RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/S/M/9 
5 February 2004 
 
 (04-0410) 
Council for Trade in Services 
Special Session  
 
 
 
REPORT OF THE MEETING H ELD ON 6 AND 9 OCTOBER 2003 
 
Note by the Secretariat1 
 
 
1. The Special Session of the Council for Trade in Services held a formal meeting on 6 and 
9 October 2003.  The agenda for the meeting, ch aired by Ambassador Alejandro Jara of Chile, is 
contained in document WTO/AIR/2182. 
2. The Chair  drew the Council's attention to the record of the last meeting contained in 
document TN/S/M/8.  He proposed that the agenda be adopted. 
3. It was so agreed .  
4. The Chair  wished to make a few comments regarding the overall situation.  He said that the 
Ministerial Conference had not resulted in the work th at had been expected.  They had instructed their 
officials in Geneva to continue work under the l eadership of the Chairman of the General Council.  
The General Council was to meet by 15 December to take whatever action necessary.  It was his view 
that the work of the Council, at least for the time being, could be pursued without influencing the 
work of the General Council.  He said that at th e appropriate time and in the appropriate context a 
further assessment of this situation might be made.   
A. ASSESSMENT  OF TRADE  IN SERVICES 
5. The Chair  recalled that at the last meeting the Council had held a discussion based on, among 
others, an extensive statement from the delegation of Malaysia pertai ning to its experience with the 
liberalization of financial services contained in docum ent TN/S/W/17.  He further recalled that it had 
been agreed that he would hold informal consultatio ns on the Assessment in order to better structure 
and focus work on this item.  He regretted that the busy summer schedule had not afforded him an 
opportunity to conduct these consultations; however, he informed the Council that consultations 
would be held in the coming days.  He invited dele gations' views in this regard and stated that he 
would seek some colleagues' opinions as well.  He further recalled that the Council had agreed to 
invite the OECD to make a presentation on a recen t study entitled "Services Trade Liberalization:  
Identifying Opportunities and Gains:  Key Findings".  He said that the Council was privileged to have 
the authors present their valuable work.  He inv ited the representatives of the OECD to make their 
presentation. 
6. A representative of the Organisation for Economic Cooperation and Development  (OECD) 
thanked Members for the opportunity to present the OECD study.  She said that the study was 
comprised of two main parts:  concrete exampl es of services exports by developing countries and a 
look at the recent work at quantifying the gains from se rvices liberalization.  With regard to concrete 
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. TN/S/M/9 
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 examples, she said that the study's research methodology had used the internet and a survey as tools.  
She acknowledged that internet-based research could in troduce a small bias in the sample in the sense 
that data was based on those companies that were in ternet aware.  In terms of the survey, a number 
had been sent to international business organisatio ns and countries and she thanked in particular 
Argentina, Colombia and Japan for the quality of  responses received from their companies.  With 
respect to the second part of the study on quantifying services gains, she said it looked at the 
reliability of these numbers and questions of methodol ogy.  She said the full study would be available 
the following month and that a policy brief had been  prepared for the Fifth Ministerial Conference.  
She hoped that the study would be useful to Member s in assessing their interests in trade in services, 
both in the context of the negotiations and domestic economic reform.   
7. A representative of the OECD said that the pr esentation would endeavour to answer briefly a 
number of questions.  What was the importance of  services in the world economy and in trade?  
Which sectors had offered export success?  What were the pattern/directions for trade in services? To 
what extent was export capacity by developi ng countries enhanced by a well-developed domestic 
market?  What were the variations on the pattern  of domestic-regional-global trade in services?  She 
recalled that services made up a major and grow ing proportion of the world economy:  in 2000 the 
value of services production was estimated at US$1.4 trillion.  Services made a major contribution to 
GDP in both developed and developing countries, for example the ratio of services to GDP ranged 
from some 39 per cent in Nigeria to 89 per cent in Hong Kong, China.  For least-developed countries, 
this range was from 10 to 50 per cent.  While the majority of trade in services took place among developed countries, it was nonetheless important for developing countries.  In terms of what and 
where developing countries were exporting, she said that, while trade in services was dominated by a 
few major partners, the study had found examples of  services exports by a large range of developing 
countries.  The sectors that had met with the mo st success were:  port services (especially the 
development of regional hubs), construction services (in particular China, but also Lebanon, Korea, 
Turkey, Brazil and Chinese Taipei), heath services (not only in modes 2 and 4, but also mode 3), 
audio-visual services (film and television in Latin America; companies that used their experience to 
enter new high technology areas) and tourism.  One of the patterns which had emerged from the study 
was a clear comparative advantage for many deve loping countries in labour-intensive services, 
especially data processing, research and deve lopment and consulting services.  While GATS 
classification tended to separate sectors, comp anies instead bundled services across a number of 
sectors.  Areas of real growth included comput er and related services, outsourcing and back-office 
services in a number of GATS sectors.  In terms of the direction of trade, she said that trade tended to 
generate among neighbouring countries, incl uding other developing countries.  In 
telecommunications, there were a number of larg e companies that exported primarily to their 
neighbours in a region.  For example audio-visu al services in Egypt had spawned trade in media 
production across the Middle East.  This was true not only of large companies but also for smaller 
niche business support and consulting services.  Sh e cited two examples from Colombia and Senegal 
which serviced companies throughout their respectiv e regions.  In some sectors the study found that 
regional markets were used as a stepping stone to  global markets.  This included construction 
companies in the Middle East that then exporte d to the United States and Japan; the television 
industry in Latin America; and port and related services provided by companies from south and south-
east Asia operating ports elsewhere.  Turning to the key patterns that had emerged from the study, she 
referred to the importance of a strong domestic ma rket to serve as a springboard, for instance in 
telecommunications, audio-visual, retail, port and higher education services.  She said the study had 
observed a few other patterns:  countries with a common language tended to have a higher level of 
reciprocal trade;  niche opportunities existed wh ere historical, geographical and cultural elements 
aligned to provide a good package; diaspora populations  started trade; and cultural, historical and at 
times former colonial links that facilitated tr ade and access to capital.  Two additional patterns 
observed were the link between increased imports leading to increased exports in financial and 
professional services (where imports led to expor ts to investor and third countries), and the  TN/S/M/9 
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 importance of twining arrangements (such as in  the case between Malaysian and Australian 
universities) which could lead to increased exports.   
8. Part Two of the study, the representative of the OECD said, sought to look at the problems 
confronted by developing countries services exporters , at some of the work on quantification, the 
barriers that existed, why it was important for count ries to liberalise services trade, what were the 
possible gains, how did countries manage the transiti on to an open regime and what types of future 
work might be pursued.  She said that some of th e problems associated with these patterns had been 
observed among a few exporters from developing countries in energy and environmental services.  
Some of the reasons surmised for these patterns in cluded the high fixed costs for entering the market, 
the presence of large global players and the lack of  an overall regulatory framework.  In sectors in 
which developing countries exporte d, some of the problems cited included the lack of access to 
finance for exporter business development, the diff iculty in establishing credit with international 
suppliers (particular in high-technology areas), th e lack of access to reliable and affordable 
infrastructure, and the lack of access to a range of formal and informal networks necessary to trade.  
In addition to examining the particular situation of developing countries as exporters of services, the 
study considered a microeconomic approach and as ked why it was beneficial for developing countries 
to liberalise.  The study found that restrictions on trade imposed costs, liberalization implied potentially large gains for those with high barriers (and developing countries with the highest barriers 
stood to gain the most), most gains arose from liberalization of the domestic market and not from improved market access abroad (b ecause reform made the business environment more competitive 
and efficient), and gains from liberalization were f ound to exceed that for goods by up to a factor of 
five.  With respect to the estimated size of barrier s, she said that the study had looked at those in 
telecommunications, financial, maritime and profes sional services in selected countries, and it had 
found that the differences in barriers between deve loped and developing countries was more prevalent 
between the first two sectors than the last two sector s.  She said that the potential spin-off gains from 
telecommunications and financial services were potentia lly higher given their infrastructural nature.  
Citing a few studies (that used computable genera l equilibrium analysis) on the potential gains from 
liberalization, she said that estimated welf are increases ranged from US$133 billion to US$414 
billion, depending on the methods and assumptions made.  In genera l, the study found that higher 
welfare gains were obtained when capital mobility a nd FDI were explicitly modelled and an imperfect 
setting was acknowledged.  Ho wever, welfare loses were observed in some cases:  for example where 
the removal of restrictions on foreign investment di verted capital to countries that previously had high 
barriers to investment; where barriers to entry whic h had previously generate d rents to owners of 
foreign capital were eroded under conditions of compe tition; and terms-of-trade effects.  The study 
also found that the movement of service-supplyi ng personnel was a crucial means of services 
delivery.  Econometric studies she said found simila r results to those using a computable general 
equilibrium analysis.   
9. The representative of the OECD said that, si nce it was known that short and medium run 
gains could be negatively affected by adjustment costs related to the removal of barriers and re-
regulation, the question of how to manage the transition to an open regime needed to be asked.  She said that for many developing countries the crea tion of appropriate regulatory frameworks and the 
ability to enforce them required significant and cost ly capacity building.  Adjustment following trade 
liberalization, while challenging, could be fac ilitated by the adoption of appropriate policy 
frameworks.  Indeed, there was ev idence that adjustment costs coul d be lower for trade in services 
than for manufacturing.  Attention needed to be given to the nature, pace and sequencing of 
liberalization, which was reflected in the GATS itsel f.  She said that the study had identified a number 
of areas for future quantification of trade in ser vices on which she sought delegations' views.  She 
thought that some of these areas might include e ffective rate of protection (how protection in 
inefficient areas affected the rate of protection), the removal of rent-creating and cost-escalating 
barriers (the extent to which gains varied dependi ng on the type of barrier), the distortion of modal 
choice (where restrictions created incentives to supply services via some modes over others), market TN/S/M/9 
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 access measures versus national treatment measures (in terms of their impact), international and intra-
national redistribution and income effects (the af fect on national income of increased efficiency 
arising from lower prices for nationally-pro duced services), and possible second round and 
microeconomic adjustment effects.  
10. The Chair
 thanked the representatives of the OECD  for their thought-provoking presentation 
on services liberalization.  The representatives of Japan , Pakistan , Korea , India , Brazil , Argentina , 
Australia , China , New Zealand , United States , Switzerland , Indonesia  and Bangladesh  also expressed 
their gratitude for the presentation.   
11. The representative of Japan , noting the importance of the study, said that his delegation 
understood the necessity of an evaluation of trade in  services based on examples and quantitative data.  
Japan, together with the United States, had proposed  the study in the Trade Committee of the OECD.  
Regarding specific cases of services exports by devel oping countries, he noted that one important 
point among others raised in the paper related to out sourcing.  He noted that the report described the 
importance of outsourcing for developing countries.  The report explained that the development of 
electronic commerce facilitated outsourcing from developing countries to developed countries and 
created growth business opportunities for developing countries.  He said that Japan was promoting 
such services exports by developing countries through expanded liberalization in telecommunications and computer related services.  Since liberalization of such services was an example of liberalization benefiting both developing and de veloped countries without encouraging major social cost, Japan 
hoped that many Members would demonstrate interest  in such liberalization in the current round.  
Japan believed that the quantitative evaluation in the OECD study demonstrated several important 
points, for instance that developing countries with  a high level of barriers would benefit greatly from 
services trade liberalization, Members would benefit more from liberalization in their home market 
than through liberalization in others' markets, a nd competition in the market was important for the 
distribution of benefits arising from liberaliza tion.  He hoped that the Members which had not 
submitted their initial offer would take into account th e outcome of the study's analysis and promptly 
submit offers proposing substantive liberaliza tion and work with services negotiations in a 
constructive manner.   
12. The representative of Pakistan
 said that the paper was comprehensive and he was pleased to 
hear that the OECD Secretariat was preparing a more detailed version.  He also thanked Japan and the United States for their support of this work of the OECD Secretariat.  He said Pakistan had always 
believed in informed decision-making and felt that  the assessment of trade in services as an ongoing 
exercise would facilitate informed decision-making.  On the question of the submission of offers, he 
agreed with the comments made by Japan in this rega rd, but noted that one of the practical difficulties 
faced by developing countries was inadequate knowledge and capacity for engaging in a more 
constructive manner in the services negotiations.  He believed that this exercise and documents such 
as the one under discussion helped to better inform  Members about the market access negotiations.  
He said that the paper's key findings drew some conclusions that he thought would have been more 
relevant for this exercise if it had been supplemen ted with more statistics and examples, particularly 
with regard to Part 2, and he said that he l ooked forward to the more detailed, final version. 
13. Turning to a few questions, the representative of Pakistan, referring to Part 2 paragraph 13 
and the finding that developed countries with histor ical and colonial links could represent a source of 
capital and credibility for exporters from developing c ountries,  he asked that the authors elaborate on 
this link.  With regard to paragraph 14 and refe rences to "include ever ything from a sound domestic 
legal environment", he sought some clarificati on as to what the authors saw as a sound legal 
environment.  He wondered whethe r a contrast between a sound and unsound legal environment could 
be subjective.  On paragraph 15 and the finding that  "services remains a relatively small part of their 
trade compared with exports in manufacturing and agriculture", he sought to know why it was that 
services trade was a relatively small part of developing  countries' trade.   He thought answers to this  TN/S/M/9 
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 question would help augment services trade.  On paragraph 19 which found that "most studies 
indicate that services liberalisation is likely to imply potentially large gains for countries with high initial trade barriers", he asked as to whether this meant that countries with more trade barriers would 
have higher gains and what the finding implied.  He sought clarification on the reference in 
paragraph 20 to a factor of five.  Referring to pa ragraph 23, the second sentence's finding that "large 
effects in these models results need not come from liberalisation of service trade per se  but from the 
assumed accompanying liberalisation of factor market s", he asked for elaboration since generally it 
was felt that liberalization was good for national economies, but the finding seemed to imply that this process was not stand-alone but needed to be accompan ied by the liberalization of factor markets.   
With respect to paragraphs 29 and 30, he recalled  the questions contained in joint submission dated 
October 2001 (S/CSS/W/114) and he thought that it mi ght be pertinent for the OECD to have a look 
at this submission that could perhaps be take n into account in the detailed final study.   
14. The representative of Korea
 thought that the study demonstrated the importance of the 
services sector to developing countries as a potentia l source of economic deve lopment and exports.   
Seeking to highlight a few of the paper's findings , he said that it emphasised that a strong domestic 
marketplace played a key role as a platform for developing export capacity.  He said that the 
liberalization of Korea's services industries had help ed it overcome the financ ial crisis of 1997.  
Liberalization had progressed in maritime, tel ecommunications, financial, distribution, and 
construction services, most of which were infrastru ctural services to the domestic market including 
for manufacturing.  He felt it important to make liberalization an ongoing process and maintain a 
competitive market environment by removing barri ers that prevented new domestic and foreign 
entrants.   Korea had made a substantial effort in  its initial offer to reflect autonomous liberalization 
undertaken since 1997 and to introduce new sectors.  He said that Korea's offer was comprehensive 
and of high quality and that Korea had undertaken a difficult domestic process in preparing it.  He 
encouraged the OECD Secretariat to continue work  which could demonstrate to developing countries 
how services liberalization would enhance the comp etitiveness of relevant industries, since many 
were in many cases reluctant to lib eralise services sectors because of their vulnerability.  Citing a case 
in point, he said that there had been severe resist ance to open distribution services in his country in 
1996, but that the result had been a competitive in dustry that had successfully moved into foreign 
markets.  He welcomed further wo rk from international organisations that would demonstrate the real 
life consequences of services trade.   
15. The representative of India , offering a few observations, said that the question of outsourcing 
had been rightly highlight ed in the paper.  While it was an ar ea of increasing interest to developing 
countries, he said that there had been some adve rse reactions to outsourcing, in as much as the 
question had been raised as to whether it displaced do mestic labour.  In light of this, he asked if the 
study had looked at existing or emerging barrier s, and whether these activities had been bound as 
commitments or remained unbound.  Referring to th e many examples in Part 1 and the large number 
of the success stories in the computer and relate d services under mode 1 and some under mode 3, he 
asked as to why it was that services exports remain ed relatively low for developing countries.  Could 
it be that some of the sectors concerned had undergon e more liberalization than in other sectors?  On 
issue of mode 4, he requested more detail in terms of assessment of mode 4 and whether there were similar success stories.     
16. The representative of Brazil
 requested a copy of the presentation materials.  Referring to 
paragraph 14, he noted that the paper indicated a se t of elements that might restrain the ability of 
developing countries to supply servi ces.  He found it interesting that the issue of market access was 
less of a problem in comparison to infrastructure prob lems that impacted the supply side issues.  He 
asked whether this finding was related to the meth odology used.  He said that in Brazil's domestic 
consultations, many had cited that the barriers to service supply were in fact related to market access 
opportunities.  Citing a finding in paragraph 25 on mode  4, he thought that an internal regulation 
establishing a minimum salary did not preclude the po ssibility that more supply would be welcomed.  TN/S/M/9 
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 He enquired as to the relationship between this limit ation and difficulties for developing countries to 
supply services through mode 4.  Referring to paragr aph 30 and areas for further analysis, he noted 
that subsidies appeared to not have been mentioned and he requested clarification in this regard.  He 
asked if any work had been done on subsidies and said he would welcome a presentation on it if this 
were the case.   
17. The representative of Argentina
 said that he had found Part One interesting as it was 
particularly novel.  On methodology, he had the impression that different methodologies had been 
used in order to assess export possibilities and benefits of imports by developing countries 
respectively.  He inquired as to why two different methodologies had been used:  examples in the first and models in the second.  Making a few comments on future work, he said that computerised models 
were being used in Argentina to tr y and assess trade.  It was true that the most benefit occurred with 
liberalization of trade in services.  It was not clear whether the benefits arose from the opening of markets or the opening of exports.  Argentina's prelim inary results showed that one of the effects of 
opening services markets was that it strengthened exports to other countries.  In this regard he thought 
that it was important to establish a link between th e negotiations in services and other negotiations.  
Liberalization would strengthen the exporter's position and was therefore related to benefits in other 
negotiations.  With respect to paragraph 30, he sa id that he would like to know the effects of 
liberalization on income distribution at a national level, as well as effects arising from asymmetric liberalization between the different modes of supply.  He noted that the lists of existing commitments 
saw a higher level of commitments in mode 3 than in mode 4 and he wondered if this asymmetry had 
an effect on developed countries and developing countries.  
18. The representative of Australia
 thought that identifying the benefits and gains of services 
liberalization was an important part of the OECD's work programme.  He thought the paper 
highlighted in a succinct and balanced manne r the key findings and developments on the 
quantification of gains in services liberalization.  Firs tly, he also said that what had struck him about 
the case studies was the number of firms from devel oping countries that were exporting to services to 
other developing countries.  This highlighted in hi s view the dimension of south-south trade services 
liberalization.  He referred to the most recent WT O Trade Report which noted that south-south trade 
was the fastest growing area of world trade, to wh ich both goods and services contributed.  He was 
pleased to see a reference in the OECD study to th e need for more research on south-south trade and 
he saw this as an area of priority for the benef it of the negotiations.  Secondly, he noted the finding 
that highlighted the benefits of unilateral liberalization.  It indicated that the greatest gain accrued 
from a Member liberalising its own domestic market since this lowered costs and stimulated greater 
productivity and competition.  Thirdly, he referred  to paragraph 15 and the finding that, for a number 
of developing countries, services remained a small portion of trade in comparison to exports in manufacturing and agriculture and he noted that th e services negotiations was only one part of the 
single undertaking.  He thought that this paragr aph highlighted the importance and urgency that 
Members should attach to reengaging quickly in the light of the setback of Cancun and reviving trade 
talks across the Doha Round and in particular in ma nufacturing and agriculture so that steps could be 
taken towards reaching the benefits of the Round.  
19. The representative of China
 said that the paper had identified a number of sectors of interest 
to China which corresponded to conclusions drawn by  her authorities, namely that there were few 
areas of great export interest or possibilities in tr ade in services, and that , as the OECD study had 
shown, China did have opportunities in areas such as construction, health, shipping and education 
services.  She said that in all these sectors the temporary movement of natural persons was an important element, since, for all these areas, pers onnel was highly qualified to perform their functions.  
However, they had met obstacles in entering important  markets, particular in terms of the recognition 
of their qualifications or experience, visa requirements, and unnecessarily high language 
requirements.  She hoped that the current round of  negotiations would provide services suppliers 
market access on paper and in effect.  She stated  that in China's accession process her country had  TN/S/M/9 
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 provided its major trading partners with extensive and deep commitments in services sectors in areas 
of their interest.  She expected that they woul d accommodate her delegations modest requests when 
compared to those imposed in accession.    
20. The representative of New Zealand  said that she was glad to see productive work continuing 
in the Council, and sought to reinforce the need fo r reengagement across a range of issues.  She said 
her delegation would save its substantive comments until after the publication by the OECD of the 
full report.  Making a few preliminary comments, she said that the report was an excellent analysis of 
the benefits and challenges facing Members in libera lising their trade in services.  She thought that  
the future work programme indicated by the OECD pointed in useful directions and she sought to 
highlight three of these areas, namely, south-sout h trade, the distortion of modal choice due to 
existing barriers, and international and intra-national redistribution and income distribution effects.  
On a procedural note, she said it would be useful if  representatives could be available at a subsequent 
meeting once delegations had had a chance to analy se the full report so that they might put more 
questions.   
21. The representative of the United States  looked forward to some of the answers in response to 
the questions that had been posed.  She noted th at some of the questions raised in document 
S/CSS/W/114 addressed whether the GATS had played a part in economic grow th, had brought about 
employment, and whether developing countries' eco nomies had become more diverse because of the 
GATS.  She considered that a main message of th e OECD paper was that the structure of the GATS 
allowed Members to respond in a manner that would address these concerns.  She said that many of 
the answers to the questions might be inherent to  trading partners themselves since the nature of 
services required market opening and reducing barrier s in the importing country.  She said that the 
OECD and other studies suggested that services were linked to other domestic areas, could stand alone or be included in the trade of goods.  She lo ok forward to more discussion on the benefits of 
increased exports and imports for developing countries.     
22. The representative of Switzerland
 said that the paper and presentation demonstrated that the 
overall economic and trade perform ance, both for developed countries and developing countries, was 
dependent on the efficiency and availability of comp etitive services sectors.  He looked forward to the 
revised version of the paper.  His delegation w as of the view that the agenda item under discussion 
was important and he was pleased that the presentation made could enrich the assessment by bringing new facts and findings to the table in accordance wi th paragraph 14 of the negotiating guidelines.  He 
said that several points in the presentation he thought c ould be of benefit to all Members.  He said that 
the paper contained numerous examples that he h oped would help developing countries to identify 
their interests and to demonstrate that there were mu ltiple ways of benefiting from trade liberalization.  
Like others, he recognised that there were ch allenges; however it appeared that important 
opportunities for all Members existed.  He thought th is to be a fundamental fact of the on-going 
negotiation process, and should encourage Members to dr aft substantial offers as soon as possible.  He 
sought to reserve the right to revert to the revi sed version of the paper at a later stage.   
23. The representative of Indonesia
 said that he agreed with some of the questions raised by 
Pakistan and asked about the difficulties faced by  developing countries in conducting assessments.   
Making reference to paragraph 14 of the study on the lack of access to financing for export or business development in  developing countries, he asked about other analytical work which might 
have been conducted by the OECD regarding worst practices which had occurred in some developing 
countries, for instance in the financial services sector  in Asia.  He pointed to the best practices that 
had occurred in some countries such as India and Malaysia, and he sought to know more about the 
negative impact of liberalization taken by certain Members, particularly in some ASEAN members in 1997.   He also enquired about the reasons and rati onale behind the findings outlined in paragraph 13 
regarding historical and colonial links, since it a ppeared to him that some countries had known more 
positive experiences than others.  He also asked about  the challenges encountered by some developing TN/S/M/9 
Page 8  
 
 countries in making a comprehensive assessment of so me sectors.  Alluding to the request from Japan 
for Members to table offers as quickly as possible,  he said that Indonesia had faced difficulties in 
conducting its assessment and in predicting the impact  of liberalization in various sectors.     
24. The representative of Bangladesh
 said that the study had touched upon some of the benefits 
possible in several sectors of importance to developing countries.  He wished to know if any study 
had been conducted on the benefits  arising from mode 4, particularly the movement of semi-skilled 
and skilled persons to de veloped countries.   
25. The representative of the OECD , responding to the comments on paragraph 15 on why 
services captured a small part of trade, she said th at one reason could be that services liberalization 
had started relatively late and was at a comparatively earlier stage to the liberalization of merchandise 
trade.  She also felt that services liberalization re quired the adoption of the appropriate policies, which 
might only partly be in place.  Citing India as an ex ample, she said that it had identified IT services as 
a priority and had adopted policies favouring growth and exports in this sector.  With respect to 
paragraph 19 and the question as to why those Memb ers with higher barriers would benefit the most 
from services liberalization, she said that it was li kely that these countries had the highest cost-
escalating barriers, which, she recalled, were tho se barriers which produced rents for producers but 
also created inefficiencies in the production of the services.  Because services were often intermediate 
inputs to other services and goods, inefficiencies at th e beginning of the chain of production were then 
passed on.  On paragraph 20 regarding the gains fro m services liberalization as five times higher than 
those of goods liberalization, she clarified that these ga ins were estimated to be five times larger in the 
case of services.  On paragraph 23 and the reference to the liberalization of factor markets, she said 
that computable general equilibrium models did no t speak to why factor market liberalization was 
necessary and why it was not sufficient to simply seek  better market access abroad.  An answer could 
come from theoretical literature and econometric stud ies.  On the former, endogenous growth and new 
trade theory identified the dynamic advantages stemming from increases in productivity and growth 
realised through technology transfers, efficiency, and greater variety offered and improved quality of 
services.  An important channel of dynamic gain s was the improved productivity in downstream 
sectors due to the enhanced access to broader variety, factor quality and lower cost of the input.  On the other hand, she said that an endogenous growth model suggested that, due to a distinctive feature 
of services and the fact that they helped to make factors of production more mobile, growth stemming 
from trade in services would be enhanced if the c ountry liberalising had a comparative disadvantage 
in that particular sector.  Thus the mobility of the factors of production implied liberalization 
measures that affected residents and non-reside nts without distinction and this altered the 
contestability of the market and its growth potential.   Turning to the econometric evidence, she said 
that a paper examining the maritime sector had look ed at the effect of liberalization under different 
degrees of competition.  The paper drew the conclu sion that the highest effects were to be found 
where the degree of competition was highest.  Simila r evidence could be found in other sectors, such 
as in financial services.  Referring to the question on paragraph 14 as to why greater market access 
seemed not to have been a factor to growth, she sai d that there was a strong bias in the evidence used 
in so far as only two sources of information were available, namely internet  searching and the surveys 
sent to contacts, and therefore, there was in both cases a process of self-selection at play.   She said 
that the responses to the survey had pointed to  the market access problems referred to by the 
representative of Brazil, such as establishing good reputation, barriers such as language and the 
limited possibility to export.  Turning to the ques tions regarding the link with former colonies, she 
said that that basis for this finding was a network of  informal relationships that could help to locate 
capital and overcome practical problems that hind ered exports.  She said that because capital was 
often concentrated in developed countries, devel oping countries with historical links found capital 
with greater facility in the country to which it had li nks.  The study also found that there often existed 
a similar legal and regulatory framework which facilitated business.   TN/S/M/9 
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 26. Turning to the question regarding the limited scope of the study, a representative of the 
OECD stated that the study had originally intende d to only identify concrete examples of developing 
countries services exports meant to complement an earlier study entitled "Open Services Markets Matter" which presented the macroeconomic picture of gains.  The current study had sought to 
supplement this with information at the microec onomic level to see where there were exports.  For 
this reason many of the points raised were not touched upon because of the limited scope of the  
study.  She endorsed the comment that there was a self-selection in the research, especially on the 
question of market access barriers, since those who responded to the survey and those on the internet 
were those already exporting.  As with all problems in market access, the fi gures appeared to be low 
because trade was prevented.  With regard to subs idies, she said that the paper touched upon these 
when addressing large companies and dominance in  certain sectors, although she said it was not an 
area in which detailed work had been done.  She sai d that colleagues at the OECD were working on 
subsidies in environmental goods, as was UNCTAD in other areas.   In terms of the two 
methodologies used, she said that two separate pr oposals had been pursued, the first on concrete 
examples of developing countries case studies and th e second on quantitative work.  She agreed with 
the comments by Argentina on looking at imports on an equally concrete fashion, especially 
examining the relationship between regulatory re form for services imports and the on-going 
relationship to exports.  In terms of  the reference to colonial links, she clarified that it was in no way 
intended as a comment on the benefits and costs of this  history, but rather was meant to highlight the 
importance of people-to-people links in services, esp ecially with regard to familiarity, access to credit, 
and links to larger international partners, which was an important element for some smaller services 
suppliers in spring-boarding into exports.  She not ed in passing a similar phenomenon at work in the 
context of mutual recognition agreements, where the pattern of common education and linguistic 
tradition could be significant.  On the question rega rding "sound legal environment" she agreed that 
this could be subject to different interpretations.  She said that this term referred to responses in the 
survey that included property rights, company law, transparent and efficient regulation, and 
incorporation in different jurisdictions, partially because of a preference in the legal environment and 
partially to generate confidence in foreign clients.   In responding to the questions as to why services 
represented such a small part of trade, she said that, although the paper only touched upon areas which 
could be the subject of further research, possibl e explanations included technology gaps, market 
access gaps, limited access to capital, problems with domestic markets that did not provide an adequate springboard, and perception problems that ma de a first success difficult.  In addition, she 
said that a number of suppliers had pointed to di fficulties such as the lack of cheap and reliable 
infrastructure with respect to energy provision and computer links.  She said that a lack of ancillary 
input services in home markets meant having to outs ource to competitors overseas.  On the point 
about outsourcing, she recalled that the paper pointed  to modern and efficient telecommunications and 
mode 1 market access were necessary for these types of activities.  She endo rsed the comment from 
India that many complicated questions in this re gard were being raised and she thought that there 
would be further policy debate on the issue in the months ahead.  Regarding the questions on mode 4 
she said that a study on the economic impact of mode 4 workers was available on the OECD web-site.  She said that not a great deal of quantitative work had been done on mode 4 due to difficulties with statistics in this regard.  She recalled that ther e were two international initiatives to improve this 
situation:  one under the UN that sought to im prove migration statistics and another by the 
International Monetary Fund which looked at the defi nition of residents and the value of trade.  She 
agreed with the point from Brazil regarding wage pa rity, and she said that it would be developed in 
the longer study on the work undertaken to quan tify mode 4 on the assumption of wage adjustment 
which might not always be realistic.  She agreed that  cost was not the only factor in mode 4 trade.  
She said that the paper had reduced its focus on mode  4 trade in order to focus on other, less obvious 
examples of developing countries services exports.  She also took the opportunity to announce the 
content and the purpose of a seminar on trade and mi gration organised by the OECD, the International 
Organisation for Migration and the World Ba nk in Geneva from 12 – 14 November.     TN/S/M/9 
Page 10  
 
 27. On behalf of the Council, the Chair
 thanked the representatives of the OECD for their 
thoughtful and interesting presentation.  He thought that there had been a good exchange of questions, 
answers and comments, and was a good substantive contribution to the Council's work under this 
item.   
28. Turning to the second presentation under this item,  the Chair recalled that at the meeting in 
July the representative of Canada had informed the Council that the Government of Canada had made 
a financial contribution to the International Trade Ce ntre in favour of a pilot project aimed at assisting 
a limited number of developing countries with their national assessments of trade in services.  A number of Members had expressed interest in learni ng more about this programme and the suggestion 
had been made that the Council invite a representa tive of the ITC to present this programme.  On 
behalf of the Council he welcomed and tha nked the two representatives of the ITC.   
29. A representative of the International Trade Centre
 thanked the Council for the opportunity to 
make the presentation.  He recalled the importance of services trade and said that the ITC had focussed on this areas in recent years.  He said that it  was the intention of the ITC to continue to shift 
resources to this area.  A second representative of the ITC sought to look at some of the challenges 
that specifically related to GATS inputs from developi ng countries.  She said that her objective was to 
describe the project undertaken with the Government  of Canada to promote fuller participation of 
developing countries in the GATS.    She said that  developing countries had difficulty in obtaining 
private sector input and feedback due to a lack of awareness about the GATS and the request-offer 
process.  She thought it might be helpful to first say a few words about the ITC's technical assistance 
programme in general.  She said that the ITC had put together a six phase technical assistance 
programme that was usually delivered to a cluster of countries at a time.  The six steps were:  (1) 
conduct an assessment of the services in each of th e countries to ascertain the state of the sector 
including through industry contacts; (2) establish lo cal champions that acted as interlocutors to 
companies; (3) create a web portal to connect the countries so that individuals and companies could 
have a web presence and facilitate cross-border links; (4) deliver training to government, trade support 
institutions (for example, Chambers of Comme rce and sector associations) and enterprises who 
benefited from information provided on how to im prove their export posture through marketing, 
effective networking, business implications of th e GATS, meetings to obtain feed-back from private 
sector actors, and training techniques; (5) organise regional networking meetings for associations so 
that they could enter into friendship agreements  that operated over borders in order to foster 
cooperation on, among others, bidding for contract s, legal advice and accounting services; (6) work 
with the government to develop an action plan th at sought to frame service s exports in a national 
export strategy and helped train those involved in trad e policy formulation.  She said that after the six 
days of training, the ITC invited one champion fro m each country to participate in a world services 
network that was being established.  She said that 12 members would come together for the first time 
later in the year and each year new countries would be  added to the project.  This would allow the ITC 
to monitor the effects of the training and increases in  trade in services.  Based on the experience to 
date, she said that the ITC had discussed ways in  which developing countries' participation in the 
GATS process might be increased.  Turning to the pa rticulars of the programme she had been invited 
to present, she said that, as a result of these discussi ons, it had been decided to look at a project that 
would involve phases 1, 2 and 6 in ten countri es.  The assessment would be conducted, local 
champions would be identified, and one trade serv ices policy officer would travel to Geneva for 
training sessions on the request-offer process.  She sai d that the coverage of the initial ten countries 
(Barbados, Jamaica, Jordan, Panama, Paraguay, Peru , Senegal, St. Lucia, Trinidad and Tobago and 
Venezuela) had been selected based in part on past  interest shown, where these countries stood in the 
request-offer process and preferences expressed by Cana da in terms of their main trading partners.  
With respect to the product methodology, she said an in-depth briefing was conducted with missions, 
an international consultant oversaw the assessment  work, the services contacts were identified and 
then national consultants were retained to co llect information on the services sector under the 
guidance of the international consultant.  Once r esearch on capacity, demand and key stakeholders  TN/S/M/9 
 Page 11 
 
 
 were identified, a report was prepared and reviewed.  She anticipated that this part of the process 
would be completed by February 2004 and thereafter training sessions would be held, preferably at 
the same time as a services cluster.  A follow-up and evaluation would be conducted at some point 
thereafter.  She said that the ITC hoped that the ten countries would become more aware about the 
process, that they would collect more private sector  inputs based on the tools given by the ITC, that 
awareness of services capacity would be increased through the reports prepared, and that more 
relevant requests and offers would ultimately result.   She said that more countries could be included 
once more financial support had been secured and th at the United States had come forth with some 
funds for a similar project.  She indicated that the ITC was conducing other projects funded by the governments of Norway and the Netherlands for wh ich she expressed gratitude.  She said that other 
tools were available, such as presentations, trade attaché modules, and on-line GATS consultation kit, 
and a business guide to the GATS.   
30. The Chair
 on behalf of the Council and the representatives of Japan , Pakistan , Indonesia , the 
Philippines , Colombia , Bolivia , Switzerland , Mexico , the United States , Chile , Canada , Norway  and 
the  European Communities  expressed their gratitude to the representatives of the ITC for their 
presentation and the efforts made by the ITC.   
31. The representative of Japan  wondered about the budgets invol ved in these programmes, either 
in total or in part.   
32. The representative of Pakistan  said that most of the questions that he had prepared had been 
answered in the presentation, including the histor y of the programme and the selection criteria.  
Referring to the technical assistance programme itself and the challenges faced by developing 
countries, particularly those issues related to  the request-offer process, he said he thought the 
programme had a practical orientation.  He shared  the view that identifying the interests in the 
request-offer process were important issues faced by developing countries, and he thought the 
initiative was a step in the right direction.  He expressed thanks to those Members that had made 
contributions and encouraged others to do the same .   He welcomed the realisation by developing 
countries that there was a need for practical help, in cluding for his own.  Given that it was difficult for 
the ITC to provide assistance to all developing countries, he wondered whether such technical 
assistance could be organised on a regional basis so as to broaden the audience base in a shorter time 
period.   
33. The representative of Indonesia , referring to the coverage of countries, noted that the ten 
initial countries were mostly located in Latin Amer ica, and he thought that his region could also 
benefit from this type of technical assistance.  Referring to the upcoming briefing, he inquired as to 
whether this meeting would be open ended.  He said that his country was diligently preparing itself in 
the request-offer process and indicated his inter est in the programme in this regard.   
34. The representative of the Philippines  sought to tie the presentation to the assessment on trade 
in services and he asked whether the assessments would be made available to a wider group of 
interested Members.  He asked whether the research  would be conducted by the ITC alone or the ITC 
in conjunction with the national consultants.  In terms of the coverage of the assessments he enquired 
whether it would be cross-cutting or select certain sectors only.  He requested clarification on the methodology used for conducting this assessment.  With  respect to bringing trade policy makers into 
the request-offer process, he thought this was laudable.   
35. The representative of Colombia
 believed that this type of programme was relevant and 
important at the current stage and would help de veloping countries and least-developed countries to 
identify their needs and explore new possibilities in  the services negotiations.  She said that in due 
course her delegation would make its requests, a nd she sought to ascertain whether the programme 
could be adjusted to the needs of recipient countries.   For example, while some areas of trade interest TN/S/M/9 
Page 12  
 
 had been identified, she said it was difficult to translate these into real market access opportunities, 
and to evaluate any real opportunities for exporters .  She underlined that the export possibilities were 
of key interest in the negotiations and she asked to  what extent the programme could be adjusted to 
take these needs into account.   
36. The representative of Bolivia
 also sought to know the selection criteria so that her country 
could at some point benefit from the programme .  She wondered how the Members would be 
informed of the programme and whether the resu lts of the studies might be made available to 
Members.   
37. The representative of Switzerland  said he might revert to the presentation at a later point in 
time.  He reiterated that the ass essment process was important for his country.  He agreed that some 
countries faced many challenges in conducting their dom estic assessment, and in this regard the work 
of the ITC was important.  He thought that these ty pes of programmes could help countries to assess 
their needs and interests, which would lend s upport to the request-offer process and the GATS 
negotiations and was fundamental to them for system ic reasons.  He said that his capital was engaged 
in thinking about1 how to improve the assessment pro cess, about which he would revert to at a later 
stage.   
38. The representative of Mexico  recalled that his country had expressed on various occasions the 
importance of ensuring the sustainability of technical assistance, namely, how programmes took into account the effect of technical assistance over time .  He noted that very often assistance was given 
without the proper analysis as to whether it delivered capacity both to institutions  and people.  In this 
context he asked what mechanisms  were being used to evaluate the sustainability of the assistance 
given.   
39. The representative of the United States
 endorsed the suggestion made  regarding the work of 
the ITC and, to the extent that the countries invol ved were agreeable, she thought it made sense to 
share the final work and to consider opening the training sessions.  She said that her delegation 
believed that the ITC work complemented the Un ited States work through its test programme.  
40. The representative of Chile  thanked the contributors and hope d others would come forward.  
She supported the question raised by Colombia and said that a country such as hers would need training in evaluating the offers received so as to better determine its interests as an exporter.  She 
sought to know whether the ITC had considered this aspect of the request-offer process in its training.   
41. The representative of Canada
, responding to the question on selection criteria, said that a list 
had been compiled by the ITC of interested countri es, to which Canada could respond favourably only 
to some.  With respect to the assessment and ma king any documentation public, he said that this 
question was between the recipient country and the ITC and, he suspected, would need to remain 
confidential.  He thought that perhaps informati on on the methodology could be distributed, but he 
said that the programme had been conceived on the assumption that the assessments would remain 
confidential.  He said that the ITC had many ar eas that could be developed and encouraged other 
Members to consider a contribution.   
42. The representative of Norway  said that the conclusion he had drawn from the discussion was 
to encourage other Members to make contribut ions to the funding of this programme.   
43. The representative of th e European Communities  sought a more detailed explanation about 
the methodology used by the ITC in conducting the capacity studies the speaker had referred to.  She 
thought it would be useful for Members to share approaches used in conducing trade assessments.  
She also wondered if it would be possible for the IT C to share with Members some of the difficulties  TN/S/M/9 
 Page 13 
 
 
 or common elements it had uncovered in the course of the programme without disclosing any 
confidential information.  
44. The Chair  said that the presentation had elicited a great deal of interest.  He hoped that 
Members would be able to contact the ITC directly should the need arise.   
45. A representative of the ITC , thanking Members for their questions and suggestions, said that 
the project she had outlined was new and she appreciat ed the feedback that had been provided.  On 
the question of the cost of the programme she said it varied depending on geographic location since this affected the travel allocation to bring represen tatives to Geneva for training.  Generally, she said 
the cost was US$10,000 to $12,000 per country.  Sh e said that the cost for the six-phase technical 
assistance programme for three countries was US$150,000.  In terms of the regional training that had 
been suggested, she thought this was a good idea.   She acknowledged that a portion of the cost 
involved brining participants to Geneva for training so that they could benefit from the ITC and WTO 
technical assistance facilities available in Geneva a nd meetings.  She agreed that the basics could be 
taught at a regional level to catch a wider audience.   As for the briefing session, she said that the 
meeting was unfortunately not open- ended, in part because it was e xpected to be a technical and 
country-specific discussion.  She took note of the re quests for technical assistance.  In terms of the 
information that would be made available to a wi der audience, she said that she would discuss this 
with Canada, but she thought that the methodology coul d be made available.  With respect to the work 
that was done, she said that a national consultant w as retained and used a template to conduct research 
under the guidance under an international service sector specialist, who prepared the final report.  She 
said that ITC managed the consultant and liaised  with the ten contact points in each of the 
participating countries.  In terms of the sectors covered, she said that normally the ITC focused on 
business-to-business services, as opposed to business- to-consumer services.  This involved giving the 
national consultant a list of some 27 business-to-bus iness services that was used as a springboard to 
further research.  In response to the question of the limits of the programme, she said that the agenda 
would be formulated in the coming months based on preliminary findings and actual needs.  She said 
that where the ITC had undertaken assessment in ot her countries this information was used to inform 
the countries as to what their services strengths were  and to target training.  In this regard, the 
template to which she had referred had demonstrated  its usefulness, and in addition, a number of 
capacity studies had been completed for some 20 countries.  Responding to the questions of the sustainability of technical assistance, she said that  the ITC had established the world services network 
through which the participants met annually and upda ted the ITC as to progress made.  Various issues 
such as effectiveness and evaluation of the assistance was discussed.  The needs that were identified 
in these meetings were used to draft programme pl ans that were presented to potential donors.  There 
was therefore a system to collect feed-back and act on it.  On the suggestion to train participants to 
analyse the offers, she took this idea on board.  Speaking to the questions concerning methodology, 
she suggested she outline how the research was conducted.  Firstly, a country's on-line services sector 
was examined for inter alia  sector associations, businesses registered, ISO 9000 companies, foreign 
investors, statistics on foreign students or patients,  initiatives for youth or women, mention of service 
imports, export development programm es, and tourism statistics.  She said that if current GDP and 
balance-of-payments could not be found from nationa l statistical sources, this information was 
obtained from the IMF.  She said that the template for each country was modified based on the on-line 
research and competitive services sectors, imported services, foreign investment links, barriers to 
exports and an assessment of infrastructure and ex port markets.  The ITC then worked with the 
national consultants to educate them on the various issues at play and provide them with background 
information.  The international consultant worked cl osely with the national consultant to ensure that 
the data being collected was relevant.  She said th at the reports were double checked and a draft final 
report was prepared for the consultants to review and comment before being finalised.  She said that 
the reports to date had proven very educati onal and helpful for the governments concerned. TN/S/M/9 
Page 14  
 
 46. A representative of the ITC said that the prac tical nature of the programme was high on the 
list of the ITC as were sustainability and capacity building.  He said that it was through the services 
network that the process would be furthered and that  the six phase programme was flexible since parts 
could be added or removed.  On the question of orga nising events on a regional basis, he recalled that 
there were positive and negative aspects to this form at, but that for the early training he thought the 
suggestion held promise and might make more effici ent use of funds.  He said he had taken note of 
Members interested in the programme and he sai d that selection was partly determined by the 
sponsor.  He said that some 20 countries had thus far benefited and he hoped that this would expand, 
including through the services network.  He welcomed any further questions that Members might want to take up directly with the ITC.  
47. The representative of New Zealand
 indicated that her delegation would be in touch with the 
ITC bilaterally on a proposal that might be processed  internally in New Zealand.  She wondered if the 
ITC had a short descriptive paper on the project geared to donors.  
48. On behalf of the Council the Chair  expressed his gratitude to the representatives of the ITC 
for their presentation.  He noted that it had ge nerated much attention from developing country 
Members interested in assistance and from devel oped countries who might contribute.   Speaking on 
9 October, the Chair indicated that he had recently held consultations individually and with a small 
group of Members that had brought forth some ideas.  He informed Members of his intention to follow up on these ideas with Members in the weeks to come, and in this regard, he invited any 
interested Member to make their interest known.  The Chair invited the Council to take note of the 
statements made and revert to th is item at the next meeting.  
49. It was so agreed
. 
B. PROPOSALS  RELATING  TO THE  NEGOTIATIONS  UNDER  ARTICLE  XIX  OF THE  
GATS 
50. The Chair  recalled that at the last meeting the Co uncil had had an extensive discussion based 
on two proposals:  the  first an addendum to a proposal on energy services from Venezuela contained 
in document S/CSS/W/69/Add.2, and the second a proposal on the liberalization of mode 4 from a 
group of 15 Members contained in document TN/S/W/14.  He recalled that the level of interest had 
been rather high, with some 33 delegations ma king comments or posing questions.  He invited 
Members to make statements on these proposals or any past proposal. 
51. The representative of India  recalled that at the last mee ting a group of developing countries 
had presented a proposal on the liberalization of the movement of natural persons and that Members 
had had a an extensive discussion on it.  In his summ ary at that time his delegation, on behalf of the 
group, had answered most questions and he had in vited any supplemental questions.  He sought to 
highlight a few additional points.  On the issue of horizontal or sectoral commitments with respect to 
mode 4, he recalled that the group was looking at a combination of both:  broader horizontal coverage 
especially for the categories de-linked from commer cial presence because the existing horizontal 
commitments did not offer substantial coverage, a nd supplemental commitments in sectors of interest 
where deeper liberalization was sought beyond the broader horizontal commitment.  He emphasised 
that the group was looking for broader horizontal  commitments combined with deeper specific 
sectoral commitments in sectors of interest to various Members.  In this connection and cognisant of 
the fact that a Secretariat paper on the categories of  mode 4 service suppliers  was cited under another 
agenda item, he thought that, since the proposal from the group touched upon the categories found in 
the Secretariat paper, he might refer to a few points immediately and revert with substantive 
comments under the mentioned agenda item.  He drew attention to the fact that the Secretariat paper 
contained facts which he felt emphasised points raised  by the group.  For example, the paper stated 
that there was only a small percentage of sche dules with categories other than intra-corporate  TN/S/M/9 
 Page 15 
 
 
 transferees and business visitors, and that these relate d almost entirely to commercial presence.  He 
reiterated his delegation's observation in this same ve in.  Secondly, the paper noted that of the 35 
initial offers, 26 did not have any change in categor ies.  This highlighted that existing commitments 
did not have the categories he had mentioned, which meant that a larg e percentage of the initial offers 
did not contain some of the categories that the group had shown an interest in.  He thought it 
important to bear this in mind in the discussion.  Thirdly, the paper indicated that only 15 per cent of 
schedules included contractual service suppliers wh ich occurred in the schedules of recently acceded 
Members and in some of the initial offers.  He recalled that this was a category de-linked from 
commercial presence in which the group had shown inte rest.  He further recalled that at the last 
meeting the group had said that the issues it was putti ng forth could be approached in a macro sense.  
The group had also alluded to a model schedule and other alternative approaches.  He said that the 
group was working on these kinds of approaches and would revert to this issue at subsequent 
meetings.   
52. The representative of Canada  said that his delegation was pleased to comment on the 
proposal.  It was important that mode 4 issues had b een noted in the paper to be an issue on which 
Members' interests converged.  Many of the issues that the paper raised, for example the nature of 
commitments, administrative procedures, recogniti on of qualifications and suggestions on how to 
proceed were issues he said Members had been discussing informally.  He thought that these 
discussions would continue with a view to determining how best to  proceed.  One possibility, he 
suggested, could be to identify and focus on key issues in mode 4 which would be susceptible to 
practical progress.  He felt that this could be discussed in the Special Session as well as in informal 
sessions.  He felt that work that could be focussed on specific questions rather  than broad issues, for 
example, on disciplines on transparency and economic needs tests.  He said th at Canada's initial offer 
contained elements that attempted to respond to some of the issues raised in the paper, and he said that 
his delegation would continue discussions in this  regard.  This included areas dealing with 
professionals, both those employed by companies who en ter temporarily on contract as well as issues 
dealing with self-employed professions to work tempor arily on contract.  In conclusion, he said that 
Canada looked forward to discuss formally and informa lly many of the issues in the paper in order to 
identify areas in which Members might make progress.   
53. The Chair  said he was aware of many informal discu ssions on this topic as well as on others.  
He encouraged delegations, when taking up item D of the agenda, to inform the Council of any 
progress occurring in friends' groups in the inter est of transparency and communication.   
54. The representative of Chile  thanked India for its introduction of the proposal on mode 4 and 
thanked Canada for its statement.  He recalled the interest his delegation had in all mode 4 issues and 
said that his delegation had not yet introduced ne w ideas on mode 4 into the Chilean offer but was 
working in that direction both nationally and with other friends.  Not wishing to repeat India's comments, he sought to highlight his delegation's particular interest in professionals, including not 
only those hired by business but any professional seek ing to have access to the market.  He believed 
that the issue of professionals was not confined to  mode 4 issues, but included the question of the 
recognition of licences and qualifications.  He had note d that in many offers a period for the entry of 
professional was indicated that was very specific, a limited the number of professions were enumerated and permits for the provision of such services were very short, perhaps three or four months.  He believed that in order to provide  effective professional services a minimum six month 
entry was necessary.   He asked Members to bear in  mind that the periods set for professional activity 
should not be too limited, as otherwise the service could not be properly provided.   
55. Referring to the India's comments on the Secretariat paper, the Chair
 suggested that it might 
be useful for the Secretariat to introduce th e paper.  The representative of the United States  enquired 
as to whether Members wishing to respond to th e Secretariat paper should speak under the present 
item or under item D.  The Chair  acknowledged the point and thought that, given that reference had TN/S/M/9 
Page 16  
 
 been made to the note, it might be useful to have  a brief presentation, which would not preclude any 
discussion under item D, under which the note had been tasked.   
56. A representative of the Secretariat
 recalled that when the request  for the note had been made 
in July, there had been a discussion about the scope of  the note and the extent to which the Secretariat 
would reflect in a factual manner the categories used  in Members' schedules.  He said that the paper 
was based on an overview of the 108 schedules (counting the European Communities' Schedule 
resulting from the Uruguay Round as one).  He said th e Secretariat had also reviewed the 35 initial 
offers submitted containing categories on mode 4.  He recalled that, to date, 38 offers had been 
received, of which 35 contained references to categor ies.  He said that the review had endeavoured to 
distil a purely quantitative account of the occurrence of the most commonly used references to 
categories.  The paper did not contain a qualitativ e analysis of the schedules' contents or how 
definitions were drawn up.  He indicated that, should Members wish supplemental information, the 
Secretariat was at their disposal, and he invited Members' comments on the note.   
57. Referring to the communication presented by India, the representative of the European 
Communities  said that her delegation had studied the proposal on the liberalization of mode 4 in the 
GATS negotiations.  She thought that it raised a numb er of interesting points; however, she felt that 
attention should not be diverted to administrative procedures or recognition of qualifications that were 
perceived to affect market access to the detriment of the key issue of actually improving market access by undertaking of market access commitments.  She reiterated her comments at the previous meeting that her delegation was disappointed with th e low level of offers made by Members and the 
lack of offers.  She stated that  the European Communities had subs tantially improved and extended its 
Uruguay Round commitments in its initial offer, including on contractual services suppliers and 
categories unrelated to mode 3, which seemed of particular interest to the co-sponsors of the 
communication.  On the other hand, she said that  the offers made by the co-sponsors of the 
communication did not demonstrate improvements or a willingness to improve their commitments in mode 4.  In this context, she said that her delega tion's analysis demonstrated that developing countries 
had as much if not more to gain from commitments from other developing countries as they did from 
developed country commitments.  In conclusion, sh e said that the issues raised were interesting but 
needed to be discussed in the light of the leve l of commitments taken made by Members.  She 
expressed thanks for the note from the Secretariat and indicated her delegation would comment on it 
after analysis.   
58. The representative of Norway
 said that mode 4 was an important issue for most Members and 
particularly for developing countries.  He noted th at Norway had offered improvements on mode 4 in 
its initial offer and for independent service suppliers  in particular.  He thanked the co-sponsors for 
drawing attention to the importance of presenting initial  offers.  He said that Members were in a phase 
in which their real intent to negotiate was demons trated through the presentation of initial offers.  He 
noted that the paper expressed some dissatisfaction with  the offers in mode 4 and he agreed with this 
sentiment.  He said that 53 Members had submitted o ffers in the current process and he thought that 
the initial offers that had been submitted we re a good starting-point for negotiations.  The 
comprehensive work that laid behind the offers  represented a significant contribution to the 
negotiations process.  He noted that a number of Members had not presented initial offers and 
encouraged Members to present thei r initial requests and offers as soon a possible.  Offers on mode 4 
he said were difficult to compare due to different sch eduling techniques and level of detail.  He agreed 
with the suggestion in paragraph 6 of the propo sal to schedule commitments according to some 
common categories.  He said that the examples me ntioned, such as intra-corporate transferees, 
business visitors, contractual service suppliers an d the independent professionals could work as 
common categories.  Referring to paragraph 8 and th e suggestion to analyse the extent to which sector 
specific commitments could complement horizontal co mmitments, he said that Norway's initial offer 
on mode 4 was based on a horizontal approach and th at his delegation was willing to discuss the issue 
of complementing horizontal commitments with  sectoral commitments based on the requests and  TN/S/M/9 
 Page 17 
 
 
 offers received.  He said that in paragraphs 9 a nd 10 of the proposal attention was drawn to the need 
to improve transparency and simplifying administra tive procedures.  He said that these issues were 
under discussion in the Working Party on Domestic Regulation and Members might benefit from work on developing disciplines to reduce administrati ve hurdles for mode 4.  On the Secretariat note, 
he welcomed it and indicated that he w ould revert to it at a later stage.  
59. The representative of Switzerland
 thanked the Chair for his efforts in allowing the Council to 
pursue its work.  On mode 4 he recalled the le ngthy and substantive contribution made by his 
delegation at the last meeting, and as a result he said he would not revert to th e various paragraphs of 
the proposal under discussion.  He said that Switzer land was ready to discuss the points contained in 
the pragmatic and clear paper in formal and informal  settings.  Reverting to a few points, he said that 
Switzerland was aware of the interest in mode 4 held by most Members, both developed and 
developing, and he was aware of the importance of mode 4 to the success, balance and involvement of 
delegations in the process.  Switzerland, he noted had one of the most extensive set of commitments in this area and was willing to make the necessary efforts to further improve its commitments in 
mode 4 as testified to by its initial offer.  He str ongly encouraged all Members to do the same since, in 
his view, the effort needed to be a collective one.  He said that his delegati on would revert to this 
issue later in the meeting when commenting on th e Secretariat note, for which he thanked the 
Secretariat.    
60. The representative of Canada
, referring to the Chair's comment regarding informal meetings, 
announced a meeting on mode 4 would be held at  the Canadian mission and that it was open to 
representatives of any Member.  Turning to his comments on the Secretariat note, for which he 
expressed his thanks, he thought that it corres ponded to what Members had requested.  The note 
contained a good overview of common elements and woul d be a useful tool.  He said that in Canada's 
initial requests and offers the issue of transparency  had often been raised and he thought the paper 
would help Members clearly define the various bus iness categories that were covered for mode 4 in 
their schedules.  Canada felt that it would be di fficult to come to common harmonised definition of 
these categories and that Members should seek to agree on common elements and then move to adopt 
those common elements and categories for use in their schedules.  He thought that if greater similarity 
and common usage could be achieved, this woul d increase the transparency and comparability of 
Members' commitments.  Echoing Norway's earlier ob servation, he said it was currently difficult to 
compare and evaluate Members' commitments as diffe rent terms were used.  He therefore felt that 
Members should work to adopt some of the categori es identified in the note and to match them with 
the common elements identified.  Addressing a ques tion to the Secretariat with respect to intra-
corporate transferees, the representative noted that there did not appear to be a mention of a pre-
employment requirement and he asked if this was not common enough an element to have been 
included or whether it had been overlooked.   
61. The representative of the United States  said that her delegation would make its comments on 
the Secretariat note under item D if th e intention remained to list the note under item D.  With respect 
to India's supplementary comments on document TN/S/W/14, she recalled that India, in making a linkage between its paper and the Secretariat note, had said that business visitors like intra-corporate 
transferees was specific to commercial presence.  Sh e wished to record that her delegation did not 
have this same interpretation.  She shared the views expressed by the European Communities 
regarding singling out any particular  mode of supply or sector in the Special Session in a manner that 
would highlight an area at the expense of other sectors or modes of supply.  She took note of the paper 
that had been presented and stated that her de legation remained pleased to discuss all proposals 
presented at the Special Session.  She further agreed with the comments by the European 
Communities regarding the general wa y in which to proceed on questi ons similar to those raised in 
the paper.  She repeated that she would revert to the categories paper.  Referring to Canada's 
suggestion on matching common elements in the S ecretariat note, she indicated her delegation's 
reservation in this regard.   TN/S/M/9 
Page 18  
 
 62. The representative of India
 sought to make a few points in light of Members' interventions.  
On the comment by the United States on business vis itors, he clarified that in the broad sense when 
looking at commercial presence, the business visitor pl ayed a large role in facilitating this presence.  
At the same time he agreed that a commercial pr esence was not necessarily required in order for a 
business visitor to enter.  He explained that his comments had been made in relation to the other 
categories that were specifically de-linked from commercial presence and it was only in that sense 
that he had referred to business visitors and comme rcial presence.  Regarding the point made by the 
European Communities, Switzerland and United St ates on the question of commitments by all 
Members in mode 4, he recalled that the group had spoken to this point previously.  While the group 
was aware of the convergence of interests and th e importance of mode 4 not only for developing 
countries but also for developed countries, he felt th e focus of the requests needed to be recognised, 
both on the part of developing countries, which fo cussed on mode 4, and developed countries, which 
concentrated on modes other than mode 4, such as m ode 3.  He felt that the question of balance in 
rights and obligations and the content of the request s needed to be borne in mind when references 
were made to the undertaking of specific commitm ents by developing countries in mode 4 and the 
need for improvements in this regard.  On the qu estion of highlighting a si ngle mode or sector he 
recalled that the area under discussion was an area that many developing countries had perceived as 
an area of comparative advantage.  He said that  the question was not simply one of wishing to 
highlight one mode, but rather he affirmed that  this mode was important to a large number of 
countries in terms of their market access negotiations.   
63. The representative of the United States  thanked India for the clarification and sought to 
emphasise that the negotiation involved a give-and-take  rather than a simple process of requests.  She 
recognised that a number of modes and sectors were of  interest to Members and that with respect to 
certain Members there might be certain sectors that we re of more interest than others.  Her delegation 
had an interest in many sectors that she felt coul d be highlighted.  She was happy to engage in 
discussions in areas of interest to Members.  No ting that this agenda item touched upon Members' 
domestic regimes, she felt that when discussing the di fferent categories that arose in the course of the 
request-offer process and the scheduling of commitme nts, account should be taken of the particular 
characteristics of Members' domestic regimes.   
64. In response to the question posed by Canada regarding the description of intra-corporate 
transferees and the requirement of prior employme nt as an essential component of the categories, a 
representative of the Secretariat  said that a reference had been made  in paragraph 7(b).  He said that 
paragraph 7 referred to the entry of intra-corporate transferees as (a) relating to executives, managers 
and specialists and (b) those persons working within  a juridical person.  Thus, the assumption was that 
this referred to a person employed prior to the transfer.  He acknowledged that the reference was 
perhaps not clear. 
65. The representative of Canada  thanked the Secretariat for its response.  He thought that, in the 
view of some, the standard used by Members to make commitments was one year pre-employment.  
While he had not systematically studied all the categories for intra-corporate transferees, on the face of it there appeared to be a one year prior employme nt standard that applied in many cases before the 
applicant could apply for a work permit or visa.  He asked whether this standard  in particular had been 
common enough to appear in the note.   
66. The Chair
 indicated that the Secretariat would come back to the delegation of Canada on this 
point.  He suggested that the Council take note of the statements made and that it revert to this item at 
the next meeting.  
67. It was so agreed .  TN/S/M/9 
 Page 19 
 
 
 C. WORK  OF SUBSIDIARY  BODIES  – REPORTS  BY THE  CHAIRPERSONS 
68. A representative of the Secretariat , referring to the decision of the Working Party on 
Domestic Regulation on the organisation of a Works hop on Domestic Regulation, recalled that at an 
earlier meeting of the Working Party it had been deci ded that the event would be held in December.  
He said that because of the convening of a Worl d Summit on Information Society in Geneva around 
the same dates, the seminar would have to be post poned.  He said that the Chairman of the Working 
Party had informed him that he would be holding consultations on this matter.   
69. The Chair of the Working Party on Domestic Regulation  reported that since his previous 
report to the July  meeting of the Special Session, the Working Party on Domestic Regulation (WPDR) 
had held one formal meeting on 30 September.   Concerning the development of regulatory 
disciplines, he said that Members had extensiv ely discussed an informal paper by Singapore 
(JOB(03)/113) on the relationship be tween GATS Articles VI:4 and VI:5, and the implications for the 
creation of regulatory disciplines.  Members also made many comments on the draft disciplines on licensing procedures introduced by the European Co mmunities at the previous formal meeting and 
subsequently circulated as S/WPDR/W/25, dated 10  July 2003.  He recalled that on previous 
occasions the work of the working party had been info rmed to a large extent by a paper circulated by 
Japan on a proposed draft Annex (JOB(03)/45Rev.1).   He said that as a complement to this 
communication the delegation of Japan had introdu ced a room document explaining the relationship 
between the draft Annex and the Annex on the Move ment of Natural Persons.  Members followed 
with questions and comments on the room document submitted by Japan.  Regarding the development 
of general disciplines for professional services, he reported that India had presented as an informal 
paper (JOB(03)/192) a revised version of the room  document distributed at an earlier meeting.  
Discussion focused on the substantive aspects of the Indian paper.  New Zealand made a suggestion 
which was well received, that Members make "show  and tell" presentations on domestic recognition 
procedures under GATS Article VI:6.  New Zealand vol unteered to give an initial presentation at an 
upcoming formal meeting.  Also with respect to professional services, the Secretariat presented the 
first revision of their compilation of the results of  the consultations with international professional 
organizations, circulated as JOB(03)/126/Rev.1.  The Secretariat indicated that it would continue to follow up the preliminary responses, as well as make further enquiries of the organizations that had 
not yet responded.  In this regard, some Memb ers recalled that there was ample room for the 
Secretariat to begin initial summation of the preliminary responses without prejudice to the results at the conclusion of the exercise.  In respect to the organization of the Workshop on Domestic 
Regulation, Members were pleased that the Secretar iat had succeeded in obtaining some funding for 
developing-country delegates to attend the workshop.  They asked that the semina r be structured so as 
to encourage maximum participation and interaction on the part of regulators.  However, due to the 
lack of hotel availability there was consequently a n eed to postpone the workshop.  In this regard he 
said that he would be in contact with delegati ons through various format s to determine possible 
appropriate alternative dates for holding the seminar.  With regard to the next formal meeting of the 
WPDR he said that, due to the need to postpone the workshop, and without prejudice to the outcome 
of his consultations, the meeting was expected be held instead during the first week of December. 
70. The Chairman of the Working Party on GATS Rules
 reported that the Working Party on 
GATS Rules held a formal meeting on 1 October 2003.  In order to assist discussions, he circulated an 
Annotated Agenda (JOB(03)/190) that proposed themes  for delegations' consider ation.  Overall, the 
level of participation during the meeting was ve ry encouraging, and even though Members held 
different views on the three agenda items, a ll delegations showed understanding and were 
constructive in their comments and questions.  On  emergency safeguard measures, delegations were 
invited to pursue their discussion of cases where a safeguard action might be needed, and which form 
such action could take.  It was suggested that th is might help delegations assess common elements of 
ESM models and address questions raised regard ing such models, including process-related and 
technical issues but also questions of desirability  and feasibility.  The Swiss delegation presented a TN/S/M/9 
Page 20  
 
 non-paper which examined a particular example and analysed the possibilities available to a Member 
government in the absence of an ESM.  In addition, the delegation of Thailand, speaking for a number 
of other Members, provided answers to questions previously raised regarding how the ESM model 
previously put forward by ASEAN would apply to a particular example.  Various Members indicated 
they would come back to these questions at the ne xt meeting.   On government procurement, the 
European Communities explained its proposal for a fram ework of rules in this area.  The Secretariat 
had prepared a note on government procurement disciplines in regional trade agreements.  A good number of delegations made comments and specific qu estions were raised.   The delegation of the 
European Communities indicated it would aim at provi ding further responses at the next meeting.  
Some delegations said they would co mment later on this issue, depending inter alia  on developments 
in the Working Group on Transparency in Government  Procurement.  On subsidies, Members had a 
detailed discussion on the issue of definition in li ght of past submissions, including from Poland.  
Members also agreed to mandate the Secretariat to  update its previous note on subsidy disciplines in 
regional trade agreements and to present a list of studi es pertaining to subsidies in services sectors that 
might have been done by other international organisa tions.  He indicated that he would, before the 
next formal meeting, hold consultations on the prop osal by Chile that Members, on a voluntary basis, 
put forward examples of subsidies relevant to services trade.  Some proposals for other materials requested from the Secretariat would also form part of his upcoming consultations. 
71. As the Chairman of the Co mmittee on Specific Commitments
 was unable to attend the 
meeting, he had requested that the Chair read his report.  The Committee on Specific Commitments 
subsequent to the last report given in July, had held a formal meeting on 29 September 2003 where it 
addressed three items:  (a) Classification Issues, (b) Sc heduling Issues, and (c) Consideration of issues 
relating to paragraph 2 of Article XX of the GATS.  Under the item of "Classification Issues", it was 
agreed that the Committee would await the discuss ion of issues related to Mode 4 in the Special 
Session before further considering any technical issu es to be taken up in the CSC.  Under item of 
"Scheduling Issues", the delegation of Brazil introduced a communication containing preliminary 
questions on initial offers (JOB(03)/189).  For Memb ers' information the Secretariat circulated its 
presentation on Scheduling of Specific Commitments , which had been delivered during the 2002 
Scheduling Workshop.  The presentation was available as JOB(03)/186 in the three official languages.  
The Committee held a first discussion of issues relati ng to paragraph 2 of Article XX, an item which 
was referred to it for consideration by the Regular  Session of the Council for Trade in Services.  It 
was agreed to convene an additional, dedicated meeti ng to consider this issue prior to the next regular 
meeting of the CSC which would be held during the cluster of services meetings in December.  
72. The Chairman of the Committee on Trade in Financial Services  reported that the Committee 
on Trade in Financial Services ha d met formally on Monday, 6 Octobe r.  There was no news to report 
with regard to the Acceptance of the Fifth Protocol .  He recalled that three Members had yet to accept 
the Protocol, namely, Brazil, Jamaica, and the Philippines.  Some delegations expressed their 
concerns about the delays in ratifying this Protocol  and encouraged those three Members to speed up 
their domestic ratification procedures.  No inte rventions were made under the agenda item on 
Technical Issues.  Concerning Recent Developmen ts in Financial Services Trade, the Committee 
continued discussing issues related to e-banking on  the basis of the replies submitted by Switzerland 
to the questions raised at the previous meeting.  Members also made follow-up comments on the communication presented by Malaysia at the last meeting and entitled "Challe nges in the Financial 
Services Sector".  In addition, Turkey made a pr esentation about recent regulatory developments in its 
securities market.  He commended Malaysia, Switzer land and Turkey for their contributions to 
discussions in the Committee, and he had encour aged other Members to come up with similar 
presentations either on e-finance or explaining their national experiences with liberalization and 
regulatory reform in the financial sector.  Members considered for the first time a proposal submitted 
by Antigua and Barbuda on behalf of Belize, F iji, Guyana, Papua New Guinea, Maldives, Solomon 
Islands, and St. Kitts and Nevis.  The proposal ai med at addressing the concerns of these countries 
with regard to the development of international st andards related to financ ial services, and called for  TN/S/M/9 
 Page 21 
 
 
 the modification of certain GATS provisions.  He said that he had announced under Other Business 
that the next Transitional Review provided under Paragraph 18 of the Protocol on the Accession of 
the People's Republic of China would be conduc ted at the next meeting in December.  
73. The representative of the European Communities , seeking to make a clarification on the 
report from the Chairman of the Committee on Specific Commitments, said that it was her 
understanding that he intended to ho ld consultations as to whether to hold a meeting prior to the next 
scheduled meeting.  
74. The representative of China  regretted that she was obliged to  take the floor and, referring to 
the report from the Chairman of th e CTFS, requested that the comments her delegation had made at 
the last meeting concerning this report be reflected in the minutes of the present meeting.2  
75. The Chair  invited the Council to take note of statem ents made and revert to this item at the 
next meeting. 
76. It was so agreed .  
D. REVIEW  OF PROGRESS  IN NEGOTIATIONS 
77. The Chair  noted that to date some 38 offers had been tabled re presenting 53 Members.  He 
thought that this was good news but more could be  done.  He recalled that at the last meeting the 
Council had held a very lengthy and substantive discu ssion on a very broad range of topics of interest 
to delegations in the context of the negotiations, including on mode 4.  During the course of this 
discussion the suggestion had been made that the Se cretariat prepare a note outlining the categories of 
mode 4 service suppliers that existed in current sch edules.  He recalled that this note, introduced 
earlier in the meeting by the Secretariat, was contai ned in document JOB(03)/195.  He further recalled 
that the representative of Peru had introduced a joint statement on behalf of a group of 18 Members 
under a standing sub-item of the agenda on the im plementation of paragra ph 15 of the negotiating 
guidelines.  This joint statement was contained in document TN/S/W/16.  He said that the Council had 
had a heavy slate of business at its last meeting,  and Members had only had an opportunity to begin 
their discussion under this sub-item.  He said that it was for this reason, among others, that he had 
regrettably not been able to engage structured consultations on the organisation of the Special 
Session's work under this sub-item as had been sugg ested.  He invited delegations to provide any 
points of views or suggestions they might have in th is regard.  Finally, he further invited delegations 
to provide any updates, in the interest of transp arency, on developments that might have taken place 
in the various friends' groups.  The Chair suggested  that the Council start with a general discussion 
before moving on to the sub-item.  
78. The representative of Colombia  sought to make a few comments in the interests of 
transparency with regard to bilateral market ac cess negotiations and to make a few comments on her 
delegation's recent initial offer.  She said that it was submitted as part of the Doha Development 
Agenda and in accordance with the mandate it estab lished.  She said that it was in line with the 
GATS, was designed to bring about a higher level of  liberalization as established in Article XIX, and 
corresponded to requests from trading partners.  Colo mbia saw the negotiations as part of the single 
undertaking and as such the offer was conditional on r eaching an overall balance in the negotiations in 
services and in other areas.  She said that a larg e number of the proposed commitments focussed on 
services offered by companies, such as advisory, engineering, physical planning and development services.  In addition, other areas of interest had al so been offered, such as construction, tourism and 
maritime.  She hoped that these efforts to includ e other areas would be recognised by Colombia's 
trading partners.  She also underlined the importan ce her delegation attached to classification in order 
                                                     
 
2 Please see Annex. TN/S/M/9 
Page 22  
 
 to have clear legal definitions.  Her delegation had sought to base its offer on the classical sectoral 
listing of the UN and the list contained in documen t W/120, and she hoped that others might consider 
likewise.  Despite the current situ ation, she informed the Council that her delegation had participated 
in a series of bilateral discussions in which it had further developed its comments on its initial offer.   
79. The representative of Bolivia
 said that liberalization of trade in services was an important 
aspect of her country's international agenda and that, as a result, great efforts had been made internally 
to present Bolivia's initial offer.  Her delegation wa s looking into the initial offers on the table and,  
referring to the points listed in document TN/S/W/14,  underlined that the thrust of her delegation's 
request focussed on the movement of natural persons.  She said that in many cases mode 4 commitments were determined by previous comme rcial presence as well as horizontal issues.  She 
said that her delegation had pointed this out in recent discussions.  She thought that the recent 
contributions by Members and the Secretariat was useful to identify problems and analysing factors 
that related to trade in services.   She thought it important to emphasise that progress in this complex 
issue should move forward on par with negotiations on other areas under the single undertaking in the 
DDA, both with respect to procedural and substantive aspects.   
80. The representative of Norway
 observed that the meeting was the first in the GATS 
negotiations subsequent to the Canc un Ministerial.  He said that the meeting of the General Council at 
senior officials level no later than December 15 w ould be important in moving the Doha process 
forward to a successful and timely conclusion.  He sai d that good work was being done in the services 
negotiations with the clear aim of achieving results  that would benefit all.  He recalled that on 
3 September, the Special Session had taken an important step in adopting modalities for the treatment 
of the least developed countries.  In this regard, he expressed his gratitude to all Members for their 
good negotiating spirit which had brought the negotiati ons to a successful conclusion.  He hoped that, 
together with others, Members would ensure that  the negotiations promoted the economic progress of 
LDCs.  He was pleased to see th at some 53 Members had presented initial offers in the negotiation 
process which contributed to leading the negotiations  forward.  He said that Members had entered a 
phase in which all Members would have to contribute  fully in order to maintain momentum.  Some 
Members had expressed dissatisfaction with the initial offers and that the offers had not met their 
expectations.  He thought it premature to enter into  an extensive discussion on the quality of offers as 
long as not all Members, and in particular Members representing large economies, had presented their offers.  He recalled that the negotiations should lead  to a balanced outcome.  This required that all 
Members contribute to the negotiations process by offering market access commitments that would 
improve market access.  It was against this background that he urged Members that were 
contemplating presenting requests and offers to do so as soon as possible.  Norway expressed sympathy with those Member countries that had t echnical problems in preparing offers, and he hoped 
that the necessary resources were being made availabl e to them to facilitate their full participation in 
the negotiations.  He recalled that Norway had c ontributed to the Doha Gl obal Trust Fund and was 
ready to make a contribution to the fund next year .  He encouraged Members to make use of the ITC 
and the technical assistance programme outlined ear lier in the meeting.  At the same time he 
encouraged more Members to contribute to the fund ing of the ITC technical assistance programme.    
81. The representative of Norway believed firmly that progressive liberalization and increased 
market access contributed to increased growth.  No rway and several other Members  had contributed 
to and financed studies on the effects of services liberalization in several sectors and he encouraged 
Members to use these studies to the extent possibl e in the preparation of requests and offers.  
Referring to the earlier presentation by the OECD, he  found the comprehensive study very useful.  He 
felt that the document could be used as a basis for in ternal deliberations and in preparing the Council's 
further work on trade in services.  He sought to highlight a few examples from the maritime sector.  
The OECD paper demonstrated that developing co untries were increasingly active in the maritime 
sector and in port and related services.  Figures published in the UNCTAD Review of Maritime 
Transport 2002 confirmed this state of affairs.  In  addition, this report contained evidence of the  TN/S/M/9 
 Page 23 
 
 
 strong and increasing participation of developing coun tries in maritime transportation. The report also 
found that developing countries had a higher share of  freight cost in import values than developed 
countries (8.83 per cent as compared to 5.21 per cent).  This could imply that there was a potential for 
increased efficiency in the transport sector.  Referring to a recent UNCTAD expert meeting on multimodal transport and logistics services, he said that the meeting and the background 
documentation demonstrated that the cost and quality  of multimodal transport and logistics services 
were increasingly relevant for the participation of developing countries in the globalised economy.  It 
was identified that, besides distance and trade volum es, the public sector could make a difference with 
respect to inexpensive and high quality transport a nd logistics services.  In particular, this finding 
applied to infrastructure and technologies, secur ity and safety, facilitation (document requirements 
etc.), legal aspect and market access.  The WTO and in particular the Special Session could provide 
contributions with respect to improving market access, by providing for broad commitments in the maritime transport sector.  Predictable and stab le liberal market conditions would help reduce 
transportation costs, improve quality and foster invest ment in the sector.  It was crucial for economic 
development.  Referring to the UNCTAD paper on en ergy services presented at the last meeting, he 
said that in relation to a world where energy markets were being opened and national energy sectors 
were becoming more liberalised, the UNCTAD paper emphasised the potential benefits to developing 
countries of opening their national energy service ma rkets and enhancing domestic capacity in the 
energy sector.  Norway shared the views expressed in the paper in this respect.  Liberalization of the 
energy sector was demanding, not least because of th e need for precise and extensive regulation that 
was required to obtain true liberalization of the sector.  In this respect, the importance of the ability of 
national authorities to enforce such regulation in a sober and prudent manner needed to be strongly 
emphasised.  He reiterated that initial offers we re needed.  Citing the Negotiating Guidelines, he 
recalled that "the negotiations shall aim to achiev e progressively higher levels  of liberalization of 
trade in services [...] with a view to promoting the interests of all participants on a mutually 
advantageous basis and to securing an overall balan ce of rights and obligations."  The initial offers 
were an important step in this respect, as they allowed Members to make a preliminary assessment of 
the balance of rights and obligations and to move  the negotiations process toward improved offers.  
He assured other delegations of Norway's co-opera tive spirit in considering their requests for further 
improvements to Norway's initial offer.  He said that this co-operative spirit would be necessary in 
order to accomplish the challenging task that laid ahead.   
82. The representative of Japan
, wishing to share his delegation's impressions on the negotiations 
over the preceding fortnight, stated that, despite th e outcome of the Cancun ministerial conference, his 
delegation remained engaged in the negotiations, which explained why it had maintained the normal 
level of capital-based participation.  He said th at his delegation had he ld many multilateral and 
plurilateral meetings and somewhat fewer bilatera l request-offer meetings.  He admitted that the 
negotiations in the bilateral setting had been of le sser intensity than on previous occasions, but he was 
encouraged by the discussions in the subsidiary bod ies, friends meetings a nd multilateral meetings.  
Acknowledging that the continuation of work might be subject to a decision from a higher authority, he felt that work should be pursued, particularly  because much work remained in services, including 
on technical issues.  In this regard, he looked forw ard to participating in the negotiations during the 
December cluster with the same level of engagement .  He felt that, at the present stage, it would send 
an inaccurate signal to decide to slow down, su spend or postpone negotia tions in December.   
83. The representative of Turkey
 recalled that his delegation ha d submitted its initial conditional 
services offer circulated on 3 September 2003 as document TN/S/O/TUR.  He said that the initial conditional offer included modifications to horiz ontal commitments, legal services, computer and 
related services, services incidental to mining, telecommunications services,  construction and related 
engineering services, education services, financial services including banking, insurance and 
securities markets, tourism and travel related service s, maritime transportation and air transportation 
services.  Turkey's initial conditional offer include d new commitments in many sectors of trade in 
services that stemmed not only from changes in legal regulations and institutional restructuring which TN/S/M/9 
Page 24  
 
 had taken place since 1994 when Turkey's first GATS commitment list was submitted, but also from 
Turkey's focus on a gradual and steady liberali zation effort.  Among some of the new services 
commitments were computer and related services and particularly telecommunications services.  
Significant developments in the telecommunications sector were taking place in Turkey, for example 
the monopoly of Türk Telekom on voice telephony would be terminated two years earlier than 
envisaged.  The monopoly would cease to exist on 31 December 2003 instead of on 31 December 
2005.  Turkey proposed in its latest offer to undert ake obligations contained in the "Reference Paper" 
concerning telecommunications.  He sought to u nderline numerous improvements which had been 
made in its GATS commitments reflecting the present legislation in many services sectors such as in services incidental to mining, education services, financial services, maritime transportation services 
and in the mode 3 section of the horizontal commitmen ts.  In this context, he said that the offer 
covered some modifications in c onstruction and related engineeri ng services, financial services, 
tourism and travel related services.  He also noted that some technical corrections had been made in the horizontal section and with respect to commitments in legal services, computer and related services, services incidental to mining, telecommunications services and financial services.  He noted 
that new footnotes had been added for computer and related services, services incidental to mining, 
telecommunications services, maritime transport services and air transport services which sought to clarify certain elements.  He pointed out that one exemption related to the banking sector, two 
exemptions related to telecommunications and one related to postal services had been removed from 
the list of Article II exemptions due to amendments  in the relevant legislation and after domestic 
consultations with concerned stak eholders.  He reaffirmed Turkey 's determination to engage in 
negotiations with a constructive spirit and good faith as it had done in the past.   
84. The representative of China
 recalled that China had tabled its offer on 5 September in the 
days prior to the Cancun ministerial conference.  It  underlined the seriousness China attached to the 
current negotiations by making c ontributions to the extent possi ble to the services liberalization 
negotiations.  In preparing its offe r, which had not been an easy task, she said that a number of factors 
had been taken into account, some of which she wish ed to enumerate.  The first was China's accession 
commitments that were broad and deep.  Because  these commitments were still being implemented 
and the adjustment costs were so significant, China's ability to make further commitments was 
severely restricted.  The second factor was China's own needs in reforming and opening up the services sector.  As her delegation had mentioned on  previous occasions, China was fully committed 
to further reform and opening-up of the services se ctor not simply because it was a Member of the 
Organization, but more importantly because it was Ch ina's stated policy.  In the course of reforming 
and opening up, China needed to have time to assess th e implications of such measures.  It had been a 
generally-shared view that domestic liberaliza tion had to take place progressively and in a 
manageable manner, which meant that the liberalizat ion process had to be monitored and adjusted in 
light of the result of this assessment.  Therefore, China needed to reflect extensively on these matters 
before it decided to make commitments under the GATS.  However, in sectors or sub-sectors where 
China was able to make the decision to libera lise, it had made new commitments or improved 
commitments in its initial offer.  A third factor was the rules governing services liberalization.  On the 
one hand, rules for trade in services were far from being complete or perfect.  She said that making commitments under the GATS required the ability of foresight that China lacked.  Even though the 
GATS had allowed for flexibility, all situations could not be foreseen as had been alluded to by the 
representative of the Philippines on behalf of some of the ASEAN members at the meeting of the 
Working Party on GATS Rules.  She said that a lack of  rules to deal with such  situations reduced the 
confidence China had in making commitments under the GATS.  In addition, she said there needed to 
be a clear understanding of the existing rules be fore making specific commitments under the GATS, 
since these commitments were almost irreversible on ce scheduled.  Finally, she stated that no steps 
back had been made from existing commi tments in China's initial offer.   
85. The representative of Peru
 recalled that he had announced that  at last session that Peru had 
submitted an initial offer under the negotiations on Article XIX of th e GATS and that this had come  TN/S/M/9 
 Page 25 
 
 
 as a result of an important effort between the privat e sector and government.  He did not wish to go 
into great detail on the offer, but sought to under line that it covered new specific commitments in 
distribution, business, financial, telecommunicati ons and professional services.  Like other Members 
he said that adjustments had been made in the light of  the requests received.  He stressed that the offer 
was conditional, subject to the single undertakin g and depended on progress in other areas of the 
negotiations.  Bearing in mind liberalization and th e particular conditions of developing Members 
referred to under Article XIX, he said that the offe r was an important step in the process and reflected 
the seriousness his country attached to the negotiations . He stated that it remained important to also 
bear in mind the rules negotiations, and he hoped that substantial improvements would be found on 
domestic regulation, safeguards and subsidies.  He e xpressed concern with the different situations that 
characterised the different negotiations.  Peru was w illing to continue to participate constructively in 
the negotiations on services and he said he would expa nd on the details of Peru's offer at a future 
meeting.  He appealed to Members to make subs tantial progress in the negotiations, particularly in 
areas of interest such as mode 4 that would cont ribute to producing a benefit for all.     
86. The representative of Switzerland , making a few overall comments, said the cluster had been 
positive and he was satisfied with the meetings at the multilateral and bilateral level.  He thanked 
those Members that had submitted offers since the l ast meeting and he said that his delegation had had 
bilateral consultations with most of them.  He confirmed that the spirit of the talks had been 
constructive and substantive.  Ge nerally speaking, the number of b ilateral consultations had been 
maintained and he hoped this would be repeated in  December.  He interpreted these various signals as 
auguring well for future work.  In this regard, he  hoped that momentum could be maintained in the 
meetings in December.  On the question of transpar ency in the scheduling of offers, he said that his 
delegation believed that this aspect was crucial in order to ensure that at the end of the day the 
schedules were transparent and as readable as po ssible.  This would help the users and private 
operators and ensure a clear legal interpretation of the schedules.  It would also avoid using precious 
time in bilateral meetings to address technical qu estions.  He recommended that Members scheduled 
using the Scheduling Guidelines, the W/120 classifi cation list and the UN CPC references whenever 
possible.  He said that if an ENT were included in  a schedule, the conditions of the test should be 
clearly outlined.   He said that Switzerland had c onsidered these parameters  for its schedule.  He 
informed Members about a recen t UNCTAD seminar that focussed on multimodal services and the 
most recent research in this area.  The seminar had examined many ques tions and had explored 
common ground to come up with key elements of st rategies to foster multimodal transportation and 
logistics services.  Without wishing to go into detail, he said the seminar demonstrated the critical role 
of logistics services and the auxiliary services to all modes of transportation for fostering trade in 
countless areas as well as for development in ge neral.  Recalling that Switzerland was a small 
landlocked country dependent on inte rnational trade, he was aware of  the importance of having access 
to efficient logistics services.  The seminar had observed that the lack of market openness impeded 
different service providers from opening these sectors and to investing in new markets.  He said that 
the resulting lack of competition reduced the choi ces of the economy as a whole which might mean 
that companies would rely on inefficient logis tics providers.  He said that this case would be 
regrettable, since it prevented growth and devel opment.  He confirmed that UNCTAD would soon 
produce a summary of this seminar and he flagged his desire to revert to this topic.   
87. Turning to the Secretariat note on the categori es of mode 4 suppliers, the representative of 
Switzerland thanked the Secretariat for the paper an d said it provided Members with a factual list of 
the key elements that constituted the main categori es in mode 4 while leaving to the side variables 
such as duration of stay and pre-employment requirements.  Switzerland hoped that the paper would help set a practical tone to structure the discussions  and in bilateral consu ltations and her delegation 
intended to use it for this purpose.  The paper also provided useful statistics and she expressed 
disappointment that 26 of the 35 offers presented had not introduced any changes in mode 4.  In this 
regard, she wished that new commitments would em erge in terms of quantit y and coverage and she 
believed that each of the larger categories should be committed on more widely across all Members' TN/S/M/9 
Page 26  
 
 schedules.  She said that she had completed her preliminary comments on this paper and that her 
delegation might revert to it in the future.  
88. The representative of Chinese Taipei
 said that while her delega tion regretted the hiatus in 
other negotiations, she was pleased that the services meetings were continuing given their paramount 
importance in terms of their contribution to economic  growth, in particular for developing Members.  
A number of studies by international organisations u nderlined the importance of ensuring that various 
issues did not impede the services negotiations.  He r delegation welcomed the offers which had been 
submitted recently and, in the interests of ma intaining momentum, called on Members who had not 
done so to table their offers as soon as possible.   On the agenda item proper she felt there had been 
progress in areas of priority for her delegation and she noted the presence of her delegation's experts 
on mode 4 in the current cluster.   Her delegation welcomed the opportunity to discuss mode 4 issues 
and she thanked those Members who had agreed to meet with her delegation.  She said that her experts had found the discussions helpful and enrich ing.  On the Secretariat note she expressed her 
gratitude and she was pleased to see that Chinese Taip ei was identified as one of the recently acceded 
Members who had provided a detailed description of the categories cove red in its Schedule that gave 
providers understandable information that permitted them to assess commitments in mode 4.  She felt 
that the note was a good basis on which to discuss th e relevant mode 4 issues such as common usage 
of categories in schedules.  Finally, in order to contribute to the discussion under the agenda item on 
assessment, she indicated her delegation's desire to present Chinese Taipei's experience with the 
liberalization of its telecommunications sector at a forthcoming meeting.   
89. The representative of Hong Kong, China
 welcomed the new offers from Colombia, Bolivia, 
Turkey, China and Peru and thanked them for th eir presentations.  Offering a few comments of a 
general nature, the representative noted that the curre nt period was rather difficult and he felt that the 
services negotiators should bear in mind the broader WTO issues in their work and do their utmost to 
help inject new life blood into the process.  Furt her noting that the services negotiations were not 
experiencing the same hiatus as in other areas, he  thought that the services negotiators should pursue 
work while their superiors and other organs dealt with the broader situation.  On the review of 
progress proper, he thought the past two week s of meetings had been productive and had 
demonstrated a clear willingness to engage in subs tantive work, as witnessed by  the discussions in the 
subsidiary bodies, friends meetings  and bilateral consultations.  He  appreciated the approach that 
Members had taken in the preceding fortnight.  While acknowledging that the pace had slowed 
somewhat, he nonetheless felt it important to mainta in the momentum that was a responsibility that 
fell to all.  He recognised that services could not liv e in isolation and that further progress in services 
negotiations could be affected by events outside th e Council.  He suggested that it was an opportunity 
for delegations that had not been in a position to engage in the services negotiations as much as they 
would have otherwise liked to take a critical look at the services negotiations and to move them in a 
direction that would bring them substantive bene fit through services liberalization.  He noted the 
positive work in this regard on the assessment, and he  welcomed the consultations that the Chair had 
announced on the assessment.  Echoing earlier comme nts, he agreed that there remained many 
technical issues to pursue in the subsidiary bodi es and in the Special Session and he expressed his 
delegation's desire to further discussions and positive and constructive contributi ons in this respect.  
He indicated that he might revert to the note on mode 4.   
90. The representative of Korea  said that he had hoped to hear the views of some of the major 
Members under this agenda item and he  regretted their silence.  He sa id that following the setback in 
Cancun, the general feeling on the prospect on th e Doha negotiations did not seem very positive.  
Although every effort would be made to resume the negotiation process, he said that the pace of the 
services negotiations appeared to be slowing and that the process was not insulated from the over 
situation.  He recalled, however, that the draft services text of the Cancun declaration had been 
attainable and he stressed that services did not cont ribute to the unravelling at Cancun.  In this light, 
he believed that work could continue in services on the basis of this draft as there was much work to  TN/S/M/9 
 Page 27 
 
 
 be done.  Despite the general observations that th e services negotiations were running smoothly, he 
recalled that the number of initial offers subm itted remained low and their quality not quite 
satisfactory.  In this light, he welcomed that sever al Members were ready to submit their initial offers.  
He said it would be desirable for the Special Sessi on to follow up discussions on the matters contained 
in the draft Cancun declaration.  He said that bilate ral meetings could be pursued at the same time as 
discussions on technical issues.  In this way, the negotiations could be move d forward without losing 
momentum in the services negotiations, which might al so play a positive role in terms of the overall 
situation.  Turning to his preliminary comments on the Secretariat note on mode 4, the representative 
thanked the Secretariat and hoped that it would help  to further work on common categories of natural 
persons.  With respect to the category of intra-cor porate transferees, he wondered whether an affiliate 
could be included in addition to a branch or subsid iary, since the concept of an affiliate was broad 
enough that it could be used as a definition in making commitments.  With respect to the categories of business visitors and service sales persons, he said that  one of the problems faced in this regard was 
the degree of overlap between the definitions relati ng to the descriptions of the activities carried out 
by these categories of natural persons.  These term s appeared to be used interchangeably among 
various schedules of Members.  To avoid confusion,  the two concepts would need to be combined.  
He believed that the category of services sales pers ons could be incorporated into that of business 
visitor.  With respect to the category of contractua l services suppliers, he said that one of the key tests 
was to distinguish between the contract for the supply of services from the employment in the labour 
market which was excluded from the application of the GATS according to paragraph 2 of the Annex 
on the Movement of Natural Persons.  In the part icular case of contractual services suppliers and 
independent professionals, it would not be easy to differentiate a contract from employment.  
Referring to the categories described in section D of th e Secretariat note, he said that the difficulty in 
using these categories laid in the fact that the concep ts were vague and difficult to verify.  He said that 
it would not be easy to identify objective criteria or elements for compiling definitions, particularly 
for item (i) which concerned spouses and partners of  ICTs and professionals, and seemed to have little 
connection to issues on trade in services.  The Chair
 suggested it might be useful for these questions 
to be made available in writing. 
91. The representative of New Zealand  sought to briefly address mode 4 issues and thanked the 
Secretariat for its note, which it thought would be a stimulus to work in the Special Session, friends groups and bilateral meetings.  She said that the id eas contained in the proposal presented by India to 
be valuable and hoped to revert to them at a la ter point in time.  On the review of progress in 
negotiations, she associated her delegation with the comments made by Japan and others.  She agreed 
that the services negotiations did not exist in a bubbl e and only so much could be achieved in services 
prior to a clearer picture in terms of other areas in  the round.  In the meantime, she felt that a large 
amount of technical and substantive work could usef ully occupy the subsidiary bodies and the Special 
Session on both market access and framework issues.  She said that the services negotiation process, 
although far from perfect, continued to edge forward despite recent events.  She welcomed the newest 
offers and noted in particular th e interventions by Colombia, Bolivia , China, Turkey and Peru.  She 
said that Members with offers on the table accounted for well over 80 percent of world GDP; nonetheless, she felt that Members were short of a critical mass.  She acknowledged the difficulties 
faced by developing countries in preparing their offers, particularly the LDCs, and she supported 
capacity building efforts.  She recognised the impor tant analytical work presented earlier in the 
meeting which looked at the benefits and challeng es to developing countries in opening up to trade in 
services.  Similarly, the ITC presentation had been helpful and she said her de legation would consider 
how it might contribute to this work.  She inform ed the Council that her delegation had had useful 
bilateral consultations.  She expressed her hope that  some major developing countries Members that 
had not tabled their offers would do so in the co ming months.  She said that friends groups had proved 
useful in addressing various sectoral and modal issues.  In terms of the framework negotiations, she 
agreed with the earlier report that the discussions had been substantive and constructive marked by 
active participation and new substantive proposals.   She hoped that the next cluster of services 
meetings would be as productive as the past fortnight, which she said hinged on the active TN/S/M/9 
Page 28  
 
 participation of all Members.  She hoped that the Council would make use of the luxury of time 
afforded by recent events.   
92. The representative of Australia
 expressed satisfaction that the cluster of meetings had been 
held and had found it to be a productive time in wh ich his delegation had been able to engage.  He 
said that one of the largest delegations from capital for some time had been present, in terms of the 
number of people in the delegation and the number of domestic agencies represented.  He said that it 
was a measure of Australia's commitment and confid ence in the process that this delegation had come, 
even though there had been some doubt cast on the su ccess of the cluster.  His delegation had been 
impressed by the work that had taken place in ma ny venues.  He recalled the good atmosphere and 
solid work done in the subsidiary bodies and appreciated the serious, cooperative and productive 
approach characterising those meetings.  He said that his delegation had held a full programme of 
bilateral consultations in which much ground had been traversed.  Productive and worthwhile friends 
groups meetings had also been held, in some of wh ich important steps had been taken in moving work 
forward.  Australia would continue to work on trade in services negotiations so long as higher bodies 
in the WTO so permitted.  He expressed concer n about the momentum for trade in services 
negotiations to continue to be useful if the br oader Doha round were not quickly brought back on 
track.  He recalled that the single undertaking a pproach that included negotiations on agriculture, 
industrials and other vital negotiations.  Even though he recognised that much technical work 
remained outstanding, he was not sure that momentum  could be maintained if the rest of the round 
languished.  He hoped that things would be put b ack on track and would work with this purpose in 
mind.  He joined those Members that had encourag ed those not having made initial offers or requests 
to do so as soon as possible.  He asked this in partic ular of Members that were  close to finalising their 
offers so that all Members could be fully engaged in and help drive forward the negotiating process.   
Implementation of Paragraph 15 of the Guide lines and Procedures for the Negotiations on 
Trade in Services 
93. The representative of Peru , echoing the Chair's opening remarks, recalled that this was a 
standing sub-item regarding the implementation of paragraph 15 of the Negotiating Guidelines.  He 
further recalled that there had been little time to  discuss this sub-item and the statement made on 
behalf of a group of countries at the last meeting.   He hoped that the joint submission would raise a 
few issues that might prompt thinking on Articles IV  and XIX:2 of the GATS.  He clarified that the 
submission was not a document for the Council's approva l, but rather was a statement on behalf of a 
number of Members meant to further thinking and reaction on the sub-item.   
94. Making a few remarks in view of the discussion held, the Chair  said that all had expressed 
satisfaction that new offers had been put on the tabl e and some had indicated that they were working 
on their initial offers, which was welcome news.  Taking into account that the Organization was 
comprised of 148 Members and subtracting LDCs and those that had directly or indirectly made 
offers, he said there remained 65 Members who could ma ke initial offers.  He also noted that since the 
last meeting nine initial offers had been submitted.  While he we lcomed these developments, he 
thought it fair to acknowledge that work remained .  Many Members had underlined the obvious links 
to other areas of the Doha negotiations.  Some Members had pointed out that in addition to new commitments, progress was also important in services rule-making issues.  A number of Members had characterised the cluster as positive, productive and transparent, and at least one Member had observed that a deteriorating situation in the negotiations overall could impact on the services 
negotiations, which were not insulated.  Some Me mbers expressed a degree of dissatisfaction with 
some of the offers tabled, though at least one Me mber had said that it was premature to draw final 
conclusions in this regard.  He recalled the referenc es to the importance of technical assistance and for 
contributions to the Global Trust Fund.  Many had expressed the view that it was important to continue with work at the same level of commitme nt if not more, and that Members should endeavour 
to make progress.  He noted that one reference had been made to the draft ministerial declaration,  TN/S/M/9 
 Page 29 
 
 
 though he refrained from making a comment on the stat us of the draft declaration.  He recalled the 
thanks expressed to the Secretariat for its paper.  He  took note of the offer by one delegation to make 
a presentation on telecommunications under the item as sessment of trade in services at the next 
meeting.  He drew attention to the statements to the effect that Members should take advantage of the 
time currently offered in view of the complexities in volved in the services area in particular for many 
developing countries.  He had not sought to summarise the discussion but to highlight a few points 
that had struck him as particularly relevant.  
95. The representative of Peru , rising on a point of clarification, sought to distinguish the joint 
statement, on which no comments had been offere d, from the standing sub-item which did not depend 
on discussion on the joint statement.  As had been ag reed by consensus, he e xpected that the sub-item 
would be maintained as it related to issues more  global and contained in  paragraph 15 of the 
Negotiating Guidelines. 
96. The Chair  said that it was his understanding that the sub-item was a standing one and by 
definition would be on the agenda.  He invited the Council to take note of the statements made under 
the item and its sub-item and revert to them at the next meeting. 
97. It was so agreed .  
E. OUTLINE  OF THE  CHAIRMAN'S  REPORT  TO THE  TRADE  NEGOTIATIONS  
COMMITTEE 
98. The Chair wished to provide the Council w ith an outline of his report to the Trade 
Negotiations Committee.  He said that he would re port that overall the meeting had been characterised 
by a positive atmosphere.  While a number of dele gations recognized certain constraints in the 
aftermath of the Cancun Ministerial, they indicat ed a desire to pursue the Council's work.  With 
respect to the Assessment for Trad e in Services, the Council held a lengthy discussion on the basis of 
a highly interesting presentation by the author s of an OECD study entitled "Services Trade 
Liberalization:  Identifying Opportunities and Gains – Key Findings".  Members expressed interest in 
the services trade success stories ou tlined in the paper, particularly those from developing countries.  
A few questions were posed about the research met hodology used in the study, and how its findings 
might lend support to the Council's work.  While  acknowledging that the paper did have some 
limitations, the representatives of the OECD felt that  general patterns could be  identified which might 
then be tailored to better fit national policy obj ectives.  The Council also heard an informative 
presentation by the International Trade Centre about a pilot project sponsored by the Government of 
Canada that provided assistance to ten Members in conducting national assessments of trade in 
services.  A number of Members expressed great interest in expanding or creating new projects in 
order to help Members overcome the capacity constraints faced in conducting assessments and 
exchange information on conclusions .  He would recall that the value of such assessments in the 
context of the negotiations had been highlighted on  many occasions, and that he thought that it might 
be useful to report that Members encouraged contribu tions to this worthy project.  Norway indicated 
that it would prepare a communication related to its  experience with the liberalization of energy 
services for discussion at a forthcoming meeting.  He w ould also report on his intention to continue to 
hold consultations with a view to structuring furt her the Council's work on the assessment of trade in 
services in the context of the negotiating guidelines.    
99. Under the item "Proposals Relating to the Nego tiations under Article XIX" he would report 
that the Council had a short but substantive discussion based on a proposal submitted in July by a 
group of 15 Members on the Proposed Liberalization of Mode 4 under GATS.  A number of 
delegations took the floor to provide substan tive comments on the proposal, to underline their 
negotiating interest in mode 4 a nd to reiterate the improvements on mode 4 commitments contained in 
their offers.  A few delegations expressed di sappointment with the low level of improved TN/S/M/9 
Page 30  
 
 commitments in the offers on the table and flagged that there were many areas of negotiating interest 
beyond mode 4.           
100. With respect to the item of the Review of Pr ogress in Negotiations, his report would state that 
Members expressed satisfaction that new offers had b een tabled since July an d that some indicated 
they were working on their initial offers.  Members welcomed these developments but felt that more 
would need to be done.  The obvious links with other areas included in the Doha Development 
Agenda were noted, as was the need for progress on market access to proceed in a balanced manner 
with negotiations on rule-making areas of service s.  A number of Members referred to the good, 
transparent and positive work that had been conducte d over the course of the cluster, including in 
friends' groups and bilateral cons ultations;  however, at least one Member noted a serious 
deterioration in the negotiations  overall and that momentum could be lost because the services 
negotiations did not exist in a bubble.  Some Member s expressed  a degree of dissatisfaction with the 
offers that had been presented, although they r ecognised that it would be premature to draw final 
conclusions.  The importance of technical assistan ce and capacity building activities were underlined 
and calls were made to continue to contribute to the DDA Global Trust Fund.  Many stated that it was 
important to continue work with the same level of commitment and endeavour to make progress.  One 
reference was made to the draft ministerial declara tion.  The suggestion was made that Members take 
advantage of the time currently affo rded to them in order to prepar e work on complex services issues.  
101. As concerned the Council's discussion on the Orga nization of Future Work, he would inform 
the TNC of the views expressed that planning for th e next cluster of meetings should continue with 
the knowledge that proposed schedule remained ultimat ely contingent on any decision taken in this 
regard by the Trade Negotiations Committee or the General Council.   
102. The Council took note
. 
F. ORGANIZATION  OF FUTURE  WORK 
103. The Chair , referring to the schedule of meetings in 2004, recalled that meeting facilities were 
a scarce resource that required advance planning for the sake of keeping options open.  He said that 
the Secretariat had made tentative bookings for meet ings in 2004 and he indicated what these dates 
might be.  He reiterated that the purpose of the te ntative bookings was in order to keep options open 
and that he was aware of the technical and political dimensions of these meetings that would be taken 
up elsewhere.  He invited delega tions to overlook the dates of the room bookings and to share any 
views they might have with himself or the Secretar iat.  With regard to the December cluster of 
meetings, he said that it appeared to him from the st atements made that delegations wished to proceed 
with meetings as scheduled.  In view of that, he thought that planning should proceed on that 
assumption, although he said that delegations would be notified of any relevant decisions taken by 
higher bodies in this regard.  It appeared to him, at least at that point in time, that a meeting would be 
useful and appropriate and he would transmit this impression to the Chairmen of the General Council 
and the Trade Negotiations Committee.  He presum ed that, should the meeting go ahead, the regular 
"book-ends" format would be preserved.  He also recalled that, as outlined earlier in the meeting, the 
dates for the workshop on domestic regulation woul d be pushed back from the date originally 
proposed during the next cluster for logistical reas ons.  He said that it was his understanding that the 
Chair of the Working Party on Domestic Regulation had been consulting delegations as to when they 
might wish to see the workshop re-scheduled.   
104. The Chair of the Working Pa rty on Domestic Regulation , informing the Council about his 
consultations, said that while most delegations were  flexible as to the date of the workshop, it 
appeared to him that a preponderance of Members preferred deferring the workshop to the February 
2004 cluster of meetings as they were mindful of  the uncertainty surrounding meetings in December 
as well as the many consultations that would be occurri ng with regard to the overall situation.  He also  TN/S/M/9 
 Page 31 
 
 
 said that logistical arrangements would have appeared to pose a problem.  He said that holding the 
workshop in February might also provide some ti me to seek more funding that might help increase 
participation.  Although he had not been able to c onsult with all delegations, those that he had spoken 
with had expressed some of these views.   
105. The representative of Brazil , referring to the Chair's comments on the meetings scheduled for 
December, sought clarification as to whether he was referring to the regular session of the Council or 
to a complete cluster.  If he had referred to the la tter, he asked if it was the Chair's understanding that 
the services meeting, benefited from a bubble.  It had been his understanding that the current meeting 
had been maintained for administrative and logisti cal reasons, and that a decision had been taken to 
suspend all meetings of negotiating sessions un til a higher body had made a decision.   
106. The Chair  said that, while the Council could only address the Special Session meetings, 
planning tried to ensure that meetings occurred in an  organised manner in the form of a cluster.  He 
confirmed that there had been some consultations w ith regard to the present meeting, and it was felt 
that there was not enough time to give notice for a meeting cancellation, which explained why a 
bubble had been created for the present meeting.  He said that this did not preclude the option of 
Members meeting in December.  From what he had heard to that point in the meeting, there was a 
desire to meet in December and he said that he wa s aware of the political dimensions that would be 
left to a higher body.  Referring to the representativ e's understanding that a decision had been taken to 
suspend all meetings of negotiating bodies, he sai d that he was not aware that any such formal 
decision had been made.  He supposed that there woul d be consultations on this point.  With regard to 
the suspension of some negotiating body meetings, he  said that the logic behind that conclusion was 
that the relevant work would be taken up under the aegis of the General Council, which had not 
appeared to be the case for services and perhaps some other areas.   
107. The representative of Brazil , referring to the comments by some delegations reflecting 
positively on a December meeting and the importance maintaining momentum, said he agreed, but he 
also felt that such momentum was not intrinsic to  the services negotiations, and that moving ahead to 
quickly could generate problems.  If there was an  impression that the Special Session would be held, 
he sought to communicate his delegation's reservation in  this regard.  Whilst he was ready to hold the 
cluster in December, he saw it connected to other areas of the negotiations for which he had not been informed of a similar readiness.  With respect to the meetings in 2004, he felt that a similar light 
should be cast on them.  Preparations and room r eservations could be made , but he thought it should 
be borne in mind that a political decision was pending and that it would be made elsewhere.   
108. The representative of the Dominican Republic
 drew attention to the World Summit on 
Information Society and the preparatory meetings for it scheduled for December.  She thought that 
this event should be taken into account in any planning, notwithstanding any decision taken by a 
higher body.  
109. The Chair  outlined the proposed dates for meetings  in December and took note of the 
representative's comments.   
110. The representative of Canada  said that he could accept the Chair's proposal and qualification 
that the planning for meetings might be for nought.  For his delegation, he was prepared to work all 
the while understanding that the absence for a date for the improvement of offers would have an 
impact.  He thought it best to leave the discussions pertaining to the overall situation to the appropriate body, and he was under the impression th at work would continue unless delegations were 
instructed otherwise.  As he had not heard any divergences in the discussion under the item thus far, 
he endorsed the Chair's comments.  TN/S/M/9 
Page 32  
 
 111. The representative of the Philippines
 said he was not aware if any other delegations were 
more informed of discussions about the deferment of  meetings for other negotiating issues specifically 
referring to agriculture, rules and market access.  He  thought that it might be useful to learn more 
about these discussions without prejudging positions as to whether the Special Session should decide whether to hold meetings in December.  He was mindful of the fact that the Special Session should be 
proactive in reserving rooms and that the body w as subject to action taken by the General Council 
which acted on behalf of Ministers between conferences.   
112. The representative of Hong Kong, China
, agreeing with the comments by Canada, felt that the 
Chair had outlined a practical way to proceed for se rvices delegates and colleagues in capital in order 
that they could plan irrespective of what might ha ppen in the wider context.  Alluding to logistics 
such as flight and hotel bookings, he thought that the issue was being looked at in a pragmatic 
manner.  He said that the Chair's caveat had been  very clear to his delegation.  Regarding the 
workshop on domestic regulation and noting the Chair's comments on the desire to augment 
participation particular from devel oping country Members, he suggested that an early indication of the 
date would be helpful fo r planning purposes.   
113. The representative of India  rose on a point of clarification with reference to the logistical 
problem encountered by the WPDR in light of th e World Summit on Information Society and asked if 
this would have any bearing on any services meeti ngs.  He also suggested that the time period 
between the bookends of a meeting be shortened give n the difficulty for capita l-based representatives 
to stay in Geneva for a long time.  The Chair  said that he and the Secretariat would look into the point 
on logistics and would alter any tentative dates if necessary.  
114. The representative of Switzerland , referring to the Chair's opening comments to the meeting, 
thanked the Chair for his efforts and thought that th e cluster had been productive.  It was for this 
reason that his delegation thought that it would be a ppropriate to have a full cluster in December.  He 
echoed the observation made by the Chair that statemen ts had been made to this effect and he noted 
that no delegation had formally opposed this suggesti ons.  It was a matter of fact that the context was 
shaped by the single undertaking and that there woul d be an overall balance in the end.  He felt it was 
appropriate to pursue work in an ambitious manner,  mindful of the fact that a higher decision might 
be made in the future.  He did not see any reason to suspend meetings and could endorse the Chair's 
approach.   
115. The representative of Cuba  urged the Chair to clarify the d ecision on continuing with services 
work.  Her delegation had been under the impressi on that services work would be contingent on a 
decision, and she sought to reserve her delegation's po sition in this regard.  She said that in principle 
her delegation was in favour of continuing work of  importance to developing countries, although she 
was aware of the overall assessment being conduc ted of the situation elsewhere.  The Chair  said that 
the current arrangement had been decided on quickl y by the Chairman of the General Council and the 
Director General.   
116. The representative of Indonesia  expressed support for the continuation of trade in services and 
his concern regarding the next cluster of meetings.  He said it would be helpful to have a confirmation 
as soon as possible in order to plan for the sending of  a capital-based delegation for the next cluster.  
The Chair  said he would endeavour to come back to  delegations as soon as possible for planning 
purposes.   
117. The representative of the United States  sought to clarify, as the Chair had proposed in a 
constructive spirit to move forward, that she unders tood that Members could tentatively plan to meet 
in December all the while bearing in mind that th ere was a larger context and that decisions made 
elsewhere might change the course.  As others had said, although representatives were present with a 
constructive spirit, she recognised that some delegatio ns might not be able to move forward or present  TN/S/M/9 
 Page 33 
 
 
 initial offers unless there was movement forward in other areas.  With respect to the dates for 
meetings in 2004, she understood that the Chair had requested that delegations reflect on these for the 
purpose of convenience and she viewed them in that light.   
118. The Chair  invited the Council to take note of the stat ements made and that it revert to this 
item. 
119. It was so agreed . 
G. OTHER  BUSINESS 
120. As there were no points pending under this item, the Chair  invited the Council to take note of 
the statements made before he adjourned the meeting.  
121. It was so agreed . 
 
 
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 TN/S/M/9 
Page 34  
 
 ANNEX
3 
 
145. The representative of China , referring to the report by the Ch air of the Committee on Trade in 
Financial Services, stated her delegation's view that it had contained an element which was not 
relevant to the Council's work.  She recalled that th e scope of the reports of the subsidiary bodies, 
including the CTFS, was to be confined to matters relating to the work of the Special Session of the 
Council for Trade in Services.  She stated that the tr ansitional review was not relevant to the work of 
the Council, which her delegation ha d highlighted in 2002 when it had expressed its hope that such a 
reference would not be made in the future.  She regretted that this hope had not been recalled and 
objected to the reference to the transitional review in  the reports of the Chairs' reports to the Council.  
She requested that the relevant references be struck from the meeting report and hoped that the 
incident would not reproduce itself in the future.     
__________ 
                                                     
 
3 Excerpt from document TN/S/M/8.