RESTRICTEDWORLD TRADE
ORGANIZATIONS/CSS/M/11
24 September 2001
(01-4577)
Council for Trade in Services
Special Session
REPORT OF THE MEETING HELD ON 12 JULY 2001
ON THE TREATMENT OF AUTONOMOUS LIBERALIZATION
Note by the Secretariat
1. The Council for Trade in Services held a special meeting on 12 July 2001, devoted to the
issue of treatment of autonomous liberalization.  The agenda for the meeting is contained in document
WTO/AIR/1582.  The agenda was adopted.
2. At the beginning of the meeting, it was agreed  that the meeting would be held in informal
mode, but the Secretariat would prepare a summary report attributing statements to individual
delegations.
3. All delegations thanked the Secretariat for the informal note Job(01)/65, dated 7 May 2001.
They considered that the note was a very good basis to structure the discussion on this issue.
4. The representative of Chile said that in some circumstances the treatment of autonomous
liberalization as envisaged in Article XIX of the GATS could be less beneficial than expected for
countries which had adopted autonomous liberalization measures.  Firstly, it would seem that not any
autonomous liberalization would be recognised.  In fact, according to Article XIX of the GATS and to
the negotiating guidelines and procedures, trade liberalization measures carried out by Members only
since previous negotiations - in this case the Uruguay Round – would be eligible for credit and
recognition. This situation might be particularly unfair for those countries which, like Chile, had
initiated and fully achieved an autonomous liberalization process in the area of services well beforethe Uruguay Round was concluded.  This group of countries would be at a disadvantage in this
negotiation given the fact that, because of this early opening, they would not enjoy recognition or
credit and they might be subject to greater demands or requirements from their trading partners.
Additionally, these countries would not only be depriv ed of the right to enjoy this recognition, but
would also be obliged to grant recognition or credit to other Members for their autonomousliberalization measures.  That dual effect would put countries like Chile at an even greater
disadvantage.  He expected that this additional element would be taken into account when the basic
criteria and definition on credit for autonomous liberalization be adopted.
5. The representative of Turkey agreed that, regarding questions after paragraph 6 of the
Secretariat note, measures to be considered for the purposes of this discussion should only be those
susceptible of being scheduled.  Both sector-specific measures and measures of general application
should be covered.  Only multilateral MFN liberalization should be eligible for credit.  Liberalization
undertaken in the context of regional trade agreements should not be granted credit.  With regard to
questions under paragraph 8, she agreed that "liberalization undertaken autonomously" meant
"liberalization undertaken by individual Members unilaterally, outside a negotiating context", but shesuggested to add the following: "but not necess arily bound in the end".  Concerning the questions
following paragraph 9, if the previous definition of autonomous liberalization was to be accepted then
the results of the extended negotiations on movement of natural persons, financial services, and basicS/CSS/M/11
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telecommunications could not be considered as included.  However, the efforts exerted by Members
during the extended negotiations should also be taken into account during the process of granting
credit.  With reference to the difference between criteria and modalities, she preferred that a two-stage
process of developing criteria first, and modalities afterwards, be followed.  Multilateral modalities
for the granting of credit needed to be developed on the basis of multilaterally agreed criteria, asstated in the Negotiating Guidelines and Procedures.  Regarding the questions after paragraph 16, she
said that the term credit was to be used, instead of recognition, since credit was the word used in the
Negotiating Guidelines and Procedures.  With respect to the question whether Members should be
able to seek credit for liberalization undertaken autonomously in the past and ask their trading
partners to reciprocate on that basis, she considered that the issue depended on the bargaining power
of the parties concerned.  Taking into account that developing countries had weaker bargaining
power, a mechanism for securing concessions from developed trading partners should be established.The meaning of "trading partners" should be clarified as well.
6. On the questions after paragraph 24, she said that credit for autonomous liberalization
measures should be granted first, and the measures for which credit had been granted might be bound
at the end of the negotiations.  Regarding the assessment of the value of measures, it seemed to be
very difficult to use quantitative approaches.  Instead, multilaterally agreed model schedules might bemore practical and appropriate.  As regards questions after paragraph 35, she considered that
autonomous liberalization measures for which Members were seeking credit might be notified.  She
preferred a collective discussion about the measures and their value in terms of liberalization.
Otherwise, there was the risk that similar liberalization measures might be assessed on a different
basis.  It would be more appropriate to deal with autonomous liberalization within a multilateralframework or, at least, to agree on a mixed approach (multilateral and bilateral).
7. The representative of Switzerland also dealt systematically with all the questions raised in the
Secretariat note.  Regarding questions after paragraph 6, he considered that only measures that were
susceptible of being included in a schedule of commitments should be considered.  He agreed that
only measures taken on a MFN basis should be discussed.  He agreed with the definition of
autonomous liberalization given by the Secretariat in paragraph 8 of the note.
8. Only those measures bound between two negotiating rounds or to be bound at the end of these
negotiations could possibly receive a credit provided that the measure had led to trade benefits for the
trading partners for the Member who liberalised it.  Members should not have an automatic right to a
credit for liberalization measures that were of no interest to their partners.  Regarding the question
under paragraph 9, he said that the extended negotiations were part of the preceeding round.  On
paragraph 11, he said that the distinction between  criteria and modalities was appropriate.  A two
stage process could be envisaged by which multilaterally agreed criteria would be set up in the first
place, for example, on the basis of the elements contained in the communication by Hong Kong China
(Job 7580);  then some modalities for bilateral treatment would be defined.  The notion of credit was
in fact extremely difficult to define.  The co mmunication by Korea (Job 7634 and Add.1) had shown
the limits of a quantitative approach.  It was not possible to determine the value of a liberalizationmeasure globally for all Members in all sectors.  That value would depend on the sector involved and
the modes of supply.  He found it difficult to envisage this notion of credit in a context other than a
bilateral one.  However, the notion of recognition is related to transparency and the fact that the
trading partners become aware of a liberalization measure.  In his view the answer to the second
question under paragraph 16 was clearly no.  A member which had undertaken autonomous
liberalization measures in the past should not necessarily ask for credit.  It was not sure that a
liberalization measure had really been advantageous to the trading partners of that Member.  The
notion of mutual advantage must be at the heart of these discussions.  A Member would be able to
request a credit only if the autonomous measure which he had to offer fully respected this mutual
advantage.S/CSS/M/11
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9. Regarding paragraph 24, he said that autonomous liberalization measures had generally been
taken for reasons of domestic policy and could not therefore automatically involve a request for credit
from trading partners who had not requested anything at all.  Whether the liberalization measures had
been taken outside or inside a negotiating context was in fact less important the actual binding of such
a measure in a schedule of commitments.  Above all, what was more important was the interest ofother Members.  The principle of progressive liberalization was related more to successive rounds of
negotiations than to liberalization outside such rounds.  He answered the second question after
paragraph 24 in the negative and the third one in the affirmative.  On paragraph 31, he said that
implementing a multilateral quantitative approach was extremely difficult.  Quantification was
subjective and could introduce distortions.  Individual liberalization measures were not of equal
interest to all trading partners in all sectors.  Regarding the questions after paragraph 31, he replied to
both of them in the negative.  Formula approaches were not feasible when the objectives varied sowidely from one country to another.  However, it would be useful to rely on qualitative assessments to
be worked out by the Member concerned together with its trading partners in bilateral negotiations.
Regarding questions after paragraph 35, he considered that notification of autonomous liberalization
was important, but that the mere act of notifying would not give right automatically to any credit.
Regarding questions under paragraph 38, he said that instead of trying to develop a multilateralformula it would be more realistic to look at credit and recognition in the context of requests and
offers in bilateral negotiations.  Paragraph 11.d) of the submission by Hong Kong, China (Job 7580)
offered a practical approach.  Switzerland could agree on a combined approach (multilateral and
bilateral), with the establishment of a multilateral framework within which credits or recognition
could be determined on a bilateral or plurilateral basis.  Finally, he considered that binding a measurewould be a logical conclusion of a negotiating proce ss, rather than a necessary prerequisite for any
discussion on credits.
10. The representative of Korea said that an eff ective mechanism to grant credit for autonomous
liberalization was a prerequisite for further liberalization of trade in services to be agreed at the
multilateral level.  He announced that his country was preparing a paper on the possible criteria, basedon a qualitative approach.  Regarding the definition of autonomous liberalization, only MFN
liberalization should be eligible for credit.  The expression "since previous negotiations" should also
include the results of the extended negotiations on basic telecommunications, the movement of natural
persons and financial services.  He added that asking for binding commitments before granting credit
was not an appropriate approach since it impinged on the negotiating position of credit-demanding
countries.  Regarding transparency, he said that the notification of measures was the first step to
negotiate credit.  Liberalization measures should be notified to all WTO Members.  Restricting thetreatment of the issue to bilateral negotiations mi ght affect the negotiating leverage of the country
seeking credit.  A mixed approach (multilateral plus bilateral) might be more realistic.
11. The representative of Hong Kong, China said that both developed and developing Members
had undertaken autonomous liberalization measures since the Uruguay Round and the subsequently
extended negotiations, which were an integral part of the Uruguay Round.  The scope of liberalizationmeasures to be considered should include measures susceptible of being scheduled (i.e.  under articles
XVI, XVII, and XVIII of the GATS), as well as non-discriminatory but restrictive measures falling
under article VI.4 and those related to the liberalization of MFN exemptions.  Only those measures
liberalized on a MFN basis should be eligible for credit.  She noted the difficulty in developing an
objective benchmark.  She agreed that autonomous liberalization meant the liberalization undertakenby individual Members on a voluntary basis outside the negotiation context.  It was important to
distinguish between bound and unbound measures.  Measures to be considered were those undertaken
after the Uruguay Round and the conclusion of the extended negotiations. She did not see any
significant difference between criteria and modalitie s.  In keeping with the negotiating guidelines,
Hong Kong, China envisaged the development of modalities prior to the start of the negotiation ofspecific commitments.  Coming to the question of binding, she considered that both the measures for
which credit was granted and the credit so granted should be bound, so as to provide predictability,S/CSS/M/11
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legal certainty, and fairness.  Transparency about the measures was also important.  If there should be
no bound commitments for measures for which credit was requested then the question would arise as
to whether the credit should also be subject to withdrawal at a later stage, specially if the measure in
question were to be adjusted or revoked subsequently.  The most feasible approach would be a
combination of bilateral and multilateral recogniti on, whereby the Council for Trade in Services could
multilaterally agree factors to be taken into account during bilateral negotiations.  In paragraph 11.d)
of the submission by Hong Kong, China (Job 7580), a possible list of such factors was suggested.
12. The representative of the European Union said that Members should be able to come up with
multilaterally agreed criteria or modalities - she did not see a great difference between the two terms.
They could relate to transparency and the factors to be taken into account.  Much of the work would
need to be done on a bilateral basis.  The question of transparency was very important.  However,
each Member should decide on what measures to put into the discussion, and should be in control ofwhom it wished to be transparent with.  The European Union would not favor a mandatory
notification to the Council, since Members would prefer to negotiate with one or several partners with
whom they had specific liberalization interests.  Obviously, the results would be applied on an MFN
basis.  It was up to each Member to have control of the process when looking for recognition or credit.
As regards the question of binding, there was a link between binding liberalization and credit, but itwas rather a question of deciding at the end of the process how much of the liberalization and credit
would be bound by partners.  Binding would come at the end of the process, assuming that a
satisfactory solution had been negotiated between partners.  Different levels of negotiating power
should be considered.  She suggested that the modal ities could indicate that where a Member believed
that it was not getting sufficient recognition or credit in the discussions, it should be open to it to bringthe matter to the attention of the Council under the agenda item on "Review of progress in
negotiations".  The elements put forward in the s ubmission by Hong Kong, China could be useful in
trying to form criteria for the multilateral aspect of the process.
13. The representative of Thailand said that multilaterally agreed criteria to be developed would
apply to all Members, regardless of their size and level of development, and credit should be given in
accordance to these criteria.  Autonomous liberalization did provide an opportunity to operationalize
Article IV of the GATS.  Thailand was exploring ways to have special and differential treatment for
developing countries built into the modalities to be developed in the future.  For example, through
additional flexibility on how the credits could be used.  The notion of criteria was flexible.  Criteria
could be established for different purposes and at different stages of the exercise.  For instance, there
could be criteria on measures that would be eligible for credit;  or criteria on how the credit could be
used.  The distinction between criteria and modalities was not particularly important.
14. Thailand's views were made known at the pr evious meeting on the relationship between
negotiations and autonomous liberalization.  In that connection, Thailand explored some liberalization
measures that were related with a negotiating context, such as those undertaken as part of IMF
programmes.  A few examples of those measures included the maintenance of a convertibility
entailing foreign exchange backing of the currency;  statutory limitations on central bank financing ofthe public sector;  streamlining antitrust legislation and issuing of legislation for the protection of
competition;  regulatory changes that would lowe r costs for banks and would remove distortions that
inhibited the development of checking accounts;  reform of the public administration, by streamlining
its activities and eliminating redundant entities and programmes;  strengthening controls over
procurement practices and cost-effectiveness of spending programmes;  tightening of capital andprudential requirements;  bringing regulatory standards closer to best international practices;  and
revamping of bank supervision practices.  These examples showed the variety of measures that could
be taken, either sector specific or horizontal. These measures should be considered in the deliberations
on autonomous liberalization.  These measures would imply greater transparency, predictability and
accountability in administrative procedures;  would introduce pro-competitive principles;  and wouldremove impediments to trade and investment.  In stead of focusing on the definition of "autonomousS/CSS/M/11
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liberalization", she suggested to concentrate on the definition of "liberalization measures" eligible for
credit.  The definition of measures contained in Article XXVIII of the GATS could be relevant in that
regard.
15. The next question was how to treat these measures for the purpose of this exercise.  There
should be a system of voluntary notification.  This would facilitate transparency.  Members could alsodevelop a set of criteria to determine what measures would be eligible for credit. Such criteria could
include the duration of the measures;  the long lasting effect of the measures;  or the criteria included
in Article V of the GATS, such as substantial sectoral coverage, elimination of existing discriminatory
measures, and prohibition of new or more discriminatory measures.  The latter might be adapted to
qualify horizontal liberalization measures for credit.  Only measures available on a MFN basis should
be eligible for credit.  On how to assess the value of the measures, factors such as the size of the
sector vis-à-vis  the economy;  and the country's share in world services trade could be considered.
16. The representative of Cyprus said that, on the definitional issue, liberalisation measures
undertaken autonomously should meet the following crite ria, in order to be considered as eligible for
recognition or credit:  be taken on a voluntary basis;  be capable of being scheduled;  be either sector
specific or applicable in many or all sectors (horizontal measures);  and be compatible with the MFN
principle.  Furthermore, for credit purposes, such measures must have been taken outside anegotiating context and countries concerned should demonstrate willingness to bind them under the
GATS.  All measures taken since the end of the Uruguay Round and meeting the criteria mentioned
before should be considered, including the results of the extended negotiations on the movement of
natural persons, telecommunications and financial services.  The distinction made between the
concepts of credit and recognition in the Uruguay Round was the most appropriate.  While"recognition" covered autonomous liberalization measures taken by Members more generally, "credit"
should be directly linked to binding commitments.
17. Concerning the linkage between the negotiations and autonomous liberalization, it was
important to define a process foreseeing the binding of these autonomous liberalization measures at
the end of the negotiations.  On the issue of assessing the value of the benefit stemming fromliberalization of measures undertaken autonomously, Cyprus considered that the construction of
benchmarks or yardsticks was very difficult and cumbersome.  Even if it were possible to devise such
a formula, the value would differ depending on the country, the size of the economy, and the sector.
Only a qualitative assessment could be worked out.  On the issue of transparency, it was essential to
ensure that all liberalization measures undertaken autonomously be made known to the WTO
membership.  A mixed system involving bilateral as well as multilateral negotiations would be
appropriate.  She supported a multilaterally acc epted framework, through which recognition and
credit could be worked out on a bilateral, plurilateral or multilateral basis.  Such a multilateral
framework could also encompass transparency issues.
18. The representative of Argentina said it was necessary to pass to a more concrete stage of the
work.  In his view the distinction between credit  and recognition worked out during the Uruguay
Round was no longer relevant.  The relevant questi on was actually how to define the credit.  One
important question was how far the multilateral work could go.  Transparency was an essential
element that should be considered at a multilateral level.  Also, an attempt should be made, in a sort of
second step, to measure the scope of the autonomous liberalization.  Some of the indicators included
the share of trade in that sector vis-à-vis  the total trade of the country;  the share of world trade in this
sector vis-à-vis  global trade in services;  the length of the autonomous liberalization measures;  the
relationship between a liberalized sector and other sectors in the economy;  and the sector's growth
expectation, both domestically and globally.  Regarding the scope of liberalization measures, he
considered that the whole process of liberalization should be taken into account for the purposes of
this exercise.  He reiterated it was necessary to move discussions forward, by identifying the main
indicators that could be used to assess the value of autonomous liberalization measures.S/CSS/M/11
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19. The representative of Norway said that the aim of the GATS 2000 negotiations was to achieve
progressively higher levels of liberalization of trade in services with due respect to national policy
objectives.  Negotiations should clearly lead to real and meaningful liberalization being laid down in
Members' specific commitments.  Autonomous liberalization generally took place because a Member
benefited from such a measure.  Backtracking would not seem logical or desirable.  Norway thereforeexpected Members to put forth offers that at least reflected their present trade regime in areas where
they had liberalized autonomously.  Credit should be sought through the request/offer method of
negotiations.  At the same time, all Members should focus on the opportunities to commit on
additional liberalization beyond the present regime.  Countries willing to make binding commitments
should be credited for this.  Similarly, credits should also be given for autonomous liberalization
undertaken since the previous negotiations when those measures were bound.  Liberalization which
was unbound did not provide sufficient basis to give credit, because of the uncertainty andunpredictability inherent in such situations.  Binding commitments constituted a crucial element and
the granting of credit should stimulate such a development.
20. The representative of Hungary said, in reply to the questions after paragraph 6 of the
Secretariat note, that liberalization measures to be considered for the purpose of this exercise were
those that might be scheduled, including article XVIII measures.  A distinction between sectoralmeasures and measures that affect all sectors was possible.  However, it was not clear whether
measures affecting all sectors had a higher value than sectoral measures.  Only MFN liberalization
should be eligible for credit.  As regards non-MFN liberalization under regional trade agreements,
paragraph 8 of Article V made it clear that parties to a regional trade agreement should not seek
compensation for trade benefits that accrued to any other Members from such an agreement.Regarding the questions after paragraph 8 of the Secretariat note, he agreed with the definition given
to the expression "liberalization undertaken autonomously".  Modalities should be established in order
to encourage Members not only to liberalize autonomously, but also to bind such liberalization, if
possible between services negotiations.  On the question under paragraph 9, he said that the
expression "since previous negotiations" included the results of the negotiations on the movement ofnatural persons, basic telecommunications and financial services.  On the questions after paragraph
16, he believed that the distinction between credit and recognition along the lines indicated in
paragraph 14 (i.e.  the concept of credit as being limited to binding commitments and the concept of
recognition as being applied more generally to liberalization initiatives) was useful, logical and
appropriate in the WTO context.
21. Credit for autonomous liberalization should be given in the context of negotiations.  Since the
value of autonomous liberalization measures was subjective, i.e.  a particular measure would bevalued differently by different Members having different sectoral interests, the bilateral request/offer
process seemed to offer the best avenue for seeking and granting credit.  He agreed however that due
to the difference in negotiating leverage, the process should not be left entirely to bilateral
discussions.  Criteria to be agreed-on multilaterally should be used in the bilateral negotiating process.
In addition, he was interested in the idea of a vo luntary peer review, keeping the possibility for
Members to bring specific cases to the Council wh en there was disagreement between the negotiating
partners on the use of the multilaterally agreed criteria.  The issue of binding was of crucial
importance.  Members seeking credit in return for their autonomous liberalization steps should show
readiness to bind those measures, at least partially.   Binding should not be a condition to be met up
front, but at the end of the bilateral negotiations.  Regarding the assessment of the value of measures,the use of a qualitative factors seemed to be more feasible and appropriate.  On transparency, he did
not see the need to set up an extensive and burdensome process of notification covering all
autonomous liberalization measures.  The process was voluntary and therefore, there should not be an
obligation to notify.  Information about successful bilateral negotiations on the granting of credit
could also be provided on a voluntary basis.  Finally, in his view, Article XIX.3 of the GATS andparagraph 13 of the negotiating guidelines and procedures did not limit the treatment autonomous
liberalization only to developing countries.S/CSS/M/11
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22. The representative of Mexico said that it was necessary to have a common understanding
about basic concepts.  On the scope of the measures, he said that all measures (sectoral and
horizontal) should be discussed.  He said that when the GATS was negotiated, paragraph 3 of Article
XIX was aimed at credit and recognition for au tonomous liberalization undertaken by Developing
Countries.  Those who stood to benefit were the de veloped countries, who would give credit and
recognition for autonomous liberalization in developing countries.  There should be a two-stage
process: first, the development of criteria, and second, the modalities.  The assessment of particular
measures would depend on the country, the sector, the benefits offered to its trading partners, and the
coverage of the measures.  It would vary from one country to another.  It would be very difficult to
establish a general guideline for the assessment of all measures, since the situation would vary from
country to country.  It would be in the interest of  the country seeking credit or recognition to notify
the measure.  The detail of measures to be notified would depend on the country, and on whether itwanted to make it known to all Members or only to some of them.  The basis for notification should
be voluntary.  He added that Mexico did not ha ve a final position on whether this issue should be
dealt with multilaterally or bilaterally.  Finally, he  suggested that the Secretariat prepare a brief note
or matrix highlighting the main views on each issue under discussion.
23. The representative of Japan agreed that only measures susceptible of being scheduled should
be considered.  Such measures should be consistent with the MFN principle.  Credit should only be
given after such liberalization measures had been bound as a commitment.  This was compatible with
the principle of progressive liberalization since Members were free to bind or not their autonomous
liberalization.  It was important that information on those measures be shared by all Members.  For
that reason, a notification to the WTO would be desirable.
24. The representative of Indonesia said that it was important to discuss further the criteria and
modalities for the treatment of autonomous liberalization, as this was of utmost importance to
developing countries.  Indonesia would like to cons ider broader notions of credit, and different ways
and means for granting such credit, before focusing on the technicalities of different calculating
methods.  Autonomous liberalization measures to be considered for the purpose of this exerciseshould cover those taken since the conclusion of the Uruguay Round.  Credit could only be received
by binding the autonomous liberalization measures.  However, autonomous liberalization should not
result in simply asking Members to bind such liberalization in order to get credit.  This was not an
appropriate solution since it would prejudice the negotiating position of the Member concerned.  Also,
there should be flexibility for developing country Members to make adjustments to their unbound
measures in situations where any binding of credits would be detrimental to the Members concerned.
25. The representative of Uruguay said that according to paragraph 13 of the negotiating
guidelines and procedures, criteria for the treatment of autonomous liberalization should be agreed on
before the beginning of negotiations of specific commitments.  He then addressed three issues.
Firstly, although Article XIX:3 of the GATS did not distinguish between developed and developing
countries, it was true that both the negotiating history of the Uruguay Round and the treatment of this
issue in the WTO implied that autonomous liberalization was meant specifically for developingcountries.  In the Montreal meeting in December 1988, and in Geneva in April 1989, during the mid-
term review, under the subheading F (Increasing part icipation of Developing Countries), it was stated
that "autonomous liberalization of market access of services exports of developing countries should
be allowed".  In addition, paragraph 3 of Article XIX came after paragraph 2, which dealt with the
appropriate flexibility for developing countries.  At the same time, the sentence after paragraph 3referred specifically to the special treatment fo r least-developed countries.  In the negotiating
guidelines and procedures, paragraph 13 was placed after paragraph 12, which dealt with the
appropriate flexibility for developing countries.  Finally, discussions held at the GATT and the WTO
on autonomous liberalization of trade in goods referred specifically to autonomous liberalization
undertaken by developing countries.  The 1991 guidelines on autonomous liberalization measures,developed by the negotiating group on market access, were entitled "negotiations on market accessS/CSS/M/11
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and developing countries".  More recently, in the WTO, the issue of autonomous liberalization had
been discussed at the Committee on Trade and Development.
26. Secondly, he considered that the expression "since previous negotiations" referred to the
Uruguay Round, whose results entered into force in 1995.  So the period to be considered should go
from the Uruguay Round until the present.  There were at least two examples of autonomousliberalization that should be recognized and perhaps credited.  In the first case, there were Members
who, after the negotiation of the Fourth and Fifth Protocols, unilaterally bound schedules of
commitments in these sectors.  These countries shou ld receive credit and recognition for such actions.
The second case concerned the Members who participated in negotiations on basic
telecommunications and financial services, who shoul d also be recognized and credited for their
greater degree of participation in these negotiations.  Thirdly, on the question of bindings and credit,
he said that Uruguay was not seeking credit, but concessions from other Members in thesenegotiations.  Finally, he thought that there was a need to move to a subsequent phase in the
discussion.  He agreed in that regard with Argent ina and Mexico.  He suggested to have an informal
paper that would enable Members to focus the discussion.
27. The representative of Israel expressed her concern that the debate might evolve into an
academic exercise without ever reaching broader conclusions.  She agreed that although it was
necessary to reach a common understanding of terms, Members should focus first on developing a
more general approach.  It could be agreed that autonomous liberalization was undertaken for internal
reasons, and that first and foremost the Member's own economy stood to benefit from that
liberalization.  However, trading partners also benefited directly from autonomous liberalization.
Autonomous liberalization also met the GATS objective of progressive liberalization.  Therefore,Members should be granted credit and this should be reflected in the negotiations.  Although in the
past credit had been linked to bindings, in light of the difference between goods and services
negotiations and the fact that Members should be encouraged to undertake autonomous liberalization,
it was necessary for the system to have some degree of flexibility and provide some leeway for
adjustment.  She showed interest the European Union's suggestion about the use of a bilateral, ratherthan a mandatory, multilateral notification system.
28. The representative of Brazil concurred with the views expressed by Argentina, Uruguay, and
Israel to the extent that the debate might lead to  an academic discussion.  There was a need to have
some criteria to use as a basis for the work, and move the discussion forward.
29. The representative of Cuba endorsed the statement made by Uruguay.  It would be interesting
to have another paper giving some answers to the que stions posed in the Secretariat note.  This issue
required further analysis and debate.
30. The representative of Malaysia noted that there were two opposing philosophies on how to
treat autonomous liberalization measures: on the one hand, supported by Malaysia those who would
seek credit without necessarily binding those autonomous liberalization measures;  and, on the other
hand, those who feel that in order to get credit a Member would have to bind the autonomous
liberalization measures.  In that regard, he suggested  that the question of binding could be left aside
until the end of the negotiations, when every Member would assess what measures to bind and to
what extent.  He agreed with the definition of autonomous liberalization provided by the Secretariat
note in paragraph 8.  It was important to identify what type of measures would fall under autonomous
liberalization.  The representative of Thailand pointed out some of those measures.  In fact, a Member
seeking credit could give a quantitative assessment of the scope of liberalization undertakendomestically.  For example, by showing the increase in foreign participation in a given sector after its
liberalization.  Qualitative assessments could also be provided, by showing cases for instance, where
applied regimes are more liberal than what was bound in a schedule of specific commitments.  Those
situations were part of autonomous liberalization, and should also be taken into account.S/CSS/M/11
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31. Regarding time-frames, the starting-point for the consideration of measures was the end of the
Uruguay Round and the extended negotiations.  However, there were cases where, due to historic
reasons, some regulations – for instance in the field of professional services - had been in place for
many years, perhaps since Malaysia gained its independence in 1957.  At that time, for instance,
Malaysia rolled over many United Kingdom regulations on professional services.  Moreover, byvirtue of those actions, there had been a fair amount of trade liberalization in some of those sectors.  It
was therefore important to have certain flexibility in order to allow for the consideration of cases, like
the Malaysian one, in which liberalization had taken place well before the Uruguay Round, since
1957.  He suggested that the criteria to assess the value of measures could be agreed multilaterally.
The issue of whether the credit and recognition would be worked out bilaterally, plurilaterally or
multilaterally was something that could be discussed later.  In that regard, he favoured in principle a
qualitative approach.  Those qualitative criteria could include issues such as the potential for marketaccess;  transparency of regulatory regimes;  and the length of the measure in place.  In addition, some
statistics of trade in services could be considered.  Also, consideration should be given to whether the
measures in question met the objectives of the GATS.  The issue of what kind of credit would be
granted needed to be further discussed.
32. The representative of Canada noted that during the Uruguay Round progress was made on
treatment of autonomous liberalization with regard to tariff reduction, but negotiators were unable to
find a way in the case of non-tariff barriers.  And since all measures in services trade were non-tariff
barriers, this meant that finding a way forward would be difficult.  Credit for autonomous
liberalization would have to be linked to a notification procedure, different to the one set out in
paragraph 3 of Article III.  Canada saw a link between credit for autonomous liberalization measuresand the binding of these measures, since binding was a fundamental benefit of international trade
agreements.  It was likely that the value of specific measures for which credit could be considered
would have to be first determined on a bilateral basis.  The commercial interests of trading partners on
particular measures would differ substantially.  She then made specific comments on the Secretariat
note.  With regard to the question under paragraph 6, she agreed that measures to be considered forthe purposes of this exercise were only measures susceptible of being scheduled.  She agreed with the
definition of autonomous liberalization provided in paragraph 8.  Regarding paragraph 9, she agreed
that the expression "since previous negotiations" should also include the results of the extended
negotiations.  With regard to the last question under paragraph 24, she agreed that autonomous
liberalization for which credit was granted should be bound at the end of the negotiations.  With no
bindings, autonomous liberalization measures might not necessarily be of a long-lasting character.
With regard to the questions under paragraph 31, it was unlikely that an objective or quantitativeyardstick for assessment of autonomous liberalization could be developed, specially in light of the fact
that autonomous liberalization would benefit some trading partners more than others, depending on
their specific commercial interests.  However, further thought should be given to the idea of
qualitative assessments of autonomous liberalization to be worked out by the Member concerned
together with its trading partners in bilateral negotia tions (i.e.  the request/offer stage).  Regarding the
question on transparency under paragraph 35, notification would likely form an important part of any
approach to autonomous liberalization.  Since it was important that all Members benefit from the
transparency that would arise from the possible notification process, only bilateral notification did not
appear to be practical.  With regard to paragraph 38, it was possible that the best way to seek credit
for autonomous liberalization would be to proceed bilaterally within an overall multilateralframework.  Finally, she considered that it was premature to ask the Secretariat to produce a more
concrete text at this point in the absence of more contributions from Members.
33. The representative of Paraguay supported the idea of moving to a higher level of the
discussion, in order to come up with agreed-on modalities and criteria.  He agreed with the definition
offered in paragraph 8 of the Secretariat note, although he noted that liberalization undertaken inplurilateral negotiations should also be taken into account.  Special and differential treatment must be
granted to developing country Members who had undertaken autonomous liberalization measures.S/CSS/M/11
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Perhaps a double valuation and credit could be given.  On the distinction between criteria and
modalities, he considered that it was necessary, first of all, to develop criteria with which to assess
autonomous liberalization measures undertaken by Members, and then to develop the modalities for
granting credit.  The actual granting of credit would come in a third phase, in bilateral, plurilateral or
multilateral negotiations.  He considered that credit and recognition were two different concepts.Receiving recognition for liberalization undertaken autonomously did not mean that a Member
needed to bind those measures.  But if there were a credit granted in order to exchange concessions,
his delegation would commit itself to bind that liberalization in a schedule.  Reciprocity would be one
of the modalities to treat these credits.  Binding should take place after the granting of credit, at the
final stage of the negotiations.  On the possible use of formulas, he said that his delegation had not get
found a mathematical formula which would be appropriate and effective for the negotiations.  But, as
far as criteria were concerned, not only quantitative but also qualitative criteria were important.Factors such as trade flows, participation of the sector in the GNP, the contribution of the sector to
employment, and the market potential could be considered to assess the value of particular measures.
Regarding transparency, he said that the notification of measures should in no case give rise to a legal
obligation to bind them.  Setting up transparency provisions would be extremely useful.  Finally, both
the criteria and modalities should be the subject of multilateral negotiation, while the determination ofcredit would take place in bilateral, plurilateral or multilateral negotiations.
34. The representative of the United States said, commenting on other Members' interventions,
that measures dealing with regulatory transparency could indeed be scheduled.  He also agreed that,
according to the plain meaning of article XIX of the GATS, all WTO Members could benefit from
autonomous liberalization, not only developing countries.  It would seem counterproductive to set upprocedures under which developed countries would be discouraged from liberalizing between rounds.
He then commented on some of the questions posed in the Secretariat note.  In his view, autonomous
liberalization measures would need to be bound to be eligible for credit.  From that perspective, the
universe of measures to be included for the purpose of autonomous liberalization would include those
that could be bound.  The alternative seemed to be what was called recognition in the Uruguay Round.The distinction between credit and recognition wo rked out during the Uruguay Round seemed to be
useful.  Regarding sector-specific measures and measures of general application, and whether they
should be addressed differently, he said that the distinction would be based on the perceived value of
particular measures.  Horizontal measures could in fact be more valuable, for instance in the case of
economy-wide equity restrictions that would be liberalized.  Alternatively, sector-specific measures
could be more valuable, for example numerical limitations on a particular sector that had been
liberalized.  It would depend on the trading partners' interests.  Regional liberalization could also beconsidered as long as it was bound, and therefore available on an MFN basis.  On definitions, he said
that the term liberalization seemed to be deal t with in the GATS in the context of specific
commitments, i.e., bindings.  That meant that the focus on autonomous liberalization would be
whether the measures were bound at the WTO or not.  Liberalization taken outside a negotiating
context should not be excluded.  There was a small number of WTO Members that had submitted newschedules between rounds, not as part of negotiations, and when those offers contained liberalization
they should not be excluded from the consideration of autonomous liberalization.  The phrase "since
previous negotiations" included the results of the extended negotiations.  On the question of bilateral
vs.  multilateral approaches, he said that the initial US submission (S/CSS/W/4) contained his
country's views on that.  Targets could be conceived, and in fact that submission provided an exampleof what could be considered as similar to a zero target for tariffs or the removal of non-tariff measures
for trade in goods.  Bilateral negotiations had a very important role to play.  Consideration of credit
should not involve the judgement of countries with no trade interest in a particular sector being
discussed by two other countries.  Finally, he supported the factors proposed by Hong Kong, China in
its written submission (Job 7580) which constituted a very good starting-point for the consideration ofcriteria for assessing the value of autonomous liberalization from a multilateral perspective.S/CSS/M/11
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35. The representative of Australia said that her country would only grant credit for bound
commitments capable of being scheduled.  She took the expression "susceptible of being scheduled"
to mean a liberalization measure relating to a se rvice that was listed in document MTN.GNS/W/120,
either now or in the course of negotiations.  Regarding sector-specific and generally applicable
measures, she considered that although such a distinction could be helpful as a general guide,ultimately Members would need to make their assessments and weight up the relative value of sector-
specific and general liberalization measures in the context of bilateral request/offer negotiations.  She
agreed that liberalization should be bound in a Member's scheduled and be made available on an MFN
basis.  The starting-point for credit should be Members' bound commitments.  Credit should be
calculated from the last time a Member made bound commitments in its schedule.  For example, in
the case of financial services, Members who revised their bound commitments under the Fifth
Protocol should have their credit calculated on liberalization since 1997.  However, Members who didnot make commitments under the Fifth Protocol should have credit calculated since 1994.  That was
based on the premise that participants in the financial services negotiations had already benefited from
trade-offs.  Criteria and modalities seemed to have the same meaning in practice.  Credit should be
requested, interpreted and given during bilateral negotiations.  The value of autonomous liberalization
per se  should be heavily discounted if it was not bound because there would be an ongoing risk of
backsliding.  The binding of autonomous liberalization was consistent with the principle of
progressive liberalization, since Members were free to choose not to bind such liberalization or to
bind a lesser degree of liberalization.  Australia did not think that quantitative yardsticks were
practical.  On transparency, she said that a process of voluntary notification to the Council could be
beneficial.  However, she also agreed with the Euro pean Union that in some cases bilateral disclosure
might need to be confidential.  Finally, she said th at any multilateral criteria would need to comprise a
general and flexible set of broad principles or factors to be taken into account, in order to
accommodate a variety of approaches in bilateral and plurilateral request/offer negotiations.
36. The representative of Kenya cautioned against going down an academic path.  He then
answered some of the questions posed in the Secretariat note.  Regional liberalization should be taken
into account for two reasons.  Firstly, the integration agenda at the regional level was generally more
advanced.  Secondly, all paragraphs of article XIX should be read together, and the notions of
progressive liberalization, flexibility, and due respect for national policy objectives needed to be taken
into account.  He favoured a multilateral approach, since that would be the only way of assuring credit
for autonomous liberalization measures of countries that did not attract any particular interest.  On
transparency, he considered it reasonable that measures be notified.
37. The representative of Venezuela said that a more pragmatic approach to this issue should be
adopted.  Only developing countries should benefit from autonomous liberalization, not developed
countries.  She said that there was a clear difference between the concepts of credit and binding.
Credit was an autonomous concept, which was parallel and complementary to negotiations.  It was
entirely independent from any binding.  Flexibility was an inalienable right of developing countries
under the agreement that would be seriously undermined if there was an obligation to bind thosemeasures.  She supported the idea put forward by Argentina and Uruguay to have a draft paper
containing simple and pragmatic criteria or guidelines.
38. The representative of the Slovak Republic said that liberalization undertaken autonomously
by individual countries outside the negotiating context of the Uruguay Round, which had been bound
or not on an MFN basis, should be subject of further discussions.  No benefit could be derived fromautonomous liberalization measures if it was first requested to bind those measures in order to be
considered as eligible for credit.  Therefore, it was necessary to establish clear conditions for using the
credit, when establishing modalities or criteria for the treatment of liberalization undertaken
autonomously.  She agreed with the European Union that Members should be flexible to choose
which measure they would notify on a voluntary basis, and to negotiate bilaterally or plurilaterally.The result of such negotiations would be multilateralized.  On the assessment of the value ofS/CSS/M/11
Page 12
autonomous liberalization measures, serious analysis was necessary since the value of measures
differed according to the specificity of the sectors and countries concerned.
39. The representative of Switzerland said that the best way to avoid the risk of engaging in an
academic discussion was to move forward step by step, trying to answer the questions raised by the
Secretariat.
40. The representative of Jordan said that any tr eatment of autonomous liberalization to be agreed
upon should take into account the level of liberaliz ation already existing in specific commitments of
individual countries, including the sectoral coverage and the date of implementation of such
commitments.  Countries who had joined the WTO during the Uruguay Round would be entitled to
take into account autonomous liberalization undertaken by them since 1995.  For a country like
Jordan, who recently became a WTO Member, account would normally be taken of its autonomous
liberalization since the year 2000;  while it ha d already undertaken commitments with relatively
higher level of liberalization in comparison with other countries.  Jordan expected a balanced
treatment of autonomous liberalization that secured benefits for all WTO Members.
41. The representative of the Philippines said that the expression "liberalization undertaken
autonomously" included measures unilaterally undertaken, whether or not necessitated by the inherent
economic needs of the Member liberalizing.  He did not subscribe to the opinion that if a Memberundertook the liberalizing measure because it was in its benefit, then it should not be entitled to
recognition and credit.  The concept of liberalization undertaken autonomously should be limited to
measures subject to scheduling under Part III of the GATS.  This should include domestic regulatory
measures in the context of Article VI of GATS.  A further criterion was that autonomous
liberalization be compatible with the MFN principle.  On the distinction between sector-specific andhorizontal measures affecting several or all sectors, he was uncertain whether the latter should be
entitled to greater recognition and credit than the former.  No distinction should be made between
liberalization bound outside a negotiating context and unbound liberalization as long as both met the
criteria.  Liberalization undertaken autonomously should only refer to measures undertaken since the
end of the Uruguay Round.  For sectors and modes of supply covered by the extended negotiations,the measures to be considered as not autonomously undertaken were those that directly arose out of
commitments made in those negotiations.  He agreed that the process of obtaining recognition and
credit did not necessarily require a priori binding.  The act of binding should occur only after
autonomous liberalization had been duly recognized in accordance with multilaterally agreed criteria.
Notification for the purpose of obtaining credit and recognition should be voluntary.  He agreed that
matters arising from bilateral negotiations on credit for autonomous liberalization could be brought by
individual Members to the attention of the Council under the agenda item on review of progress in thenegotiations.  He also supported the notion of special and differential treatment for developing
countries in this context.  He recognized the diffic ulties in formulating an objective yardstick for the
multilateral assessment of measures, including the possibility of a formula approach.  He looked
forward to discussions on a qualitative approach to this issue.
42. The representative of India associated himself with the statements of Malaysia, Israel,
Hungary, Thailand, Argentina, Uruguay, Philippines, and Turkey.
43. The representative of St.  Lucia said that getting credit and recognition for autonomous
liberalization was significantly important because, although her country was committed to
liberalization, it had very limited negotiating capital.  The notion of potential market access needed to
be stressed in cases of countries which might not attract enough interest from other trading partners.Liberalization undertaken in the services context was different from that undertaken in the goods area,
because it was more difficult to reverse it due to structural changes in the market.S/CSS/M/11
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44. In concluding, the Chairman said that all delegations were pleased with the Secretariat's note,
which proved to be extremely helpful in taking the discussion beyond the preliminary stage.  The note
brought out the complexities of the issues involved and helped structure the discussion in terms of
their different elements.
45. It was also said that the discussion should not lead to an academic exercise.  The question
then was how to move to a more operational phase.  Some suggestions were made in that regard.  One
was to ask the Secretariat to prepare a paper on possible criteria to assess autonomous liberalization
measures.  Another one was to ask the Secretariat to prepare a compilation of issues raised in order to
better focus the discussion on the specific elements.  In his view, the discussion was not exhausted.  In
fact, some Members indicated their intention to submit further papers on the subject.  In addition,
some delegations said that additional papers of this kind by the Secretariat were premature in the
absence of more contributions by Members.  He further considered that there were different anddivergent views on the issue of autonomous liberalization that could only be solved politically.
46. He suggested that the Secretariat be asked to prepare a brief note pointing out the broad views
expressed under each relevant issue.
47. The Council so agreed.
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