RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/M/53
14 June 2001
(01-3015)
Council for Trade in Services
REPORT OF THE MEETING HELD ON 14 MAY 2001
Note by the Secretariat
1. The Council for Trade in Services held a meeting on 14 May 2001.  The agenda for the
meeting is contained in document WTO/AIR/1549. Under Other Business, the Chairman said he
would make suggestions on a date for the next meeting of the Air Transport Review; also, the
Secretariat would inform delegations of the status of the electronic schedules.
2. The Chairman proposed that the Council adopt the agenda as circulated, with the addition of
the item raised under Other Business.
3. The Council so agreed.
A. REVIEW OF ARTICLE II (MFN) EXEMPTIONS – DATE OF ANY FURTHER
REVIEW
4. The Chairman recalled that, at its last meeting, the Council had held discussions on the date
for a further review of MFN exemptions, as provided  for in paragraph 4(b) of the Annex on Article II
Exemptions.  He noted that there had been considerable support for the proposal made by Japan that
the next review should take place no later than June 2004.
5. The representative of Japan reiterated his delegation's proposal that the next review should
take place no later than June 2004.
6. The representatives of the United States and Chile  supported the proposal of Japan. The
representative of the European Communities supported the proposal, while noting that a review may
prove impracticable in parallel to ongoing of negotiations.
7. The representative of Australia was of the view that the next review should take place either
six month before the end of negotiations, or no later than June 2004, whichever date came first.
However, he could join the consensus on the Japanese proposal.
8. The Chairman proposed that a further review of MFN exemptions should take place no later
than June 2004.
9. The Council so decided.
B. ARTICLE II (MFN) EXEMPTIONS – ISSUES ARISING FROM THE REVIEW
10. The Chairman recalled that the Council had not discussed this item at its last meeting due to
time constraints.  The last discussion on the communications submitted by Japan, Korea and Hong
Kong, China (S/C/W/173); Hong Kong, China (Job 7775); and Chile (Job (01)/34) dated back to theS/C/M/53
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December 2000 meeting.  He suggested to discuss first the joint paper by Japan, Korea and Hong
Kong, China; together with the separate informal paper by Hong Kong, China, as these contributions
raised a number of substantive issues which seemed closely related.
11. The representative of Australia supported both papers and noted that the views expressed on
reciprocity and regional agreements were similar to the views outlined by Australia during the review
of MFN exemptions.  With respect to the communi cation from Hong Kong China, he emphasized that
the paper encouraged Members to look critically at those MFN exemptions that could be removed in
the light of the review.
12. The representative of the United States stated that the issues raised in the papers did not
necessarily need to be taken up jointly, but could be taken up bilaterally wherever there were concrete
problems.
13. In reply to a request by Pakistan for clarification of paragraph 16 of document S/C/W/173, the
representative Japan emphasized the significance of the Article V and said that Members should
pursue regional cooperation within the disciplines of that Article and not resort to MFN exemptions
where they needed to deviate from the principles of the GATS.
14. The representative of the European Communities stated that while her delegation welcomed
the papers overall, she took exception to the statement in paragraph 2 of document S/C/W/173 that all
exemptions were of a temporary nature and needed to be terminated at the end of the 10 year period.
Arriving at any authoritative interpretation of the notion that such exemptions should "in principle"
not exceed 10 years had proven difficult in the past and would likely remain difficult in the future.
She concurred with the reference in paragraph 6 that efforts to reduce MFN exemptions would
contribute to further liberalization of trade in services.
15. The representative of Argentina requested clarification concerning the scope of paragraph 17
of document S/C/W/173 on development policies.  In particular, the question of considering ways to
verify in an objective manner to what extent preferential trade relations in services - as opposed to
MFN based relations - between a developing country and another Member were able to contribute to
the former's economic development seemed to be out of context in the MFN review.
16. The representative of Korea concurred with the arguments made by Hong Kong, China that
for cases where MFN exemptions were made in ar eas where specific commitments existed, the MFN
exemptions could be used only to grant favourable treatment beyond the scope of the specific
commitments, but could not be used to undermine those commitments. Any exemptions resulting in
less favourable treatment should be reviewed and deleted.  On document S/C/W/173, he highlighted
that the technical issues identified to date woul d allow for extensive work with a view to amending
the existing MFN exemption guidelines.
17. The representative of the Dominican Republic stated that paragraph 20 of document
S/C/W/173 argued that MFN exemptions could only  provide for more favorable treatment in excess
of what was provided in Members schedules of specific commitments. As far as the tourism sector
was concerned, the MFN exemption lists would in fact weaken what was set out in the schedules of
specific commitments.
18. The representative of Japan suggested that the content of the paper by Hong Kong, China be
incorporated in the MFN guidelines or be adopted by a decision of the Council.
19. The representative of Norway shared the interpretation advanced in document Job 7775, that
MFN exemptions could not weaken the scope and depth of commitments made in the schedules.S/C/M/53
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20. Turning to the informal paper by Chile, Job (01)/34, the Chairman recalled that the
considerations put forward in that paper on pr ocedures for withdrawal and reduction of MFN
exemptions had enjoyed a substantial degree of support at the last discussion.  However, some
delegations had requested more time to reflect on this issue.  He noted that a resolution of this matter
at this meeting would have implications for the next agenda item, "Rectification of a Technical Errorin an MFN Exemption List
21. The representative of Chile stated that the objective of the paper was to discuss procedures
that would apply if in the course of the MFN re view process or during negotiations a Member should
decide to withdraw or reduce the scope of one of its MFN exemptions. Where a Member decided to
withdraw an MFN exemption, Chile proposed that a notification to the Council for Trade in Services
that the inconsistent measure was brought into conformity would suffice.  Such procedure would be in
accordance with paragraph 7 of the Annex on Article II Exemptions.  Where a Member decided toreduce the scope or level of an exemption, Chile proposed to apply the procedure referred to in
Article XXI:5.  Based on this Article, procedures for both modification and rectification had been
developed.  For the case of MFN exemptions, the second procedure, contained in document S/L/84
could be applied.
22. The representative of the European Communitie s agreed that the procedure for modification
of schedules could be applied also to withdrawal , reduction, or technical changes in MFN exemption
lists.  As those procedures had been adopted by a Council decision, presumably an equivalent decision
was needed.
23. The representative of the United States encouraged the development of procedures that would
allow Members to withdraw, or modify and make their MFN exemptions less restrictive.  He said that
there seemed to be a gap in the structure of the GATS in this respect.  His delegation wished to
develop a better understanding of the legal basis for closing this gap.  There was a slight difference
between the modification of schedules under Articl e XXI and the modification or withdrawal of MFN
exemptions, and there were questions as to whether a legal basis existed for an equivalent of
document S/L/84 for MFN exemptions.  He requested the Secretariat to look into this matter.
24. The representative of Brazil stated that this important issue should be tackled in a pragmatic
manner.  The question of withdrawal of a MFN exemption did not pose a problem in terms of
procedure.  As for reductions of the scope or technical rectifications of MFN exemptions, he
concurred in principle with the view that the procedures agreed for improvements or technical
rectifications of schedules of specific commitments contained in S/L/84 could be adjusted for
application to MFN exemptions.  He supported the suggestion that the Secretariat provide clarification
on the legal aspects involved.
25. The representative of Canada supported the development of a process to deal with the
modification of MFN exemptions and agreed that th e examination of the Article XXI procedure was a
logical first step.  For early withdrawals of MFN Exemptions, consideration of the use of notification
to the Council for Trade in Services should be examined, as paragraph 7 of the Annex on Article II
Exemptions provided for this possibility at leas t in spirit. She supported the suggestion that the
Secretariat provide clarification on the legal aspects involved.
26. The representatives of Japan and New Zealand  supported the proposal made by Chile.
27. The representative of Korea stated that the Council for Trade in Services was entitled to take
a decision on the matters raised by the proposal by Chile.  He concurred with the delegation of Chile
that with regard to the reduction of MFN exemptions, GATS Article XXI procedures could be appliedmutatis mutandis.   With regard to withdrawal of MFN exemptions, application of paragraph 7 of the
Annex on Article II Exemption could be a solution.  For the case of simple changes of a technicalS/C/M/53
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nature which were not mentioned in paper by Chile, he believed that the certification procedure set
out in document S/L/84 could be applied.
28. The Chairman suggested that the Council take note of the statements made and revert to both
the discussion of the issues addressed in documents S/C/W/173 and Job 7775; as well as the question
of procedures for withdrawal and reduction of MFN exemptions at the next meeting. On the latterquestion, he suggested that the Secretariat examine the legal aspects involved.
29. The Council so agreed.
C. RECTIFICATION OF A TECHNICAL ERROR IN AN MFN EXEMPTION LIST
30. The Chairman drew Members' attention to a communication from the Dominican Republic
(S/C/W/175), received for the December 2000 meeting, concerning a technical rectification of its list
of Article II (MFN) exemptions concerning legal services.  The technical error in question had existed
since the conclusion of the Uruguay Round.  Several delegations had expressed views on theappropriate procedure that should be followed to introduce such a rectification.  At the last meeting on
23 March 2001, one delegation had requested further time to reflect on this issue.
31. The representative of the European Communities stated that her delegation had no problem in
principle with the rectification, but believed that a procedure should be put in place to address this
issue first.
32. The representative of the United States stated that it was useful to develop the appropriate
procedures for rectifications of MFN exemptions fi rst, before taking a decision on a particular case.
33. In conclusion, the Chairman said that the Council would revert to the issue at its next
meeting.
34. It was so agreed.
D. ARTICLE II (MFN) EXEMPTION IN BASIC TELECOMMUNICATIONS
35. The Chairman recalled that the Council, at its last meeting in March 2001, had continued
consideration of Brazil's submission, S/C/W/160, concerning its revised schedule of commitments in
basic telecommunications.  He drew the Council's attention to document S/C/W/191, whereby Brazil
had initiated a certification procedure for its draft schedule of commitments in basictelecommunications.  Brazil had also circulated a Draft Decision on the Exemption from Article II
(MFN) listed by Brazil in Basic Telecommunications , S/C/W/192.  The effect of this decision would
be to allow Brazil to maintain the MFN exemption resulting from the negotiations and listed under the
Fourth Protocol, which would take legal effect upon the entry into force of Brazil's schedule of
specific commitments in basic telecommunications.
36. The representative of Brazil stated that the draft decision – which had already been circulated
as a room document at the last meeting – took account of the fact that notwithstanding that the Fourth
Protocol did not enter into force for Brazil, the MFN exemption listed therein had been submitted
within the specified period of time in accordan ce with paragraphs 3 and 6 of the Decision on
Commitments in Basic Telecommunications, S/L/19.  The draft decision took account of the fact that
the MFN exemption had been within the lega l terms specified in the Annex on Basic
Telecommunications according to which the listing of exemptions was not contingent upon thesubmission of specific commitments. This had been the case in many sectors where Members had
listed exemptions but had made no specific commitmen ts.  Therefore the decision stated that Brazil'sS/C/M/53
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MFN exemption would take legal effect, however, its entry into force would be contingent upon the
entry into force of the schedule of specific commitments, i.e. the ratification of the schedule by Brazil.
37. The representative of the European Communities noted that the MFN exemption in question
had been submitted in conjunction with an offer and that both the offer and the MFN exemption had
been subsequently attached to the Fourth Protocol.  The proposed draft decision included a link to anew offer that Brazil had submitted for certification.  Her delegation was examining the legal basis of
the draft decision and would engage in further c onsultations with Brazil on both the MFN exemption
and the new offer.
38. The representative of the United States stated that he remained concerned with the legal basis
for the draft decision. He noted that the exemption related to the Fourth Protocol which Brazil had not
yet accepted; however, acceptance of the Fourth Protocol was a pre-condition for the entry into force
of any Article II exemption submitted during the basic telecom negotiations.  In addition, a MFNexemption and scheduled commitments negotiated during the basic telecom negotiation should enter
into force simultaneously, and not separately.
39. The representative of Brazil stated that the link between the MFN exemption and the
negotiations in the Fourth Protocol had been established by the decision by the Council for Trade in
services that adopted the Fourth Protocol.  Therefore, his delegation was seeking a decision by thesame Council.
40. Concluding the discussion on this item, the Chairman said that the Council would revert to
the issue at its next meeting.
41. It was so agreed.
E. REVIEW OF THE UNDERSTANDING ON ACCOUNTING RATES IN BASIC
TELECOMMUNICATIONS
42. The Chairman recalled that the Council had held various discussions on the subject of the
review of the understanding on accounting rates in basic telecommunications.  He drew the attention
of the Council to a proposal from Australia, contained in Job (01)/73, dated 14 May 2001, on terms of
reference for a Telecommunications Accounting Rates Review.
43. The representative of Australia proposed terms of reference for a substantive review of the
accounting rates moratorium on disputes. These terms of reference covered three points: purpose,
issues and timeframe. The purpose of the review wa s to determine if a new understanding on dispute
settlement should be agreed, based primarily on arguments from the proponents as to why such an
understanding should be agreed.  The main issue for consideration concerned exploring the reasons
for continuing to exclude from the GATS measures affecting accounting rates/termination services.
One related sub-issue would be the validity of the 1997 report's assertion that the accounting ratessystem, established under the International Telecommunications Regulations was the usual method of
terminating international traffic. Other issues, especially those relating to the impact on developing
countries, were listed in the paper accompanying the proposed terms of reference.  Regarding the
timeframe, she suggested that Members should aim to complete the review by March 2002.
44. She recalled that telecommunications accounting rates were one method of structuring pricing
and payment arrangements for international telecommunications traffic. Historically, the accounting
rate system had been used as the main payment method for state-controlled monopoly carriers. Rates
had often been subject to government regulation, re sulting in rates higher than those that would
prevail in competitive markets; also the rates sometimes discriminated arbitrarily between countries.
Following liberalization of international telecommunications markets, carriers were now using aS/C/M/53
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wider range of payment methods to cover the costs of end-to-end telecommunications services.
Australia considered that all international telecommunication services should be recognised as traded
services, and that international settlements arising from such services should be subject to the GATS
principles of transparency and non-discrimination.
45. Regarding developing country interests, she noted that all countries could regulate
termination charges consistently with ITU recommendations and in GATS-consistent ways, under
application of MFN.  Secondly, developing countries were the most negatively affected by the
moratorium because it prevented them from invoki ng WTO dispute settlement procedures against
discriminatory pricing measures imposed by regulators in other countries.  Third, as a matter of
principle, Members should not carve out a particular service from the GATS simply on the basis that
work was proceeding in another forum (the ITU), particularly when that forum was not addressing
similar issues.
46. The representative of Brazil stated that he did not share Australia's interpretation – set out in
Job (01)/73 - that the understanding had expired on 1 January 2000.  The language in paragraph 7 of
the report of the Group on Basic Telecommunications suggested that the understanding be reviewed
no later than at the commencement of the next round of negotiations on services commitments. As a
substantive review had not taken place to date, his delegation believed that the understanding was stillin place.  More generally, the issue of accounting rates was still being analyzed at the ITU.
47. On the issue of the continuing validity of the understanding, the representative of Japan stated
that a mandate existed to review the understanding.  There was no notion of expiry of the
understanding.  The representative of Mexico added that a consensual decision would be required to
terminate the understanding.  His delegation was of the view that the conditions that had given rise to
the conclusion of the understanding still existed.  The representative of Uruguay shared the position
expressed by Brazil.
48. The representative of the United States stated that the main problem concerning accounting
rates today was not discriminatory treatment, but the high level of these rates in some countries. Since
1992, the ITU had recommended that accounting rates be cost-oriented. However, in many countriesthe rates remained ten to twenty times above cost.
49. Concluding the discussion on this item, the Chairman noted that several delegations had
requested time to study the proposal by Australia and said that the Council would revert to the issue at
its next meeting.
50. It was so agreed.
F. ELECTRONIC COMMERCE
51. The Chairman recalled that the Council had held a substantive discussion in March 2001 on
the communication from the European Communities on electronic commerce, S/C/W/183, as well as
on other aspects of the work programme.  He noted that the General Council, at its meeting on
8 May 2001, had agreed that its subsidiary bodies should continue their discussions and report back;
further, that the General Council would retain the item of e-commerce on the agenda for its next
regular meeting in July.  The General Council had moreover agreed to organize a dedicated discussionon cross-cutting issues before the next regular meeting, most likely in June 2001.  The Chairman
opened the floor to comments on the EC paper, as well as generally any e-commerce issue under the
examination of this Council and the latest developments in the General Council.
52. The representative of Cuba, referring to his delegation's recent paper, S/C/W/193, stated that
in the "Declaration on Global Electronic Commerce" adopted at the Second Session of the MinisterialS/C/M/53
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Conference in May 1998, WTO Members had agreed to establish a work programme to examine all
trade-related issues relating to global electronic commerce, specifically taking into account the needs
of developing countries. In this regard, the Council for Trade in Services, examined the need to
increase the participation of developing countries, inter alia, by the implementation of Article IV of
the GATS concerning the liberalization of market access in areas of export interest to them andregarding better access to technology, including technology relating to encryption and security of
transactions.
53. In spite of these provisions and the recognition that international trade, viewed as a vehicle
for economic and social progress, must be governed by rules and procedures compatible with the aims
of Article XXXVI, Part IV of the GATT 1994, several developing countries Members of the WTO
including Cuba, and others that did not belong to this organization, were unable to participate in the
Global Project of the International Telecommunication Union (ITU) being conducted in cooperationwith the Swiss company Wisekey  as part of the ITU project "Electronic Commerce for Developing
Countries," due to the United States policy of imposing unilateral and coercive measures in violation
of the rules and principles of international trade.  Yet the software programme being withheld used
encryption techniques that were already in commercial use and did not have the potential to be used
for other purposes, in relation to national security for instance.
54. The restrictions had many negative consequences both for the developing countries concerned
and for international trade in general.  More specifically, they represented a barrier to the extremely
rapid progress of electronic commerce, and they prevented the execution of secure transactions by
internationally recognized means, including the collection and making of payments both in domestic
and foreign trade.  This situation accentuated and further widened the digital gap between countriesand hampered international trade.  Technological restrictions of this kind worked against the
expansion of global electronic commerce and the creation of new trade opportunities, an objective
recognized in the aforementioned Ministerial Declaration.
55. In the light of the above, he underlined the ne cessity and importance of eliminating across the
board all types of politically motivated restrictions, whether commercial or technological, includingthose affecting the purchase and free use of encryption technologies and hardware available on the
market, as these restrictions constrained the development of global electronic commerce and the full
incorporation of all developing countries as an indispensable condition for reaching a multilateral
agreement or decision within the WTO framework in favour of unrestricted electronic commerce.
56. The Chairman suggested that the Council re vert to the item at the next meeting.
57. The Council so agreed.
G. TECHNICAL REVIEW OF THE GATS
58. The Chairman recalled that the issue of a technical review of GATS provisions, with the
objective to ensure their legal consistency and clarity, had been considered at various stages over last
years.  At the last meeting of the Council, the delegations of Australia, the European Communities, ,
Japan, Norway, Switzerland, and Hong Kong, China introduced a proposal to place the technical
review of the GATS, Job (01)/40, as a standing item on the Council's agenda.  During the discussion,several delegations supported the idea of a review in principle, while emphasizing the need to
preserve the existing structure and principles of the GATS.  Since the item was raised under Other
Business at the last meeting, no decision had been taken and therefore the item was inscribed on the
agenda of this meeting.
59. The representative of the European Communities said that at the last meeting, a number of
Members wished to see concrete proposals relating to issues to be taken up during a technical reviewS/C/M/53
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in order to obtain a clearer picture about content and scope of such a review before agreeing to
placing the item on the Council agenda on a regular ba sis.  She noted that as a follow-up to an earlier
discussion, the Secretariat had prepared a background note, Job (01)/17, with examples of two
possible issues.
60. The representative of the Dominican Republic stated that any technical problem with the
provisions of the GATS, which might give rise to confusion in terms of implementation, should be
taken up in the context of the General Council's special mechanism on implementation.
61. The representative of Japan expressed an interest in discussing issues related to Article V, as
well as paragraph 2 of Article XX in the context of a technical review.  The review should be
completed by the end of the services negotiations.  As a first step, the Council might consider
discussing the scope and procedures of a technical review.
62. The representative of India stated that before taking a decision to inscribe the technical review
permanently on the agenda of the Council for Trade in Services, Members should have a definite
notion of a list of issues, rather than engaging in an open-ended exercise.
63. The representative of Mexico stated that his delegation shared the view that some technical
adjustments needed to be made regarding Articles XVI and XVII.  What was required for the conduct
of a review was, first, to establish a list of issues, i.e. to identify those Articles where technicaladjustments might be considered; secondly, a time frame needed to be established for the review.
64. The delegations of Pakistan, Singapore,
 Turkey  supported the call by India and Mexico for
more clarity on the issues to be taken up and a timeframe for a technical review.
65. The representative of Paraguay, speaking on behalf of Mercosur , stated that it would have
been better to put this item on the agenda with the notion that it was a request for a technical review
made by certain delegations.  He supported the call more clarity on the issues to be taken up and a
timeframe for the review, and pointed out that certain topics, such as Article V, exceeded the
framework of a technical review, as their content expressed a balance of rights and obligations of
Members and therefore exceeded the framework of any possible technical review.
66. The representative of Panama supported the establishment of a list of issues and a timeframe
for a technical review.  The discussion could be advanced either through a supplement to the proposal
put forward in Job (01)/40 or through consultations.
67. The representative of Australia, suggested keeping the item on the regular CTS agenda to
allow delegations a chance to bring up issues they wanted to see reviewed.  Both in the Council and in
the subsidiary bodies, issues might arise that could be usefully considered under this particular
technical review heading.
68. The representative of Switzerland supported the statement made by the delegation of
Australia.
69. The representative of the United States stated that there had been an informal agreement,
reflected in previous documents, that Members would be willing to take up particular issues and
particular Articles based on agreement by Members.  However, he believed paragraph 2 of the paper
submitted went a little beyond what was his delegation's understanding of the scope of a review.
70. The representative of Korea believed that a timeframe for the review was not necessary. If the
technical review was made a standing item on the agenda, issues could be addressed as they came up.S/C/M/53
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71. The representative of Egypt sought clarification as to how a technical review would affect the
second phase of negotiations, i.e. negotiation of the proposals that had already been submitted.
Negotiating proposals were based on the GATS as it stood at present.  If a technical review was to be
embarked upon with a non-exhaustive list, how was th e Council to proceed on these parallel tracks?
72. The representative of Malaysia echoed the concerns over a concrete mandate and timeframe
for a review, and stressed that whatever format a re view took, it needed to be understood that it would
not change the existing GATS architecture.
73. The representative of Hong Kong, China agreed  that a technical review should preserve the
existing structure of the GATS.  As for the issues to be considered, he stated that the proposal in
Job (01)/40 foresaw that the technical review be based on submissions by Members.  This would
ensure that whatever issue was proposed would have to be agreed by Members during the course of
the technical review. Likewise, any changes that might result from the review would have to beagreed by consensus.  However, there was no need for a time frame.  On the question by Egypt, the
delegation of Hong Kong, China stated that the review might facilitate the negotiating process
because it provided a forum for dealing with any inconsistency that Members detected during the
negotiations.
74. The representative of New Zealand supported the statement made by the delegation of Hong
Kong, China concerning the structure of a technical review.
75. The representative of the European Communities,  in reply to the question raised by Egypt,
stated that the technical review could help arriving at a common understanding of issues,
e.g. regarding scheduling matters, without impacting on rights or obligations of Members themselves.
76. The Chairman summarized that many delegations expressed support for the idea of a
technical review in principle, and delegations agreed that a review needed to preserve the existing
structure and principles of the GATS.  Some Members wanted so see a defined scope and time frame
for the review.  He encouraged delegations to develop a list of possible items for a technical review
and concluded that the Council would revert to this item at the next meeting.
77. It was so agreed.
H. COOPERATION BETWEEN THE INTERNATIONAL CIVIL AVIATION
ORGANIZATION (ICAO) AND THE WTO
78. The Chairman drew the attention of the Council to a letter from the Secretary-General of
ICAO, (Job (01)/64) containing a proposal to develop a memorandum of understanding or a co-
operation agreement with the WTO.
79. A representative of the Secretariat stated that ICAO had been an observer to the Council on
an ad hoc basis, according to a decision taken in the Council in 1998.  The ad hoc observership meant
that ICAO would be invited to Council meetings whenever an item of interest to them was on the
agenda.  The letter by the Secretary-General of ICAO was addressed to the Director General of the
WTO, who in turn replied that cooperation between ICAO and WTO had been very useful, and that a
decision on a MOU or a cooperation agreement would have to be taken my Members.  Subsequently,
ICAO had communicated to the WTO Secretariat their desire to commence with the drafting of a textof a cooperation agreement.  At this point, it appeared appropriate to get an indication from Members
as to whether in principle it would be desirable to consider such an agreement.
80. The representative of Pakistan expressed procedural concerns about entering into a
cooperation agreement with any intergovernmental organization before that organization was aS/C/M/53
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permanent observer to the WTO, and specifically to  the Services Council.  He sought clarification
from ICAO concerning the idea expressed in the letter by the Secretary-General of ICAO that a
memorandum of understanding would help define the respective roles of WTO and ICAO and
alleviate concerns of the organizations' respective members regarding the application of the GATS to
air transport.  He wondered what the nature of these concerns was, what value-added ICAO envisagedfrom a MOU with the WTO.
81. The representatives of New Zealand and Australia
 supported the request for clarification
made by Pakistan.
82. The representative of the European Communitie s stated that an agreement between ICAO and
the WTO was principally a good idea. The fact that ICAO held an ad hoc observer status could be
dealt with in the text of any MOU. A number of agreements between the WTO and other
organizations could provide guidance on how to proceed with such a text.
83. The representative of Mexico stated that his delegation preferred if the Council followed its
current approach and invited ICAO whenever necessary and appropriate.
84. The representatives of Japan, Australia,  Chile,  Canada,  and Argentina  expressed support for
further exploring elements of a possible cooperation agreement with ICAO. The representative of
Chile suggested that ICAO could be invited to the next meeting to explain what elements it
considered should be part of a memorandum.
85. In summing up the discussion, the Chairman said that several delegations had raised questions
of procedure and content.  He proposed to invite a representative of ICAO to the next meeting in order
to clarify the objectives of the envisaged cooperation agreement.  He concluded that the Council
would revert to this item at its next meeting.
86. It was so agreed.
I. OTHER BUSINESS
87. Under Other Business, the Chairman suggested that the next meeting on the Air Transport
review be scheduled in the first half of July.  He recalled that the July cluster of services meetings
extended over the first two weeks of the month.
88. A representative of the Secretariat announced that the electronic schedules were now
available on the Members' section of the WTO homepage, as well as in CD-ROM format.  Two
copies of this CD-ROM, along with a user manua l would be distributed to Members shortly.  He
reiterated that the electronic schedules were meant to serve as a practical tool, and did not have any
legal status.
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