RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/M/35
17 May 1999
(99-1988)
Council for Trade in Services
REPORT OF THE MEETING HELD ON 26 APRIL 1999
Note by the Secretariat
1. The Council for Trade in Services held a meeting on 26 April 1999.  The agenda for the
meeting is contained in WTO/AIR/1061 and WTO/ AIR/1061/Corr.1.  No points were raised under
other business.
A. ELECTRONIC COMMERCE – IMPLEMENTATION OF THE PROGRAMME ADOPTED
BY THE GENERAL COUNCIL
2. The Chairman recalled that at its previous meeting, on 22 and 23 March 1999, the Council
had completed the first round of discussions on the items of the work programme adopted by the
General Council. The Council had also submitted an Interim Report on Electronic Commerce to the
General Council (S/C/8).  The Chairman proposed that the Council continue the implementation of
the work programme by focusing on five of the ten issues which had been identified in the Interim
Report as needing substantial further work.  The other five issues would be taken up at the next
meeting in May.
3. The representative of the United States suggested that it was no longer necessary to hold
discussions in informal mode and that the Council should remain in formal mode, also to allow the
discussions to be fully recorded in the report of the meeting.  He also pointed out that, considering
that some delegates were coming from distant places to take part in the discussions on electronic
commerce, it would have been desirable to devote greater time to the discussion of this subject inorder to justify the presence of sectoral experts.
4. The representatives of the European Communities and of Japan
 agreed that it was appropriate
to hold the discussions on electronic commerce in formal mode. The representative of the European
Communities stressed that as the work programme moved on, it was important to avoid repeating
discussions that had been held in the first part of the work programme and that at the end of
discussions on each item, the Council should note whether consensus had emerged or whether further
discussions were needed.  Where there was no consensus yet, the Council should provide guidance for
further discussions.  The representative of Canada said that his delegation believed that work should
now move on from the stage of “emerging agreement” and focus on “reaching consensus” on issues.He added that the Council should also deal soon with  those issues identified in the Interim Report as
“issues on which a common understanding appeared to be emerging,” where a formal discussion
would have helped.
5. Several delegations including Argentina, Brazil
, India  and Indonesia  expressed a preference
for conducting the discussion in informal mode, as this would have allowed them to participate more
actively.  Some also pointed out that it would have been necessary to know in advance if the
discussion was going to be conducted in formal mode, and that this time their instructions from capital
were for an informal discussion.  Two delegations also noted that it was desirable to continue to useS/C/M/35
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the informal mode for these discussion, considering that the General Council had not yet conducted
the Interim Review, which should provide the subsidiary bodies with guidance over further work.
6. The Chairman proposed that for this meeting of the Council the discussion be conducted in
informal mode as in previous meetings, on th e understanding that there would be a Chairman’s
summary for the record.  This was necessary as several delegations had legitimate expectations thatthe discussion be held in informal mode also at this meeting of the Council.  He also proposed that as
from the next meeting the discussion would be held in formal mode.
7. On the basis of the informal meeting the Chai rman provided the following summary under his
own responsibility:
The distinction between Modes 1 and 2
8. Members noted that the current distinction between Modes 1 and 2 presented particular
problems with respect to the delivery of services through electronic means, and that work in this area
was required  in order to ensure the legal certain ty of commitments.  One delegation noted that work
on the distinction between Modes 1 and 2 was importa nt in order to clarify the scope of commitments
and suggested that the main thrust of the Council’s work should consist in finding the most
trade-liberalizing solution, in order to encourage t echnological progress and economic growth in this
field.  Other delegations emphasized the importance of ensuring legal certainty in establishing
whether a transaction was covered by a Mode 1 or by a Mode 2 commitment.  It was noted that in the
Uruguay Round and in the following sectoral negotiations fewer restrictions had in general been
scheduled under Mode 2 than under Mode 1, but it was also pointed out that many Members probably
did not have electronic commerce in mind when they made commitments under Mode 2.  Suggestionsas to possible ways of avoiding or minimizing uncertainty included the possibility of merging
Modes 1 and 2 in a single mode covering all transactions between one jurisdiction and another;
alternatively, the problem would disappear if Members ensured that their commitments under these
two modes mirrored each other, since legal uncertainty could only arise where the level of
commitment varied as between one mode and the other.  It was suggested that access to a foreignwebsite might be regarded in all cases as occurring under Mode 2, but this was thought by some to be
an over-simplistic approach.
9. Most delegations said that they found useful the suggestion in the Secretariat paper
(S/C/W/68), that for operational purposes, to establish the consistency of a measure with a Member's
commitments, the essential question was on whom the measure impinged – the foreign supplier or the
domestic consumer.  However, it was pointed out that the definition of the modes in the GATS relates
to where the service is delivered, Mode 1 applying where consumption occurs inside the territory ofthe Member who has undertaken commitments, and Mode 2 where it occurs outside.  The difficulty in
making this definition operational, of course,  was in establishing where an electronic transaction took
place (although it was pointed out that the same difficulty applies to international telephone calls).
10. There was discussion of a possible link between the Modes of supply and the place of legal
jurisdiction governing a transaction.  It was suggested  that there were significant parallels between the
two issues and that the issue of legal jurisdiction could be helpful in relation to the work programme
and to the distinction between Modes 1 and 2 under the GATS. The determination of the law
applicable to the transaction could constitute a criterion to determine the relevant GATS mode of
supply: if the law of the country of the supplier applied it could be argued that the transaction had
taken place under Mode 2.  Some delegations however argued that there was no relationship betweenthe territory in which a transaction took place for GATS purposes and the place of legal jurisdiction in
private international law, and that the latter was an issue outside the current scope of the GATS and
the WTO. Some delegations argued that the debate on the distinction between Modes 1 and 2 riskedS/C/M/35
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becoming too abstract and that a general solution would be difficult to achieve;  it might therefore be
more productive to deal with this problem in a case-by-case manner.
Classification and scheduling of new services
11. There was a general view that the number of genuinely new services involved in electronic
commerce was probably very small:  certification and authentification services were mentioned as
possible examples of new services which had arisen in the realm of electronic commerce for which a
place would need to be found in the system of classification.  There was no dissent from the view that
a service did not become "new" merely by virtue of electronic delivery.  In any case, all services,
whether "new" or not, were covered by the GATS.  It was agreed that work on classification in this
area was necessary, and that it might form a part of the forthcoming revision of the Services Sectoral
Classification List (MTN.GNS/W/120).  Again, some delegations stressed that the issue of newservices could only arise where the transaction in question had no non-electronic counterpart and that
for all existing services the normal classification category would apply:  the principle of technological
neutrality meant that no existing service could be considered new just because it was supplied
electronically.
Classification and scheduling of internet access services
12. Regarding classification and scheduling of Internet access services, there was a general view
that Internet access services were part of telecommunication services.  Several delegations recalled
that most telecommunication services are covered by many GATS Schedules already.  A number of
delegations also noted that they had not been able to identify new services in this area, with the
possible exception of authentication services.
13. However, questions arose as to where Internet access services fit into Members' schedules
and, if they were regarded as telecommunications, whether they were basic or value-added
telecommunication services.  One delegation suggested that although it was possible to consider an
Internet service provider to be making access available to a packet-switched data network, Internet
access services were in fact more like value-added telecommunications. Another delegation suggestedthe Internet closely resembled a basic telecommunications network.  The point was made that
commitments regarding Internet access services already existed in many schedules, although different
approaches to their scheduling had been taken.  Thus, a number of Members had made explicit
reference to Internet access services or to the relevant CPC number for "integrated telecommunication
services" (CPC 75260), while many others had intentionally scheduled these services by virtue of
their commitments on data services or value-added services, understanding that their coverage was
ensured by the principle of technological neutrality, which was agreed to cover all technologies,including the Internet.   It was suggested however that it would be valuable to clarify the matter of
classification, so that it would be clear to all whether and to what extent these services were covered
by schedules.  Another delegation pointed out that considerable confusion could arise from the
different ways in which a schedule might indicate or imply commitments on Internet access services
and that it might be worth examining the intenti ons of Members when the commitments were made.
General support for the concept of technological neutrality did not mean that commitments in
Schedules should be prejudged or interpreted more broadly than originally intended by the scheduling
Member.  It was suggested that policy guidance should be developed, to ensure clarity and help move
forward trade liberalization.
Clarification of the scope of the annex on telecommunications in relation to internet access services
14. In discussion of the question whether the obligations in the Annex on telecommunications
applied to Internet access services, the view was expressed that where there were commitments on
Internet access services in a Member's schedule, then that Member must ensure that Internet accessS/C/M/35
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providers have access to public telecommunications tr ansport networks and services (PTTNS), as for
other services needing access to public networks.  However, doubt was expressed as to whether the
Internet itself should be regarded as part of the PTTNS and therefore as being a service to which
access must be ensured under the Annex.  One delegation said that although it was an important
infrastructure, Internet was difficult to imagine as a basic telecommunications infrastructure andhence covered by PTTNS:  moreover, as Internet services are very frequently provided on a
competitive basis, was it necessary to apply the Annex guarantees on access to Internet?  It was
suggested that the central question in regard to whet her or not Internet access provision fell within the
scope of the PTTNS as defined by the Annex was whether it was a basic or value-added service.  It
was noted that the question of the coverage of the Annex was not only a policy question but a
technical one as well.  It was also suggested that Members should not give a broader interpretation to
the scope of the Annex than was originally intended.
15. Another delegation observed that defining Internet access provision as services "required" by
governments "to be offered to the public generally" might be stretching the Annex definition of
"public" and agreed that where there was competition in the supply of services, less need would arise
to impose public service requirements – a factor that would have broader implications for the
application of the Annex.
16. However, another delegation believed that since the Internet was an open network run by a
quasi-regulatory private organization, it was very  close to a public telecommunications network as
defined in the Annex.  As a result, even where Members had no telecommunications commitments,
the Annex on Telecommunications would imply an obligation to provide access to the Internet.
Another delegation agreed that both the telecoms Annex and the Reference Paper apply to Internet
access services, although it might be necessary to consider separately the transport and content
elements of transmissions.  In this respect, a delegation suggested that study of paragraph 2(c) of the
Annex on telecommunications could also throw useful light on its intended scope.
 The applicability of the principles of the basic telecoms Reference Paper to electronic commerce
17. In discussing this issue, it was pointed out that the telecoms Reference Paper had been a
response to certain specific characteristics of the telecommunications sector, especially the prevalence
of dominant suppliers.  The question was asked what characteristics of electronic commerce posed
similar problems.  Another delegation said that in order to decide whether the Reference Paper's
principles were applicable, it would first be necessary, as with the case of the Annex on
telecommunications,  to determine whether Internet access provision was a basic telecommunications
service.   If not, the Reference Paper would not apply.  However, another delegation suggested thatsince Internet access services were  telecom services, then the reference paper commitments applied
to these just as to any other telecommunication serv ice; meaning that Internet access providers could
not engage in anti-competitive practices and so on. It was also pointed out that many Members had
not assumed commitments under the Reference Paper.
B. DEVELOPMENT OF DISCIPLINES PUSUANT TO ARTICLE VI:4 OF THE GATS
18. The Chairman recalled that at its last meeting the Council held a discussion on the question of
how to carry out future work on the development of multilateral disciplines pursuant to paragraph 4 of
Article VI of the GATS.  The Secretariat had prepared two notes.  The first, contained in document
S/C/W/97, provided an account of work on domestic regulation undertaken in the WTO and in otherinternational organizations.  It also gathered information on domestic regulation contained in the
papers prepared by the Secretariat for the Information Exchange Exercise.  The second note,
contained in document S/C/W/96, provided an overvi ew of some of the issues which Members might
wish to consider in the process of developing disciplines on domestic regulation.  At the previous
meeting of the Council, delegations made prelimin ary comments on these two papers.  However, atS/C/M/35
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this meeting of the Council delegations focused on the organizational aspect of the Article VI:4
programme.
19. Regarding organization, the Chairman stated that  the main issue was how to manage the two
overlapping mandates, that is, paragraph 4 of Article VI itself, which called upon the Council to
develop disciplines on domestic regulation on all services sectors, and the Decision on ProfessionalServices which called upon the WPPS to fulfill the same task for professional services.  Although the
discussion at the previous meeting of the Council was moving in a rather clear direction, it was not
conclusive and it was agreed to hold informal consultations.  On 19 April 1999, the Council held an
informal meeting where a clear preference was expressed for the idea of establishing a new subsidiary
body which would be responsible for carrying out all the work foreseen under Article VI, including
the tasks of the WPPS.  It also emerged from the discussion that there was a widely shared preference
for giving priority to the development of horizontal disciplines applicable to all services sectors, whileretaining the possibility of developing further disciplines applicable to specific sectors or groups of
sectors.  The Chairman had asked the Secretariat to prepare a draft Council decision reflecting these
elements, which was circulated at the informal meeting.  On the basis of delegations’ comments, theSecretariat produced a revised draft decision dated 26 April 1999 for consideration and adoption by
the Council.
20. The representative of the European Communities welcomed the draft decision and suggested
to extend the mandate of the working party to cover all aspects of regulation.  He argued that it was
not premature to do this, as issues of domestic regulation were going to play a major role in the next
round of services negotiations.  He also underlined that the new working party should first pursue its
mandate at the horizontal level and then take up work in the sectors.  The delegations of Australia,
New Zealand and United States  supported the suggestion by the European Communities  on widening
the mandate of the new working party.  Several other delegations, including India and Brazil  said that
they did not have instructions for substantial changes to the decision, such as the widening of the
working party’s mandate, and pointed out that, if a decision was to be adopted at this meeting, they
could not accepts a widening of the mandate.  However, some of the delegations which supported thewidening of the mandate noted that if it proved too difficult to reach a consensus on this issue at this
point in time, this did not preclude the possibility of doing so at a later stage.  Some delegations,
including India, Poland
 and Uruguay , pointed out that it was their understanding that the working
party established by the decision would be developing disciplines applicable only to sectors wherespecific commitments had been undertaken.  The delegation of Hong Kong, China suggested that
there was no need to decide on such an issue, which should be taken up by the working party in the
course of its work, like it had been the case in the WPPS for accountancy.  It was clear that thedecision did not prejudice in any way the outcome of  the debate on the applicability of the disciplines.
21. The Chairman asked delegations if they could adopt the draft decision after some small
changes to the text had been incorporated.
22. It was so decided.
C. ASSESSMENT OF TRADE
23. The Chairman noted that Article XIX:3 requires the assessment of trade to be carried out by
the Council for Trade in Services.  The Secretariat had provided a great deal of information in its
various papers, but these could only serve as an input to the assessment, and not as a substitute for it.
Article XIX:3 calls for the assessment to be ca rried out with regard to the objectives of the
Agreement, including the trade and developmental objectives enshrined in Article IV:1.  However,
such an assessment is rendered difficult by the paucity of statistics, particularly acute for developing
countries, by the lack of information on whether GATS commitments had actually improved on trade
regimes, and by the fact that various liberalization initiatives, as in basic telecommunications andS/C/M/35
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financial services, had been negotiated too recently for any economic consequences to be observable.
Given these constraints, the experience gained by national governments in the implementation process
proved essential for the assessment.
24. A representative of the Secretariat added that the Secretariat continued to investigate what
additional material was available, including studies conducted by other international organizationssuch as UNCTAD, which could help Members carry out the assessment, and encouraged delegates to
bring to the Council's attention any information sources considered useful in this respect.
25. The representatives of Uruguay, Egypt
, Switzerland , Hong Kong, China , Brazil , India  and
Cuba invited the Secretariat to continue its contacts with UNCTAD, which, with its development
perspective, might have produced information relevant to the assessment of trade.  The representative
of Hong, Kong, China added that other organizations might also be contacted.  The representative of
Brazil suggested that the collaboration with UNCTAD could be prospective, with a view to
identifying how the interests of developing count ries could best be reflected in future GATS
commitments.
26. The representative of Egypt noted that, while Members were probably best placed to conduct
the assessment of trade on a sectoral basis, they were not in a position to carry it out in overall terms.
He thus encouraged continued collaboration of the WTO and UNCTAD Secretariats, and expressed
particular interest in studies on how developing countries had benefitted from liberalisation under the
GATS, on the problems they had encountered, and on how these might be overcome.  The assessment
was vital for the drafting of negotiating guidelines and procedures.  The representative of India noted
that an assessment of what the GATS had achieved, in particular with respect to the objectives ofArticle IV:1, was central to the confidence-building exercise necessary to embark on a new round ofnegotiations.  He also urged Members not to underestimate the importance of the assessment.
27. The representative of the European Communities noted the need to be realistic about the
objectives of such an exercise.  He wondered about the need for UNCTAD's participation in this
context.  The work carried out by the WTO Secretariat provided sufficient information to draw
preliminary conclusions on the evolution of trade in services, on the role of the GATS in shaping it,and on how the structure of the Agreement could be improved. It was not necessary to complete the
assessment in order to establish negotiating guidelines and procedures, and could start on work these
guidelines and procedures.  The assessment could continue once more information was available or a
more specific input was given to the Secretariat.  As preliminary conclusion, he noted that the
imbalance of commitments across countries and sectors needed to be corrected.  Liberalization and
deregulation were taking place across many sectors, but not solely as a result of commitments under
the GATS.  Pro-competitive and regulatory disciplines were increasingly needed in the future.
28. The representatives of Switzerland, Hong Kong, China
 and the European Communities  said
that the assessment of trade should not be conducted as a one-off exercise, but rather be considered as
an on-going process.  Any new information could provide fresh impetus.
29. In summarizing the discussion, the Chairman noted that many delegations had expressed a
desire for the Secretariat to interact with other organizations, and in particular with UNCTAD, with
the aim of identifying material and information that might be of relevance to the assessment.  He
would explore with the Secretariat what could be done in addition.  Several Members had also noted
that the assessment should be an on-going exercise, and that it required continued attention.  The
Chairman urged delegations to carry out their own national assessments and contribute these to the
overall programme.S/C/M/35
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D. PREPARATION OF NEGOTIATIONS UNDER ARTICLE XIX  - NEGOTIATING 
GUIDELINES AND PROCEDURES
30. The Chairman recalled that at the previous meeting of the Council the delegation of
Switzerland had introduced a paper on the GATS 2000 services negotiations under other business.
The paper focused on the content of the upcoming negotiations and outlined three possible major
areas of work, that is, specific commitments, domestic regulation and functioning of GATS.  The
paper also suggested some review work to ensure legal consistency of the GATS.  In addition to the
paper submitted by Switzerland, Japan submitted an informal paper dated 23 April 1999, on possible
elements for negotiating guidelines and procedures.
31. The representative of Japan introduced the informal paper by his delegation, which identified
some possible elements to be taken up in the negotiating guidelines and procedures, but did not yet
constitute the final position of his government.  He argued that the negotiating guidelines and
procedures should be simple and not too detailed and that their scope should include all services
sectors and the review of MFN exemptions and of the Annex on Air Transport Services.  Some issues
on which work was already mandated under the GATS should be given special attention, including
the reduction and elimination of all MFN exemptions, domestic regulation and negotiations onmaritime transport services.  On the modalities for the negotiations, he pointed out that a period of
about three years constituted a likely timeframe to achieve some results and that his delegation was
flexible on the issue of the negotiating bodies, but that it would have been desirable to use existing
bodies.  He also suggested a standstill on commitments during the negotiations, regarding voluntary
liberalization and giving due regard to special and differential treatment for developing countries.
32. The delegation of Uruguay, supported by Brazil
 and Mexico , argued that there was a process
under way in the General Council, which was the competent body to develop negotiating guidelines,
and that, if the Services Council were to undertake work in this area, it needed a clear mandate from
the General Council.  This was also necessary in or der to avoid duplicating work on this issue.  Other
delegations including Canada, Egypt , Hong Kong, China , Switzerland  and United States  said that the
roles of the General Council and of the Services Council on this issue were not mutually exclusive
and that the Services Council had a mandate to fulfill under Article XIX:3.  Work done by the
Services Council on the negotiating guidelines and procedures should help the General Council in
reaching decision on this matter.  It was clear, however, that substantive input by the Services Council
would not pre-empt the role of the General Council in taking final decisions.
33. The representative of Hong Kong, China inform ed the Council that also his delegation had
submitted a non-paper on negotiating guidelines and procedures dealing with the administrative
arrangements and the scope of the negotiations.  He said that the guidelines and procedures should be
general and should include all matters that command the interest of Members.  He suggested that the
negotiating guidelines might be structured along the following lines: (i) processes pursuant to
Article XIX of the GATS (to cover the negotiation of specific commitments); (ii) processes pursuant
to Articles IV and XXV (to take account of the rights and interests of developing countries);(iii) processes pursuant to the mandated items under the GATS (domestic regulation; recognition;
GATS rules; modification of schedules; Annex on Article II exemptions; Annex on Air Transport
Services; Annex on Maritime Transport Services).
34. The representative of Indonesia speaking on behalf of ASEAN suggested five core elements
to address in the negotiating guidelines and procedures: (1) framework issues (including definitional
and classification problems, the dividing lines between Articles VI, XVI and XVII and the definition
of the economic needs test); (2) domestic regulation (Article VI:4 work programme); (3) mandated
work (review of Article II exemptions, negotiations on maritime transport services, recognition and
GATS rules); (4) developing country concerns; (5) market access (a fair and balanced package for the
entire membership).  He added that the negotiating guidelines and procedures should also stipulate aS/C/M/35
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timeframe for the conclusion of the negotiations and that ASEAN favoured a timeframe of three to
four years.
35. The representative of the Dominican Republic said that he disagreed with the view expressed
in the paper by Switzerland that assessment exercise was concluded.  Regarding the negotiating
guidelines and procedures, he underlined the importance of complying with Article IV and said thatsuch compliance would determine the depth of developing countries’ commitments.
36. The representative of the European Communitie s said that the negotiating guidelines and
procedures should be general and open ended.  He argued that the guidelines should address clearly
outstanding liberalization issues and that the coverage should be comprehensive.  The guidelines
should also include work on unfinished business, such as Article VI and GATS rules, and on
streamlining the functioning of the Agreement.  The representative of the United States said that the
negotiating guidelines and procedures represented the means to achieve the end referred to in
Article XIX, namely achieving market access by removing trade restrictions.  He added  that in the
negotiating guidelines and procedures his delegati on was interested in exploring alternatives for
achieving market access liberalization, based on different scheduling approaches.  Regarding Article
IV, he said that it was important that developing countries identified sectors of interest to them and
that Members considered the role of market opening in services for the growth and the integration of acountry in the global economy.
37. The representative of Australia said that she was interested in hearing more from developing
countries on how GATS liberalization had helped them to meet their development objectives.  On
autonomous liberalization she suggested considering whether the formula developed in the General
Council  would have been applicable to services.  She argued that for mode 3 (commercial presence)there were still important restrictions in place and that the removal of these restrictions should
constitute a priority in the next round.
38. The Chairman pointed out that there was no conflict between the respective roles of the
General Council and of the Services Council.  It wa s for the General Council  to decide finally on the
negotiating guidelines and procedures it received form the Services Council.  The Services Council
therefore was well placed to provide input to the General Council, without pre-empting its decision-
making authority on this matter.  However, if the Services Council were to provide input to the
General Council, this had to be done no later than July 1999, which left only three meetings of the
Services Council to complete work in this area.  He also suggested that following the discussion on
this item at the next meeting in May, Members should be in the position to ask the Secretariat to
prepare a first draft of the negotiating guidelines and procedures.
39. The Chairman suggested that the Council take note of the statements made and revert to this
subject at the next meeting.
40. The Council took note.
E. SYSTEMIC ISSUES ARISING FROM ARTICLE V OF THE GATS
41. The Chairman recalled that at the previous meeting of the Council, under Other Business,  the
delegation of Hong Kong, China introduced a paper on Systemic Issues arising from GATS Article V,
with the request that it be inscribed on the agenda of this meeting.  This paper had been circulated asdocument S/C/W/102.  In addition, Hong Kong, China submitted an informal paper dated 23 April
1999 on the same subject expanding on the previous one.  Also the delegation of Japan submitted an
informal paper dated 23 April 1999 entitled “Inter pretative Remarks on Article V:1 of the GATS.”
The Chairman invited the delegation of Hong Kong, China and the delegation of Japan to present their
papers.S/C/M/35
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42. The representative of Hong Kong, China in troduced in particular Job No. 2361, which
expands on document S/C/W/102 on Economic Integr ation Agreements in Services (EIAS).  The
paper addressed the relationship between the re quirement for "substantial sectoral coverage" in
Article V:1(a) and the requirement for the "absence or elimination of substantially all discrimination"
in Article V:1(b), and the application of the conditions contained in these two sub-paragraphs as wellas the development of possible disciplines.
43. The representative of Japan presented the informal paper by his delegation and highlighted
two issues.  First, with respect to the requirement fo r "substantial sectoral coverage", he noted that the
exclusion of infrastructural sectors from an EIAS could raise a consistency problem, and agreed with
Hong, Kong, China's view that domestic services statistics may be needed to complement the often
insufficient trade statistics.  Second, on the "reasonable time-frame" for the elimination of
substantially all discrimination, a period of 5 years was suggested, in view of the timing set for thenew round of negotiations in services.
44. The representatives of Australia, the European Communities
 and Poland  welcomed a
discussion on Article V issues.  However, the latter two delegations also noted that such a debate
should not delay the analysis of such agreements in the Committee on Regional Trade Agreements
(CRTA).  The representative of the European Communities also said that the discussions in theServices Council should avoid having the counterproductive effect of undermining or nullifying the
right of WTO Members to conclude EIAS.
45. The representative of Korea noted the need to improve Article V.  He called for discussions to
be undertaken during the next round of negotiations to clarify, among others, the following issues:
First, any modification of schedules resulting from an EIAS should not entail adding new limitations;
second, Members should agree on which GATS obligations, other than MFN, can be departed from
with an EIAS;  third, the requirements for "substantial sectoral coverage" and "substantially all
discrimination" in Article V:1(a) and (b) require further elucidation;  and, finally, paragraphs 2 and 3
of Article V should be clarified in conjunction with the three factors contained in footnote 1 to
Article V:1(a).
46. The representative of Argentina noted that the Article V issues which were raised were a
matter for negotiations and a debate in the Services Council was untimely.  He further remarked that
only six agreements were currently under review in the CRTA.  He then provided a number of
comments on Hong, Kong, China's document S/C/W/102.  For example, on the requirement for
"substantial sectoral coverage", he noted that the three factors mentioned in footnote 1 to Article V
should be examined together; that a case-by-case approach should be adopted;  and that aspects of
labour mobility beyond the scope of mode 4 would be covered by the provisions of Article Vbis onlabour market integration agreements.  Concerning a "reasonable time-frame", the representative of
Argentina noted that no useful conclusions could be drawn from the goods context, given the
differences that exist between services and goods trade.  He also felt that there was no need to clarify
what was meant by a "wider process of economic inte gration", or special and differential treatment of
developing countries in Article V.
47. With regard to the work carried out in the CRTA, the representative of Hong Kong, China
noted that this had not been fruitful also because of the problems of interpretation of Article XXIV of
the GATT and V of the GATS.
48. The representative of the United States stressed importance of the notification obligation
contained in Article V and expressed doubts as to all WTO Members having abided by it.  The
delegation of Uruguay reserved its position on this point.S/C/M/35
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49. The Chairman suggested that the Council take note of the discussion and revert to this matter
at the next meeting.
F. COUNCIL INFORMATION SESSION ON TELECOMMUNICATIONS STATEMENT BY
THE CHAIRMAN
50. At the previous meeting of the Council it had been agreed that a special information session
of the Council would be held on telecommunicat ions.  On the basis of suggestions made by
delegations at that meeting, the Secretariat prepared a draft agenda, which was circulated during the
informal meeting held on 19 April 1999.  Following delegations’ suggestions the Chairman proposed
that the special meeting of the Services Council on Telecommunications take place on 25 June 1999in the afternoon.  In order to allow Members enough time to discuss all the issues on the agenda he
also proposed that the session begin at 2pm and finish at 7pm.
51. The Council so agreed.
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