RESTRICTEDWORLD TRADE
ORGANIZATIONTN/S/M/8
29 September 2003
(03-5110)
Council for Trade in Services
Special Session
REPORT OF THE MEETING HELD ON 4 AND 10 JULY AND 3 SEPTEMBER 2003
Note by the Secretariat1
1. The Special Session of the Council for Trade in Services held a formal meeting on 4 and
10 July and 3 September 2003.  The agenda for the meeting, chaired by Ambassador Alejandro Jara ofChile, is contained in document WTO/AIR/2133.
2. The representative of UNCTAD requested to raise a point related to a paper on energy services
produced by UNCTAD under Other Business.
3. The Chair indicated that he wished to raise a matter under Other Business pertaining to a draft of
his report to the Trade Negotiations Committee on work since the Fourth Ministerial Conference.  He
suggested that the agenda be adopted including the items which had just been referred to.
4. It was so agreed.
5. The Chair recalled that at the last meeting he  had informed the Council about his report to the
Trade Negotiations Committee on the work of the Council since Doha.  He said that this report would
be made under his responsibility, and was a factual report that could contain his appreciation of thecourse of the negotiations and future work.  Although he was not necessarily required to give advance
notice of the report, he wished to make available to delegations a draft of the factual portion of the
report in order that they might make any observations.  He said that he would complete the report in
the light of the discussions at the present meeting.  With regard to the portion of the report containing
his views on the course of the negotiations and future work, he presumed that Members would wish to
share their views in this regard under the agenda item Review of Progress in Negotiations.  He
indicated that he might pick up from these comments elements which he could transmit to the TNC inorder to provide a prospective view of the negotiations.
A. 
 ASSESSMENT OF TRADE IN SERVICES
6. The Chair recalled that at the last formal meeting a number of delegations had made comments
under this agenda item in connection with a communication from the United States containing an
assessment of services trade and liberalization in the United States and in developing economies(TN/S/W/12).  He further recalled that the suggestion had been made that he engage in consultations
in order to sharpen the focus of the Council's work on this item.  He said that because of the heavy
schedule of meetings in recent weeks no structured consultations had been undertaken.  He invited
delegations who had points of view in terms of the elements on which the Council could focus to
share these suggestions.  He also recalled that a number of comments had been made concerning thedifficulties posed by the dearth of statistics and lack of clear conceptual methodologies that could be
                                                     
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.TN/S/M/8
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used in conducting an assessment that identified po ssible opportunities and gains.  In this regard, he
said that his attention had been recently drawn to the paper entitled "Services Trade Liberalization:
Identifying Opportunities and Gains" prepared by the OECD which he thought delegations might find
useful.  He suggested that the Secretariat circulate informally the "Key Findings" of this document to
Members .  
7. The representative of Brazil, referring to an earlier discussion in a subsidiary body regarding
organisations presenting their contributions the Council's subsidiary bodies, recalled that there had
been some doubt expressed as to whether a document by UNCTAD on subsidies in services should be
circulated.  He sought to make the point that his delegation had disagreed with the position taken by
some Members who had attempted to veto the participation of other important international
organisations in helping to solve the impasse on some of the issues related to services.  His delegation
welcomed every contribution that could shed light on the various services issues and in this regard
welcomed the Chair's initiative on the paper from the OECD.
8. The representative of Canada informed the membership that Canada had presented a donation to
the International Trade Centre to help some developing countries benefit from a programme that
assisted them in the assessment of services economies in terms of imports and exports.  She recalled
that the ITC had created a programme in order to help developing countries make assessments and
had conducted a number of pilot projects, which she believed had been completed.  As Canada foundthese programmes had proven helpful to developing countries in conducting an assessment and
participating in the negotiations in terms of requests and offers, Canada was working with the ITC to
provide a contribution in favour of ten countries who had expressed an interest in the programme.
She noted that more countries had expressed interest and she encouraged other Members to come
forward with funds so that these countries could take advantage of the programme.  She said theprogramme had entered its sixth phase, which brought together the ITC and the WTO, and which tried
to translate the assessment information gathered from business communities into request and offers.
This phase brought people involved in the assessment to Geneva, and Canada hoped that, with the
help of the partners involved, the information gath ered would lead to fuller participation in the
negotiations.  She thought that it might be helpful for the ITC to make a short presentation to theCouncil at the next session in order to better inform all Members about the programme and so that any
Member who might have an interest in the programme could make itself known.
9. The Chair on behalf of the Council thanked Canada for its contribution to assist developing
countries in conducting assessments of trade in serv ices and furthering their ability to participate in
the negotiations.  He also took note of Canada's suggestion to invite the ITC to make a presentation.
10. The representative of the United States noted that her delegation had been a supporter of the work
of the ITC and said that the United States was studying the programme mentioned by Canada.  She
recalled that the United States had contributed funds for some projects related to trade in goods to the
benefit of developing countries.  She said that this initiative was very pertinent to the work on
assessment.  Her delegation was interested in the work of a number of organisations, including
UNCTAD and the ITC.  The United States remained interested in any support that could be provided
for work at the WTO, including the assessment, and examined each initiative carefully on a case-by-
case basis to make sure that the work was progressive.
11. The representative of Pakistan thanked the Chair for his earlier report and hoped that he would
shortly be able to resume his consultations on the assessment.  With respect to the Chair's invitation
for delegations to suggest elements for the discussion, he believed that many developing countries had
made substantial contributions which indicated in which direction an assessment of trade in servicescould move forward.  In this regard, he recalled document S/CSS/W/114 circulated in October 2001,
which contained elements that he felt could help the Chair in his consultations.  He was not
suggesting this document to the exclusion of others and, bearing in mind the Secretariat compilation
of assessment documents, he believed that elements could be identified from these documents.  HeTN/S/M/8
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indicated that he was flexible as to whether the Chair would want these elements to be gathered by
individual or a group of delegations or the Secretariat.  He said that his delegation was more interested
in seeing the consultations begin at the earliest, and would appreciate any help from the Secretariat.
Turning to the paper from the OECD Secretariat, he echoed comments by Brazil concerning an earlier
discussion on a paper by UNCTAD.  He shared the frustration Brazil had expressed regarding a paperby an observer to the Council that could assist its work  on subsidies.  He said that he failed to see the
systemic concerns that had been raised in the context of that discussion.  Echoing Brazil, he said that
his delegation would not block the distribution of a document from an international organisation
which could contribute to the membership's informa tion and knowledge about issues, and in that spirit
his delegation welcomed the OECD paper.  He expressed his gratitude to Canada for its contribution
to the ITC and he believed that this contribution would help developing countries and LDCs in
carrying out national assessments of trade in services, which would help them to draw up theirrequests and offers based on well-thought out national opinions.
12. The representative of Japan, referring to the OECD paper, felt that this was a useful document and
was he was glad that it would be distributed.  He suggested that a presentation of the paper's contents
be made by the OECD.  He believed that the paper "Services Liberalization:  Identifying
Opportunities and Gains", which contained examples  of developing country services exports and a
modelling of the economic benefits of services trad e liberalization, included an interesting analysis
and was rich in concrete business examples.  He felt that the information could be used for the
assessment and for bilateral discussions.  He highlighted a few of the report's observations, including
the examples of developing countries that were found to have gained from liberalization in the
domestic services market and not from seeking improved market access in foreign services markets.He also recalled the report's observation that a strong domestic market was a platform for developing
export capacity, such as in telecommunications, audio-visual and retail services.  He highlighted as
well the exceptions to this observation, such as in information technology and related services where
geography was less determinant, as well as tourism services where companies could initially aim at
global markets.  Another exception he said was the development of domestic export capacity throughimported services, for example when developed country subsidiaries based in developing countries
were active in export markets.  He suggested that a further discussion on the paper, preceded by a
presentation by the OECD would be useful.
13. The Chair took note of the suggestion to invite the OECD to make a presentation on the paper to
which the delegation of Japan had referred.
14. The representative of Venezuela sought to thank Canada for its contribution and said it was a
good example to be followed in helping developing countries to prepare their offers.  With regard to
the OECD paper, he expressed concern that some delegations had welcomed it without question,
whereas, with respect to UNCTAD documents which he recalled was a multilateral organisation
under the United Nations umbrella and not a regional organisation, obstacles were placed before the
discussion of these documents.  He did not feel that this type of discrimination should occur against a
multilateral organisation, particularly in comparison to work by a regional organisation.
15. The representative of Cuba expressed gratitude to the delegation of Canada for its contribution.
She echoed earlier comments made regarding the distribution of documents and said that documents
of all sources, including the OECD and UNCTAD, were  helpful and should be used.  She did not feel
that any source of information should be discriminated against and asked the Chair or the Secretariat
to explain any applicable procedures.  She felt UNCTAD documents should be an available resource.
16. The representative of Chile echoed the gratitude expressed by others to Canada for its
contribution and hoped that others would follow its example.  Turning to the question of the
distribution of documents and sharing the frustrati on expressed by others in the earlier discussion in
the WPGR, she said that her delegation would not  oppose the distribution of documents and felt that
all information should be welcome as it could help the Council's work.  Chile welcomed the documentTN/S/M/8
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and presentation from the OECD; however, she hoped that this same readiness would be demonstrated
by all in order to share knowledge and forward the objectives of the Organisation.
17. The representative of Brazil wished to seize the opportunity to point out that double patterns were
being utilised in the Organization.  He said that were his delegation to behave as had others, it would
indicate that it could not agree to the OECD paper being distributed, and it would oppose Japan'ssuggestion that the Council invite the OECD.  He was not clear whether the concerns that had
expressed were systemic or specifically related to UNCTAD, because the European Communities and
the United States had not requested a bibliography prior to the circulation of the OECD document in
order to ensure that no harmful information was presented.  He indicated that the question had become
of systemic concern for his delegation, and might need to be examined in terms of the procedures for
observers.  He sought to use the opportunity to clarify the question.
18. The representative of the United States expressed regret that a procedural issue had been raised to
the detriment of a valuable discussion on the assessment of trade in services to which many
developing countries wished to see given more attention and focus.  She registered her delegation's
concern about the characterisation of statements made regarding the role or behaviour of an
institution.  She stated that the a delegation could express concern regarding the content, nature, future
use and purpose of a specific study where these were not clear and which could be used in a negativemanner in a formal meeting or panel proceeding.  She recalled that concerns had been expressed by
some developing countries in the past about certain institutions without these concerns being taken as
disparaging of the institution.  The United States position, she reaffirmed, was not with respect to an
institution, but had sought to clarify the type of study that was being requested and the use that
Members would make of it.  As far as she was aware in the context of the assessment no request hadbeen made for UNCTAD to present a paper, though her delegation was willing to explore this
possibility.  She said that from time to time and on a case-by-case basis concern by various Members
had been manifested in terms of the type of papers discussed and presentations made.  At the same
time, she recalled that a Member was not prevented from presenting a study, introducing data or
obtaining information from any source.  She was perplexed as to how the perception had emerged thatdelegations were prevented from receiving information from any institution, as she had made no
suggestion that a paper or a statement from UNCT AD as an observer could not be put forth.  She
regretted that in clarifying her position, she had had to evoke UNCTAD in particular and stated that it
was not done with disparaging intent.  It was of concern to her delegation that certain delegations had
interpreted her position to mean that UNCTAD should not make a presentation.  Rather, her position
had sought to clarify, in light of past problematic experiences, what the study involved since it
pertained to a certain area that was highly sensitive to her delegation.  Members had seen many usefulcontributions from UNCTAD and ones from other institutions of less use in her delegation's view.
She said that, although she understood the argument that such information did not compromise a
delegation's position, it was also time-consuming to defend or correct errors, or to request an
additional statement in order to set the facts straight.  She said that a study's inputs needed to be
factual, as otherwise time was lost discerning the facts and work was confused and delayed.  She saidthat her delegation, on the present occasion, had been prepared to discuss the OECD paper, and would
have been prepared to discuss any other that had been on the agenda.  She reiterated that her
delegation would examine requests for studies and could have concerns with the purpose of these
studies.  In this regard, the proposal in the WPGR had merit and her delegation was examining it,
including possible ways to present the information in a way similar as had been done in theCommittee on Financial Services.  She recalled that her delegation was considering ways to move
forward with the request, which, she noted, she had pointed out to those delegations expressing
frustration.  She stated that it was the right of any Member to express concern in these types of
situations.  She hoped that the discussion could move forward and looked forward to any other
manner to profit from the work of other institutions.
19. The representative of Thailand recalled that her delegation had significant interest in the
assessment and had put forth an assessment on its national experience.  She also thanked Canada forTN/S/M/8
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its generous contribution to the ITC and expressed interest in learning more about the ITC's
programme.  She felt that there needed to be consistency in the treatment of international
organisations.  She expressed her confidence in the research ability of the OECD and UNCTAD and
felt that their work was of use to Members.  She felt that Members should treat consistently the
requests for the circulation of studies for information purposes to various bodies.  She suggested thatthe paper on subsidies be circulated to the WPDR and treated in the same manner as the OECD paper
in the Special Session.
20. The representative of Uruguay, referring the OECD paper, said that the suggestion to circulate it
had been made without advance notice and that Me mbers had demonstrated flexibility in receiving
information that could contribute to discussion.  He felt that in order to be consistent with the
approach of some Members, a bibliography could be requested from the OECD before Members
could proceed with discussions.
21. The representative of the European Communities clarified that his delegation held no prejudice
against UNCTAD and that it had indicated, in the discussion in the WPDR, its desire to consult with
its capital on the request.  His delegation did not seek to question the work of UNCTAD and stated
that it was conducting important work.  His delegation would participate in an up-coming experts
meeting which he hoped would be successful.  It was clear that no double standard existed, that theintention was to continue discussion, and that it was preferable to hold debate on factual and credible
information.
22. The representative of  the United States sought a clarification as to the nature of the request or
proposal from Thailand.
23. The representative of Mexico noted the exchange of views on this point and presumed that the
point to be raised by the representative of UNCTAD under Other Business was related.  If this
presumption were accurate, he thought that it might be helpful for the UNCTAD representative
elaborate on the document.  Mexico had no objection to receiving documents in the working groups
and the Council, and felt that similar approaches should be used to the submission of documents.
24. The Chair asked delegations to return to the discussion on the assessment of trade in services.  He
was aware of the earlier discussion and the rules of procedures that should be followed.  He said that
the representative of UNCTAD would be making a statement under Other Business that was not
related to the topic under discussion.
25. The representative of Tunisia, on behalf of the African Group thanked Canada for its contribution
to the ITC to help Members conduct assessments.  He felt this was an important initiative that should
be followed in order to help African and other developing countries participate in the negotiations.
He invited other donor countries to follow this example.  He stressed that African countries wished tobenefit from these types of technical assistance.  He enquired as to the criteria to benefit from this
programme.
26. The representative of Malaysia said his delegation was interested in the discussion regarding the
UNCTAD paper but, heeding the Chair's advice, would not speak to it at the present juncture.  As
others, he sought to express his delegation's gratitude for the contribution made by Canada to the ITCprogramme on assessment.  On the assessment of trade in services proper, he noted that his delegation
had an oral contribution, which his delegation had prepared in response to the requests by delegations
to provide information on national experiences with trade liberalization in services.  In this regard, his
delegation had a statement on financial services which touched upon Malaysia's experience in this
sector over the preceding years.  He also indicated that some of the issues the paper referred to wereof relevance to the review of progress in negotiations and had a bearing on Malaysia's position with
regard to the financial services sector.   He said that Malaysia's financial system had evolved over
time and the policies had been modified according to changing circumstances domestically andTN/S/M/8
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internationally.  He said that Malaysia sought to focus on developing an efficient and sophisticated
financial system that could meet the financing needs of the economy as well as support, he
underlined, national policy objectives.  In this context, while Malaysia recognised that the opening up
of the domestic financial sector to foreign competition would contribute towards creating a more
efficient, competitive and market-driven financial sector, such opening needed to be implemented in acareful and phased manner.  He reiterated that this process should be progressive and measured.
27. In terms of the foreign participation in the Malaysian financial sector, the representative of
Malaysia stated that it had always been significant in the domestic financial sector.  A careful study of
Malaysia's commitments at the conclusion of the financial services negotiations in 1997 reflected the
commitment of the Government to bind its existin g liberal policies on foreign ownership.  In the
banking sector, the Government had allowed the 13 foreign banks established to maintain their 100
per cent equity ownership, but they had been required to be locally incorporated.  Malaysia had alsobound foreign presence at an aggregate maximum of 30 per cent of the total equity of a domestic
banking institution.  In the insurance sector, existing foreign shareholders were allowed to increase
ownership subject to a maximum 51 per cent of the equi ty of the insurance company.  He said that the
new entry of foreign insurance companies was also allowed through participation of up to 30 per cent
of the total equity of a locally incorporated insurance company.  The capital market had also
progressively opened to global players, with gradual increases in foreign equity participation in stock
broking, fund management and the entry of managers, specialists, experts and professionals.
Malaysia had committed to 49 per cent foreign equity in stock broking companies and, under
appropriate circumstances, a11owed 100 per cent foreign ownership, such as in the management
investment advisory.  He concluded that Malaysia had made important commitments.
28. Turning to the challenges faced by Malaysia, the representative of Malaysia stated that in the
aftermath of the economic and social turmoil created by the Asian financial crisis, Malaysia had found
it necessary to vigorously pursue its long-term objective of building a resilient, competitive and
dynamic financial sector which would play a catalytic role in the transformation of the economy and
serve as an engine of growth.  He said that this was an important national policy objective.  He statedthat in order to prepare the domestic institutions for future liberalization, a timeline of ten years had
been set aimed at building a core of strong and forward-looking domestic players.  The timelines were
encapsulated in the Financial Sector Masterplan and the Capital Market Masterplan, both of which
had been launched in 2002 and provided a guide on Malaysia's approach towards financial
liberalization and the strategies that would be adopted.  The focus of both master plans in phase 1 was
on building capacity.  For this purpose, the emphasis was to enhance the effectiveness and
competitiveness of domestic financial institutions and to establish an efficient consumer protectioninfrastructure.  While progress had been on track in phase 1, he said that several developments in the
past year had posed serious difficulties for the domestic institutions, and the authorities had had to
review some aspects of the implementation.  One of the greatest challenges faced by domestic
institutions was their ability to compete effectively in a more liberalized environment due to skill gaps
which were still lacking in critical areas, particularly in the area of credit and treasury riskmanagement in the banking sector.  He recalled that it had been acknowledged by the Basel
Committee on Banking Supervision on the New Capital Accord that the emerging economies in Asia
faced difficulties in implementing the Basel requirements due to a lack of skills.  In the next decade,
the banking and broking sectors were expected to experience greater and more dramatic structural
changes.  Advance communication technology was rapidly changing the way business was beingconducted.  In this regard, financial services entities would require large amounts of capital
investments to remain competitive and to be able to assume higher risks.  To provide for stronger
capitalization of the domestic institutions, he said that the banking and broking institutions had
embarked on a merger programme.  As at end December 2002, from 54 institutions, the domestic
banking institutions had consolidated into 10 banking groups.  In contrast, there were 13 foreign-owned commercial banks.  In the broking sector, as at December 2002, the number of stock broking
companies stood at 40, as compared to 66 when the consolidation programme commenced in 2000.
This merger process was a first for Malaysia in terms of its scale and complexity, as it involved moreTN/S/M/8
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than 50 banking institutions and 66 stock broking companies.  It was not surprising therefore that the
financial sector was still undergoing a process of restructuring and consolidation, particularly in the
broking industry, where some players were still at work finding merger partners.
29. The representative of Malaysia stated that his delegation, as a Member of the WTO, was
committed to long-term gradual and progressive liberalization of the financial services sector.However, at the same time, he felt it important to  ensure that the implementation of liberalization was
to be achieved in the context of Malaysia's needs, namely, for the financial sector to assume the role
of supporting the nation's economic development agenda.  It was his delegation's position that for the
benefits of liberalization to be fully realized, the pace of liberalization had to be in tandem with the
capacity and ability of the system to absorb these changes without undermining financial stability.
Liberalization had to be carried out at a pace that was consistent with the prevailing conditions,
infrastructure and regulatory framework and the n eeds of the economy.  It was equally important that
liberalization did not marginalise the domestic financial institutions.  An important lesson of the last
financial crisis had been that liberalization strategies needed to be accompanied by increased
regulation, effective supervision and enhanced capacity building.  His Government had a
responsibility to its domestic constituency to ensure that wealth was distributed equitably.  To achieve
this it was imperative that domestic institutions were given a fair chance to equip themselves to faceglobal competition.  This was why Malaysia had chosen to approach liberalization in a sustainable
and progressive manner.  The approach encompassed a question of time, but not intention.
30. The representative of India, responding to the Chair's invitation for suggestions, indicated that he
shared the view that informal consultations should commence at the earliest and be based on
contribution by Members.
31. The representative of Switzerland thanked the repr esentative of Malaysia for its statement.  He
requested that a written or electronic copy of the statement be made available to interested
delegations.
32. The representative of Thailand, in response to the United States, indicated that she felt that
procedural consistency was desirable among various bodies.  She expressed gratitude for the
intervention from Malaysia and stated that the information had been useful.  She recalled that
Thailand had experienced a similar consolidation process and had stabilised its financial sector, and
she understood the difficulties involved in this process.  She echoed the point made by Malaysia
regarding the need for a regulatory framework that governed the current state of the financial sector.
She recalled that the rules of the financial sector were elaborated by a handful of countries, the
standards and guidelines of which many developing countries had strove to implement including
Thailand, although not always to the satisfaction of it s trading partners.  She noted that some of those
countries who set the standards were hesitant to adopt them.  Although many countries recognised the
need for balanced and sound standards in the financial sector, she said that the process of catching up
to the developed country rules took time.  She entirely agreed that liberalization of the financial sector
should be accompanied by the creation of a sound regulatory framework which required time.  Like
Malaysia, she felt that the approach referred to a question about time and not intention.
33. The representative of the United States requested that a written copy of the statement by Malaysia
be made available as it provided very useful information for those seeking to analyse where any
problems might exist.  She also welcomed the comments from Thailand on that delegation's
experience and she hoped that some of the work of the ITC and other organisations would shed light
on problems so that Members could address them appropriately in the assessment.  In response toThailand's question, she indicated that her delega tion would be open to discussing an assessment
paper from UNCTAD.  She could supported having a bibliography on subsidies in the WPGR from
the OECD if that was of interest.TN/S/M/8
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34. The representative of Indonesia expressed concern with the state of progress of the discussion as
stated in Article XIX:3 and the Negotiating Guidelines.  His delegation was of the view that Members
should not consider the assessment as a secondary matter, since it was critical to developing countries
and its result would be important for the smooth im plementation of progressive liberalization of trade
in services for them.  In the same way that some Members had questioned the desirability orpossibility of having emergency safeguard measures, he felt that developing country Members needed
to question the desirability and possibility of further liberalization of trade in services based on the
result of an assessment.  He said that the importance of such an assessment to developing countries
was recognised explicitly by GATS Article XIX:3, which referred to Article IV:1.   He felt that these
issues should be addressed and work finalised in a timely manner in order to meet Members' needs for
scheduling commitments and to respond to domestic inquiries.  He recalled that Article IV spoke not
only of market access, but also the need to assist  developing countries in building domestic capacities.
In that regard, his delegation welcomed the contribution by Canada to help developing countries
better participate in the global market.
35. The representative of Pakistan requested that a written copy of the statement by Malaysia be made
available so that Members could examine it more closely.  On the Chair's points regarding elements
for structured consultations on the assessment, he s ought clarification as to the format that these
suggested elements from delegations should take.  He also inquired as to the timeframe the Chair had
in mind.
36. The Chair said that a compilation of assessment documents by the Secretariat could be updated if
Members wished.  He thought it might also be useful to go through the assessment documents to
identify any common elements they might contain.  He clarified that he did not see these elements assolely for use in consultations, but thought that an  overview of the assessment, and the main elements
which had emerged from the discussions and the submissions made might be useful in order to
structure and focus the discussions.  With respect to the timeframe, he said this would depend on
Members.  He recalled that the Council had a number of items pending, including the modalities for
the special treatment for LDCs and consideration of S&D proposals, and that meeting rooms andavailability of interpretation was limited.  He said he had taken note of the interest expressed.
37. The representative of the Philippines supported th e Chair's initiative for informal consultations on
this issue as well as the proposal to have a more structured discussion on the basis of elements that
were on the table, although he did not want to prevent any Member from adding any additional
elements.  Second, he wanted to commend Malaysia for its statement, which was one born from the
experience of the Asian financial crisis and which most in ASEAN had shared.  He felt that his
delegation had made substantial commitments in financial services in the spirit of progressiveliberalization in the Uruguay Round.  He echoed Malaysia's comments that, while he recognised that
the opening of the domestic financial services sector to foreign competition contributed to a more
competitive and efficient market-driven sector that would benefit the economy, he said that such
opening needed to be implemented in a careful and phased manner.  He said that the approach was
underpinned by certain factors, for example, the need for economies to enhance the competitivenessof domestic financial institutions as well as establish efficient consumer protection and infrastructure
as part of capacity building prior to undertaking drastic financial services commitments in the round.
He said that the findings of the Basel Committee on banking supervision on the new capital accord
applied equally to all economies in Asia which faced difficulties implementing the Basel requirements
due to a lack of skills.  He also echoed the comment that his delegation was committed to progressiveliberalization in the financial services sector; however, in order for the benefits of this process to be
fully realised, the pace of this liberalization needed to be in tandem with human capacity and the
ability of the system to absorb change without undermining financial stability.
38. The representative of Jamaica expressed her delegation's appreciation for the presentation by
Malaysia.  She said that, based on her country's experience with the liberalization of financial services
and difficulties it had faced in late 1990s, her delegation could identify with Malaysia's comments andTN/S/M/8
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conclusions.  She noted that Jamaica had made commitments in this sector and recognised the benefits
linked to this liberalization, such as the development of a competitive and efficient financial services
sector.  However, she noted that Jamaica was in the process of rebuilding this sector and
strengthening its regulatory framework, which she agreed required time.  She echoed Malaysia's
conclusion that the of pace liberalization had to be in tandem with the capacity and ability of thesystem to absorb changes without undermining financial stability.  Liberalization needed to be carried
out at a pace consistent with the prevailing conditions, infrastructure and regulatory framework, and
needs of the economy.  Finally, she agreed that lib eralization needed to be accompanied by increased
regulation, effective supervision and enhanced capacity building.
39. The representative of Brazil requested that the Ch air summarise the situation with respect to the
status of the submission of documents and a form al presentation by the OECD.  The Chair responded
that the submission of documents was dealt with through the appropriate procedure.  He recalled that
he had suggested that a document from the OECD be circulated.  On the question of a presentation, he
said that there had been a suggestion that the OECD be invited to make a presentation of the
document, which could occur in the autumn, subject to the OECD's and Members' agreement.  The
representative of Brazil indicated that his delegation would revert to this question later in the meeting.
40. The representative of Malaysia indicated that his delegation would have its statement made
available.2
41. The Chair stated that the Council had welcomed and expressed its gratitude for an important
contribution by Canada to the ITC in favour of an assessment programme for a limited number of
developing countries.  He encourage other potential dono rs to follow this example.  He recalled that a
suggestion had been made to invite the ITC to make a presentation about its programmes in order tobetter inform interested Members as to how they might take advantage of the services of the ITC.  He
also took note that Members had agreed to have circulated a study from the OECD for information,
and that there had been a suggestion, still outsta nding, that the OECD be invited to make a
presentation on it.  He said that a substantial and interesting presentation on financial services had
been made by Malaysia.  He thanked the delegation of Malaysia for its important contribution to theCouncil's work.  In terms of future work, he said that the Secretariat would be updating as required its
note on the documentation presented under this item, and that past submissions could be looked at in
future open-ended consultations to structure and focus the Council's work.  He suggested that the
Council revert to this item later in the meeting onl y with regard to the question of the OECD, and that
the Council take note of the statements made.
42. It was so agreed.
B. MODALITIES FOR THE SPECIAL TREATMENT FOR LEAST-DEVELOPED
COUNTRY MEMBERS
43. The Chair recalled that at the last meeting Members had held a substantive discussion on this item
based on a revised draft of the modalities from the LDC Group contained in document TN/S/W/13.
Members had expressed gratitude for the significant efforts expended by the LDC Group in preparing
this revised draft.  Notwithstanding the considerable will among Members to move forward with workon these modalities, he recalled that a number of interventions pointed to concerns that some
delegations had with the text, some of which had been elaborated upon at an open-ended informal
meeting held on 11 June.  As he had indicated on that occasion, he had been engaged in consultations,
and in this regard, he drew Members' attention to  a note by the Secretariat, contained in JOB(03)/127
which sought to present the drafting elements suggested by some of the non-LDC Members.  He saidit had been produced in the interests of transparency and was intended to assist delegations.  He stated
that the United States had not been able to attend one of these consultations and had made available
                                                     
2 Circulated at TN/S/W/17.TN/S/M/8
Page 10
its suggestions, which had been subsequently circulated in document JOB(03)/133.  In his view,
further consultations were necessary as the process logically moved into the drafting stage and he
hoped that Members would take advantage of the period remaining before the shortened summer
break in order to make timely progress.  He stat ed that in his consultations, including with LDC
Members, the will and intention existed to finalise work before the Ministerial Conference in Cancun.
44. The representative of Bangladesh indicated that the LDCs had taken note of the documents the
Chair had referred to and had directed them to capital for consideration.  He hoped to be able to revert
to the paper in consultations.  He requested that the texts be made available in French in time for these
consultations for the benefit of the francophone delegations in the LDC Group.
45. The representative of the United States indicated that her delegation had been unable to attend an
earlier consultation, which had prompted it to put forth its comments in draft form.  These comments
had not been included in the Secretariat note because they had reached the Secretariat after thecirculation of its draft.  She indicated that in a drafting session her delegation would engage its
language.  She expressed her support for the Chair's suggestion for further consultations, and she
hoped that any further draft would include the United States input.
46. The representative of the European Communities welcomed the effort by the LDC Group and the
Chair for his useful consultations.  He felt that the draft by the Secretariat reflecting Members' views
was a good basis on which to achieve quickly the objective of establishing the modalities.  He said
that the  European Communities attached importance to  this issue as it felt that the modalities should
create a framework through which LDCs could participate actively in the negotiations.
47. The representative of Australia shared the Ch air's commitment to completing the modalities in
time for the Ministerial Conference.  She thought that it would be a boost to the consideration of
services issues.  Thanking the Secretariat for the draft it had prepared, she indicated that her
delegation had some drafting suggestions that it sought to make in consultations.  Her delegation took
note of the drafting suggestions by the United States.
48. The representative of Uruguay said that, as the present meeting was the last prior to Cancun, it
was also the last opportunity for Members to adopt any result.  In this regard, he wondered whether
the Council might wish to leave this item open in order to allow the Chair to continue his
consultations and for the Council to resume in formal session in order to forward the results to
Ministers in Cancun should events so warrant.
49. The Chair suggested that the Council leave this item open in order to allow it to formally approve
the modalities at a later point in time should the results of future informal consultations so warrant.
50. It was so agreed.
51. The Chair, re-convening the formal meeting of the Council for Trade in Services on 3 September,
recalled that in July the Council had agreed to l eave the item pertaining to the modalities for the
special treatment for LDCs open in order to allow for consultations with a view to achieving
consensus and adoption of a text.  He said that after numerous consultations, he had prepared a draft
text contained in document JOB(03)/184/Rev.2.  Tw o minor modifications had been proposed to this
document:  the first in paragraph 4, the last sentence, the addition at the end of the second sentence,"of the GATS"; the second in paragraph 6, the first sentence, which would read "Members shall, as
provided for in Articles IV and XIX of the GATS, give special priority to providing effective market
access in sectors and modes of supply of export interest to LDCs, through negotiated specific
commitments pursuant to Parts III and IV of the GATS."
52. The representative of Brazil stated that, with regard to the references to Article XIX in paragraphs
6 and 9 and the impression that the text gave, it was his delegation's understanding in this regard that,TN/S/M/8
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as a developing country, Brazil did not share the same obligations of developed countries as far as the
modalities were concerned.
53. The Chair proposed that the Council take note of the statement made by Brazil and that the draft
text contained in JOB(03)184/Rev.2 be adopted with the amendments he had just outlined.
54. The draft was adopted.
55. The Chair indicated that he would be requesting through the Chair of the General Council that an
adjustment be made to the draft ministerial declaration where there was a place-holder concerning the
modalities adding language to the effect that Ministers would welcome the adoption of the Modalities
for the Special Treatment for LDCs in the negotiatio ns on trade in services.  He thanked delegations
for their flexibility and constructive approach throughout the consultations.
56. The representative of the United States thanked the Chair for his efforts and expressed her
gratitude to the LDCs for their tireless work a nd commitment to the issues which allowed for the
modalities to be adopted.  She felt that this would send a positive message prior to the meeting in
Cancun.  Her delegation sought to make the point that, notwithstanding the fact that her delegation,
like other developed country Members, would use all of their efforts and resources to try to realise
along with LDCs the benefits of the services ne gotiations, she hoped that other developing country
Members would act in kind, and not get bogged dow n in a discussion of who was responsible for
what.  In fact, the type of trade that would bring the quickest benefit to LDCs would probably start
with neighbouring developing countries.  She felt that the responsibility was a shared one.  She did
not expect Members to be absolutely equal in their actions; however, they should endeavour to do
what they could.
57. The representative of Bangladesh, speaking on behalf of his ambassador, said that on behalf of
least-developed countries, he expressed his sincere gratitude to the Chair and the Secretariat.  The
modalities would not have been arrived at without his strong determination and dedication.  His effort
had been exemplary in the Organisation.  He considered the negotiations in services of prime
importance to the LDC Group.  In fact, there were numerous estimates that the potential benefit of
free trade in services could be several times that of free trade in goods.  Moreover, the greatestpotential benefit for all laid in the liberalising of the movement of natural persons.  It was estimated
that a temporary visa scheme for temporary labour and not migrant labour that amounted to no more
than 3 per cent of the OECD labour force would give economic benefits for both developing and
developed countries equivalent to US$150-200 billion.  To date mode 4 had been of limited
significance to LDCs whose competitive advantag e laid in the export of less skilled persons.
Paragraph 9 of the modalities indicated that mode 4 was the most important mode of supplying
services internationally, and in this paragraph, the LDCs had implied the movement of less skilledpersons supplying services internationally.  Effective market access this area would make an immense
contribution to efforts to alleviate poverty.  In his view, no other area had more to offer to LDCs and
to other Members.  He therefore called upon Members, and particularly the developed countries, to
give special and serious consideration to the implementation of paragraph 9 of the modalities.  He
highlighted that LDCs as a group accounted for a mere 0.4 per cent of the total world export of
commercial services.  The LDCs modalities was a means for increased participation of LDCs in trade
in services.  The participation of LDCs in international trade could not be enhanced without effective
market access and national treatment in sectors and modes of supply in sectors of export interest to
LDCs.  The success of the modalities would depend on their full and effective implementation.  He
urged Members to facilitate the increasing particip ation of LDCs in services trade.  He thanked
Members who had contributed to the realisation of the modalities and he said that without their active
participation the Council would not have been able to complete its work.
58. The representative of Djibouti endorsed the comments made by the representative of Bangladesh.
He said that the efforts of the Chair and the Secretariat had been key to achieving a result.  He alsoTN/S/M/8
Page 12
thanked the representatives of the United States and the European Communities for their efforts.  He
recalled the LDCs' economic, political and social situations whose remedies were often beyond the
capacity of their governments.  He said that these were situations specific to the LDCs, and he urged
developing country and developed country Members to take into account these situations in keeping
with their own development situation.  He thanked Members for the flexibility that they had shown.
59. The representative of Canada thanked the Chair and the Secretariat for their intensive efforts.  Her
delegation was of the opinion that the implementation of the modalities in favour of the LDCs was a
shared responsibility of all Members.
60. The representative of Senegal welcomed the adoption of the Modalities for the Special Treatment
for Least-Developed Country Members in the negotiations on trade in services, and said that the
efforts of the Chair over the previous months were a testimony to his leadership, talents and
flexibility.  He also conveyed his thanks to the Secretariat for its work.  He welcomed the conciliatoryapproach developing and developed country Members had demonstrated through their comprehension
and flexibility.  Like other LDCs his delegation expected to see market access opened and, even if not
all of his delegation's expectations had been fulfilled, he said that this was the indication that had been
given.  He also took note of the statements made by  the United States, Canada and Brazil.  He recalled
that the plan of action for LDCs in 2001 stated that assistance to LDCs was a differentiatedresponsibility for developed and developing countries.  His delegation hoped that differentiated
market access would be accorded to LDCs in the future and that Members would consider this point
in the work of the Council.  With respect to the statement made by Bangladesh on behalf of the LDC
Group, as well as the statement by Djibouti, he cited a report by the World Bank which stated that
remittances represent the primary source of inco me for LDCs.  This underlined the systemic and
developmental stakes at play for the LDCs which was at the heart of the Doha Development Agenda.
He said that this decision, as well as the future work of the Special Session of the Council would
continue.
61. The representative of the European Commun ities thanked the Chair for his efforts and
determination in achieving the result obtained.  She also thanked the Secretariat for the considerable
work it had conducted in this exercise.  She thanked the LDC Group which had spent long hours in
negotiations and discussions in spite of human resources challenges.  She agreed with the
representative of Senegal that the process that had led to the approval of the text had been
conciliatory.  She felt that the Council had achieved an important step.  She hoped that the adoption of
this text would facilitate negotiations between the LDC and other Members.
62. The representative of Uganda added his voice to those who had thanked the Chair for his efforts
in difficult negotiations that had led to a consensus.  He also thanked other partners for their views
and considerations.  He underlined that the agreement contained modalities, and that market access
had not yet been achieved.  He said that the future would testify to the commitment Members had
expressed, namely that LDCs would gain effective market access in the request-offer process.  His
delegation looked forward to effective market acces s being granted and implemented in the spirit of
the modalities.  With respect to the exceptions that had been voiced, he noted that the adopted textreferred in most instances to Members and he hoped that that this wording indeed reflected the
Members of the WTO as a whole.
63. The representative of Thailand welcomed the successful conclusion of the modalities, and she
thanked the Chair for his tireless efforts and determination.  She also thanked the Secretariat for its
work, and the LDCs for the particular flexibility they had demonstrated.  She hoped that themodalities would prove useful to LDCs in helping them to integrate their economies into the world
trading system, particularly with respect to services.  She said that her delegation and colleagues in
ASEAN attempted to provide assistance to LDCs in that region; however, she recalled the limitations
that these developing countries had in providing assistance.  She recalled that, regardless of its levelTN/S/M/8
Page 13
of development, her country had endeavoured to provide assistance to LDCs and she felt that
Members should remain mindful of the limitations they faced in helping others.
64. The representative of Panama recalled the importance of the services sector and expressed his
gratitude for the Chair's efforts in concluding the work on modalities, as well as to the delegations
who in the end made an extra effort to arrive at a result.  His delegation was pleased that the Council
had arrived at a successful conclusion.
65. The representative of Uruguay expressed his thanks to the Chair for his efforts and congratulated
Members on their achievement in agreeing to the text.  He felt that the time was ripe to conclude work
on the modalities in view of the mandate in Article XIX and in light of the timeframe that all
Members had adopted in the Doha Development Ag enda.  He hoped that the modalities would work
as a positive element at the ministerial meeting in Cancun.
66. The representative of Ethiopia thanked the Chair for his relentless effort, and congratulated
Members on a successful outcome.  He stated that it was incumbent on the membership to realise the
goals expressed in the modalities through their full and faithful implementation.  He requested
through the Chair that his delegation benefit from these modalities in the course of its accession
negotiations.
67. The representative of Malaysia expressed his delegation's gratitude to the Chair and the
Secretariat for its work in achieving agreement.  Referring to the interventions from the LDCs, he
shared their hope that the modalities would prove of benefit to them at the end of the day.  Referring
to comments from developed Members that all Members had, to varying degrees, a role to assume, he
said that while Malaysia did not disagree with these, the point by Bangladesh was well taken that
those capable of doing more could be expected to do more.  In this regard he also recalled thecomments by the representative of Senegal concerning the notion of differentiated responsibility.  He
acknowledged that the text referred to all Members; however, a measure of realism needed to be
added to the equation given the limitations faced by developing countries.  He said that programmes
that existed would be used to the fullest extent possible, which he hoped would lead to a situation in
which the marginalization of the LDCs would not be a topic that would need to be addressed in the
future.
68. The representative of Hungary welcomed the timely adoption of the modalities, even though its
content fell somewhat short of his expectations.  He also thanked the Chair and Secretariat for their
efforts.  His delegation supported the concept of special and differential treatment tailored to the
needs of beneficiaries and that the LDCs merited such treatment.  Finally, in his delegation's view,
every Member had a part to play in line with its individual level of development and capacities in
providing special treatment for the LDCs through the adopted modalities.
69. The representative of Brazil expressed his appreciation for the Chair's and Secretariat's efforts.
He also thanked his colleagues from LDCs and he r ecognised the flexibility that they had shown.  He
hoped that in other areas of the services negotiations flexibility would also be demonstrated by all
parties and not from one group of Members.  He recalled that the initial language for the draft
modalities that had been provided by the LDCs had referred to developed Members and to the extentpossible other Members.  Given the concerns expressed by developed Members in this regard,
compromise language had been reached.  In this regard, he reiterated that his delegation saw its role in
the process, but also saw that the burden for developing countries was not the same as for developed
countries with respect to the LDC concerns in the negotiations.
70. The representative of Japan thanked the Chair and Secretariat for their work in completing an
important task.  He expressed his sincere gratitude to the LDCs, and especially the distinguished
representative of Bangladesh for his competent coordination.  Japan was committed to working with
all Members in increasing the participation of LDC Members in the current negotiations.TN/S/M/8
Page 14
71. The representative of Switzerland extended his delegation's thanks for the Chair's efforts without
which a result would not have been possible.  He said that the views and flexibility shown at the
appropriate time had opened the path to agreement.  He particularly thanked the LDCs in this regard
and said that they had a precious instrument.  He hoped that this instrument would enable them to
involve themselves more actively.  Switzerland considered that all Members should view favourablyrequests from LDCs, which he thought was essential for their economic development.  He expressed
his delegation's satisfaction that LDCs had this instrument in hand and pledged that Switzerland
would give careful and special consideration to any request from LDCs.
72. The representative of Hong Kong, China added his voice to those who had welcomed the
adoption of the modalities for LDCs and thanked Members for their demonstration of flexibility,
especially from the LDCs.  He concurred with colleagues from Malaysia and Thailand that it was
important to translate the words into action.  In this regard, his delegation considered that the adoptionof the modalities was a commitment by the membership  to give the agreed treatment to LDCs.  It was
critical for the rest of the membership to ensure  that effective implementation of the modalities in
order to achieve their purpose.  He expressed gratitude to the Chair and Secretariat for their efforts.
73. The representative of India joined those colleagues who had welcomed the adoption of the
modalities and had thanked Members for the flexibility demonstrated, particularly by the LDCs.  He
also thanked the Chair and the Secretariat.  He stated that it was important that the main purpose of
the modalities, namely the increasing participation of the LDCs in services trade, be realised.  He
associated his delegation with the statements made by Brazil and Malaysia.  He agreed that the
document referred to shared responsibilities, but at the same time it was necessary to be mindful of
the differences in capacity as well as the individual level of development, which had been providedfor in the GATS.
74. The representative of Korea echoed the thanks expressed by others for the efforts of the Chair and
Secretariat.  He also expressed appreciation for the flexibility demonstrated by LDCs in the
consultations process.  His delegation pledged to implement the modalities in a sincere manner in
order to help LDCs increase their participation in trade in services negotiations.
75. The representative of Australia welcomed the adoption of the modalities and felt that the Chair
had done a sterling job at bringing the negotiations to a close.  He expressed appreciation for the
flexibility demonstrated on all sides, as well as for the work of the representative of Bangladesh.
Australia considered the implementation of the modalities as a shared responsibility and pledged to do
its part.
76. The representative of El Salvador congratulated the Chair on his work and felt that the modalities
would be good news for ministers.  The document was an important one, particularly for the LDCs.
In order it to have positive consequences, he agreed with the representative of Brazil that all would
have a responsibility to implement the modalities.
77. The representative of Haiti congratulated the Chair for his efforts as well as those of the
Secretariat.  He thanked Members for the flexibil ity they had shown towards LDCs and he hoped that
this flexibility would also materialise in the request-offer process.
78. The representative of Cuba echoed the congratulations expressed by others and thanked the Chair
and Secretariat for their efforts, as well as the LDCs for the flexibility they had demonstrated.  Like
other delegations, she hoped that the expectations of the modalities would materialise and contribute
to broader international efforts to assist LDCs.  She took note of statements by the developed
countries that their commitments would be taken seriously in the commercial sphere and that the
requests of LDCs would be given careful attention.  She recalled that Cuba had a tradition of south-
south cooperation, and she hoped that northern countries would demonstrate greater participation and
altruism in order to better and more fairly distribute wealth.TN/S/M/8
Page 15
79. The representative of Bangladesh thanked the distinguished delegates of Japan, Australia and
Hong Kong, China for their kind words.
80. The Chair observed that the Council had accomplished important work and achieved a reasonable
text that carried weight for an important group of Members of the Council.  He remarked that the
Council had concluded the negotiating architecture foreseen in the GATS, and that the negotiationswere well underway.  He said that time was of the essence in terms of putting these elements into
work.  Recalling earlier comments by Uganda and other delegations, he said that the modalities did
not provide or ensure effective market access, but rather it would be up to Members to use the
modalities effectively in order to reap benefits for the LDCs.  He saw the adoption as a triumph for
all, and recognised the tremendous level of flexibility that Members had shown in order to reach
consensus on this matter.  He thanked delegations for their kind words and looked forward to serving
the Council in future endeavours.  Noting that the Chairs of the negotiating bodies had been appointeduntil the meeting of ministers in Cancun, and that as  a result he might not continue in his function, he
said that it had been a pleasure to work with al l delegations.  It was noteworthy that the Council had
achieved in the preceding months two sets of modalities, namely for autonomous liberalization and
for the treatment of least-developed countries, which he hoped would bode well for other areas under
negotiation.  He recalled that a number of delegates had been attributed new postings and heexpressed warm thanks for their very positive contribution to the work of the Council.  He wished
them success in their new responsibilities.
81. A representative of the Secretariat reminded delegations that the next cluster would begin the
week of 29 September for two week s.  With respect to the organisation of a seminar on domestic
regulation, he said that unfortunately efforts to secure financing for the travel of one or tworepresentatives from developing countries had not proven timely.  As a consequence, the seminar
would not be organised in the next cluster of meetings; however, he hoped that funding could be
secured in time to hold the seminar during the December cluster of meetings.  He noted that this
would have implications for the organisation of that cluster.  He then outlined the schedule of
meetings for the cluster in September-October.  He solicited any views delegation might have on thispoint.
82. The representative of Colombia announced that her delegation would be presenting its offer the
next day.  With regard to the organisation of the next cluster of meetings, the representative made a
few suggestions.
83. The representative of Rwanda joined other delegations in thanking the Chair for his work and
effort in bringing the modalities to a successful conclusion.  He informed the Council that his
delegation intended to submit its offer after the ministerial conference.
84. The representatives of Korea, Guatemala , United States , Uruguay , Australia  and Thailand  shared
their delegations' views with respect to the suggested schedule of meetings for the cluster in
September-October.
85. The representative of Djibouti congratulated the Chair for his excellent work in leading the
Council.  Referring to the statement by the Secretariat on the funding of the domestic regulation
seminar, he stated that training seminars were very important for developing countries and in
particular for LDCs.  He appealed for donor Members to do what they could to provide funding in
order to better integrate developing countries, and particularly LDCs, into the multilateral system.  He
thanked donors for the past generosity and hoped that their efforts would continue in the future.
86. A representative of the Secretariat made a few points to clarify the nature of event under
discussion and its funding.  He recalled that funding for regular technical cooperation events had been
allocated.TN/S/M/8
Page 16
87. The Chair, adjourning this item, proposed that the Council take note of the statements made.
88. It was so agreed.
C. PROPOSALS RELATING TO THE NEGOTIATIONS UNDER ARTICLE XIX OF THE
GATS
89. The Chair recalled that at its meeting in May, the Council had had a lively discussion on energy
services based on the presentation of two proposals related to this sector.  The first had been
submitted by group of Members including Chile, the European Communities, Japan and the United
States contained in JOB(03)/89, and the second an addendum to a proposal from Venezuela contained
in document S/CSS/W/69/Add.2.  He also drew th e Council's attention to a new communication from
a group of 14 Members related to the liberalization of mode 4 and contained in document TN/S/W/14.
90. The representative of India said it was a privilege for India to introduce the paper "Proposed
Liberalization of Mode 4" on behalf of Argentina, Bolivia, Chile, China, Colombia, Dominican
Republic, Egypt, Guatemala, India, Mexico, Pakistan, Peru, Philippines and Thailand, which related
to liberalization of mode 4 under Article XIX of the GATS.  He recalled that some Members had
submitted proposals on mode 4 that had been discussed in the Special Sessions and indicated that
Members had also raised issues relating to mode 4 in the bilateral request-offer negotiations.
However, he said that expectations for mode 4 liberalization within most of the initial offers had notbeen met, but rather consisted of either standstill or minimal improvements to existing mode 4
commitments.  Further, he said that market-acce ss commitments in mode 4 might not be meaningful
unless issues related to work permits, visa procedures, recognition of qualifications and economic
needs tests were addressed simultaneously.  He did not believe there had been progress in these
related issues in the appropriate fora.  It was from this perspective that the group had filed the presentproposal in order to focus multilateral attention and discussion on issues raised in the paper, without
which mode 4 liberalization would not be effective.  He said that the importance of mode 4
liberalization to many developing countries could hardly be overemphasised.  At the same time the
interests between developed and developing countries was converging on this topic, which provided
an opportunity for faster liberalization of mode 4.  He stated that this would greatly contribute toincreasing developing countries' participation in world services trade and would be one of the most
significant elements for operationalising Article IV of the GATS.  In this context, he believed that it
was important to discuss the progress in mode 4 under paragraph 15 of the negotiating guidelines and
procedures, which was a standing agenda sub-item in the Special Session.
91. Turning to some of the specific elements contained in the proposal, the representative of India,
referring to its section on the nature of commitments, observed that commitments in mode 4 were
primarily related to commercial presence and the related movement of higher skilled personnel.  Hefelt that commitments in meaningful categories of personnel delinked from commercial presence and
other skills was necessary.  For this purpose, the co-sponsoring group believed that it might be useful
to have common categories recognised in Members' horizontal commitments which could be
complemented by specific sectoral commitments to either address deeper liberalization compared to
the horizontal commitments or persons with additional skill levels not covered in the horizontalsection.  Second, referring to the paper's discussion  of administrative procedures he said that, with
respect to work permits and visas, the real challenge was to differentiate between the temporary
movement of service providers, for which the GATS applied, from permanent immigration and to
devise ways to apply simpler, faster and more transparent procedures for the former.  Transparency of
regulations was another critical element to be considered.  He felt that economic needs tests and theirelimination for the identified categories could substantially promote effective market access in mode 4
and needed to be considered by the membership.  Third, he identified the recognition of qualifications
as another crucial area that needed to be addressed in order to achieve meaningful market access.  In
this regard, he felt that certain alternative approaches could be explored in parallel, both in the
relevant subsidiary bodies as well as in the Special Session.  These approaches were (1) theTN/S/M/8
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development of disciplines under Article VI:4 of GATS covering the areas of qualification
requirements and procedures, licencing requirements and procedures and technical standards.  (2) The
possibility of undertaking Additional Commitments under Article XVIII of the GATS related to
verifying a foreign service supplier's competence to provide the service with a view to laying down
transparent procedures for recognition and to reduce the burdensomeness of domestic regulations inthis regard.  (3) The strengthening of the framework for recognition agreements under Article VII of
the GATS through the compliance with notification and consultation requirements under Article
VII:4(a), (b) and (c) in order to improve transparency and to provide adequate opportunities to third
country Members to negotiate accession to such agreement or to negotiate comparable ones.  In
addition, he suggested that this framework could be strengthened through the development of possible
multilateral guidelines and principles to guide th e establishment of recognition agreements which
could take their cue from the accountancy sector guidelines and build on them with a view toexploring their inclusion as an additional commitment under Article XVIII of the GATS.  Fourth, he
said that a possible model schedule could provid e a framework for uniformity in commitments and
address the other issues raised in the proposal.
92. The representative of India stated that the group of co-sponsors believed that this negotiating
proposal needed to be considered in its entirety in the Special Sessions of the Council for Trade in
Services because of the commercial value of mode 4 commitments and the need to address all the
issues raised in it for providing meaningful market  access for all countries, especially for developing
countries.  The group recognised that some technical issues might need be considered in relevant
subsidiary bodies.  He looked forward to substantive engagement by Members on this proposal with a
view to provide meaningful market access in mode 4 and bring about a desired balance in the marketaccess negotiations in services.
93. Rising on a point of order the representative of  Venezuela observed that his delegation's proposal
had appeared first on the agenda.  He explained that he felt compelled to draw this to the Chair's
attention since Venezuela's proposal in May had also been left to the side in favour of a proposal on
energy services from Chile, the European Communities, Japan and the United States.  He sought anopportunity to further present the proposal from Venezuela indicated on the agenda.
94. The Chair responded that he had not overlooked the proposal from Venezuela.  He explained that
practice saw new proposals presented before opening the floor to delegations having previously
presented proposals for further discussion.  In line with this practice, he indicated that Venezuela was
the next delegation on the speakers' list.
95. The representative of Venezuela accepted the Chair's statement and expressed gratitude for the
opportunity to take the floor.  He stated that at the last meeting his delegation had presented an
addendum to a proposal originally presented in October 2001 regarding the classification of energy
services contained in document S/CSS/W/69.  Vene zuela's proposal was based on a list of commercial
services and was intended to cover all services whic h were commercialised with respect to all energy
sources and included services used by the energy sector and other sectors.  With a view to being
specific, the Venezuelan proposal included all services which were commercialised and marketed inthe energy sector.  The Commercial Reality List it outlined reflected the need to have different
conditions for market access and national treatment in line with the development objectives of
developing countries.  His delegation recognised the need for different classification references and
tools, such as the W/120 list and the UN CPC.  He felt that his delegation's proposal was an evolving
one to which the Members of the energy friends group had contributed and he hoped that the proposalwould be enriched by all participants in the negotiations.  He recalled that the energy friends group
had produced two proposals:  the proposal from Venezuela that had been worked on in the friends
group and a communication from Chile, the European Communities, Japan and the United States.  He
mentioned this in response to some informal questions that he had been asked as to how it was that
two proposals could emerge from the same group.  He replied that the group operated in a democraticfashion, that the two proposals could exist together and that they might be merged in the course of theTN/S/M/8
Page 18
negotiations.  He announced that at an upcoming event, two representatives of the Ministry of Mines
and from the oil industry would be present, and he hoped for a fruitful discussion.
96. The Chair highlighted the extraordinary transparency in the energy friends group and he hoped
that other friends groups in other sectors could share information on work being conducted.
97. The representative of China speaking on energy services classification stated his delegation's
gratitude for presentation made by Venezuela and the papers presented by it and Chile, the European
Communities, Japan and the United States, which had provided valuable material for discussion.  He
believed that a central classification reflecting the international energy services industry in a feasible,
reasonable and precise manner would be conducive to making commitments.  China was studying the
proposal from the group of Members carefully and w ould revert to it.  Making preliminary comments
on the proposal from Venezuela he said it provided clear definitions for energy services classification
and laid a good foundation for further discussion.  Seeking to highlight a few specific points he saidthat geophysical and geological services marked as item 1.3 could include all geophysical services
such as geophysical exploration and geo-chemical  exploration.  Second, further description was
needed for drilling bit services and cementing (pressure pumping) services, respectively marked as 2.4
and 2.18.  Third, China suggested that drilling pipe repair services and down-hole tools repair services
be added to category 2, "Drilling and Completion of Oil and Gas Wells".  Fourth, coal and crude oilrefining, reforming and purification services, marked as item 5.4, needed further clarification as to
what types of activities were included.  Finally, he said his delegation would require more time to
reflect the scope of energy services and welcomed other Members' views.
98. Turning  to the proposal on the movement of natural persons, the representative of China said
that, as one of the co-sponsors, his delegation believed that liberalization of mode 4 would providemarket access to service providers from developing Members and would help to increase their
participation in world services trade as provided for in Article IV.  However, China found that the
results of the Uruguay Round provided limited liberalization of mode 4 and noted that little
improvement was proposed in the initial offers of the developed Members.  China deemed the paper
as timely in order to facilitate negotiations on movement of natural persons under the DohaDevelopment Agenda.  China hoped that developing Members' concerns about mode 4 would be fully
taken into account in the current round of the negotiations.  He sought to underline some of the
practical elements relating to mode 4.  First, mode 4 should be delinked from commercial presence,
and in this regard, China supported the idea of introducing the category of contractual services
suppliers.  He noted that China had raised a similar point in its requests, namely that a natural person
who was awarded a services contract without a commercial presence would be permitted to provide
the service in accordance with the duration, terms and conditions of that contract.  He said thatcommercial presence should not be a prerequisite to this category of natural persons.  In his view,
winning a services contract not only demonstrated a market demand for the services of the natural
persons, but also reflected a recognition of the qualifications of the services provider for the provision
of that service and therefore, the entry of contractual services suppliers should not be restricted.
Second, he said that more sectoral commitments should be made in mode 4 as a supplement tohorizontal commitments, which was of the utmost importance to developing Members in services
sectors apart from professional services.  He said that sectoral commitments should be concrete and
explicit, and the restrictive measures for various sectors and the categories applied to each sector
should be specified rather than addressed through an unclear description in the horizontal
commitment.  He recalled that Members had an obligation under Article III to take effective action toprovide information on these restrictive measures.  Third, the procedures regarding the application for
visas and work permits should be transparent and the standards for approval should be reasonable
wherever specific commitments had been undertaken.  China believed that temporary service
suppliers and permanent immigrants should be treated differently:  the entry of temporary service
suppliers should be administered by a separate and independent set of immigration regulations or aseparate set of regulations within the overall immigration policy system.  Fourth, he said that the
elimination of economic needs test for mode 4 under any form was important for improvement of theTN/S/M/8
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liberalization of the movement of natural persons.  China wished to express through its statement its
hope that the negotiations on the liberalization of mode 4 would achieve concrete results.
99. The representative of Chile said that his delegation would be submitting its offer in the coming
week once a few final technicalities had been addressed.  With respect to the presentation made by
Venezuela, he thanked that delegation for its proposal.  He also sought to made a few points on theproposal presented by India and contained in TN/S/W/14.  For his delegation mode 4 services exports
were important and could be expanded if some of the restrictions mentioned in the proposal were
removed, for example, the lack of commitments for professional and independent workers that
allowed for true market access, and restrictions on the entry and temporary movement of service
suppliers, including those linked to visa procedures.  He felt that some restrictions such as permits
required to supply services were unreasonable.  For example, for architecture or construction service
providers, visas were sometimes issued for a few months in cases where the project extended over alonger period.  He noted that paragraph 5 of the OECD document discussed under item A of the
agenda indicated that developing countries were particularly successful in the construction sector,
which was an acknowledgement of this sector's im portance to developing countries; however, he said
there was no real access to supply these services.  He noted that the OECD paper did not refer to
mode 4, which offered great potential to developing countries for the supply of services.  He agreedwith India that a fundamental issue in services supply under mode 4 was the lack of mutual
recognition of diplomas.  Although most services exports were in mode 4, he said that when the
private sector had been consulted in Chile, it responded that the market access granted under the
GATS was of little practical use to it.  The private sector was generally disappointed with the
opportunities available under the GATS and it had appealed for an increased level of ambition onmode 4 in offers.  He believed that a solution needed to be found in order to achieve true market
access and to overcome problems such as the mutual recognition of diplomas or certificates, the
obtaining of visas, and the duration of visas.  He said that the current situation was not in line with
Chile's main export sector, namely mode 4.  He said that Chile would be participating more actively
in the negotiations and using more fully the GATS and he thought that the Council could monitorprogress or lack thereof with respect to mode 4 as a whole.  He recalled that most of the elements in
the proposal had been addressed by subsidiary bodies, but he thought that the Special Session should
put particular emphasis on progress made in the various subsidiary bodies.
100. The representative of the United States thanked Venezuela for the addendum to its proposal
and said that it would continue to be discussed as an essential part of the work of the energy friends
group to facilitate the scheduling of commitments that provided meaningful market access.  She noted
that her delegation had participated in a useful UNCTAD experts meeting and she commended theDirector of the trade division of UNCTAD for organising such useful events.  She welcomed the
proposal from India and a group of other co-sponsors, and looked forward to studying it and reverting
to it in a future discussion.  She suggested that, when discussing the Chair's report to the TNC, the
Council might want to touch upon mode 4, and indicated that the United States would have some
thoughts in this regard.
101. The representative of South Africa indicated that South Africa was willing to participate
constructively in discussions with the friends of energy services.  She formally requested that South
Africa be noted as co-sponsor of the proposal cont ained in TN/S/W/14.  She informed the Council
that she had received a communication from capital that the proposal was in line with South Africa's
broader policy objectives and she thanked India for its work.  She looked forward to more substantivediscussion on this issue and expressed support for Chile's suggestion for a more formatted and formal
consideration of this issue in the Special Session.
102. The representative of El Salvador said her delegation considered the proposal on
liberalization of mode 4 of interest and indicated it was under study in capital.TN/S/M/8
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103. The representative of Ecuador said that that the proposal on the liberalization of mode 4 was
complete, well-structured and contained key issues related to the topic and she expressed support for
the item being dealt with in the Special Session.  Referring to the categories listed under the proposal's
paragraph 6, she said she would like to see a category corresponding to professional practices,
namely, movement of professionals which would improve transfer of technology and knowledge.
With respect to economic needs tests, she said that there was no mechanism in the GATS to restrict
their application.  She observed that some Members had indicated categories of persons that would be
subject to an ENT in the horizontal section, whic h did not mean that other Members did not apply
ENTs to persons not included in their specific commitments.  Although Ecuador had a comparative
advantage in mode 4, she said that ENTs reduced predictability and that the liberalization of trade in
services would not be successful unless this was addressed.  She suggested that each Member could
indicate minimum quotas for the entry of natural persons providing various services.  For example, intourism, the incorporation of an ESM could limit the need to use an ENT.  She recalled that Article IV
stated that the increasing participation of developing country Members in world trade should be
facilitated through negotiated specific commitments relating to the liberalization of market access in
sectors and modes of supply of export interest to them.  She said that schedules of commitments
contained a serious bias against mode 4 which should be corrected in the negotiations for example inprofessional sectors where the movement of natural persons was an important export for developing
countries.  She said that a special visa related to temporary entry and stay was of interest to her
delegation and Ecuador was prepared to examine its current legislation in this regard.  She reiterated
that the temporary movement of natural persons was of particular importance to developing countries
and she said that some studies indicated that the benefits arising from expanded trade in mode 4would be approximately 35 times greater than those arising from the international flow of goods and
services and would contribute some US$200 billion per year to developing country economies.  This
measure would bear even greater fruit if one took into account positive externalities, especially
through the transfer of experience and technology by highly skilled workers returning to their
countries.  Her delegation reiterated its support for the proposal and its further discussion.
104. The representative of Colombia thanked Venezuela and India for the proposals they had
presented and expressed full support for the proposal relating to mode 4.  She said that it contained
important elements that had been raised by various Members in the negotiations and that her country
considered it to be of importance in order to achieve liberalization in mode 4.  She recalled that
Colombia was among the Members that had submitted a negotiating proposal on this subject and she
indicated that the content of Colombia's requests to its trading partners had reflected this interest.
While her delegation welcomed initiatives, contributions and fora for discussion on mode 4 in thecontext of the negotiations, she recalled that the multilateral setting was an essential complement to
bilateral discussions.  For Colombia the aim of the proposal was to put on the table the elements that
would enable it to achieve greater market access for its services and products in various sectors and
eliminate related obstacles.  Referring to paragraph 4 of the proposal, she said that horizontal and
sectoral commitments should not be exclusively confined to those linked to commercial presence.She thought that the search for common categories was an interesting path that should be explored as
it would contribute to achieving the interests of developing countries in the area of services.  She
emphasised that administrative procedures pertaining to the issuance of visas and work permits were
obstacles which prevented suppliers' access to markets.  She believed that the GATS covered this type
of limitation and she encouraged Members to work in this regard.  She stated that the Colombianprivate sector had complained that it could not enter markets to compete because of obstacles and
requirements for the issuance of visas, such as high costs and long delays.  The issue was of vital
interest to Colombia.  Finally, she said that the aim in presenting the proposal in the Special Session
was to complement work underway in other areas of the negotiations and she hoped that the Special
Session would monitor this work which was of particular importance.
105. The representative of Thailand thanked Venezuela for its proposal and recalled the questions
that her delegation had asked at the previous meeting and looked forward to more detailed discussion.
Her delegation had further examined the proposal and had noted some technical questions which herTN/S/M/8
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delegation intended to raise at the meeting of the Committee on Specific Commitments, including
pertaining to classification.  She reiterated that Thailand had undertaken significant autonomous
liberalization in energy services, but she said that it had not been uniform throughout the sector and
that Thailand had different regulatory regimes for different sources of energy.  While her delegation
was still considering which approach would be most appropriate in the negotiations, she said that herdelegation's thinking would be guided by the differ ences in the national regulatory framework as well
as the different levels of liberalization.  She felt that, because the energy sector was relatively new to
the negotiations and commitments relatively modest, this was a sector in which Thailand would
indicate conditions in order to operationalize Article IV.  Turning to mode 4, she thanked India and
added that the issue of recognition was important to complement market access negotiations on
mode 4.  She believed that more attention should be paid to sectoral commitments along with
horizontal commitments and did not see why mode 4 should be confined to horizontal commitments,as she could see room for sectoral commitments in mode 4.  Her delegation sought to see further de-
linkage between mode 3 and mode 4 in the round and the total elimination of economic needs tests.
She agreed with Colombia that the issue required more attention and merited greater multilateral
effort in the Special Session as well as in other subsidiary bodies, two of which she felt could be
useful in pursuing work related to mode 4.  She recalled that a paper on mode 4 had been produced bythe OECD in early 2002, that it covered both developed and developing countries, and that it had been
circulated in Working Party on Domestic Regula tion.  She noted that UNCTAD was organising a
seminar on mode 4 in the coming month and hoped that information which resulted from it would be
useful to Members.
106. The representative of Korea thanked Venezuela for the addendum to its proposal and sought
to make comments on the joint proposal from Chile, the European Communities, Japan and the United
States.  Although he recognised the utility of iden tifying the four major activities in this sector, he
believed that most Members had regulatory regimes that were based on the source of and not the
activities related to energy.  As such, even if Members negotiated along the lines of these four
activities, he felt that it would be difficult to indicate fully the activities concerned as they wouldappear throughout the schedule, which was based on the W/120 classification list.  He sought the
views of other Members on how to handle this situation and other technical difficulties without
deviating from the W/120 classification system while at the same time taking into account the merits
of the joint proposal.  With regard to mode 4, Korea expressed its appreciation for the proposal and
pledged to carefully review it with a view to participating in the discussion in a constructive manner.
Seeking clarification on paragraph 13(b) of the proposal which pertained to the verifying of a foreign
service provider's competence and placing the burden of proof on the domestic regulator whenmoving from a less burdensome measure to a more burdensome one, he asked for a clear elaboration
on what was meant by such burden of proof.  He asked to what extent the burden of proof could be
placed on the regulator of the receiving country and what specific level of burdensomeness was
related to the burden of proof.  He wondered which would be more burdensome:  the administration
of a test of service suppliers' competence as illustrated in paragraph 13(b), or the evaluation of theeducation or training system of the sending country, including its curriculum.  If the latter, then he
wondered if this meant that the re gulator of the receiving country w ould need to conduct an in-depth
study of the education and training systems of all other Members and justify its assessment.  In this
regard, he felt that there could be an asymmetry in the burden of proof for deciding the eligibility of
the qualification of the service providers vis-à-vis  the eligibility of its qualification.  Such a concept of
burden of proof might discourage Members from undertaking additional commitments in mode 4.
107. The representative of Japan stated that Japan's initial offer had been made public in English
and Japanese on its government's website.   With respect to the proposal on mode 4, he recognised the
importance of mode 4 in the services negotiations which explained why Japan had made an effort to
meet this interest in preparing its offer.  It was for this reason that he felt some frustration when hehad read the evaluation of Members' offers alluded to in paragraph 4 of the proposal.  He said that
Japan had improved its existing mode 4 commitments in terms of conditions and scope, and also
introduced new commitments and entirely new categories delinked from mode 3.  He hoped that theTN/S/M/8
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co-sponsors would take note of Japan's initial offer in this respect.  On the various points of concern
raised in the paper, he shared to a certain degree the aspirations and issues to be treated.  For example,
on paragraph 6 and the possibility of using common categories, he felt that this had already been
obtained to a certain extent through the existing requests and offers.  This was also his view with
respect to the need to enhance transparency in the procedural aspects of visa and immigrationprocedures and he thought this should be further di scussed among Members.  He also thought that the
questions raised should be posed in the context of the scope and the mandate of the GATS and the
negotiations, which related to the question of MRAs or other elements which could be related to
immigration matters.  These questions also needed to be put in the context of practicability or
feasibility of certain measures, such as the possibility of separating immigration procedures for
temporary and permanent entry.  Members needed to ask, in practical terms, to what extent it would
be feasible to draw the line between temporary and permanent entry, and how to act when a personentering on a temporary basis would then seek to stay on a more permanent basis.  He also wondered
how to handle the question of visas required for the nationals of some countries but not others.  He
reiterated his view that these questions needed to be examined in the context of practical feasibility.
On the question of sector specific commitments, he said that this was a question of whether there
could be perfect concordance between the categories under an immigration regime and the existingcategories in the classification list W/120.  He wondered whether there could be a benefit to not
specifying sectors since most cases were based on broad categories.  His delegation was willing to
engage in these discussions, including bilateral, plur ilateral and multilateral fora.  He agreed that the
Special Session could also have a role to play in these processes.  Finally, he said Japan looked
forward to see the offers of the co-sponsors and to seeing how they would address the question of
mode 4.
108. The representative of Switzerland welcomed the paper on mode 4 and saw it as a valuable
input into the negotiations and a demonstration by the co-sponsors of their commitment to the
negotiations and determination to take the appropriate steps to bring new dynamics to them.  He said
his delegation was aware of the interest many Members held for mode 4, and agreed that several ofthe ideas had merit.  He indicated it would be st udied and a position elaborated upon in light of any
additional information in the paper.  Switzerland was aware of the importance of mode 4 for the
success of the negotiations as well as the implication for all Members.  To his mind, it was important
that all Members make the necessary effort in this mode and improvements in terms of negotiating
targets and results for all Members including those interested in the aspects of mode 4 described in the
proposal.  He said that Switzerland was willing to make the necessary efforts to move in this direction
while taking into account of the overall balance of the negotiations and the overall package based onoffers presented.  Indicating he would revert to the proposal, he welcomed the recognition underlined
by the co-sponsors on the convergence of interests between the groups of Members and he thought
that this was a positive signal.  On substance, he felt that the idea to develop common categories, as
outlined in examples (a) to (d) of paragraph 6, was worth studying.  He noted that Switzerland already
used the first three categories listed in paragraph 6 and was one of the few Members to have category(c), "contractual service suppliers", in its existing Schedule.  His delegation felt there was an in
interest in having common categories and it was an important objective for Switzerland to have a
body of rules in the GATS, including in the schedules, which was as harmonised as possible.  On the
question of service providers delinked from a commer cial presence, he indicated that Switzerland was
one of the few Members that had a commitment on contract workers, and he agreed with the idea ofde-linking the presence of persons from a commercial presence.  Responding to the remarks relating
to horizontal commitments, he observed that most commitments were in the horizontal sector and he
did not think this was bad per se .  He explained that, while for modes 1 to 3 there were sectoral issues
related to trade in these modes, for mode 4 the legislation and relevant provisions were also
horizontal; hence it was natural that the commitments, which reflected the structure of national law,were horizontal.  He said that for the service providers, it was more convenient and transparent to
have a condensed horizontal commitment applicable to  all committed sectors, rather than to struggle
with sectoral commitments, especially given the fact that services were often inter-linked.  He recalled
that it was often the case that to provide a service, an array of the W/120 categories were relevant.  HeTN/S/M/8
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said it was much more convenient to have on e horizontal commitment rather than to determine
whether the relevant commitment was listed under, for instance, computer-related services or
consultancy services.  Referring to paragraph 14 of the proposal, he indicated that this would be
studied, although he recalled that, in general, his delegation sought not to overload WTO bodies with
recurrent tasks.  He was also concerned about sett ing a precedent.  He thought that the submission of
this proposal demonstrated that any Member could bring forth ideas as they saw fit.
109. The representative of the European Communities said that his delegation was fully aware and
recognised the importance of mode 4 for a number of countries in the negotiations.  Indicating he
would revert to this proposal in a more detailed fashion and making a few preliminary remarks, he
agreed that, in terms of the nature of comm itments, almost all Members including developing
countries and least-developed countries had commitments that were limited to those linked to mode 3.
He said that the European Communities, along with a few others, was among the few Members tohave undertaken commitments delinked from commercial presence.  He stated that the European
Communities offered to further and substantially expand  its commitments in this regard in its initial
offer.  On administrative procedures and a GATS permit, he thought that Members should recognise
the right to regulate the entry and stay of persons in their territories, as was recognised in the Annex
on the Movement of Natural Persons.  Members also needed to maintain the right to refuse entry to
persons who constituted a threat to their security, as set out in Article XIV(a) or were likely to abuse
the terms of their entry, as was set out in the Annex on the Movement of Natural Persons.  He felt that
these issues needed to be distinguished from the i ssuance of permits to service providers.  With regard
to ENTs, he recalled that the European Communities had made a significant effort in this regard in its
initial offer, in which it had removed almost all of its mode 4 ENTs.  He said that this effort was evenmore significant if one took into account the improved and expanded nature of the proposed mode 4
commitments in its initial offer.  He said that he shared the co-sponsors disappointment with the low
level of overall offered commitments, and the fact that in some cases no improvements had been
offered.  However, in his delegation's view, it was somewhat regrettable that the paper did not
recognise and focus on the positive aspects of the offers in light of the substantial efforts by manygovernments.   He said that his delegation's offer was one such example.  He recalled the negotiating
context, noted that only two of the fourteen co-sponsors had submitted an initial offer and looked to
substantial offers being submitted shortly by all Members.
110. The representative of Australia, thanking Venezuela for its communication, recognised that an
efficient energy sector was a driver of economic growth for all Members.  She indicated that her
delegation would reflect on the paper and hoped to revert to it.  With respect to the proposal on
mode 4, she said that her delegation had not had sufficient time to fully consider it, but she saw it as avaluable contribution.  Australia recognised the particular importance of mode 4 to developing
countries as expressed in previous and the present meeting and took these concerns seriously.
However, she also noted the wider importance of mode 4 commitments for all Members, including for
developed countries.  Mode 4 commitments were one of the important elements of the market access
and national treatment package for Australia.  She said that Australian service providers, particularlyin professional services, had asked her government to work for better access in areas of interest, with
many of those markets in developing countries.  Her delegation welcomed the opportunity to discuss
the issue further.
111. The representative of Cuba said that the proposal contained in document TN/S/W/14
constituted a considerable contribution in the effort to achieve a balanced result in the negotiations
and she was pleased to note that Members indicated they were examining it constructively.  She said
that the barriers to mode 4 were linked to discre tionary conditions with respect to granting licences,
and lack of mutual recognition of title and diplomas, and she felt that these issues had been well
addressed in the proposal.  She felt that the negotiations offered an important opportunity to examine
the topics it raised.  She echoed the concern by others on the lack of correspondence in thenegotiations between the offers and restricted market access in mode 4, and that a lack of  significant
commitments on mode 4 would lead to a major imbalance in the results obtained.  She said that whenTN/S/M/8
Page 24
assessing the liberalization of trade in services, it remained unclear as to the advantages that could be
obtained through the opening of markets.  She felt that it was important to examine in the multilateral
framework some of the issues that had arisen from bilateral negotiations.  She thought it would be
useful to conduct an examination into the nature  of bound commitments and the major restrictions that
existed in mode 4.  This would enable Members to see the degree of market opening and nationaltreatment and would facilitate the assessment of the offers, particularly with respect to Article IV.
Cuba felt that the proposal offered an opportunity to obtain greater balance in the negotiations in this
respect.  Finally, referring to the proposal from Venezuela, she expressed Cuba's support for the
approach and the breakdown of energy sector it outlined.
112. The representative of New Zealand, making comments on the proposal relating to mode 4,
stated that it had given her delegation much to consider on how value could be added through
commitments in mode 4 trade liberalization.  Making a few preliminary comments on the proposal,she took note of the points raised regarding administrative procedures, procedural hurdles and delays
that visa procedures could pose to the temporary movement of services suppliers.  She said that New
Zealand's visa processing system allowed for rapid assessment of work visa applications and noted
that a clear separation of temporary of services suppliers from permanent immigration could not
always be easily achieved as domestic constituencies could regard this temporary movement as anintegral part of overall objectives in terms of immigration and labour market policies.  New Zealand
was also interested in the focus of the paper on the linkage between recognition of qualifications and
professional registration, and mode 4 services supply.  Recalling a similar statement made in the
regular session of the Council on 3 July, New Zealand considered further exploration and discussion
of these issues to be beneficial and important in giving effect to mode 4 commitments.  Sheacknowledged that challenges existed in identifying potential collective action in the area of
recognition.  She indicated that her delegation might revert to the paper's contents on additional
commitments in recognition and improving transparen cy in the recognition process.  She said that
mode 4 was a significant issue for New Zealand given the importance of this mode of supply to its
many small services exporters.  New Zealand had underlined this significance through the inclusion ofimproved mode 4 commitments in its in initial offer which included the removal and an ENT from
over 100 occupations of varying skills levels.  Her delegation looked forward to further discussion on
this issue.
113. The representative of Tunisia, speaking on behalf of the African Group, stated that the
proposal on mode 4 was very detailed and contained key elements that deserved full attention.  He
said that  the participation of African and the developing countries in world services exports was well
below its potential and expectations, and improvements in this regard would require Members to takeinto account the requests made by these Members in the sectors and modes of supply of interest to
them.  In this regard, he said that the movement of natural persons was a crucial element for these
countries, and that mode 4 trade faced many draconian obstacles which hindered the free circulation
of developing countries' workers, such as in the issuance of visas and the recognition of qualifications.
He felt that concrete undertakings were necessary in order to soften these restrictions, which wouldcontribute to lowering clandestine immigration to these countries and to reducing poverty in African
countries.  This in turn would contribute to achieving the millennium objectives including through
worker remittances, a reduction in the excess labour in African countries, an the transfer of skills.  He
stated that mode 4 was of great importance and that market-access commitments were not sufficient in
themselves to allow for effective entry.  He said that mutual recognition agreements would be a usefultool in this regard to facilitate the movement of natural persons.  Given the differences in export
capacities between developed and developing countries, he felt that it would be wise to give a greater
attention to the recognition of skills, including those of semi- and low-skilled labour.  In this regard,
he felt that the proposal was constructive and contained innovative ideas which should be taken up in
the Special Session, and Members should seek to explore all ways to make the negotiations on mode 4multilateral.  In this regard, he said that the African Group expressed support for the mechanism
proposed in the TN/S/W/14 in order to make progress in the negotiations in mode 4.TN/S/M/8
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114. The representative of Hong Kong, China, making a few preliminary comments on the
proposal regarding mode 4, stated that his delegation appreciated the importance of mode 4
liberalization in the negotiations and would support the discussion of the relevant issues.  He noted
that the paper raised many pertinent issues and he hoped that they could be discussed in the Special
Session and the appropriate subsidiary bodies which could provide relevant input.  On the nature ofcommitments, he had noted the definitional and classification issues this topic raised and that they had
already been raised in the Committee on Specific Commitments.  He further noted that the purpose of
this discussion was not to achieve harmonization, but to examine possible common categories, and he
suggested that Members might also consider common parameters behind the different categories.  He
expressed interest in the points raised relating to transparency and the burdensomeness of application
procedures and their importance in the application of market-access commitments.  He sought to
reflect further before reverting to them.  He also sought Members' views as to whether the discussionin the WPDR might have some relevance, especially with respect to procedural disciplines.  Hong
Kong, China was interested in recognition issues and saw them as an important element to ensure
effective market-access commitments.  He noted with interest the various approaches outlined for
addressing this issue.  He believed that the various approaches were not exclusive but rather should be
complementary and that the work of Working Party on Domestic Regulation would be relevant in this
regard for at least one of these approaches.  He also took note of the suggestion for a model schedule
and he sought to hear more specific ideas in this regard, and particularly how it would relate to
existing horizontal commitments made by Members.  His delegation was open to further discussion
and individual elements of a model schedule with a view to enhancing comparability and
predictability.  He indicated that his delegation was open to discussion on mode 4 in the present andother fora and looked forward to initial offers from trading partners so as to carry forward market
access negotiations in the modes and sectors of interest to them.
115. Noting the preliminary nature of her comments,  the representative of Trinidad and Tobago
welcomed the addendum to the proposal on energy services from Venezuela, which was an area of
great interest to her colleagues in capital whose vi ews ran along similar lines.  She added that there
was also interest in capital in the proposal on energy services from Chile, the European Communities,
Japan and the United States.  Both proposals were under consideration.  With respect to the proposal
on mode 4, she stated that, although her delegation had not been actively engaged in the discussions
on this matter, it placed great importance on this el ement of trade in services and looked forward to
continued debate.
116. The representative of Norway indicated that he would study the document related to mode 4
further and consider its proposal carefully.  On energy services he stated that Norway considered this
sector as one with great potential for supporting gr owth in the world economy.  He was pleased that a
number of developed and developing countries had made proposals and requests in this field and he
expected offers to reflect the proposals.  As was clearly demonstrated in Norway's initial offer, his
country favoured a broad approach that took into account the full spectrum of commercial realities in
the market.  Norway supported the proposal from Venezuela, which he felt gave a better picture of thesituation in the world market in comparison to ot her proposals.  He thought that the delegation of
Venezuela had done a considerable service to Members in helping them to better understand the broad
scope of the sector.  He said that classification issues were a means to help Members understand the
subject-matter of the negotiations and to clarify the meaning of commitments discussed.  However, he
said that the core of the negotiations was the qual ity of commitments, and in this regard Norway had
put forth a comprehensive list of initial offers in the field of energy services in the firm conviction that
broad commitments in this field could make a valu able and cost-effective contribution in global trade
in services.  He stated that Norway's experience with open competition had been positive.  He hoped
that other Members would move from discussions on classification to negotiations on real
commitments.  He said that his delegation would approach these negotiations constructively and wasopen to discussion with all delegations with a view to achieving meaningful progress for consumers
and industry.TN/S/M/8
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117. The representative of Mexico, referring to the discussion on energy, said that its position was
determined by its domestic situation which had not been finalised and explained why his delegation
had not been able to participate more actively in the energy services group.  With respect to the
proposal on mode 4, he sought to elaborate the reasons why Mexico was co-sponsoring the proposal.
He stated that a real demand existed for certain categories of services suppliers in the markets ofdeveloped countries, particularly for low- and se mi-skilled workers.  He said that the commitments
offered in the initial offers did not contain subs tantial improvements in existing commitments for
mode 4.  Rather, they were limited to categories of personnel providing services linked to commercial
presence and were limited to highly skilled persons.  He said that developing countries were interested
in and had requested commitments for the categories not necessarily linked to commercial presence
and which included service providers of varying levels of skills.  He said that the objective of the
mode 4 negotiations was not to achieve the harmonisation of migration categories for the entry ofservices providers covered by national legislation, but rather to reach consensus on the use of
categories in the interest of all Members.  He said that the existing offers were generally confined to
all horizontal commitments that were applicable to all sectors in a very limited way.  In mode 4 he
said there were no commitments established for specific sectors, for instance, with respect to
architecture, engineering or legal services.  For this reason, he felt that it was necessary to examinethe need for complementarity between sector specific commitments and horizontal commitments.  In
addition, he stated that there existed among the developing countries a convergence of interests on the
need to receive additional commitments on transparency and procedures, including on matters such as
temporary visas and temporary work permits, in order to ensure full implementation of market access
and national treatment commitments since these affected the temporary entry and temporary stay ofservice providers.  He observed that the provision of services by natural persons from developing
countries was affected by a lack of recognition of their professional qualifications or equivalent
training as well as the requirements for issuance of temporary work licences.  Mexico felt that
Members should analyse various possible solutions to these problems.  Finally, responding to earlier
statements that expressed the hope that developing countries would open substantially their marketsunder mode 4, he observed that there was an important difference in the distribution of production
factors world-wide and the different potential of countries.  He said that equivalent access under
mode 4 by developing countries would defeat a purpose of the negotiations, much as it would do the
same if applied to goods.  He said that Members needed to bear in mind their different potentials and
the distribution of the factors of production among them to see how they could be more
complementary.  He said that his delegation had some ideas regarding the model schedule, but
indicated he would revert to this point.
118. The representative of Canada reiterated her delegation's interest in energy services and its
view on the need to clarify how these services were classified.  She recognised that this was an
important and complex issue that had been worked on and she looked forward to further discussion on
the proposals tabled.  Turning to the paper on mode 4, she sought to emphasise Canada's interest in
mode 4 liberalization, indicated that it had significant export interests in this area across a number ofdifferent sectors and looked forward to having all Members, including the proponents, table offers
reflecting the elements included in the paper.  See believed that Canada's offer put forth a significant
offer on mode 4 which addressed a number of the issues raised in the paper.  For example, she noted
that in the Uruguay Round Canada had delinked in its commitments the mode 3 element from mode 4,
including through commitments for contract wo rkers, and that the offer would augment the
commitments through increased transparency elemen ts.  She said that the paper raised important
points in this regard, particularly on ENTs.  Canada  was asking Members to indicate if they had ENTs
or not, in order to make it clear if these existed in the schedule.  Her delegation believed this was an
important exercise because it would force Members to decide internally whether these measures were
captured under Article XVI within their definition of an ENT.  She said that there were no ENTs in allareas in which Canada had made commitments and she looked forward to further transparency from
Members in this regard.  Responding to the suggestion for commitments to be listed under individual
sectors, she stated that Canada had indicated its sectoral commitments for some professions in the
horizontal section and listed below the broad categories of professionals, intra-corporate transfereesTN/S/M/8
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and business visitors in order to make it clear as to which aspect of these categories were related to
contract suppliers or independent professionals or in order to indicate whether the professional
categories were linked to a mode 3 element.  She thought that this improved the transparency and
clarity of the commitments, since otherwise they could be difficult to decipher.  She said the relevant
professional services were listed in the horizontal section in the interests of transparency since itindicated some minimum educational and licencing requirements.  She said that the nine professions
indicated could be linked to particular sectors, and she thought that this was fairly clear from the
Schedule, although she welcomed further discussion in this regard if Members thought differently.
With respect to the question of temporary versus pe rmanent movement, she said that it was related to
the Annex and what was and was not captured under the GATS for mode 4 in terms of non-entry into
permanent labour markets, and therefore thought that this distinction was important.  She said that
Canada's legislation was set up with a temporary-permanent distinction, which had facilitated its focuson the temporary access under mode 4.  For Members whose legislation was not set up in this way,
she presumed that what constituted the temporary aspects of the regime and how to reflect this in the
schedule of commitments would be the determination of the Member concerned.  She indicated that
she would be pleased to discuss this further as it touched upon the crux of the scope of mode 4.
119. The representative of Brazil indicated that he would revert to some technical questions on the
proposal by Venezuela at a later point in time.  On mode 4 he reiterated that this was an important
issue for his delegation and he shared the concerns expressed and points raised in the communication.
He emphasised his delegation's view that the issue of mode 4 needed to move forward in terms of
horizontal and sectoral commitments.
120. Referring to the communication on mode 4, the representative of Guatemala said that the her
delegation felt that this was in important topic to address in the context of the development agenda.
She felt that in terms of mode 4, the initial offers did not take into account the needs of developing
countries nor did they cover all of the aspects related to mode 4.  Guatemala was prepared to negotiate
and had an interest in ensuring that its priorities were taken into account, one of which was
liberalization in mode 4.
121. The representative of Argentina asked the participants in the energy friends group if they
would be willing to pursue their discussion in the Committee on Specific Commitments.  With respect
to mode 4 and recalling that Argentina was a co-sponsor of the proposal, he said that it was in many
Members' interest to consider this mode of supply.  He said that for his delegation the possibility of
using categories was important, as this would make it easier to assess offers and commitments.  He
said that the question was not a matter of harmonising laws on migration, but rather having common
definitions and categories.  He drew a distinction between a discussion on liberalization in mode 4 andnational immigration laws.  In order that the type of movement covered under commitments and the
offers was clear, he felt it was important to distinguish between temporary movement for services
supply and long-term immigration in order to determine what types of services could be supplied
under mode 4.  On the question of economic needs te sts, he recalled the proposal by MERCOSUR on
this topic, and he reaffirmed that were industri alised countries to eliminate ENTs, this would help
achieve the objectives of Article IV.  With respect to the recognition of certificates and qualifications,
he noted that this was a difficult issue that would require innovative and create efforts by Members in
order to ensure that commitments under mode 4 were not made hollow because of a lack of a
provision to recognise professional qualifications.  He did not have any specific ideas in this regard;
however, he was interested in pursuing work on this from the perspective of the GATS, namely, toallow for an instrument under which temporary reco gnition of professional qualifications could be
granted.
122. The representative of Chinese Taipei indicated that her delegation attached importance to
energy services and encouraged other Members to discuss this sector further.  She felt that Members
might need to take time to identify and modify the proposed detailed classification which covered allservices required by the energy industry and the services it offered.   She said that for non-core energyTN/S/M/8
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services included in the classification, the question as to what constituted core and non-core services
would require time to be fully addressed.  In the interest of efficiency, she did not feel that it was
desirable to attempt to negotiate on all the related services sectors under the energy services umbrella.
Moreover, the sectors related to the non-core energy services, she observed, were negotiated within
each respective sector.  With respect to the proposal on mode 4, she felt that it could contribute to aconstructive framework and merited further discussion and careful study.  Chinese Taipei was
interested in the issue of the recognition of qualifications and had noted on previous occasions that
many of its professional services providers had encountered difficulties in having their professional
credentials recognised as mandated by GATS Article VII.  She recognised the important role that
Article VII played in relation to mode 4 negotiations and welcomed the parts of the paper relating to
the development of disciplines under the scope of Article VI and of possible multilateral guidelines
and disciplines to guide the recognition issue.  She indicated that she would revert to this issue withdetailed comments.
123. The representative of the Philippines sought to emphasise a few points of interest to his
delegation and to address some points raised in earlier statements.   In his view, many barriers and
impediments to trade existed which could be characterised as being of a domestic regulatory nature
and many of which had been presented in the Working Party on Domestic Regulation.  For hisdelegation, these constituted the most relevant impediments to trade in mode 4.  He felt that certain
procedural disciplines which the Working Party was seeking to develop and to which Hong Kong,
China had referred could be most relevant.  He indicated that it was for this reason that that paper's
paragraph 13(a) spoke of the development of disciplines under Article VI:4 and covering qualification
requirements and procedures, licencing requirements and procedures, and technical standards.  On theissue of the absence of sector-specific commitments, he was mindful that most schedules under
mode 4 included the entry "Unbound, except as indicated under horizontal commitments" and that this
was in large part a function of national legislation which tended to apply uniformly to all sectors.  He
reminded Members that the co-sponsors had never characterised this entry as bad per se , but rather
felt that it should be complemented by sector-sp ecific commitments.  Seeking to address some of the
points raised in earlier statements and indicating that  he would to revert to these complex points in a
more detailed manner at a latter stage, he believed that, with respect to the dichotomy between
temporary and permanent movement, most of the co-sponsors were willing to discuss this issue with
their trading partners.  However, he noted that a preliminary glance at schedules indicated that
generally a period of three to five years was indicated under mode 4, which he thought could be a
useful starting-point for discussion.  He indicated th at there might also be a variance in the duration of
stay depending on the sector concerned, which was an  example of when a sector specific commitment
could be made.  On the issue of preventing the temporary movement of natural persons from
becoming permanent migration, in his view this was an issue to be addressed through appropriate
administrative measures, and which should not prevent Members from undertaking commitments.  On
comments relating to the offers from the co-sponsors of the proposal, he found it somewhat disturbing
that it had been highlighted that only two of the co-sponsors had presented an offer, since this seemedto imply that the presentation of offers was a precondition for trading partners to make substantive
improvements to their existing commitments in mode 4.  In the light of a widely recognised
asymmetry in the level and scope of commitments in mode 4 at the conclusion of the Uruguay Round
and the extended negotiations, he had hoped that Members would have taken this asymmetry into
account in preparing their initial offers.  He understood that Members had calibrated their offers to thenature of the initial phase of the negotiations; however, he felt that tying the lack of substantial
improvements to the lack of offers on the part of Members interested in mode 4 strained  logic.  He
had preferred the characterisation by other Members of these offers.  He reiterated that the questions
that had been raised in the paper would need be given due consideration.
124. The representative of Peru expressed his support for the presentation by India on the proposed
liberalization of mode 4 under the GATS.  He said that for his country and many developing countries
mode 4 was a priority in the negotiations.  The fact that many developing countries had not been able
to table their initial offers he said should not be interpreted as a lack of interest on the part of theseTN/S/M/8
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countries in the negotiations.  Rather, he underlined that they faced considerable constraints in
harmonising the positions of various public administrations and those of the private sector.  He hoped
that understanding in this regard would be demonstr ated.  Seeking to highlight four points related to
the negotiating proposal TN/S/W/14 and of particular interest to Peru, he said that the topics it
contained should be discussed in a multilateral framework and that priority should be given to theconcept of temporary versus permanent immigration.  Second, he felt there was a clear lack of balance
in the existing specific commitments in terms of thos e aspects that were linked intrinsically to mode 3
and highly qualified professionals.  He sought to have included other occupations, such as technical
workers and service providers who were not necessarily professionals or had management
qualifications.  He felt that this was an important step Members could adopt in order to move beyond
corporate transfers.  He said that in order to include these new categories, agreement on a new format
would be required that would address, for inst ance, business visitors, independent workers and
contractual services suppliers.  Third, he said that Members should adopt both horizontal and sectoral
commitments since there were important topics to be included in specific sectors and would facilitate
the negotiations.  He thought that the classification of occupations of the International Labour
Organization would be a useful guide.  Fourth, on the topic of transparency and safeguards for due
process in the granting of visas for the temporary movement of services suppliers, he said this wasimportant and expressed support for the proposal in this regard.  He highlighted that the Council
should consider the important items contained in paragraph 15 of the proposal.
125. The representative of Egypt fully endorsed the proposal on mode 4 and recalled that one of
the objectives of the GATS was the increasing participation of developing countries in trade in
services.  Article IV specifically provided that this objective should be achieved through theliberalization of market access in sectors and modes of supply of export interests to them.  She further
recalled that this had been reflected in the negotiating guidelines.  She said that many developing
countries had a concern that the results of the Uruguay Round was not satisfactory in terms of mode 4.
In the present negotiations most of the initial offe rs lacked substantial improvement in this regard.
She said that it was extremely important to hold a multilateral discussion on mode 4 so thatdeveloping countries could obtain effective commitm ents in the same way that developed countries
had obtained them for sectors of interest to them, such as in financial and telecommunications
services.  She stated that a balance in the services package would mean that developing countries
would benefit from their competitive advantage and would enhance their credibility in the multilateral
trading system.
126. The representative of Bolivia thanked Venezuela for its proposal and had taken note of the
statements made on energy services by, inter alia , China, Japan and Norway.  With respect to mode 4
she said that Bolivia had co-sponsored the proposal because of the importance it attached to this mode
of supply, which, she recalled, was a position her delegation had expressed in the Special Session and
in subsidiary bodies.  She felt that the statements made and questions raised in the course of the
discussion indicated that the movement of natural persons would be a recurring topic in the Special
Session and demonstrated that many developing countries sought to increase specific commitmentsand open markets for their nationals to the greatest possible extent in this regard.
127. The representative of Uganda fully associated his delegation with the statement made by
Tunisia on behalf of the African Group.  He said that the proposal from 15 co-sponsors spoke to
mode 4 issues forcefully.  He agreed with Peru on the aspects which should be negotiated
multilaterally.  He sought to give a practical example of how market access in mode 4 could make acontribution to alleviating poverty in his country, although he warned the comparison touched upon
trade in agricultural products.  He said that Uganda's largest export was coffee and that in terms of
volume its exports had grown significantly; however , in terms of income obtained from coffee, there
had been a tremendous decline.  Continuing with this example, he said that, according to the last
government budget presented a month earlier, remittances from Ugandans working abroad was thricethat of the income generated from exports of coffee, which he repeated was Uganda's largest export.
He felt this was a pertinent example of the importance of mode 4 to Uganda.  Turning to the questionTN/S/M/8
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of economic needs tests, he said that the most unfair application of an ENT occurred when an entire
country was looked upon as poor and its citizens were subjected to more rigorous tests.  It was
relatively easy to classify a LDC and he felt that th ese issues needed to be addressed.  Turning to the
initial offers, he thanked those Members who had presented and clarified their offers to his delegation.
From a general perspective, however, he said that the offers needed to be enhanced.
128. The representative of Indonesia said that the communication from Venezuela provided his
delegation with valuable materials for the classification issue for energy services.  He indicated that
his comments would be preliminary as the government's energy experts were studying it.  He said that
his delegation shared some views it outlined, in particular with respect to the concept and scope of
energy services which included upstream and downstream services of energy commercialisation and
other services.  He looked forward to participating in more detailed discussions on this matter, either
in the Special Session or in the Committee on Specific Commitments.  With respect to mode 4, hisdelegation shared the concern of the co-sponsors that those offers submitted contained no substantial
improvement in mode 4, and were often confined to personnel related to mode 3.  He shared the view
that commitments for categories of personnel should  be delinked from commercial presence.  As for
the other categories of personnel, his delegation was concerned by the commitments offered that were
related to commercial presence and highly-skilled persons.  He said that for many developingcountries, medium- and lower-skilled categories of personnel were of the primary areas of interest.
He felt that this issue needed to be addressed properly and he looked forward to further discussion.
He also shared the point of view that commitmen ts in mode 4 should not only be made at the
horizontal level, but at the specific sectoral level as well.
129. Referring to his earlier point of order the representative of Venezuela said that there had been
a misunderstanding, expressed his appreciation for the Chair's explanation and confirmed that his
delegation had no further concern in this regard.  Turning to the proposal on mode 4, he felt that it
would be useful to discuss multilaterally the issues it raised with a view to achieving true market
access under mode 4.  He indicated that he supported the communication and its discussion under the
sub-item pertaining to the implementation of paragraph 15 of the negotiating guidelines.  He thenturned to the replies to the questions that had b een posed, beginning with those from China.  This
intervention had touched upon the inclusion in the classification of other branches of geophysical and
geo-chemical services and had suggested to broaden the classification on gas and oil pipelines, and to
refer to crude oil.  He acknowledged that the activ ities covered in the energy services sector could be
broadened and broadened again owing to its characteristics.  In response to China's question he cited
paragraph 7 and 8 of the addendum to Venezuela's proposal, which stated that the Commercial Reality
List "is subdivided into items or classes that follow the actual formation of service markets in theeconomic and commercial reality.  In this sense, a separate service item is included only if specialized
suppliers have that particular service as the object of their trade and of their commercial competition
for the benefit of customers inside and outside the energy industry creating thus a particular market."
He said that if a market was created in geophysical or geo-chemical services, these could be included
in the Commercial Reality List because it was flexible and could accommodate broadenings andextensions.  Turning to the question from Thailand on his delegation's view on questions being
directed to it in the Committee on Specific Commitments, he indicated that every Member had the
right to ask questions and he would be prepared to answer Thailand's questions.  He added that the
energy friends group had not sought to avoid the questions posed in the CSC, and rather had
organised informal meetings attended by experts from capitals who could focus on detailed technicalaspects to which the CSC lent itself less well.  Responding to South Africa's interest in consultations,
he said that this interest would be reciprocal.  In response to Korea's comments on how to classify
other activities without moving away from the W/120 classification list, he recalled what the
Venezuelan energy expert had stated in May, namely that the Venezuelan proposal did not ignore the
W/120 classification list of the CPC, but rather elaborated on W/120.  In this regard, he citedparagraph 9 of the addendum to Venezuela's proposal:  "This reflects the concern of WTO Members
about the possible repercussions of introducing new reference codes, such as the CPC  […] and
explained that a Member could extend the W/120 classifi cation list if it wished to do so."  He drew aTN/S/M/8
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parallel with tariffs in the harmonised system, where at the national level all Members could extend
the harmonised system tariff.  In response to the question from Chinese Taipei regarding the
efficiency of the Commercial Reality List and the inclusion of core and non-core activities, he pointed
again to the relevant paragraph of his delegation's proposal.
130. The representative of India thanked the South Africa for joining the list of co-sponsors, and
the co-sponsors and delegations for making a large number of substantive comments.  He thought that
it might be useful to try to clarify some of the issues and doubts that had been raised in the course of
the discussion.  Following the paper's sub-headings , the first of which related to the nature of
commitments, and referring to the comments related to horizontal versus sectoral commitments and
the pragmatic aspect of horizontal commitments from the point of view of immigration regimes, he
echoed comments by the Philippines that the intention was not to suggest that horizontal
commitments were not useful.  However, he thought that it might be useful to recognise that thisargument would have added weight if horizontal commitments were broad and deep, which in his
view was not the case.  He thought that the Members that  had expressed an interest in mode 4 did not
support an approach that would confine mode 4 commitments to horizontal ones while at the same
time not broadening these commitments.  On the contrary, he felt that a better approach would see
sectoral commitments as complementing horizontal commitments and broad horizontal bindingssupplemented by sector commitments where deeper liberalization would be possible.  On the question
of common categories, he had noted the interest expressed in this regard by a large number of
delegations and he felt that it was worthy of reflection and one possible way to broaden horizontal
commitments.  On the question of administrative procedures and the issue of visas and work permits,
he recognised what had been said regarding the right of Members to regulate the entry of naturalpersons in terms of the Annex as well as the concerns regarding security.  He recalled the rights that
other Members had in terms of mode 4 and said that the procedures for visas and work permits should
not nullify commitments.  He felt that there needed to be a balance between the two, and said that this
explained why the group had suggested that it might be useful to differentiate between temporary and
permanent movement.  He also believed that concern regarding the change of temporary serviceproviders to permanent service providers could be addressed through administrative procedures and
safeguards.  He noted that all Members were confronted with this concern, regardless of whether such
a distinction was made.  On the question of economic needs tests and the desire by the group of co-
sponsors to see these eliminated, he said that he would welcome further discussion on this account.
Finally, on questions relating to the recognition of qualifications and the linkage with work being
done in subsidiary bodies such as the WPDR, he echoed comments made by Hong Kong, China that
many of the approaches in the paper were simultaneous and not mutually exclusive of work on-goingelsewhere.  Overall, work in various fora would help provide the recognition package required to
ensure predictable market access.  Referring to paragraph 13(b) of the proposal and a question from
Korea regarding whether the administration of a test of the service supplier's competence would in
effect be less burdensome than determining his educational status, he thought it a fair assumption to
say that through the administration of such a test one was testing the supplier's educational status andtraining.  He said that the intention was to ensure, in the case where a regulator believed that it was
applying the least burdensome measure, that it could be determined that, in effect, the regulator was
using the least burdensome measure.  For example, in a case where the service supplier was informed
that he would first need to make up for certain defici encies prior to being able to sit a test, then the
burden of proof would lie with the regulator with respect to the least burdensome nature of themeasure.  He said that it was in this type of context that the burden of proof had been referred to.  On
the other issues relating to recognition, he recalled that some had been raised earlier in the regular
session with respect to the implementation of Article VII of GATS as well as in the WPDR.  On the
concept of a model schedule, he said he would revert to it and that this approach would allow
Members to tackle these issues together.  He also said that it was the feeling of the group of co-sponsors that, unless the range of issues was tackled as a package, effective market access in mode 4
could not be provided.  It was from this perspective that he felt a model schedule should be viewed.
Finally, on the mechanism to move this issue forward and the balance that could be brought about in
the market access negotiations, he reiterated the role that the Special Session could play in terms ofTN/S/M/8
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bringing about balance and monitoring progress in mode 4.   On the state of offers from the co-
sponsors, he echoed the comments from the delegation of the Philippines in this regard, and recalled
that the requests made by the group of co-sponsors probably focussed on mode 4 while the requests
from developed countries probably had a greater concentration in other modes of interest to them.
This was a question of balance that should be borne in mind.  He said that India was at an advanced
stage of finalising and tabling its offer.
131. The Chair took note that South Africa had joined as a co-sponsor of the document
TN/S/W/14.  He noted that some 33 interventions had been made on this agenda item, which he took
as a positive sign.  He took note that Chile had indicated that it would table its offer in the coming
week, that India was in the final stages of preparing its offer, and that Japan had made its offer public.
On behalf of the Council he thanked the delegation of Venezuela for its contribution, which
highlighted the work of the friends group and had provided some explanation as to thecomplementarity of the two proposals.  Some delegations had referred to it as a good foundation on
which to build a consensus.  Some Members had in dicated their intention to pose questions at an
upcoming forum and a good number of delegations had expressed support for the proposal in his
view.  Comments and questions had also been made on a proposal on energy services from Chile, the
European Communities, Japan and the United States.  He thanked the 15 co-sponsors of the proposalon mode 4 for their submission, which touched upon administrative procedures, the recognition of
qualifications, the nature of commitments in mode 4 and the proposal for a model schedule for
mode 4.  Many delegations had indicated that they would refer the paper to capital before reacting in a
more definitive manner.  He said that he took the interest and observations made to be an indication of
a good level of engagement.  He said that the proposal had received widespread support particularlyfrom developing Members.   He took note of comments about the role of the Special Session in terms
of monitoring the progress in the negotiations and said he would consult with the co-sponsors in order
to ascertain how they saw this occurring and on how  this might affect the organisation of the work of
the Council.  Although he realised that he had not summarised the entire discussion, the Chair thought
that it had been very extensive and profound and suggested that the Council take note of thestatements made.
132. It was so agreed.
D. OUTLINE OF THE CHAIRMAN'S REPORT TO THE GENERAL COUNCIL ON THE
CONSIDERATION OF PROPOSALS ON S&D TREATMENT PROVISIONS
133. The Chair recalled that at the last meeting of the Council he had informed the Council about a
letter that he had received from the Chairman of the General Council which referred to the Special
Session three GATS-specific S&D treatment provisions.  He further recalled that a copy of this letterand the relevant proposals were circulated informally to Members in advance of an open-ended
informal meeting held on 11 June.  As the proponents of the proposals had not been fully represented
at that meeting, the Council had not been able to have a full discussion of the issues raised.  He stated
that the letter from the Chairman of the General Council required that the Special Session report to the
General Council in advance of its last formal meeting prior to the Fifth Ministerial Conference and hewished to provide an outline of this report for information.
134. The Chair indicated that the report would state that following the understanding reached at the
General Council on 15 May 2003 regarding the consideration of proposals on special and differential
treatment provisions contained in various agreements, three GATS-specific S&D treatment proposals
had been referred to the Special Session.  This referral had been made with the request to consider andreport to the General Council before its last meeting prior to the Fifth Session of the Ministerial
Conference.  He said that he would report that, in  accordance with the directions outlined in the letter
of the Chairman of the General Council, the Special Session of the Council for Trade in Services had
held an informal meeting on 11 June 2003 in order to consider the proposals referred to it.  At that
meeting the Secretariat was requested to compile a checklist of issues and questions raised.  ThisTN/S/M/8
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checklist was circulated under the symbol JOB(03)/118.  Subsequent consultations would take place,
although no decision had been reached on any of the proposals to date.  He informed the Council of
his intention to prepare his report in the coming days.
135. The representative of Tunisia said that his delegation had noted the questions that had been
submitted to the African Group and was open to any further discussions that the Chair might wish to
organise.  However, he suggested that the consultations not be held concurrently with the meeting of a
Special Session or a meeting examining S&D proposals in order to enable the members of the African
Group to participate in greater numbers.
136. The representative of Uruguay took note of the Chair's comments and asked whether
Members might wish to undertake an additional effort to achieve a result, without prejudging that
result, that could be forwarded to the General Counci l.  As the present meeting was the last one prior
to the Ministerial Conference, he thought that it might be useful to keep this item open to allow forany further results to be forwarded to the General Council.
137. The representative of Cuba expressed support for the suggestion by Uruguay.  The
representative of Tunisia expressed his delegation's support for this suggestion.  The Chair  recalled
that his report to the General Council would need to  be finalised in time for that body's next formal
meeting.  Taking this into account, he suggested that the Council take note of the statements made,that it keep this item open until the end of the present formal meeting and that in the interim he
organise consultations on this matter.
138. It was so agreed.
E. WORK OF SUBSIDIARY BODIES - REPORTS BY CHAIRPERSONS
139. In keeping with what had been agreed concerning the regular reporting from the subsidiary
bodies to the Special Session, the Chair  invited the chairs of these bodies to present their oral reports.
140. The Chair of the Committee on Specific Commitments reported that since its last meeting in
May, the Committee had held a formal meeting on 30 June 2003 at which it adopted the update to the
annual report of 2002 to the Council for Trade in Services, which had been subsequently circulated as
document S/CSC/8.  He reported that under the agenda item "Classification Issues", the Committeecontinued an exchange of views on a communication from the European Communities on the
classification of legal services.  He said that, in terms of future work, he had concluded at the end of
the discussion that Members participating in so-called friends groups could brief the Committee on
developments in these discussions, on a voluntary ba sis, and, if so requested, in informal mode.  In
addition, he said he was planning to consult informally on the parameters for an update of elements of
a Secretariat background note on "Presence of Natural Persons - Mode 4", contained in document
S/C/W/75 dated 8 December 1998.   With regard to other possible future work, the Committee hadagreed to keep on its agenda an item on scheduling issues, under which Members could raise matters
related to the scheduling of commitments.  The Committee also requested the Secretariat to circulate a
presentation on the scheduling of commitments which it had given at a scheduling workshop in
November 2002.  He said that the Committee would meet during the next cluster of services meetings
in September or October.
141.  The Chair of the Committee on Trade in Financial Services reported that the Committee had
met formally on Monday, 7 July 2003.  He reported that there was no news to report with regard to
the acceptance of the Fifth Protocol.  He recalled that three Members had yet to accept the Protocol:
Brazil, Jamaica, and the Philippines.  Some delegations expressed their concerns about the delays in
ratifying this Protocol, and encouraged those Members to provide the Committee with updated anddetailed information about the status of their domestic ratification procedures.  He said that no
interventions were made under the agenda item on Technical Issues;  however, he took theTN/S/M/8
Page 34
opportunity to remind Members that this was a broad item, under which Members could raise any
technical issue related to trade in financial services , including those that might arise in the bilateral
negotiations.  Concerning the agenda item on recent developments in financial services trade, he
reported that Switzerland provided further replies to the questions raised at the previous meeting on its
paper about e-banking.  In addition, following an intervention by Chinese Taipei, there had been ashort but interesting discussion on the relationship between international recommendations to prevent
money laundering and their impact on the actual provision of certain financial services through
electronic means, such as the opening of deposit accounts.  It seemed to the Chair that there was a
need to continue discussing the issue of e-finance, both from a regulatory and a trade perspective.  In
this regard, he encouraged other Members to engage in this debate.  He said that Malaysia had made a
detailed intervention on the latest developments in its financial sector, with particular reference to the
first phase of the so-called Financial Sector and Capital Market Masterplans.  He encouragedMembers to make similar presentations on national experiences, which would be to the benefit of all.
For the sake of information and cognisant that th e matter pertained to the regular activities of the
Council for Trade in Services, he said that he had announced under Other Business his intention to
conduct consultations on the timing and other organizational matters related the Transitional Review
under Paragraph 18 of the Protocol on the Accession of the People's Republic of China.  He said thatthe Committee, together with the Council for Trade in Services, had been mandated to conduct this
review on an annual basis.  He said that in conducting his consultations, he would seek to ensure
consistency with organizational decisions that could be taken by the Council for Trade in Services.
He said that the Committee would meet during the next cluster of services meetings.
142. The Chair of the Working Party on Domestic Regulation reported that since his previous
report to the May meeting of the Special Session, the Working Party on Domestic Regulation had held
one informal meeting on 13 June, and one formal meeting on 1 July.  He said that the informal
meeting had been dedicated to the organization of the workshop on domestic regulation.  He said that
the first item on the agenda of the July formal meeting was the update to the annual report of 2002 of
the WPDR to the Council for Trade in Services, circulated as S/WPDR/W/24 and dated 20 June 2003.
Following comments by several delegations, Members adopted the report with a few amendments.
Regarding the development of regulatory disciplines, he stated that much of the morning of the July
meeting had been spent discussing an informal paper by Singapore (JOB(03)/113, dated 11 June
2003) on the relationship between GATS Articles VI:4 and VI:5, and the implications for the creation
of regulatory disciplines.  He indicated that discussion had also continued on a submission by Japan
regarding a proposed draft Annex on Domestic Regulation (JOB(03)/45Rev.1, dated 2 May 2003).
He said that the European Communities had also introduced draft disciplines on licencing procedures,circulated as S/WPDR/W/25.  He recalled that the representative of the European Communities were
meant to be a complement and not an alternative to Japan's draft Annex on Domestic Regulation.  As
with the draft Annex, the EC draft disciplines were seen as an important step in fulfilling the WPDR
mandate under GATS Article VI:4 to develop any necessary disciplines on domestic regulation.
Members made extensive comments on the Singapore paper, the EC draft disciplines and Japan’sdraft annex.  In respect to the discussion of the regulatory measures contained in the "Examples
paper", the latest version of which was circulated as JOB(02)/20/Rev.6 and dated 24 June 2003, the
delegation of Chinese Taipei introduced additional regulatory examples, circulated as a room
document, which was followed by comments from Me mbers.  Concerning the development of general
disciplines for professional services, he reported that India introduced an informal paper as a roomdocument, which prompted a very healthy discussion.  Some Members expressed frustration at being
unable to obtain the recognition of qualifications for their services suppliers, while other Members
questioned whether the WPDR was the correct forum for discussing MRAs and recognition issues in
general.  Under this agenda item the Secretar iat introduced a compilation of the results of the
consultations with international professional organizations, circulated as JOB(03)/126, dated 25 June2003.  The Secretariat indicated that it would continue to follow up the preliminary responses, as well
as to make further enquiries of the organizations that have not responded.  He further reported that the
WPDR held an informal meeting on 13 June dedicated to the organization of the Workshop on
Domestic Regulation.  Based on these and earlier consultations, the Secretariat prepared a revisedTN/S/M/8
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outline for the workshop, circulated JOB(03)/35/Rev.2, dated 30 May 2003.  Members approved the
revised outline at the July formal meeting, and agreed on the date of 6-7 October 2003, subject to
confirmation by the Special Session.  He recalled that the main objective of the seminar was to hold a
dialogue, to inform regulators, and to seek their views on the development of disciplines on domestic
regulation.  He said that the next formal WPDR meeting was expected to be held in the week of 6October 2003.
143. The Chair of the Working Party on GATS Rules reported that the Working Party had held a
formal meeting on 2-3 July 2003.  In order to structure the debate, an annotated agenda had been
issued for delegations' consideration in addition to JOB(03)/125.  He said that on 2 July, the Working
Party adopted the update to its annual report (2002), which was circulated at S/WPGR/12 and
transmitted to the Council for Trade in Services.  He recalled that the three work programmes on
emergency safeguards measures, subsidies and government procurement, adopted on 22 July 2002,called for the Working Party "to prepare for the opportunity provided by the Fifth Ministerial
Conference to take stock of progress made in the negotiations."  On 16 June the Working Party had
held an informal discussion on the form and the content of this stock-taking.  Following that meeting
and after informal consultations, and taking into account time limitations, the Chair had decided to
include a specific item on the agenda of the formal m eeting in July to give delegations time to reflect
on the progress made in the negotiations under these agenda items.  He said that on 30 June he had
circulated, under his own responsibility, two repo rts on the negotiations on subsidies (S/WPGR/10)
and on government procurement (S/WPGR/11) as mandated in the respective work programmes.  He
said that the two reports, together with the Chair's report on the negotiations on emergency safeguard
measures (S/WPGR/9) had been proposed as background documents for the discussions.  Heindicated that some 26 delegations intervened to give their assessment and voice their expectations
and concerns with respect to the current state of the negotiations on the three agenda items falling
within the mandate of the Working Party.  In the lig ht of these exchanges, it was clear that there was
an absence of consensus and progress on each issue was slow.  Many delegations expressed their
frustration at this slow progress, particularly in areas  of interest to them.  With regard to emergency
safeguard measures, he reported that there was neither agreement on the establishment for a
mechanism, nor agreement on the form a mechanism could take.  He said that recent proposals had
been made on government procurement in services; however, there were divergent views among
delegations as to the scope of the mandate of Article XIII.  In subsidies, he thought that delegations
suffered from the egg-and-chicken syndrome and had discussed which should come first:  an
exchange of views in order to work on a definition of subsidies in services or vice versa .  With regard
to subsidies, many delegations stated that they c onstituted an important issue in the area of services.
It was recalled that Article XV stipulated that "Members shall exchange information concerning all
subsidies related to trade in services that they provide to their domestic service suppliers."  He said
that suggestions were made as to how Members could meet this mandate.  Some delegations
suggested that they continue their discussions on the definition and categorisation of subsidies in
services.  The Working Party also discussed a possible contribution from UNCTAD which would
provide information on subsidies in services.  He said that he would consult Members in this regard.
With respect to emergency safeguard measures, this issue had not been addressed due to a lack of
time.  He said that the WPGR would hold an inform al meeting at the end of July to advance work on
this topic.  The Working Party would meet in the next cluster of services meetings.
144. The Chair noted that some of the work of the some of the subsidiary bodies could be of
relevance to the work of the Special Session and could be addressed in his report to the TNC.  Where
appropriate and relevant, he invited Chairs to share with him their views as to the future work on
negotiations in these subsidiary bodies.
145. The representative of China, referring to the report by the Chair of the Committee on Trade in
Financial Services, stated her delegation's view that it had contained an element which was not
relevant to the Council's work.  She recalled that the scope of the reports of the subsidiary bodies,
including the CTFS, was to be confined to matters re lating to the work of the Special Session of theTN/S/M/8
Page 36
Council for Trade in Services.  She stated that the transitional review was not relevant to the work of
the Council, which her delegation had highlighted in 2002 when it had expressed its hope that such a
reference would not be made in the future.  She regretted that this hope had not been recalled and
objected to the reference to the transitional review  in the reports of the Chairs' reports to the Council.
She requested that the relevant references be struck from the meeting report and hoped that theincident would not reproduce itself in the future.
146. The representative of the Philippines, referring to the stock-taking portion of the report by the
Chairman of the Working Party on GATS Rules, recalled that it was the understanding of the
Members of the WPGR that the opportunity would be  provided at the Working Party for Members to
raise concerns and issues of interest with respect to the three negotiations.  He said that it was also the
understanding of the membership that when the oral reports of the subsidiary body Chairs were made
to the Special Session, Members would have a further opportunity to make comments on the stock-taking exercise as well as on the reports.  It was in this light that he noted the grave importance that
his delegation attached to this issue.  He also bore in mind the report by the Chair of the Special
Session to the TNC and, referring to paragraph 10 of the draft of this report, encouraged the
membership take advantage of the preparations for Cancun and to reach an agreement on ESMs in an
appropriate timeframe while keeping in mind the timeframes for the other components of the servicesnegotiations, namely 1 January 2005.  He recalled that it had been stated on many an occasion that the
rules component of the services negotiations was an integral part of the negotiations and he saw an
emergency safeguard measure as providing a safety net for undertaking further progressive
liberalization in services.  Given the importance that his delegation attached to these issues, he
requested that the Secretariat include in the meeting report of the Special Session his intervention at
the formal meeting of the WPGR.
∗
147. The representative of the United States, responding to the intervention by China, said that she
had understood that the topic referred to had been included on the agenda of the Committee on Trade
in Financial Services.  While she acknowledged China's position, her delegation did not feel it
appropriate for a delegation to strike facts that other delegations could have made from the record of ameeting.   She sought a clarification as to whether the Chair had reported facts or suggestions that had
been made in the Committee.  With respect to th e report from the Chair of the WPGR, she requested
that her delegation's intervention at that formal meeting also be included in the record.  
∗
148. The Chairman of the Committee on Trade in Financial Services sought to clarify his
intervention and apologised for any confusion he might have caused.  He said that at the last formal
meeting of the CTFS, under Other Business, he ha d indicated that he would be holding informal
consultations on the timing and other organisational matters related to the transitional review
mechanism.  He pointed out that he had endeavoured to make it clear in his earlier report that this was
not an activity related to the Special Session.  Howeve r, in the interests of transparency and in order to
assist smaller delegations unable to attend all the meetings, he had though it was important to informthe Members of the Special Session about what had been discussed.  He reiterated that he had taken
care in his report to underline that this issue ra ised was related to the Council for Trade in Services
and not its Special Session.
149. The representative of the European Communities requested that her delegation's statement
made at the formal meeting of the WPGR be reflected in the report of the present meeting.  ∗
150. The representative of China felt compelled to clarify the question posed by the United States.
Her delegation believed that the scope of the reports of the subsidiary bodies to the Special Session of
the Council for Trade in Services should be confined  to the matters related to the work of the Special
Session.  This scope was well-known and therefore, her delegation felt that the issue was not relevant
to the Special Session.  She acknowledged that the Chair of the CTFS had pointed out that the issue
                                                     
∗ Please see Annex 1.TN/S/M/8
Page 37
was not relevant to the Special Session;  however, given this comment, she questioned its relevance in
the Special Session.  She understood that he had acted in the interest of transparency; however, she
felt that it was one of an infinite number of issues not relevant to the work of the Special Session.  She
recalled that it was her delegation's understanding that, if a Member wished to include items that
related to one Member in particular, it was normal practice that the delegation be consulted.  Shestated that her delegation had not been informed that the matter would be raised under Other Business.
She strongly requested that the statement made by the Chair of the Committee on Trade in Financial
Services related to the transitional review mechanism be struck from the minutes of the present
meeting.
151. The representative of the United States thanked the Chair of the CFTS and the delegation of
China for its clarifications.  She acknowledged th e point made by China concerning the reports made
to the Special Session, since the transitional review mechanism, to her understanding, was an activityof the Council for Trade in Services and the relevant subsidiary bodies.  She took note that the reports
of the Chairs of the subsidiary bodies to the Special Session was a de facto  practice for transparency
purposes and was not necessarily a reflection of any institutional structure.  She maintained her view
that the CFTS Chair's report had been informative and that he had explicitly indicated and qualified
the nature of his report under Other Business, and she took note of China's concerns about beinginformed of issues relating to its delegation before they were raised.
152. The representative of Malaysia believed that the issue of an emergency safeguard measure
was an important one for many developing countries, particularly Malaysia.  He reiterated his
delegation's view that there was a need to work constructively on ESMs in order to come to a final
decision by the deadline Members had set for themselves.  He believed that an ESM would beconducive to a better negotiating environment.  He requested that his delegation's statement made in
the WPGR related to the stock-taking issue, and especially on an ESM be recorded in the minutes of
the present meeting.
∗
153. The representative of Thailand associated her delegation with the comments made by the
comments made by the delegations of the Philippines and Malaysia made at the meeting of the WPGR
and reproduced in the minutes of the present meeting.  She requested that Thailand's statement made
at the last formal meeting of the WPGR be reco rded in the report of the present meeting.  ∗
154. The representative of Indonesia associated his delegation with the comments by Malaysia, the
Philippines and Malaysia made at the formal meeting of the WPDR, in particular with reference to the
emergency safeguard measures.
155. The representative of Uruguay requested on behalf of MERCOSUR that its statement made in
the Working Party on GATS Rules be reflected in the record of the present meeting.  ∗
156. The Chair thanked the Chairs of the subsidiary bodies for their work.  He took note of the
requests that the relevant statements were reflected in the report of the current meeting and suggested
that the Council take note of the statements made.
157. It was so agreed.
F. REVIEW OF PROGRESS IN NEGOTIATIONS
158. The Chair recalled that the last formal meeting of the Special Session had been the first
opportunity for Members to introduce their initial offers and that a number of delegations had availed
themselves of the opportunity to do so.  He said that since the last meeting five new initial offers had
been submitted and he hoped that more delegations would have good news in this regard.  As had
                                                     
∗ Please see Annex 1.TN/S/M/8
Page 38
been pointed out by the delegation of Brazil in May, the present meeting represented the last
opportunity before Ministers would meet in Cancun for the Special Session to review the progress in
the negotiations.  He hoped that the discussion would be positive and helpful to all delegations, as
well as provide him with possible elements for his reports to the Trade Negotiations Committee.  He
further recalled that the Council had agreed to a proposal from a group of Members that a permanentsub-item be included under this agenda item on the Implementation of Paragraph 15 of the Guidelines
and Procedures for the Negotiations on Trade in Services.  On the basis of a suggestion from a
delegation, he recommended that the Council begin with its regular business on this item before
turning to the sub-item.
159. The representative of Uruguay, speaking on behalf of MERCOSUR, noted that this group of
Members had actively participated in the negotiations on trade in services, had made proposals in
various sectors with respect to various subjects, and had made initial requests to various Members.He said that initial offers had also been submitted by MERCOSUR countries.  In general terms, this
group had indicated that the negotiations on trade in services had made satisfactory progress,
particularly in comparison to other areas of the nego tiations.  This did not mean that the content of the
initial offers submitted to date measured up to the expectation of Members.  He felt it was important
not to lose sight of the importance of a general balance in the Doha negotiating agenda.  In this regard,the MERCOSUR delegations did not see progress in other areas, especially from the standpoint of
developing countries, including in agriculture, which was of utmost importance.  In this particular
connection, he felt that progress in areas such as agriculture would have a positive impact on the
services negotiations.  Bearing in mind that he was speaking at the last session of the Special Session
prior to the Fifth Ministerial Conference and having heard statements made elsewhere at the WTOthat Cancun would need to address the issue of services and particularly market access, he said that a
reference to services at Cancun should also cover other areas, such as GATS Rules and domestic
regulation.  Finally, he noted that the current meeting of the Special Session of the Council for Trade
in Services was being held concurrently with a meeting of another negotiating body.  He appreciated
the difficulty in organising meetings in light of time constraints; however he felt that in the future itwould be desirable to avoid concurrent meetings of two negotiating bodies.
160. The representative of Mexico sought to make a short statement raising points it had
experienced in the context of the multilateral, pl urilateral and bilateral negotiations.  Mexico had
made a quantitative and qualitative assessment of the offers tabled, and in particular those from
developed countries.  His delegation had compared this assessment with Mexico's offer, and
concluded that it was one of the best in both respec ts, which testified to Mexico's commitment to the
negotiations.  He said that, within the limits of its resources, Mexico had brought experts to bilateralmeetings in order to meet with developed country delegations.  In general, he said that there had been
few positive responses to Mexico's offer, both in terms sectors and modes of particular concern to
Mexico.  He said that the limited exceptions in this regard were limited in scope, for example in
mode 4.  He recalled his earlier statement under item B of the agenda regarding the need to make
progress on market access in mode 4 as well as in terms of principles such as  transparency.  Takinginto account the fact that the GATS was structured in such a way as to identify mode 4 as a particular
mode of supply, he said that mode 4 had been neglected in comparison to the treatment given to other
modes.  He said improvements to existing commitm ents and in the improved offers as requested by
Mexico would help determine the level of participation of his delegation in the multilateral,
plurilateral and bilateral negotiations.  He indicated that some important elements had been includedin the submissions related to this issue, ranging fr om transparency to other crucial points in achieving
market access, which were borne out of formal and informal discussions.  In this regard, Mexico had
co-sponsored a proposal presented by India and he hoped that discussion of this proposal would
continue in the near future in a constructive spirit so that at the end of the day Members could agree
upon issues in a balanced manner.
161. The representative of Tunisia, speaking on be half of the African Group, sought to focus on
the progress made in the negotiations on trade in services.  The African Group regretted the weakTN/S/M/8
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participation of its group in the negotiations.  He noted that fewer than 30 per cent of Members had
made submissions in the request-offer process and that very few were from Africa.  He said that this
lack of participation, and the delay in the submission of requests and offers was explained by a lack of
financial and human resources and institutional restraints, and particular the lack of experts able to
participate in the multilateral and bilateral negotiations and meetings on a regular basis.  Thissituation, he explained, compromised their ability to understand events and therefore to respond and
react, and could undermine the desired balance in the negotiations.  In this regard, the African Group
sought to make a few concrete suggestions.  He said that greater liberalization in services sectors in
African countries required the appropriate consideration of certain constrains limiting these countries'
ability to make offers.  He stated that several analyses of the impact of liberalization of trade in
services, including by UNCTAD, had highlighted the fact that if developing countries did not
overcome their supply constraints, they would not be able to increase their participation in world trade
in services no matter what amount of market access they were offered.  Thus, the group called upon
donor countries and relevant institutions to supply the necessary technical and financial assistance so
as to strengthen and consolidate the competitiveness of national services industries in Africa, as well
as to assist enterprises which exported services and which were exposed to little competition in the
national context.  He felt that Members should explore all ways of multilateralizing negotiations onmarket access in sectors of interest to developing countries, including mode 4 and tourism services.
He recommended the creation of a fund to finance the participation of African experts so that they
could participate in the multilateral and bilateral negotiations on services.  He called upon the various
institutions which provided assistance to increase these allocations in order for them to analyse offers
and countries' interests in the negotiations.  The African Group requested that the Secretariat providetranslations of the offers in the WTO working languages as quickly as possible.  He said that the
African Group had noted an imbalance between the negotiations on market access and those on rule-
making, which he felt could impair any market access that was granted and needed to be rectified.  He
said that the negotiations on rules needed to be completed with expediency and within the deadlines
so as to give to African countries a clearer pict ure of the liberalization offered by their trading
partners.  In this regard, the African Group felt that clear guidelines should be established by ministers
at Cancun.  He underlined that a separation should be made between the work of the subsidiary bodies
and the request-offer process in the context of the negotiations on market access.  He said that the
debate on domestic regulation and classification should be pursued in the relevant bodies and not in
the framework of bilateral negotiations on market access, since the African Group did not have the
capacity to discuss these issues at the bilateral leve l.  The African Group also wished to express its
concern with the offers submitted by its main economic partners.  These offers had been hardlyimproved or contained new limitations.  The concerns of the developing countries did not seem to
have been reflected in the initial offers, for ex ample a lack of new and significant commitments in
mode 4.  The African Group thus encouraged Members, and particularly developed countries, to
liberalise in sectors and modes of supply of interest to developing countries and African countries.  In
regard to the sectors of export interests, he stated that these were not far removed from thoseidentified by other developing countries, which included inter alia , professional services, tourism
services and mode 4 supply of services.  The Group called upon all Members to prove their flexibility
in the framework of the negotiations under the Doha Development Agenda.  He said such flexibility
would help the African countries and have a posit ive influence on the negotiations overall.  He
reiterated the right of developing countries to retain the flexibility necessary to liberalise fewer sectorsand to gradually open their markets in accordance with  their level of development.  He expected that
trading partners would take into account these views when revising their initial offers.  The Group
called for Members to fully implement the guidelines and procedures adopted in March 2001, and in
particular with respect to the situation of small suppliers of services.
162. The representative of the Slovak Republic stated that pursuant to paragraph 15 of Doha
Ministerial Declaration, her delegation had submitted its initial offer to the WTO Secretariat.  This
offer covered horizontal commitments, MFN exemptions and specific commitments in individual
services sectors.  It was based on the consolidated schedule of the Slovak Republic.  She said that the
initial offer presented a more liberal, open and transparent trade regime in services.  In this regard, sheTN/S/M/8
Page 40
sought to highlight some of the major changes it  contained.  Individual sectors and sub-sectors were
identified in accordance with the W/120 classification list.  In computer services, the Slovak Republic
subscribed to the understanding on the scope and coverage of computer and related services, CPC 84,
as attached in the annex.  As well, with regard  to postal and courier, environmental and maritime
transport services, some new improvements were offered.  Her delegation had submitted its offer as asign of its commitment to make a major contribution to the multilateral system on trade in services.
Given the high level of commitments made by her country in the Uruguay Round and the extended
negotiations on telecommunications and financial services, she was convinced that the offer was a
significant contribution to the negotiations.
163. The representative of Chile informed the Council that his delegation had submitted its offer,
and he sought to make a few preliminary comments in this regard.  He stated that it was a conditional
offer and Chile reserved the right to withdraw, change  or add to it at anytime prior to the end of the
negotiations, including for reasons motivated by progress in other areas of the negotiations, such as in
agriculture, market access in non-agricultural products and rules.  Chile also reserved the right to
make changes of a technical nature to the offer.  He indicated that Chile's initial offer included new or
improved commitments in, inter alia , professional services, taxation services, energy services,
computer and related services, leasing services and maritime transport services.  With respect tomaritime transport services and referring to the joint statement on this sector, his delegation
encouraged all Members to participate actively in these negotiations so as to achieve significant
liberalization in this important sector.  He said th at Chile's initial offer did not include any changes to
horizontal commitments, which, he stated, was without prejudice to its work on commitments in
mode 4.  He explained that, while no change had been made to mode 4 commitments, his delegationwas attempting to harmonise its position with developments at the WTO.  He said that the lack of new
offers and commitments in mode 4 should not be taken to mean that Chile was not very concerned by
this sector.  Echoing comments by Mexico, he said that it was a vital sector and that Chile was
engaged in bilateral consultations in order to determine the best way to submit any improvements in
mode 4.  Finally, referring to paragraphs 20-22 of the Doha Declaration which could lead to a resulton investment, he stated that Chile reserved its right to remove from the offer commitments
undertaken through mode 3, so that they could be included in any new agreement in a manner
consistent with other undertakings.
164. Turning to the progress in negotiations and in terms of market access the representative of
Chile noted that the result of some 30 offers was positive and he hoped this number would increase as
Cancun approached.  He urged Members to submit their initial offers prior to that meeting.  He said
that the quantity of offers did not necessarily guarantee their quality.  Referring to Mexico'sintervention regarding the preparation of offers as well as the technical and resource capacity
challenges faced by Members, he wondered whether the Secretariat could provide assistance to
delegations in their work on assessing the offers.  He recognised that it was not the work of the
Secretariat to assess the offers; however, he thought that work might be done which would help
Members, and especially the developing countries, in processing data and conducting theirassessments.  For example, tables reflecting improvements by sectors and modes could be useful for
each Member in determining whether market access was progressing.  The information would be
objective and neutral.  With respect to market access in mode 4 and referring to the proposal
contained in document TN/S/W/14, he stated that mode 4 trade was of importance, particularly for
developing countries.  He felt that in order to achieve real and effective market access for freelanceand independent technicians and professionals it would be essential that all Members felt that progress
was being made in the negotiations.  Without this, some Members could feel that they were making
concessions without receiving anything in return.  With respect to the development of disciplines, he
stated that the work in the WPDR was moving in th e right direction but that much work lie ahead with
regard to mutual recognition agreements and entry visas.  With respect to work in the WPGR, his
delegation was concerned with the lack of progress, and the lack of information that had been
gathered on subsidies.  He agreed that the task of gathering such information was complex and it was
not always clear as to which subsidies were being applied; but he felt that a greater effort needed to beTN/S/M/8
Page 41
made in order to all to be aware of the importan ce of this information.  Bearing in mind the lack of
progress in the WPGR and mindful of the March 2004 deadline for negotiations on emergency
safeguard measures, he felt that the WPGR should make a general assessment of its state-of-play and
an overall stock-taking, and not confine itself to an assessment of ESMs.  Finally, he raised the
question as to what would occur subsequent to the meeting of ministers in Cancun, and he felt that itmight be helpful to establish a provisional timetable for the initiation of the submission of revised
offers, which could be close to March 2004.
165. The representative of Japan recalled that in May his delegation had been encouraged by the
number of offers submitted and indicated that this sense of optimism had somewhat faded given the
limited number of offers that had been submitted in the interim.  His delegation was disappointed that
some of the most important developing countries in terms of world trade and their role in the Special
Session had not presented their offers.  He felt that in the services negotiations, for which generalnegotiating modalities where not called for as in other market access negotiations, the tabling of offers
was the starting-point.  He considered that fairly good progress had been achieved in this area thus far,
and that much work would remain after this starting-point.  It was for this reason that he urged
Members to present their offers as soon as possible.  He recognised and understood in general terms
the difficulties which could be involved for developing countries, especially the LDCs in preparingand presenting offers.  However, he encouraged Members to look into the policies of liberalization
and deregulation that they might have undertaken since the end of the Uruguay Round negotiations to
see what might be presented as an initial conditional offer.  He believed that in this way Members
could start to discuss a mutually beneficial outcome in the market access negotiations.  Referring to
some of the statements regarding the quality of the offers tabled, he stated that Japan had made effortsto respond to these requests and interests of the developing countries in its initial offer, for example,
through improvements to existing categories and entering new categories of commitments in mode 4
that were delinked from mode 3, full commitments in tourism services, and the addition of
commitments in business services.  He said that ministers at Cancun would take stock of the situation
and determine whether the participation of the larger membership was ensured.  In this respect, hesaid that the number of offers on the table by September would be crucial signal.  Ministers would
also need to give political guidance so as to main tain and reinforce the momentum of the negotiations.
In this respect, he thought it might be necessary and useful to have a timeframe for the remaining
period of the negotiations, especially if the number of initial offers remained low by the time ministers
met.  He felt that this might also be necessary  with respect to the steps to be taken after the
presentation of initial offers.  In order to avoid any drag on the services negotiations within the overall
context of the DDA negotiations, he felt it was important to establish an appropriate timetable toguide the negotiations.  Japan recognised the importance of negotiations on multilateral front,
particularly on GATS Rules and Domestic Regulation and remained engaged in them.
166. The representative of India sought to share his views on the progress to date in the services
negotiations.  He observed that market access negotiations had entered a substantive stage with 28
submissions tabled.  He stated that India was at an advanced stage of finalising its offer.  With regard
to the overall nature of the offers, he observed that the requests by developing countries in sectors and
modes of export interest to them had generally not been accommodated, which he regretted.  He felt
that Members needed to recognise the existing asymmetry in commitments between sectors and
modes of export interest to developing countries versus those of interest to developed countries.  India
hoped that this asymmetry would be suitably addresse d in the current round of negotiations.  He found
that this asymmetry had been largely maintained in the initial offers tabled.  India was of the view that
such an asymmetry in the market access negotiations would come in the way of the effective
operationalisation of GATS Article IV and paragraph 5 of the negotiating guidelines and procedures.
Balanced market access negotiations, he indicated, would require substantial improvements in sectors
and modes of interest to developing countries, especially in mode 4.  He recalled that a group ofdeveloping countries had presented a proposal on mode 4 for meaningful liberalization and he hoped
that, in both the multilateral process and the bilateral request-offer negotiations, the issues raised in
the paper would be suitably addressed and substantive improvements made in mode 4 commitmentsTN/S/M/8
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in subsequent offers.  He recalled that market access negotiations were only one aspect of the
negotiations and that the negotiations in rule-making areas of were of equal importance.  He
highlighted an example contained in the proposal on mode 4 that effective market access required
substantive progress in the areas of domestic regulation, including in recognition issues and
administrative procedures.  There was a need to maintain a proper balance between market access andrule-making negotiations.  India believed that it was important to review the extent to which
Articles IV and XIX:2 were being implemented and, in  this regard, he thought it might be useful for
Members to consider the political direction they expected ministers to give in order to suitably address
the concerns that it and others had raised.
167. The representative of Norway recalled that the present meeting was the last prior to Cancun
and he sought to offer some observations on the progress in negotiations, taking into account the
mandate, the negotiating guidelines, and the work programme adopted at Doha.  He recalled that themandate stipulated that Members would work with a view to achieving a progressively higher level of
liberalization.  He said that, to date, more then 40 country Members had presented an offer, and
having analysed the content of these offers, he admitted that the quality of the offers differed from the
goal contained in the mandate.  On balance, Norway believed that they represented movement in the
right direction.  He felt that the comprehensive work that preceded the presentation of the offersrepresented a significant contribution to the process, although he was disappointed that a number of
Members had not yet presented their offers.  The consultations his delegation had held that week had
indicated signs of forthcoming initial offers.  He said that the first challenge was to increase the
number of offers on the table and to work on the qual ity of these offers with a view to promoting the
interests of all participants and to securing an overall balance of rights and obligations.  The secondchallenge was the timeframe of the negotiations.  He recalled that the deadline was a mere 18 months
away and Members knew that many areas would re quire demanding work.  As a consequence, the
time had come for Members to concentrate their work on concrete commitments.  Referring to some
of the interventions made by some developing countries, he stated that Norway had great
understanding and sympathy for the problems faced by these Members in preparing their offers and hehoped that the technical assistance resources available to them could be increased.  In this regard,
Norway had made proposals to strengthen the relevant WTO budgets and he hoped that Norway
would be able to increase its contribution in this regard in the forthcoming budget.  He was pleased to
see the great number of informal meetings being held, the good working atmosphere in all services
areas and the broad participation of many delegations.  He was impressed by the strong presence of
experts from many capitals, which added to the substantive nature of the negotiations on many
complicated dossiers.  He had observed a gradual broadening of the participation in the negotiationsthat would help support a variety of interests and co ntribute to negotiating results of benefit to all
Members.
168. The representative of Norway sought to share his impressions of the status of various
important areas.   In maritime transport services, Norway was encouraged by developments in this
area.  He said that the broad support demonstrated through the joint statement on this sector tabled on3 March 2003 was a testimony in this regard.  He had observed substantial commitments tabled in this
sector by some 30 country Members and he indicated he would encourage further offers of the same
quality.  He recalled that ships carried over 80 per cent of world trade in goods.  Broad commitments
ensuring predictability and stable liberal market conditions for shipping would constitute a major
contribution of the round to increase world trade to the clear benefit of all Members, not the least ofwhich were the developing countries.  He said that  a strong coalition of Members was willing to work
to this end and he was confident that this coalition would grow stronger.  Second, he said that the
negotiations on energy services represented an opportunity to modernise the world market which
would give strong incentives for growth.  Norw ay had made a comprehensive offer which he hoped
would contribute to progress in this area.  He noted that there were currently few offers on the tableand he felt that all Members should evaluate how and in which sectors of the energy field
liberalization would contribute to realising growth potential.  He recalled that Venezuela had provided
the Council with a universal checklist of the world market for energy services, from which eachTN/S/M/8
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country could select what it considered to be meaningful and commercially relevant services in line
with their level of development and regulatory regime.  He believed that all Members had sufficient
guidance to work on concrete commitments and he looked forward to working constructively with
delegations.  He recalled that the energy friends group had organised two recent seminars to discuss
different issues relating to scheduling commitments in  this field.  He hoped that as many Members as
possible would be able to take part in these discussions both in informal meetings and bilateral
consultations.  Third, with regard to financial services, he noted that several Members including
Norway had tabled offers which aimed at an ambitious liberal agenda.  It appeared that others had
been more reluctant to revise their schedules and take on similar commitments.  He expected progress
and improved offers in this important sector in the time to come.  Fourth, he recalled that his
delegation had consistently emphasised the importance for Members to remove limitations in the
telecommunications sectors and he urged Members to commit to the common set of regulatoryprinciples contained in the Reference Paper.  He was convinced that this was in the interest of all
participants, developed and developing countries alike.  In his opinion the current offers on
telecommunications met these criteria only to a certain degree.  He hoped that Members could work
towards achieving a fully liberalised global telecommunications market beneficial to consumers,
suppliers and economies in general.  Fifth, he noted that mode 4 was a key issue for several Members.particularly developing countries.  In its initial offer Norway had made several improvements in
mode 4 and Norway would consider constructively al l new inputs brought forth by Members.  He said
that, based on the many bilateral meeting his delegation had held (30 in May and 15 in July), he had
the impression that many delegations would consider improvements on the issues that had been
raised.  He thanked those delegations who had res ponded constructively in the areas that Norway had
sought improvements and he assured them of Norway's cooperative spirit in considering their requests
for further improvements.  He thought that a cooperative dimension would be necessary to complete
the task within the challenging timeframe.  He hoped that Members would soon find consensus on the
Modalities for the Special Treatment for LDCs.  Norway had repeatedly expressed its understanding
for the concerns of the LDCs and would support so lutions that would help promote their economic
progress.  He also recognised the importance of the work being done in the subsidiary bodies on rule-
making.  In sum, he felt that the trend in the negotiations was positive and that good work was being
done in a constructive atmosphere.  He said that the clear aim was to achieve results that would be to
the benefit of all and he looked forward to cooperating with delegations on achieving concrete and
meaningful commitments to this end in the course of the current round.  Noting that this would be his
last intervention to the Special Session, the represen tative of Norway expressed his gratitude to the
Chairman for his strong leadership.  He said that his colleagues had a high level of expertise andcompetence and he was certain that they would achieve positive results for the negotiations and send a
powerful signal of hope and progress to the world economy.  The Chair expressed his personal
appreciation for the support and effort the representative of Norway had given to the negotiations.  Hesaid that he had been a leading contributor to the good working atmosphere, good level of engagement
and broadening participation, and he indicated that his departure would be a loss.
169. The representative of the Philippines commended those delegations which had recently tabled
an offer and he thought that these testified to the fact that negotiations in trade in services were
moving ahead in a smooth fashion.  In the light of a number of meetings in which he had participated,
it was his view that earlier optimistic characterisations of the negotiations might need to be revisited.
He took note that developed countries had started to note the decreasing pace of in-coming offers, andseen from his perspective, he wondered whether this would justify new timetables, particularly since
the offers were being tabled and since developing countries had consistently indicated that their delay
in tabling their offers was not political strategy, but was a question of completing a technically
complicated exercise.  He said that the disappointment articulated by some might not have been just
since a healthy percentage of world trade was covered under the offers on the table.  In thisconnection, he underlined that he was not implying that offers should be delayed, but rather that the
process should be allowed to move forward in th e knowledge that developing countries had been
consistent in indicating their desire to participate in the process and to submit their offers as soon as
possible.  Many delegations had raised the issue of the quality of the offers on the table and he echoedTN/S/M/8
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earlier comments that the nature of commitments pr esented in the initial offers, particularly with
respect to mode 4, left room for improvement.  He recalled that he had previously had occasion to
raise the question of the commercial value of some of the offers, especially in terms of mode 4, and he
indicated that his delegation would continue to raise this question with respect to the initial offers.  He
felt that it would be misleading to say that the initial offers of some had been presented in such a wayso as to encourage others to table their offers and assess what sectors they would be willing to include
in their offer.  In this regard, he reiterated that the existing asymmetry from the previous round in
which mode 4 commitments weighed lightly in the scales and that developing countries expected this
asymmetry to be redressed in the initial offers of their trading partners.  He highlighted that many
developing country delegations, including his own, had often raised the indispensable nature of the
rules aspect of the services negotiations and that a successful conclusion of the negotiations would
require the progress and conclusion in certain agreements on rules.  He indicated that emergencysafeguard measures was of foremost concern, because such rules would provide a necessary safety net
when making commitments.  Referring to arguments that it was not desirable to create legal
uncertainty of commitments through these types of agreements, he said that Members had had ample
occasion to discuss these arguments and he recalled that discussions on the substantive technical
issues related to ESMs over the past eight years had allowed Members to understand what amechanism would entail.  In this respect, he thought that Members had taken technical work as far as
was possible, and he suggested that it might be appropriate to seek political guidance from ministers
on how to move forward on this issue.  He did no t seek to preclude further technical work in the
working party, but felt that there was scope for political guidance.  Ministers should be informed as to
the need to conclude an agreement as a complement to the market access negotiations, bearing inmind the 1 January 2005 deadline.  He also wished to highlight the importance of negotiations on
subsidies, for which Members had a clear negotiating mandate and an opportunity to provide
momentum prior to Cancun.  With regard to the negotiations on possible disciplines on domestic
regulation, he felt that work had been energised by submissions and that there was a realisation that,
in order to complement the market access negoti ations, renewed efforts in this regard would be
helpful in the lead up and subsequent to Cancun.  Referring to earlier comments concerning a balance
of rights and obligations, he highlighted that the negotiations in services were not an isolated venture,
but linked to other negotiations, for instance those in agriculture, which he characterised as the engine
or the brakes of the negotiations.
170. The representative of Indonesia sought to share his delegation's view on the progress in the
negotiations on trade in services.  He informed Me mbers that in the process of the negotiations,
Indonesia had been involved in comprehensive bilateral consultations on the scope of the initialrequests received from its trading partners.  He said that his delegation had difficulty in undertaking a
full evaluation of the requests and hoped that flexibility would be demonstrated for developing
countries such as Indonesia to open fewer sectors in a progressive manner and in line with its level of
development as envisaged in Article XIX.  With regard to the preparation of initial requests and offers
from Indonesia, he informed the Council that his country had encountered some difficulties in thisregard.  He said that the analysis of requests and the preparation of an offer were complex tasks.  The
negotiation process required extensive consultations with stakeholders, complex technical analysis to
identify current and potential trade interest and the study of the impact of services liberalization and
development prospects.  He indicated that many domestic stakeholders were not well-informed about
the GATS, and technical assistance to improve this  situation would be welcome.  Although Indonesia
had not submitted its initial requests and offers, he stated that this was not due to a lack of interest or
commitment to the negotiations, but rather was explai ned by a lack of institutional capacities and the
assessment of trade in services currently underway.  He said that determining trade interests and the
possible consequences of making new commitments consisted of a process in which the public and
private sectors analysed the impact of the GATS, which had taken more time than expected.  Hehoped that Members would take into account the limited capacity of developing countries in making
an assessment of its services sectors.  His delegation's strong view was that in order to increase the
participation of developing countries in services trade as envisaged in Article IV, developed countries
should take into consideration the constraints encountered by developing countries and least-TN/S/M/8
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developed countries in obtaining market access in developed countries.  He requested developed
countries to consider seriously the appeal by developing countries and least-developed countries to
obtain broader market access on specific sectors and modes of supply of export interest to them.  In
mode 4 for example, his delegation found that this mode had not been fully reflected in offers,
especially from developed countries, and had not anticipated the concerns of developing countries.He said that his country's concern in this regard was not limited to high-skilled professionals but also
low and medium-skilled personnel.  He was of the view that the services negotiations provided an
opportunity for developing countries to achieve meaningful commitments in modes and sectors of
interests to them, as reflected in the Doha Declaration.  He said that increased market access
commitments by developed countries in areas of key services interest to developing countries would
play a determining role in ensuring a pro-development outcome.  Indonesia had noted the imbalances
in the process of the negotiations, which emphasised the market access interests of developedcountries.  As well, the developed countries had stronger capacity to acquire higher commitments
from their trading partners, as reflected in their requests and in bilateral negotiations.  By contrast, the
negotiations on rules had been making little progress, even though the need for these rules was clear,
since they were part of the legal framework that his delegation expected to be completed in the
context of the multilateral trading system.  He observed that the negotiations in trade in services weremoving well; however, he felt that it was equally important to make progress in rules negotiations,
which needed to be commonly agreed upon and transparent in order to ensure that the liberalization of
trade in services would be effective.  In this regard, his delegation emphasised the importance of
completing the negotiations on emergency safeguard measures prior to the end of the negotiations on
specific commitments as provided for in the negotiating guidelines.  He said that in order to not hinderthe market access negotiations it was of crucial importance that issues of interest to developing
countries be addressed.  Indonesia considered that the negotiations on market access and on rules had
equal importance and that the successful result of the negotiations would be judged by the successful
result of both of these negotiations.  Finally, his delegation favoured increased transparency in
domestic regulation.  Nevertheless, he said that  the implementation of any disciplines should be
realistic and not burdensome, especially for developing and least-developed countries.
171. The representative of Egypt expressed her delegation's support for the statement made by
Tunisia on behalf of the African Group.  Her delegation believed that a dynamic was needed to ensure
effective implementation of paragraph 15 of the negotiating guidelines and Articles IV and XIX of the
GATS.  She said that developing countries needed to ensure that the negotiations would achieve
results to their advantage.  Multilateral discussions on issues of interest to developing countries,
especially on mode 4, was of the utmost importance.  She echoed the suggestions by Tunisia on theeffective ways to enhance the participation of African countries in the negotiations.
172. The representative of Peru hoped that in the future two negotiating bodies would not be held
concurrently.  Turning to the progress in negotiations, he underlined Peru's interest in the negotiations
and indicated that his delegation was preparing its initial offer, which would be presented prior to the
Ministerial Conference.  With respect to the bilateral consultations and the request-offer process, hefelt that acceptable progress was being made; nonetheless, he felt that this should be accompanied by
progress in horizontal areas.  He underscored the importance that his delegation attached to
emergency safeguard measures, subsidies, domestic regulation and certain classification matters, the
latter of which he thought should be dealt with in further detail in the Committee on Specific
Commitments.  With respect to the balance between the content of requests and that of the offers, heobserved that the process was at an initial stage and he hoped that improvement could be made and an
effective balance achieved which reflected the objectives of Article IV.
173. The representative of Jordan shared many of the views expressed with respect to the progress
thus far.  She said that Jordan was making all efforts to participate in the negotiations as a recently
acceded Member with extensive commitments.  She indicated that her delegation had received andtabled a number of requests, and had conducted bilateral consultations with trading partners, which
she had found constructive.  Jordan remained engage d in the negotiations with a view to securing theTN/S/M/8
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interests of all Members.  Her delegation expressed its gratitude for the statement made by the
representative of Tunisia on behalf of the African Group and shared some of the concerns he had
expressed, in particular those related to the financial and human resources constraints faced by
developing countries, as well as those related to market access in sectors of interest to developing
countries.  She indicated that her delegation might bring its own sectoral interest to the table at afuture stage and supported leaving all rules related issues to the competent subsidiary bodies and not
to a bilateral request-offer process.  She also expressed support for guidance to complete work on
GATS Rules.
174. The representative of Korea said that on the basis of their initial offers the concerned
Members had entered into more substantive bilateral market access negotiations.  However, he
recalled that fewer than 30 offers had been submitted, which was a cause for worry.  Although he
understood that there were domestic and administrative constraints for a number of developingMembers, he hoped that more Members would submit their offers quickly in order to allow for more
balanced progress in the services negotiations.  He was encouraged that some developing countries
had indicated that they were planning to submit their initial offer prior to Cancun.  At the present
juncture, he thought it propitious to consider what action should be taken to ensure continued
progress.  In this respect, he echoed earlier suggestions regarding further timeframes meant tomaintain momentum in the services negotiations.  While recognising Members' discretion in
determining when to submit requests or offers, he felt that without a definite timeframe for the
submission of improved offers some Members might opt to defend their initial offers until the end of
the negotiations without reflecting the necessary changes in their schedules.  He said that a new
timeframe would act as a guide post for further pr ogress for Members who had actively participated in
the market access process while providing needed domestic momentum for those Members who had
not submitted their initial offers.  His delegation was open with respect to the suggestion for specific
timeframes, and he suggested that a possible deadline could be fixed for end 2003 for initial offers
and 31 March 2004 for the submission of improved of fers.  He looked forward to hear the views of
other delegations in this regard.
175. The representative of Switzerland expressed gratitude to those delegations who had submitted
an offer, which he saw as a positive signal, and which his delegation would examine with care.  With
regard to progress in the negotiations, he felt that they had begun in a satisfactory manner, included a
good number of substantial offers, and bade well for the future.  He said that in his view not only the
number but the quality of the offers mattered and in this regard the quality was variable.  The offers
tabled to date ranged from those of good quality to others that were insufficient in his view, both in
overall terms and in certain modes of importance to his delegation.  He observed that this was normalat the present stage and that additional efforts would be needed to move ahead and to attain a
satisfactory level of liberalization in the round.  He indicated that Switzerland was willing to
participate in this effort in the framework of the overall negotiations.  He said that one aspect of the
negotiations regarded the transparency and intelligibil ity of the offers.  In this regard, his delegation
had noted some weaknesses, particularly with respect to the scheduling guidelines and systematicreference to the CPC.  He hoped that discussion on these points could be picked up at future meetings.
He recalled the importance that his delegation attached to mode 4 and had taken note of the paper
tabled earlier in the meeting by 15 Members with satisfaction.  Referring to one idea in the paper he
found to be useful, he suggested that the Secretariat indicate categories of persons or service suppliers
under in mode 4.  The paper had identified four categories and he thought there might be others inexisting schedules and that it would be useful for the Secretariat to produce a note that would list
existing categories, including the four referred to, with definitions.  He noted that this would be
without prejudice to applicable conditions and woul d give Members a framework for work that could
be used by all as they saw fit.  With respect to rule-making, he said that his delegation would be
actively participating in this work and he noted that  progress had been made in terms of participation,
work done and submissions made in many areas, notably in domestic regulation and in the Working
Party on GATS Rules.  Echoing a comment made by the representative of the Philippines, he agreed
that much technical expertise had been acquired, which had helped Members to refine and focus theirTN/S/M/8
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position, as was the case for Switzerland.  He had listened with care to the interventions by
developing countries concerning balance in the offers made in terms of the interests of developed
countries and developing countries, and he believed that Switzerland's offer was balanced and
responded to the requests from various groups in the negotiations.  In this regard, he hoped that his
delegation had been successful and thought that this was the case.  Specifically, his delegation hadtried to remove nationality requirements and he noted that only one such requirement was contained
in the offer.  As well, the offer proposed to eliminate all economic needs tests, which had often been
requested by developing countries and was a negotiating objective for his delegation.  He stated that
Switzerland had improved its existing high level of commitment in mode 4.  In terms of commitments
in mode 1, which he felt was rarely mentioned but nevertheless of importance to the developing
countries, he noted that the offer had opened new opportunities for trade under this mode, which he
thought would be of benefit to developing countries.  In this regard and referring to earlier commentsrelated to business and tourism services, he stated that in both of these sectors Switzerland had
endeavoured, to the extent possible, to eliminate its restrictions and introduce new sectors.  He felt
that these two sectors were substantial in Switzerla nd's Schedule.  He was aware that there were other
areas of interests that had not been raised.
176. The representative of Chinese Taipei observed that the current meeting was particularly
important because it was the last one prior to Cancun, and that much preparation would be needed in
order to forward a good progress report to ministers.  With this in mind, he indicated that his
delegation had invited 11 experts from various competent authorities to Geneva and that some 14 sets
of bilateral meetings had been held during the cluster.  In addition, he indicated that his delegation had
attended a number of friends groups meetings and overall had found the process to be encouraging,instructive and informative, and had helped his delegation to clarify its initial requests and offers and
identify the priority areas on both sides.  While his delegation was mindful of the constraints of some
of the Members in preparing their initial offers, he remained disappointed that 29 Members had tabled
their initial offers.  He noted that some key Members were missing from the list at an important stage
when Members were seeking to lay the foundation for progressive liberalization in the negotiations.In this regard, he felt that it was crucially important that Members table their initial offer promptly in
order to create positive linkages and to maintain momentum and progress in the round.  Like others,
he expressed concern with, in some cases, the low level of improvements in the initial offers
compared with the original commitments scheduled.  Chinese Taipei called on Members to make their
offers prior to Cancun and to make those offers substantial so that a good progress report could be
made.  In the same way he observed that negotiations in many other sectors had missed mandated
deadlines, he expressed concern in this regard, and he felt that the proposals mentioned should beexamined seriously.  As was to be expected, he stated that his delegation had its own priority sectors,
such as legal, computer and related, distribution, telecommunications, audio-visual, financial and
maritime transport services, and recognised the prioritie s of others.  He recalled that according to the
guidelines and procedures for the negotiations on trade in services, there was no a priori  exclusion of
service sectors or modes in the negotiations.  He found that there were often too many issues on thetable for discussion and felt that, in order to adhere to deadlines, a more pragmatic approach, which
would prioritise interests and sectors so as to better focus the discussion in the future, would prove
more conducive to progress.  After Cancun, Members would be able to focus on sectors of common
interest, which would allow them to time to focus on other issues, such as classification and domestic
regulation.  He said that while the market access negotiations in services generally were advancing ata good pace, he recognised that negotiations on some multilateral issues could be improved,
particularly with respect to the establishment of an emergency safeguard measure and on possible
disciplines for domestic regulations governing all serv ice sectors.  He said that in the interest of
ameliorating progress overall, he believed that the two approaches should be better synchronised so as
to maintain the rhythm of the negotiations.
177. The representative of Hong Kong, China, sp eaking on the initial offers, agreed with the
delegations of Chile, Japan, Switzerland and others who had underscored that not only the number but
the quality of the offers was important.  In order to allow delegations to better determine the quality ofTN/S/M/8
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offers, he agreed with Chile's request for possible assistance from the Secretariat.  In terms of the
suggestion for timelines, Hong Kong, China thought  that it would be useful for the Council to
consider such timelines taking into account the state of progress as the negotiations advanced.   More
specifically, in order to maintain a sense of progress in various areas and maintain momentum he
thought that a timeline in itself would not drive progress, but rather could precipitate a sense ofprogress by Members.  His delegation sought to reflect further on this suggestion and to reflect on
how such a sense could be best maintained in the Council.  He hoped that further impetus would be
given to the services negotiations and, in this regard, he recalled earlier references to balanced
outcomes in terms of market access and modes and rule-making work.  In his view, the best way to
achieve a balance was for all Members to actively engage in the negotiations and clearly indicate their
areas of interest in the relevant fora.  The submission of an initial offer, he observed, would be a
major step in the regard.  He also felt that posi tive engagement in multilateral rules work would be
important to achieve a balanced outcome.  Hong Kong, China had taken note of the capacity
difficulties expressed by some regarding the submission of their initial offers, and he hoped that
despite these, their initial offers could be submitted prior to Cancun.  His delegation wished to
underscore a point to which it attached importance contained in paragraph 6 of the Annex on
Article II Exemptions and referred to in paragraph 6 of the negotiating guidelines, which made clearthat MFN exemptions were subject to negotiations.  In his view, MFN exemptions were distinct from
specific commitments, but were part and parcel of the negotiations in the Council.  In this regard, he
recalled previous negotiating proposals related to the removal of MFN exemptions.  He suggested that
a reference be made in the report to the TNC that, apart from the negotiating proposal related to
specific commitments, proposals related to the re moval of MFN exemptions had been submitted and
considered by Members.  His delegation expressed concern over the negotiations on the MFN
exemptions, which, as far as he could discern, had not moved forward in the request-offer process.
He recalled that in the past his delegation had underlined the removal of MFN exemptions through all
means of negotiations, and he sought to highlight that a lack of progress in the bilateral negotiations
on this issue would increase his delegation's interest in pursuing the removal of MFN exemptions inthe multilateral forum.  He indicated he would revert to this point.  Referring to a sector of particular
importance for efficient transportation and trade, namely logistic and related services of which
maritime transport was a key component, he said that in his delegation's view, efficient point-to-point
logistics chains for delivery and distribution would greatly facilitate international trade.  He said that
with the growth in global trade in  goods and services, the demand and benefits of logistics and related
services were becoming increasingly significant, not only for the supplier of these services, but even
more so for the users of these services.  He felt that this was particularly the case when logistics costswere estimated to be at least 20 per cent of production costs and, in cases of countries with
insufficient transportation assets, these costs could be higher.  Given the importance of these services,
his delegation looked forward to sharing more of its views and further discussion.
178. Turning to the rule-making negotiations, the representative of Hong Kong, China sought to
strongly emphasise the importance of this part of the services negotiations.  While his delegation didnot consider the rules negotiations to be a prerequisite to market access negotiations, he felt that the
development of clear rules and a legal framework would help ensure the effectiveness and legal
certainty of market access commitments.  He thought this was perhaps best illustrated in the case of
domestic regulation, which had seen recent positive discussion that he hoped would be pursued.  In
particular, he noted that the development of disciplines under Article VI:4 would be essential inensuring that market-access commitments were not rendered meaningless by regulatory barriers.  He
felt that the negotiations were essential in order to complement the market access negotiations.  He
recalled that, in the context of the stock-taking in the Working Party on GATS Rules, he had
underscored the importance of making progress in all three areas that were under negotiation.  He
sought to highlight the issue of subsidies, which he indicated was of particular importance to hisdelegation.  He said that work on subsidies was particular in that there was no apparent debate over
the mandate or the deadline, and nonetheless, progress was not being made.  He saw a clear mandate
contained in GATS Article XV for information exchange for the purpose of negotiations on subsidies,
and had observed the lack of substantial progress.  Alluding to the chicken-and-egg syndrome referredTN/S/M/8
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to by the Chair of the WPGR in his report, he did not feel that this was a reason for not actively
engaging in the discussion.  He indicated that his delegation would continue to participate actively
and to contribute to ideas on advancing the negotiations on subsidies.
179. The representative of Australia observed that since the beginning of the request-offer process,
Members had engaged intensively and assiduously in efforts build a package of specific commitments
and to advance work on rule-making.  She recall ed comments to the effect that the services
negotiations were moving along well, but she felt that this state of affairs should not be taken for
granted.  Her delegation believed that success would depend on how well the participation of all
Members was maximised, how Members responded to deeply-held interests in market access and
rule-making, and how Members would build a package reflecting the central role of services in
building all areas of Members' economies.  She said that the wide range of informal groups in a wide
range of sectors attested to the importance of servic es.  With respect to the efforts to build a market
access package, she stated that Australia had put forth an offer which built on the extensive
commitments it had made in the Uruguay Round and subsequent sectoral negotiations.  She said that
Australia had benefitted from the autonomous liberalization it had undertaken in the services area, and
she agreed with Japan that domestic deregulation, privatisation and liberalization could form the basis
for work on initial offers.  Since the submission of initial offers, her delegation had valued theopportunity to engage more fully on the specifics of Australia's market access priorities, had
appreciated the interest by others in its initial of fer, including by some who had not made offers, and
had firmly registered their views on the extent to which their expectations had or had not been met in
the offer.  She indicated that Australia had undertaken some 70 bilateral meetings and had benefitted
from the presence of Australia's and other Members' experts.  She said that efforts in market accesswould have benefitted from a higher number of offers.  She appreciated the concerns raised relating to
the institutional constraints faced by some, and Australia was considering how it might support further
capacity building in services.  She joined those Members who had encouraged Members to submit
their initial offers.  Her delegation welcomed the offers from the Slovak Republic and Chile, and
acknowledged the amount of work entailed in producing an offer.  She believed that a large number ofoffers submitted by the time ministers met in Cancun would constitute a signal of the undeniable
importance of this sector to the world economy.  She said that by her calculations some 80 per cent of
world trade was covered by the offers submitted; however, responding to a comment by the
Philippines, she felt that an important question wa s maximising the ownership of the outcome of the
negotiations and in that regard the offer of every Me mber was very significant.  She agreed with the
statements made that quality was as important as the number of offers on the table and called for a
higher level of ambition in this regard.  Australia recognised the mandate on rule-making and stoodready to contribute to this process.  Her delegation also attached importance to the modalities on the
special treatment for LDCs and looked forward to the Chair's consultations on this matter.  In terms of
future work, while she appreciated the argument th at timeframes might help to focus energies, she
thought that it might be premature to prejudge what ministers might decide, since this issue would
need to be considered along with other areas unde r negotiation.  While timelines might be helpful in
the domestic context, she thought it would be best le ft to ministers to decide on how to take the round
forward.
180. The Chair announced that a new initial offer had been submitted by the delegation of
Singapore, which he welcomed.  He recapitulated that Chile had made a suggestion for the Secretariat
to prepare some data on the offers and that Switzerland had suggested that the Secretariat prepare anote outlining the categories of natural persons, including those contained in the proposal on mode 4
which had been presented by India on behalf of a group of Members.
181. The representative of China wished to express support for the statements made by India, the
Philippines, Indonesia, and Uruguay on behalf of MERCOSUR.  She stated that, in terms of market
access, her delegation had held consultations with a few of  its major trading partners, whichcontinued to focus on the clarification of some technical issues.  Her delegation's preliminary study of
the offers of its major developed trading partners showed that there was little or no improvement onTN/S/M/8
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market access for China's service suppliers, for example, she said that there remained many economic
needs tests and MFN exemptions, particularly those based on reciprocity which her delegation did not
think was in conformity with the rules of the GATS.  She also observed that there was no substantial
improvement in mode 4, and she noted that a study by the OECD circulated to Members of the
Council highlighted that developing countries had a clear comparative advantage in labour intensiveservices and that there remained an asymmetry in their market-access commitments for sectors and
modes of supply of export interest to industrialised countries versus those of interest to developing
countries.  She noted that other delegations had expressed similar comments in the light of their
assessment of the initial offers.  Her delegation therefore sought improved market access in sectors
and modes of supply where developing countries had a commercial interest in accordance with Article
IV of the GATS and paragraph 5 of the negotiating guidelines and procedures.  She stressed that the
particular situation of recently acceded Members and of developing countries needed to be fully takeninto account in market access negotiations and that all Members bear in mind that progressive
liberalization needed to be accompanied by proper domestic regulation.  With respect to the
negotiations on GATS Rules, she echoed comments by the representative of the Philippines that
guidance should be sought from Ministers on the negotiations on ESMs.  Her delegation felt that the
negotiations should be balanced in terms of the negotiations on market access and rules, and in termsof market-access commitments made by developed and developing countries.  She informed the
Council that China's internal consultations with regard to its initial offer were continuing and that it
would submit its initial offer prior to Cancun.  She requested that her delegation's comments made at
the last informal meeting of the WPGR pertaining to the stock-taking in the negotiations on ESMs and
government procurement be recorded in the minutes of the present meeting.
∗
182. The representative of Colombia stated that the process of internal consultations for the
preparation of Colombia's initial offer were progressing and her delegation hoped to table it in the
next few months.  She stressed that for her delegation progress in the negotiations were advanced
through the complementary process of bilateral, plurilateral and multilateral negotiations, and that
balance was required in all three areas.   She stated that Colombia would continue to constructivelyparticipate in these processes.  She expressed her concern about the low level of commitments in
sector and mode of supply of interest to Colombia.  Her delegation's assessment of the offers
submitted suggested that the interests identified in its negotiating proposals and its requests appeared
not to have been taken into account.  The proposed undertakings did not provide trading opportunities
for Colombia's exporters, because they focussed on sectors and modes of supply in which Colombiadid not have a competitive edge.  In this regard, she suggested that mode 4 would be crucial if
Colombia were to achieve a satisfactory balance.   The services negotiations needed to be designed so
as to reduce the impact of measures on trade in se rvices and so as to facilitate effective access to
markets.  For this to be achieved, her delegation shared the position expressed by other Members that
market access negotiations could not progress in isolation, but needed to advance in parallel with thenegotiations on domestic regulation and the development of disciplines on emergency safeguard
measures and subsidies.  She indicated that classification issues were also of concern to her
delegation, particularly with respect to the lack of technical discussion at the multilateral level, which
in turn had raised questions with regard to the undertakings contained in offers.  In this regard, she
believed increased discussion at the multilateral level to be relevant so as to supplement and improvethe concerns or questions that could arise.  In her view, there remained a large number of areas of
concern related to the scope of some sub-sectors of interest to it, and she urged all Members to
proceed in a multilateral manner.  She reminded th e Council that Colombia had special interests in
other areas, such as in agriculture, and that balance would be assessed in the light of the results
achieved in that area.  Referring to the suggestion made by the representative of Switzerland, she
expressed support for this suggestion, recalled that Thailand in the Committee on Specific
Commitments had made this request and said it was her understanding that the Secretariat wasworking on this task.  Referring to the question of a timetable for the services negotiations, she sought
to reflect on and revert to it.
                                                     
∗ Please see Annex 1.TN/S/M/8
Page 51
183. The representative of Côte d'Ivoire wished to manifest his delegation's interest in the
negotiations.  Although his country had not been able to respond to the requests addressed to it, he
recalled the reasons that others had evoked.  In this regard, he regretted that movement forward
seemed to be occurring at two paces, and it appeared that some developing countries were excluded
due to a lack in their capacity.  The African Group, as noted by the representative of Tunisia in hisearlier intervention, had identified the numerous obstacles the group faced and he supported the
suggestion Tunisia had made.  He hoped that the suggestion would be examined favourably and taken
into account so that the negative impression that the negotiations were open only to developed
countries Members of the WTO would be dispelled.
184. The representative of New Zealand said her delegation saw the link between market access
and rules negotiations as inseparable parts of the Council's work and wished to see progress in both.
With respect to the market access negotiations, her delegation was not disheartened by the progress ofnegotiations to date.  While she acknowledged that the quality of offers was at times patchy, she did
not find this situation surprising at the present stage.  However, she hoped that Cancun would be an
important way-station in the negotiations and felt that it represented an important opportunity for
ministers to consider the progress made in the Special Session.  It was important that as many offers
as possible be on table in order for ministers to make their assessment and she urged Members whohad not tabled their offers to do so prior to Cancun.  New Zealand acknowledged the challenges faced
by developing countries and particularly least-developed countries with regard to resources and
technical challenges involved in the process, and was supportive of efforts to address these needs and
concerns.  She noted that through bilateral consultations and in the work of the Council with regard to
the request process, it had been made clear that many developing countries had identified areas ofinterest.  Her delegation was heartened by indications given in bilaterals and in the Council that a
number of developing countries were well-advanced in the preparation of their initial offers, including
a number of large developing economies.  She was hopeful that ministers would be in a position at
Cancun to assess progress and to give guidance to the Special Session in its future work.  However,
she felt that it would be premature to prejudge the guidance ministers might give.  She noted thatprofessional services were an ongoing focus in the negotiations for her delegation and were of
importance for a range of developing countries.  On postal and courier services, she flagged New
Zealand's offer in this sector and noted that, although her country did not have a postal monopoly,
Members with monopolies had options for tabling substantive and meaningful commitments in the
postal sector.  She said that one such example existed and she hoped progress could be achieved in
this area.  On maritime transport services, she recalled the joint statement from a number of Members
and associated her delegation with the comments made earlier by Norway on this sector.  On airtransport, she indicated that New Zealand had made a significant offer and would work with others to
further progress.  Her delegation had noted the interest of a range of delegations in work on mutual
recognition, and noted in particular the contribution from India.  Her delegation would examine with
careful interest proposals that would come forward, and remained hopeful that some multilateral
action might be possible, despite the challenges at identifying effective work in this area.  On mode 4,New Zealand had noted the recent proposal submitted and acknowledged the importance of this mode
to developing countries.  She said that New Zealand had included in its offer a significant
improvement in mode 4 commitments, acknowledged th e interest of developing countries in seeing
more progress in this area and would give careful thought to it.  She expressed support for the
suggestion by Chile in terms of tasking the Secretariat with some processing work that could helpsmall and developing country delegations conduct their own analysis of the offers.
185. The representative of Nicaragua thanked the Chair for the opportunity to make comments on
the eve of the ministerial in the knowledge that the comments made at the meeting was one of the
bases for his report.  He said that his delegation was making all efforts to take active part in the
negotiations, but he expressed frustration that his delegation could not participate fully because of themany elements under negotiation.  This situation explained why many delegations had not been able
to meet the indicative deadlines.  He voiced the concern that the requests made by his delegation,
although somewhat after the indicative date, had not been taken into consideration in the initial offers.TN/S/M/8
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He said that little or nothing of his delegation's requests was reflected in the initial offers and that,
with few exceptions, the areas of interest to his delegation remained subject to national treatment and
MFN exemptions, which he felt would need to be revisited if a genuine opening up were to occur.
While noting that Nicaragua's main concern related to agriculture and related anti-competitive
practices, he hoped that Members would adopt a more positive approach to its requests.  In thisconnection, Nicaragua had great faith in the opportunities that services liberalization might afford.  He
said that market opening needed to be in line with the development programmes of Nicaragua.
Recalling that the services negotiations were being undertaken on market access and horizontal issues,
he said that, with regard to the latter, the current classification system and its multilateral use in
drawing up schedules did not respond to the dynamic nature of services since human innovation and
ingenuity could create new markets.  He said that the CPC and W/120 classification list provided
temporary solutions and the fact that they were not adaptable had a direct influence on the binding ofnew sectors of interest to many Members, for example in tourism in Nicaragua's case.  With respect to
domestic regulation, he felt that little progress would be made if Members departed from the domestic
policies referred to in the Agreement.   He believed that the recent approaches should have as their
basis the regulation he had alluded to as well as the policy on which it was based.  He observed that
the overall picture was not encouraging, as many answers to questions posed remained outstanding,which had engendered further questions.  In a more optimistic light, he stated that as market opening
in services trade advanced, more work on horizontal issues would need to be completed and his
delegation would work constructively to this end.  He informed the Council that in the coming days
Nicaragua would be tabling its initial offer and, like many other developing countries, was expending
tremendous effort in order to work constructively.  He drew the attention of Members to anintervention that would be made later in the meeting by the representative of Peru, and said that the
answers to the questions the representative of Peru would be presenting would give developing
country Members a better indication as to how progress was proceeding in trade in services.
186. The representative of Malaysia expressed his delegation's gratitude to those Members who
had tabled an offer, and in particular those most recently submitted from the Slovak Republic, Chile
and Singapore.  He hoped that the latter would provide an example to other ASEAN Members.
Recalling what he had said in recent bilateral meetings for the sake of transparency, he confirmed that
Malaysia was working on its initial offer and explained that domestic consultations and the
preparatory process had been more time-consuming than expected.  He noted the concerns raised by a
number of other developing countries, such as India, the Philippines, and China about the
asymmetries in the approach of the negotiations, which he thought should be taken into account.  He
hoped that the Chair's report would take these asymmetries into account and that developed countrypartners would give them the greatest attention.  Taking note of the deadlines as well as the delays
arising from asymmetries and evoking a wider perspective on the negotiations, he stated that
Members needed to bear in mind the development dimension of the GATS, the services negotiations
and the Doha Development Agenda in the context of the current round, and demonstrate their
agreement on development.  In this regard, he recalled that his delegation had expressed concernabout the comprehensiveness of the some of requests at previous meetings.  He further recalled that
his delegation had indicated that, while it respected the ambitions of others, he hoped that they would
take into account the difficulties faced by delegations in a position similar to his own in responding to
all of the requests.  He underlined that the negotiating guidelines and Article XIX:2 were clear on this
point.  He recalled that delegations had often spoken about the use of a bottom-up approach, thequestion of progressiveness and the respect of national policy objectives.  He thanked Members for
these acknowledgements and hoped that they would adhere to these points in spirit and letter and take
into account that delegations such as his own might not be in a position to take on commitments in
certain sectors in this round, for example in financial services for the reasons he had elaborated under
agenda item A.  In the context of the current negotiations, his delegation bore in mind that theapproach was not a "big bang" approach to liberalization, but rather a progressive one, and that there
would be subsequent rounds.  In this regard, he reca lled that his delegation's intent was clear, and that
the pace, and not the direction, of liberalization was its concern.  He asked for understanding from
trading partners and felt that Article XIX:2 should be respected in letter and spirit, for example, in theTN/S/M/8
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case where developing countries indicated that bi nding commitment in certain sectors was not within
reach.  He supported the suggestion by Chile.  Referring to suggestions for new deadlines, he
questioned the need for them as he felt that most Members had met the deadlines or missed them for
legitimate reasons.  Asking the ministers to set new deadlines would imply that Members had failed to
meet the existing ones and would not send a positiv e signal.  Rather, he thought energies should be
focussed on submitting initial offers prior to Cancun.  He felt that the utility of a deadline in and of
itself was limited, as testified to by the numerous deadlines on the ESM negotiations, and that the
political will and capacity of Members were more relevant.
187. The representative of Thailand stated that, in terms of the progress in the negotiations, her
delegation had participated in four bilateral consultations and a few friends groups meetings.  She said
that her delegation had held fewer bilaterals because other participants had indicated that it was
difficult to negotiate in the absence of an offe r from Thailand.  She thanked those Members who had
tabled offers and had taken note of the frustration expressed by some in the bilateral negotiations that
Thailand had not tabled its initial offer.  She assured Members that a draft had been prepared, was
being examined carefully and would be submitted in due course.  She recalled that her delegation had
been active through the submission of papers and would remain so with the submission of its offer.
She said that her delegation had largely overcome the technical and institutional problems related tothe preparation of its offer, but that political difficulties had been encountered in domestic
constituencies.  She explained that when the initial offer had been presented to the relevant domestic
authorities and her Minister, they had enquired as to which Members had tabled offers and whether
these were of benefit to Thailand.  Her initial analysis was that the first set of offers did not present
concessions of interest to her delegation.  The problem was political, she believed, since the quality ofthe offers made it difficult to convince public constituencies to proceed.  She said that in one bilateral
consultation a delegation had indicated that it could have made a better offer on mode 4 but that it was
awaiting Thailand's offer.  She indicated that the nature of this offer in mode 4 was rather poor and
that in this context it was difficult for her to envisage improving Thailand's mode 3 bindings.  She
said that her delegation would attempt to put forth an attractive initial offer; however, she urgedMembers to demonstrate flexibility since negative signals created difficulties.  She wished to stress
her delegation's concern over the imbalance between the bilateral and the multilateral negotiations.
She recalled that in the meetings of the subsidiary bodies her delegation had made a number of
requests, for instance for a discussion on the categories of mode 4 in the Committee on Specific
Commitments, which had been met with reticence despite her reassurances to the concerns expressed
about the harmonisation of these categories.  In the Working Party on Domestic Regulation her
delegation had supported work on recognition which was met by opposition.  With respect to requestsin the Working Party on GATS Rules related to emergency safeguard measures and subsidies, there
had also been stalemate.  She stated that in th ese situations some Members suggested the issue be
taken up in a bilateral context, and she responded that there was insufficient time and an imbalance in
terms of the experts present in the bilateral consultations.  In this regard, she felt that the imbalance
between the bilateral and the multilateral negotiations needed to be addressed, and she felt that it wasnot useful that time was short in the working parties.  She recalled the multilateral nature of the
Organization, and the need to work in a transparent and balanced manner.  On market access and
rules, she expressed support for the comments made by the Philippines and recalled her delegation's
comments in the working party.  Her delegation attached importance to completing a framework in
rules in order for progress to be made in market access.  This would ensure that Members wereoperating within a clear and objective set of rules.  With respect to the rules negotiations, she shared
the view that some political guidance would need to be given at Cancun.  On market access, she said
that her delegation had submitted requests which covered four or five major sectors, and that most
pertained to mode 4, which was a focus for her delegation.  In this regard, she thanked the delegation
of India for its work on both mode 4 and recognition issues.  She echoed earlier comments thatexpressed disappointment with the offers on mode 4.  She said that Thailand was competitive in a
number of areas, but that mode 4 was where the negotiations held the most promise.  With respect to
the linkage between services and agriculture, she said that her delegation negotiated on services with
the understanding that there should be progress in other areas.TN/S/M/8
Page 54
188. The representative of Cuba said that for her delegation an overall balance would require
balance in the negotiations between market access and rule-making.  These negotiations were
complementary and a balance on disciplines would improve Members' disposition to enter into greater
commitments.  She also felt that it was extremely important that a correspondence be achieved
between the sectors offered and the sectors of interest to developing countries.  She felt that theproposal presented by India on mode 4 would be a po sitive contribution to achieving a balance in the
negotiations.  She appreciated the statement by Tunisia on behalf of the African Group and she
thought that the problems encountered by developing countries in the negotiations should be taken
into account when fixing deadlines for offers.   In this regard, she believed that the delay experienced
reflected the existence of objective obstacles and that deadlines should reflect progress in all areas and
not only in market access.  Finally, she indicated that her delegation would submit its offer shortly.
She said that balance in the commitments in the offers submitted in services and progress in otherareas was of importance.
189. The representative of Pakistan said that in the letter and spirit of paragraph 15 of the
negotiating guidelines Pakistan, like other developing country Members, was in process of preparing a
submission with a view to ensuring that the objectives of paragraph 15 were met.  Referring to the
statement to be made under the sub-item by the delegation of Peru, he noted that the statement posed anumber of questions that were geared to review the extent to which the provisions of Article IV were
being implemented.  He believed that the exercise of the review of progress in the negotiations drew
its strength from paragraph 15, which clearly set out the objectives of this review.  He asked whether
a simple enumeration of the number of bilateral consultations held and of requests and offers on the
table was adequate to address the requirements of paragraph 15.  He believed that this had not beenthe case to date, that there was need to reflect on how to address the requirements of paragraph 15,
and that the joint submission would be a step in this  direction.  Turning to the issue of timeframes, he
stated that his delegation did not wish to see surprises on this account.  He said with certainty that that
the incorporation of timeframes in the Doha mandate on services was a surprise because the Geneva
process had not contained any timeframes.  He recalled his surprise at Doha at seeing thresholds forrequests and offers.  In principle, his delegation had no difficulty with timeframes, but he felt that any
timeframes would require the endorsement of the Council.   He sought to flag in very clear terms that
his delegation would not wish to see such surprises in Cancun.  He thought that it might be useful to
remind those delegations which had raised the issue of timeframes of the unfinished business in the
Council for Trade in Services and the subsidiary bodies.  His delegation was open to discussing
timeframes related to the tabling of requests of of fers, subject to the clear understanding that there
would be timeframes for the other unfinished business, inter alia  in rule-making and the assessment
of trade in services.  He noted in clear terms the linkages between market access and rule-making.  On
the issue of imbalances, he stated that this overhang of earlier asymmetries needed to be addressed
and he believed it to be an important issue in th e market access negotiations that the current round
provided an opportunity to redress.  He noted that many Members tended to agree on a position
shared by Pakistan that an increase in market access commitments augmented and facilitated theincreasing participation of developing countries.  He said that if developed Member partners sought
positive engagement from the developing countries, in terms of the language in the Agreement of
relevance to them, then enhanced and deeper commitments in modes and sectors of interest to
developing countries would auger well for the negotiations.  Although he acknowledged that Pakistan
had not tabled its initial offer for reasons of genuine institutional constraints, he expresseddisappointment at the content of the offers, particularly in the areas that his delegation had clearly
identified as being of interest to it and he noted that no commitments were forthcoming.  He indicated
that his delegation had been following the developments taking place in request-offer process and on
horizontal issues, and his analysis led him to believe that the negotiations to date were one-sided.  He
hoped that the demandeurs in the negotiations could shed light on how this situation had come about.Pakistan was more than convinced that the comple tion of unfinished business in rule-making would
directly impact on its market access commitments.  On mode 4, he reiterated the interest his
delegation had expressed in this mode for a number of years and noted that no progress had been
made in most offers tabled, and particularly in those from important trading partners.  In this regard,TN/S/M/8
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maintenance of the status quo would not be acceptable to his delegation.  Having studied the offers
particularly with respect to mode 4, he said that he could conclude that his delegation's concerns were
not being heard, which was of concern to him and affected its level of ambition in the negotiations.
He was aware that the negotiations were at their starting-point, and he said that more commitments on
the table would raise his delegation's level of comfort in the market access negotiations.  He did notwant to have the impression that the negotiations were tilted in favour of their market access aspect,
but rather that there was an overall balance in the state of negotiations in market access, rule-making
or other unfinished business.
190. The representative of the European Communities felt that it would be appropriate before
Cancun to look at the work that had been carried out since Doha and how the negotiations had been
proceeding overall.  He thought that since Doha and in line with the mandate Ministers had given,
some good work had been done, particularly on the Modalities for Autonomous Liberalization.  Workhad also intensified on the Modalities for the Special Treatment for LDCs and he hoped that the
Council would soon be in a position to adopt them.  Multilateral work had been done on trade
assessment, and he thought there had been useful work, for example, on the exchange of information
of experiences from different Members of varying levels of development focussing on specific sectors
and reflecting their own national liberalization experiences.  This had shed light on and raised issueswhich could be of use to other Members who were considering undertaking liberalization in similar
sectors.  It was obvious that this work would need to continue, and that the Council would need to
identify ways forward and the important role that technical assistance could have in assisting
Members to carry out national or sectoral assessments as they saw necessary.  He reaffirmed that this
was an important part of the Council's work.  In terms of work on rules, he noted that considerablework had been done on both domestic regulation and GATS Rules.  This was reflected by the number
of submissions that had been made by Members on the different issues that had helped greatly to
improve the level of understanding on these issues.  He noted that the views were divergent, but this
did not imply that useful work had not been carried out since Doha.  He agreed that work would need
to be carried out on rules issues as the process moved forward.  In terms of the bilateral market accessnegotiations, he felt that the process overall had run smoothly and was a success in terms of the level
of participation of partners in bilateral meetings, regardless of the difficulties that some had in
preparing offers.  He said there had been a general willingness to discuss and exchange views, which
he thought was very constructive to the process.  He  noted that prior to Doha the bilateral negotiations
was the missing element, and given this, he thought that it was normal that this element had been
focussed on over the preceeding two years.  In terms of the offers on the table, he recalled the
perspective at the May meeting, in which 25 offers looked encouraging, and noted that the 30 currentoffers should be looked upon more prudently.  He felt that it was important for Members to do their
utmost to submit an offer prior to the Ministerial and he fully understood that the service negotiations
raised complex technical issues that Members, particularly from the developing world, had difficulties
overcoming.  These needed to be dealt with through technical assistance or other means, and in this
regard, he shared the views of the representative  of the African Group to the effect that technical
difficulties and human capacity building were more acute, but not exclusive, to the African continent,
and that ways to address these needed to be found.  He also said that there needed to be more
participation in the negotiations and the number of offers needed to increase in order to send a
positive signal before Cancun.  He agreed that the quality was varied though not systematically bad,
and he underlined a few cases in which bold offers had been submitted which entailed particularlydifficult political decisions at an early stage in the negotiations and which would imply legislative
changes were they bound.  He agreed that overall the necessary quality was not present and was
varied, particularly on mode 4 which was of interest to developing countries and which would require
more effort.  He said that this was an issue which needed to be recognised and taken seriously in the
negotiations.  The European Communities had made a substantial attempt to transmit this messagethrough its initial offer.  In summary, he said that overall the services negotiations were proceeding in
a satisfactory manner, although there were some normal lacunae given the stage of the process.  He
felt that what was required were ways to overcome these points in the future.TN/S/M/8
Page 56
191. The representative of Iceland stated that her delegation remained firmly committed to the on-
going negotiations, despite its discreet participation.  While Iceland shared the frustration expressed
by some Members, she believed that difficulties could be overcome.  On the review of progress, her
delegation was of the opinion that the negotiations were progressing relatively slowly but in a positive
manner.  She felt that a dose of optimism would be useful.  She recalled that 18 months remained untilthe completion of the single undertaking and her delegation remained optimistic in this regard.  She
recalled that in the Uruguay Round, Iceland had made commitments which reflected the liberal nature
of its economy and which included full commitments in several sectors.  She further recalled that
Iceland had subsequently made three supplements to its Schedule containing further substantive
commitments in maritime transport, telecommunications  and financial services.  She said that in the
present negotiations, Iceland had received requests from some Members which referred to full market
access and national treatment in many sectors, transparency in regulations, et cetera .  She stated that
many of the requests received were not relevant or did not necessarily apply to Iceland, as was evident
in its Schedule.  She indicated that her delegation had held bilateral consultations with interested
partners and that it had not made requests owing to capacity and resource constraints and not to a lack
of interest in the negotiations.  She recalled that Iceland had submitted its initial offer on 31 March
2003 in response to the requests received and in accordance with the present legislation.  It fullyreflected the openness of the services economy in Iceland.  She said that it was publicly available on
the web-side of the Ministry of Foreign Affairs, which also provided information on the GATS and
the terminology of the negotiations.  This had been done in the spirit of transparency and to make the
information available to the public.  She formally requested that Iceland's initial offer be made an
unrestricted document.  She was pleased to note that some 30 offers had been submitted, butencouraged others to follow this example.  She agreed with other delegations that the level of
ambition in the initial offers submitted to date varied and that the quality of the offers was more
important than the quantity.  With regard to the Modalities for the Special Treatment for LDCs, she
endorsed the earlier statement made by the delegation of Norway.
192. The representative of the Dominican Republic voiced her delegation's commitment to the
negotiations, which had been demonstrated through some 24 requests and would be soon ready to put
forth its initial offer.  She indicated her delegation's intention to submit this offer before Cancun.
Referring to the risks associated with an economy for which services accounted for 55 per cent of
GDP, she said that her delegation was concerned with the imbalance in the negotiations, particularly
subsequent to the tabling of initial offers from several developed countries.  She said that there was an
imbalance between the level of ambition in requests compared to the low level of concessions and
improvements in the offers.  She observed an imbalance within the offers, in terms of the sectors andmodes of supply of interest to developed countries and those of interest to developing countries.  A
third imbalance existed between the faster rate of progress in the bilateral negotiations on market
access and the lack of progress in the multilateral negotiations on horizontal issues.  She said that the
Dominican Republic had made a tremendous effort from a financial and human resource point of view
in preparing and tabling its requests and offers.  She saw these negotiations as a serious nationalcommitment and she hoped that there would be substantial improvements made in sectors and modes
of supply in areas of interest to her country and that Members would commit to making progress in
horizontal issues such as in rules, disciplines and classification.  She believed that the process should
be of benefit to all Members and not a group of countries.  She believed that it was necessary for the
offers to reflect the interests of the developing c ountries in terms of the concessions granted and those
obtained that would mean real market access in the real world.
193. The representative of the United States had listened with interest to the comments made and
the United States appreciated a number of the concerns raised about the nature of progress and the
views expressed on how to move forward after Cancun.  She echoed the views expressed by the
European Communities on the progress to date in  the negotiations.  The United States took a realisticapproach in terms of the work remaining in the negotiations, and felt that that there had been progress
which she hoped would be recognised by Ministers in the services negotiations in terms of the number
of requests and offers that had been received.  It was her strong hope that the number of offers wouldTN/S/M/8
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increase by Cancun.  Her delegation had been encouraged in the bilateral consultations from the
information received on the work Members were doing on their offers and their intentions to submit
those offers by Cancun.  She believed that it was important to recognise the other areas of progress
such as in the Modalities for Autonomous Liberalization, which was an area of considerable progress
that had enabled the negotiations to proceed.  She also believed that it should be recognised that therequest-offer process was well in place.  She echoed the European Communities on its point that,
given the constraints of developing countries, th e process was running relatively smoothly, although
she recognised that more could be done.  She felt that it would be very important for ministers at
Cancun to provided guidance in a number of areas.  The United States felt that it would be important
for ministers to note the importance of the Modalities for the Special Treatment for LDCs and felt that
reaching agreement on the modalities should remain a priority, and if possible prior to Cancun.  Her
delegation would participate wholeheartedly.  She believed that, once the modalities had been agreed,their implementation was essential in order to facilitate the highest level possible of LDC participation
in the negotiations.  She believed that it could be useful to have guidance from ministers on trade-
related technical assistance, which was an area of great importance.  She thought it would be useful to
have guidance from ministers that would urge Members to work with the Secretariat, other WTO
Members and other intergovernmental organisations in  order to make ensure that the efforts being
collectively made were being effectively delivered to developing countries with respect to all parts of
the negotiations, including the on-going services  assessment in accordance with the negotiating
guidelines and procedures.  She felt that it would be very important for Ministers to note the
importance of services as an engine for growth and development.  In that regard, she thought that it
was important that there be no a priori  exclusions of sectors in the coverage of the negotiations.  She
thought it would be important to highlight that an on-going effort should be made to ensure that the
negotiations achieve a higher level of services liberalization that encompassed sectors that were key to
infrastructure growth and development.  In the United States view this included sectors such as
telecommunications, distribution, construction and engineering, energy services, environmental,
tourism, audio-visual and financial services.  Th ese were areas where she thought liberalization in
developed countries and developing countries could achieve concrete progress, growth and
development.  She had listened with interest to comments, concerns and proposals for new timelines
post-Cancun.  She did not feel that this terminology was necessary at this point.  Instead, she felt that
all could benefit from guidance from ministers after Cancun.  In particular, she felt that a type of
roadmap was needed in order to move from Cancun to a successful conclusion of the negotiations,
especially given the concerns that had been raised regarding the need to improve the existing offers.
It seemed to her that in order to achieve that important goal the Council would need some political
guidance.  With this in mind, she hoped that wh at would emerge from Cancun would be guidance on
how to increase the level of participation in negotiations, how to improve the quality of the offers and
how to bring the process to a successful conclusion.  She had listened with interest to the comments
that ministers note the work that had been pursued with respect to rules and the she suggested that it
would make sense for ministers to note this work, and to provide guidance in terms of holding to the
agreed deadlines.  In terms of the overall coverage of the negotiations and the level of liberalization to
be achieved, she felt that it was important for ministers to take note of the importance of the
temporary movement of natural persons supplying services.  The United States in general was
encouraged by the progress in the negotiations and was looking forward to Ministers providing a
useful roadmap.
Implementation of Paragraph 15 of the Guidelines and Procedures for the Negotiations on
Trade in Services
194. The representative of Peru, speaking on behalf of the delegations of Barbados, Bolivia,
Colombia, Cuba, China, Ecuador, Egypt, Honduras, India, Indonesia, Jamaica, Malaysia, Nicaragua,
Pakistan, Peru, Dominican Republic, Trinidad and Tobago and Venezuela sought to make a statementunder the sub-item F of the agenda, Implementation of Paragraph 15 of the Guidelines and Procedures
for the Negotiations on Trade in Services.  He said that the objective of the joint statement was to
establish some basis to initiate, under this sub-item of the agenda, the review of the progress inTN/S/M/8
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negotiations regarding the effective implementation of the objectives of Articles IV and XIX:2 of the
General Agreement on Trade in Services.  The co-sponsors considered that a simple and effective way
to undertake this review was to provide a set of questions that could facilitate the analysis of initial
offers and streamline the discussions towards concrete objectives, bearing in mind the interests and
needs of developing and least-developed countries.  He observed that the assessment of the offerspresented was a particularly complex process, especially in the case of developing countries and least-
developed countries that had very limited experience and scarce institutional and human resources.
The determination of the real conditions of market access that had been offered to developing country
Members within the framework of the current negotiations required a systematic and careful analysis.
That was the reason why the co-sponsors considered it convenient to orient such analysis through
concrete questions that could be classified in three main categories:  factual questions; analytical
questions; and questions relating to the relative value of the offers taking into account the extent towhich those offers responded to the initial requests presented or the needs that had been identified by
each developing country Member.
195. Within this first category of questions the representative of Peru thought that, in principle, the
following questions could be considered.  (a) What improvements were being offered as horizontal
commitments? (b) What conditions and limitations were attached to the offer in the horizontal
commitments? (c) What were the subsectors and modes of supply where commitments were being
offered?  (d) What kind of conditions and limitations were attached to a specific sector, subsector and
mode of supply where commitments were being offered? (e) Were additional commitments being
offered within the context of Article XVIII of the GATS given the objectives of Article IV? (f) What
were the new commitments being offered in mode 4 both at the horizontal level and at specificsectors? (g) Were there new classifications being used in the offers and, if that was the case, what
degree of acceptance did the existing classification have amongst Members? (h) Was there any
commitment to reduce the MFN exemptions?
196. With respect to the second category of analytical questions the representative of Peru put
forth the following questions.  (a) Did the offer include modifications that might be understood asmerely technical adjustments or corrections? (b) Did the offer incorporate new liberalization
commitments or did it merely aim to bind existing liberalization? (c) Could certain aspects of the offer
be understood as going back on previous commitments and, if that was the case, to what extent?
(d) To what extent did the offer incorporate new sp ecific commitments that facilitated the increasing
participation of developing country Members in world trade relating to the liberalization of market
access in sectors and modes of supply of export interest to them in accordance with Article IV? (e) To
what extent did the offer incorporate the initial requests presented by developing countries, includingthose aspects relating to the elimination of economic need tests or matters related to domestic
regulation of particular interest to them (transparency and due process in the case of granting of visas
for the temporal entry of service providers, or elimination of burdensome licensing procedures and
requirements)? (f) What other development aspects were included in the offers presented relating to
the strengthening of the domestic services capacity of developing countries and its efficiency andcompetitiveness on trade in services or to the improvement of their access to distribution channels,
information networks and transfer of technology? (g) To what extent did the offer take into
consideration the particular needs of small service providers as mandated in paragraph 15 of the
Guidelines and Procedures for the Negotiations on Trade in Services?
197. The third category of questions, said the representative of Peru, referred to the evaluation that
each Member should undertake individually according to its particular interests and commercial
priorities.  (a) Did the offer have a commercial value in an economic sector of importance for the
exporting developing country Member, based on their current situation or on their future potential?
Would it be reasonable to expect a real economic benefit or advantage immediately or in the long
term derived from that offer?  (b) What was the economic importance of the offer for the importingMember? (c) What were the market conditions and the competition situation in the sector or subsector
where the offer was being made (were there subsidies, situations of unfair competition, advantagesTN/S/M/8
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offered to other Members under economic integration agreements or mutual recognition agreements,
etc.)?
198. The representative of Peru stated that the co-sponsors believed that by sharing this approach
they could help other developing countries carry out their own individual assessment of the initial
offers presented, in the context of the objectives established in Article IV of the GATS.  The idea wasnot to question individual offers at the multilateral level.  On the contrary, the co-sponsors were of the
view that the answers to the questions he had outlined would provide guidance that would allow
developing countries and developed countries to undertake a collective, objective and systematic
evaluation of the progress in market access negotiations through the exchange information, the
identification of concrete problems that were common to developing countries, and the exploration
ways and means to address those legitimate concerns.  The set of questions was not exhaustive and
the co-sponsors believed that it could be complemented with the valuable suggestions that otherMembers could possibly provide in order to improve the efficiency of the review process.  He recalled
that some 30 initial offers had been presented, of which more than ten belonged to developed country
Members.  In general, the co-sponsors believed that more needed to be done in order to negotiate
specific commitments of commercial significance for developing countries and to address the
significant problems that could be identified in those sectors, subsectors and modes of supply ofparticular interest to those countries.  The co-sponsors recognized that this situation could be part of
the normal proceedings in the request-offer process that had recently entered a new phase.  However,
they wished to underscore that the offers presented by developed country Members should be
promptly and substantially improved in the negotiations in accordance with the review process
mandated by paragraph 15 of the Guidelines and Procedures for the Negotiations on Trade inServices.
199. The representative of Colombia stated that the questions enumerated by the representative of
Peru had arisen from the process of carrying out a general assessment of the offers and she felt that
they could contribute to the discussion so that Members, individually or collectively, could carry out s
assessments and contribution to the review of progress as set out in the guidelines and procedures forthe negotiations.  She thought that some of the questions required factual information and that the
Secretariat could help gather this information on the understanding that this was at the request of
Members.  She believed that several of the questions required factual information and that it would be
very helpful if the Secretariat could compile such elements.
200. The representative of Tunisia wished to endorse the joint statement made by the
representative of Peru.
201. The representative of the Philippines expressed his supported for the paper presented by the
representative of Peru and felt that it meshed appropriately with the suggestion by Chile for a template
to assist developing country Members to better understand the offers in terms of improvements or
changes.  In this regard, he drew a distinction between the three types of questions that had been
outlined.  In terms of the first category of questions for a factual analysis, he felt that work could be
facilitated through a note from the Secretariat with the caveat that it was limited to a purely factualpresentation of the offers.  On second category of questions, he believed that it was incumbent on
Members to do the type of analysis they aimed at.  In terms of fleshing out the substance of paragraph
15, the questions in the second category could be asked of the membership in order to better
appreciate the offers.  On the third category of questions he believed would better be addressed by
individual Members in their own appraisal of the co mmercial relevance of the offers.  He agreed that
this category of questions would be very useful.
202. The representative of Mexico expressed his delegation's support for the statement made by
Peru on behalf of 17 Members.  He believed it contained germane questions that would help Members
assess the offers made.TN/S/M/8
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203. The representative of Uruguay said that the statement by Peru had recalled that paragraph 15
of the negotiating guidelines had been adopted by consensus.  Quoting paragraph 15, he said that "the
Council for Trade in Services in Special Session,  when reviewing progress in negotiations, shall
consider the extent to which Article IV is being implemented".  Paragraph 15 also suggested the
measures and parameters for achieving the objectives it outlined.  He understood that the questionswhich had been submitted were a tool which would enable all Members to analyse this process, the
progress in the negotiations, and to what extent Articles IV and XIX:2 were being implemented.  In
this regard, he felt that the paper made an extremely useful contribution.
204. The representative of Thailand indicated her delegation's support in principle for the thrust of
the paper that had been presented by the representative of Peru.  She believed that the set of questions
would be useful in helping Members evaluate the offers on the table.  On the suggestion to have the
Secretariat conduct some factual work on the offers as suggested by Chile, her delegation sought toreflect on the format and type of work that could be of benefit to Members and in particular for
developing countries.  She sought an opportunity to consult with capital on the proposal and indicated
she might revert to it.
205. The representative of the United States believed that the joint statement and its questions
could provide a useful tool to both developed a nd developing country Members in their individual
evaluations of Members' offers.  She sought to clar ify that the questions that had been outlined called
for judgements and evaluations which a Member could make for itself, but which she did not feel
would be appropriate for the Secretariat to make.  She emphasised that the paper could be very useful
as a voluntary tool for Members to use, but the United States could not support a suggestion for its use
to extend beyond this.  In terms of the comments made that the questions might be in line with theearlier suggestion made by Chile, she said that it was her understanding that Chile had suggested a
listing or inventory of Members' offers, which she saw as a different exercise that did not entail a
specific evaluation or judgement with respect to indi vidual offers.  Finally, she sought to clarify that it
was appropriate for the Secretariat to provide tec hnical advice to Members on an on-going basis and
to compile information in the course of the negotiations; however, she felt that an evaluation orassessment of individual offers would be inappropriate.
206. Making a few preliminary comments, the representative of Canada sought to reflect on the
paper further and wished to share with Members some thoughts on how this might be done.  He
agreed that the paper put forth a number of useful  questions which he thought could not be answered
by the Secretariat because of the qualitative nature of the work such answers entailed.  He thought that
the questions could be useful in bilateral negotiations and wondered as to how they might be used in a
more multilateral context.  He was struck by the fact that the system was based on a bilateral process,and he asked to what extent Members were moving from a bilateral to a multilateral basis.  He
recognised that the circulation of offers occurr ed on a multilateral basis in line with the MFN
principle, which did not occur with requests because of their more bilateral nature.  As an initial
reaction, the proposal appeared to move away from a fundamental concept of the GATS.  He felt that
the Council needed to be careful of what could be asked of the Secretariat in terms of these types ofassessments.  On the earlier suggestion from Chile on a quantitative assessment which had been
supplemented by suggestions for qualitative considerations, he wondered to what use this information
would be put.  He hoped that after Cancun Members could more clearly indicate the type of work the
Secretariat could complete.  Referring to the suggestion by Switzerland on work related to mode 4, he
assumed that this did not seek to set standards but  would be used as a checklist, and thought it might
be useful.  He made reference to the views the Secretariat might have on its role in this respect.   He
recalled the Member-driven nature of the Organization and recognised the role of the Secretariat.  He
said that the types of questions he had been alluding to would guide his thinking on this issue.  He felt
that it was important for Members to have a sens e of how any information compiled would be used.
207. The representative to Japan thanked the group of Members who had presented the paper,
which he thought gave useful questions that his delegation was using in the request-offer process.TN/S/M/8
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With respect to how the paper would be operationalised in practice, he agreed that careful reflection
was necessary, particularly in terms of the role of the Secretariat.  Although the first set of questions
were characterised as factual, he saw some qualitative aspects and he did not think that Secretariat
work could occur without the involvement of the delegation concerned, which might open the door to
a correction or negotiation exercise between itself and delegations.  He thought that the paper wouldbe very useful for individual use but cautioned against a collective exercise.
208. The representative of India, referring to the comments on factual versus judgemental
assessments, said it was his delegation's position that it was the prerogative of the Member to make
this type of judgement.  Although he thought that Members should reflect on how to best
operationalize the process, he presumed that the paper attempted to set out questions for all to use in
assessing the offers and he thought it necessary to distinguish between a purely factual exercise for
which the Secretariat could provide assistance, and a judgemental exercise which would need to occurwith the association of the Member concerned.  On the proposal regarding the categories of mode 4,
which he recalled had been discussed at length in the Committee on Specific Commitment, he thought
that it would be a useful exercise.  He clarified that the purpose of such an exercise was not
harmonisation, which was not attainable, but rather to look at the common categories and definitions
in offers which might be linked to this process under discussion.
209. The representative of Switzerland required some time to study the paper carefully.  He sought
to make a distinction between the substantial contents of the points enumerated in paragraphs 4 ,5 and
6, versus the procedural aspects linked to the initiative.  With regard to the former and on a
preliminary basis, he said the questions were relevant.  He thought it might be useful to add one
question to category (a), namely, to what extent a specific commitment met the requirements of the
scheduling guidelines, such as CPC reference, and whether it was transparent.  The questions in
category (b) were mostly relevant, although he found a few to be too subjective, for instance question
(d).  With respect to the questions in category (c) he could not see an objective manner in which to
answer these questions without a substantial information exchange that he had difficulty envisaging,
and he thought it should be left to each Member to determine the value of a commitment.  Withrespect to the procedural aspect, he said the approaches suggested covered a broad spectrum from use
in bilateral negotiations to a multilateral exercise in volving the Secretariat.  He assumed that such use
would be made in bilateral negotiations and with respect to the latter he thought the solution was not
feasible in terms of resources.  He recalled that in principle his delegation expressed concern with
overloading the Council with work.  A middle approach, he said, could see Members presenting their
offers along the lines of the questions outlined in the paper and it would be up to Members to use this
information to make their own assessment without the involvement of the Secretariat and withoutspending too much time.  He agreed that further reflection would be necessary.
210. The representative of China as a co-sponsor of the paper expressed her support for the
presentation made by the representative of Peru.  In her delegation's view the paper was meant to
share ideas and to help developing country Members carry out their assessments of the initial offers.
She thought that many developing country Members lacked the human capacity to conduct anassessment of the offers and that the paper presented the relevant questions in this regard.  With
respect to the suggestion by the representative of Colombia, she understood that the Secretariat would
be invited to carry out work on the questions contained in paragraph 4 and to gather information on
the factual parts of the offers.  She indicated that if the Secretariat could have difficulty in conducting
this work for all Members work could focus on the offers of relevance to developing countryMembers.
211. The representative of Peru wished to that thank delegations for their contributions and
suggestions and said that he was open-minded and flexible.  He said that the paper was not a formal
proposal, but rather sought answers from the Secretar iat.  He agreed that there were many variations
that could be explored and he looked forward to doing so.TN/S/M/8
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212. The Chair stated that a substantive contribution had been made by a group of developing
countries with a great deal of support and a number of relevant questions posed in terms of using the
document as a useful tool to assess developments in the negotiations.  It was obvious that
operationalisation would not occur immediately, particularly in light of the misgivings expressed over
the role of the Secretariat.  There was also a question regarding shifting focus away from a possiblefundamental principle.  Chile had made a suggestion on information collection that had received some
support, although others sought time to reflect on its extent and purpose.  The Chair suggested that,
time permitting, Members could discuss the points that had been raised including what could be
appropriately undertaken by the Secretariat and by Members.  This would help Members take
advantage of a good proposal and address the questions it had raised.  He proposed that Members
discuss this further and the he hold informal consul tations on how to carry  work forward.  He thanked
the co-sponsors of the paper and suggested that Council take note of the statements made.
213. It was so agreed.
214. Making a few general remarks in the knowledge that he could not fully summarise the debate,
the Chair said that the discussion would be very he lpful in providing him with elements for his report.
He indicated that the elements he would highlight would not necessarily be included in his report but
which he thought were important.  It had been observed that the services negotiations werecharacterised by a positive atmosphere, increasing engagement, broadening participation and was
moving in the right direction.  Second, there had been some important proposals made, particularly on
mode 4.  With regard to offers, he noted that there had been some new offers and that 30 offers had
been tabled.  This number, relative to the number of Members, was low.  He recalled the pledges that
had been made by various delegations that their offers would be forthcoming in the coming weeks andprior to Cancun, as well as a request that an offer be derestricted.  He said serious attention had been
drawn to a problem in the negotiations in terms of  developing countries and particularly LDCs who
had human capacity constraints in elaborating their offers, which perhaps explained their low
participation in the negotiations as reflected in the offers.  This posed a risk of the end-result being
unbalanced.  He said there had been a suggestion that funds be made available for experts to come toGeneva, which he indicated would be passed on to the appropriate bodies.  These Members had also
evoked the need for technical assistance in order to assess requests and elaborate offers.  He said that
statements had been made that the quality of the offers was lacking, that they were removed from the
requests, and that they contained little in terms of mode 4.  He said that some Members were
encouraged by developments in maritime, energy and financial services.  Asymmetries in the
negotiations had been pointed out, and Members had indicated that the offers were on the table, that
the quality was mixed, that there was room for improvement, and that there was need for someguidance from ministers in this regard.  Links had been drawn with other negotiations and in
particular with agriculture.  In terms of other negotiations and work being conducted in services, there
had been a substantial manifestation of dissatisfaction with the level of progress in the negotiations on
rules, although there were some encouraging signs on domestic regulation.  On the emergency
safeguard mechanisms, reference had been made to technical and political problems.  Dissatisfactionhad been expressed by those delegations speaking on subsidies.  Problems regarding classification
issues that could not be resolved bilaterally had been mentioned.  It had been pointed out that a
balance was needed between the negotiations on rule-making and on market access.  The  deadline for
the negotiations on ESMs as well as for reports in the other areas had been spoken to.  By and large
Members had been encouraged to make offers prior to Cancun and it had been recalled that it wouldbe ministers' privilege to determine what they would say on the negotiations overall and in services.
It seemed to him that if ministers saw room to seek improvement on offers, including in sectors of
interest to developing countries, they could or  might not consider a timeframe, which would be
examined in relation to the overall picture of the negotiations.  He was not suggesting a timeframe,
but had retained from the discussion that it was a possibility before ministers.  The importance ofcompleting work on the LDC modalities had been highlighted, with a preference of doing so before
Cancun.  There had been some suggestions that the situation of recently acceded Members might be
taken into account in the negotiations.  Finally, he highlighted that some developing countries, forTN/S/M/8
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example the African Group, had stressed the services supply constraints they faced and the need to
address these.  In this regard, he said that venues for appropriate action existed within and outside the
Organization.  He had not sought to draw any conclusions, but had wanted to share some reflections
on the discussion.
215. Referring to his delegation's proposal for a factual note by the Secretariat, the representative
of Switzerland sought clarification.  The Chair  suggested that the Secretariat prepare a note as had
been outlined and that the Council take note of the statements made.
216. It was so agreed.
G. OUTLINE OF THE CHAIRMAN'S REPORT TO THE TRADE NEGOTIATIONS
COMMITTEE
217. The Chair sought to recall that for the present meeting he would be making two reports to the
Trade Negotiations Committee.  The first was th e report on work since the Fourth Ministerial
Conference in preparation for the Fifth Ministerial Conference, on which he intended to make a few
remarks under Other Business.  The second was his regular report submitted subsequent to every
formal meeting.  It was with respect to the latter that he wished to give an outline.
218. The Chair stated that with respect to the Assessment on Trade in Services he would report
that the Council had had a substantive discussion in part based on a particularly rich oral statement byMalaysia on its experience with the liberalization of its financial services sector.  A few delegations
echoed comments from this statement that the sequencing and pace of reforms in this sector was of
critical importance.  The Council had expressed its gratitude to the government of Canada for a
financial contribution to the International Trade Centre which was ear-marked for a project that
assisted governments in conducting national assessments on trade in services.  The Council hadagreed to invite the ITC to a future meeting to make a presentation on how Members might better take
advantage of this programme.  Finally, a number of delegations suggested that elements contained in
the submissions made under this item to date could be used to structure the Council's on-going work.
He would recall that he would be holding c onsultations on this item in the coming weeks.
219. Under Proposals Relating to the Negotiations under Article XIX the Chair indicated that he
would report that India had presented a proposal on behalf of 15 developing country Member co-
sponsors on the liberalization of movement of natural persons.  Discussion on this proposal had been
substantive and characterised by a large number of interventions underlining the importance of this
mode of supply, particularly to developing country Members.  A number of points had been raised in
the course of the discussion including the need to examine the current nature of mode 4 commitments,
administrative procedures relevant to mode 4, the recognition of qualifications of service suppliers
and a possible model schedule.  The proposal had served to draw additional attention to this issue atan important juncture in the request-offer process.  Additionally, the delegation of Venezuela
expanded upon an earlier presentation of a proposal on energy services.  He thought it would be worth
noting the exemplary nature of the transparency with which the energy friends group had been
pursuing its work as demonstrated by its oral reports and written submissions.
220. The Chair said he would report that the Council had held substantive and very extensive
discussions under the item Review of Progress in Negotiations.  Overall, Members felt that the
negotiations to date had been running relatively smoothly.  Important work had been done on the
various elements of the negotiating architecture mandated in paragraph 3 of Article XIX.  Market
access negotiations were being conducted in a positive and constructive atmosphere, and the
participation of Members was broadening.  However, delegations had sought to identify a number ofareas of concern.  For example, there were some expressions of disappointment with the limited
number and the overall modest nature of the offers on the table.  Repeated encouragement had been
recorded for Members to renew their efforts to submit initial offers prior to the Ministerial ConferenceTN/S/M/8
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and eight delegations indicated that this was their intention.  Attention was drawn to the difficulties
faced by developing countries, and particularly th e least-developed country Members, in overcoming
the technical and human capacity constraints required in preparing an offer.  In terms of the quality of
the offers, a number of Members indicated it was mixed and at times did not include sectors and
modes which they had identified in their requests as being of particular interest to them.  Othersindicated that they were encouraged by progress in the negotiations on financial, maritime transport
and energy services sectors.  In terms of the rule-making components of the negotiations,
disappointment was expressed with the lack of progress in work, although a few Members noted there
were initial encouraging signs emerging from the Working Party on Domestic Regulation.  Members
highlighted a particular concern over the negotiations on emergency safeguard measures in the
context of the preparations for the meeting of Ministers in Cancun.  Finally, he would note that the
Council had held its first discussion under a permanent sub-item on the implementation of paragraph15 of the Negotiating Guidelines relating to Articles IV and XIX:2 of the GATS.  The proponents of
this proposal had presented a series of questions which they felt could be used as a basis for future
work.  Due to a lack of time, Members had only commenced their discussion of these questions.  He
would report that he would be holding consultations in this regard in order to prepare for continued
discussion in October.  With respect to the sub-headings Outstanding Issues and Future Work, theseissues would be taken up in the other report he would be preparing.
221. The Council took note.
H. ORGANIZATION OF FUTURE WORK
222. A representative of the Secretariat stated that, as had been agreed, the next cluster of meetings
would be held on the week of 29 October and the following week.  He recalled an earlier discussion in
which the date had been changed in order to avoid overlap with a conference organised by the
International Telecommunications Union.  Referring to a discussion held in the Working Party on
Domestic Regulation regarding the organisation of a seminar, he recalled that the seminar was
expected to be held on 6-7 October.  He said that the Special Session had not reached a conclusion on
this proposal and sought Members' guidance in this regard.
223. The Chair recalled that a number of points under earlier agenda items had remained
outstanding.  With respect to the Modalities for th e Special Treatment for LDCs, he recalled that the
Council had agreed to leave this item open with the aim of achieving consensus and preferably prior
to Cancun.  He said this would allow the Council to reconvene in formal session on this item if
necessary.  With respect to the task entruste d to the Council by the General Council on the
consideration of three S&D proposals from the African Group and the LDCs, he stated that there had
been some progress over the past days with a good exchange of views.  However, he indicated that theCouncil needed to close this item in order for hi m to meet the General Council's requirement that a
report on the consideration of the proposals be made available to it in time for its up-coming formal
meeting.  He indicated that should a consensus emerge, he would report this to the Chair of the
General Council in order that he put it across to the membership for consideration.  Finally, he
recalled that there remained the outstanding possible invitation of the OECD to present a paper at afuture meeting under the item A ssessment for Trade in Services.
224. The representative of Brazil indicated that he had reflected on Japan's suggestion that the
OECD be invited to make a presentation on a paper entitled "Services Trade Liberalization
Identifying Opportunities and Gains: Key findings".  His delegation was willing to go along with this
suggestion insofar as he could assume that the appr oach suggested would help bridge the gap in terms
of information on the services sector and would be applied as well in the subsidiary bodies when
dealing with the same type of suggestions.  He indicated that he understood the immediate
consequence to be that if UNCTAD wished to present a paper in October on subsidies, it would not
face any preconditions.TN/S/M/8
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225. The representative of Pakistan thought that this was an important issue and, in the interest of
consistency and fair play and with a view to ensu ring that no discrimination would be shown against
any organisation from a developed or developing countries view, he was willing to go along with the
invitation insofar as no preconditions were attached.  In this regard, it was on the understanding that
organisations, particularly those with observer status in the Council and its subsidiary bodies, wouldbe able to make presentations for information purposes.  He sought reassurance in this regard.
226. The representative of the United States said that her delegation had understood that the
Secretariat had circulated a paper that the OECD had already prepared and that the suggestions had
not consisted of the Council commissioning the OECD  to prepare a study.  She said that, had the
present case been to commission a study by OECD, her delegation would have proceeded in a non-
discriminatory manner and requested a bibliography prior to agreeing to that study.  Her delegation's
position remained the same.  She said that in this instance, if UNCTAD had prepared a paper andMembers' wished to see it circulated in a fashio n similar to the present OECD paper, her delegation
would have no issue with that.  She said that if a Member requested that an organisation be allowed to
present its paper, as in the past, this was not an issue and was consistent with past practice.  She
recalled that the earlier concern of the United States in a subsidiary body had been, though it might
not necessarily have appeared to be the case, that the request pertained to the commissioning of astudy.  She said that if her delegation were to join in a consensus on the commissioning of a study, it
needed to have an idea as to its contents and see a bibliography.  With this in mind, she said that what
was being requested in the Working Party on GATS Rules concerning an UNCTAD study could be
further clarified.  She considered that the discussion related to the case at hand and did not imply
agreement with respect to any points in other councils.  She said that if a similar question were raisedin those councils her delegation would likely take a similar position.  She did not think that it was
appropriate for the Council for Trade in Services  to determine the practices of other bodies.
227. The representative of Pakistan wished to clarify that his references to other bodies of the
Council referred to the subsidiary bodies of the Council for Trade in Services.  Seeking a point of
clarification on the previous intervention, he ha d understood that the United States would have no
problem if any organisation volunteered to provide information without a request from any particular
Member, but would have a problem if the memb ership commissioned a particular study or
information.  He elaborated that he sought to distinguish between a Member's request for information
and an organisation coming forth on a voluntary basis with information, having it circulated, and
requesting subsequently to make a presentation.
228. The representative of Uruguay observed that it appeared to him that no objection had been
made to the UNCTAD Secretariat presenting its report, as it had been agreed would be done with
respect to the OECD paper.  His delegation was not aware that UNCTAD had been requested to carry
out work, but rather that they were preparing a paper and had requested the opportunity to present it.
He thought that the same approach should be adopted and they be invited to present their paper.
229. The representative of the Secretariat, recalling that the Special Session of the Council for
Trade in Services was established in 2000 together with the Special Session of the Committee on
Agriculture, stated that the assumption followed in both the agriculture and services bodies was that
the Council on Trade in Services or Committee on Agriculture was meeting in a special session.
Therefore, observers to the regular sessions were considered observers to the special sessions as no
new body had been created.  He said that this assumption remained valid and was the basis upon
which observers had been invited.  In terms of the rules of procedures for observers from internationalorganisations such as UNCTAD, he confirmed that they had the right to ask for the floor and that the
Chairman was to accord them the floor at the end of a discussion on a given item.  However, the
procedures did not give observers the right to circulate papers or communicate with the Council
Members in writing.  He said that this explained the practice that had been followed, with respect to
contributions from international organisations, whether observers of not, to seek the approval of theCouncil to circulate these documents.  He said that, exercising a degree of judgement that a particularTN/S/M/8
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paper might be useful to Members, a Chair of the Council or of a subsidiary body could recommend
its circulation.  He said that this was how Members of the Council had proceeded since the
establishment of the WTO.  The spirit in the various services bodies had been that, given an
information deficit on services, all Members had always welcomed the contribution of other
organisations, even non-governmental organisations w hose contributions were seen as relevant.  Such
organisations had been invited on several occasions to make presentations, for example, the
International Bar Association, the International Federation of Accountants or the International Union
of Architects.
230. The representative of the United States took note of the history outlined by the Secretariat.
She had wondered whether the creation of the TNC had lead to any changes in the special sessions for
services and agriculture.
231. The Chair recalled that he would be holding consultations on the Assessment for Trade in
Services.  In the light of the various points that had been touched upon, he suggested that the Council
close item D of the agenda, that the OECD and UNCTAD be invited to make presentations as
outlined, and that the Council take note of the statements made and revert to this item at its next
meeting.
232. It was so agreed.
I. OTHER BUSINESS
233. The representative of UNCTAD wished to raise two points.  The first was to request of the
Council that it agree to have a study circulated to  Members.  This study entitled "Managing Request-
Offer Negotiations Under the GATS – The case of energy services" had been prepared by the
UNCTAD Secretariat as a background note for the ad hoc  experts meeting on energy services held at
the OECD on 6 June 2003.  She said that energy services were an actively debated topic, including in
the framework of the GATS negotiations, but that there was limited literature available on it.  The
paper that she had brought to the attention of the Council was meant to contribute to the analysis of
this rather complex services sector, which had close links to the sustainable development prospects of
all countries, particularly developing countries.  She said that the paper focussed particular attentionon the potential the GATS had for anchoring development-enhancing reforms in energy services
markets.  It provided illustrative examples on how  to strategically link technology transfer and export
promotion to market access discipline.  It identified sensitive areas where countries might wish to
retain policy and regulatory flexibility.  In a ddition, she informed the Council that UNCTAD had also
released an official publication entitled "Energy and Environmental Services: negotiating objectives
and development priorities".   She hoped that the analytical work on energy services carried out by
UNCTAD would prove useful to WTO Members and in particular developing country Members
engaged in negotiations on a complex and crucial sector.  On the second point, she wished to inform
and invite Members to a meeting related to the temporary movement of natural persons supplying
services under the GATS, which would be held from 29-31 July at UNCTAD.  The title of this
meeting was "Market Access Issues in Mode 4 and Effective Implementation of Article IV on
Increasing Participation of Developing Countries."  This experts meeting was to explore the differentfacets of mode 4 in order to achieve a convergence of views and on a set of options necessary to
ensure further progress in mode 4 negotiations under the GATS, and to facilitate trade through this
mode.  The discussions would provide a better understanding of the economic importance of trade
through mode 4.  She said that the presentations would made by various constituencies, including
regulators, academics, researchers and trade negotiators, and would contribute to identifying dynamicfactors behind this process and what conditions were necessary to ensure a positive outcome of
liberalization in mode 4 and the increasing participation of developing countries in trade.  She
reiterated that trade negotiators would be welcome.TN/S/M/8
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234. The representative of the United States stated that her delegation had attended the earlier
experts meeting referred to by the representative of UNCTAD and had provided comments in that
forum.  She indicated that her delegation might like to have those comments circulated to Members as
well and would approach the Secretariat in this regard.  She sought to record that none of her
delegation's proposals dealt with the ownership of the resource, as she was not certain whether thestudy made this entirely clear.
235. The Chair thanked the representative of UNCTAD for its contributions, and suggested that
the paper be circulated to Members for information.
236. It was so agreed.
237. Noting that six representatives were attending their last meeting of the Council, the
representative of Canada wished to have recorded the appreciation he had for their presence and
contribution to collective work.  He hoped that Members would join him in wishing them well in their
future endeavours.
238. The Chair recalled that he had indicated at the beginning of the meeting that he wished to
make a few remarks concerning his report to th e Trade Negotiations Committee on the Council's work
since the meeting of ministers in Doha.  A draft of  this report was contained in document TN/S/W/15.
He said that this draft report was factual, that he would be adding to it some of his prospective views,
and that the report would be made under his own responsibility.  He said that he had abstained from
drafting this last portion of the draft report because he had wanted to hear the views Members had
expressed under the item review of progress in nego tiations.  He thanked Members for their valuable
views and indicated that he would be finalising his draft in time for the Trade Negotiations Committee
to take note of it at its next formal meeting.  He suggested that the Council take note of the statementsmade and that he adjourn the meeting.
239. It was so agreed.TN/S/M/8
Page 68
ANNEX 13
II. STOCK-TAKING OF PROGRESS MADE IN THE NEGOTIATIONS
6. The representative of the United States said she wanted to focus first on process and format.
Her delegation appreciated the work put into the reports on subsidies and government procurement,
which had been submitted on the Chairperson's responsibility.  She noted that these reports followed
the format of the Report on emergency safeguar d measures, although the work programmes contained
different mandates.  The work programme on ESM specifically stipulated that the note by the
Chairperson should identify "areas of convergence and divergence among Members, with a view to
providing a basis to facilitate further negotiations".  The work programmes on subsidies and
government procurement only provided for a note "to report on the progress of work", but did notinclude any reference to an assessment.  On the positive side, the reports were well-done.  With
respect to the stock-taking, her delegation had not agreed that the Working Party should produce a
report covering eight years of work.  The work programmes, which had been carefully negotiated in
July 2002, stipulated that the Working Party would "p repare for the opportunity provided by the Fifth
Ministerial Conference to take stock of progress made in the negotiations".  She enquired what an oralreport from the Chair would entail, and noted that the information contained in the update to the
annual report might be used for the stock-taking.  The stock-taking should start in July 2002 and cover
the period since.
8. The representative of the European Commun ities thanked the Chairperson for dedicating a
specific point of the agenda to the stocktaking of progress made in the negotiations on ESM, subsidies
and government procurement in services.  In the EC's view, according to the work programmes
adopted on 22 July 2002, the Fifth Ministerial Conference provided for an opportunity to take stock of
progress.  It was up to Members to decide whether they wanted to make use of that opportunity, and
in this regard, the initiative of the Chairper son was timely and welcomed, because it allowed
Members to express their views on how the negotiations had progressed.  The Report on emergency
safeguard measures by the former Chairperson and the Reports on subsidies and procurement by the
present Chairperson had been submitted on their own responsibilities and could not replace Members'
views.  Nevertheless, the EC could agree with the Chairperson's suggestion to use these reports as
background documents for today's discussion.  From a general perspective, the EC wished to
underline a number of elements that, in its view, emerged from the discussion in the WPGR over the
past years and that, to a certain extent, were reflected in the Chairpersons' reports.  First, the mandateson the three agenda items stemmed from the text of the GATS and should be treated on an equal
footing, regardless of the importance that individual Members might attach to each of them.  Second,
the discussions on these three issues had been held without prejudice to the outcome of the
negotiations.  Third, while a great number of contributions on procurement and on emergency
safeguard measures were on the table, it appeared that an important amount of technical work still hadto be done on subsidies.  Fourth, the EC had been the most active participant in the discussions of the
three issues.  Indeed, it had presented several submissions and, as regards subsidies, was among the
few Members that had exchanged information with in the Working Party.  Since the three work
programmes had been adopted, the European Communities and Poland had been the only Members
that had put forward submissions.
9. With respect to government procurement, the EC was of the view that technical work was
well advanced thanks to 24 formal contributions by Members, as well as to the notes by the
successive Chairpersons and the WTO Secretariat.  Concrete proposals were now on the table and
allowed the WPGR to move forward into a subseque nt stage of the negotiations, provided Members
showed sufficient willingness.  In this context,  the EC was of the opinion that the value of GATS
commitments would be significantly enhanced if th ey were extended to government procurement of
                                                     
3 Excerpts from document S/WPGR/M/43.TN/S/M/8
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services.  This was the case for many services sectors, and in particular those of specific interest to
developing countries.  Discussion of the EC pr oposals of July 2002 and May 2003 had shown that the
GATS offered a flexible framework that could enable Members to move towards more transparency
and increased competition in government procurement markets, leaving it to individual Members to
open up on a sectoral basis where and when it suited them best.  Based on the discussions, commentsand suggestions of Members, the latest EC communication proposed concrete ways to achieve these
aims.  An Annex to the GATS could be negotiated laying down the conditions under which GATS
provisions would apply to government procur ement.  The communication had shown that an
agreement on government procurement of services was feasible and could be easily put in place, so as
to enable the negotiation of commitments on procurement in the framework of the GATS.  Members
had underlined the need to avoid duplication of work with the Working Group on Transparency in
Government Procurement (WGTGP) and to ensure compatibility between the GATS and theAgreement on Government Procurement (GPA).  The EC had designed the May 2003 proposal with
these concerns in mind which, hence, provided a good basis for the negotiation of a framework
agreement.  From a technical point of view, the negotiations could and should be completed before
the end of the negotiations on specific commitments.  This would allow Members wishing to
undertake commitments in respect of government procurement to do so.  Opening governmentprocurement to international competition had a positive impact on national budgets, on the
development of infrastructure and on economic growth.  The EC was convinced of the WTO
membership's keen interest in more transpar ency and increased competition in government
procurement markets.
10. With respect to emergency safeguard measures, the EC was of the view that the question of
feasibility and desirability of an ESM in services, which had not been solved at the time of concluding
the GATS negotiations, remained unresolved after many years of discussions.  Indeed, the EC had the
feeling that scepticism over the possibility of de veloping an ESM within the GATS had been growing
over time.  In this regard, it could be observed that most of the contributions either directly addressedfeasibility and desirability, or were made without prejudice to the position on these two issues.  The
ASEAN proposal to develop an ESM based on the model applying to trade in goods had raised a
number of questions intrinsically related to desirability and feasibility (like the modal application of
an ESM and the protection of acquired rights).  No answer had been provided so far.  In this situation,
many delegations, including the EC, had tried to mo ve forward the work of the WPGR by calling for
a discussion of actual or hypothetical situations where a safeguard action might be needed, and which
form that action could take.  However, only one hypothetical example submitted by ASEAN was onthe table and the WPGR was still examining whether it could justify an ESM within the meaning of
Article X.  Many delegations had raised questions that remained unanswered.  It is in this context that
a small number of Members had suggested to enter into negotiation on an agreement even if
fundamental technical issues had not been solved.  However, it was not possible to ignore the
problems encountered in the development of an ESM.  The EC reiterated the assessment made in itslast contribution to the WPGR, which had been supported by several delegations, that an ESM could
not constitute an instrument for introducing new general exceptions to the GATS or alternatives to the
situations foreseen in Article XXI.  A positive conclusion on the question of an ESM presupposed: (i)
the identification, in case they existed, of concrete examples, whether actual or hypothetical, of
emergency situations in services that were not already addressed by GATS provisions, and (ii) ademonstration that an ESM would be feasible and desirable to deal with such situations.  It had to be
acknowledged that none of these two conditions had been met so far.
11. Turning to the issue of subsidies, the European Communities shared the views of the Chair
that an important amount of technical work still had to be done.  The exchange of information onsubsidies related to trade in services that should have helped to prepare the negotiation of any
eventual disciplines had practically not taken place.  One of the reasons for the current situation might
be the absence of an agreed definition of subsidies in the services area.  In this regard, the EC wished
to underline the importance of reaching such a defini tion, following an approach closely related to the
GATS framework, as suggested in the recent report of the Chair.  The EC also believed that aTN/S/M/8
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confusion between exchange of information and notification of subsidies had contributed to the small
amount of information submitted.  The EC considered that the GATS did not establish an obligation
to notify subsidies, but only to exchange information.  Indeed, the notification of subsidies could only
result from an obligation that Members might wish to undertake in the framework of the negotiations.
On that basis, the EC had already submitted a co ntribution explaining the Community regime for aid
in the services area (Job No.  4302), and encouraged Members that had not yet provided information
to follow this example in order to move forward the technical work of the WPGR.  It was important to
underline at this stage that the requirement under Article XV was for Members and, not for third
parties, to exchange information.  In this respect, the EC wished to clarify that the only contribution
expected from UNCTAD was the bibliography of relevant material on subsidies.
12. The representative of the Philippines said that, in his delegation's view, this agenda item
constituted THE stock-taking, and the three Chair reports provided reference material.  In his
understanding, there would not be a stock-taking report after this meeting, but the Chairperson of the
WPGR would present, as usual, an oral report to the Special Session of the Council for Trade in
Services in which he would refer to this discussion.  On that occasion, each delegation would have the
opportunity to make additional comments.  With respect to the negotiations on emergency safeguardmeasures, he felt there was some confusion among certain Members concerning his delegation's
position.  The Philippines was not opposed to discussing technical issues if this could help to clarify
feasibility of an ESM.  The list of documents  annexed to the Chair's Report showed that many
contributions had already been made on technical issues and that extensive discussions had been held.
ASEAN had offered answers to virtually all questions.  Some of the answers were obviously notsatisfactory to some delegations, but this did not justify allegations that answers had not been
provided.  For instance, concerning the issue of acquired rights, ASEAN was not in a position to
dictate a solution, but had offered three options in its draft agreement.  He felt that, in fact, some
delegations had already decided that an ESM was not feasible.  ASEAN had nevertheless continued to
address questions raised by those delegations, for instance by presenting an example of a situationjustifying safeguard action, in order to convince them  that an ESM was feasible.  With respect to the
issue of desirability, his delegation attached great importance to paragraph 31 of the Chair's Report on
ESM:  political will from all Members was necessary in order to solve the issue of desirability and to
finalize negotiations by 15 March 2004.  Should it be impossible to resolve the political dimension in
the Working Party, decisions then needed to be taken at a higher level (CTSSS, TNC or Ministerial
Meeting).  The position of the sceptics was influenced by their domestic constituencies or their own
fears of how an ESM might work.  This was due in part to the fact that the Agreement on Safeguardshad been misused by certain Members.  He noted that the Dispute Settlement Body had never upheld
any safeguard measure applied in the goods area.  It was imperative to get political guidance now,
especially in view of the negotiating deadline.  Subsidies were a difficult issue, in particular when
Members tried to transpose the goods model to services.  There was a "chicken-and-egg" situation and
more information on services subsidies was needed in order to determine what kind of subsidiesshould be addressed.  This information should come from Members, but international organizations
should not be precluded.  Article XV clearly mandated that disciplines on subsidies be established.
Concerning government procurement, he doubted that the negotiations were at a well-advanced stage,
despite the active role played by the European Communities.  In fact, the Working Party had not
moved beyond a discussion on the scope of the mandate.  Not all delegations accepted that ArticleXIII entailed negotiations on  market access and national treatment.  If Article XIII was read in light of
the Vienna Convention, it was clear that the limitation contained in paragraph 1 applied to
paragraph 2.  He disagreed with paragraph 13 of the Chair's Report where it stated that Members had
"focused on a Communication from the EC".  Rather, the main focus of discussion had been the scope
of the mandate (paragraph 14).  Moreover, in paragraph 16 of the Report, the main reason why theissue of government procurement had been "dormant" was due to the doubts regarding the scope of
the mandate.  The Working Party needed to determine the scope of the mandate in the procurement
negotiations, rather than the "degree of ambition" (paragraph 21).TN/S/M/8
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13. The representative of Uruguay, speaking on behalf of Mercosur (Argentina, Brazil, Paraguay
and Uruguay), thanked the former and the current Chairpersons for producing the reports on
emergency safeguard measures, subsidies and government procurement.  With respect to the
negotiations on ESM, and without prejudice to their results, Mercosur was of the view that, should
work continue at the current pace, it would be very difficult, if not impossible, to reach a result withinthe March 2004 time-frame.  This was a statement of fact.  The Working Party had spent eight years
on this subject and had extended the deadline on four occasions.  Mercosur did not consider that
substantive progress had been made on the issue of subsidies either and wished to recall that,
according to the Negotiating Guidelines, Members "s hall aim to complete negotiations […] prior to
the conclusion of negotiations on specific commitments".
4  Speaking on behalf of Uruguay only, he
wanted to support the statement made by the representative of the Philippines regarding paragraphs 13
and 14 of the Chair's report on government procurement:  it should be clarified that the discussionfocussed on the scope of the mandate, and that, in addition, comments were made on the EC proposal.
He acknowledged that the report was made on the Chair's responsibility and remained in his hands.
15. The representative of the United States wished to commend the Chair for the substance of the
reports on subsidies and government procurement.  She recalled that her delegation had problems only
with the interpretation of the mandate contained in  the work programmes.  However, the reports had
been prepared under the responsibility of the Chai rperson and should be put forward without changes.
With respect to the negotiations on ESM, desirability was a question of substance, not of political
will.   Enforcing a safeguard measure was not the same as enforcing limitations contained in specific
commitments.  The "political will" that was missing was a will to provide answers to questions posedby her delegation.  The problems that the "demandeurs" wanted to address with an ESM needed to be
identified concretely.  The United States wanted to secure liberalization, and not to provide second-
best solutions.  "Real" examples of situations in which an ESM might be taken should include precise
indications, including the country involved and the year during which the situation arose.
16. The representative of Thailand supported the statement made by the delegation of the
Philippines regarding emergency safeguard measures and government procurement.  Her delegation
did not want to prejudge the issue of subsidies, on which her government had not yet taken position.
With respect to emergency safeguard measures, she recalled that a great deal of technical work had
been carried out since 2000.  It was now time to get political guidance.  Her delegation did not accept
the assertion that no answers had been provided to questions posed by other delegations and, in fact,
could produce a big compilation of the answers given to questions concerning the papers presented byASEAN.  ASEAN wanted to negotiate, and, theref ore, was ready to be open, reasonable and
constructive.  The Working Party should not go back to the issue of desirability, but discuss technical
issues.  These could be overcome to make an ESM possible.
28. The representative of the People's Republic of China said that her delegation had not been
consulted concerning the form of the stock-taking.  At the informal meeting on 16 June, China was in
favour of a collective stock-taking for three reasons:  (i)  the stock-taking was different from the
Chair's reports;  (ii) an objective and factual report prepared and adopted by the Working Party would
have been a positive signal;  and (iii) it would have helped Ministers to assess the situation, in
particular on ESM.  Nevertheless, China was ready to follow the suggestion made by the Chairpersonin his Annotated Agenda.  Her delegation was concerned about the slowness of the negotiations on
ESM.  The fact that these negotiations had not led to any achievement after eight years was
regrettable.  Moreover, at the current pace, there would not be any result by the deadline, and this
might affect the market access negotiations.  The stumbling-block was that some Members, which had
such a mechanism in their own schedule or in bilate ral agreements, did not find it desirable for other
Members.  She disagreed with the argument that liberalization under GATS was less deep than under
bilateral agreements, because, in some sectors, Members had undertaken full commitments.  What
could they do if, in the future, an emergency situati on arose in one of these sectors?  There was clearly
                                                     
4 S/L/93.TN/S/M/8
Page 72
a need for an ESM and it would be too late to start negotiating it once an emergency situation had
arisen.  With respect to the issue of feasibility, she noted that Brazil had made a useful proposal;
Members having a safeguard mechanism, in their schedule or in bilateral agreements, should explain
to the Working Party how they implemented it conc retely.  Creative solutions should be found to take
into account the specificities of services trade.  There was a need for political will from all Members.Finally, her delegation shared the view expressed by the Philippines regarding the negotiations on
government procurement:  market access and national treatment were outside the scope of the
mandate.
31. The representative of the United States thanked for the clarifications given with regard to the
stock-taking.  She noted that the Chairperson had no mandate to make any type of recommendation.
The Working Party should abide by its work programme concerning the stock-taking and, inparticular, the three negotiating issues should be treated equally.
35. The representative of Malaysia said that the stock-taking exercise was important because it
allowed to determine where the Working Party stood.  The negotiations on rules were a
complementary facet of the market access negotiations.  The rules negotiations had started in 1995and one of the mandates was still not clearly identified.  A great deal of discussions had taken place
on emergency safeguard measures and several deadlines had not been met.  The March 2004 deadline
was drawing closer and, although it was supposed to be the last extension, there were already talks
that it might be extended again.  Hence, Ministers could not be told that everything was going well.
His delegation was pressured to accept that some issues, the desirability of which had never beendiscussed, be put on the WTO agenda at Cancún.  For Malaysia, an ESM was desirable because it
would give the necessary confidence to liberalize services.  Malaysia had not tabled yet its initial offer
because the private sector did not find it desirable to open the market.  The Shangri La example
reflected some of the problems faced by ASEAN countries.  Moreover, during the 1997 financial
crisis, money flowing out of Malaysia had caused an emergency situation, which had led thegovernment to freeze all grants to students wanting to study abroad.  This showed that an ESM was
feasible.  Ministers should be aware of the lack of progress in the rules negotiations.  Further guidance
was needed and Malaysia hoped that they would agree that there was a political need for an ESM.
Progress in the market access negotiations was also limited, as evidenced by the statements made at
the last meeting of the Special Session by developing countries complaining about the lack of mode 4
commitments.  With respect to subsidies, there wa s a clear mandate to negotiate, and more efforts
should be devoted to information gathering.  Concerning government procurement, his delegationsupported the statement by the Philippines.  The Chairperson's report could be more balanced.  His
delegation was of the view that there was no progress on government procurement;  the only relevant
contributions concerned the scope of the mandate .  Discussions on government procurement were
short and totally lacked momentum.
39. The representative of the United States thanked the delegation of Malaysia for its frank
statement.  Her delegation was among those that continued asking questions which, in turn, were also
raised by people giving political guidance in capitals.  Answers were needed in order to have a proper
definition of what was being negotiated since these could be no blank cheque.  The reference to the
1997 financial crisis was helpful since it helped to understand what this Working Party was talkingabout.  For any example, it would be useful to know  where and when a situation justifying a safeguard
action had occurred.  One should also keep in mind that some emergency situations could be
addressed through Article XII or XIV, for instan ce.  She welcomed Brazil's comment that an ESM
was needed in order to help promote liberalizatio n.  She enquired whether, in the view of the
"demandeurs", an ESM should apply only to new market-access commitments.  The matrix presentedinformally by New Zealand at a previous meeting c ould be helpful and should be used in future.  It
would facilitate discussion on modal application, whether with specific or hypothetical examples.
The negotiations on emergency safeguard measures should be as specific as the market access
negotiations.TN/S/M/8
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40. The representative of the European Communities noted that the Chairperson's report on
emergency safeguard measures referred to political will without prejudice to the outcome of the
negotiations.  In his view, all delegations had political will, but no common view on the outcome.  It
should be kept in mind that all three negotiating mandates were related to trade liberalization.
Concerning the interpretations of treaties, he noted that, in addition to textual interpretation,contextual and teleological interpretations were also relevant.  A textual interpretation of Article XIII
led to the conclusion that there was a mandate to negotiate on market access and national treatment,
otherwise paragraphs 1 and 2 would have been put in reverse order.  A teleological interpretation led
to the same result because one of the objectives of GATS was progressive liberalization of services.
43. The representative of the Philippines said that the United States had raised some key technical
issues that the Working Party was trying to address.  ASEAN had prepared answers to some of the
questions posed to them at the last meeting and hoped that they would also help to solve the issues
raised by the United States.  Concerning the EC's comment on the Article XIII mandate, he recalled
that the Appellate Body favoured a literal interpretation of WTO provisions.  With respect to the view
that a teleological interpretation of Article XIII was consistent with the objective of progressive
liberalization, he noted that some WTO agreements, such as the TRIPs agreement, pointed in anopposite direction.
__________