RESTRICTED
PREPARATORY COMMITTEE PC/SCS/M/6/Rev.1
FOR THE 22March 1995
WORLD TRADE ORGANIZATION
(95-0618)
SUB-COMMITTEE ONSERVICES
REPORT OFTHE MEETING HELD ON16DECEMBER 1994
Note bytheSecretariat
Revision
1. TheSub-Committee onServices helditssixth meeting on16December 1994. Theagenda
forthemeeting iscontained inAirgram PC/AIR/52. Inaddition, under Other Business, theChairman
reported onthemeeting oftheNegotiating Group onBasic Telecommunications which washeldon
12and13December 1994. TheSub-Committee agreed totakeupItemAontheAgenda attheend
ofthemeeting.
ItemB:Verification ofSchedules
2. TheChairman indicated thataninformal meeting oftheSub-Committee hadbeenheldon
15December 1994forthepurpose ofverifying schedules ofcommitments onwhich negotiations had
beenconcluded. Thatexercise hadessentially beenoneofclarification withrespect tothetechnical
accuracy ofschedules asareflection oftheagreed results ofnegotiations aswellastheirconsistency
withtheagreed Guidelines fortheScheduling oftheCommitments. Themeeting wasnotconcerned
withthesubstance ofthecommitments. Eight schedules hadbeenexamined, namely thoseofSt.Kitts&
Nevis, United Arab Emirates, Mali, Angola, Qatar, Burundi, Ecuador andSlovenia. Ofthese, the
schedules ofEcuador andSlovenia wereverified; inthecaseoftheother sixitwasmade clearthat
bilateral negotiations werenotcompleted. Theverification ofthesewilltakeplaceafterthenegotiations
areconcluded.
3. Asforindividual schedules, theChairman stated thatEcuador 'sschedule wasverified andwould
besubmitted tothePreparatory Committee foritsapproval atitsmeeting on21December 1994.
Similarly, Slovenia 'sschedule wasverified adreferendum tothemeeting ofitsaccession Working
Party on19December 1994. Theschedule would alsobesubmitted tothePreparatory Committee
forapproval. Inthecases ofBurundi andMali, which areleast developed countries, bilateral
negotiations onthesubstance oftheir schedules would continue into1995. Thedeadline forthe
submission fortheirschedules is15April 1995. Inthecaseoftheother countries which hadbecome
contracting parties totheGATT in1947 pursuant toArticle XXVI.5(c), namely; StKitts&Nevis,
Angola,UnitedArabEmiratesandQatar,substantivenegotiationswouldalsocontinueontheirschedules
into1995. Inthiscontext theChairman referred toongoing work inthePreparatory Committee
concerning adraftdecision toextend thenegotiating period untiltheendofMarch 1995. TheSecretariat
wasasked tobring thesedevelopments totheattention ofthosecountries which havesubmitted schedules
forverification butwere notpresent atthemeeting.
4. TheSub-Committee tooknote.PC/SCS/M/6/Rev.1
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ItemC:Other Business
5. TheChairman reported thattheNegotiating Group onBasic Telecommunications hadheld
itsfourth meeting on12and13December 1994. Thegroup hadapproved arequest forobserver status
fromtheRepublic ofSlovenia. Asaresult, thenumber ofGovernments participating inthenegotiations
remained at25andthenumber ofGovernments participating asobservers increased to28.Thegroup
continued toreview participants 'responses tothequestionnaire onBasic Telecommunications: ithad
completed thereview ofthe20responses submitted thusfar.Thegroup hadalsodiscussed outstanding
technical andconceptual issues related tothenegotiating andscheduling ofcommitments. Subsequent
meetings ofthegroup willfocus onthose issues. Ithadbeenagreed thatthedateofthenextmeeting
ofthegroup would be27-28 February 1995 followed bybilateral consultations between delegations
fortheremainder oftheweek.
ItemA:Issues relating totheScope oftheGATS
6. TheChairman recalled thatatthefirstmeeting oftheSub-Committee heldon15July1994,
itwasagreed thatissues relating tothescope oftheGATS should beamatter ofpriority tothe
Sub-Committee andhehadbeenrequested tostartaprocess ofinformal consultations onthesubject.
Thestatement oftheChairman oftheGNS of14December 1993 hadstated thattheresult ofthe
consultations would bereported totheCouncil forTrade inServices forappropriate decision.
Accordingly, theChairman oftheSub-Committee nowsubmitted adraftreport ontheconsultations
foradoption bytheSub-Committee. Thedraftreport hadbeensubject toinformal consultations prior
toitssubmission attheformal meeting. Those consultations hadrevealed disagreement overthelast
sentence inparagraph 7which read: "Accordingly, ithasnotbeenpossible toreach agreement asto
whether theyarewithin oroutside thescope oftheAgreement". Nevertheless hewassubmitting the
report asitstood inthehopethatafterfurther consideration, delegations would beabletoapprove
it.TheChairman indicated thathewasconvinced thatthedraftreport asitstood didnotprejudice
theposition ofanydelegation. However, hewould welcome anyproposed language thatwould be
acceptable toallMembers oftheSub-Committee.
7. Therepresentative ofAustralia expressed hissupport forthedraft report submitted bythe
Chairman. However, inanattempt tofacilitate itsadoption, heproposed analternative language to
thatofthelastsentence ofparagraph 7ofthedraftreport which read: "Accordingly, asfarasthese
measures areconcerned, ithasnotbeenpossible toreach agreement ontheissues which havebeen
thesubject ofconsultations intheSub-Committee". TheChairman theninvited delegations tocomment
onthisproposed language.
8. Therepresentative oftheEuropean Communities tooktheviewthatthedraftreport submitted
bytheChairman asitstood wasanaccurate reflection ofthesituation andshould therefore beadopted
bytheSub-Committee. Herdelegation wasnotready toengage inanyredrafting exercise anymore.
9. Therepresentative ofSweden speaking onbehalf oftheNordic countries, agreed withthe
statement made bytherepresentative oftheEuropean Communities. He,aswellastherepresentatives
ofSwitzerland andJapan, supported thedraftreport submitted bytheChairman asitstood.
10. Therepresentative ofIndiastated thathisdelegation hadserious problems withthelastsentence
ofparagraph 7ofthedraftreport submitted bytheChairman. Therefore, hecould notagree toits
adoption bytheSub-Committee asitstood. Ontheother hand, heexpressed support forthealternative
language proposed bythedelegation ofAustralia.
11. Therepresentatives ofHungary, Brazil, NewZealand, Canada, Argentina andKorea supported
theadoption ofthedraftreport submitted bytheChairman. They alsoexpressed theirwillingnessPC/SCS/M/6/Rev.1
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toaccept thealternative language proposed byAustralia forthelastsentence ofparagraph 7.
12. TheChairman concluded thatitdidnotseem possible thataconsensus could beachieved on
alternative language forthelastsentence ofparagraph 7.Consequently, thedraftreport could not
beadopted bytheSub-Committee. Hewould therefore make areport tothePreparatory Committee
and,eventually, totheCouncil fortrade inservices onhisownresponsibility.
13. TherepresentativeofPakistanstatedthattheissueofthescopeoftheGATShadbeendeliberated
atlength foryears. Ithadalsobeenthesubject ofveryspirited discussions during thecourse of1994
onthebasis ofthestatements of10December and14December 1993 bytheChairman oftheGNS.
During theentire course ofthosediscussions, delegations hadparticipated inthespiritofaccommodation
andcooperation. Heexpressed satisfaction thatanagreement hadbeenreached onmeasures relating
tojudicial administrative assistance andmeasures relating totheentry andstayofNatural Persons.
Hisdelegation wassorry thatithadnotbeenpossible toreach acommon understanding ontheother
three categories ofmeasures. Herecalled thattheGATS "applies tomeasures bymembers affecting
Trade inServices". Itfollowed from thisthattheAgreement extends toallmeasures, unless ithad
been expressively provided toexclude some from itsscope. This wasreflected inDocument
MTN.GNS/W/177.Rev.1 where itstates thatparagraph 1ofArticle 1oftheGATS wasformulated
inaninclusive sense andnotinanexclusive fashion, which could beseenasanindication thatthe
intent ofthenegotiations hadbeentowidely cover anymeasure which affects Trade inServices. The
statement bytheChairman oftheGNS on14December 1993 wasalso, inessence, aconfirmation
ofthatunderstanding,. Therefore, itshould beassumed thatthecoverage oftheGATS withrespect
themeasures affecting tradeinservices is,andhastobe,universal unless otherwise decided orprovided
for.
14. Therepresentative ofPakistan alsostated thatitwasessential topreserve theunityandintegrity
oftheGATS. Anyattempt tointerpret itsprovisions before theirentry intoforce would onlydiminish
itsvalue andthecommitment ofparticipants toit.Intheabsence ofanagreed common understanding
ontheoutstanding issues, theonlyalternative wastoaccept thedisagreement andreflect itinthereport
oftheSub-Committee. Thatreport would notprejudice anyposition. Anyfuture problems arising
outoftheimplementation oftheAgreement would bedealtwithbythemechanism available under
theWTO.
15. Therepresentative ofSwitzerland recalled thatduring theUruguay Round negotiations ithad
notbeenpossible toachieve agreement onwhether, andifsotheextent towhich, certain types of
measuresidentifiedindocumentMTN.GNS/W/177/Rev.1werewithinoroutsidethescopeoftheGATS.
Asaresult theChairman oftheGNS hadissued aformal statement (MTN.GNS/49) on
10December 1993assuming thatparticipants would refrain fromtaking issues arising inthisareato
disputesettlement.TheChairmanhadalsostatedthatparticipantsmustassumetheirownresponsibilities.
Subsequently, attheGNS meeting on14December 1993 itwasagreed byallparticipants thatan
additional period oftimeupto15December 1994 would beprovided forfurther consultations with
aviewtoreaching abetter common understanding oftheways inwhich measures ofthiskindmay
affect Trade inServices. Theresult ofthiswork wastobereported totheCouncil forTrade and
Services forappropriate decision (MTN.GNS/W/260). Inviewofthisdecision, andinorder notto
prejudge subsequent discussions, Switzerland hadrefrained from tabling MFN exemptions relating
tosocial security measures initsfinalsubmission on15December 1993(MTN.GNS/W/211/Rev.2).
Switzerland 'sprevious submission dated 12December 1993(MTN.GNS/W/211/Rev.1) hadcontained
thefollowing statement: "Atpresent noexemption issubmitted formeasures taken under statutory
systems ofsocial security. Switzerland reserves therighttoexamine these measures inlightofthe
approach taken byother participants". Inspiteofextensive consultations during 1994, there were
stillseveral categories ofmeasures, inparticular those relating tosocial security, onwhich ithadnot
beenpossible toarrive atacommon understanding onwhether theyfellwithin oroutside thescopePC/SCS/M/6/Rev.1
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oftheAgreement. Intheabsence ofacommon agreed understanding there continued tobenobasis
onwhich participants could exercise responsibilities. Thetaskagreed on14December 1993remained
unfinished. Therepresentative ofSwitzerland stressed thewillingness ofhisdelegation tocontinue
work ontheoutstanding issues withaviewtoreaching substantive solutions meeting theconcerns of
allparticipants.
16. Therepresentative ofJapan stated thatinspiteofhisdelegation 'sappreciation forthework
donesofar,itwasregrettable thatithadnotbeenpossible toreach acommon understanding onthe
outstanding issues, including social security, which would haveenabled delegations toassume their
responsibilities.HereiteratedJapan'spositionthatsocialsecuritymeasuresshouldbeconsideredoutside
thescope oftheGATS sincethose measures would notsubstantially affect tradeinservices. Hestated
thattherewasaneedtocontinue multilateral work onthose issues. Inthemeantime, delegations were
notabletoassume theirresponsibilities concerning theirschedules andMFN Exemption lists.
17. Therepresentative ofAustria stated thathiscountry hadincluded initsdraftMFN Exemptions
on13December 1993 alistof"measures relating tothepreferential useofsocial security schemes
aswellasmeasures relating toinvestment protection". Subsequently, inthelightoftheChairman 's
statement of14December 1993, andinorder toavoid prejudging theresults oftheconsultations, Austria
hadwithdrawn those reservations. Heexpressed thedisappointment ofhisdelegation withtheoutcome
oftheconsultations, aswellastheinability oftheSub-Committee toadopt thedraftreport submitted
bytheChairman. Healsostated thathisdelegation wasstillconvinced thatallfivecategories of
measures referred tointheNotebytheSecretariat (MTN.GNS/W/177/Rev.1) wereoutside thescope
oftheGATS andtherefore itreserved itsrights.
18. Therepresentative oftheEuropean Communities stated thatherdelegation would liketoreserve
itsrights tocomment ontheChairman 'sdraftreport atthemeeting ofthePreparatory Committee on
21December. Sheregretted thefactthatitwasneither possible toachieve abetter common
understanding oftheissues, nortoagree ontheadoption ofareport oftheSub-Committee. What
hadstruck herdelegation throughout theprocess ofconsultations wasthatithadnotbeenpossible
toreach aconclusion orabetter common understanding despite thefactthatthere hadbeenalarge
majority ofcountries thatbelieved thatthemeasures inquestion wereoutside thescope oftheGATS.
Herdelegation wasamong those. They hadparticipated seriously intheconsultations, presenting
substantive arguments andconcrete examples demonstrating howanumber ofthose measures might
affect trade inservices, rather thanapproaching thematter from arhetorical anddogmatic point of
view. Asaresult ofthatwork, ithadbeenpossible tobuild upalarge majority which came tothe
same conclusion thatthese measures didnotaffect trade inservices andtherefore were outside the
scope oftheGATS. Since ithadnotbeenpossible toreach anagreed conclusion, thefundamental
question ofwhether these measures wereinside oroutside thescope oftheGATS remained unsettled;
there wastherefore nolegalbasistoassume thattheywereinside thescope oftheAgreement. Itwas
onthatbasisthatherdelegation hadnottaken MFN exemptions orreservations fromNational Treatment
attheendoftheRound. Thelegalsituation remained unchanged. Herdelegation reserved itsposition
andwould takeupthematter further inthePreparatory Committee.
19. Therepresentative ofCanada stated thathisdelegation hadparticipated inthediscussion of
issues relating tothescope oftheGATS withfullconfidence thatacommon understanding could have
beenreached among allparticipants astowhether, andifso,towhat extent, certain categories of
measures fellwithin thescope oftheGATS. Anumber ofparties totheGATS hadeither refrained
fromtabling, oractually hadwithdrawn, MFN exemptions andNational Treatment reservations relating
tocertain categories ofmeasures indicated inMTN/GNS/177/Rev.1. They hadbeenconvinced that
further discussions would haveledtoacommon understanding which would havemetthelegitimate
concerns ofallparties. Hadthisnotbeenthecase, there would havebeenamuch larger number of
MFN exemptions andNational Treatment reservations. Itwasimportant thatthisbeborne inmindPC/SCS/M/6/Rev.1
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asthenegotiating context inwhich thetwostatements oftheChairman were made (MTN.GNS/49
of11December 1993 andMTN.GNS/W/260 of14December 1993).
20. Therepresentative ofCanada added thatintheabsence ofsuccess intheconsultations toreach
acommonunderstanding,hisdelegationhadbeensurprisedanddisappointedthatsomeGATSparticipants
werenotprepared tocontinue thediscussion ofthisissue, andevenmore sothatthesame participants
hadrefused toapprove asimple andfactual report submitted bytheChairman oftheSub-Committee.
There were many lessons tobedrawn from theyearlongconsultations, none ofthem were positif.
Inlegalterms, itremained unclear which categories ofmeasures, andtowhatextent, werecaptured
bythedisciplines oftheGATS. Theinability toreach acommon understanding oreventoagree on
amechanism forfurther discussion wassetting theGATS itself offonabadstart. Intheabsence of
acommon understanding, Canada reserved allitsrights withrespect toitsposition regarding whether,
andtowhatextent, certain categories ofmeasures fellwithin thescope oftheGATS.
21. TherepresentativeofSweden,speakingonbehalfoftheNordiccountries,supportedthestatement
made bytherepresentative oftheEuropean Communities. Hestated thattheunresolved issues relating
tothescope oftheGATS outlined inDocument MTN/GNS/W/177/Rev.1 hadbeenthere foralong
timeintheservices negotiations. TheNordic countries hadreferred tothose issues onmany occasions
during thenegotiations, andtheirposition hadalways beenthatthose measures felloutside thescope
oftheGATS. Despite thewillingness oftheNordic countries toengage indiscussions onthematter,
theproblem could notbesolved intheprocess leading tothesubmission ofthedraft Final Actin
December 1991. Further attempts weremade in1992and1993, buttheresults werenotconclusive.
During thenegotiations, theNordic countries hadconsistently reserved theirposition onthismatter.
Therepresentative ofSweden recalled thattherevised MFN Exemption Listsubmitted byFinland in
earlyDecember 1993hadstated that:"Over thepastyears, theNordic countries haverepeatedly raised
questions concerning towhatextent MFN exemptions havetobetaken forcertain measures, suchas
those contained insocial security agreements. Ourinitial listofMFN exemptions reflected this
uncertainty. TheNordic countries continue tohavequestions concerning thosemeasures, andwebelieve
thattheyarebestdealtwiththrough collective solutions. Duetolackoftime, weareaswellready
toseekprocedural solutions which would allow ustoaddress these questions properly atalaterstage.
However, Finland willnotextend benefits contained ine.g.social security agreements onanMFN
basis."
22. Therepresentative ofSweden added thatthesame, orverysimilar statements werecontained
incorrespondingsubmissionsbytheotherNordiccountries(indocumentMTN.GNS/W/209forIceland,
MTN.GNS/W/196 forNorway andMTN.GNS/W/198 forSweden). Inaddition, theNordic countries
hadreserved therighttorevert totheissueofsocial security measures intheirschedules ofcommitments
intheabsence ofacollective understanding providing forlegal certainty. Hethenreferred tothe
statementsmadeindocumentsMTN.TNC/W/62/Rev.4forFinland,MTN.TNC/W/74/Rev.3forIceland,
MTN.TNC/W/63/Add.1/Rev.4forNorwayandMTN.TNC/W/59/Rev.4forSweden.Withoutprejudice
tothefinaloutcome onthematter, Finland andSweden hadintroduced National Treatment reservations
forsocial security measures intheirrespective draftschedules. Against thatbackground, itwasclear
thattheuncertaintyregardingthemeasuresreferredtoindocumentMTN.GNS/W/177/Rev.1hadcreated
difficulties fortheNordic countries during thenegotiations in1993. Therefore, theNordic countries
hadwelcomed thestatement oftheChairman oftheGNSdated 14December 1993(MTN.GNS/W/260),
which provided more timetoconsider thematter withaview toreaching acommon understanding
ontheissues. After theChairman hadmade thatstatement inthemeeting oftheGNSof14December,
thespokesman fortheNordic countries declared thatthose ofthem thathadintroduced National
Treatment reservations forsocial security measures would withdraw theirreservations inorder not
toprejudge theoutcome ofthediscussions. Thataction wastaken ingoodfaith. Inaddition, theNordic
countrieshadrefrainedfromfilingMFNexemptionsonmeasuresreferredtointheChairman'sstatement.
Headded thatthediscussion hadclearly shown thatmostdelegations hadconcluded thattheunresolvedPC/SCS/M/6/Rev.1
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measures listed indocument MTN.GNS/W/177/Rev.1 felloutside thescope oftheGATS. TheNordic
countries realised thatithadnotbeenpossible toreach abetter common understanding oftheways
inwhich those measures affect trade inservices andtherefore toagree onwhether theyfallwithin
oroutside thescope oftheGATS. Against thatbackground theNordic countries maintained their
position thatthemeasures concerned felloutside thescope oftheGATS.
23. Therepresentative ofIndia stated thatitwasimportant tooutline thehistorical background
totheissues relating tothescope oftheGATS. Thisissuehadbeensubject todiscussion before 1993,
butithadnotthenbeenpossible toagree onacommon understanding. Ataformal meeting ofthe
GNSon1October 1993, thattheChairman hadinvited delegations tosubmit totheSecretariat questions
relating tothescope oftheGATS. Onthebasis ofthose questions theSecretariat hadprepared the
NoteinDocument MTN.GNS/W/177/Rev.1 dated 4November 1993. India hadnotbeenaparty to
those questions andthought atthetimethatitwasextremely inappropriate toraisequestions ofsuch
akindastocastdoubts ontheveryscope oftheGATS. Thedelegation ofIndia nevertheless took
noteofthedocument prepared bytheSecretariat andparticipated inthediscussions thatensued. On
11December 1993theChairman hadmade astatement, following consultations onthesubject, making
itclearthatpending further clarifications ofissues relating tothescope oftheGATS, participants must
assume theirownresponsibilities indeciding whether anymeasures thattheymaintain should be
scheduled ormade thesubject ofMFN exemptions. Theonlyother qualification inthestatement was
anencouragement intheformofbestendeavours todelegations toshow restraint withregard toMFN
exemptions andDispute Settlement. Insofarasthestatement of14December 1993wasconcerned,
themannerinwhichithadbeenintroducedandadoptedcouldbequestioned.Nonetheless,thedelegation
ofIndia hadaccepted thestatement ingood faithandparticipated inthediscussions thattookplace
during theperiod ofoneyearwhich ended on15December 1994. Therepresentative ofIndia did
notagree withthose delegations thatclaimed thatthestatement of14December, coming asitdidso
soonafterthatof11December, somehow caused participants torethink andrefrain from assuming
theirownresponsibilities. Inanycase,thestatement of14December innowaysuperseded thestatement
of11December. Itmerely gaveextra timetoparticipants withaviewtoreaching abetter common
understanding ontheways inwhich certain measures affect tradeinservices. Hestated thatanyother
interpretation ofthose twostatements would beinconsistent withboththeletter andspirit oftheGATS
itself.
24. Headded thatthedelegation ofIndia hadapproached theconsultations ingood faithbuthad
beenclearfromtheverybeginning thatthefollowing fundamental objectives could notbecompromised:
(1)thattheintegrity oftheGATS must notbeundermined inanyway, (2)thatMFN andNational
Treatment areunassailable principles andcannot become amatter ofconvenience and,(3)thatitwould
setadangerous precedent totrytointerpret theGATS evenbefore itentered intoforce. Itwasagainst
thisbackground thattheIndian authorities hadcarefully considered theissues relating tothetypes of
measuresreferredtoindocumentMTN.GNS/W/177/Rev.1.Afterdeliberationandreflection,itseemed
clearthatitwould beimpossible tosaywithanydegree ofcertainty thatanyofthose types ofmeasures
arenotmeasures affecting trade inservices. Throughout theconsultations some participants had
persistently sought legalcover formeasures theymaintained which wereinconsistent withtheGATS
rather thanmaking agood-faith effort tofindways inwhich suchmeasures could bebrought into
conformity withit.TheGATS, likeother Agreements resulting fromtheUruguay Round, wasaleap
offaith forallparticipants. Members must make their ownjudgement andassume their own
responsibilities.
25. Therepresentative ofIndia alsostated thathisdelegation could notassociate itself withany
statement which gaveanimpression thatthere weredoubts concerning thescope oftheGATS. The
consultations hadshown thatthere wereprofound divergences onthismatter which weremore likely
toincrease thandecrease ifthiskindofdiscussion were tocontinue. Theexpiry ofthedeadline of
15December 1994 exhausted themandate given bytheChairman 'sstatement of14December 1993.PC/SCS/M/6/Rev.1
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Members were freetoraiseanyissues intheCouncil forTrade inServices under theWTO within
therights andobligations oftheGATS. Even ifthisshould happen, itshould bedelinked from the
consultation process which ended on15December.
26. Therepresentative ofAustralia, speaking onbehalf ofAustralia andNewZealand stated that
towards theendoftheUruguay Round, there hadbeenmuch uncertainty amongst delegations about
theextent towhich certain categories ofmeasures identified inMTN.GNS/W/177/Rev.1 fellwithin
thescope oftheGATS. Asaresult, theChairman oftheGNSissued astatement ataninformal meeting
on10December 1993 inwhich henoted thattheconsultations which hadbeentaking place onthose
measures hadrelevance fortheirscheduling andforthequestion ofMFN exemptions (MTN.GNS/49).
Herecalled thatthere hadbeenawidespread concern atthattimethatintheabsence ofsome shared
understanding about howsuchmeasures related tothescope oftheGATS, which could formthebasis
forallparticipants totaketheir ownresponsibilities inrespect ofallavenues thenopen tothem,
precautionarydecisionsbysomedelegationstoscheduleArticleXVIIreservationsandMFNExemptions
would havebeenduplicated byothers leading tothe"telephone book" scenario which mostdelegations
wished toavoid. Itwasinthiscontext thattheChairman, inissuing his10December 1993statement,
urged participants toexercise restraint. After consulting withconcerned delegations, theChairman
issued asubsequent statement on14December 1993 providing anadditional period forfurther work
tobedonetoarrive ataclearunderstanding oftheways inwhich thecategories ofmeasures identified
inMTN.GNS/W/177/Rev.1 mayaffect trade inservices. Ithadbeennoted thattheresults ofthat
work would bereported totheServices Council foranappropriate decision. Thatstatement hadthe
intended effect, nearly alldelegations either withdrawing theirexisting draftreservations/exemptions
orwithholding suchentries which theyhadintended totable onthefinaldayofthenegotiations,
15december 1993.
27. Headded thatpursuant tothe14December 1993 text,theSub-Committee hadengaged in
intensive work, particularly ininformal session, inseeking toreach acommon understanding which
would serve asabasis forparticipants toassume theirresponsibilities. While abetter understanding
hadbeenachieved onanumber ofissues, itwasregrettable thatthere remained several categories of
measures, including those relating tosocial security, onwhich ithadnotyetbeenpossible toarrive
atanagreed common understanding oftheways inwhich measures ofthiskindmight affect trade in
services. Intheabsence ofsuchanunderstanding, therecontinued tobenobasisonwhich delegations
could exercise responsibilities. ThetasksetbytheGNSChairman inhis14December 1993statement,
inorder togiveeffect totheintention ofthatelement ofthe10December 1993 statement on
responsibilities, remained unfulfilled.
28. Therepresentative ofAustralia concluded thatthecombination ofthese events meant thatthe
situation outlined inthe10December statement remained current, pending anagreed outcome of
multilateral work onthescope issues where noconsensus hadbeenreached, delegations werenotyet
inaposition toexercise responsibilities withregard tothescheduling orexemption ofmeasures in
those areas. Itwastheview ofthedelegation ofAustralia that,inorder forresponsibilities tobe
exercised, multilateral workneeded tobecompleted. Thatwould ensure thattherights ofalldelegations
would notbeprejudiced.
29. Therepresentative ofEgypt reserved therightofhisdelegation tomake afullstatement at
themeeting ofthePreparatory Committee on21December. Nonetheless, hehadsome briefcomments
tomake. Hestressed theimportance oftheruleofconsensus intheconduct ofwork under theWTO
andrecalled thatthestatement of14December 1993 hadbeenadopted hastily andintheabsence of
some delegations. Hisdelegation believed thatthestatement wasarecipe forconfusion since itdid
notprovide foraclearconclusion totheprocess ofconsultation. Heappreciated thatsome participants
hadwithdrawn measures fromtheirschedules andMFN exemption lists,which waswhyhisdelegation
wasopenminded regarding thequestion ofproviding legalcoverage forthem. Inhisview, however,PC/SCS/M/6/Rev.1
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theChairman 'sstatement of14December 1993didnotrepresent asufficient basisfortheserious action
ofwithdrawing suchmeasures from schedules andMFN exemption lists.
30. Therepresentative ofMexico stressed thatthere must notbeanyunilateral interpretation of
GATS provisions resulting from theabsence ofagreed conclusions.
31. Therepresentative ofKorea stated thatheregretted thefactthatnoagreement wasreached
andreserved theright ofhisdelegation withrespect toMFN exemptions andNational Treatment
reservations. Therepresentative ofTurkey alsoreserved therights ofhisdelegation concerning
MFN exemptions.
32. TheChairman expressed hisregret thatnoagreement hadbeenreached inspiteofthesincere
efforts bymany participants.