RESTRICTEDWORLD TRADE
ORGANIZATIONS/CSC/M/23
24 June 2002
(02-3470)
Committee on Specific Commitments
REPORT OF THE MEETING HELD ON 3 JUNE 2002
Note by the Secretariat1
1. The Committee on Specific Commitments held a meeting on 3 June 2002.  The agenda for the
meeting is contained in WTO/AIR/1802.  No points were raised under Other Business.
A. APPOINTMENT OF THE CHAIRPERSON
2. The Chairperson recalled that according to th e rules of procedure for the Committee, the
hand-over of the chairmanship should have taken place at the end of the previous meeting of the
Committee.  However, the Chairman of the Counc il for Trade in Services had not finalized his
consultations on the chairmanships of the subsidiary bodies in time for the last meeting.  Therefore, it
was decided that the hand-over would take place at  the beginning of the following meeting.  She
proposed that, according to the outcome of the consultations conducted by the Chairman of the
Council, the Committee elect Mr. NIKLAS BERGSTRÖM of Sweden as its Chairperson for 2002 by
acclamation.
3. The Committee so decided.
B. CLASSIFICATION ISSUES
4. The Chairperson recalled that two submissions had been introduced under this agenda item
for consideration by the Committee.  The first one was a proposal by the delegation of Australia
(contained in document S/CSC/W/32 of 11 March 2002) on the classification of legal services. The
second was a proposal by the delegations of MERCOSUR and Bolivia (contained in document
S/CSS/W/108 presented to the Council for Trade in Services in Special Session) on the classificationof postal and courier services.
5. The representative of Australia said that some questions on their proposal had been raised at
the Council for Trade in Services Special Session.  Her delegation's replies would be  finalized shortly
and would be submitted to that forum.  The representative of Argentina, on behalf of MERCOSUR
and Bolivia, invited questions on their proposal on postal services.
6. The representative of the European Communities recalled the proposal submitted by her
delegation on postal and courier services (Job No. 4146, dated 14 July 1999).  Her delegations was
interested in revising the classification of postal and courier services to reflect the current market
realities of the sector.  The EC's proposed approach was flexible enough to enable the scheduling of
commitments in accordance with different domestic regimes and stages of development of Members.Her delegation attached great importance to advancing technical discussions in the CSC.
                                                     
1 This document has been prepared under the Secretariat's own responsibility and without prejudice to
the positions of Members and to their rights and obligations under the WTOS/CSC/M/23
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7. The representative of Brazil expressed interest in discussing classification issues regarding
legal as well as postal services.
8. The representative of Venezuela recalled that at the previous meeting some delegations had
expressed the view that the Committee could play a more active role in increasing transparency in the
negotiations.  It was with that aim that Venezuela wanted to provide some information on theconsultations held with a variety of delegations regarding the classification of energy services.  The
delegations concerned included those of Canada, Chile, the European Communities, Japan, Norway
and the United States.  The discussions had covered key classification-related issues taking a two-step
approach.  First, an analysis of a list of "energy se rvices markets" in order to test which ones could be
the "commercial reality" of the sector.  Second, an attempt to match the list of markets or activities
with CPC provisional codes and descriptions found in W/120.  Those consultations were in progress,
and Venezuela expected that they would help to facilitate the current negotiating process and enhancethe understanding of the types of services supplied in the energy sector and their CPC descriptions.
9. The representative of the European Communities recalled her delegation's proposal on the
classification of environmental services.  The classification discussions in that sector were very
advanced and her delegation felt that it would be useful to try to complete them as soon as possible.
She invited any further questions delegations might have at that stage.
10. The representative of Thailand observed that further classification questions for various
sectors might emerge once the requests had been received by delegations.  She urged all delegations
to be open to addressing such questions in the Committee.  The representative of Australia said that
her delegation intended to use their proposed classification in the formulation of requests.  The
representative of Mexico stressed the importance of addressing classification issues in the CSC.  As of
the end of June, delegations might be discussing requests based on different sectoral classification
approaches.  It was necessary to pay due attention to that matter.
11.  The representative of Hong Kong, China concurred with Thailand regarding the role of the
Committee.  It would be useful to continue discussions on classification issues with a view to
identifying whether there was common ground among the various proposals in a given sector.  Thatwould assist Members in considering how to structure initial offers in a way that would promote as
much as possible a common approach.  He proposed that a compendium of all proposals on
classification issues, including those tabled in the CSC and before the Services Council, be requested
from the Secretariat.  The idea was to have a tool for reference to help comparing the different
approaches that had been suggested and would presumably be used in forthcoming requests for
specific commitments.  He did not envisage any analysis by the Secretariat.  Ensuing discussions by
the Committee would provide the analytical elements that might need to be reflected later on, possiblythrough a revision of that compendium.
12. A representative of the Secretariat responded that such a compendium or synopsis, similar to
that done for negotiating proposals, focusing on classification proposals in each sector could be
prepared relatively soon.
13. The representative of Canada suggested that any such synopsis should include the full range
of classification issues, not only those currently reflected in the negotiating proposals.  A number of
issues had been raised by Canada well in advance of the negotiations, which had not been resolved.
The synopsis could be revised from time to time.  In clarifying the proposal made, the representative
of Hong Kong, China indicated that his suggestion referred to all classification proposals meaning
suggestions on how to classify a sector.   While classification issues might have been raised in the
CSC in the past, they would not all necessarily qualify as a "classification proposal" which contained
specific suggestions.S/CSC/M/23
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14. In supporting the proposal, the representative of Thailand recalled that some of the proposals
previously discussed in the CSC had been presented subsequently in the Services Council.  In such
cases, the latest version should be included in the proposed compendium.  The representative of
Canada added that Members could indicate to the Secretariat their latest proposal in a given sector or
any other document for inclusion in the compendium.
15. The representative of Turkey observed that the discussion seemed to suggest that Members
could request commitments and submit offers based on any classification they preferred.  Since this
might create difficulties in the negotiating process, she sought further clarification.  The representative
of the European Communities felt that the compendium or synopsis suggested and ensuing
discussions could help to clarify Turkey's questions.
16. The representative of Hong Kong, China indicated that the aim of his proposal was to
facilitate technical discussions and enhance Members' understanding of the various classification
proposals for the purpose of scheduling commitments.  The compendium would be a factual reflection
of what had been suggested on classification, either in negotiating proposals or in CSC discussions,
having a bearing on the request and offer process.  On Turkey's question, it was recognized by
Members that the classification to be used in requests, offers or schedules of specific commitments
was an issue for each Member to decide individually.  However, it was also recognized that the use ofa common classification would enhance readability of schedules.  Therefore, it was important to make
efforts to reach common ground on classification issues to prevent an excessive number of variants
from being used.  Any discussion on the basis of the proposed compendium would not prejudge the
use of any type of classification by Members at the end of the process.
17. The representative of Mexico sought clarification as to the scope of the compendium to be
requested from the Secretariat in view of Canada's comments.  He added that the compendium could
also indicate in additional columns the W/120 classification and the CPC rev. 1 classification for the
sector in question, for comparison purposes.  The representative of Switzerland questioned the
usefulness of the proposal of Hong Kong, China and suggested further consultations.
18. The Chairperson said that further clarification of the scope of the compilation proposed by
Hong Kong, China seemed necessary.  He would consult on this matter and suggested to postpone a
decision to the next meeting.  He said that the Committee would take note of the comments made and
revert to this item at the following meeting.
C. MATTERS RELATING TO THE SCHEDULING OF COMMITMENTS:
1. Incorporation of new commitments into Members' schedules
19. The Chairperson recalled the discussion at the previous meeting.  As requested by the
Committee, the Secretariat had circulated a paper, as document S/CSC/W/33 of 3 June 2002, to assist
Members in assessing the options that had been flagged so far.  He invited the Secretariat to introduce
the note.
20. A representative of the Secretariat said that, based on discussions and previous experience,
the Note explored two scenarios without excluding any other possibility that Members might wish to
consider.  For working purposes, the two scenarios had been termed "accumulation" and"replacement".  These terms and others, such as reference to a Sixth Protocol, were used only to
facilitate description, but were not aimed at imposing any particular language upon Members.  The
Note examined each of the two scenarios in relation to a set of relevant considerations namely,
method of incorporation, relationship between new commitments and pre-existing ones, changes in
classification, implications of the new scheduling guidelines, and possibility of any technicalrefinements to pre-existing commitments.  There were two attachments to the paper:  the first gave anS/CSC/M/23
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overview of how commitments had been incorporat ed into schedules since the Uruguay Round; the
second featured the documents containing commitments of Members.  This gave a sense of how the
situation would be if Members decided to follow the accumulation approach.  The paper also
expressed the desirability of an early decision on the approach to be followed to provide an adequate
opportunity to verify and refine the final outcome.  The Chairperson invited views on the paper and
the approaches explored.
21. The representative of Uruguay stressed the importance of aiming at an early decision on this
matter to allow sufficient time for preparation.  He  would be providing comm ents at the following
meeting. The representative of Canada supported a consolidated approach, keeping in mind that
Members should have recourse to the old schedules in case of a dispute. The representative of Brazil
also expressed support for a consolidated approach  from the beginning of the process, i.e. the
submission of initial offers.
22. The representative of Chile felt that this issue seemed to concern form rather than substance.
Past discussions had shown agreement on two main objectives, namely, that new commitments should
not undermine existing ones and that the legal certainty of bound commitments had to be preserved.
In both scenarios described in the paper it was possible to achieve these objectives through explicit
indications in the future protocol.  While the objectives were attainable under both scenarios, Chilepreferred the replacement or consolidated approach for reasons of clarity.  The private sector had
already difficulties in reading GATS commitments which would be compounded by the number of
schedules.  It was important to agree on this matter as soon as possible.
23. The representative of Venezuela said that the paper drew attention to the importance of the
instrument by which the results of the negotiations would be incorporated in the schedules of
Members.  It also explained the possible consequences of changes in classification demystifying in a
way certain problems that had been raised during classification discussions, particularly regarding the
legal certainty of commitments.  The section on classification changes shed some light on issues dealt
with before under agenda item B.  In practice changes in classification seemed possible, regardless of
whether they were agreed by all Members.  Paragraph 31 of the paper mentioned the possibility ofassistance by the Secretariat for developing countries in consolidating or merging existing
commitments.  Attachment 2 of the paper gave an idea of the current – and sometimes complex -
status of commitments for each Member.  Consolidation and replacement was the approach favoured
by her delegation.
24. The representative of Switzerland found the paper very useful as it provided an explanation of
past practices and advantages and disadvantages of the two approaches.  Many of the points made at
the previous meeting were confirmed.  A quick decision on the matter would facilitate the preparationof offers and the following bilateral negotiations by ensuring transparency and coherence.  As to the
method of incorporation, the current negotiations were more challenging given the increasing number
of sectors covered.  It would be more appropriate and practical to proceed according to the
replacement method, where legal certainty and transparency could be ensured.  In drawing up requests
his delegation had realised the complexities of determining current commitments of other Members.He shared the views expressed in paragraph 28 that these negotiations would be an excellent
opportunity to create consolidated schedules with legal value.  The replacement method presented no
problem as to the link between old and new co mmitments.  Each Member should ensure that
commitments found in former schedules were not omitted.  Bilateral discussions would allow to
clarify problems that might arise during the process, which was not possible if the accumulationmethod was to be used.  As to questions of classification, the lengthy discussions in the CSC had
demonstrated the need for any solutions to be flexible.  The replacement method was sufficiently
flexible;  it did not prevent Members from adopting new classifications.  The coexistence of new and
old classifications, as in the accumulation approach,  might create confusion in the future.  It would be
interesting if Members elected to make new commitments on the basis of CPC rev. 1, as opposed toS/CSC/M/23
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provisional CPC.  The current context provided an opportunity for a technical revision of schedules
and it would not be advisable, for the sake of consistency, to have old schedules coexist with new
ones.  The further accumulation of schedules would be at the expense of transparency and legal
certainty.
25. The representative of the European Communities felt that the paper provided a good basis for
the CSC to reflect on the form that the schedules should take at the end of the negotiations and to
arrive at a reasonably early decision.  Her delegation had expressed preference for a consolidated
schedule that would clearly show the position of each Member.
26. The representative of Thailand also favoured the consolidated (or replacement) approach on
the grounds of transparency and legal certainty.  Her delegation had also encountered problems with
the number of schedules for each Member in preparing the requests.  To prevent more confusion in
the future the replacement approach should be fo llowed and the CSC should come to a decision as
soon as possible.  The possible use of CPC rev. 1 instead of the Provisional version, was a separate
issue from that of consolidating schedules.  Although the two versions of CPC had generally similar
coverage, with different numbering, there was not always a perfect correspondence.  The provisional
CPC, for instance, did not seem to classify some services on which her authorities were seeking
commitments, but this did not mean that a change of the whole schedule to CPC rev. 1 was warranted.Such a major change at that stage would be premature.  To preserve legal certainty of Thailand's
commitments her delegation would prefer using the provisional version as much as possible.  That
was not to say that Members would be prevented from using CPC rev.1 where necessary.
27. The representative of Hong Kong, China expressed preference for the replacement approach
which was more convenient.  An early decision on this matter, before submission of offers, would
allow Members to start the preparation, comparison and verification process.  Having the initial offers
include all existing commitments of a Member would greatly facilitate the negotiations.  Members
might need to indicate to the outside world what would be achieved in the current negotiations and a
consolidated schedules would facilitate that as well.  The Secretariat Note, paragraph 8 and 9,
observed that commitments in old schedules could not normally be undermined at the conclusion ofthe current negotiations without recourse to Article XXI.  It was also mentioned that there would need
to be express reference in the Sixth Protocol if a Member intended to provide in the new schedule for
less favourable treatment than the pre-exiting one in its current schedule.  Presumably under the
replacement method the new schedule, once in force, would  replace the old ones that would cease to
exist.  He wondered how a Member would be able to determine or substantiate less favourable
treatment with respect to a commitment contained in the old schedule, if a recourse to dispute
settlement was envisaged under this scenario.  On paragraph 16, the Note stated that "changes brought
about by the new schedule would presumably override the original inscriptions on the same subject"
and a reference was made to the Vienna Convention in that regard.  Given that commitments were
inscribed in a negative manner by listing limitations pursuant to Article XVI and XVII, he wondered
whether the compatibility between the new and old sc hedules would refer to limitations rather than to
what his delegation called commitments.  In a way there were no positive commitments, but ratherlistings of limitations.  How would the limitations in a new schedule override those inscribed in pre-
existing schedules and not be read together?  Classification issues were the most complicated ones in
the discussion of incorporation;  however, he woul d be open to explore further Switzerland's proposal
of using CPC rev.1.  There were two aspects to consid er in that regard:  first, the simple substitution
of CPC codes, assuming that there was exact correspondence between the two versions, and second,there were subsectors where the CPC rev. 1 had introduced substantial changes and switching to it
would require a major review of the schedules.
28. The representative of Colombia preferred the consolidated approach due to its greater
transparency.  The problems involved in changes in classification should be reflected upon further,S/CSC/M/23
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taking into account the proposal made by Colombia and the other Andean countries on classification
criteria.
29. The representative of Mexico said that paragraph 5 of the Note acknowledged the challenges
posed by the multiplicity of documents.  A single document containing all commitments might thus
be preferable.  Regarding the points made in paragraph 8 of the Note, he concurred that thenegotiations under Article XIX had to achieve further liberalization and not the contrary.  The
replacement method would be appropriate provided that existing documents remained available for
any future reference.  In paragraph 17, the Secretariat recognized the importance of W/120.  For legal
certainty it would be necessary to refer to documents that had been accepted on a multilateral basis
and represented some common classification.  Paragraphs 28 and 29 mentioned the possibility that the
Secretariat prepared a draft consolidated schedule for each Member.  He would welcome such
assistance in the process of preparing offers by March 2003.
30. The representative of Turkey supported having consolidated schedules at the end of the
negotiations.  To overcome concerns regarding errors and interpretation problems, all previous
schedule could be annexed to the consolidated ones, retaining their legal status and be available for
use in case of dispute.
31. The representative of China felt that this issue was urgent, as it had a bearing on market
access negotiations.  Her delegation supported the consolidated approach which allowed Members to
better understand the commitments in force and facilitated comparison.  In order to ensure that
original commitments were not undermined in the consolidation process, bound commitments in pre-
existing schedules should remain legally valid.
32. The representative of Korea felt that the issue should be resolved as soon as possible so that
Members could prepare initial offers in an orderly manner.  In the case of accumulation, some
technical difficulties could arise in sectors such as environment and energy, which might need
classification changes.  Most Members seemed to prefer the consolidated approach, which his
delegation  also supported.
33. The representative of Chinese Taipei said that his delegation favoured a consolidated
approach incorporating old and new commitments.  The more transparent and coherent the way
commitments were scheduled, the better for faithful implementation.  The representative of Thailand
wondered whether a new CD-ROM had been prepared that include recent accessions.  Arepresentative of the Secretariat said that no up-dates had been made.
34. The representative of  Peru expressed support for a consolidated schedule.  Paragraph 21 of
the Note discussed how proposed changes to schedules of commitments could be identified, which
was one of the most important points for discussion.  He shared the view expressed in paragraph 32regarding the relationship between old and new schedules in that the former would constitute proper
sources for future interpretation.
35. The representative of Australia noted that virtually all delegations that had spoken in this and
the previous meeting had expressed support for a consolidated schedule.  In the March meeting,
however, one delegation had expressed some doubts as to whether the offers should be presented onthe basis of a consolidated schedule.  She encouraged Members to take a decision as soon as possible
to enhance predictability and give a signal for the preparation of offers.
36. The representative of Senegal also supported a consolidated approach.  There were some legal
issues to consider in order to prevent uncertainties in the process.  Paragraph 31 of the Note referred
to technical assistance by the Secretariat in carrying out the consolidation of commitments, which wasessential and should be provided.S/CSC/M/23
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37. In summing up, the Chairperson observed that all statements made supported the consolidated
approach and called for an early decision.  He suggested to continue the discussion informally in
advance of the July formal meeting.
38. The Committee so agreed.
2. Approaches to the scheduling of additional commitments under Article XVIII of the
GATS
39. The Chairperson recalled that at the previous meeting discussion of this item had focused on
clarifying aims and procedural aspects.  In that context a Note had been requested from the
Secretariat, which would be issued before the next formal meeting.
40.  The representative of Japan expressed interest in discussing additional commitments, which
had the potential to promote the liberalization of trade in services.  It was helpful to look at the
commitments that had been made under Article XVIII as well as the elements that had been suggestedby Hong Kong, China in preparation for the offer stage.
D. DATE OF NEXT MEETING
41. The Chairperson proposed that, in accordance with the practice of grouping meetings of
subsidiary bodies close to meetings of the Council, the next meeting be held during the week before
the next formal meeting in July of the Council for Trade in Services.
42. The Committee so agreed.
E. OTHER BUSINESS
43. No points were raised under other business.
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