RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/M/66
18 June 2003
(03-3246 )
Council for Trade in Services
REPORT OF THE MEETING HELD ON 14 MAY 2003
Note by the Secretariat1
1. The Council for Trade in Services held a meeting on 14 May 2003 chaired by Ambassador
Ousmane Camara (Senegal).  The agenda for this meeting is contained in document WTO/AIR/2092.
2. The Chair informed the Council that he intended to make a statement regarding the Review
mandated under paragraph 5 of the Annex on Air Transport Services under "Other Business".  He
suggested that the agenda as circulated be adopted with the addition under Other Business to which he
had just referred.
3. It was so agreed.
A. RE-OPENING OF THE FIFTH PROTOCOL FOR ACCEPTANCE BY THE DOMINICAN
REPUBLIC
4. The Chair drew the Council's attention to a communication received from the Dominican
Republic requesting the re-opening of the Fifth Prot ocol to the GATS on Financial Services, contained in
document S/C/W/221.  He further drew the Council's attention to a draft decision in this regard contained
in document S/C/W/222.  He invited the delegation of the Dominican Republic to present itscommunication and inquired as to the duration of  re-opening of the protocol it was requesting.
5. The representative of the Dominican Republic noted that her delegation had informed the
Committee on Trade in Financial Services that it had ratified the Fifth Protocol on 31 December 2002,
and that the President had promulgated it on 7 February 2003.  Her delegation was therefore requestingthat the Council re-open the Fifth Protocol for her country's acceptance.  She noted that her delegation
was preparing the international instrument of ratifica tion for transmission to the Secretariat.  She stated
that a period of two months to complete this process would be acceptable to her delegation.
6. The Chair proposed that the Council adopt the draft decision contained in document S/C/W/222,
with the date 16 July 2003 appearing in the last para graph as the date until which the Protocol would
remain open for acceptance by the Dominican Republic.
7. It was so decided.
                                                          
1 This document has been prepared under the Secretariat's own responsibility and without prejudice to the
positions of Members and to their rights and obligations under the WTO.S/C/M/66
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8. The representative of the United States thanked the delegation of the Dominican Republic for
submitting its notification of ratification and looked forward to the finalisation of the outstanding
paperwork.
B. RE-OPENING OF THE FIFTH PROTOCOL FOR ACCEPTANCE BY URUGUAY
9. The Chair drew the Council's attention to a communication received from Uruguay requesting
the re-opening of the Fifth Protocol to the GATS on Financial Services, contained in document
S/C/W/223.  He further drew the Council's attention to a draft decision in this regard contained in
document S/C/W/224.  He invited the delegation of Uruguay to present its communication and inquired
as to the duration of re-opening of the protocol it was requesting.
10. The representative of Uruguay noted that through the enactment of the law 17.618 of 10 January
2003, the Government of Uruguay had approved the Fifth Protocol to the GATS.  He said that the
parliament had instructed the executive to make  an interpretative statement, upon depositing the
corresponding instrument of ratification.  Quoting this statement, he said that the Eastern Republic of
Uruguay understood that work accidents and occupational disease insurance regulated by law 16.074 of
10 October 1989 were included under paragraph 1(b)(ii) of the Annex on Financial Services, and wereexcluded from the scope of the General Agreement on Trade in Services.   He stated that the Eastern
Republic of Uruguay was requesting the re-opening of the Fifth Protocol for acceptance.  With respect to
the duration of the re-opening, he stated that all pertinent documents necessary to complete the process
had been prepared and that his delegation was in the Chair's hands.
11. The representative of Hong Kong, China, seeking a point of clarification, requested that
delegation of Uruguay explain the scope of the law it had referred to in its written communication, as well
as the reason why the law was considered as excluded from the GATS.  In particular, he sought to
ascertain if it related to any of Uruguay's specific commitments.
12. The representative of Uruguay said that law 16.074 referred to industrial injuries, accidents and
diseases, and sought to elaborate on some of the law' s articles with a view to responding to Hong Kong,
China's questions.  He noted that article 1 stated that it was compulsory to have industrial accident,
injuries and diseases insurance.  Article 2 provided that any employer was civilly responsible for
professional industrial accidents and injuries that occurred to their employees at work, under the
conditions stipulated in the law.  Article 3 stated that an employer was any person of a public nature,
private or mixed nature, who used the work of other persons (understood as workers or employees of aperson and who discharged permanent or occasional duties) irrespective of special insurance provisions
that could be contracted for.  Article 8 stated that the State Insurance Bank was established as a state bank
to provide medical assistance and compensation for all workers covered by the law, irrespective of
whether an employer had complied with their obligation to take out insurance.  Article 13 established that
the scheme was a public law which could not be changed by agreement between the parties.  To thisextent, he added that the State Insurance Bank, which he reiterated was a state bank, was the only
competent entity with respect industrial accidents, injuries and diseases.  He further added that in
Uruguay's commitments outlined in the Fifth Protocol, Uruguay had not made a commitment for this type
of insurance.  He said that the statement he had read earlier was provided by Uruguay's parliament, with a
view to recording it at the time of the deposition of the instrument of ratification.
13. The representative of the European Communities offered congratulations and gratitude to the
delegations of the Dominican Republic and Uruguay for accepting the Fifth Protocol.  He urged other
Members in the process of ratifying the same protocol to complete the necessary procedures so as to
finalise acceptance expeditiously.S/C/M/66
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14. The representative of the United States thanked the delegation of Uruguay for submitting its
notification of acceptance of the Fifth Protocol.  She urged other Members to complete outstanding
ratification processes.  With respect to the communication from Uruguay, and seeking to clarify a
technical point, she stated that her delegation accepted the contents of S/C/W/223 with respect toUruguay's position only.  However, the United States sought to clarify that the specific position of one
delegation was not to be understood as a general interpretation of Article 1(b)(ii) and 1(c) of the Annex on
Financial Services or other language in the GATS.  She said that her delegation had previously requested
information on Uruguay's regime and was satisfied with the information provided.
15. The representative of Japan welcomed the co mmunications from the Dominican Republic and
Uruguay requesting the re-opening of the Fifth Protocol for their acceptance.  He urged other Members
not having yet accepted the Protocol to redouble their efforts in order to reach early acceptance.
16. The representative of Poland informed the Council that that his country had ratified the Fifth
Protocol and that it would be requesting its reopening.  He indicated that a statement to this effect would
be made at the forthcoming meeting of the Committee on Trade in Financial Services.
17. The Chair proposed that the Council adopt the draft decision contained in document S/C/W/224,
with the date 16 June 2003 appearing in the last paragraph as the date until which the Protocol would
remain open for acceptance by Uruguay.
18. It was so decided.
C. NOTIFICATIONS TO THE COUNCIL PURSUANT TO GATS ARTICLE III:3
19. The Chair drew the Council's attention to a communication received from the delegation of
Chinese Taipei pursuant to Article III:3 of the GATS and contained in document S/C/N/230.  He
proposed that the Council take note of this notification.
20. It was so agreed.
D. PROPOSALS FOR A TECHNICAL REVIEW OF GATS PROVISIONS – ARTICLE XX:2
21. The Chair recalled that at its last meeting, the Council had held extensive discussions under this
agenda item.  On substance, the Council had pursued its discussions based on two submissions from
Brazil and Hong Kong, China, presented in December 2002 and February 2003 respectively.  The
discussion had addressed the question of the applicability of Article XX:2 in cases when "Unbound"
appeared in the market access column and "None" in the national treatment column or vice versa .  The
point had also been raised as to the possible impact on existing and future commitments.  In addition, the
delegation of Switzerland had indicated its intention to circulate a paper recapitulating the points it hadraised in its intervention.  This communication was contained in document JOB(03)/85.  With respect to
moving the discussion forward, the question of changing the title of the item on the agenda had been
posed.  Two suggestions in this regard had been put forth:  that the Council focus on the proposals and
possible solutions relating to Article XX:2 with a view to circumscribing the discussion, and that the
Council begin a technical review proper.  It was noted on a number of occasions that the Council had notdecided to commence a technical review.  He recalled that his predecessor, in her summary remarks, had
suggested that it might be more efficient for the Council  to determine the nature of its discussions, as any
change in the title of the item would flow from this.S/C/M/66
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22. The representative of Switzerland recalled that he had elaborated on the points in his
delegation's communication at the last meeting, regarding his delegation's position where "None"
appeared in the market access column and "U nbound" in the national treatment column, or vice versa .
His delegation's conclusion upon examination of these types of practical scenarios, was that Article XX:2
did not apply to them.   He noted that the Article XX:2 contained a number of precise terms that spoke of'measures' which must be 'inscribed' in the respective columns and of a 'condition' or 'qualification'
inscribed in the market access column which also applied to the national treatment column.  To his mind
it was clear that when "Unbound" appeared in a co mmitment, this neither constituted an inscribed
measure, nor a condition or qualification.  It was his delegation's position that this practical scenario could
not be read using the rule contained in Article XX:2.  He also noted that, subsequent to an examination of
a large number of Schedules of Specific Commitments, he had concluded that, although there were many
cases in which "Unbound" appeared in both columns, there were relatively few which replicated thescenarios under discussion.  For these cases, he recalled the utility of paragraph 18 of the Scheduling
Guidelines, which, he felt, if applied systematically by Members, would help resolve the problem and
ensure transparency.  He urged Members to take note of the Scheduling Guidelines, including paragraph
18, and, when inscribing measures in the market access column, to include conditions or qualifications
that Members would wish to apply in a discriminatory manner.
23. The representative of Australia stated that his delegation was inclined to support the position
taken by Switzerland in its paper, namely, that Article XX:2 applied to cases where measures inconsistent
with both Articles XVI and XVII were inscribed, and that an "Unbound" in the market access column
could not be considered as equivalent to a set of inscribed measures, and as such, could not imply anapplication of Article XX:2.  He agreed with the arguments set out in parts A and B of the Swiss
communication and he considered that Article XX:2 provided sufficient clarity when scheduling and/or
interpreting new commitments.  Citing paragraph 14 of the Swiss communication, he agreed that, in an
effort to improve the clarity of commitments, Memb ers should base new commitments in their initial
offers on paragraph 18 of the Scheduling Guidelines.  In cases where a measure inconsistent with ArticlesXVI and XVII had been scheduled in the market access column, he encouraged Members to indicate that
the measure also applied to national treatment.
24. The representative of the European Communities noted that his delegation was in the process of
examining the various communications submitted under this item.  He stated that the European
Communities' position in large part coincided wi th the one outlined in the communication from
Switzerland.  He agreed that an "Unbound" in the ma rket access column did not correspond to a measure
nor a condition in the sense of Article XX:2.
25. The representative of Brazil agreed that XX:2 wa s meant to apply to situations in which there
was an inscription in both columns, and had not been drafted to address the case where a "None"
appeared in one column and an "Unbound" in the other.  However, he noted that this conclusion did notresolve the problem of interpretation before Members and it remained necessary to agree on a way to
interpret these scenarios.  Referring to the report of the last meeting, he said that two interpretations were
possible, both of which seemed accurate.  The first, in which an "Unbound" appeared in market access
and "None" in national treatment, would be that a Member could not inscribe a discriminatory
quantitative limitation in the market access column, because of the "None" under national treatment.  Asecond interpretation would be to recognise that an "Unbound" in the market access column meant that
the Member had taken no commitment with respect to market access.  In this case, the Member would
remain free to inscribe any of the six market access restrictions listed in Article XVI.  He noted that
Article XVI did not indicate that, in cases where a "None" appeared under national treatment, an Article
XVI:2(f)-type measure would be prohibited.  He felt that this was another acceptable way analysing thecase.  Therefore, although it was correct to say that Article XX:2 did not apply, two interpretations of theS/C/M/66
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case under discussion remained possible.  He wondered if Article XX:2, although perhaps not intended
for this case, could shed light on it.  He felt that the discussion must move beyond the question of the
applicability of Article XX:2 in order to solve the problem.
26. The representative of Switzerland, seeking to respond to the second point raised by Brazil,
agreed that there were cases where an "Unbound" and "None" occurred in which the exact meaning of the
commitment was not clear, in particular with respect to whether the Member could inscribe a
discriminatory quantitative measure under Article XVI.  His delegation's position in this regard was that,
in these cases, a Member would have the ability to introduce quantitative limitations while being
committed to ensuring these limitations did not have a discriminatory aspect, because it remained bound
by the "None" commitment in the national treatment column.  A commitment in the national treatment
column had legal weight, which applied fully to all measures, even if they came under Article XVI:  thenational treatment commitment applied to both quantitative and non-quantitative measures.   With respect
to the question as to the extent to which Article XX:2 could guide the discussion, he said that if he
proceeded by à contrario  reasoning, this would confirm the conclusion he had just elaborated.  If the
drafters of the GATS had expressly taken account of and noted this type of relationship between Articles
XVI and XVII in cases where a measure was inscribed, and had explicitly stated that a "None" in thenational treatment column was affected by an inscription in the market access column, then à contrario ,
in cases where an "Unbound" appeared in the mark et access column, the commitment taken in the
national treatment was not affected.  If the drafters had intended that in all instances the market access
inscription affected the national treatment column, then there would have been no reason to specify the
types of instances when the measure inscribed in the market access column would affect the nationaltreatment column.
27. The representative of Hong Kong, China sought  to distinguish two issues.  First was the
question of how to schedule new commitments in a way which would ensure that delegations scheduled
in a manner consistent with their intentions.  He stated that this issue was a purely technical one, as it leftthe level of commitment scheduled up to the Member.  He felt that the problem was to ensure that a
convention or common language was used to ensure  that the commitments inscribed reflected exactly
what the delegation intended.  Second was the issue of interpretation of existing commitments.  He said
that this issue could be seen as more than purely technical and as going beyond the technical question
under discussion.  In this regard, the interpre tation of a "None/Unbound" or "Unbound/None" scenario
was a separate issue from the one under discussion.  He noted that the communication from Switzerland
illustrated one possible interpretation, while the statement from Brazil indicated there could be another.The question facing the Council, he felt, was whether it wished to perpetuate existing uncertainties in the
scheduling of new commitments, or whether it preferred a solution, at least with respect to new
commitments, and if possible, with respect to existing commitments.  He reiterated that the central
problem concerned the scheduling of new commitments, and that his sentiment was that a solution should
be found had been reinforced by the presentation of the two possible interpretations at the meeting.  Acommon understanding would allow delegations to clearly  indicate clearly their intentions in cases such
as the ones under discussion.
28. The representative of Brazil, referring to th e intervention by Switzerland, stated that the
interpretation presented by that delegation was logically consistent.  However, he felt that there were
other interpretations that were equally logically coherent.  His reflections did not seek to examine the
logic of the interpretations, but rather to find a common interpretation.  He inquired as to whether the case
in which a "None" appeared under national treatment which impeded a Member from scheduling
discriminatory quantitative measures under the market access column would create a hierarchy in favour
of Article XVII.  He stated that if an "Unbound " under market access meant that no commitment was
being taken with regard to market access, then a "None" under national treatment, seen from the SwissS/C/M/66
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viewpoint, would amount to a market access commitment, since the ability to apply a discriminatory
quantitative limit would be precluded.  Would the entry in the national treatment column in this case not
reduce the meaning of the "Unbound" in the market access column?
29. Responding to the question from Brazil, the representative of Switzerland stated that his
delegation considered there to be no hierarchy between Articles XVI and XVII.  One could not say that
Article XVI was superior to XVII or vice versa .  This did not contradict his reasoning:  in his delegation's
analysis, the "None" entry, because it was the commitment taken, prevailed.  The entries scheduled
remained the free choice of Members, and implied no hierarchy between these Articles.  The argument
would run both ways:  if a "None" in the national tr eatment column would establish a hierarchy in favour
of Article XVII, then by the same token, a "None" in the market access column would establish a
hierarchy in favour of Article XVI, and hence, there was no hierarchy.  He reiterated that his delegation'sposition that a commitment made was to be implemented in full, because an "Unbound" entry could not
be seen as compromising a full commitment in the other column.  He stated that an "Unbound" in the
market access column indicated that the Member intended to retain discretion to apply a quantitative
restrictions, however, at the same time, the "None" in the national treatment column indicated that
quantitative restrictions would be non-discriminatory.  He stated that in Switzerland's legal system, as inothers, there were instances where a Member sought to maintain quantitative restrictions, such as
economic needs tests, but pledged to apply them in a non-discriminatory manner.  He agreed that there
could be other views and that clarity in the context of the negotiating round was important.  He felt that it
was important for new commitments to be clear, and indicated that his delegation would request that such
situations were clarified in bilaterals.  He agreed that the preferred outcome would be for the Council toreach a common understanding.
30. The representative of Canada noted that her delegation would reflect further on the argument
that Article XX:2 applied only where an inscribed measure appeared, and not when a combination of
"Unbound" and "None" entries appeared.  Her first reading of the Swiss communication found it to
interpret narrowly Article XX:2 to inscribed limitations.  She noted that its paragraph 9 also seemed to
interpret commitments which contained a "None" and an "Unbound", and it was not clear to her at the
present stage that this type of a link could or should be made.  Referring to the possible ambiguity of
Article XX:2, she stated it could have arisen from the fact that Members had made commitments based on
different understandings of the meaning of Articl e XX:2, which would mean that an authoritative
interpretation or informal understanding would potent ially affect the scope of some commitments to be
made in the current round, as well as existing commitm ents through roll-back or roll-forward.  She agreed
that a process would be needed to address the problem of legal uncertainty which could arise.  She further
agreed that this was an issue for bilateral negotiations and it would be difficult to consider the issue
outside of the current round of negotiations and discussions.  In this regard, she felt that discussion on the
offers would be helpful in understanding the practical import of the issue.
31. The representative of Hong Kong, China responding  to the point raised in the last paragraph of
the Swiss communication regarding paragraph 18 of the Scheduling Guidelines, stated that, if the main
argument was that Article XX:2 was not applicable to  the scenario under discussion, then the same could
be said for the Scheduling Guidelines, which were phrased along similar lines to Article XX:2.  Paragraph
18 could be seen as a previous attempt to address the ambiguities arising from XX:2, which could beunderstood to mean that Article XX:2 might be insufficient to address the scenario under consideration.
His intention was not to say that paragraph 18 of the Scheduling Guidelines was applicable to this
scenario, but to suggest that the Council could think of applying the same principles contained in
paragraph 18 to the scenario.  He concurred with this approach as being a possible avenue to a solution
and drew attention to paragraph 3 of Hong K ong, China's previous submission, JOB(03)/34, which
attempted to address a possible solution in cases where Article XX:2 would not be applicable, namely, toS/C/M/66
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indicate in "None/Unbound", "Unbound/None" scenarios that the entry did not intend to provide coverage
for measures falling under the other Article.  For example, Members wishing to take non-discriminatory
market access measures could indicate so in the national treatment column and Members wishing to
reserve the ability to maintain discriminatory measures  related to market access could indicate this in the
market access column.
32. The representative of Chile noted that the Council had not taken a final stand on the issue before
it, and he stated that it would have been helpful to ha ve such information prior to the circulation of initial
offers, as it would have facilitated the elaboration of offers.  He felt that it was important to further clarify
the limits of the various possible interpretations a nd the meaning these would have for commitments.  He
felt that the Council should come to a common understanding in order to avoid misunderstanding.  He
asked the Swiss delegation if it could elaborate on paragraphs 10 and 11 of its submission.  His delegationremained unclear as to how to consider Article XVI:2(f)-type measures in cases where market access was
"Unbound" and national treatment read "None".
33. Responding to Hong Kong, China's comments regarding paragraph 18 of the Scheduling
Guidelines, the representative of Switzerland agre ed that there existed a parallelism between this
paragraph and Article XX:2, both of which were based on scenarios that involved inscribed measures.  He
pointed out that such language was used in the penultimate line of paragraph 14 of the Swiss submission,
and therefore he shared Hong Kong, China's understanding.  With respect to new offers, he stated that
Switzerland, in the process involved in drafting its offer, came across one situation in which it might wish
to make a reference foreseen in paragraph 18, although it had no cases relevant to Article XX:2.  Hereiterated that its offer was an initial offer.  Turning to the questions raised by Chile, he responded that, if
one assumed that a "None" in the national treatment column was intended to limit the ability of Members
to devise discriminatory measures of the types found in Article XVI:2 (a) to (e) inclusive (because these
measures could contain a non-discriminatory or a discriminatory aspect), then it would be difficult to not
assume the same for Article XVI:2(f)-type measures, by arguing that its sole virtue was that it was by
definition discriminatory.  He felt that there was no way to construct an argument that would differentiate
between Article XVI:2 (a) to (e)-type measures and Article XVI:2(f)-type measures.  He stressed that,
having examined many Schedules, his delegation had found many cases where "Unbound" and
"Unbound" occurred, but also that there were few cases of a combination of "Unbound" and "None"
entries.  Furthermore, he stressed that in most cases where this scenario did occur, it appeared under
modes 1 and 2, with few cases under mode 3.  Moreover, he said that Article XVI:2(f) had little relevance
for modes 1 and 2, which meant that the problem being discussed was relatively limited.  He noted thatmost Members which had Article XVI:2(f)-type measures in their national legislation had scheduled them
explicitly.  He concurred that if Members wished to agree on a different way to schedule these types of
scenarios for the current round, the Council should discuss this, or on a case-by-case basis in bilaterals.
Seen from the analytical perspective, he said that the scenario could be dealt with in a logically consistent
manner that reduced the seriousness of the problem.  He agreed that problems could have arisen in caseswhere Members were unaware of this scheduling t echnique, however, he felt that this was a separate
problem.
34. The representative of the Philippines sought to register his delegation's gratitude to the previous
Chairperson for her efforts to move the Council's business forward.  Turning to the agenda item under
consideration, he felt that the Swiss submission presented a cogent set of arguments which lead to certain
conclusions, however, he agreed with earlier statements that there were alternative ways of perceiving the
issue which led to other conclusions.   He echoed Canada's comment that the Swiss approach seemed
somewhat narrow and based on a literal reading of Article XX:2, which underscored the term 'inscribed
measures'.  He noted that recent panel and appellate body rulings also tended to favour a more literalreading of Agreements' provisions, which, he added, was not inappropriate.  Seeking to build on previousS/C/M/66
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interventions, he agreed with Brazil that the Swiss interpretation did not solve the problem at hand.   He
recalled comments by Hong Kong, China to the effect that there were two ways to approach the problem:
from the perspective of scheduling new commitments and any impact on existing ones.   He also took
note of Switzerland's comment that most instances of  the scenario being examined occurred in modes 1
and 2 and that mode 3 instances, which appeared to be most relevant, were limited in number.
35. Expressing his delegation's preliminary thinking on the issue, he thought that it could be useful
to try to give meaning to both a "None" and "Unbound" entries as they exist in their respective columns.
In pursuing this endeavour, he agreed that there woul d need to be some interpretation to indicate which
entry would have preponderance or weight.  He stated that in giving meaning to the entries, there were
two possible approaches, a literal understanding of Article XX:2, or a more systemic approach to these
entries.   Expanding on these possibilities, he said that a systemic approach in interpreting "None" and
"Unbound" entries would raise the question as to whether an "Unbound" entry in the market access
column could be interpreted as the general rule, or  whether the "None" in the national treatment column
could be interpreted as the general rule.  He further inquired as to whether such general rules would allow
for exceptions.  Without seeking to establish a hierarch y, he recalled that an approach in-line with the
basic architecture of the GATS (that of a positive list approach), would make it reasonable to assume thatan "Unbound" was better aligned with the process of deepening commitments.  As such, an "Unbound"
entry could offer a general rule, and thus the explicit inscription of making a full commitment, i.e.
"None", would constitute an exception to the general rule.
36. Expanding his thoughts to the practical scenarios under discussion, the representative of the
Philippines said that, in a case where market access was "Unbound" and the entry in the national
treatment column was "None", one approach woul d be to say that the "Unbound" entry under market
access was the general rule and that the commitment not  to discriminate in the national treatment column
constituted the exception.  Seen from such a perspective, the Member would remain free to maintain any
market access limitation, and given the full commitment under national treatment, would not be able toimpose discriminatory practices, including foreign equity requirements in its legislation.  In the opposite
scenario where a "None" appeared under market access and an "Unbound" in the national treatment
column, it could be argued that the "Unbound" in th e national treatment column constituted the general
rule, and the starting-point to further liberalization, while the "None" under the market access column
constituted the exception.  In practice, this would allow a Member to have discriminatory measures,
however, it would not be allowed to discriminate th rough an Article XVI:2(f)-type measure, i.e. by a
foreign equity limitation on foreign service suppliers.  This was but one view.  Another, more literal view
of these same two scenarios, he thought, could be  envisaged.  For example, in the instance where
"Unbound" appeared in the market access column a nd "None" in the national treatment column, and
given the second sentence of Article XX:2, it could be argued that the entry in the market access column
necessarily limited the national treatment entry, such  that, in this scenario, the market access column
inscription would override the national treatment commitment and would allow for a foreign equitylimitation for foreign service suppliers.  With reference to the earlier comment that the issue could be
resolved bilaterally, he agreed that, for the sche duling of future commitments Members could encourage
trading partners to schedule along the lines laid out in paragraph 18 of the Scheduling Guidelines.
However, he stated that for the interpretation of exis ting commitments, it would be more helpful to have a
common understanding of how to interpret such entries.
37. The representative of Thailand, expressing some preliminary views and addressing the comment
that scenarios of the type that were being examin ed were few, noted that she was not in complete
agreement with this observation.  Having examined the initial offers, she said that there were ambiguous
instances of this type of entry under modes 3 and 4.  Citing an example with respect to engineeringservices, she said that some Members made a distinction between different types of engineering, such asS/C/M/66
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computer, industrial, civil and environmental, when making commitments.  Pursuing the hypothetical
example, she outlined a situation in which a Me mber took a mode 4 commitment with respect to
computer and industrial engineers and allowed thei r movement through a commitment for specialists and
business visitors, as indicated in the market access column.  At the same time, the Schedule indicated in
the market access column that the Member was unbound with respect to mode 4 for civil andenvironmental engineers.  A "None" appeared in the national treatment column.  In light of the comments
by Switzerland, she wondered how this inscription w ould relate to the "Unbound" in the market access
column for civil and environmental engineers.  The "Unbound" would mean that no commitment was
made for civil and environmental engineers and thus the "None" in the national treatment would not
apply.  At the same time the "None" in the national treatment column would appl y to the other two types
of engineering services for which a commitment was made.  She felt that a similar situation for mode 3
could occur and would be more ambiguous.  She reiterated that her delegation had not taken a finalposition, but was inclined to share the concerns of the Brazilian delegation.  Her delegation also agreed
with Hong Kong, China's statement that clarification should be sought through the use, to the greatest
extent possible, of the Scheduling Guidelines and hoped that new commitments in the current round
would avoid the scenario being discussed. She said that her delegation was concerned with the issue of
existing commitments and agreed that a common understa nding in this regard might be difficult to come
by.  She agreed that possible problem areas should not be left to bilateral negotiations, and that, as far as
possible, a common understanding should be sought.  She felt that the issue, inasmuch as it could upset
the balance of rights and obligations, would not remain  purely technical.  With regard to the thrust of
Switzerland's communication, she agreed that Article XX:2 might not apply, however, she agreed with
Brazil that the problem persisted and that it needed to be resolved.
38. Commenting on the Swiss communication, the representative of Argentina felt that it had
highlighted the difficulty for the Council to make head way in addressing a real problem, that of a scenario
where an "Unbound" appeared in the market access co lumn and "None" in the national treatment column.
He noted that different interpretations on the scope of this commitment had been advanced.  He took thehypothetical example in which a Member, when presenting its offer, inscribed a foreign equity limitation
in the place of a previous "Unbound" inscription in the market access column that had appeared along
with a "None" in the national treatment column.  In this case, some would say that this constituted a
substantial improvement in commitment, while others might say it would be a modification subject to
Article XXI.  He therefore felt that a multilateral solution would be preferred, particularly if this scenario
arose in only a few instances and could be more easily resolved.  However, he felt that a technical
solution would not be possible, since a solution woul d imply a hierarchy between Articles XVI and XVII.
He believed that the solution proposed by Switzerland implied a hierarchy in favour of Article XVII, as it
would limit one of the measures included in Article XVI where a commitment existed in the national
treatment column.  The solution proposed by Brazil, he thought, would imply the reverse hierarchy and
give priority to the "Unbound" entry under market ac cess.  He encouraged Members to suggest ways in
which to move forward in this discussion.
39. The representative of Hungary stated that his delegation was inclined to share the interpretation
contained in Switzerland's communication JOB(03)/85.  He felt that, in the scenario in which an
"Unbound" appeared in the market access column and a "None" in the national treatment column, a
Member would not be able to schedule discriminatory quantitative limitations.  He acknowledged thatother delegations might have different views.  He felt that a common interpretation would not seem to
correspond to a technical review or be within reach, as it could have an impact on existing commitments.
He agreed with Hong Kong, China that the Council' s approach should be forward looking and focus on
future commitments, and he was not sure that the issue should be resolved solely in the bilateral context.
He felt that the solutions explored could include the one contained in paragraph 11(3) of Hong Kong,China's communication.S/C/M/66
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40. Recalling paragraph 18 of the report of the last meeting, the representative of Uruguay said that
the suggestion had been made that the incoming Chair hold informal consultations with a view to
deciding on how to find a solution.  He thought it us eful to recall this suggestion and felt that these
consultations could be held with the delegations who had expressed the most interest on this issue todetermine the manner in which to proceed.  This was important in order to bring the discussion to a
conclusion and not let it proceed ad infinitum .  He noted that the fact that Members were involved in
market access negotiations meant that a decision, one way or the another, was necessary.  He stated that
work on the Scheduling Guidelines had detected a problem with interpretation that had required
discussion.  He thought that consultations might be helpful in determining if the matter could be pushed
forward.  He reiterated the relative urgency of deciding how to proceed given the market access
negotiations context.  Recalling statements made at th e last meeting, he said that the point had been made
that the Council had not embarked upon a technical review, but something more closely resembling a
technical discussion.  He suggested that, with respect to the title of this item on the agenda, it could
appear as "Proposals Concerning Article XX:2", for ex ample, or other Articles which Members felt posed
a technical problem.  This would limit the discussion to the problems that Members had identified.  The
Members concerned could propose the inclusion of an item on the agenda which would then be examinedby the other Members.  Such an approach would br ing the process to a conclusion.  With a view to
proceeding expeditiously he suggested that, for the next meeting, the title of the agenda item appear as
"Proposals Concerning", followed by a specific  article that Members found pertinent to discuss.
41. The representative of Switzerland, speaking to the issue of hierarchy between Articles XVI and
XVII, reiterated his delegation's position that there was no hierarchy between these Articles.  Rather,
whenever a Member committed, in either column to have no limitations, then the Member had to abide by
this commitment, even if it reduced its ability to ma intain a limitation in the other column, unless another
provision appeared in the Schedule.   This approach maintained analytical symmetry.   He stated that he
had heard the argument that an "Unbound" in the ma rket access column would allow for the maintenance
of an Article XVI:2(f)-type measure and that, because these measures were by definition discriminatory,
they should override the "None" entry in the national treatment column.  Assuming one maintained
analytical symmetry in applying this hierarchy, he  inquired as to how a "None" under market access and
"Unbound" under national treatment would be considered?  In this scenario and applying the same logic,
it could be argued that this was meant to allow fo r the freedom to maintain discriminatory measures,
including a foreign capital limitation, since this would be a discriminatory measure which happened to
also be quantitative.  Would this mean that a "N one" and "Unbound" would allow a Member to introduce
a foreign capital limitation despite having a "None" under market access?  He felt that this was the
problem of interpretation encountered in the absence of analytical consistency.  He felt that a reading of
Article XX:2 must be approached in a consistent ma nner in order to avoid creating new problems.  He
agreed that some Members could have problems with regard to Article XVI:2(f)-type measures, but felt
that Article XX:2(a) was not an obstacle to finding one consistent interpretation.  Rather, he thought thatproblems might be related to drafting.  He agreed that informal consultations on future work would be
helpful, and, with respect to the title of this item, he  felt that any change should first identify the precise
nature of the problems, which might not be related to Article XX:2.  He remained open to discussing
these problems as well, but felt that it was not related to Article XX:2.
42. The representative of Singapore, referring to paragraph 5 of the Swiss proposal, stated that his
delegation's view was that an "Unbound" in the market access column was equivalent to a listing of all
existing and future possible market access restrictions.  In this regard, an "Unbound" entry in the market
access column would allow Article XX:2 to apply.  Secondly, he noted that by inserting an "Unbound" in
the market access column, the Member concerned retained the flexibility to maintain all six measuresidentified in Article XVI, whether discriminatory or non-discriminatory.  He felt that this interpretationS/C/M/66
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would not create a hierarchy between Articles XV I and XVII.  He emphasised that Article XVI was
crafted to address both discriminatory and non-discriminatory aspects of all six measures contained in
Article XVI.  He said that, had the GATS drafters intended Article XVI to be strictly non-discriminatory,
they would have stipulated so.  Since they had not, Article XVI covered both discriminatory and non-
discriminatory aspects.  With respect to Article XVI:2(f), he said that the measure was by definitiondiscriminatory, and therefore, it could be argued that it was subject to Article XVII.  However, he
believed that it should be recognised that Article XVI:2(f) was specifically included in and was in integral
part of Article XVI.  Thus, an "Unbound" entry for market access would also constitute an "Unbound" for
the measure contained in Article XVI:2(f).  Finally, he noted that Article XX:2 was meant as a scheduling
convention, and his capital was still examining the legal implications of any interpretative position on this
matter.  His delegation did not favour pursuing an interpretative statement based on Article XX:2.  His
delegation felt that paragraph 18 of the Scheduling Guidelines provided a model that delegations shoulduse in the negotiations.
43. The representative of Cuba echoed earlier comments that the Swiss communication raised a
question regarding interpretation which needed to resolved.  Her delegation reserved its position on this
issue.  Referring to the intervention by Uruguay, she expressed support for its proposal regarding the titleof this item on the agenda.
44. The representative of the United States agreed with the comments made by the representative of
Uruguay on the utility of consultations by the Chair in order to address how to pursue, from a procedural
viewpoint, the discussion.  She noted the suggestions made regarding the title of the agenda item, and shefelt that Members should reflect on this further.  Given the multiple concerns and suggestions made over
the course of the discussion, she thought that consultations would help move the process forward.
45. The Chair stated that he had taken note of the request for informal consultations on this item.
He noted that the delegation of Switzerland had made a presentation which had engendered a substantive
and rich discussion.  He felt that some progress had been made.  He noted that a number of delegations
had shared the position elaborated upon by Switzerland, while some reserved their position.  It seemed to
him that a number of delegations were of the opinion that Article XX:2 did not apply to the scenario
being examined; however, he recognised that divergent opinions remained.  He noted that a distinction
had been drawn between existing and future commitments , as well as the link to offers.  He said that a
proposition had been made for him to hold informal consultations, and that he would take the initiative to
begin consultations as soon as possible.  He hoped that these consultations would help move thediscussions forward and allow the Council to use its ti me more efficiently.  He proposed that the Council
take note of the statements made and that the Council revert to this item at its next meeting.
46. It was so agreed.
E. OTHER BUSINESS
47. The Chair sought to make a few remarks on the Review of Air Transport conducted pursuant to
the Annex on Air Transport Services.  He recalled that paragraph 5 of the Annex mandated a review
which had not yet been completed by the Council.  He  stated that at the last meeting of the Council
dedicated to the Review, held on 18 March 2002, the general view of Members was that the next meetingdedicated to a Review should occur after the Worldwide Air Transport Conference of the International
Civil Aviation Organization (ICAO), which had been held in Montreal from 24-29 March 2003.  He said
that an initial report containing the consolidated conclusions, recommendations and the Conference
declaration, had been prepared by ICAO.  He suggested that this document be circulated to Members.  He
wished to inform the Council of his intention to undertake consultations with a view to finding anS/C/M/66
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agreeable date to hold the fifth meeting dedicated to the Review of Air Transport Services.  In this
respect, he encouraged Members with views or sugges tions on the matter to get in touch with the Chair.
He suggested that the Council take note his statement made under this item in addition to the statements
made at the meeting and that the meeting be adjourned.
48. It was so agreed.
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