative interpretation that was being
sought, there were certain relevant GATS principles that should be adhered to in forming regional free
trade agreements.  She asked delegations to indicate their concerns in that area, since discussions on
regional trade agreements were under way in the Negotiating Group on Rules, and the issue could bealso raised in the normal course in the CTS.  With respect to Article XXV, her delegation supported
the establishment of appropriate forms of cooperation with all relevant organizations in the field of
technical assistance, complementary to services li beralization.  With respect to the LDCs' proposal on
paragraph 6 of the Annex on Telecommunications, she expressed concern about the possible
administrative burden that the additional reporting re quirement might entail, and sought clarification
as to the level of detail envisioned in the notifications, and as to whether the proposal only related to
developed countries.  Finally she enquired whether the Monitoring Mechanism on S&D treatment
could address that concern.
43. The representative of New Zealand while agreeing with the views expressed by the delegation
of the European Communities concerning the in-built flexibility in the GATS, felt that it was
important to give careful consideration to the prop osals for further flexibility.  With respect to the
LDCs' proposal on Article IV.1, he encouraged the LDCs to identify the sectors and modes of supplyof interest to them, and to make requests on that basis.  His delegation understood the capacity
constraints faced by LDCs and was ready to consider ways to assist them.  His delegation was
interested in exploring the linkages with the assessm ent of trade in services, under way in the CTS, as
well as in examining other ideas.  On the LDCs' proposal concerning Art IV.3 (paragraphs 50-51 of
TN/CTD/W/4/Add.1), he said that the proposed establ ishment of "multilaterally agreed criteria for
giving priority to the least-developed country Members…" cut across the basic MFN principle which
applied under Article II of the GATS.  He sought clarification as to what the proponents had in mind
by the phrase "additional measures ensuring the increasing participation of LDCs … in the sectors of
their trade interest".  Individual sectoral suggestions would have to be considered on a case-by-case
basis and in accordance with the fundamental princi ples of the GATS, including the MFN principle.
He said that the LDCs' proposal to institute a re porting mechanism under paragraph 6 of the Annex on
Telecommunications was useful, but it would not be appropriate to limit it to developed countries
alone, since a substantial amount of technical cooperation took place under the aegis of international
organizations, such as the ITU or, at a regional level through the Asia-Pacific Telecommunity and
APEC.  With respect to the African Group's proposal on Article IV, he said that the establishment ofquotas for developing country suppliers would run counter to the overall liberalization objectives of
the GATS.  He joined the representative of the European Communities in seeking clarification as to
what the proposal concerning the 40 and 60 per cent  meant.  Finally, concerning the African Group'sTN/CTD/M/9
Page 10
proposal on Article XXV, he noted that the WTO had already moved to conclude agreements with
some international institutions in that respect, for instance the ITU.  His delegation did not believe
formal agreements to be always necessary, but encouraged the WTO Secretariat to cooperate with the
secretariats of the relevant international institutions, including regional ones, which were in a position
to provide technical cooperation and assistance.  His delegation was open to considering suggestionsregarding more formal cooperative arrangements on a case-by-case basis.
44. The representative of Australia agreed with the previous statements on the in-built flexibility in
the GATS.  In relation to the proposal made by the African Group on Article IV of the GATS, he
noted that there had been only a few initial requests on movement of natural persons in the context of
the services negotiations, and therefore asked what degree of priority was being attached to that
proposal.  He also sought further information on the type of recommendations envisaged in the
proposal, and on the kind of information on which they were based.  Concerning the proposal on
Article V.3, he asked for more information on the difficulties experienced in that respect by
developing countries.  In relation to the proposal on Article XXV he supported cooperation between
the WTO and other relevant international agencies.  With respect to the LDCs' proposal, his
delegation understood the capacity constraints faced by LDCs and was in favour of providing
technical assistance to help LDCs identify their in terests in the services area, and to assess how those
could be translated into requests.  In relation to the LDCs' proposal on Article IV.1, he recalled that
Article IV.3 of the GATS, and the Guidelines and Procedures for the Negotiations on Trade in
Services provided special consideration for LDC Members, and noted that the primary vehicle to
signal specific interests was the lodgement of initial requests.
45. The representative of Canada agreed with the views put forth by the delegation of the European
Communities, regarding the unique structure of the GATS, which itself provided flexibility to
Members.  He noted the flexibility in the liber alization process specifically provided for by
Article XIX of the GATS.  He also recalled the discussions that had taken place about modalities, and
the work undertaken to develop criteria for the recognition of measures of autonomous liberalization
as envisaged in Article XIX.3 of the GATS.  Hi s government was interested in a mechanism for
phasing in commitments in certain sectors.  As for negotiating proposals, he said his government had
tried to identify and address issues of interest to developing countries.
46.  The representative of Switzerland said that participation of developing countries in trade in
services would foster growth and economic developm ent.  The GATS provided the right instrument to
create the legal security and predictability of framework conditions which were necessary to establish
an investment-friendly climate.  Nonetheless, he recognized developing country Members' need for
some flexibility.  Regarding the proposal on Article IV by the African Group, he urged developingcountry Members to clearly communicate their interests in the context of the request and offer
process, and said that his delegation would certainly consider their interests in a constructive way.  He
sought clarification on the proposal to reserve quotas for supply of services, while indicating that
movement of natural persons was a sensitive area for his Government.  He sought clarification on the
concrete implications of the African Group's proposal on Article V .3.  In respect of the proposal on
Article XXV, he expressed doubts as to the WTO being the appropriate organization to deal with the
supply-side and infrastructural constraints of developing and LDC Members.
47. The representative of Uruguay agreed with the delegations which had pointed out that one way
to implement Article IV was to submit requests, and noted that various developing country Members
had already done so and were now hoping for a positive response from their trading partners.  Thetask of the Special Session was to fulfil the mandate given by Ministers in Doha.  He encouraged as
much coordination as possible between the Chairpersons of the Special Sessions of the CTD and the
CTS, because of the similarities in the proposals submitted to both bodies.TN/CTD/M/9
Page 11
48. The representative of Venezuela said that her delegation supported the proposals, and felt that it
was necessary to make Articles IV.1-2 and XIX more effective.  Her delegation believed that
maintaining flexibility in the GATS in favour of developing countries was a part of S&D treatment,
and that the need for additional flexibility had to be taken into account.  Article XXV of the GATS
charged the Secretariat with providing technical assi stance to developing countries.  The Secretariat
therefore had to comply with that obligation in the first place, although that did not exclude
cooperation with other international organizations.  She said there were many possibilities for S&D
treatment within the GATS that were yet to be explored, and hoped that this would be done in the
future.  Her delegation was concerned at the lack of commitment on the part of some Members to
respect the mandate set out in paragraph 44 of the Doha Ministerial Declaration.  In that connection
she recalled that S&D treatment had been one of the conditions that developing country Members had
demanded be fulfilled, in order for them to embark in the negotiating process mandated by the DohaWork Programme.
49. The representative of Japan recalled that the GATS stipulated that increased participation of
developing country Members in the multilateral trading system should be facilitated through the
negotiation of specific commitments.  The issues outlined in the proposals by the African Group and
by the LDCs should, therefore, be considered within the multilateral discussions on the SpecialSession of the CTS.  His government was ready to consider the requests and offers presented by
developing country Members.
50. The representative of Norway said that their delegation was in the process of holding bilateral
meetings, and looked forward to discussions with developing country Members and the LDCs, to
consider how a good result could be reached in the negotiations.
51. The representative of Brazil supported the statement made by the delegation of Uruguay.
Concerning the general issue of S&D in GATS, he said that the central provision to that effect was
Article IV of the Agreement.  The lodgement of specific requests by developing countries was one
way to operationalize it, particularly to operationalize its paragraph 1(c).  A number of developing
country Members had made efforts to do exactly that within the time-frames established inparagraph 15 of the Doha Ministerial Declaration, and expected developed country Members to fully
take into account those requests.  It was too early to assess the extent to which developing countries
interests were being taken into account by their developed trading partners.  In connection with the
need for coordination between the work of the Special Session of the CTD and that of the CTS, he
recalled that paragraph 15 of the Guidelines and Procedures for the Negotiations on Trade in Services
provided for the development of a mechanism for th e implementation of Article IV.  That mechanism
had to include an assessment of the extent to which the objectives of Art IV were being met in thenegotiations; that bore a direct relation with the discussion under way in the Special Session of the
CTD.  He noted that the Special Session of the CTS was also discussing modalities for the treatment
of LDCs in the services negotiations and modalities for the treatment of autonomous liberalization.
He therefore supported more interaction between the two bodies.
52. The representative of Pakistan associated himself with the statements made by the
representatives of Uruguay and Brazil.  He pointed out that the current approach to the discussions
would not lead the discussions anywhere.  Other Members' interpretation of the proposals seemed
overly simplistic.  The mainstream of the arguments against the proposals was that there was no need
for S&D in GATS, since it was already there as an in-built mechanism and that developing country
and LDC Members could operationalize the existing provisions under the GATS through the requestsand offer approach.  His delegation did not agree with such an approach.  There was a need to answer
the fundamental question of what GATS offered a nd what it had delivered up to then.  Developing
country Members had an immense interest in the GATS negotiations, but felt that many of its
provisions were still to be effectively operationalised, especially the development-related ones.
Bilateral requests could not solve the S&D issues in the GATS, because these were horizontal issues.TN/CTD/M/9
Page 12
He noted that the issues under discussions had been raised in the CTS, albeit in the form of effective
implementation and concrete proposals for the implementation of Article IV provisions, and that other
submissions would be made.  He therefore agreed  with the proposal for coordination between the
Chairpersons of the Special Sessions of the CTD and of the CTS.
53. The representative of Mexico agreed on the need for effective coordination between the
Chairpersons of the Special Sessions of the CTS a nd the CTD.  As to S&D in the GATS, he noted that
when drafting the GATS a different approach from the traditional one had been chosen.  It had been
then felt that the best approach, especially for developing country Members, would be to introduce
provisions in favour of developing countries in the body of the Agreement, beginning from the
preamble.  The needs of developing country Members had been taken into account when drafting
Article I, and were also safeguarded by other provisions, in particular Article IV, Article XIX, and the
schedules of commitments for each developing country Member.  The GATS had been in force foraround seven years, and the evaluation of liberalization of trade in services was a standing agenda
item in the CTS.  It was still too early to evaluate the extent to which that liberalization had helped
developing country Members.  Within the CTS there was an opportunity to review the progress made
in relation to the GATS provisions, and in particular to the increasing participation of developing
countries.  It was important to use those mechanisms and to ensure coordination between the CTS andthe Special Session of the CTD, as well as with other fora, including those outside the WTO.  As to
the proposals on technical assistance, he considered them to be valid ones.
54.  The representative of Paraguay agreed that there was a need for effective coordination between
the Special Sessions of the CTS and of the CTD, and that it was important to implement Articles IV
and XIX of the GATS and paragraph 15 of the Guidelines and Procedures for the Negotiations onTrade in Services, as had been emphasized by the representatives of Uruguay, Brazil, Mexico and
Pakistan.  He also noted the statements made by several developed country Members that they would
seriously take into account the requests tabled by various developing country Members, amongst
which were also the requests made by Paraguay.  His Government had made an effort to submit its
requests within the given time-frame and, in negotiating areas that were important for it.  He alsonoted that Paraguay had not received reciprocity as far as S&D was concerned.  He joined those
delegations that had urged for coordination between the Chairpersons of the Special Sessions of the
CTS and of the CTD.
55. The representative of the United States urged developing country Members to introduce in the
services negotiations, the issues which they had raised in the Special Session of the CTD.  That would
facilitate these being taken into account, in particular, when taking a decision on modalities for the
treatment of developing countries, especially the LDCs, under the provisions of Article IV.3.  In thiscontext, she highlighted that Article IV stated that the "increasing participation of developing country
Members in world trade shall be facilitated through negotiated specific commitments…".
56. The representative of Saint Lucia, responding to the statement made by the representative of the
United States on the opening section of Article IV.1, stressed the link between that provision and
Article XIX.3, which specifically spoke of carryin g out an assessment of trade in services with
reference to the objectives of the GATS, "…including those set out in paragraph 1 of Article IV".
That was to be done before establishing the guidelines for the negotiations.  In response to those who
had urged developing and least-developed country Members to table their requests, she stressed that
some Members like Saint Lucia, did not have the capacity to formulate requests and did not even
know the export barriers they faced.  That was also due to the fact that the assessment mandated byArticle XIX.3 had not been carried out.  Developing country Members were therefore not able to
effectively participate in the negotiations.  She also stressed the need for coordination, so that the
negotiations yield positive results for all developing country Members.  She agreed with the
delegation of Pakistan that S&D issues were of a systemic nature, in that it was not only her
government but also a number of other developing countries' Governments that faced the sameTN/CTD/M/9
Page 13
constraints.  The GATS was development-friendly, but it was yet to be fully implemented in that
respect, so as to enable Members like Saint Lucia to realize the potential they might have in the
services industry.
57. The representative of Kenya noted that questions had been asked by many delegations, and
requested those delegations to submit them in writing, so that they could respond to them.  He did not
agree with what some delegations had said about the different form of S&D provisions in the GATS
and noted that his delegation saw Article IV as an S&D provision for developing countries, especially
given the context in which it had been drafted.  In response to the delegation of Canada, he said that
reopening the GATS was not the intention of the African Group.  Instead, their objective in the
Special Session of the CTD was to make S&D provisions in the GATS effective.  He acknowledged
the importance of coordination, but like the representative of Pakistan stated that the request and offer
approach could not solve all the problems that existed with respect to S&D treatment in the area ofServices.
58. The Chairman concluded by noting that there had been a very full exchange of views, with a
range of comments having been made on the proposals tabled for consideration.  The Special Session
would have to now examine how to  move forward in areas where some receptivity had been shown.
He undertook to follow-through the proposed coordination with the Chairman of the Special Sessionof the CTS, with the support of the Secretariat.
__________