RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/220
3 December 2002
(02-6666)
Council for Trade in Services
DRAFT
REPORT (2002) OF THE COUNCIL FOR TRADE IN SERVICES
TO THE GENERAL COUNCIL
1. Since its last report to the General Council, dated 9 October 2001, the Council for Trade in
Services has held seven formal meetings.  Reports of the meetings are contained in documents
S/C/M/55, S/C/M/56, S/C/M/58, S/C/ M/59, S/C/M/60, S/C/M/61, and S/C/M/63.  The Council has
also held two special meetings dedicated to the review of the Annex on Air Transport Services, thereports of which are contained in documents S/ C/M/57 and S/C/M/62.  The reports of the meetings
should be read in conjunction with this report.  During the reporting period, the Council addressed the
following matters:
I. NOTIFICATIONS MADE TO THE COUNCIL PURSUANT TO GATS
ARTICLES III:3, V AND VII:4
2. At its meeting held on 4 October 2001 the Council took note of the following notifications:
(i) Notifications pursuant to Article III:3 of the GATS concerning modifications to
services regulations in sectors where specific commitments have been undertaken:
Brazil (S/C/N/143-154)
Albania (S/C/N/155-165)
Sri Lanka (S/C/N/167-168)Switzerland (S/C/N/170-172)
(ii) A notification pursuant to Article V concerning an economic integration agreement:
EFTA and Mexico (S/C/N/166)
(iii) A notification pursuant to Article VII:4 concerning recognition measures and
agreements or arrangements:
Switzerland (S/C/N/173-178)
3. The Council referred the economic integration agreement between EFTA and Mexico to the
CRTA.S/C/W/220
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4. At its meeting held on 3 December 2001 the Council took note of the following notifications:
(i) Notifications pursuant to Article III:3 of the GATS concerning modifications to
services regulations in sectors where specific commitments have been undertaken:
Japan (S/C/N/179)
Poland (S/C/N/180-182)
(ii) A notification pursuant to Article V concerning an economic integration agreement:
New Zealand and Si ngapore (S/C/N/169)
5. The Council referred the economic integration agreement between New Zealand and
Singapore  to the CRTA.
6. At its meeting held on 5 June 2002 the Council took note of the following notifications:
(i) Notifications pursuant to Article III:3 of the GATS concerning modifications to
services regulations in sectors where specific commitments have been undertaken:
Latvia (S/C/N/183-184)
(ii) Notifications pursuant to Article V concerning an economic integration agreement:
European Communities and Latvia (S/C/N/187)
European Communities and Estonia (S/C/N/188)
European Communities and Lithuania (S/C/N/189)
European Communities and Slovenia (S/C/N/190)
Chile and Costa Rica (S/C/N/191)
(iii) Notifications pursuant to Article VII:4 concerning recognition measures and
agreements or arrangements:
Latvia (S/C/N/185-186)
7. The Council referred the five economic integration agreements notified to the CRTA.
8. At its meeting held on 17 July 2002 the Council took note of a notification pursuant to
Article V concerning an economic integration agreement between the European Communities and
Mexico, contained in document S/C/N/192, and referred it to the CRTA.
9. At its meeting held on 25 October 2002 the Co uncil took note of a notification pursuant to
Article V concerning an economic integration agreement between Jordan and the United States,
contained in document S/C/N/193, and referred it to the CRTA.
II. ISSUES ARISING FROM THE REVIEW OF ARTICLE II (MFN) EXEMPTIONS
10. At its meeting held on 4 October 2001 the Council based its discussion on a communication
from Hong Kong, China; Japan and Korea, which addressed a number of procedural and substantive
issues raised in the context of the review.  Discussions continued on a paper from Chile (JOB(01)/34)
regarding the procedures for the reduction and wi thdrawal of MFN exemptions.  Based on a request
from the Council, the Secretariat had produced a note  examining the legal aspects of procedures for
the termination, reduction, and rectification of MFN exemptions (JOB(01)/106).   Discussion beganS/C/W/220
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on a communication from Mexico (S/C/W/196) regarding indeterminate deadlines indicated in some
MFN lists and the 10 year in principle deadline indicated in the Annex on Article II (MFN)
Exemptions.  The Council agreed to revert to this item at its next meeting.
11. At its meeting held on 3 December 2001, the Council pursued its discussions on a
communication from Mexico (S/C/W/196), as well as on earlier contributions, which focused on thesubstantive issue of terminating MFN exemptions.  It also began discussion on a communication from
Korea, contained in document (S/C/W/204).  The Council agreed to revert to this item at its next
meeting.
12. At its meeting held on 19 March 2002, the Council continued its discussion on earlier
communications from Mexico (S/C/W/196) and from Korea (S/C/W/204) regarding the specific or
indicative nature of the 10 year deadline contained in the Annex on Article II (MFN) Exemptions.
Reference was also made to an earlier paper from Hong Kong, China (Job No. 7775) regarding MFNexemptions which were purported to grant less favourable treatment.  The Council agreed to include
this item on future agenda only upon receipt of new submissions.
III. PROCEDURES FOR THE TERMINATION, REDUCTION AND RECTIFICATION
OF ARTICLE II (MFN) EXEMPTIONS
13. At its meeting held on 3 December 2001, the Council considered draft Procedures for the
Certification of Terminations, Reductions and Rectifications of Article II (MFN) Exemptions,
contained in document S/C/W/202, which had been prepared by the Secretariat upon the request of
Members.  A draft decision in this regard, contained in S/C/W/203, was also submitted for
consideration.  The Council agreed to revert to this item at its next meeting.
14. At its meeting held on 19 March 2002, the Council considered a revised draft of the
Procedures for the Certification of Terminations, Reductions and Rectifications of Article II (MFN)
Exemptions, contained in docum ent S/C/W/202/Rev.1.  Changes were suggested and requests to
revert to the revised draft were made.
15. At its meeting held on 5 June 2002, the Council considered a new revised draft of the
Procedures for the Certification of Terminations, Reductions and Rectifications of Article II (MFN)Exemptions, contained in document S/C/W/202/ Rev.2.  After a few minor amendments were
proposed and accepted, the draft decision contained in document S/C/W/203 was adopted, and has
been issued as document S/L/105.  The procedures were issued as document S/L/106.
IV. REVIEW OF THE UNDERSTANDING ON ACCOUNTING RATES IN
TELECOMMUNICATIONS
16. At its meeting held on 4 October 2001, the Council continued its discussions on the review of
the understanding on accounting rates, as provided for in paragraph 7 of the Report of the Group onBasic Telecommunications, contained in do cument S/GBT/4.  The Council postponed its
consideration of two notes presented by Australia in July, on Terms of Reference for a
Telecommunications Accounting Review (JOB (0 1)/73) and related Questions and Answers
(JOB (01)/111).  The Council agreed to revert to this item at its next meeting.
17. Discussion continued on this item in the Council's meeting on 3 December 2001.  The
representative of Australia suggested that the Council complete the review by its March 2002
meeting.  The Council agreed to revert to this item at a future meeting.
18. At its meeting held on 19 March 2002 the Council considered a new proposal from Australia,
contained in JOB(02)/25, to obtain additional information necessary to the review.  It was suggestedS/C/W/220
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that Members communicate answers to the questions contained in the new proposal to the Secretariat.
The Council agreed to revert to this item at its next meeting.
19. At its meeting held on 5 June 2002, the Council continued its discussions based on the
previous submissions.   It was noted that no information had been communicated to the Secretariat
based on the questions contained in JOB(02)/25, and the Council agreed to revert to this issue in thefuture only if such information had been received.
V. PROPOSALS FOR A TECHNICAL REVIEW OF GATS PROVISIONS
20. At its meeting held on 4 October 2001, the Council continued its discussion on this item
based on previous submissions from the Secretariat (JOB(01)/17); Australia, the European
Communities and their Member States, Hong Kong, China, Japan, Norway and Switzerland
(JOB(01)/40); and Japan (JOB(01)/107), which cont ained suggestions with regard to possible issues
to be addressed in a technical review.  The Council ag reed to revert to this item at its next meeting.
21. At its meeting held on 3 December 2001, the Council continued to discuss the substantive
issues raised in previous submissions, as well as those contained in a communication from Brazil,
contained in JOB(01)/165.  The Council agreed to  revert to this item at its next meeting.
22. At its meeting held on 19 March 2002, the Council pursued its discussions on this item based
on the previously tabled submissions.  Given the interest expressed in a number of particular cases,namely Articles XVI, XVII and XX:2, the Chair suggested he convene an informal meeting on this
issue with a view to reaching a concensus on which subjects could form part of a technical review.
VI. PROPOSALS FOR A TECHNICAL REVIEW OF GATS PROVISIONS  –
ARTICLE XX:2
23. At its meeting held on 5 June 2002 the Council had a preliminary substantive discussion on
Article XX:2.  The Council tasked the Secretariat to produce a note on the drafting history of
Article XX:2.  The Council agreed to revert to this item at its next meeting.
24. At its meeting on 17 July 2002 the Council continued its discussions based on a Secretariat
note contained in JOB(02)/89 on the drafting histor y of Article XX:2.  The Secretariat was further
tasked with producing a short note illustrating some of the scenarios raised by a few Members in thediscussion.  The Council agreed to revert to this issue at its next meeting.
25. At its meeting held on 25 October 2002, the Council continued its discussions based on two
Secretariat notes, contained in JOB(02)/89, and a new note, contained in JOB(02)/153, which
illustrates a few practical scenarios.  The Council agreed that an informal, open-ended meeting on this
item be convened and to revert to this item at the next meeting.
VII. IMPLEMENTATION OF COMMITMENTS BY THE PEOPLE'S REPUBLIC OF
CHINA – STATEMENT BY THE UNITED STATES
26. At its meeting held on 19 March 2002 the Council had a discussion on this item at the request
of the United States on the basis of a statement made by its delegation.  The Council took note of the
statements made.
27. At its meeting held on 5 June 2002 the Council had a discussion on this item at the request of
the United States.  It was agreed that the discussion of this item was outside the context of thetransitional review mechanism.  The Council took note of the statements made.S/C/W/220
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28. At its meeting held on 17 July 2002 the Council had another discussion on this item at the
request of the United States.  The Council took note of the statements made.
VIII.  PREPARATIONS IN CONNECTION WITH SECTION 18 OF THE PROTOCOL ON
THE ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA
29. At its meeting held on 5 June 2002 the Council had a discussion on this item at the request of
the United States.  The Chair proposed to have consultations on the matter.  The Council agreed to
revert to this item at its next meeting.
30. At its meeting held on 17 July 2002 the Council continued its discussion on this item.  The
Chair informed the Council of the General Coun cil's intention to conduct its review on 10-11
December 2002.  She proposed further consultations on the matter.  The Council took note of the
statements made.
IX. TRANSITIONAL REVIEW UNDER SECTION 18 OF THE PROTOCOL OF
ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA
31. At its meeting held on 25 October 2002 the Council for Trade in Services conducted and
concluded the first Transitional Review under Section 18 of the Protocol of Accession of the People's
Republic of China.  The Council took note of the report from the Committee on Trade in Financial
Services on its own review, contained in document S/FIN/7, which would form part of the Services
Council's report on this matter to the General Council.  Discussion on this item took place based on
communications from the European Communities and their Member States (S/C/W/211 and
S/C/W/211/Corr.1);  the United States (S/C /W/212); Japan (S/C/W/213); Chinese Taipei
(S/C/W/217); and Australia (S/C/W/2 19).  The Council took note of the statements made.  The report
to the General Council on the review of the Council for Trade in Services is contained in document
S/C/15.
X. WORK PROGRAMME ON ELECTRONIC COMMERCE
32. At its meeting held on 4 October 2001 the Council had this item on its agenda but no
discussion has taken place.
XI. NEGOTIATIONS UNDER ARTICLE X OF THE GATS (EMERGENCY
SAFEGUARDS) – EXTENSION OF THE DEADLINE FOR NEGOTIATIONS
33. At a special meeting held on 15 March 2002 the Council received a communication from the
Chair of the Working Party on GATS Rules proposing to extend the deadline on the negotiations
under Article X of the GATS on emergency safeguard measures, contained in document
S/C/W/205/Rev.1.  The Chair of the Working Part y on GATS Rules presented a proposal for the new
deadline of 15 March 2004, on the basis of which.  The Council adopted the Fourth Decision on
Negotiations on Emergency Safeguard Measures (S/L/102).
XII. RE-OPENING OF THE FOURTH PROTOCOL FOR ACCEPTANCE
34. At its meeting held on 5 June 2002, following a request from Papua New Guinea, the Council
adopted a decision, contained in document S/L/104, to re-open the Fourth Protocol to the GATS
relating to basic telecommunications, for acceptance by Papua New Guinea.S/C/W/220
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XIII.  RE-OPENING OF THE FIFTH PROTOCOL FOR ACCEPTANCE
35. At its meeting held on 25 October 2002, following a request from the Republic of Bolivia, the
Council adopted a decision, contained in document S/L/108, to re-open the Fifth Protocol to the
GATS relating to financial services, for acceptance by the Republic of Bolivia.
XIV. COOPERATION BETWEEN THE INTERNATIONAL CIVIL AVIATION
ORGANIZATION (ICAO) AND THE WTO
36. At its meeting held on 4 October 2001, the Council had a discussion based on a previous note
by the Secretariat (JOB(01)/64), containing a le tter from the Secretary-General of ICAO with a
proposal to develop a cooperation agreement betw een ICAO and the WTO; a new Secretariat note
(JOB(01)/199), containing an ICAO paper entitle d "Cooperation between the International Civil
Aviation Organization and the World Trade Organi zation"; and an oral presentation made by a
representative of ICAO.  The Council agreed to revert to this item at a future meeting.
XV. REVIEW OF THE ANNEX ON AIR TRANSPORT SERVICES UNDER
PARAGRAPH 5 OF THE ANNEX
37. The third meeting devoted to the review was held on 9 October 2001.  The Council continued
its discussion based on an oral presentation and an ICAO paper on charges for airports and air
navigation services, contained in document S/C/ W/188; a communication from the United States,
contained in document S/C/W/198; and a communi cation from Brazil on the situation of commercial
air transport in Brazil, contained in document S/C/W/201.  The Council also discussed documents
prepared by the Secretariat, contained in  S/C/W/163/Add.3, S/C/W/163/Add.4, S/C/W/163/Add.5,
S/C/W/163/Add.6 and S/C/W/200.  The report of th e meeting is contained in document S/C/M/57.
The Council agreed to hold a further meeting in March 2002.
38. The fourth meeting devoted to the review was held on 18 March 2002.  The Council pursued
its discussion based on a new Secretariat note , contained in document S/C/W/200/Add.1; and a
communication from Australia, Chile and New Z ealand, contained in document S/C/W/206.  Given
the divergent views concerning the scheduling of a future meeting, the Chair suggested that he hold
informal consultations in this regard.  The report of the meeting is contained in document S/C/M/62.
XVI. APPOINTMENT OF NEW CHAIRPERSON OF THE COUNCIL
39. At its meeting held on 19 March 2002 the Council appointed Ambassador Mary Whelan
(Ireland) as the Chair of the Council for Trade in Services.
XVII.  WORK OF THE SUBSIDIARY BODIES
40. The activities of the subsidiary bodies are reflected in their respective reports, which are
annexed to this report as follows:
Annex I Report of the Committee on Specific Commitments
Annex II Report of the Committee on Trade in Financial Services
Annex III Report of the Working Party on Domestic Regulation
Annex IV Report of the Working Party on GATS Rules
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