RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/67
9 November 1998
(98-4435)
Council for Trade in Services
REPORT TO THE GENERAL COUNCIL ON ACTIVITIES DURING 1998
DRAFT
1. The Council for Trade in Services held eight meetings so far in 1998.  Reports on the
meetings are contained in documents S/C/M/24-31 and should be read in conjunction with this report.
The Council addressed the following matters:
I. ENTRY INTO FORCE OF THE FOURTH PROTOCOL
2. The Council held two special meetings on 16 and 26 January 1998 to address matters relating
to the entry into force of the Fourth protocol to the General Agreement on Trade in Services.  At the
second of those meetings the Council agreed to re-establish the mandate of those Members who had
accepted the Protocol to decide on its entry into force.  Subsequently, they agreed that the Fourth
Protocol would enter into force on 5 February  1998.  The Council took note of this decision.
II. VERIFICATION OF THE SCHEDULES OF COMMITMENTS IN FINACIAL
SERVICES
3. An informal meeting of the Council was held on 30 January and 2 February 1998 to conduct
the technical verification of the Schedules of Commitments and Lists of Article II (MFN) Exemptions
resulting from the negotiations on financial servic es concluded on 12 December 1997.  Following that
meeting, the delegations concerned made technical corrections and improvements to their Schedulesand Exemption Lists.  At the meeting held on 26 February 1998, the Council agreed that the
verification process was concluded, and that the Sc hedules and MFN Exemption Lists as contained in
the Compilation dated 23 February and in the other documents before the Council were the final
results of the negotiations on financial services, and therefore would be attached to the Fifth Protocol
to the GATS.
III. PREPARATION FOR NEGOTIATIONS UNDER ARTICLE XIX OF THE GATS:
THE EXCHANGE OF INFORMATION
4. At the Ministerial Conference held in Singapore in 1996, Ministers endorsed a
recommendation in  paragraph 47 of document S/C/3 calling upon the Council for Trade in Services
to develop an information exchange programme with the aim of facilitating the access of all
Members, in particular developing country Members, to information regarding laws, regulations and
administrative guidelines and policies affecting trade in services.S/C/W/67
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5. As part of the information exchange, a series of discussions was held on specific services
sectors.  The focus of these discussions was on the manner in which the services in question were
defined, traded and regulated as well as on the existing trade barriers.  The discussions were aimed at
enabling Members to identify negotiating issues and priorities.  The Council agreed on five questions
which constituted a useful, but not exhaustive, framework for the discussions.  These questions were:
(i) What are the regulatory authorities, governmental and/or non-governmental?
(ii) Are there any special or common problems encountered as regards transparency or 
the application of the most-favoured-nation principle?
(iii) What are the most prevalent types of restriction on market access or national 
treatment?
(iv) Are there other types of regulation - for example in the areas of licensing, technical 
standards or qualification requirements - which commonly restrict trade in the sector?
(v) What are the main barriers exports face in the markets of other Members?
6. The Council asked the Secretariat to prepare background papers on the sectors to be discussed
at each meeting.  These papers were based on information available on each sector and on the analysisof specific commitments.  They contained information on the economic importance of the service,
issues of definition, the main ways in which the service was traded and regulated, existing regulatory
barriers to trade, limitations commonly found in schedules and sources of further information.
7. The Council meeting of 24 and 25 June 1998 held discussions on Distribution Services;
Construction and Engineering Services;  Postal and Courier Services, and Audiovisual Services.  Themeeting of 22 and 23 July held discussions on Legal Services; Advertising Services; Architectural and
Engineering Services; Computer and Related Services; and Environmental Services.  The meeting of
14 October held discussions on Education Services; Health Services; Tourism Services; and Energy
Services. The meeting of 23and 24 November held discussions on Land Transport;  Air Transport and
Maritime Transport Services.
IV. SUBMISSION OF SCHEDULES OF COMMITMENTS IN BASIC
TELECOMMUNICATIONS
8. At the meeting held on 26 February 1998 the Council took note of the Schedules in basic
telecommunications of Cyprus and Barbados
, which had been subjected to the regular certification
procedure. The procedure was concluded for Cyprus on 30 January 1998 and for Barbados on20 February 1998 and the Schedules entered into force on these date respectively.
V. NOTIFICATIONS TO THE COUNCIL PURSUANT TO GATS PROVISIONS
9. At its meeting of 26 February the Council took note of the following notifications:
(i) Notifications pursuant to Article III:3 of the GATS concerning modifications to
services regulations in sectors where specific commitments had been undertaken:
Uruguay S/C/N/54
Poland S/C/N/56
Poland S/C/N/57
Japan S/C/N/58
Japan S/C/N/59
Japan S/C/N/60Japan S/C/N/61S/C/W/67
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Japan S/C/N/62
Norway S/C/N/63
Norway S/C/N/64
(ii) Notifications pursuant to Article VII:4 of the GATS concerning recognition measures
and agreements or agreements:
European Communities and S/C/N/43
their Member States 
Venezuela S/C/N/44
Venezuela S/C/N/45
Venezuela S/C/N/46Venezuela S/C/N/47
VI. COOPERATION BETWEEN THE ITU AND THE WTO
10. The question of a cooperation agreement be tween the Internatio nal Telecommunication
Union (ITU) and the WTO was raised at several Council meetings during 1998.  The Councilmandated the Secretariat to consult with the ITU Se cretariat on the possible form and content of such
an agreement.  A draft reflecting the state of these consultations was circulated at the meeting of the
Council of 14 October 1998.  Although it was the general view that some form of cooperation with
the ITU would be desirable, especially in the fields of technical cooperation and exchange of
information, Members still had to agree on the substance as well as on the form of an agreement withthe ITU and in particular on whether it should take the form of a formal cooperation agreement or of
an exchange of letters.
VII. RE-OPENING OF THE SECOND AND THIRD PROTOCOLS FOR ACCEPTANCE
11. Following a request from the European Communities, the Council adopted a decision to re-
open the Second and Third Protocols for acceptance, to allow Belgium to accept these protocols.Members welcomed as a positive development the fact that Belgium could accept the protocols, but
stressed that deadlines had an important function and that they must be observed.  They agreed that
the re-opening in this case should not constitute a precedent.
VIII.  WORK OF SUBSIDIARY BODIES
A. C
OMMITTEE ON SPECIFIC COMMITMENTS
12. The Committee on Specific Commitments has held two formal meetings so far in 1998.
Several informal meetings on the draft procedures for the implementation of Article XXI(Modification of Schedules) have also been held. The formal discussions of the Committee focused on
three items:  classification issues, the institution of a system of electronically consolidated and
updated schedules and the possible revision of the scheduling guidelines.
13. As far as classification issues are concerned, the activities of the Committee were threefold.
First, the examination of the ongoing revision of the Central Products Classification, in order toappreciate its possible relevance for the Committee's future work.  The Secretariat produced detailed
studies of the changes brought about by the revised CP C in a number of service sectors.  On this basis
the Committee concluded that a global conversion to this new classification would not be desirable at
this time but that the new classification could help to resolve problems of classification which may be
identified by delegations in the future.  Second, the Committee began discussion of the question of thedefinition and treatment of new services.  Third, the Committee, in accordance with a mandate given
by the Council for Trade in Services, began the examin ation of classification issues raised during theS/C/W/67
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exchange of information programme, on the basis of a compilation of these points drawn up by the
Secretariat.
14. The Committee approved in principle the establishment of a system of electronically
consolidated and updated schedules of commitments.  It was agreed that these electronic schedules
would not have legal status, since their format would differ from the treaty copies, though theirsubstantive content would be the same.  The Committee also considered the calendar, budget, format,
circulation, prices and verification procedure relating to this project.
15. Concerning the possible need to review the scheduling guidelines the Committee examined
several contributions by Members on this topic.  The Chairman invited delegations to come forward
with issues and questions they might wish to raise in this regard.
B. WORKING PARTY ON GATS RULES
16. The Working Party on GATS Rules has held five formal meetings so far in 1998.  In each
meeting, the Working Party considered all th ree negotiating mandates:  emergency safeguard
measures under Article X, government procurement under Article XIII and subsidies under
Article XV.
1. Negotiations on emergency safeguard measures under Article X of the GATS
17. Differing views have been expressed by Members with regard to the desirability of
developing an emergency safeguard mechanism under the GATS.  Substantive discussions are
continuing on the subject without prejudging the position of any delegation in respect of the
desirability, feasibility or form of any possible emergency safeguard mechanism.
18. Discussions in the Working Party have focused on four key questions identified by the
Chairperson in an informal note (dated 3 June 1997):  (i)  On whose behalf would emergencysafeguard action be taken?  (ii) In what circumstances would emergency safeguard action be taken
and what would be the purpose of such action?  (iii) What approach should be adopted in respect of
injury/adverse effects, and the relevant causal link between injury/adverse effects and commitments
under the GATS?  (iv)  What measures would be taken under the emergency safeguard mechanism?
Are some measures deemed more suitable than others?
2. Negotiations on government procurement under Article XIII of GATS
19. Discussions continued on responses to the questionnaire on national procurement regimes.
These discussions were on the basis of a Note from the Chairman containing an indicative tabulation
relating questionnaire responses to possible elements of multilateral disciplines.   In recent meetings,
discussion has focused on the scope and coverage of any disciplines on government procurement.  In
this context, the issue of how concessions should be treated has received particular attention.
Members have emphasized the need for the Working Pa rty to continue to coordinate work with the
Working Group on Transparency in Government Procurement.S/C/W/67
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3. Negotiations on subsidies under Article XV of GATS
20. Delegations expressed the need to continue the technical analysis of subsidies related to trade
in services.  To this end the Secretariat prepared a note presenting information on the subject
contained in WTO Trade Policy Reviews.  The Chairperson circulated an informal note (dated 3 April
1998) to facilitate Members' consideration of the circumstances in which subsidies may cause tradedistortions.  Discussion on the relevant conceptual and legal issues is continuing even as efforts are
being made to advance the information exchange.
C. W
ORKING PARTY ON PROFESSIONAL SERVICES
21. The Working Party on Professional Services (WPPS) has held ten meetings so far in 1998.
Reports of the meetings are contained in documents S/WPPS/M/14-23.  The work of the WPPS in
1998 focused almost exclusively on the development of disciplines on domestic regulation for the
Accountancy sector, as mandated by Article VI:4 of the GATS and by the Decision on ProfessionalServices of 1 March 1995.  The text of the disciplines was finalized at the meeting held on 22 October
1998.  The only outstanding issue after the October meeting on which the WPPS still had to reach a
consensus concerned the legal form the disciplines should take.
22. The discussion in the WPPS on the Accountancy Disciplines touched upon several issues
affecting the legal structure of the GATS.  The Wo rking Party discussed the relationship between the
scope of Articles XVI (Market Access) and XVII (National Treatment) on the one hand and the scope
of Article VI :4 (Domestic Regulation) on the other.  A consensus emerged that the Disciplines should
apply only to non-discriminatory measures falling out  of the scope of Articles XVI and XVII.  Market
Access and National Treatment barriers should be dealt with in specific commitments negotiations.
The WPPS position on this matter was reflected in a Chairman’s Note entitled Discussion of MattersRelating to Articles XVI and XVII of the GATS in Connection with the Disciplines on Domestic
Regulation in the Accountancy Sector.
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