RESTRICTED
WORLD TRADE S/C/M/3
26June1995
ORGANIZATION(95-1724)
Council forTrade inServices
REPORT OFTHE MEETING HELD ON30MAY 1995
Note bytheSecretariat
1. TheCouncil forTrade inServices heldameeting on30May1995. TheAgenda forthemeeting
iscontained inAirgram WTO/AIR/87. Under Other Business, thedelegation ofNewZealand requested
theaddition ofanitemunder concerning work under paragraph 4ofArticle VIoftheGATS.
ITEM A:RULES OFPROCEDURE FOR THE COUNCIL FOR TRADE INSERVICES
2. TheChairman drewattention toparagraph 5ofArticle IVoftheWTO Agreement which calls
upon theCouncil forTrade inServices toestablish itsRules ofProcedure, subject totheapproval of
theGeneral Council. Herecalled thatatthefirstmeeting oftheCouncil forTrade inServices ithad
beenagreed thathewould startinformal consultations onthismatter andreport backtotheCouncil
withaproposed draftoftheRules ofProcedure which, ifaccepted, would besubmitted totheGeneral
Council forapproval. Accordingly, hehadsubmitted thedraftcontained indocument S/C/W/2 dated
29May1995fortheconsideration oftheServices Council. Hestated thatthereremained anoutstanding
issue relating toRule33(Decision Making) which isrelevant tothethree sectoral Councils.
3. Onedelegation stated thatalthough there werenoproblems ofsubstance, itwasnecessary to
make itclearthatRule33relating toDecision Making would notoverride anylegalprovision contained
intheMultilateral Trade Agreements.
4. TheChairman suggested thatinformal consultations should continue.
5. TheCouncil soagreed.
ITEM B:VERIFICATION OFSCHEDULES OFLEAST-DEVELOPED COUNTRIES
6. TheChairman stated thataninformal meeting oftheCouncil hadbeenheldon16May1995
forthepurpose ofverifying theSchedules ofCommitments ofLeast-Developed Countries which,
according totheMinisterial Decision onMeasures inFavour ofLeast-Developed Countries, hadbeen
given additional timeofoneyearuntil15April 1995 tosubmit theirschedules. TheSchedules of
nineteen Least-Developed countries hadbeen verified. TheAirgram convening thatmeeting
(WTO/AIR/76) contained alistofthose countries. Hetheninvited therepresentative oftheSecretariat
togiveamore detailed account.
7. Therepresentative oftheSecretariat stated thatattheinformal meeting twoquestions hadbeen
addressed inrelation toeachoftheSchedules. Thefirstwaswhether negotiations oncommitments
hadbeenconcluded andthesecond waswhether there were anytechnical orlegalproblems arising
fromtheschedule aspresented. Hestated thatinonecase, thatoftheSolomon Islands, negotiations
hadnotbeenconcluded, while inallother cases negotiations hadbeenconcluded andtheSchedules
hadbeentechnically verified. TheSchedules which hadbeenverified werethose ofAngola, Botswana,
Burundi,theCentralAfricanRepublic,Chad,Djibouti,Gambia,Guinea,Guinea-Bissau,Haiti,Lesotho,
Malawi, Mali, Maldives, Mauritania, Rwanda, Sierra Leone, Togo andZaire.S/C/M/3
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8. TheChairman suggested thattheCouncil should consider theSchedules ofthecountries referred
toindocument WTO/AIR/76 verified, withtheexception ofthatoftheSolomon Islands, andtransmit
them totheGeneral Council forapproval.
9. TheCouncil soagreed.
ITEM C:REPORT OFTHE COMMITTEE ONTRADE INFINANCIAL SERVICES
10. TheChairman drew attention totheMinisterial Decision onFinancial Services adopted at
Marrakesh, which called upontheCommittee onTrade inFinancial Services tomonitor theprogress
ofanynegotiations undertaken under itsterms andreport thereupon totheCouncil forTrade inServices
by30April 1995. Pursuant tothatDecision, theCommittee onTrade inFinancial Services had
submitted totheCouncil areport indocument S/FIN/1 dated 28April 1995.
11. TherepresentativeoftheEuropeanCommunitiesstressedtheimportanceofsuccessfulconclusion
by30June1995 oftheon-going financial services negotiations. Hestated thatduring thelastround
ofconsultations there hadbeensome limited progress bysome negotiating partners andexperienced
thehopethatmore would beachieved subsequently. AttheendoftheUruguay Round negotiations
inDecember 1993, thedelegation oftheEuropean Communities hadannounced thatitwould maintain
itsgenerous offer asasignofgoodwill andasanincentive toother partners toimprove their
commitments. However, itshould notbetaken forgranted bynegotiating partners thatthisposition
would bemaintained. TheEuropean Communities wereready tomaintain theirhighlevels ofbindings
provided thatthenegotiations wereconcluded inasatisfactory manner. Healsohoped thattherewould
bemultilateral confirmation ofsome ofthebilateral agreements reached between some participants.
12. Therepresentative ofIndia agreed withtherepresentative oftheEuropean Communities on
theimportance ofasuccessful conclusion ofthese negotiations by30June1995. Healsoexpressed
concern about thelackofmention ofother on-going negotiations. Hehoped thatnegotiating partners
would takeseriously theinterest ofhisdelegation inthenegotiations onMovement ofNatural Persons
andthatthesenegotiations would alsoconclude successfully onthesamedate. Hisdelegation attached
particular importance tothemaking ofoffers onMovement ofNatural Persons without therequirement
toestablish acommercial presence.
13. TheCouncil tooknoteofthestatements made.
ITEM D:THEWORKING PARTY ONSAFEGUARDS, GOVERNMENT PROCUREMENT AND
SUBSIDIES
14. TheChairman recalled thatatitssecond meeting on30March 1995, theCouncil haddecided
toestablish aWorking Party toconduct negotiations onSafeguards, Government Procurement and
Subsidies.Ithadalsobeenagreedthatinformalconsultationswouldcontinueinordertoreachagreement
onthedates forstarting work oneachofthethree subjects, onthesequence inwhich theyshould be
taken upandontheappointment ofaChairperson. Asaresult ofsuchconsultations theChairman
suggested thattheWorking Party should takeupthethree subjects intheorder inwhich theyappear
intheGATS, thatissafeguards, government procurement andsubsidies. Healsosuggested thatthe
Working Party should startwork onthethreesubjects onstaggered dateswithintervals offourmonths,
sothatwork onsafeguards would startinJulyandongovernment procurement andsubsidies in
November andMarch respectively.S/C/M/3
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15. TherewasgeneralsupportfortheproposalsmadebytheChairman.Somedelegationssuggested
thatwhile work onsafeguards would startinJuly, informal preparatory work should alsotakeplace
ontheother twosubjects. TheChairman indicated thathewould prefer toleave suchamatter tothe
Working Party itself todecide upon. Hesuggested thattheCouncil should decide along thelinesof
hisproposals.
16. TheCouncil soagreed.
17. Insofar astheappointment ofaChairperson fortheWorking Party wasconcerned, theChairman
indicated thathewould continue hisconsultations andthathehoped tobeinaposition tomake aconcrete
proposal inthenearfuture.
18. TheCouncil tooknote.
ITEM E:THE WORKING PARTY ONTHE ENLARGEMENT OFTHE EUROPEAN UNION
19. TheChairman recalled thatatthemeeting oftheCouncil on30March 1995aWorking Party
hadbeenestablished ontheEnlargement oftheEuropean Union. Ithadalsobeenagreed thatthe
Chairman would consult ontheterms ofreference andtheappointment ofaChairperson fortheWorking
Party.Insofarasthetermsofreferencewereconcerned,theChairmanindicatedthatfurtherconsultations
werenecessary toreach aconsensus. Therefore, hesuggested thatconsultations should continue and
thathewould report backtotheCouncil atitsnextmeeting. With respect totheappointment ofa
Chairperson, hesuggested thattheWorking Party should bechaired byAmbassador Wade Armstrong
ofNewZealand, theChairman oftheNAFTA Working Party ontrade ingoods.
20. TheCouncil soagreed.
ITEM F:NOTIFICATION OFTHE EUROPEAN UNION
21. TheChairmanrecalledthatatthemeetingoftheServicesCouncilon30March1995thequestion
ofthenotification oftheestablishment oftheEuropean Union itself hadbeendiscussed andseveral
delegations hadtaken theviewthat,under theterms ofparagraph 7(a)ofArticle VoftheGATS, such
notification would beinorder. There hadalsobeenacleardistinction made between thenotification
requirement assuchandtheestablishment ofaWorking Party. Ithadbeenagreed thattheCouncil
would revert tothematter atthismeeting. TheChairman invited delegations toexpress theirviews
onwhether thenotification requirement inparagraph 7(a)ofArticle Vwasapplicable totheEuropean
Union.
22. Therepresentative oftheEuropean Communities recalled thathehadexplained attheprevious
meeting oftheCouncil whyhisdelegation needed more timetoreflect onhowtheEuropean Union
should betreated under Article VoftheGATS. Herecalled hissuggestion thatanadhocsolution
might beappropriate inthecaseoftheEuropean Union which constituted aneconomic integration
arrangement thathadbecome aMember initself. Heindicated thathisdelegation needed more time
toconsult withother delegations informally onpossible ways toresolve thisissue before taking itup
again atCouncil level.
23. TheChairman suggested thattheCouncil should takenoteofthestatement made andrevert
tothismatter atitsnextmeeting.
24. TheCouncil soagreed.S/C/M/3
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ITEM G:NORTH AMERICAN FREE TRADE AGREEMENT
25. TheChairman recalled thatatthemeeting oftheServices Council on30March 1995, arequest
hadbeenmade fortheestablishment ofaWorking Party ontheNorth American FreeTrade Agreement.
Ithadnotbeenpossible toreach adecision atthatmeeting. Heasked whether theCouncil wasnow
inaposition toestablish aWorking Party.
26. Therepresentative ofMexico speaking onbehalf ofthethreeMembers oftheNorth American
FreeTrade Agreement accepted theestablishment ofaWorking Party toexamine theprovisions of
NAFTA inthelightofArticle VoftheGATS. Hestressed theinterest ofhisdelegation inhaving
suchaWorking Party startitswork soon, andhishopethatallMembers oftheWTO would takethe
same approach toArticle Vinspite ofthefactthatparagraph 7(a)ofthatArticle contains theword
"may" rather than"shall" inrelation totheestablishment ofworking parties. Healsosupported what
hadbeenproposed previously bythedelegation ofCanada, thatthisWorking Party onServices should
work inco-ordination withtheother Working Party onthesameagreement inrelation totradeingoods
andthatbothworking parties should bechaired bythesame person.
27. TheChairman thensuggested thataWorking Party should beestablished withthefollowing
terms ofreference:
"Toexamine theNorth American FreeTrade Agreement andtoreport totheCouncil forTrade
inServices onitsconsistency withArticle VoftheGeneral Agreement onTrade inServices".
Healsoproposed thattheWorking Party should bechaired byAmbassador Donald Kenyon
ofAustralia, whoistheChairman oftheWorking Party onthesame agreement inrelation totrade
ingoods.
28. TheCouncil soagreed.
ITEM H:NOTIFICATIONS PURSUANT TOARTICLE VOFTHE GATS
29. TheChairmanstatedthatatthemeetingoftheServicesCouncilon30March1995,thedelegation
ofSwitzerland hadproposed, under Other Business, thattheCouncil should adopt ageneral procedure
forthenotification ofallexisting agreements falling within thescope ofArticle VoftheGATS. By
suchaprocedure adeadline would beestablished forsuchnotifications. Attheendofabriefdiscussion
ontheitem, ithadbeenagreed torevert toitatthefollowing meeting. TheChairman invited theviews
ofother delegations onwhether anagreement canbereached onsuchaproposal.
30. Mostdelegations whospoke indicated thatalthough theysympathized withtheobjectives behind
theSwiss proposal, theyhaddoubts concerning theeffectiveness ofimposing adeadline onnotifications
aswellasthelegitimacy ofsuchadeadline. Therepresentative ofonedelegation wasoftheview
thatalthough imposing adeadline might notbeappropriate some waymust befound toensure the
fulfilment ofthenotification requirements under Article V.Hesuggested thatthismatter might be
resolved ininformal consultations. Other delegations maintained thatatthetimeofnegotiating Article V
therehadbeennoagreement thatsuchadeadline should besetup,hence theuseoftheterm"promptly".
31. Therepresentative ofSwitzerland stated thathisdelegation 'sproposal reflected aconcern for
thewelfare ofthesystem ingeneral. Article Vcontained alegalobligation tonotify suchagreements
"promptly". After almost sixmonths from theentry intoforce oftheagreement itwaslegitimate to
raisequestions concerning what"promptly" meant inorder toclarify Members 'rights andobligations
under theGATS. Hesupported thesuggestion thatinformal consultations should takeplace onthis
matter andrequested thattheCouncil should revert toitatitsnextmeeting.S/C/M/3
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32. TheChairman suggested thattheCouncil takenoteofthestatements andrevert tothismatter
atitsnextmeeting.
33. TheCouncil soagreed.
ITEM I:PARTICIPATION OFOBSERVERS
34. TheChairman stated thataccording totheadhocprocedure thathadbeenagreed bytheGeneral
Council concerning theparticipation ofinternational inter-governmental organizations asobservers
inthemeetings ofWTO bodies, theServices Council should decide ateachmeeting which ofsuch
organizations should beinvited atitsfollowing meeting. Hesuggested thattheCouncil continue to
invite thefourorganizations which hadbeensofarparticipating asobservers initsmeetings, namely
IMF, theWorld Bank, UNCTAD andtheUN.
35. TheCouncil soagreed.
36. TheChairman alsoinformed theCouncil thattheDirector-General oftheWTO hadreceived
aletter from theSecretary General oftheInternational Telecommunications Union (ITU) requesting
observer status fortheITUintheGeneral Council andtheCouncil forTrade inServices. Heasked
whether delegations were inaposition totakeadecision onthisrequest immediately orwhether it
should beplaced ontheagenda ofthenextmeeting.
37. Onthebasisofcomments bysome delegations theChairman suggested thattheCouncil should
takeupthismatter atitsnextmeeting.
38. TheCouncil soagreed.
OTHER BUSINESS
39. TherepresentativeofNewZealandsuggestedthattheSecretariatshouldprepareanoteconcerning
thescope ofthework programme envisaged under paragraph 4ofArticle VIoftheGATS. Shestated
thattheissues involved inthatareahadactually beencoming upinthecontext ofsectoral negotiations
suchasthose onBasic Telecommunications andthatMembers would continue toencounter them in
discussions onothersectors suchasprofessional services. Herdelegation wasconscious oftheresource
constraints andwasnotrequesting theestablishment ofaseparate working party onthesubject atthat
point, orenvisaging animmediate startofwork onit.Ontheother hand, aninformal paper bythe
Secretariat would helpdelegations understand thescope ofthework involved under paragraph 4of
Article VI.
40. Anumber ofdelegations were oftheviewthatalthough theyappreciated theimportance of
theissues toberaised inrelation toparagraph 4ofArticle VI,theywould prefer thatMembers reflect
more ontheissues involved andpresent theirownideas inwriting. Informal discussions toclarify
theissues could thentakeplace. Subsequently, theSecretariat would beinabetter position toprepare
suchadocument.
41. TheChairman suggested thatdelegations should present theirviews inwriting totheSecretariat.
Informal consultations onthesubject would beheldbefore anydecisions concerning thepreparation
ofanotebytheSecretariat.
42. TheCouncil soagreed.