RESTRICTEDWORLD TRADE
ORGANIZATIONS/CSS/M/4
18 September 2000
(00-3725)
Council for Trade in Services
Special Session
REPORT OF THE MEETING HELD ON 13 AND 14 JULY 2000
Note by the Secretariat
1. The Council for Trade in Services held a Special Session on 13 and 14 July 2000.  The
agenda for the meeting is contained in document WTO/AIR/1353.  Under Other Business, the
Chairman said that he would make a statement concerning the participation of acceding countries in
the negotiations.
2. The Chairman proposed that the Council adopt the agenda as circulated, with the addition of
the item raised under Other Business.
3. The Council so agreed.
A. NEGOTIATING GUIDELINES AND PROCEDURES PURSUANT TO ARTICLE XIX
OF THE GATS
4. The Chairman recalled that, at its last Special Session, the Council had held a first discussion
on the guidelines and procedures for the negotiations as required by Article XIX of the GATS.  The
discussion had focused on how the Council should proceed with its work on this item and it had been
agreed that the Secretariat would prepare a compilation of elements that might be considered in the
preparation of the guidelines and procedures.  A ccordingly, the Secretariat had produced the note
contained in Job No. 3820, dated 20 June 2000.
5. A representative of the WTO Secretariat recalled that the Secretariat had not been given a
mandate to prepare a draft text of the guidelines.  Hence, the note produced only listed elements
which might be considered in the preparation of the guidelines, on pages 2 and 3, followed by existing
documents and drafts which could be drawn upon for guidance.  The note also contained a list of
proposals submitted by delegations to the Council for Trade in Services and the General Council
during the preparatory phase of the Seattle Ministerial Conference.  This list was non-exhaustive, and
could be complemented by additional proposals  that delegations wished to see included.
6. The Chairman suggested that Members' discussion focus on developing a common
understanding of what the guidelines and procedures should include.  Pages 2 and 3 of the Secretariat
note contained a number of elements for that purpose, but there was no presumption that the list
should be considered comprehensive or that all of its elements enjoyed consensus;  delegations might
wish to raise additional elements for inclusion in th e guidelines.  He said that it would be helpful if, at
the end of the discussion, Members could arrive at a clear view of what the guidelines and procedures
should eventually contain.  He then drew delegations' attention to the informal paper submitted by the
European Communities and their Member States, titled "Negotiating guidelines: Drafting elements",
dated 12 July 2000.S/CSS/M/4
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7. The representative of the European Communities explained that the idea behind the paper was
that negotiating guidelines were useful if established early in a negotiation.  Generally, guidelines
were adopted, with the possibility of being modified or completed at a later stage if required, before
the start or at the outset of negotiations;  they were necessary to manage the negotiating process and
had to be neutral, so as to cater for different degrees of ambition and sensitivity.  The Council hadcarried out useful work on the guidelines in 1999 and the discussions had shown a good degree of
convergence;  hence, there was no need to start from scratch.  The paper by his delegation had drawn
elements from various written and oral contributions, as the guidelines should reflect a collective
sense and not an individual vision.  Paragraphs 1 and 2 addressed the objectives of the negotiations
and were based on the premise that Article XIX set them out rather precisely;  indeed, the basis of
Members' various contributions on the guidelines had always been Article XIX.  He indicated that
paragraph 1 reproduced the first paragraph of the "road-map".  It was important to recall theobjectives set out therein, as these were valid beyond the first phase of the negotiations.  Paragraph 2
contained elements drawn from various contributions, including the notion that negotiations should be
broad-based, with no a priori  exclusion of any sector or mode of supply.  Members did not as yet
have a clear idea of how autonomous liberalization should be treated, so that the paper suggested that
Members revert to the issue during the course of the negotiations and complete or amend theguidelines accordingly, as it was felt that this s hould not prevent the establishment of the guidelines.
Paragraph 3 dealt with modalities.  Point (a) was based on the premise that the "road-map" mandated
a stock-taking session to review progress and deci de how to move forward.  In the course of this
stock-taking session, and taking into account delegations' need for flexibility and human resource
constraints, Members might decide to create additional bodies, with a view to achieving effectiveparticipation of all Members.  The stock-taking exercise could play a key role in organizing the start
of the market access negotiations, as set out in point (c).  The Special Session would in fact decide
then, on the basis of progress made, on a date for lodging initial offers.  To that effect, Members
needed to have a view of their respective objectives and requests regarding market access;  hence, the
proposal that initial requests be lodged by December 2000, or in any case before March 2001.  Heexplained that the term "initial requests" did not refer to the traditional requests that triggered bilateral
negotiations, but rather to the proposals that Members had agreed to submit by December 2000 as part
of the "road-map" decision and which would describe the general objectives for the negotiations, as
did the proposed Annex on Tourism or an earlier proposal by Pakistan on mode 4.  Such exchange of
initial requests would ensure a transparent process and result in an open negotiation with no a priori
exclusions, which in turn would help Members assess whether the negotiations' outcome had been
balanced and mutually beneficial.
8. The representative of Brazil, speaking on behalf of MERCOSUR, expressed the firm
commitment of MERCOSUR to the establishment of negotiating guidelines and procedures in
accordance with Article XIX:3.  The guidelines were different from the "road-map";  they would have
an important substantive and organizational content in terms of the objective of the negotiations,
which had to move forward in a balanced manner to reflect the interests of all Members.  Guidelines
had to be established for the entire negotiations, to serve as a challenge by providing expectations and
time-frames to be met.  Questions which needed to be addressed included progressive liberalization,
appropriate flexibility for developing countries, coverage and scope of the negotiating process,
modalities for negotiations and what approaches might be adopted beyond the traditional request-offer
one, credit for autonomous liberalization, work underway for disciplines on domestic regulation andGATS rules, in parallel with the conclusion of the current work in the Committee on Specific
Commitments, scope of the technical review of the text of the GATS, timetable for the negotiations.
As concerned the timetable, she said that the mandated negotiations were not a technical exercise in
isolation from other contexts.  She said that MERCOSUR wanted to see progress in the services
negotiations, but stressed that MERCOSUR's interest did not lie solely with these negotiations;  it wasimportant that the General Council take stock of progress in the negotiations on services and
agriculture and consider the overall balance.  With  respect to the paper by the European Communities,
she would revert to it at the next Special Session.  She then said that the concentration of services-S/CSS/M/4
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related meetings was proving counterproductive, as it left insufficient time for consultations, and
therefore suggested that the rate of meetings in 2001 be moderated.
9. The representative of the United States stressed the importance of the early establishment of
negotiating guidelines and proposed that work on the guidelines be completed by October 2000.  With
respect to the note by the Secretariat, he observed that the brevity of the Uruguay Round guidelinescould provide a useful guidance.  He noted the importance of aiming for an appropriate length of the
text and of striking a balance between substantive and procedural issues.  As concerned the paper by
the European Communities, he said that it offered a good direction on the scope of the negotiations.
In view of the big and complex negotiations ahead, organizational guidance was necessary;  hence, his
delegation had drawn up a framework for negotiation which contained eight specific proposals for
inclusion in the guidelines.  First, they proposed that Members adopt a standstill during the
negotiations;  Members would not adopt new measures affecting trade in services that improved theirnegotiating position or which could be used as leverage.  Then, a timetable would be agreed which
would supplement the December and March dates in the "road-map" with the two additional deadlines
of December 2002, for the conclusion of the negotiations, and of the 2001 midterm, to agree on
modalities for liberalization, such as the approach for tourism.  Modalities for the treatment of
autonomous liberalization should consist of making the nature of autonomous liberalization known,and then of the relevant Member seeking agreement with interested parties on their respective
bindings relative to the autonomous liberalization and discussing the issue of credit;  additionally, it
might be possible to set agreed targets for multilateral liberalization against which the value of
particular autonomous liberalization measures might be gauged.  His delegation continued to support
the request-offer approach as one way of achieving targeted results and of focusing attention on aparticular restriction in a given sector.  However, in order to serve the diversity of objectives and of
Members' interests, other supplementary modalities might be appropriate and Members should make
use of a full range of modalities.  Further, they proposed that, to achieve progressive implementation
of commitments, Members might liberalize in a phased manner depending on individual
circumstances.  They suggested that a needs assess ment for developing countries, aimed at their full
participation in the negotiations, be a regular item on the agenda of the Special Session.  For some
Members, such assessment might involve identify ing sources of assistance to help with the
specification of their interests in the negotiations  or with the development of the regulatory capacity
needed to assist market opening.  Modalities for the treatment of least-developed countries should also
be developed, to include the freedom of choosing their participation in plurilateral and multilateral
initiatives, flexible time-frames, possible use of phase-ins and transition periods and extended time
limits to submit final country schedules.   They also suggested that, by the midterm deadline, the
ongoing work on possible new GATS disciplines on domestic regulation be brought to conclusion.
Several delegations asked that the United States intervention be made available in writing.
10. The representative of Canada said that the paper by the European Communities contained a
number of interesting elements, such as the emphasis on Members' right to regulate, negotiating
modalities, benchmarks, progressive liberalization and treatment of autonomous liberalization.
11. As concerned the note produced by the Secretariat, the representative of India took note of the
fact that it was not a draft text of the guidelines but only contained elements for possible
consideration.  He indicated that the paper should mention the assessment of trade mandated by
Article XIX and that the section devoted to the scop e of the negotiations should include a reference to
"modes of supply", as well as sectors.  The section on modalities should make it clear that the request-offer technique was the primary negotiating modality, which could be supplemented, if necessary, by
others.  He reserved his delegation's right to revert to the note.
12. Commenting on the paper by the European Communities, he expressed concern about the
reference, in paragraph 2(a), to "reducing the imbalance in commitments";  "imbalance" was not a
concept that existed in the GATS, and also went against the principle in Article XIX of liberalizationS/CSS/M/4
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taking place with due respect for the level of development and of flexibility for developing countries.
Similarly, he was uncomfortable with the notio n of "comprehensive" negotiations;  he could,
however, go along with a formulation along the lines of "no a priori  exclusion of any sector or mode".
Paragraph 2(c) also raised concerns, as it seemed to confuse the rule-making work with the
negotiations on specific commitments and appeared to indicate that the negotiation on emergencysafeguards had no prospect of meeting its deadline.  The language in paragraph 2(d) was considered
too weak, as, in line with Article XIX, autonomous liberalization required more than "special
attention".  In addition, the starting-point for the negotiations were the commitments undertaken
during the Uruguay Round, and developing countries were looking for credit for liberalization
undertaken autonomously since then, and not aiming at closing the gap between commitments and
actual practice.  With regard to the proposal in paragraph 3(c), he said that the March 2001 date was
not binding, but only a best endeavour, and that it  required careful consideration and he would revert
to it.
13. Reacting in a preliminary manner to the statement by the United States, he noted that a
standstill had been adopted also during the Uruguay Round negotiations, but that it had to be linked to
the treatment of autonomous liberalization;  a standstill made sense solely if the commitments did not
reflect market realities.  On autonomous liberalization, he found the suggestion that the nature of suchliberalization be made known useful, but was concerned about possible bilateral approaches to
treating autonomous liberalization;  the intention in  Article XIX was that a multilateral approach was
needed and that modalities for the treatment of autonomous liberalization be established by the
Membership, to do away with the negotiating pressures of bilateral settings.  On modalities, it had to
be made clear that the request-offer approach was the principle negotiating modality.  Implementingliberalization in a phased manner was an interesting idea, but required careful consideration and might
raise concerns if it became part of a bigger round of negotiations.  With respect to the proposed needs
assessment for developing countries, he said that what was important was to see how Article IV could
be implemented.  Finally, he had noted the emphasis placed on the development of disciplines for
domestic regulation, but stressed that there were also other issues which were being negotiated andthat it was important to have a sense of perspective on where progress could be achieved and where it
could not.
14. The representative of Norway said that the European Communities' paper represented a
balanced and helpful guide and that he could support its main elements, such as the comprehensive
approach to the negotiations and the suggestion in paragraph 3(c), which allowed time to plan the
request-offer stage.  That suggestion was useful given the complexity of the negotiations and also
with a view to transparency and confidence-building.   With respect to the Secretariat paper, he said
that recalling that difficulties had been encountered also during the Uruguay Round was useful.  He
would revert to the intervention by the United States, but shared their concern for developing
countries and supported their proposal in that respect.  As concerned the deadline for the negotiations,
he said that the issue required careful consideration.
15. The Chairman invited delegations' views on how they saw the process of establishing the
guidelines move forward.
16. The representative of Japan said that the Secretariat note was well balanced and that he
supported the lack of a reference to a time frame.  He indicated that a reference to the negotiations on
MFN exemptions needed to be added, as these were clearly mandated by the Annex  on Article II
exemptions. and were within the scope of Article XI X.  Negotiating guidelines needed to take into
consideration the state of play of the WTO as a whole and should not prejudge the work underway to
launch a new comprehensive round of negotiations as soon as possible.  On the submission by the
European Communities, he observed that it covered most of the elements in the Secretariat note and
was comprehensive in that sense.  He noted the lack of reference to a time-frame for the negotiations
supported the suggestion that a date for lodging initial offers to be decided at the stock-takingS/CSS/M/4
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exercise.  He sought clarification on the duplication which existed between paragraphs 1 and 2 of the
paper, with respect to references to higher lib eralization and to the rule-making work.  He also
wondered about a lack of reference to the "road-map", for example in paragraph 3, where no mention
was made of the relationship between the "road-map" and the negotiations;  in his delegation's view,
the negotiations had to proceed as agreed in the "road-map" until March 2001.  With respect to theUnited States' statement, he said that his delegation would consider it further, but observed that the
suggested time-frame for the negotiations was not appropriate, as the decision on how to proceed
should be based on the progress made.
17. The representative of Cyprus stressed the urgency of establishing the guidelines, and
consequently welcomed and supported the main thrust of the European Communities' submission,
which offered a good basis for a flexible and balanced outcome.
18. The representative of the Philippines, speaking on behalf of ASEAN, said that the Secretariat
note was useful to identify the issues and the legal provisions to refer back to, but noted that a
reference to the assessment of trade in services , which was lacking, was of great importance and
should be added.  He acknowledged that the Council had discussed negotiating guidelines at length in
the past and agreed that Members should start deliberating on the elements of the guidelines.  He
stressed that, in addition to what was specified in the chapeau of the "road-map", the negotiations hadto promote the interests of all Members on a mutually advantageous basis and to secure an overall
balance of rights and obligations;  this was an important reminder that the services negotiations did
not exist in isolation.  The guidelines should specify a number of items.  First, no sector or mode of
supply should be excluded from the negotiations , which should promote the interest of all WTO
Members.  The assessment of trade should be fold ed into the guidelines:  Members should draw upon
the work carried out until then in order to draft them, but the assessment should continue as an on-
going exercise.  Special attention had to be devoted in the negotiations to sectors and modes of
interest to developing countries, and developing countries should have the discretion to operationalize
their rights under Article XIX:2.  Technical assistance was relevant in that light, but only to the extent
that it gave flesh to Article IV:1 and did not deprive developing countries of their rights underArticle XIX.  Autonomous liberalization was already in place;  during the negotiations, account
should be taken of such liberalization, modalities for its treatment developed and credit given.  With
respect to modalities for the negotiations, paragraph 31 of the draft Seattle Ministerial declaration was
considered acceptable, along with the notion that the basis for the negotiations were Members'
existing commitments.  ASEAN was open to suggestions, especially on autonomous liberalization,
and would give consideration to the proposals of the European Communities and United States in that
light and revert to them.
19. The representative of Hungary observed that the negotiating principles of Article XIX, such
as the respect for national policy objectives and the level of development, had not been included in the
Secretariat note, but said that Members could borrow from the language agreed in the "road-map".
With respect to the European Communities' submission, he hoped that it would expedite work on the
guidelines and expressed support for its main elements.  He welcomed the fact that the paperreproduced the first paragraph of the "road-map", as this paragraph could guide Members beyond the
first phase of negotiations.  He said that borrowing language from existing drafts was in the interest of
efficiency, but that it had to be acknowledged that Members were in a different situation and that
existing texts should be looked at in that light.  He noted that paragraph 2 of the European
Communities' paper suggested that the market access negotiations and the rule-making work go intandem;  he said that outstanding rule-making work should be concluded as quickly as possible, no
later than the end of the negotiations.  He found the time-frame suggested in paragraph (3) realistic
and agreed with the dates for submitting initial proposals.  He also concurred that no decision on a
date for lodging initial offers should be taken before the stock-taking exercise.  He would revert to the
United States intervention.S/CSS/M/4
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20. With regard to the European Communities' submission, the representative of Egypt supported
the first paragraph, which had been borrowed from the "road-map".  He could also support
paragraph 2(b) if it were changed to "the market access negotiations will be based on the request-offer
method, which may be supplemented if appropriate by other approaches …".  He said that a
distinction should be made between the negotiations on emergency safeguards and the rule-makingwork as a whole in paragraph 2(c) and that a reference to "credit for autonomous liberalization"
should be added in paragraph 2(d).  With respect to paragraph 3(a), he said that agreeing to additional
subsidiary bodies would be difficult, especially in view of the constraints of smaller delegations, and
that the focus should be on existing bodies.  He found the reference to the negotiations on maritime
transport services in paragraph 3(b) superfluous, given the previous suggestion that negotiations be
comprehensive in terms of sectors.  He appreciated the proposed flexibility on the dates in
paragraph 3(c).  He stressed the importance of the assessment of trade for the establishment of theguidelines.  He would revert to the United States intervention in a future discussion.
21. Reserving his delegation's right to revert to the submissions and interventions made, the
representative of Pakistan stressed that Articles XIX and IV were the basic parameters for the
objectives and scope of the negotiations and that any proposal which transcended them would not beacceptable.  He also said that the suggested dates for the negotiations were unrealistic and highlightedthat parallelism existed in the mandated negotiations, as well as in services-related issues.  He took
note of the United States' suggested deadline for the negotiations on domestic regulation, but stressed
that a deadline existed for the negotiations on emergency safeguard measures and that the rule-making
work had to proceed in parallel.  He supported the comments by Egypt and India. With respect to the
Chairman's question about how to proceed with the es tablishment of the guidelines, he indicated that a
draft text for the October meeting would be premature.
22. By way of preliminary comment, the representative of Mexico said that the Secretariat note
was a useful reference;  he concurred that the assessment of trade also had to be taken up, but felt that
it did not necessarily have to be mentioned in such a compilation.  With respect to the contributions
by the European Communities and the United States, he noted that both overlooked the fact that nocomprehensive round of negotiations had been launched in Seattle.  The former suggested that
additional subsidiary bodies might be established, a suggestion which would not be looked at
favourably even in the context of a bigger round, whereas the latter was proposing concepts such as a
standstill, which was not in Article XIX, and a timeframe, which could be given positive
consideration only if within the context of a negotiating round.  He added that the references in the
paper by the European Communities to "imbalance in commitments" and "closing the gap between
current commitments and actual market practice" were not and could not be drawn from Article XIX.Similarly, nowhere was it stated that recognition of autonomous liberalization required binding;  this
would be looked at in the context of the discussion on modalities for the treatment of such
liberalization.
23. He added that the draft Seattle Ministerial text should be the basis of the work on the
guidelines, but it required a few logical adjustments, such as the dates, and to take into account the
uncertainty surrounding the launch of a bigger round of negotiations.  With regard to the Chairman's
question on how to proceed, he said that the "road-map" was sufficient until March 2001, as it ensured
that proposals could be submitted and that the stock-taking session would assess progress made and
decide how to continue.  There was no hurry to es tablish the guidelines before the end of the first
phase of negotiations.  He did not exclude the possibility that Members might need to consider hisdelegation's requests in areas other than the built-in-agenda negotiations in order to convince Mexico
to make concessions and have a more successful negotiation.
24. In a preliminary manner, the representative of the Czech Republic observed that the proposal
by the European Communities built on the "road-map" and said that it was a positive step towards
starting the negotiations in the near future.S/CSS/M/4
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25. By way of preliminary comments, the representative of Korea said that the negotiations on
MFN exemptions should be added to the elements for consideration in the guidelines in the Secretariat
paper, as mandated by the Annex on Article II Exemptions.  He concurred with many of the points
raised in the submission by the European Communities, such as the comprehensiveness of the
negotiations and the reference to a technical review.  On scope, he observed that the negotiations onmaritime transport services should have already resumed, and sought clarification on whether existing
subsidiary bodies in paragraph 3(a) were meant to include the Negotiating Group on Maritime
Transport Services.  He supported the inclusion of the results of the reviews of the Annex on Air
Transport Services and of the Understanding on accounting rates.  He stressed the importance of
establishing modalities for the treatment of autonomous liberalization, but acknowledged that this was
a difficult concept and involved technical issues of no easy solution.  Without wishing to prejudge any
modalities, he was in favour of developing them dynamically and could support a formulation similarto the one in the draft Seattle declaration or in the European Communities' paper.  The issue was
closely related to the basis of the negotiations;  these were existing commitments.  He found
references to deadlines premature, as they needed to be considered in a broader context.
26. The representative of Switzerland said that the guidelines were important, because of the
broad scope of issues to be tackled in the negotiation, and should be brief and purposeful.  At that
stage, Members had agreed on the "road-map" to guide work primarily in the first phase of the
negotiations.  He concurred with Japan that the guidelines should be viewed in the context of a
broader round of negotiations.  He supported the fact that the proposal by the European Communities
drew from existing obligations:  in addition to the mandated rule-making work and the technical
review of the GATS, the scope of the negotiations comprised what was clearly set out in Article XIX,which offered guidance also with respect to the aim and modalities of the negotiations and the
assessment of trade.  On the latter, he stressed th at it was clear from Article XIX that the assessment
should not be part of the guidelines as some delegations seemed to suggest, but rather of the process
leading to their elaboration.  With regard to autonomous liberalization, he had noted with interest and
would reflect further on the suggestion by the United States.  He observed that attempts at establishingconcrete modalities for the treatment of autonomous liberalization had failed until then because of the
difficulty of defining the notion of credit;  until that was resolved, he said that the proposal of the
European Communities was useful.  With respect to special treatment for least-developed countries,
he indicated that Articles XIX and IV offered useful guidance;  he would also consider further the
United States suggestion on technical assistance.  He supported the suggestion for a standstill, which
was a usual notion in negotiations.  On negotiating modalities, he tended to support the European
Communities' and the United States' suggestions, but noted that while phase-ins could be part of thenegotiating tools, prudence was required when they concerned prospects for future liberalization.  He
was in favour of the European Communities' proposal that additional subsidiary bodies might be
created if warranted by the substance of the discussion and also tended to support the proposal in
paragraph 3(c) of their paper.  With respect to the timetable suggested by the United States, he said
that he could support holding a mid-term review, but that the date of that review, as well as the finaldeadline for the negotiations, needed to be decided in the broader context of a comprehensive round
of negotiations.  He felt that it was feasible for the Secretariat to draw up a text containing alternative
drafting elements for the meeting in October;  however, he indicated that agreeing on the guidelines
was more complex and would require additional time.
27. The representative of Hong Kong, China sa id that the guidelines had to conform to
Article XIX, be sufficiently comprehensive to take into account the interests of all Members but not
too detailed.  The papers by the Secretariat and the European Communities contained largely the
elements which had to be included in the guidelines.  He agreed with Japan and Korea that
negotiations on MFN exemptions should be included in the guidelines.  He stressed that the rule-
making work was as important as the market access negotiations and was in favour of a technicalreview of the GATS.  The possibility of amending the guidelines in the course of the negotiations
required further discussion, but he felt that it depended on the wider WTO context and on the level ofS/CSS/M/4
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detail of the guidelines themselves.  He found the paper by the European Communities helpful, but
sought further clarifications on the reference to an "imbalance in commitments" in paragraph 2(a).
Further to the explanation offered, he said that he supported the proposal in paragraph 3(c), agreed
that a transparent process with general proposals would be useful and found the timetable proposed
realistic.  He wondered if the United States delegation could elaborate further on their proposal for astandstill, and on what the relationship was between the standstill and the possible starting point of the
negotiations, and drew delegations' attention to the two references to a standstill which could be found
in the Secretariat paper, on pages 10 and 18.  He concurred that it was technically feasible for the
Secretariat to produce a draft text for the guidelines in October, but wondered if it was also politically
feasible.
28. The representative of Turkey said that Article XIX offered guidance for the establishment of
the guidelines, which should be short and simple, but also clear and precise, to avoid endless
discussions which might hinder the effective start of the negotiations.  In a preliminary manner, he
said that the submission by the European Commun ities contained many useful elements and was a
constructive starting-point.
29. The representative of Malta said that the proposal by the European Communities was heading
in the right direction and was acceptable to her delegation.  Negotiations had to be comprehensive,
take into account national objectives and Members' level of development and the interests of
developing countries.  In order to enable preparations for the second phase of the negotiations, she
said that, as agreed in the "road-map", proposals should be submitted if possible by December, so that
the stock-taking exercise could be carried out by March 2001.
30. The representative of Senegal said that the contributions by the European Communities and
the United States were constructive.  He recalled the clear direction offered by Article XIX on the
guidelines, stressed the importance of the assessme nt of trade for their establishment and of the
provisions in Article XIX and IV for developing countries.  With respect to how to proceed, he said
Members could either follow the "road-map" March 2001 timetable or the one in Article XIX, which
required the completion of the assessment of trade and the establishment of the guidelines andprocedures.
31. The representative of Mauritius said that the Secretariat note provided a useful historical
perspective and that he would revert to the contributions by the European Communities and the
United States.  He stressed that the negotiations had to preserve the architecture of the GATS and
guarantee flexibility for developing countries with due respect for their level of development.  He had
taken note of the attention for least-developed countries and proposal for technical assistance in the
United States intervention, but stressed the importance of Article IV.  He also recalled that themandate for progressive liberalization in Article XIX spanned over successive rounds of negotiations.
He said that the guidelines should draw elements from written and oral contributions which fitted
within the parameters of Article XIX.  He would reflect further on Brazil's concern about the
concentration of meetings.
32. The representative of Venezuela said that the papers by the Secretariat and the European
Communities were useful bases to build on.  She would revert to the United States intervention and to
the comments by India and Mexico.  She said that MERCOSUR's comments gave an important
outlook with respect to prudence to be followed wi th regard to different forms of consultations and
the ability to respond to negotiating requirements.  She stressed the importance of concluding work in
the Council's subsidiary bodies before the negotiations on specific commitments and of progressiveliberalization taking place with due respect for national policy objectives and the level of development
of individual Members, with appropriate flexibility for developing countries.S/CSS/M/4
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33. Commenting on the Secretariat note, the representative of New Zealand said that it was a
useful resource document.  The paper by the European Communities was helpful in focusing on
elements for inclusion in the guidelines, and his delegation could endorse the proposal in
paragraph 2(c) that the rule-making work progress in parallel with the negotiations on specific
commitments and the one in paragraph 3(b) that the results of the review of the Annex on air transport
be included in the negotiations.  He noted that paragraph 1 of the paper reproduced the preamble of
the "road-map";  his view was that this should form  the basis of any negotiating guidelines eventually
produced.  He would revert to the United States intervention, as well as to other delegations'
comments.  More generally, he felt that it would be useful to replicate elements of the draft Seattle
declaration, such as the a priori  non-exclusion of any sector from the negotiations, or the request-offer
method to be supplemented by other appropriate negotiating modalities, sectoral or horizontal, which
might be agreed upon.  As to the question of the process ahead, his delegation was flexible and tendedto see the "road-map" as guiding Members until March 2001.  Work on the guidelines needed to be
supplemented with proposals submitted in accordance with the "road-map", which would give further
structure and context to the negotiations.
34. The representative of Uganda said that Article XIX offered guidance on the objectives of the
negotiations and the establishment of the guidelines.  He stressed the importance of the assessment of
trade and its being a precondition for the establishment of the guidelines.  He echoed India's comment
on the reference to "closing the gap" in paragraph 2(d) of the submission by the European
Communities and stressed that existing commitments were the starting-point for the negotiations.
With respect to the European Communities' suggestion for least-developed countries, he said that the
guidelines should aim at the adoption of measures to favour these countries' services exports.  Withregard to the Chairman's question on how to procee d, he concurred with Mexico that the "road-map"
was sufficient until March 2001.
35. Reserving her right to revert to Member's contributions, the representative of Australia said
that agreement seemed to exist on a number of th e elements of the guidelines, and suggested that
Members focus their discussion at the October meeting on outstanding issues, such as the treatment ofautonomous liberalization or the assessment of trade in the context of the guidelines.  She concurred
that the "road-map" was sufficient until March 2001.
36. The representative of Kenya stated that the assessment of trade was missing from the
Secretariat note and that it should be added.  He echoed comments by India, Egypt and Mexico,
among others, with respect to the paper by the European Communities.  On the proposal for technical
assistance, he said that developing countries as a group did not need to be assisted in identifying their
objectives in the negotiations;  they knew what these were, namely their increased participation inservices trade as stated in Article IV.  Technical assistance was important as a confidence building
measure;  it should not be used as a means of convincing developing countries to undertake
commitments.
37. The representative of Brazil said that there were a number of issues which needed to be
inserted in the wider context of other negotiating effo rts in the WTO.  She said that a draft text of the
guidelines by the Secretariat was premature and that it would be more useful after the submission of
Members' proposals based on the "road-map".
38. The representative of Bolivia recalled that the draft Seattle declaration contained a reference
to pro-competitive disciplines, and she said that a similar reference should be included in the
guidelines.  She said that competition was important to ensure that the advantages of liberalizationwere fully reaped and that consumer benefitted from lower prices.
39. The representative of the European Communities responded to questions from delegations.
He said that he had taken note and would consider further Korea's point on paragraph 3(a) about theS/CSS/M/4
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negotiations on maritime transport services.  On the question by Hong Kong, China about the
imbalance in paragraph 2(a), he explained that his delegation's paper was based on the premise that an
imbalance in commitments did exist, and that the negotiations were aimed at increased trade in
services, improved market access and progressive liberalization.  He noted that some delegations had
proposed reverting to the draft Seattle text, and he had no problems with that suggestion when itcontributed to greater clarity.  He proposed that the Secretariat put together focused elements of
drafting for the guidelines, developing into a more substantial draft of the checklist on page 2 of the
Secretariat note.
40. The representative of the United States said that his delegation would be providing a written
submission.  He indicated that references to a standstill could also be found in the Secretariat paper,
and that his delegation's proposal was similar to those references:  with a standstill, Members would
not be taking trade restrictive measures aimed at improving their negotiating positions.  Heacknowledged that, while a standstill was a "usual" provision in negotiations, there was no reference
to it in Article XIX;  in the same way, however, Members were saying that request-offer was the sole
or predominant negotiating modality, but no reference to that effect could be found in Article XIX.
41. Summing up the discussion on this item, the Chairman said that the debate had been
constructive, the importance of the guidelines had been underscored and a healthy degree of
convergence of views had emerged.  Nobody had questioned the mandate in Article XIX.  He
observed that no consensus existed for a common draft on the guidelines to be prepared for the
October meeting, but said that the European Communities' suggestion of concentrating on elements
for discussion was short of a common paper.  He therefore suggested that, for the Council meeting in
October, the Secretariat identify a number of issues to help focus Members' discussion.
42. The representative of Mexico said that the suggestion of identifying issues for discussion was
useful, especially if an insufficient number of proposals were submitted by Members.  With respect to
the list of issues, he said that deadlines should not be addressed before March 2001, as they were
linked to the rest of the WTO work and belonged to discussions in the General Council.
43. The Chairman concluded that the Secretariat would revise the list of possible elements for
inclusion in the guidelines on pages 2 and 3 of the note.  He added that he would welcome early
communication of any suggestions delegations might have in that respect.
44. The Council so agreed.
B. ASSESSMENT OF TRADE IN SERVICES
45. The Chairman recalled that, at its last meeting, the Council had held a relatively extensive
discussion on the assessment of trade.  Contributions had focused, in particular, on three issues:
confirmation of the importance attached to the relevant provisions of Article XIX:3, in conjunctionwith Article IV:1;  recognition of the need for country contributions, describing and analysing the
impact of services liberalization on sectoral and overall economic performance;  and re-iteration of
the need for improved statistical information at  national and international level.  As far as
international data sources were concerned, the Secretariat had been requested to check whether an
update of its earlier note on services trade statistics, document S/C/W/27, was warranted.  He offeredthe floor to a representative of the WTO Secretariat.
46. A representative of the WTO Secretariat said that the Secretariat would report on the update
of document S/C/W/27 at the Council meeting in Oct ober.  He then drew delegation's attention to a
new Secretariat note, circulated as document Job No. 4418 dated 12 July 2000, containing an update
of sources of information on statistics from non Balance-of-Payment sources.  Contrary to what mightS/CSS/M/4
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be understood from the first paragraph, the Secretariat was not aiming to provide a comprehensive
view of such information sources.
47. The representative of Pakistan stressed the importance of the assessment of trade, as the
successful integration of developing countries in the multilateral trading system depended on the
treatment they had and would receive, on their ability to develop export capacity and on liberalizationin sectors of interest to them.  He indicated that the papers which had been produced by the WTO and
UNCTAD Secretariats pointed to significant trade barriers faced by developing countries.  With
respect to mode 4, there was a lack of meaningful commitments, and frequent barriers were economic
needs tests, visa problems, licensing requirements, lack of mutual recognition of qualifications,
nationality and residency requirements and prohibitions and limitations to movement.  Other barriers
identified were subsidies, technical standards, discriminatory access to information, distribution
channels and information and lack of transparency.  He informed Members that his delegation wouldbe submitting a paper assessing the operation of the GATS from the perspective of developing
countries.
48. The representative of India supported the intervention by Pakistan.  He said that the
Secretariat note was helpful in giving an overview of statistical sources and encouraged data
collection from such sources, pointing to sectors of interest to developing countries, namelyconstruction, health, tourism, computer and ma nagement consultancy services.  He informed
Members that his authorities were looking at the Uruguay Round commitments and trying to assess
their effects after 5 years, and were also in contact with other international organizations.  He stressed
the importance of going beyond simply noting the importance of the assessment of trade.
49. The representatives of Barbados, Morocco
 and Uruguay  echoed the comments made by
Pakistan and India.
50. The representative of Canada acknowledged lack of data as an important problem.  She
mentioned that, in collaboration with their United States colleagues, Canadian statistical officers had
run a seminar in Santiago for FTAA Members' statisticians and trade policy officials.  She offered to
bring Canadian statistical officers to Geneva to r un a similar, half-day seminar on how services trade
statistics were collected and how that related to trade negotiators' needs.
51. The representative of the United States endorsed the Canadian proposal and offered to consult
with his authorities on availability on their part.  He said that he looked forward to the contributions
by India and Pakistan.  The representative of Korea indicated that at the Council meeting in October
his delegation would also present a contribution on Korea's assessment of trade.
52. The representative of the European Communities expressed support for Canada's proposal.
He said that EU officials would also be available to participate in the seminar and offered to help with
the organization of the event, including, if n ecessary, a contribution to its financing.  The
representative of India also supported the Canadian proposal and suggested that half-a-day could be
devoted to the assessment itself, with the discussion of Members' own contributions.
53. The representative of Japan also endorsed Canada's proposal.  By way of preliminary
comment on the Secretariat note, he noted its wide coverage but indicated that for several sub-sectors,
such as courier or legal services, which were being addressed in the Committee on Specific
Commitments, sources of information were missing.
54. Several delegations intervened to express support for the Canadian proposal and willingness
to participate in the event.  The representative of Côte d'Ivoire asked that interpretation be made
available, the representatives of Tanzania and Senegal  wondered about possible financing forS/CSS/M/4
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participation of capital-based experts, and the representative of Uruguay asked that a skeleton
structure of the seminar be made available in order to allow for more active participation.
55. A representative of the WTO Secretariat indicated that the Secretariat would produce an
update of document S/C/W/27 by adding data which had been published since 1997.  He said that
statistics were no substitute for the assessment, which required a judgment on the effect of the GATSon services trade, along the lines of the contribution being prepared by India.  Services statistics were
inadequate and often not sufficiently recent to shed enough light on the impact of the GATS on trade
in services.  He noted the widespread support for the seminar proposed by Canada and said that the
Secretariat would try, with Canada's input, to circ ulate a skeleton of the programme.  He would look
into dates, possibly in October, as well as into possible financing, but warned that there might not be
funds available in the WTO budget and could not offe r any guarantees in that respect.  He could,
however, assure delegations that interpretation would be available.
56. The Chairman concluded that the Secretariat would produce an update of document S/C/W/27
by adding data which had been published since its original submission.  The Secretariat would pursue
the offer for a half-day seminar, for which interpretation would be guaranteed and try to circulate an
early skeleton of the programme and look into possible technical assistance financing.  [He would be
consulting to find a suitable date for the seminar.]
C. TOURISM SERVICES
57. At its last meeting, the Special Session had continued its discussion on the proposal by the
Dominican Republic, El Salvador and Honduras, contained in documents S/C/W/127 and Corr.1, and
its follow-up in document S/C/W/149, on a GATS Annex on Tourism.  The Chairman recalled that
the proposal had generated a great deal of interest and that it had been agreed that substantial time
would be devoted to this agenda item.  There had also been a proposal to hold a seminar or
symposium on tourism, which had enjoyed broad support as a way of deepening Members'
understanding of the sector.  The point was made, however, that the event had to focus on issues
relevant to the negotiations under the GATS.  It had been agreed that the Secretariat would prepare a
short note containing ideas on the organization and the substantive content of such a seminar.Accordingly, the Secretariat had produced the note circulated as Job No. 4112, dated 28 June 2000.
58. A representative of the WTO Secretariat drew delegations' attention to two elements of the
Secretariat note.  First, the note suggested that the seminar take place early in the new year given the
heavy workload for the reminder of 2000.  Second, the seminar was useful if it focused on GATS
commitments and disciplines, as the role of the WTO was not to compete with the World Tourism
Organization in promoting the importance of tourism, but rather to promote those issues of relevance
to the negotiations.  In that respect, he stressed the importance of session 5 as proposed in the note.
59. The Secretary-General of the World Tourism Organization was offered the floor to make a
statement, which is contained in document Job No. 4662 dated 21 July 2000.
60. The representative of the Dominican Republic said that the OECD Tourism Committee had
expressed support for their proposal for an Annex on Tourism.  He would revert to Members'
comments on their proposal at the October meeting of the Special Session, with a systemic analysis ofthe Annex and a possible revision of the paper.  With respect to the Secretariat note, he concurred that
session 5 was the most important one, but said that the other ones had to be discussed beforehand.
The agenda for the seminar had to be given a more definitive shape and the number of topics possibly
cut down.
61. The representative of the European Communities echoed several of the comments made by
the representative of the World Tourism Organization.  According to recent conclusions of aS/CSS/M/4
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European Commission High Level Group on To urism and Employment, tourism was widely
represented in all EU countries and accounted for about 2 million businesses, mainly small and
medium-sized enterprises, generating 5.5 per cent of GDP, 6 per cent of employment and 30 per cent
of external trade in services.  Tourism was a sector with a clear potential for job creation, with a
potential to generate 2.2 to 3.3 million extra jobs by 2010.  Despite a fall in the EU's share of theworld tourism market, the EU was still the main source and destination of international tourist flows.
His delegation's priority actions on tourism were based on the recognition that tourism-related
activities accounted for a significant number of jobs and offered a clear potential for employment-
creation;  that greater and more effective involvement of the tourism industry was needed to help
create a sectoral identity and to raise the industry's awareness of the GATS;  and that public
authorities at all levels had a prominent role to play in contributing to a balanced and sustainable
development of the sector.  That was why his delegation supported the thrust of the proposal by theDominican Republic, El Salvador and Honduras, even though the need for Annex to deal with tourism
in the GATS still required further reflecti on and did not entail an immediate decision.
62. He suggested that Members start by focusing on the substance of the proposal, which he saw
as essentially consisting of:  some definitions and the description of a cluster, which would help to
achieve broad and coherent liberalization;  a proposal for competitive safeguards modelled on thetelecom Reference Paper;  and a proposal of regulatory nature aimed at improving the regulatory
background for consumers and producers.  He said that he would confine his comments to the first
element, but would revert to the other two at the next meeting.  He therefore drew Members' attention
to a recent OECD report containing a typology of exis ting barriers to trade for the core of the tourism
sector, namely hotels and restaurants, travel agencies and tour operators, and tourist guides, andsuggested that Members use the report as a way of focusing the discussion.  The report pointed to the
exiguous number of restrictions on mode 2 trade, while it observed that non-bindings for mode 1
frequently reflected a perceived lack of technical feasibility.  However, it also noted the importance of
electronic commerce in mode 1 trade, as the Internet was increasingly used to make on-line bookings,
enquires and marketing.  He therefore suggested that Members focus also on the implications ofelectronic commerce for tourism.  On mode 3, the report pointed to significant restrictions, notably
equity limitations, measures related to licensing and authorizations, economic needs tests and
nationality or residency requirements.  Against such a background, he suggested that Members
examine restrictions maintained for the core tourism sectors.
63. As concerned the Secretariat paper, he concurred with the proposed date and length of the
seminar and with the suggestion that it be anchored to the GATS negotiations.  He suggested that
Members continue discussing the substance of the proposal for an Annex at future meetings, so as toarrive at a list of issues for a focused discussion at the seminar, which could thus feed into the
negotiations.  In that respect, he suggested, on a preliminary basis, that electronic commerce be part of
the discussion, and that, given the fundamental importance of air transport for tourism, air transport
services also appear on the agenda.
64. The representative of Switzerland said that he supported the idea of a seminar, which should
focus on the GATS and the negotiations.  With respect to the Secretariat paper, he said that all the
proposed sessions were important, as they were all relevant for trade policy and the GATS, and
concurred that session 5 was the most important one.  He suggested that the seminar might last one
and-a-half to two days, in order to allow for sufficient time for discussion.  The representative of
Bolivia also supported the seminar and concurred that it should last up to two days.
65. The representative of Canada expressed support for the seminar as an information gathering
event to achieve a better understanding of the issues concerned, the proposed agenda and the
suggested timetable of early 2001.  She was flexible with respect to the sessions suggested in the
Secretariat note, but was of the view that such an agenda would take two days.  She said that more
precise information was necessary on the specific nature of the problems faced by developingS/CSS/M/4
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countries and on whether and how GATS-related solutions could help.  She indicated that her
delegation would be comfortable if some of the discussion focused on subjects not strictly within the
trade policy mandate of the WTO.  She stressed that the agenda of the seminar had to match the time
allotted to it.  With respect to how to proceed, she concurred that Members should continue their
discussion in the Special Session, but was not clear that Special Session meetings provided sufficientopportunities for the detailed discussion which the proposal for an Annex on Tourism merited.
66. The representative of Japan supported the suggestions for the seminar in the Secretariat paper,
as well as the proposals on timing and speakers.  The seminar should examine the existence of
impediments in the tourism sector;  a difficulty which had to be tackled in that respect was that the
peculiarity of the tourism sector was that it contained many components, such as travel agents, hotel
suppliers, CRS vendors, air transport service suppliers, which covered almost all of sectors in the
W/120 classification. Session 1 in the Secretariat note should focus on specific problems as concretelyas possible, through diverse viewpoints and through various tourism-related business activities.  No
particular service which was part of tourism services should be excluded or highlighted.  She
expressed concern that treating components separately might result in fragmentation and not
sufficiently deepen the discussion and stressed that a comprehensive, broad and well-balanced
approach was necessary.  Amongst the various components, her delegation was particularly interestedin CRS, sales and marketing of air transport services, MFN exemptions and the level of commitments.
She said that session 5 of the seminar should consid er all discussions in the Council, Special Session
and subsidiary bodies, as well as the reviews of MFN exemptions and of the Annex on Air Transport
Services.  As for air transport, the current exclusi on of air transport services from the GATS had to be
borne in mind.
67. The representative of Uruguay said that the Secretariat note was very useful.  He then drew
Members' attention to the UNCTAD Expert Meeting on Electronic Commerce and Tourism scheduled
for 18 to 20 September in Geneva.
68. The representative of Peru expressed support for the seminar and the Secretariat paper.  He
said that the usefulness of the seminar would increase if it were anchored to the GATS and the
negotiations and that it had to be borne in mind that tourism was a sector where the linkage between
Articles IV and XIX could be made.  With respect to the Secretariat paper, he stressed especially the
importance of session 1, in particular as concerned the specificity of the sector and in order to obtain
information and technical advice to make a more informed decision about the possible creation of an
Annex, and session 3, as the competitive environment included issues which could contribute to
developing countries increasing their share in tourism services trade.  He said that there was a need to
explore means of increasing the presence of developing countries' service suppliers in the systems ofdistribution and sale of tour packages.  Such services were classified as air transport services in the
W/120 classification, but they could not be excluded when commitments were being negotiated and
Article IV:1(b) could be a reference in that respect.
69. Commenting in a preliminary manner on the Secretariat note, the representative of the
United States said that the topics enabled particip ants to be focused on the negotiations and engage in
discussions with delegations and supported the suggested timing and mix of academic and private-
sector speakers.  He also supported the European Communities' suggestion to focus on three main
elements of the Dominican Republic proposal a nd on using the OECD report on tourism as a
reference.
70. The representative of Sri Lanka supported the proposal for an Annex on Tourism and echoed
the comments made by the representative of the World Tourism Organization.  She stressed that the
seminar should be linked to the GATS and to the requirements of Articles IV and XIX specifically;
she also supported the European Communities' proposal that the link with electronic commerce be
examined.S/CSS/M/4
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71. The representative of Guatemala said that her authorities were developing a national strategy
for tourism in view of the importance of the sector  for her country.  She supported the proposal for a
seminar and suggested that sessions 3 and 4 proposed in the Secretariat note address competition and
regulatory issues related to the promotion of trade in tourism services.
72. The representative of Hong Kong, China expressed support for the seminar and for devoting
two days to it.  He could support the topics suggested in the Secretariat note, as well as the European
Communities' proposals.  He stressed the importance of focusing the discussion and suggested that
Members further discuss and decide by the October meeting on the issues they wished to tackle, so as
to help the Secretariat identify speakers and possible papers for the seminar.
73. The representative of Chile supported the proposal for the seminar.  He suggested that
Members undertake an in-depth analysis of the proposal for an Annex on Tourism.  He noted that the
link with specialised agencies was important, and stated that one emphasis of the seminar should beon how to address the tourism cluster.
74. The representative of Turkey expressed support for the Secretariat note.  He said that the
seminar should consider the importance of tourism for developing countries and the work of other
international organizations, in order to avoid duplications.
75. The representative of New Zealand concurred with the suggested timing of the seminar, with
the proposal that it might last more than one day and with the 5 areas suggested in the Secretariat
note.  He also supported the comments by the Eu ropean Communities and Peru with respect to the
focus of the seminar.  He suggested that the Counc il meetings leading up to the seminar be used to
explore in a more structured manner the proposal for an Annex on Tourism.
76. The representative of Mauritius expressed support for the seminar, echoed the comments by
Sri Lanka and said that the proposal for an Annex on Tourism represented a useful basis.  The
representative of Kenya said that the topics proposed in the Secretariat note were useful, and
particularly session 1.  He said that the link between tourism and air transport was crucial.  Therepresentative of Cuba said that the seminar should also address the benefits for developing countries
and noted that point 7 in the proposal for an Annex on Tourism was closely related to the issue.
77. The representative of Ecuador supported the proposal for an Annex on Tourism, the list of
topics for the seminar suggested in the Secretariat note, echoed the intervention by the European
Communities in that respect and concurred that more than one day might be necessary for the
seminar.  He stressed that the seminar should focus on the negotiations and that private-sector
participation should not be restricted to big tourism operators.  He said that consideration should be
given to funding to increase developing countries' participation to the event.
78. The representative of Mexico expressed support for the seminar and concurred that it might
take more than one day.  He stressed that the event should not be linked, either formally or informally,
with the Council and its subsidiary bodies.  He added that the selection of lecturers had to be carried
out by the Secretariat, that no report of the seminar should be produced and that, as in past established
practice, the record of the seminar should be lim ited to a compilation of presentations and papers.
79. The representative of Argentina was in favour of an in-depth discussion of a proposal for an
Annex on Tourism.  With respect to the seminar, he had no preference on its length, but stressed that
the programme should not be too broad or lose sight of the trade policy focus and of the fact that the
seminar had emerged as a consequence of a negotiating initiative of a group of countries.  With
respect to session 4 in the Secretariat note, he said that it should not address aspects which fell outside
the scope of the WTO, and, as concerned session 1, he said that the analysis of trade barriers in theS/CSS/M/4
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tourism sector should not be restricted to the commitments but examine them in relation to existing
disciplines.  The representative of Australia concurred.
80. The representative of Honduras was grateful for Members' support for their proposal and said
that it was important to clarify doubts and provide answers to questions.
81. The representative of the Dominican Republic said that his delegation would start informal
consultations before the October meeting of the Special Session in order to arrive at a more complete
and detailed agenda for the seminar.  He said that the seminar should be closely linked with the
proposal by his delegation and the delegations of El Salvador and Honduras.
82. Summing up the discussion on this item, the Chairman said that there was agreement that a
seminar on tourism would be held early in 2001 in Geneva.  The Secretariat would produce a revised
agenda for the seminar for the Council meeting in October, and the length of the event would be
decided on that basis.  He said that the Council would hold a structured discussion of the proposal bythe Dominican Republic, El Salvador and Honduras as a lead up to the seminar, which would be
conducted according to usual practices.  He reminded delegations of the UNCTAD Expert Meeting on
Electronic Commerce and Tourism, scheduled for 18 to 20 September in Geneva.
D. OTHER MATTERS RELATING TO THE NEGOTIATIONS UNDER ARTICLE XIX
OF THE GATS
83. The Chairman recalled that, at its last meeting, the Council had held a preliminary discussion
of the two documents submitted by Australia, as Job No. 3194, and the European Communities, as
document S/CSS/W/3, on the use of a cluster approach in the negotiation of specific commitments.
The discussion had been useful in terms of raising several questions with respect to the two proposals
and it had been agreed, in view of the preliminar y nature of the discussion, that the Council would
revert to those questions.
84. The representative of Chile concurred with Australia that it was fundamental to distinguish
between a revision of the classification and clusters.  A cluster approach could theoretically be applied
to all sectors, but it was only necessary for those sectors where advantages would be derived because
of interests in related sectors or of classification problems.  Members' willingness to participate inclusters was vital, and flexibility was important in order to avoid rigid clusters which would be
advantageous to some Members only.  The European Communities' checklist suggestion was deemed
appropriate.  He would be proposing for consideration sectors of interest to his delegation, such as
distribution services, at the next meeting.
85. Addressing questions raised at the previous meeting, the representative of Australia said that
the flexibility and voluntary participation in cluster negotiations proposed in paragraphs 4 and 5 of her
delegation's paper were intended to meet the requirements in Article XIX that liberalization take placewith due respect for national policy objectives and Members' level of development.  She concurred
with Chile that the willingness to participate in cluster negotiations was essential and said that some
negotiations could be plurilateral, if so preferred.  She explained that the decisions on clusters would
not be taken too early in the negotiations, as it was important to see how these proceeded.  Clusters
were different from classification issues and the two issues were somewhat separated, withclassification belonging in the Committee on Specific Commitments and clusters in the Special
Session.  She explained that model schedules would be used to deal with deficiencies in classification
and with closely related sectors.
86. Responding to questions which had been raised, the representative of the European
Communities explained that there was no risk that clusters could undermine or threaten the GATS
architecture or make the negotiations more complicated.  A cluster had nothing to do with theS/CSS/M/4
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architecture of the GATS and would not change the bottom-up approach to scheduling commitments.
It was essentially a memory tool, which could facilitate negotiators' work by enabling them to address
several sectors simultaneously and coherently.  In addition, and of importance particularly to smaller
delegations, a cluster could save time and resources.  A cluster would also not result in less flexibility,
as dealing with several sectors or sub-sectors together did not reduce Members' freedom whenundertaking commitments.  A cluster was essentially a checklist which would help to take into
account links between sectors and ensure that co mmitments corresponded as much as possible to
economic realities.  Finally, he addressed the question of whether clusters were a classification or
negotiating issue and whether they had to be addressed before or after the establishment of guidelines.
His delegation shared Australia's view that clusters were a negotiating issue.  They also contained
some classification problems, but in essence they were a negotiating issue because Members might
decide to use them in order to facilitate and simplify the negotiations.  For that same reason, clustershad to be addressed in the Special Session and, as had been the case for the communication on
tourism, could be dealt with in the absence of guidelines.  Different views existed about how clusters
could be used, so that it was important to clarify the issue at the same time as Members were
discussing the adoption of negotiating guidelines;  discussions did not need to reach definitive
conclusions, as it was probably necessary to experiment with clusters and assess the results.  In thatrespect, he supported the suggestion by Argentina that concrete examples, like tourism or
environment, would be helpful.  He also indicated that, while at that stage his delegation's preference
was for a checklist approach, or "illustrative list", as it was called in the paper by Australia, the two
approaches in the Australian paper were not mutually exclusive and could be compatible.  It was
indeed possible to use a cluster based on a checklist approach during the negotiations and then decide,if appropriate, to use a model schedule to finalise them.
87. The representative of Korea said that his delegation had no objection to the use of clusters but
there where a number of issues which needed to be tackled beforehand.  He wondered about the
implications for scheduling, and in particular as concerned the relationship between existing and new
commitments if a cluster approach were to be adopted.  For the time being, he had identified threepossible ways of inscribing new commitments into schedules:  attachments, completely new
schedules, or both new and old schedules.  In this regard, he noted that the work on the scheduling
guidelines in the Committee on Specific Commitments was based on the understanding that the new
guidelines would not apply retroactively, so that the old schedules would remain based on the old
guidelines and any new set would be based on the new ones;  it would therefore be difficult to have a
one completely new set of schedules.  Hence, it might be more feasible to attach the new
commitments to the old ones.  However, if a cluster entailed a permutation of sectors this might beproblematic, as the legal certainty of the schedules or their sectoral coverage might be compromised,
or their readability diminished, which would raise serious concerns.  He sought information from the
Secretariat on how a similar issue had been addressed for the GATT.
88. The representative of Argentina said that his delegation approached the issue of clusters in an
open-minded manner and that clusters should not be an end in themselves and should be seen in a
broader context than the negotiation alone.  He concurred with paragraph 2 in the Australian paper
that the technical work of changing the classifi cation should be distinguished from the negotiating
proposals on clusters.  He said that environmental services were a clear example of a sector where, in
order to achieve effective market access, related activities also had to be liberalized.  He was also
concerned with Australia's suggestion that there was no need to have clusters in all services sectors,and that a choice would depend on how the negotiations proceeded.  The flexibility and voluntary
participation proposed by Australia required careful consideration, as did the interesting issue raised
by Korea, especially with respect to infrastructu ral services which might need to be repeated in
relation to several sectors.  Without prejudice to his delegation's final position, he suggested that
concrete examples might be helpful.  He noted that Australia and the European Communities viewedclusters essentially to be used in market access negotiations, whereas the proposal by the Domincan
Republic on tourism contained a different concept of clusters, not related to classification but rather toS/CSS/M/4
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pro-competitive principles.  Clusters were a negotiating tool and should be analysed without prejudice
as to how they would be used, by whom or for which sector.
89. The representative of the Dominican Republic said that the use of clusters was a negotiating
issue.  Their tourism proposal used a cluster concept which was clearly defined as a domain of
application of regulatory principles, which included pro-competitive disciplines.  The definition of thetourism cluster proposed in their paper was based on an agreement on Tourism Satellite Accounts
reached at a conference held in Nice in 1999, and comprised sectors characteristic of and related to
tourism, as had been adopted by the UN Statistica l Commission in March 2000.  A revised version of
their proposal would present a more restricted defini tion of cluster.  He said that the discussion on
clusters had to distinguish between clusters in commitments and in new disciplines and arrive at
objective criteria for their definition.
90. The representative of Canada underscored Korea's comments, as the legal certainty of
Members' commitments was of great importance.  She concurred with Australia and the European
Communities that the definition of clusters should not result in amendments of the existing
classification and supported the idea that there should not be too many clusters and that they should
result from a process of natural selection of Members' proposals.  The European Communities's
proposal that the end-use of a service be taken into account to define clusters was problematic, andshe wondered whether, for example, environmenta l law would belong to environmental services
rather than to legal services.  She also sought clarification on the meaning of "lack of coherence" in
paragraph 4 of their paper.  She wondered whether services sectors outside clusters would receive
appropriate attention.  She added that the challenge with clusters was that their scope could only be
understood when used in practice and, without presupposing the final decision, wondered if tourismand environmental services might not be used to explore practical examples.
91. The representative of Bolivia echoed the comments by Argentina and Korea.  She said that
clusters had nothing to do with legal commitments and thus wondered why they were being discussed
before the market access negotiations.  Her delegation was of the view that the request-offer approach
would result in coherent clusters by itself and that clusters were memory tools without any mandatorycharacter.  She stressed the importance of retaining the flexibility for developing countries, of taking
into account Members' level of development and of preserving the positive approach to scheduling
guaranteed by the GATS.
92. The representative of Japan said that distinguishing between classification issues, which
might result in changes to the W/120 classification list, and clusters, which would not change W/120,
was important for the legal certainty of Members' commitments.  He noted that the definition of
clusters and the way they would be used were inter-related.  Australia had suggested that they couldbe used either as illustrative lists or as model schedules, whereas the European Communities had
expressed a preference for using them as checklists for the time being, but had also referred to model
schedules and to the fact that the two approaches were not mutually exclusive;  however, his
delegation wondered whether it was not necessary to  distinguish between the two ideas, in particular
with respect to the degree of flexibility and of Members' participation in the negotiations.
93. The representative of Mexico shared Australia's view that it was important not to confuse
classification issues discussed in the Committee on Specific Commitments and clusters.
Commitments were based on an identical, neutral classification, and he supported the work in the
CSC, where Members were exploring ways of improving the services classification in order to better
reflect economic realities.  However, his delegation was opposed to the idea that clusters would distortthe classification of services, and noted that the choice of sectors for the development of clusters
would influence the balance of interests in favour of net exporters of such services.  He stressed the
importance of the classification remaining neutral.  He echoed Korea's comments and expressed
concern about the legal uncertainty which could result from a fragmentation in classification if modelS/CSS/M/4
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schedules were developed on the basis of clusters, as suggested in the Australian paper.  In his
delegation's view, those Members interested in clusters should use them as negotiating tools for
themselves, and not as multilaterally agreed ones, so  as to ensure that concessions were negotiated
only by those interested Members.
94. The representative of the Czech Republic said that his delegation was flexible as to how to
achieve progressive liberalization and could in principle accept clusters as a complement to request-
offer.  He said that commitments should not be bound in advance of the negotiations, whereas the
scope of each sector should be clearly defined beforehand.  The efficiency and viability of different
negotiating approaches would be demonstrated by the negotiations themselves.
95. The representative of Hong Kong, China said that request-offer was the basic negotiating
modality and others could be adopted as necessary.  His delegation had no difficulties with the
concept of clusters and concurred with the European Communities that clusters were checklists, to beused as memory tools in bilateral negotiations.  He identified different types of clusters :  on sectors,
such as those discussed in the Committee on Specific Commitments;  on regulatory disciplines, in the
discussion on tourism;  and possibly also on modes.  He stressed that the discussion was valuable to
understand other Members' thinking and as a transparency exercise.  Although clusters were a
negotiating tool, it was useful to discuss them both in the Special Session and in the CSC.  He notedthat confusion existed with respect to their impact on the classification methodology, but stressed that
they should not have any.  He expressed caution about a possible fragmentation and excessive sub-
divisions in the classification, which might not be warranted by Members' regulatory policies.  He
shared Bolivia's comments that clusters might emerge during the negotiations, and was of the view
that they would not apply to all sectors.  He suppo rted Korea's comments and their suggestion that the
Secretariat look into the goods experience with respect to changes in classification.  He sought
confirmation from the delegation of Australia that the suggestion about "opting in" in paragraph 6 of
their paper presumed that the commitments of thos e Members who decided to opt in would be open to
all WTO Members and would not result in a plurilateral agreement.
96. The representative of Hungary agreed with paragraph 3 of the Australian paper that market
realities had to be borne in mind to achieve liberalization in closely inter-related sectors, but was not
convinced that such a result could not be achieved with the request-offer approach.  The purpose of
clusters was precisely to that effect, as memory tools.  He stressed that they should be defined
narrowly, to avoid fragmentation.  The suggestion that participation in cluster negotiations would be
voluntary required careful consideration, as his delegation favoured a multilateral approach and was
doubtful about a plurilateral use of model schedules with minimum level of commitments.
97. The representative of the United States presented a proposal for a framework for the
negotiations on services.  She said that the "road-map" was important to give direction to the work of
the Council for Trade in Services and the Spec ial Session, and the Council's subsidiary bodies,
provided benchmarks to gauge progress and urged Members to submit proposals by the end of 2000,
on negotiating modalities on increasing participation of developing countries and in particular special
priority for least-developed countries, on treatment of autonomous liberalization and on other issues.Hence, her delegation's proposal addressed those issues as well as the objectives of the negotiations.
She said that the proposal was a framework to accomplish the ambitious mandate in Article XIX,
where Members had agreed to successive rounds of negotiations to liberalize services trade as a key to
growth and prosperity, access to lower-cost and better-quality services and improved competitiveness.
Services accounted for between 60 and 80 per cent of GDP.  In developing countries, they representedover 50 per cent of GDP, and their share was increasing, as was their export potential.  The services
negotiations were successful only if, as was mandated, they went beyond the status quo by reducing
or eliminating existing restrictions.  They had to achieve the full participation of developing countries,
and in this respect the submission on tourism was encouraging.  A "needs assessment" for developing
countries should appear as a regular item in the agenda of the Special Session, to identify sources ofS/CSS/M/4
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assistance that might help Members specify their interests in the negotiations.  Negotiations should
take place with due respect for national policy objectives, such as the maintenance of high levels of
protection for consumers, health, safety and the environment, and with appropriate flexibility for
developing countries to phase-in implementation of liberalization commitments consistently with their
development needs.  Given that the paper by her delegation would only be available at the end of themeeting, she suggested that Members revert to it  at the October meeting;  in the meantime, her
delegation would be holding consultations with interested delegations.  The representative of
Barbados welcomed the United States statement and expressed interest in their consultations.
98. The representative of the European Communities said that the framework proposed by the
United States delegation contained substantial concepts which needed to be studied carefully.  The
proposal was perhaps too ambitious, but he nonethele ss welcomed its level of ambition, as he saw no
drawback in starting by aiming high.  He indicated that similar questions about deadlines andnegotiating modalities had also arisen in the negoti ations on agriculture, even though some of the
other issues under discussion were specific to particular sectors.  He also said that the proposed
framework had to be examined in the broader cont ext of the efforts underway to launch negotiations
in other areas, as a broader negotiating round was still the main objective, and noted the need to assess
possible interactions with the broader agenda.  He indicated that he would revert to the statement bythe representative of the United States at future meetings.
99. Commenting on the issues of clusters, the representative of Switzerland noted that some
delegations had suggested that there might be only a handful of clusters;  his delegation was of the
same view, but considered that telecommunication, financial and maritime services could be looked at
as clusters.  He also noted that the W/120 classification was not compulsory, and that the modes couldalso be considered as clusters.  He acknowledged that the legal certainty of the commitments was a
relevant concern, but observed that it would have to be faced irrespective of the decision on clusters
and mentioned that the technique used for the extended negotiations could possibly be adopted.  With
respect to the question whether clusters were a technical or negotiating issue, he said that they were a
technical tool but a negotiating issue.  Negotiations  were aimed at improving the level of Members'
commitments;  Members should not limit themselves to the request-offer approach, but, and that was
what clusters were about, formulate policy intents in given sectors and see which sectors needed to be
considered together to make commercial sense.  Clus ters were useful in that respect, for transparency
considerations and to ensure full participation by all Members.  With regard to their relationship with
the request-offer approach, he said that clusters were additional tools, which Members might want to
use and which should not be imposed.
100. Circumscribing her comments to the issue of cluster, the representative of Brazil said that the
responses provided by Australia and the European Communities had helped with her delegation's
doubts and concerns.  Her authorities were still considering the implications and possible use of
clusters, particularly the model schedule approach.  At that stage, she echoed the comments made by
Korea and Canada on the legal and scheduling implications related to the use of clusters.  She agreed
that cluster issues should be dealt with separately, as a classification tool in the Committee on SpecificCommitments, and as possible auxiliary negotiating tools in the market access negotiations.  She
suggested that the Secretariat prepare a paper refl ecting the various concerns raised at the previous
and present meeting of the Special Session.  Such a paper would serve to guide Members' reflections,
focus on the legal and scheduling implications of the various options presented, further clarify what
clusters meant as subsidiary negotiating modalities and perhaps provide a definition of the clusterconcept, as for Members to have recourse to such a modality it was necessary that it be clearly defined
in the guidelines and procedures.
101. The representative of Mauritius observed that the discussion appeared to have given rise to
two trends:  clusters as a classification nomenclature issue;  and clusters as a classification negotiating
approach.  The first trend related to the work which was on-going in the Committee on SpecificS/CSS/M/4
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Commitments, which was distinct from the important work related to the second trend, which was
higher in the hierarchy of Members' discussion and appropriately so, as it concerned negotiating
modalities and hence fell within the work on the establishment of the guidelines and procedures.
Unless the classification nomenclature issue was resolved first, it was difficult to see how clusters
could be used as negotiating tools.  He stressed that the two issues should not be confused and thatmore reflection was necessary.
102. The representative of Turkey said that his delegation had no preliminary objections to clusters
and that the issue merited further discussion.  Clusters could be useful tools for liberalization, as well
as technical tools, and could improve coherence in commitments in related services.  His delegation
had no objections to using clusters, provided that a consensus was reached, which was however
proving elusive.  Hence, he suggested that clusters be not applied as general principles for the time
being, but only voluntarily applied to some sectors in order to test them.
103. The representative of Indonesia, speaking on behalf of ASEAN, said that systemic issues
existed, like the ones raised by Korea and Mexico, and that the issue of clusters needed to be clarified
further.  The implications of clusters for developing countries with respect to their rights and
obligations under the GATS needed to be taken into account.  He observed that economic realities
were important and needed to be reflected, but that they were not the only factor that predominatedthe need for coherence in Members' commitments.  For the sake of the argument, if clusters were used
as a negotiating tool, they should be used as a means, namely as memory tools, and not as an end.  He
reaffirmed that participation in cluster negotiations  should remain voluntary and that they should not
result in a binding multilateral understandings or impositions on other Members.
104. Responding to the question from Hong Kong, China on paragraph 6, the representative of
Australia explained that the possibility of opting in or out dealt with ASEAN's concern that
participation in cluster negotiations remain voluntary;  Members would have the choice of whether toparticipate in the negotiations or not, but at the end those Members who had chosen to opt in would
apply the results of the negotiations in an MFN-consistent manner, similarly to what had happened
with the negotiations on basic telecommunications.  With respect to Brazil's comments aboutidentifying sectors of interest in advance, she said that, in her authorities' experience, that had proven
too difficult and that identification would be easier at a later stage, as and when appropriate.
105. The representative of Mexico said that the question raised by Hong Kong, China was
important.  His delegation favoured a voluntary use of clusters, on an individual basis, and not
multilaterally agreed.  Drawing an analogy with the goods case, he noted that the Information
Technology Agreement had been negotiated plurilaterally, but the concessions had then been
multilateralized, while the Committee membership was restricted to the Members involved.  Clustersused as voluntary negotiating approaches did not hamper liberalization, but they should not lead to
changes in specific commitments.  With respect to Brazil's suggestion for a Secretariat paper, he said
that such a paper might be useful when Members had a clearer view on clusters.
106. The representative of India said that his delegation's position on clusters had not changed
since the previous meeting.  He observed that it seemed that no-one was denying that request-offer
was the principle negotiating approach.  Some Members appeared to consider clusters to be valid only
in a limited number of areas;  others wanted to look at concrete examples before making a final
decision.  A number of points had been usefully raised, such as legal issues, systemic changes to the
architecture of the GATS and appropriate flexibility for developing countries, voluntary participation
in clusters negotiations and bilateral versus mu ltilateral approaches.  On the latter issue, his
delegation's view was that clusters should be used bilaterally as memory tools.  He also echoed the
comments made by ASEAN and Mexico.S/CSS/M/4
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107. The representative of Venezuela said that she would revert to the issue of clusters.  With
respect to MERCOSUR's comment on the speed of events, she observed that the United States had
already submitted a negotiating proposal.  In a preliminary manner, she could support the proposal for
a "needs-assessment" for developing countries in the Special Sessions of the Council, she concurred
with the importance of respecting national policy objectives and of the possibility of making marketaccess obligations conditional on the achievement of such objectives.
108. The representative of Egypt echoed the co mments made by ASEAN and Mexico.  His
delegation would look into the voluntary approach proposed for clusters and was of the view that
request-offer could be supplemented by approaches which took into due account the structure of the
GATS and its legal certainty.
109. The representative of Uruguay said that his delegation would continue to look into the issue
of clusters, but noted that two concrete proposals had been made, on environmental and tourism
services, and that both the European Communities and Australia felt that clusters would apply only to
some sectors, so that it would be useful to know  from delegations which other sectors they had an
interest in.  He then reaffirmed what the delegation of Brazil had said on behalf of MERCOSUR on
item A, namely that the mandated negotiations in services were not taking place in isolation from
progress being made in the other areas and that MERCOSUR's interest was not limited solely toservices.
110. With respect to Members' comments on his delegation's intervention, the representative of the
United States reiterated the interest of his delegation in wide consultations.
111. Summing up the discussion on this item, the Chairman said that the debate had been useful
and that several Members had indicated that they would revert to this agenda item.  Generally,
delegations were approaching the issue of clusters in an open-minded manner, but additional
questions and concerns had been raised which warranted further discussion in the Special Session.  He
suggested that the Secretariat prepare a paper, extracting from the reports of meetings, to guide the
discussion with respect to the concerns mentioned.
112. The representative of Mexico said that he considered the paper by the Secretariat to be
premature, but could go along with the suggesti on.  He asked that the issues mentioned by the
delegation of India be also included.
113. A member of the WTO Secretariat addressed the question raised by the delegation of Korea
on how successive schedules had been incorporated in the case of the GATT.  His recollection was
that there had been an accretion of schedules, except when the tariff nomenclature had changed to the
Harmonised System, in which case the old schedules had been replaced with new ones through a
procedure of consultation and verification.  He added that the complexity of an accretion process inthe case of services schedules would be greater than for tariff schedules, hence making the argument
for replacing old schedules with new ones, as had been done for the extended services negotiations,
more compelling.  At any rate, it was something that Members needed to think about before the end of
the negotiations.  He said that the Secretariat would provide a short note on the issue.
E. WORK OF SUBSIDIARY BODIES - REPORTS BY CHAIRPERSONS
114. In keeping with what had been agreed concerning the regular reporting from the subsidiary
bodies to the Special Session, the Chairman invited the Chairpersons of those bodies to present their
oral reports.
115. The Chairman of the Committee on Financial Services, Mr. Lotfy Abdel-Hamid of Egypt,
said that, as in previous meetings, the items on the Committee's agenda were the acceptance of theS/CSS/M/4
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Fifth Protocol to the GATS,  technical issues, other issues for future discussion, recent developments
in financial services trade and the request for observer status from the International Association of
Insurance Supervisors.
116. On the acceptance of the Fifth Protocol, he was pleased to inform Members that Ghana had
submitted its instrument of acceptance to the WTO Secretariat on 26 May 2000.  Thus, as of then,9 Members, namely Bolivia, Brazil, Dominican Republic, Jamaica, Kenya, Nigeria, Philippines,
Poland and Uruguay, were still conducting domestic processes to enable acceptance.  The Committee
had heard progress reports from Poland, Brazil, and Uruguay.
117. Regarding "Technical Issues", the Committee had decided to set the issue of the distinction
between modes 1 and 2 aside for the time being, and to reintroduce it at the request of any delegation
or when the Committee received a written contribution on the issue.
118. Under "Other Issues for Future Discussion", delegations had expressed their views on the
desirability of discussing issues related to prudential regulation.  In that respect, some delegations
supported a discussion on regulatory matters in general, including prudential regulation, to enhance
understanding of the specific issues involved, and a proposal for requesting information from relevant
international organizations was considered.  Other Members objected to the idea of discussing
prudential measures as they saw no need for clarification given the definition contained in the Annexon Financial Services.  The Committee had heard calls for caution in deciding whether to take up the
matter in future discussions and had decided to conduct informal consultations on how to proceed
before its meeting in October.
119. Regarding "Recent Developments in Financial Services Trade", the Committee had been
informed about the establishment of the Financial Services Agency in Japan as the entity responsiblefor all aspects of financial regulation.  Additionally, Canada had announced that on 13 June a package
for reform of the Canadian financial system had been submitted to Parliament, which would benefit
all participants in the Canadian financial services sector.
120. The Chairman of the Committee on Specific Commitments, Mr. Tomo Uyama of Japan, said
that, since his last report, the Committee had held  one formal meeting and two informal meetings.
The Committee was working on two items:  the revision of the guidelines for the scheduling of
specific commitments and possible amendments to the existing services sectoral classification.
121. Since his last presentation, there had been some good progress in the revision of the
scheduling guidelines, which had also benefited from a round of informal consultations.  The
Committee had been able to bridge important gaps due to an increased spirit of cooperation among
delegations and thanks to the flexibility offered by Members on some contentious issues.  There was
at that stage a very small number of outstanding contentious issues, which the Committee would try toovercome as it approached the best endeavour deadline of March 2001.  To that effect, the Secretariat
had been asked to prepare a first draft of the revised scheduling guidelines for consideration at the
next meetings.
122. The work on classification had seen another round of informal discussions on a number of
sectors, namely environmental, energy, legal, postal and courier, and construction services.  Thisselection of sectors was without prejudice to any other sector whose classification a Member might
wish to discuss in the Committee.  At the last informal meeting on classification, Members had also
discussed a paper by the Secretariat on the issue of “Production on a fee or contract basis”, which was
relevant to the classification of some of the sectors under examination.
123. In the sectoral discussions, Members had made progress on the classification of
environmental services on the basis of a revised proposal by the European Communities.  At the endS/CSS/M/4
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of the discussion there was good convergence of views among Members on the classification of
“core” environmental services, with differences still remaining on 3 contentious issues.  On the
proposed environmental “clusters”, on the other hand, some delegations had expressed reservations,
as the general question of “clusters” was still being debated in the Special Session.  On energy
services, work had advanced on the basis of a detailed proposal by the United States and of anillustrative list of energy services by the European Communities.  Substantive comments had been
made on the proposal by the United States, which in the view of many delegations represented a good
starting point for work on the classification of the sector.  On legal services, work had advanced on
the basis of proposals by the United States and Japan; on postal and courier services, on proposals by
the European Communities and the United States and on construction services, on a proposal by New
Zealand.
124. Regarding its work both on scheduling guidelines and on classification, the Committee was
well aware of the best endeavour deadline of March 2001, which had been set by the Special Session
for the completion of work on those two items, and was organizing its work in the most efficient
manner in order to meet the target.
125. The Chairman of the Working Party on GATS Rules, Mr. Tony Sims of the United Kingdom,
said that, since the last Special Session, the Working Party had held one informal meeting, where it
had discussed emergency safeguard measures, and one formal meeting, where it had discussed the
three issues on its agenda: safeguards, subsidies and government procurement.
126. On safeguards, the informal meeting had been the last of four devoted to the discussion of
questions raised in the Chairperson's Note circulated as Job No. 1979.  There had been was an in-
depth discussion of the issues of compensation, sp ecial and differential treatment, and unforeseen
developments.  The Secretariat had prepared, under its responsibility, a note, circulated as
Job No. 3449 and Addendum 1, summarizing comments made by Members on all the issues discussed
during the four informal meetings held since March.   At its formal meeting, the Working Party had
further discussed the ASEAN Concept Paper and the issues raised in the Chairperson's Note Job
No. 1979, but had focused also on a communication circulated by the delegation of Poland, entitled"Emergency Safeguard Mechanism Contained in Art. 18 Act of 18 December 1998 on Foreign
Exchange Law", as well as three background papers pr epared by the Secretariat:  "Inter-Agency Task
Force on Statistics of International Trade in Services – Progress Report", "Patterns of Limitations
Scheduled under Mode 2" and a second revision of Job No. 5294, entitled "Relevant Criteria, Sources
and Conditions".  In view of the 15 December d eadline, the Working Party had also considered how
to organise work in the subsequent weeks and months.
127. On subsidies, the European Communities had presented an informal paper describing its
regime for state aid in the services area.  Delegations had discussed the desirability and possible
content of a "rolling checklist of issues", which would help to address in a more systematic manner
the various issues under this agenda item and it had been agreed that the Chairman would prepare the
checklist under his own responsibility.  Delegations had also considered two background papers by
the Secretariat, "Information Contained in WTO Trade Policy Reviews" and "Limitations inMembers' Schedules Relating to Subsidies", which had been prepared pursuant to proposals by
Argentina and Hong Kong, China.
128. On government procurement, delegations had given preliminary comments on the informal
paper "Government Procurement of Services – Possible Development of Multilateral Disciplines"
circulated by the European Communities.
129. The following meeting of the Working Party would be held on 27 September 2000.S/CSS/M/4
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130. The Chairman of the Working Party on Domestic Regulation, Mr. Sergio Escudero of Chile,
said that, since his previous report, the Working Party had held an additional formal meeting.  The
meeting had began with Members continuing their reports on their voluntary domestic consultations
with professional services organizations in respect to the potential horizontal applicability of the
accountancy disciplines to other professions.  The item had been placed first on the agenda because,due to time pressures, Members had been unable to report at the previous meeting.
131. Generally, Members had stated that initial responses from their consultations, although
limited in number, had been rather positive.  Some professions had requested additional disciplines to
cover the specificities of their particular sector.  A number of Members circulated written reports of
their consultations, including Australia; the European Communities; Hong Kong, China; Japan;
Poland; the United States; and Uruguay.
132. Also discussed was the issue of the parallel Secretariat consultations regarding the
accountancy disciplines with specific international professional services organizations identified by
Members.  A revised listing had been circulated prior to the meeting.  Delegations had agreed that, in
connection with the following Working Party meeting to  be held in early October, they would seek to
make a final listing of the international organizations to be consulted, as well as to make their best
efforts to conclude domestic consultations.
133. The other major item on the agenda was continued discussion of concepts relating to the
development of regulatory disciplines for services as a whole.  In that context, Members had
commented on the draft Secretariat Checklist of issues under discussion.  Initial comments had also
been made by some Members on the substantive issues themselves identified in the Checklist.
Members had agreed that the Checklist be revised and expanded.  In order to permit adequate time forthe discussion of substantive issues, a half-day informal meeting was to be held immediately before
the following formal Working Party meeting in October.
134. The representative of Brazil was pleased to note that all bodies were making progress in their
work, which represented an important contribution to the negotiations, but asked that their meetings
be scheduled back-to-back with the ones of the regular and special sessions of the Services Councilwithin the same week, so as to ensure participation of capital-based experts.
135. The Chairman appreciated the concern of the Brazilian delegation, but said that it was
difficult to fit all the meetings into one week, also  because the reviews of MFN exemptions and of the
Annex on Air Transport Services and the seminars on services trade statistics and on tourism were
also scheduled around the "services weeks".  He added that he would be meeting with the four
Chairpersons of the subsidiary bodies, and with the Secretariat, to try to rotate the sequence of
meetings so as to do justice to all four bodies.
F. OTHER BUSINESS
136. The Chairman drew delegations' attention to the procedures adopted by the General Council
on 8 May 2000 concerning the participation of acceding countries in the mandated negotiations,
contained in document WT/L/355.  The procedures specifically covered negotiations on agriculture,
services and other elements of the built-in agenda.  They provided that negotiations be open to Statesand separate customs territories for whom an accession working party had been established.  They
also stipulated that any decisions in the context of those negotiations would be taken only by WTO
Members.  He suggested that the Council take note of the procedures and proceed accordingly.
137. The Council took note.S/CSS/M/4
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138. The representative of the Dominican Republic sought confirmation from a representative of
the WTO Secretariat of what had been reported in the fourth line of paragraph 12 of document
S/CSS/M/3 about the legal status of the "road-map".  A representative of the WTO Secretariat
confirmed that what had been reported corresponded to what he had said at that meeting.
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