 RESTRICTED  
  
S/C/M/139  
 
22 August  2019 
(19-5422) Page: 1/19 
Council for Trade in Services    
 
 
REPORT OF THE MEETIN G HELD ON 27 JUNE 2019 
NOTE BY THE SECRETAR IAT1 
The Council for Trade in Services held a meeting on 27 June 2019 chaired by Ambassador Muylle 
(Belgium).  The agenda was contained in document WTO/AIR/CTS/1 9. 
 
The Chairman  indicated that, under Other Business, he would make a statement  on the schedule of 
meetings after the summer break and the Secretariat would report briefly on its discussions with the 
UN Statistical Division concerning the accessibility of the CPC Provisi onal.  
 
The representative of the European Union  said that he wished to add an item of Other Business to 
update  delegations about  an EU initiative on Specific Trade Concerns . 
 
The agenda was adopted as modified . 
1  ITEM A: NOTIFICATION S PURSUANT TO ARTICL ES III:3, V:7 AND VII:4 OF THE GATS  
1.1.  With regard to the notifications made pursuant to GATS Article III:3 (Transparency), the 
Chairman  drew the Council's attention to the communications received from Macao, China (in 
document S/C/N/9 46), and India (in documents S/C/N/9 47 to 950) .  
1.2.  The representative of India said that her delegation was notifying four measures in insurance 
and insurance -related services pursuant to Article III:3 of the GATS, as contained in documents 
S/C/N/947 to S/C/N/950. She recal led that, at the previous meeting, India had notified six 
agreements pursuant to Article VII:4 of the GATS , as contained in documents S/C/N/924 to 
S/C/N/929. In brief, the Government of India was making all sincere efforts to comply with its 
notification o bligations under the various provisions of the GATS.   
1.3.  The Chairman  suggested that the Council take note of the notifications and the statement 
made.  
1.4.  It was so agreed . 
1.5.  Concerning the notifications made pursuant to Article V:7 (Economic Integration), the 
Chairman  drew the Council's attention to the communications received from  Canada and Chile ( in 
document S/C/N/65/Addendum.2); and from Bangladesh,  China,  India,  Lao PDR,  the Republic of 
Korea and Sri Lanka ( in document S/C/N/954).  
1.6.  The representative of the United States  had a question about the notification of the Asia -Pacific 
Trade Agreement. From t he description, it seemed tha t the services part of the agreement  was 
simply a framework to cooperate on services sectors , through improving infrastructure facilities, 
joint production, marketing and purchasing agreement , and research and development. As it seemed 
like a very limited framework agreement, he asked whether or not there were any actual services 
trade commitments  in that agreement that would meet the requirement s of GATS Article V  on 
substantial sectoral coverage and absence or elimination of substantially all discrimination . The 
                                                
1 This document has been prepared under the Secretariat's own responsibility and is without prejudice 
to the positions of Members or to their rights and obligations under the WTO.  S/C/M/139  
 
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  notification also mentioned that working groups had been established in 2018, and the refore he 
wondered whether it was premature to notify that agreement under either the CTS or the CRTA.  
1.7.  The representative of Canada  explained that the modernized Canada -Chile FTA had entered 
into force in February 2019 , marking another milestone in the tw o countries'  bilateral relationship 
and building on over 20 years of strong and successful economic partnership.  
1.8.  This partnership was a great example of two countries that had benefit ted from breaking down 
the barriers between them. Bilateral trade  had nea rly quadrupled  since the free trade agreement 
between the two countries had entered into force in 1997.  Bilateral trade in services had reached 
$339 million  in 2017 and the modernized agreement would  keep increasing th ose opportunities in 
both countries.  
1.9.  The modernized agreement was also an opportunity to make the agreement more inclusive, 
for example by including a trade and gender chapter , which was a first for Canada. The chapter 
acknowledge d the importance of incorporating a gender perspective into eco nomic and trade issues 
to ensure that economic growth was inclusive. It also provide d a framework for Canada and Chile to 
undertake cooperation activities on issues related to gender and trade; and it establishe d a bilateral 
committee under the CCFTA that would oversee these cooperation activities.   
1.10.   The representative of Chile echoed the statement by Canada, highlighting the excellent trade 
relations between the two  countries, which had marked a new milestone with the entry into force of 
their modernised bilateral free trade agreement in February 2019. The bilateral free trade 
agreement, which had been in force for some 20 years, had been very useful in harnessing the 
potential for trade between Canada and Chile, i ncluding in trade in services. In the new modernised 
version, new chapters had been incorporated and existing ones had been updated. Amongst the new 
chapters, he also wished to highlight that relating to trade and gender, which moved towards more 
inclusive  trade. Chile hoped to progress towards the implementation of the agenda on inclusive trade 
with Canada as well as with all its other trading partners.   
1.11.   The Chairman  suggested that the Council take note of the notifications and the statements 
made and tha t the agreements notified be referred to the Committee on Regional Trade Agreements 
for consideration.  
1.12.   It was so agreed . 
1.13.   The Chairman  drew delegations' attention to the fact that, at its meeting scheduled for 1 7 
and 18 September , the CRTA would be consider ing two regional trade agreements that covered 
trade in services.  The agreements in question were : the Pacific Alliance and the EAEU -Viet Nam 
agreement . He hoped that the information  he had provided  would be useful to delegations in 
organising their time.  
1.14.   Turning to the notifications made under Article VII:4 (Recognition), he drew the Council's 
attention to the communications received from Australia and New Zealand ( in document S/C/N/951) 
and from Montenegro ( in documents S/C/N/952 and 953).   
1.15.   The representative of South Africa  wished to inform Members that , pursuant to her 
delegation's  previous  statement on the chronically low level of compliance with existing notification 
requirements in the WTO, notably under GATS Article III:3, her delegatio n would be submitting a 
paper with other co -sponsors on "An inclusive approach to Transparency and Notification 
requirements in the WTO ". She rei terate d that South Africa  was raising th at issue  with the objective 
of engaging in an exercise where  making systemic improvements to the functioning of the WTO 
bodies was in the interests of all Members, and not what many Members perceive d as selective 
improvements. She looked forward to discussing th e matter more comprehensively after the 
summer.  
1.16.   The Chairman  suggested that the Council take note of the notifications and the statement 
made.  
1.17.   It was so agreed . S/C/M/139  
 
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  2  ITEM B: OPERATIONALIZATION  OF THE LDC SERVICES  WAIVER  
2.1.  The Chairman  recalled that, at the March me eting, the Council had discussed the organization 
of the dedicated session it had agreed to hold as part of the process to review the operation of 
preferences notified under the LDC Services Waiver.  At that meeting, t he LDC Group had informed 
the Council t hat it had started bilateral consultations with notifying Members, and that it would seek 
the Chairman's  assistance following those consultations.  
2.2.  Further to a request of the LDC Group, he had  consequently held two rounds of informal 
consultations with the  LDC Group and notifying Members, on 13 and 23 May, with a view to reaching 
convergence on the proposed structure of the dedicated session.  
2.3.  During those consultations, there had been  broad agreement among participants to structure 
the dedicated session in two parts.  Part I would be organized as a workshop, to allow Members and 
relevant stakeholders to exchange information related to the participation of LDCs in trade in 
services.  Part II would be organized as a formal meeting of the Council.   
2.4.  In terms of Pa rt I of the dedicated session, at the end of the consultations it had been  suggested 
that the Secretariat draw up a programme outline for the workshop, based on the information and 
comments exchanged by LDCs and notifying Members.  That draft programme outl ine was contained 
in document JOB/SERV/290.   
2.5.  With regard to Part II, in order to allow for a meaningful exchange during the formal meeting 
of the Council, participants in the consultations had requested him to draw up the proposed agenda 
items for that meeting, together with an annotation that would provide context and guidance to 
Members in preparing their participation and structuring their interventions at the meeting.  Both 
those elements were reflected in the "Note by the Chairperson" contained in document 
JOB/SERV/289.   
2.6.  Finally, in terms of the t iming of the dedicated session, the LDC Group had expressed a 
preference to hold it in late October, and there had been  no opposition to that suggestion at the 
consultations.  As such, as indicated the in the Note by the Chairperson, the proposed dates were 
29 October, for the workshop, and 30 October for the dedicated formal meeting of the Council.  
2.7.  The representative o f Senegal , speaking on behalf of the LDC  Group, thanked the Chairman 
for his note contained in  document JOB/SERV/289.  The Group  had reviewed the note and f ound that 
it accurately capture d the consultations the Chairman had held and the Group also found  the 
proposed agenda for the dedicated discussion  acceptable . The LDCs had also reviewed the 
Secretariat outline in document JOB/SERV/290  and fou nd that the outline of the programme for the 
workshop was also acceptable and in line with consultations the Chairman  had held. They had noted 
the specific dates proposed for the two planned events and they were agreeable to the same.  The 
Group hoped that other Members would  find th ose dates acceptable.  
2.8.  The Chairman  noted that the two Notes had met with the Council's agreement and suggested 
that the Council take note of the statement made . He said that the Council would  revert to th at item 
at its next  meeting.  
2.9.  It was so agreed . 
3  ITEM C: WORK PROGRAMME ON ELECTRONIC COMMERCE  
3.1.  The Chairman  recalled  that, u nder th at agenda item , there was a standard sub -item, called 
"exchange of information and experiences based on submissions by Members".  He underst ood that 
the delegation of China plan ned to make a brief statement under th at sub-item, to introduce some 
of China's e -commerce programmes that contribute d to inclusive and sustainable growth.  For th at 
meeting, a communication  had also been received  from the United States,  contained in document 
S/C/W/382  and titled "The Economic Benefits of Cross -Border Data Flows".  
3.2.  The representative of China  said that his delegation wishe d to take th e opportunity to share 
some case examples on e -commerce, which demonstrated how e -commerce help ed promote S/C/M/139  
 
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  industrial development and international trade, contributing to inclusive and sustainable growth, 
rural development as well as poverty reduction.  
3.3.  He s tarted with the first case study , about China's Haider, on  building a win-win 
"internet+industry " ecological circle . He explained that the Haier  Group corporation  was a leading 
multinational consumer  electronics and home appliances  producer  based in Qingda o, China, with a 
sales revenue of around US$38 billion in 2018 . Haider design ed, develop ed, manufactured  and sold 
products including air conditioners, washing machines, refrigerators, televisions as well as mobile 
phones, computers and microwave ovens.  Since 2008 , Haider had  modularized the product design 
and manufacturing system of the whole  enterprise . From modularization to automation, then to 
unmanned factory, and now to  interconnected factory, Haier ha d initially established the ecosphere 
system and bu siness model  system of  the interconnected factory, which enhance d the demonstration 
effect for the transformation from  mass manufacturing to mass customization.  
3.4.  The overall economic benefits of Haier's interconnected factories were obvious.  The overall 
efficiency of the interconnected factories ha d been greatly  improved, the product development 
period shortened by more than  20%, the delivery period shortened from 21 days to 7 -15 days, and 
the energy  utilization rate increased by 5%.  
3.5.  Haier had built a win -win ecosphere covering both hardware and netware. By turning products 
into netware to increase man -to-machine interconnection and user -participation in the whole 
process, Haier  had formed a "users ' circle", which provide d users with more intelligent  product 
solutions, and also attract ed all parties to create user value and achieve a win-win situation.  
3.6.  From mass manufacturing to mass customization, Haier ha d initially reali sed seamlessness, 
transparency and visualization of user experience. Now, Haier  had three customization modes: 
module customization, mass customization and exclusive customization, which enable d users to 
achieve the best experience in a full range and cycle.  
3.7.  He then moved to the second case study , on c ross-border e-commerce platform s helping 
optimize industrial chains , which concerned N etEase Kaola , China's biggest cross -border import retail 
e-commerce platform. NetEase Kaola, together with other cross -border e -commerce platforms, ha d 
gathered thousands of brands in different  countries. For example, the number of foreign brands ha d 
reached 279 in 2018. The c ross-border e -commerce platform ha d empowered high -quality brands 
from developing countries to actively participate in global competition, in particular.  
3.8.  Using  Thai latex p roducts as an example , he indicated that,  at the end of 2015, NetEase Kaola 
had produced a TV documentary program me describing how Thai latex pillows were produced and 
sold to Chinese consumers through cross -border e -commerce platforms. After the broadcast  of the 
program me, the sales of Thai latex products  had increased by 466% in 5 months and  the export of 
Thailand's latex industry to China had increased by more than 100% in 2016. Besides,  the local 
industry  had upgraded from exporting raw materials to pro ducts like pillows and mattresses, making 
the gross profit margin increase by 6 times. It ha d created a win -win scenario, by helping the 
upgrade of the local industry and improving the utility of consumers worldwide.  
3.9.  One of the biggest advantages of cross -border e -commerce was breaking the information 
asymmetry in international  trade. It quickly matche d the supply and demand in the international 
market and provide d a one-stop service for the pairing, including customs clearance and sales 
solution s. That way, efficiency was greatly improved, and new opportunities were created for small 
and medium -sized brands from all over the world to enter global market s, helping them  gradually 
upgrade in the global value chain and become key players in the industry.  
3.10.   The representative of the United States  thanked China for its presentation, which  nicely 
complement ed the paper that his delegation had  submitted  by demonstrating the importance of 
cross-border e -commerce as well as data flows , as presumably th e companies  in the case studies 
presented by China  needed to have data  flowing.   
3.11.   His delegation underst ood that Members had had a very short time to review the US 
submission , and at that stage he wished to  highlight  just three points : first, the purpose of the 
submissio n; second,  some of the main features of  the submission ; and, third,  possible follow -up 
ideas.   S/C/M/139  
 
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  3.12.   First, the purpose of the submission. At the last Ministerial Conference, Ministers had 
instructed Members to reinvigorate work under the Work Programme on Electronic Commerce. At 
the same time, various Members had embarked on negotiations for an ambitious  agreement on e -
commerce and digital trade. Therefore, the submission was designed to further Members’ 
understanding on the importance of cross -border data flows in expanding e -commerce and trade 
through the exchange of information under the Work Programme , while at the same time serve as 
a complement to the ongoing efforts to reach an ambitious outcome in the e-commerce negotiations 
that had met the previous week. From what he had heard, it had been a rich discussion with 
constructive engagement by partici pants.  
3.13.   Second, some  of the  main features  of the paper . He specifically wished to highlight  three . 
First, the paper note d the challenge to find a balance that enable d key public policy objectives to be 
met while preserving the significant economic and trade  benefits from data -enabled trade. Second , 
the importance of data to all industries : services, manufacturing, and agriculture ; this was not 
limited simply to the ICT sector. Similarly, the benefits of data flows were particularly relevant for 
SMEs and deve loping countries. It was not just big businesses and developed countries that 
benefit ted from data flows. The paper cite d some examples of th at point, including concrete 
examples of services provided by developing countries service providers, including LDC s, that rel ied 
on cross -border data flows. Th ird, the paper examine d challenges ahead, including the treatment of 
personal data – privacy and security – and the potential fragmentation of responses to th ose issues, 
which increase d compliance costs and could impose burdens to trade.  
3.14.   Third, possible next steps. He suggested that Members might  want to examine ways to avoid 
that fragmentation of responses by exchanging experiences, and possibly inviting groups that were 
working on setting standards in th at area, such as the OECD or APEC. An exchange of information  
and a  sharing  of experiences might  be useful way s to use the Work Program me. The U nited States 
was willing to work with other Members to determine the best way to reinvigorate th ose discussions.  
3.15.   The representative of Canada  took the opportunity to highlight some elements of the Trade 
Facilitation Office (TFO) Canada. TFO Canada was an important partner to support developing 
countries to grow their private sector, maximize the benefits of free trade  agreements with Canada 
and grow their economies. TFO Canada was a non -profit organization, where a majority of TFO 
Canada projects were funded by the Canadian government through Global Affairs Canada on a cost -
share basis with project partners and partici pating enterprises.  
3.16.   TFO Canada Trade Information Services website provide d up-to-date information, e -learning 
and an online registry using technology strategically to maximize the opportunities to connect 
developing country exporters with buyers. More spe cifically, under the Canadian Market Access 
Services (CMAS), TFO Canada also provide d web-based services to developing countries exporters 
and Canadian importers. Th ese include d general and sector -specific information, advice and links 
for the benefit of e xporters researching or implementing a market -entry strategy to export their 
goods  or services to Canada. It also include d the opportunity for the exporter to publish their export 
offers in a database which reache d over 1,200 Canadian importers. To complem ent and sustain the 
services for developing country exporters, TFO Canada provide d an information service for Canadian 
importers interested in sourcing products from developing and emerging economies.  This include d 
a searchable database for identifying new  products or suppliers, and a customised news bulletin. 
Key results since the inception of the CMAS project include d: 10,000 exporters and importers had 
registered on TFO Canada Foreign Supplier Database , enabling hundreds of new collaborations ; 
3,200 SMEs  from developing countries had been trained ( as of January 2018) ; 93 companies had 
generated more than $18,000,000 in export sales, bringing significant added revenue to their 
communities ; 27% of exports sales had been generated by women -led SMEs ; $1 million had been 
leveraged funds from private sector and other partners . 
3.17.   Turning to the US submission, the representative thank ed the U nited States  for submitting 
and presenting its paper on the economic benefits of cross -border data flows. Canada could  support 
a discussion on th at area and f ound the paper informative and timely given the ongoing discussions 
at the WTO on th at topic.  
3.18.   The digital economy and the digitalization of international trade ha d created new opportunities 
to promote inclusive econ omic growth, including by eliminating distances, increasing connectivity, 
reducing transaction costs, and facilitating the economic participation of disadvantaged and under -
represented groups (e.g. SMEs, women, Indigenous peoples, persons with disabilities , youth, etc.), S/C/M/139  
 
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  all of which would have been impossible without the ability to send data and information across 
borders.  
3.19.   Data flows, the key enabler of the digital economy, indirectly contribute d to the narrowing of 
the global digital gender divide, insof ar as data could  be transmitted seamlessly across and 
throughout markets. The use of digital platforms , enabled by data flows , might  offer women many 
additional opportunities, including the possibility to overcome challenges related to physical mobility, 
access to new markets, to knowledge as well as flexibility in working time and supplementing 
household income. Online platforms might  allow women to more easily access new product markets, 
which, in turn, could  trigger innovation in the digital space. The use of digital platforms might  
therefore result in relatively higher female employment rates on platforms than in traditional 
industries or businesses , as with the example of Uber v ersus  traditional taxis, where the proportion 
of female Uber drivers was nearly twice that of traditional taxis (14% v ersus  8% respectively).  
3.20.   As indicated by the U nited States , digital trade ha d the potential to benefit and create new 
opportunities for all sectors of the economy that engage d in commercial transactions over the 
Internet . Canada  believe d that it had the potential to improve the economic participation of under -
represented or disadvantaged groups such as women, SMEs, youth, persons with disabilities, and 
Indigenous peoples, and by extension, increase the number of acti ve participants in the digital 
economy in developing countries, thereby contributing to overall economic development.  
3.21.   She then sought a clarification from the United States. P aragraph 33  of the US submission  
suggest ed that one way to overcome the challenge s posed by differences in regulatory approaches 
to issues such as privacy or cybersecurity was to identify interoperability regimes, such as ISO 
standards, that would be recognized in trade rules. She asked if the United States could provide 
further information on the types of internationally agreed norms or instruments  it was considering . 
3.22.   The representative of Australia  recalled that her delegation had provided information on  
Australia's  Digital Economy Strategy and cooperation  activities at the previous  meeting ; she 
welcome d China 's presentation, the US paper and Canada 's statement  at that meeting. Th ose inputs 
helpfully contribute d to Members ' understanding of the challenges and opportunities related to e -
commerce and digital trade. It was particularly useful to have real commercial examples across 
different services sectors, geographic regions, levels of development and sizes of firms , including 
SMEs.  Her delegation  continue d to welcome information -sharing on th ose issues in t he CTS and 
support ed the US proposal for presentations from other bodies such as the OECD and APEC to share  
their latest work in th at area.  
3.23.   The representative of Senegal , speaking on behalf of the LDC Group , thank ed the United 
States for its submission.  The submission was useful in providing more information on the United 
States' views and expectations on the topic of cross -border data flows.  The LDC Group particularly 
thank ed the U nited States for submitting its views within the framework of the e-commerce Work 
Programme, which , together with the Moratorium , was up for renewal by the end of the year. 
However, the issue of cross -border data flows also impact ed modes 1 and 2 in the context of 
services.  It was important for Members to examine th ose issues, especially their impact on LDCs.  
While some examples related to LDCs appear ed referenced in the  US paper, the LDC Group would 
ask the U nited States if more information could  be elaborated across all LDCs and any benefits and 
impact s on LDC services commitments.  
3.24.   With respect to e-commerce, the LDC Group wished to register in the CTS the views it had 
expressed at the Council for Trade in Goods . As the expiration of the e -commerce Work Programme 
Decision approache d, at the end of 2019,  the LDC Group call ed on the four bodies designated for 
work under the Work Programme  to delve deeper into the benefits and costs of e -commerce for 
LDCs.  LDCs were very interested in both aspects of th at platform and th e relevance of e -commerce 
in improving trade for LDC traders and consumers.  
3.25.   The LDC Group ha d identified a number of  challenges for LDCs in the utilization of e -commerce 
for consideration in the e -commerce Work Programme.   These were: limited knowledge among 
enterprises, government players and regulators of e -commerce; lack of mechanisms to start up 
enterprises in e -commerce business;  concerns about possible adverse effects of e -commerce and 
how to mitigate them;  limited existence of aff ordable ICT infrastructure (e.g. internet, broadband 
coverage, electricity, telecommunications infrastructure and services); limited access to credit cards , S/C/M/139  
 
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  the main vehicle for on -line payments , and high incidence of unbanked consumers or limited 
experien ce with on -line payments; inadequate facilities for physical delivery of online purchases; 
user mistrust of quality and effectiveness; inadequate online payment facilities;  limited  trade finance 
for LDC enterprise e -commerce; limited skills among enterpris es desiring to use e -commerce to use 
ICTs strategically for B2B, B2C, or B2G , buying and selling goods and services;  lack of statistical 
data on electronic commerce in LDCs; and weak legal and regulatory frameworks where needed , for 
example consumer protec tion laws.  
3.26.   Speaking  then in its own national capacity, the representative o f Senegal  thanked the U nited 
States for its submission under the e-commerce W ork Program me. It was indeed an important 
contribution to Members'  discussions and deliberation s on cros s-border data flow s, the associated  
benefits and related interest s and concerns. His delegation  looked forward to a more in -depth 
discussion in the WTO regarding policy measures that support ed digital growth, in particular in 
developing counties and LDC s, while ensuring regulatory balance between different interests.  
3.27.   He concur red with the U nited States that digitalization and digital transformation ha d the 
potential to benefit consumers, business and economies around the world. According to the 
submission, the flow of data had translate d into an estimated contribution of USD 7.8 trillion to 
global econo mic activity , or 10% of global GDP. He was interested to learn more about how such 
flow of data ha d contributed to LDCs and low -income countries ' GDP. In other words , what was the 
share of th ose countries in the USD 7.8 trillion global economic activity?  
3.28.   Without prejudging the answer to those questions, he expect ed the number to be  either  
unknown or low for the very reasons indicated in the LDC statement, mainly the digital divide, the 
lack of infrastructure  and skills, and low level of ICT -enabled services . He was  also interested to 
learn more about how the implantation of banks like Ecobank in many African countries was linked 
to free flow of data. In his delegation's  view, that  might be the result of the free movement of 
persons and establishment policies  adopted in the economic regional communities.  
3.29.   In Senegal's view, in order to fully benefit from the data economy, Governments had to put 
in place the right policies and strategies that enable d an ecosystem conducive for business to start, 
grow and be comp etitive in the regional and international market s. Many developing countries and 
LDCs were lagging behind in terms of digital policy and strategy, data policy, data storing and 
processing, cloud computing and artificial intelligence. Senegal had embarked i n the process of 
elaborating its e -commerce strategy, with the assistance of the Enhanced Integrate d Framework 
and building upon the rapid e-trade readiness assessment by UNCTAD and the Digital Senegal 2025 
programme. His delegation  welcome d Members ' and development partners ' support in finalizing the 
elaboration process as well the implementation phase. As indicated by the African Group in pa st 
interventions , Senegal  also call ed on Members to continue sharing their experience s and best 
practices on how they succeeded in their digital transformation.   
3.30.   Data ha d been assimilate d to the new oil , and even to avocado by some, but what was 
constant i n Senegal's  view was that it was the raw material of the digital economy and its collection, 
storage and processing raise d legitimate concerns that went beyond privacy. Indeed, Members were 
concerned about the treatment of personal data of their citizens a nd ha d the right to regulate in that 
respect. But Members also  had the right to preserve their legitimate public policy interest s related 
to data flow s and data localization. Those interest s might  be linked to national security, law 
enforcement and market regulation that required data to be accessed easily by competent 
authorities. This brought him to ask the question whether requiring copy of data to be stored locally 
constitute d a restriction to the free flow of data. Some Members ha d indicated that that requirement 
might  be burdensome to businesses, especially MSME s. While his delegation  acknowledge d that fact, 
Senegal  also call ed on Members to evaluate the cost for local authorities to access data when it was 
stored abroad.  
3.31.   Senegal  recognize d that there was a right balance to be established between the need for 
cross-border data flow s and the preservation of legitimate public policy ob jective s, a notion which 
needed to be circumscribed and understood , and the protection of privacy. Furthermore,  the 
question about the treatment of personal data and other -than-personal data also needed  to be 
discussed in th e CTS , as making the difference between those two types of data might  be often very 
difficult. His delegation  welcome d further deliberation on that issue.  S/C/M/139  
 
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  3.32.   The representative of Switzerland  thank ed China for its presentation of case studies and the 
United States for its communication rega rding the economic benefits of cross -border data flows.  
Technological progress and digitalization ha d led to a vast increase in cross -border data flows. Data 
enable d new services and ha d become an integral part of the production process of many goods. 
The benefits , but also the risks , attached to the increasing role of data in economic activities and 
international trade were source s of debate.  
3.33.   Switzerland consider ed that papers  like the US one  contribute d to enhanc ing Members'  
understanding of cross -border  data flows and support ed the idea of inviting international bodies such 
as the OECD and APEC to present their latest work in that area to a future CTS meeting.  Switzerland 
would continue to support international dialogue on th at topic, both in the ongoing negotiations for 
an agreement on e -commerce and more broadly within the e-commerce W ork Programme.  
3.34.   The representative of New Zealand  thanked the  United States and China for their respective 
paper and  presentation ; it was interesting t o see how the two dovetail ed together nicely in some 
respects . He wished to present a couple of initial responses to the US paper and add to the mix of 
the discussion a small example of the digital  industry from the N ew Zealand  economy.   
3.35.   He highlight ed a couple of points in the US submission.  F irst, the core issue that the paper 
set out was the need to  balance issues around the free flow  of data and the importance of data to 
all economies with the legitimate public policy interest s that were also attached  to that data , such 
as, as mentioned by  Senegal , issues related to privacy,  cybersecurity , the need to regulate the on -
line economy and enforce that regulation . That balance had come through as a key issue in the US  
paper , which was  something that  had particularly resona ted with New Zealand .  
3.36.   Second , in light of New Zealand's slightly different trade profile compared , in particular,  to 
that of the United States but also to some other developed economies , he highlighted  that d ata flows 
were not  simply i mportant for traditional IT or tech firms. Data and digitali zation  for New Zealand 
were central to its wider  economic development strategy, particularly in areas such as agri tech, 
which the  United States had also included in its paper . Agritech could  suppo rt efficient low -input 
production , improve yields, support risk management and help to verify and build  trust in product 
and food safety . Those were challenges that  all Members  faced; digital services trade , coupled with 
technology , could  support agriculture growth and could  help to address many of those challenges. 
Agritech exports for New Zealand had been stabl e at around $1.5 to 1.6 billion per annum in recent 
years but the level of global investment in agritech ha d grown by over 50% in  the previous  five 
years.  
3.37.   Finally, he highlighted  a small example from New Zealand, namely mobile apps and games . 
Some new research, which ha d not been published  yet, had valued the New Zealand interactive 
gaming sector in 2018  at approx imately  $143 millio n, which by New Zealand standards was relatively 
significant. Meaningfully, 93% of that figure was from purely digital export s. Digital technology and 
data flows , which were inherent in those  services,  made it  easy for developers to directly g ain m ore 
of the revenue from the services  that they produce d by supporting self -publishing. Th e research he 
had mentioned had also indicated that , on average , 70% of revenue end ed up with the producers 
of those mobile apps and games , with the remaining 30% goin g to the distribution platforms , which 
compared to essentially an inverse of that relationship, with only 30% going to the producer s, when 
a traditional publishing model was used and even less for con sole retails, where th at share was 
around 15%. There were some very interesting elements  to be extrapolated from that  example,  in 
terms of benefits for relatively small producers of on -line apps and games and the benefits for MSMEs 
and the people involved in th ose. Finally, he noted that i nteractive gaming , the term which he had 
used as a shorthand , did not just mean leisure -based gaming  but also included applications for 
education and training and health applications , for instance, which implied that there were wider 
benefits from that sector , which  were enable d by data flows and digital trade.  
3.38.   The representative of China  appreciate d the efforts of the U nited States  in preparing and 
presenting its comprehensive and in -depth study. He also thank ed Canada for the experience shar ed. 
He wished to draw Members ' attention to Senegal 's intervention, which reflected the need for 
developing Member s and LDCs to develop e -commerce infrastructure, build regulatory capacity and 
bridge the digital gap. The increasing demands to find a balance between facilitating cross -border 
data flow s and achieving legitimate public policy objectives, including industrial development, had 
to be given due consideration.  S/C/M/139  
 
- 9 - 
 
  3.39.   China agree d that data flow s were of great importance to the development of e -commerce. 
In particular, with the advanc ement of information technology, the needs for data analysis continue d 
to increase. Ensuring cross -border data flow s played an essential role in promoting international 
trade and was conducive to lowering the average cost of global trade, promoting trade f acilitation, 
accelerating the trend of digitization, and assisting Members to enhance their innovation capabilities 
and achieve leapfrog development.  
3.40.   Meanwhile, cross -border data flow s had to  be subject to the precondition of security. 
Individuals need ed to protect their own information security, and countries need ed to safeguard 
their national security and public interests as well. Data was susceptible to many challenges and 
risks in every link of production, storage and circulation. In fact, risks faced b y cross -border data 
flows were extremely complex and diverse. Therefore, effectively protecting against the risks 
brought by data flow s was the key consideration for every Member when developing policies, and 
appropriate data protection could  achieve a bal ance between development and security.  
3.41.   The WTO advocate d free trade, but it also gave Members the right to regulate, as long as the 
relevant measures were implemented in a reasonable, objective and fair manner. Data flow s without 
effective regulation and p rotection would  seriously affect consumer confidence, as well as enterprises 
and national interests. The internet was not an outlaw territory, thus developing regulatory measures 
consistent with each country 's social conditions appear ed particularly vital. All Members ha d the legal 
right to achieve the goal of safe development, and to promote the lawful, orderly and free flow of 
data. 
3.42.   Furthermore, developed Members h ad an  overwhelming competitive edge and play ed 
dominant roles in the area of digital technology. For instance, by the end of 2018, there were 430 
hyperscale data cent res globally (the m arket intelligence firm International Data Corporation 
generally define d a data centr e as "hyperscale " when it exceed ed 5,000 servers and 10,000 square 
feet, but in reality many were much larger in size), among which about 80% were located in 
developed Members, and 40% were located in the United States. Apparently, there was a long way 
for everyone else, especially devel oping Member s, to catch up and build their own capacity in that 
regard. Necessary policy space, including space to regulate data flow s and storage , might be needed 
by many developing Members who wish ed to establish their own data centres  and digital indust ry.  
3.43.   Currently, many Member s were actively formulating cross -border data flow policies, which 
aimed at ensuring national security, protecting privacy, as well as the achievement of other 
legitimate public policy objectives. That was an emerging, complex an d challenging issue, and 
Member s were still in an exploratory phase. In that light, in order to identify differences between 
Member s' policies, facilitate understanding and build confidence among the Member ship, further 
discussions in a progressive manner were needed, without undue haste.  
3.44.   The representative of South Africa  thanked China for the interesting presentation and other  
Members  for sharing their experiences. Her delegation associate d itself with the statements delivered 
by Senegal.  
3.45.   She also thanked  the U nited States for introducing its submission. It wa s a welcome 
contribution , in view of th e critical subject as well as the US  substantive engagement under the 
exploratory, non -negotiating e-commerce Work Programme. Her delegation was particularly 
enthused that th e paper was about the economic benefits of data and not privacy protection , which 
was often cited as the only important aspect of cross -border data flows.  
3.46.   She share d some preliminary thoughts on the submission as well as some general views.  At 
the outset, she noted that the paper dr ew heavily on OECD research. From a developing country 
perspective, South Africa did not consider that an objective or inclusive source of reference.  Her 
delegation welcome d future discussions that would also be able to draw on multilateral work on data 
flows, in particular UNCTAD 's work and the 2017 and 2018 Trade and Development Reports.  
3.47.   She noted that paragraph 4 of the US submission made reference to "preserving the 
significant economic and trade benefits from data -enabled trade ". It was important to point out, as 
in the 2018 Trade and Development Report but also as extensively covered in several other studies, 
that the economic benefits of data -enabled t rade ha d accrued to a small number of companies, the 
majority of which were based in just two countries. The economic consequences of data -enabled S/C/M/139  
 
- 10 - 
 
  trade , therefore  had to  be examined because the digital environment ha d created giant and 
extremely profitabl e companies that pa id very little tax.   
3.48.   The size of some companies and their enormous share in data ownership were creating a 
number of challenges in terms of labour -capital balance and market power concentration. They were 
also exacerbating traditional information asymmetries in market economies. The concentration of 
digital tech companies ha d created problems for th e national security and local control in other 
Members ' jurisdictions.  
3.49.   She noted that paragraph 6 made  reference to digitalisation and consumer empowerment , 
such as better preference matching, lower prices, and greater convenience. In South Africa's  view, 
the paper did not present a balanced view of the benefits and challenges emanating from cross -
border data flows. It erroneously glamourize d the economic benefits of data while downplaying the 
socio-economic imperatives of the appropriation of data by techn ology firms. Why else were 
Members  seeing a universal increase in punitive measures against Google, Amazon and Facebook 
for abuse of dominant market power and allegations of disenfranchising consumers through 
unacceptable business practices ? 
3.50.   In South Africa's  view, a realistic conversation about the benefits of data and consumer 
empowerment should be weighed against the practices by technology firms , such as their methods 
of data collection, the processing and use of data, as well as algorithmic bias, price-fixing, anti -
competitive practices and predatory pricing.  
3.51.   Hypothetically, if one took away data from th ose tech firms or took away their ability to freely 
access it as was currently the case, what would become of th ose companies? If their entire busi ness 
model was predicated on collecting and monopolising data, then a fundamental question Members 
should be asking was how to distribute the value -added of the benefits of data integration . 
3.52.   Now that it had been established that the currency of the digital  economy was data, Members  
had to  begin to converse on how data for development could  be leveraged in the digital economy. 
In South Africa, dislocations  were happening  in almost every sector where rapid digitalisation ha d 
caused new firms to decimate estab lished industries. Her delegation saw  merit in deepening 
Members'  discussions to understand the arguments that some Members made  that the cross -border 
free flow of data in trade agreements did not stop countries from ownership of data. South Africa  
was interested in learning exactly how one could 'own' something if anyone could  take it away 
without the permission  of the 'owner' . It seem ed premature to suggest that cross -border data 
sharing had to be allowed without a common understanding and agreement on ho w to share the 
value -added.  
3.53.   More generally speaking, South Africa agree d that there was enormous value now embedded 
in the control and management of data flows , the raw material of the digital economy. More need ed 
to be done at the national, regional and international levels that beg an to assess just how important 
and valuable data was. 
3.54.   Members  could interrogate data governance and distinguish data internal to a business and 
those  which a company collect ed from the collective social, artefactual or natural environments. 
Each might  need to be treated differently. For a business to fully own the latter simply because it 
possesse d the technology to collect that data should be of alarming concern to most Members . 
3.55.   The ownership of data did not mean that there was no sharing of data. The economic benefits 
accrue d to countries that ha d data and digital infrastructure and capabilities to translate data into 
products. Owner ship of data could  increase the bargaining power of countries as they could  ask 
foreign firms to share their digital technology and encourage digital technology transfers and 
technology diffusion in exchange for sharing their data with them.  
3.56.   The localisati on of data was very crucial for developing countries, otherwise if data was located 
outside the national boundaries, even if a country ha d access to it and control led it, it could not  stop 
others from having access to that data, e.g., to countries that own ed the cloud. With no level -playing 
field in the digital arena and in the context of a growing digital and technological divide, foreign firms 
would  have a much higher capacity to use the data and form digitally intelligent products to be sold 
back to dome stic consumers . That was currently what was happening.  S/C/M/139  
 
- 11 - 
 
  3.57.   On the way forward, her delegation  believe d that any presentations o f latest work should not 
be limited to the organisations listed in the US paper but  should  also include  UNCTAD and others 
who ha d produced useful contributions to the growing discourse on digital trade, notably the GDS 
Division in UNCTAD. She suggest ed that more consultations be held on the way forward.  
3.58.   The representative of Chinese Taipei  thanked the United States and other Members for their 
respective submission  and interventions.  He echo ed the statements made by Australia, Canada and 
New Zealand in terms of cross -border transfer of information by electronic means . His delegation 
had made a sta tement at the meeting of the joint statement on e -commerce initiative  in June and 
had also submitted a proposal for facilitating the discussion in that meeting . Chinese Taipei  had 
pointed out the paramount importance of  the free  flow of data for consumers to access, distribute 
and use services and applications . His delegation's  proposal intend ed to cover a potential scenario 
where a government tried to interfere in  the transfer of information on the customer's side , for 
example by requiring certain software  and app s being installed in devices. His delegation  looked 
forward to discussing th at issue with Members and to establish ing a freer and fairer e-commerce 
market to  the benefit of MSMEs, women and young entrepreneurs.  
3.59.   The representative of India wished t o congratulate the United States for tabling a paper  under 
the Work Programme on Electronic Commerce on the important issue of 'data'. India ha d been a 
supporter of comprehensive and fulsome discussions on all aspects of e -commerce under the Work 
Programme , which ha d a non -negotiating and exploratory mandate.  
3.60.   To further re -energise and refocus the discussions on issues that were relevant today, India 
and South Africa ha d recently made two submissions under the Work Programme. India viewed the 
US submission as flagging another critical issue related to 'data' and therefore her delegation 
welcome d the submission and look ed forward to meaningful discussions on the same.  She also took 
the opportunity to thank China, Canada, Senegal, N ew Zealand  and others for sharing relevant 
information under the W ork Programme . 
3.61.   Coming to the US paper , India agree d that data was increasingly becoming the lifeblood of 
economic activity and tra de. It was often said that data was the oil of the digital economy. The 
burgeoning on -line retail trade through platforms ha d data flows at its foundation. Communication s 
using mobile applications and other real -time exchanges not only generate d a vast arr ay of data, 
including physical location, financial details and consumer preference s, but also create d a dynamic 
profile of the individual user, which could  be used for a variety of commercial purposes, such as 
precision marketing, targeted advertisements a nd credit worthiness assessment, enabling large 
digital companies to target consumers with tailor -made marketing content. In that manner, data 
generated by the activity in one area could  provide a competitive edge for a new business in another 
area. 
3.62.   This h ad enabled a handful of companies to dominate the digital economy. Because of the 
significant first -mover advantage and coupled with the network effects, once a certain scale had 
been reached, it bec ame virtually impossible for a 'second mover ', on its own , to make an entry in 
the market.  
3.63.   Globally, small beginnings ha d been made for communities to take some control over their 
own data. She illustrate d three such instances . First, t he Maori community in New Zealand ha d 
developed a framework for data soverei gnty for indigenous groups . Second, the Decentralized 
Citizen -owned Data Ecosystems , or DECODE, project  in Amsterdam and Barcelona was a European 
Commission -funded project to explore how  to build a data-centric digital  economy  where  data 
generated  and gathered  by citizens,  the Internet of Things (IoT) and sensor networks was available 
for broader communal use, with appropriate privacy protections . Third, d ata sovereignty for 
indigenous people in Canada ha d been trademarked as OCAP , where  OCAP stood  for 'ownership, 
control, access and possession of data '. These were indeed positive beginnings.  
3.64.   In short, data about an individual belong ed to that individual; data about a community 
belong ed to that community; and data about a nation belong ed to that nation. It definitely did not  
belong solely to the large multi-national corporations  that were currently appropriating all economic 
benefits through monetisation of data.  S/C/M/139  
 
- 12 - 
 
  3.65.   Her delegation was happy to note that the idea of data being a critical asset, with significa nt 
economic value, was commonly shared amongst all Members . India agree d that it was essential to 
ensure that the economic benefits from e -commerce in general , and data flows in particular , were 
more equitably shared amongst all stakeholders. In fact, Indi a's draft e -commerce policy, which was 
out in the public domain for comments, was rooted in that very belief. The Draft National E -
Commerce Policy view ed data as a national asset and laid down possible strategies to create a legal 
and technological framewo rk that could ensure that India 's data was used for India 's development 
in times to come.  
3.66.   The d igital revolution was considered as the mother of all industrial revolutions and, therefore, 
Members'  collective efforts at the international level had to be such that they were beneficial for 
countries'  economy, business, people and economic growth. Data, which was a critical element of 
the digital economy and e-commerce trade, need ed to be leveraged by developing countries for their 
own economic development.  
3.67.   As regard ed the next steps, she second ed South Africa 's suggestion to invite the relevant 
Division of UNCTAD to present the findings of their research work in case the OECD and APEC were 
invited to a  future CTS meeting.  
3.68.   The representative of Egypt  thanked all delegations  who had spoke n and expressed their 
views, and discuss ed their concerns , about that very important topic. The US communication  was 
still being studied in Capital and he would revert t o it. By way of initial comment , he said that the 
views expressed at that meeting, along with th ose expressed the previous week, including  at the 
General Council meeting to discuss the communication by India and South Africa and the related 
discussions und er the JSI, reflect ed the importance of engag ing constructively in the WTO  to 
understand and identify the key areas of priorit y that Members  needed to address further  in their 
discussions.  
3.69.   One of the key priority areas that Egypt had identified in its e -commerce strategy, launched 
with the help of UNCTAD two years earlier , was data collection and statistics , which was a major 
challenge to Egypt . Some  of the gaps that Egypt faced in that regard  included data on e-commerce 
services , SME data, e-payment data , data on household and individuals  and e-commerce data . Other 
gaps concerned t he need to conduct an in -depth analysis of the survey findings of IT clubs in order 
to determine the success factors that had enabled the IT clubs to operate  an effective revenue model 
and to build a business model on training and usage of ICT tools . Additionally , Egypt  was working 
to operationalize the key performance indicators that it had  identif ied to help measure the progress 
in that very important area.  
3.70.   He also wished to share information on a  recent development  in e-commerce -related 
provisions in the area of consumer protection, which  had been repeatedly mentioned in some of  that 
day's interventions . On 18 September 2018 , Egypt had ratified its new Consumer Protection Law, 
with the Executive Regulations issued by Prime Minister Decree No. 822 on April 2019. Its key 
attributes were protecting consumers from unsafe products and implementing the rights of citizens 
to allow them to know the details of the services they use d or the goods they consume d. 
3.71.   The new Law cancel led the previous one, No. 67/2006, and replace d its provisions with those 
more protective of consumers. Indeed, the old Law could  be criticized for not providing consumers 
with enough protection. The Law and Executive Regulations set out some relevant definitions , 
including distant contracting and supplier. The Law exclude d financial and monetary services as per 
Law No. 2003/88 Promulgating the Law of the Central Bank, the Banking Secto r and Money, as well 
as Law No. 10/2009 for the Regulation of Non -Banking Financial Markets and Instruments. The new 
Law contain ed a number of provisions concerning e -commerce. Article 37 stipulate d that the 
business must, before carrying out the contract,  provide the consumer with information regarding 
the business itself, the product, the warranty, the post -sale services, the delivery date and location.  
The definitions  related to distance contracting and supplier ha d also been covered under the Law.  
3.72.   The representative of the European Union  thanked China for its very specific and concrete 
presentation, which was  very welcome. He also thanked the United States for its communication , 
which was an interesting paper that illustrate d the importance of data flow s for digital trade and for 
what was a matter of commercial activities in almost all economic sectors . He shared the US S/C/M/139  
 
- 13 - 
 
  assessment that there was indeed an increasing trend to impose new obligations for companies in 
response to increa sing data flow s. 
3.73.   The EU was also equally satisfied with the on -going negotiation s on digital trade, which ha d 
dealt with those exact topics  the previous week , and believe d that that was the place where it was  
looking forward to continuing the conversation on those topics. He also wished to seize the occasion 
to recall a well -known EU position in th at space, which was that privacy was a fundam ental right in 
the EU perspective and not a trade issue . Hence, the EU would  have some concerns about a 
discussion or an evaluation of privacy regimes at the WTO . That was a perspective that would  need 
to be taken into account as discussions  move d forward .  
3.74.   The representative of the United States thanked all delegations that  had intervened on the 
US paper . He knew that Members had no t had the submission  for very long, and the United States 
would  welcome further discussions and questions.  In reply to the particular  point raised by Canada, 
he indicated that the United States did not have a specific approach to suggest . For the United 
States,  for example , the National Institute of Standards and Technology (NIST) ha d developed 
standards related to cyber -secur ity, and his delegation would be willing to share at a future CTS 
meeting the relevant main elements.   
3.75.   In terms of other institutions providing information to the CTS, his delegation was  fairly open -
minded about institutions coming to relay information on their work, as long as the work that they 
were presenting was relevant to the discussion. He did know that APEC, for example,  would be  
holding a workshop in August titled "Facilitating trade through adherence to globally recognised 
cybersecurity standards  and best practices ". That might be something worth hearing about in terms 
of what other organizations were doing in that particular  area, to help inform Members'  discussion s 
in the WTO.   
3.76.   His delegation was also happy to work with the LDCs to address the qu estions that they had 
raised in terms of LDC participation in that particular area . The submission  gave a few examples,  
but he was certain that there were many others, as well as many challenges that companies might 
be facing , and his delegation was happy to examine th ose. Many issues had been raised  in the 
discussion , such as the digital divide, taxation, consumer protection or privacy;  Members needed to 
be aware of th ose issues  but also needed to be pragmatic on what the WTO  should focus on, which 
was trade.  
3.77.   The Chair man thanked China for its presentation, the United States for its submission and all 
delegations for a very interesting exchange of views. He would reflect on how to take forward the 
suggestion to invite other i nternational organisations, such as OECD, APEC or UNCTAD.   
3.78.   Before moving to the next agenda item, he recall ed that the Buenos Aires Ministerial Decision 
on the Work Programme on Electronic Commerce instruct ed the General Council to hold periodic 
reviews on  work under the Work Programme, based on the reports submitted by the relevant WTO 
bodies.  The next such review was scheduled for 23 and 24 July. Therefore, in line with past practice, 
he would be producing, under his own responsibility, a Chairman's Repor t to the General Council of 
the discussions th e CTS had had under the Work Programme, back in March and at that meeting.  
The report would  be purely factual, reflecting the essence of Members'  deliberations.  
3.79.   He then suggested that the Council take note of t he statement s made and  said that the 
Council would  revert to this item at its next meeting.  
3.80.   It was so agreed . 
4  ITEM D: UPDATE OF THE SECRET ARIAT BACKGROUND NOT E ON MODE  4 – REQUES TED 
BY INDIA  
4.1.  The Chairman  said that that item had been added to the agenda of the Council at the request 
of the delegation of India. 
4.2.  The representative of India said that, a s she had  emphasized on several previous occasions, 
her delegation welcome d the updat e of all the Secretariat  Background Notes  on the modes of supply , S/C/M/139  
 
- 14 - 
 
  i.e. on modes 1 and 2, mode 3 and mode 4. Besides, as requested by one delegation, the Secretariat 
should also prepare an additional Note on inter -modal linkages.  
4.3.  She understood  that while most delegations support ed the updating  of all modal Notes by the 
Secretariat  as well as one new Note on inter -modal linkages, one delegation continue d to have 
concerns on the updating  of those Notes, and especially the Note on m ode 4.  Meanwhile, her 
delegation  had met with the Chair man and the Secretariat  and it had been  made to understand that 
that delegation was agreeable to having 'new' Notes in all modes, including mode 4, plus a new Note 
on inter -modal linkages.  
4.4.  While her delegation was willing to explore that route of having 'new' Notes rather than having 
the older modal Notes updated, she would want to understand from that delegation the precise 
concerns with the 2009 mode 4 Secretariat Background Note and how that delegation foresaw  
addressing the same in the proposed 'new' Note on Mode 4 . In brief, her delegation request ed for 
clarity on possible differences in the content of an updated mode 4 Note, to which that delegation 
was oppose d, and a new mode 4 Note which was acceptable to that delegation. She also t ook the 
opportunity t o express her delegation's  sincere thanks to both the Chairman  and the Sec retariat  for 
their best efforts in trying to resolve th at issue.  
4.5.  The representative of the United States wished to  clarify his delegation's  position, which  had 
not really  changed . The United States did not see much utility in simply redoing an old Note on 
mode  4 when it  was not clear  that much ha d changed since that time. His delegation  had been open 
to a possible review of new literature , to determine if there was actuall y new information relevant 
to mode 4 that might be useful.  It had  never agreed or suggested that a new modal Note would be 
appropriate.  The same concern would apply in regard to Notes on the other modes of supply, wh ere 
it was also not clear what  there wou ld be that  was new to review. The intermodal linkages  angle , 
instead , was something novel  and his delegation was open to see  if a Note  could be developed in 
that area.  
4.6.  He had been  a delegate in Geneva back in 2009 when th e updates to the Secretariat 
Background Notes on sectors and modes  of supply  had been  agreed to , in response to the DDA and 
in the context of spurring negotiations that had hit a low point . His delegation was not sure what 
was the purpose of updating those Notes at that point in time,  as there was no real new information  
available, or, as his delegation had said at the last meeting , what would be the purpose of  just 
putting a new date on an old Note.  
4.7.  The Chairman  suggested that the Council take note of the statement s made.  
4.8.  It was so agreed . 
5  ITEM E: CYBERSECURITY MEASUR ES OF CHINA AND VIET NAM – REQUESTED BY JAPAN  
AND THE UNITED STATE S  
5.1.  The Chairman  said that that item had been added to the agenda of the Council at the request 
of the delegation s of Japan and the United States . 
5.2.  The representative of Japan  express ed its gratitude to the United States  for co-requesting the 
inclusion of that agenda  item. Japan also  thank ed China for responding to bilateral consultations 
with his delegation  in Geneva and in Beijing on that issue. Japan  hoped to find common acceptable 
solutions through cross communication , including exchanging of views at CTS meeting s. 
5.3.  Japan had recently submitted  its comments on two draft implementing measures : the Draft 
Cybersecurity Assessment Measures and the  Draft Data Security Management Measures , which the 
Chinese government had sought public comments  on. His delegation  would  submit Japan's  
comments on the Draft Security Assessment of Cross -border Transfer of Personal Information  
Measures .  
5.4.  Japan  appreciate d China's efforts of seeking public comments from various stakeholders from 
the perspective of transparency. His delegation  expect ed that China would  continue to ensure 
transparency and take into consideration the input s of all stakeholders before finalizing its rules and 
regulations . In that regard , Japan request ed China to ensure  that th ose implementing measures S/C/M/139  
 
- 15 - 
 
  would  be the least trade -restrictive possible and fully consistent with various rules in  the GATS and 
other WTO rules.  
5.5.  Japan continue d to bring that matter before t he CTS because China's proposed restrictions on 
cross-border transfers of information, especially on the requirement of a burdensome security 
assessment and data localisation request , could have a significant adverse effect  on trade in services , 
including supply  through commercial presence and on a cross -border basis. Japan had continuously 
reiterated in the Council its request that China develop the draft rules and regulations in such a 
manner that they would  not unfairly hinder the level playing field of the business environment in 
China, both in a formal and actual treatment and be f ully consistent with  the GATS.  
5.6.  With respect to Viet Nam's measures , Japan also thank ed Viet Nam  for responding to bilateral 
consultations with his delegation  in Geneva and in headquarter s on that issue. His delegation  hoped 
to find common accepta ble solutions  through cross communication , including exchanges of views at 
CTS meetings. With respect to the draft Decree implementing its Law on Cybersecurity, Japan 
recognize d that the Government of Viet Nam  was still working on the drafting of the Decree. Japan 
expect ed that Viet Nam  would  continue to ensure transparency and take into consideration the inp uts 
of all stakeholders before finalizing t he Decree  and other related laws and regulations so that the 
final Decree would  be the least trade -restrictive possible.  
5.7.  The representative of the United States  said that, as  Members m ight recall, at the previous  
Council meeting in March his delegation  had continued its longstanding effort to clarify, understand 
the rationale, and underscore concerns on various aspects of China 's Cybersecurity Law and various 
draft and final implementing measures connected with th at and other Laws, including in regard to 
China 's proposed restrictions on cross -border transfers of "important data " and "personal 
information " and data localization requirements.   
5.8.  Although many questions remain ed on those measures, at that meeting his delegation wished 
to draw Members ' attention, and seek any relevant explanation China might  be able to provide, on 
two new draft measures the National Internet Information Office of the Cyberspace Administration 
of China had recently re leased for public comment , namely the Draft Measures for Security 
Assessment of Cross -border Transfer of Personal Information, dated June 13 , and the Draft Data 
Security Management Measures, dated May 28.  
5.9.  The June 13 draft Measures for Security Assessment of Cross -border Transfer of  Personal 
Information appear ed to cover some of the same subject matter as the draft measure that China 
had released in 2017 , "Measures on the Security Assessment of Cross -border Transfer of Personal 
Information and Important Dat a". The United States  would appreciate understanding the relationship 
between th ose two measures.  One key concern with the June 13 Measures was that they continue d 
to require "security assessments ", and in some cases an individual 's consent, solely of the basis that 
the transfer was cross-border.   
5.10.   He also noted that both th ose draft Measures refer red to concepts his delegation  had 
previously sought clarification s on, but which still remain ed not clearly defined, and thus thwart ed 
efforts to understand the s cope and effect of either th ose or former measures.  Terms of particular 
concern include d "network operator " and "sensitive personal information ". The 2017 draft Measure s 
also referred to "important data, " which raise d great concern.  No other country in the world propose d 
to require evaluation of that category of data.   
5.11.   The May 28 draft Data Security Management Measures also contain ed one Article that would 
require network operators to assess security risks before providing "important data " abroad and 
would require the transfer of "personal information " abroad to be carried out in accordance with 
"relevant regulations. "  
5.12.   His delegation  welcome d China 's responses to the US concerns and any other context it could 
provide on th ose two draft Measures, includin g how they relate d to China 's overall implementation 
plans for its Cybersecurity Law.   
5.13.   Turning to Viet Nam's cybersecurity measures, the representative recalled that, a t the 
previous  CTS meeting, his delegation had  noted its appreciation for Viet Nam 's dec ision to post for 
public comment a revised Draft Decree implementing its Law on Cybersecurity.  S/C/M/139  
 
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  5.14.   He underst ood that Viet  Nam ha d been working diligently to revise this Draft Decree. Given 
the numerous questions and concerns his delegation had  identified in the detailed comments it, and 
others , had filed the previous  year, he would request that Viet  Nam not finalize th at Decree until 
WTO Members and other stakeholders ha d had sufficient time to review proposed changes and 
further consult with t he government of Viet  Nam, as appropriate.  
5.15.   His delegation  would also appreciate any information Viet Nam  could  provide on the status of 
the review process, and any indication of whether suggested changes would  be reflected in the new 
draft.  Once again, he thank ed Viet Nam  for publishing the draft measures and for taking into account 
the serious concerns raised by WTO Members.  
5.16.   The representative of New Zealand  said that, in relation  to China's measures first, his 
delegation welcomed China's remarks at the pr evious meeting and  its efforts to welcome suggestions 
from interested parties with a view to ensuring that regulations were drafted in a way that was clear 
and non -discriminatory. His delegation had appreciated the opportunity to comment on the draft 
measures for cybersecurity reviews and  would  continue to do so on other draft measures.  
5.17.   New Zealand acknowledge d that security and data protection challenges existed,  and that 
Members had the right to regulate on th ose important public interest issues . Nonethel ess, such 
measures had to  be introduced in a manner that was consistent with existing international 
obligations and minimize d negative impacts on trade . This encompassed consistency with WTO 
obligations , including national treatment obligations, and ensuring measures were not more trade 
restrictive than necessary to fulfil a legitimate public policy objective. His delegation  encourage d 
China to implement its cybersecurity regulations in a manner that was transparent to all business 
and consistent with  the letter and spirit of the obligations contained in the GATS. New Zealand 
welcome d further information and exchanges with China on those  important issues.  
5.18.   In relation to Viet Nam's measures , in line with his delegation's  interventions in previous 
meeti ngs of the Council, New Zealand  continue d to have a strong interest in the revision of the draft 
Decree and urge d Viet Nam to continue to engage with stakeholders so they might  effectively input 
into the consultation process before final regulations were implemented. His delegation  reiterate d 
the importance of th ose regulations remain ing consistent with Viet Nam's  GATS commitments and 
to ensure that the requirements , including regarding the local storage of data and limitation s on 
cross-border transfer of d ata, did not unduly act as a barrier to foreign service suppliers , putting 
businesses at a potential  commercial disadvantage.  
5.19.   The representative of the European Union  expressed his delegation's support to the 
interventions made by Japan and the United Sta tes. The EU had explained its concerns regarding 
the cybersecurity measures of China in previous CTS meetings, in particular in relation to the data 
localisation requirements and data flow restrictions imposed by the Cybersecurity Law and its 
implementing measures.  
5.20.   He thanked  China for the explanations it ha d provided until then  at the CTS and in other for a 
on those measures. His delegation had  appreciate d the opportunity to comment on the most recent 
Chinese draft measures in a public consultation. The European Union,  however , consider ed that the 
draft measures on the security assessment for personal information outbound transfer did not 
alleviate the conc erns it had expressed earlier as regard ed their negative impact on foreign business. 
In particular, the scope of the security assessment obligation was very broad, and the definitions 
and the requirements contained in the draft measures continue d to create  a lot of legal uncertainty 
for foreign business.  
5.21.   The European Union consider ed that, because of the requirements in the draft measures and 
the legal uncertainty surrounding their implementation, foreign companies operating in China could 
find themselves in a de facto  less competitive situation compared to domestic operators, including 
in sectors where China ha d taken international commitments.  Therefore, the EU wished to  invite 
China to provide further information on the concerns raised by Japan, the Unit ed States and other 
Members , as well as to take on board the opinion s of foreign business operating in the country before 
issuing the relevant measures.  
5.22.   With regard to Vet Nam's measures, t he European Union support ed the views expressed by 
Japan and the United States regarding the implementing decree of the Cybersecurity Law of S/C/M/139  
 
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  Viet Nam. The European Union would also appreciate an update by Viet Nam on the state of play of 
the review, and on whether the concerns his delegation  had expressed previously ha d been taken 
into account. The European Union  would welcome Viet Nam to provide an opportunity for comments 
on the reworked draft decree before it was adopted formally.  
5.23.   The representative of Chinese Taipei  thank ed Japan for having raised th at issue again in the 
CTS, and also echo ed other Members ' statements  in that regard . Members ' measures on the 
international transfer of information would affect cross-border business operations and MSMEs'  equal 
opportunity for market access . His delegation was very happy to continue to discuss related issues 
in the future meetings .   
5.24.   Like Japan and other Members, t he representative o f Australia  said that her delegation 
appreciate d China 's efforts in consul ting with interested parties on its draft measures related to 
cybersecurity , and most recently on measures related to the cross -border transfer of personal 
information.  Australia was  reviewing these measures closely and continue d to urge China to take 
into account business 's and WTO Members ' concerns.  
5.25.   Australia  also appreciate d Viet Nam 's engagement on its cybersecurity measures. As raised 
in previous meetings, like other Members, her delegation  continue d to have a number of concerns 
with concepts in Viet N am's Cyber security Law.  Australia ha d provided feedback on Viet Nam 's draft 
decree implementing the new Law, noting its interest in seeing a law that maintain ed Viet Nam 's 
embrace of digital platforms , support ed increased participation in global e -commerce , and enhance d 
the business environment in Viet Nam , including by being compliant with international trade 
commitments and regional trade agreements.  Her delegation looked forward to continuing to work 
with Viet Nam  on its Cyber security Law . 
5.26.   The representative of Canada  wished to add her delegation's voice to the those of those  of 
other Members that had raised concerns with regard to the measures announced by China and 
Viet Nam.  In the past , Canada ha d highlighted specific concerns linked to t hose measures. Her 
delegation  welcome d the opportunity to provide comments in the different fora and wished to 
highlight, as other Members ha d done, the importance of  China and Viet Nam  taking into account 
comments obtained from the private sector and from  other WTO Members. Canada  continue d to 
encourage China and Viet  Nam to provide updates on the relevant development s linked to the 
measures  at issue .   
5.27.   The representative of China  wishe d to take th at opportunity to provide some preliminary 
feedbacks to the questions raised by the United States, Japan and some other Members. First, 
regarding the draft Measures for Security Assessment for Cross -border Transfer of Personal 
Information and the Measures fo r Data Security Management , he noted that i t was the common 
practice of many Members to establish certain standards or requirements to be met before the cross -
border flow of personal data and other important data took place, in order to ensure that th ose data 
would  be properly protected.  
5.28.   Recently, the Chinese authorities  had drafted the Measures for Security Assessment  for Cross -
border Transfer of Personal Information and the Measures for Data Security Management for public 
comments. The draft Measures specif ied the requirements for security assessment as stipulated by 
the Cyber security Law. The draft Measures took into account the need for cross -border data transfer 
and tried to keep a balance between data transfer and data security. The draft Measures require d a 
"security assessment " for certain internet operators before transferring personal data and  other  
important d ata abroad. If the assessment f ound that such transfer s would  not undermine national 
security or public interests, and the safety of th ose data could  be guaranteed, such cross -border 
transfer s would  be allowed.  
5.29.   Cross -border transfer of data was an importa nt issue in the digital age. China was willing to 
further discuss that issue with Members and enhance relevant international cooperation, with a view 
to guaranteeing the free flow of e -commerce data on the condition of security and promoting 
economic globa lization and innovation.  
5.30.   Second, regarding the Measures for Cyber security Review , he noted that the  cybersecurity 
review was an important regime in order to implement the National Security Law and Cyber security S/C/M/139  
 
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  Law of China. Its purposes include d enhancing  supply chain security, enhancing the security of 
critical information infrastructure, and safeguarding national security.  
5.31.   Critical information infrastructure operators defined by the relevant authority were obliged to 
undergo the cybersecurity review. Ot her internet products and services providers were not subject 
to such reviews. The review would  follow the principle of non -discrimination. It would  not target any 
specific Member, and domestic and foreign products and services would  be treated equally. It  was 
neither an administrative approval nor a market access measure. Only those purchasing activities 
that affect ed or might affect national security would  be subject to th e security review.  
5.32.   The drafts  mentioned above  took into account China's  experience of recent  years, the 
practices of other Members , including developed Members, and opinions from various stakeholders. 
In order to show maximum transparency, China had published th ose drafts for public comment 
before implementation. China was willing to consider the suggestions from Members or other 
stakeholders in due course.  
5.33.   After responding to relevant comments and questions, China wishe d to take that opportunity 
to make some comments on recent US measures concerning cybersecurity.  In May 2019,  the US 
Government had issued an Executive Order on Securi ng the Information and Communications 
Technology and Services Supply Chain. This Order prohibit ed a series of commercial transactions, 
including any transaction  that "otherwise poses an unacceptable risk to the national security of the 
United States or the  security and safety of United States persons ". Several concepts used, such as 
"unacceptable risk to the national security ", seem ed vague and arbitrary, and might  lead to 
discrimination against foreign products and services, thus violating relevant WTO rul es. Given its 
negative impact on international trade, he wished to know  whether and when the U nited States was 
going to notify th at measure , and other measures of a similar nature , to the WTO. As a matter of 
fact, the United States had  failed to make even a single notification under Article III:3 of the GATS 
after the year 2010. While failing to notify its own measures that ha d come into force, the U nited 
States had requested China to explain its draft measures, which was neither fair nor reasonable.  
5.34.   In add ition, the C ouncil was  not the proper place to discuss Members ' laws and regulations 
that were still in the process of being drafted and on which public comments  were being sought . The 
information China was asked to share on a draft measure ha d far exceede d any information that 
was usually given in a typical notification of a measure in force, which was rather strange and overly 
burdensome. At the same time, his delegation  was fully aware that there were certain laws and 
regulations adopted by some of the most advanced economies in the world , having much greater 
implication s on global trade, that ha d not even been notified. China did not understand th at double 
standard . He urged the relevant Members to no tify th ose measures as soon as possible and  reserve d 
his delegation's  right to seek clarifications on many of th ose measures.  
5.35.   The representative of Viet Nam  was grateful for the opportunity to respond to Members' 
remarks. His delegation had  repeatedly expl ained that the draft decree implementing certain articles 
of the Vietnamese Cybersecurity Law had narrow ed down the scope of some specific obligations to 
only national security concerns . He thank ed relevant Members for their continued interest and 
wished  to reiterate that Viet Nam's  legislative  drafting process for th e Decree was transparent and 
democratic. Interested stakeholders and members of the public had been  given ample opportunities 
to provide comments within the statutory timeframe. However , his de legation  remain ed ready to 
engage with interested Members to provide further explanation s if requested.  
5.36.   The Chairman  suggested that the Council take note of the statements made.  
5.37.   It was so agreed . 
6  ITEM H: OTHER BUSINESS  
6.1.  As indicated at the start of the meeting, the Chairman  wished to make a n announcement about 
the schedule of meetings for the autumn.  In light of the agreement reached under item B, on the 
"Operationalisation of the LDC Services Waiver", the Council  would  be holding a dedicated session 
to review the operation of preferences notified under the LDC Waiver on 29 and 30  October.  That 
session would  consist of a workshop and a dedicated Council meeting.  His intention was also to hold, 
during that same last week of  October, a regular meeting of the Council, possibly back -to-back with S/C/M/139  
 
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  the dedicated meeting on the LDC Waiver.  In light of the workload facing Members towards the end 
of the year, after that October meeting he did not  plan, at that juncture,  to convene an y further 
meetings of the CTS , unless a need arose to consider urgent or unforeseen business.  
6.2.  The representative of the European Union  wished to inform the CTS about the EU's  initiative to 
strengthen the ability of regular WTO bodies to effectively address  and resolve concerns that 
Members ha d with trade -related measures of other Members. While more and more Members use d 
the possibility to discuss such trade concerns in WTO bodies, they often remain ed on the agendas 
for a long time without sufficient progre ss. 
6.3.   The EU was currently working, together with several other Members, on developing a proposal 
for a set of horizontal procedural guidelines that would apply to WTO Councils and Committees 
dealing with trade concerns.  The ideas in its draft proposal concern ed, for example: better 
preparation of meetings, more consultation between the Members raising and responding to a trade 
concern outside of the meetings, more coordination between different WTO bodies sometimes 
debating the same concern , and, if a concern was repeatedly raised without resolution, the possibility 
for the Chairperson to hold an informal meeting with the Members involved in order to find a way 
forward.  
6.4.  The EU was consulting on th ose ideas in an open and inclusive manner , with a  view to 
presenting a proposal to the General Council in July. He invite d all interested Members to approach 
his delegation  for more details.  
6.5.  The representative of Switzerland  thanked the European Union for presenting to the CTS its 
proposal on procedural guidelines to address trade concerns, a proposal that his delegation 
considered valuable and was co -sponsoring. He also took the opportunity to inform Members that 
Switzerland was preparing a proposal for a mediation framework that would be complementary t o 
the procedural guidelines and give a new venue for Members to solve their concerns in a non -
litigation mode.  
6.6.  The representative of South Africa  sought a clarification from the European Union. She asked 
what exactly was  a trade concern  in a services conte xt, and wondered if , for example, the issue s 
discussed under the previous agenda item, on cybersecurity measures, would be considered a trade 
concern.  
6.7.  The representative of the European Union  replied in the affirmative, indicating that the 
discussion the C ouncil had just had on cybersecurity measures was an example of what a trade 
concern would be. He added that the notion was relatively large and covered  all instances in which 
Members were discussing the measure of another Member.  
6.8.  A representative of the  Secretariat  recalled that the website of the United Nations Statistics 
Division had no longer provided access to the Provisional Version of the Central Product 
Classification. Upon New Zealand's request, the Secretariat had been in re gular and repeated contact 
with UNSD on that matter, and she was pleased to report that there had been some progress.  The 
UN Statistics Division had informed the Secretariat that the CPC classification instruments and 
relevant correspondence tables were henceforth available on the UNSD website, under the page on 
"Classifications on economic statistics". UNSD would continue working to upgrade its webpage, with 
the objective of adding more user -friendly functionalities. The Secretariat would continue to enga ge 
with UNSD and would report back to the Council as appropriate.  
6.9.  The Chairman  said that the Council would take note of the statements made.   
6.10.   It was so agreed . 
6.11.   The meeting was adjourned . 
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