RESTRICTED
WORLD TRADE S/C/M/11
8August 1996
ORGANIZATION(96-3165)
Council forTrade inServices
REPORT OFTHE MEETING HELD ON28JUNE 1996
Note bytheSecretariat
1. TheCouncil forTrade inServices heldaspecial meeting on28June1996. Theagenda for
themeeting iscontained inparagraph 2ofAirgram WTO/AIR/362. TheChairperson proposed that
thetwoitems ontheagenda betaken upinreverse order.
ItemB:Thestatus ofacceptances oftheSecond andThird Protocols totheGATS
2. TheChairperson recalled thatthedeadline fortheacceptance oftheSecond Protocol tothe
GATS, relating tofinancial services, andtheThird Protocol, relating tomovement ofnatural persons,
was30June1996. InsofarastheSecond Protocol wasconcerned 18outof29Members concerned
hadthusfaraccepted it.TheywereChile, Japan, Morocco, Hong Kong, Switzerland, Turkey, Kuwait,
Singapore,Hungary,theEuropeanCommunity,India,Canada,Korea,Australia,Norway,SouthAfrica,
Thailand andVenezuela. With respect toMembers States oftheEuropean Communities, ninehad
accepted. They wereFinland, Germany, Ireland, Austria, United Kingdom, Denmark, France, Italy
andtheNetherlands. Brazil, Portugal andGreece hadaccepted subject toratification. Insofaras
theThird Protocol wasconcerned fiveMembers hadthusfaraccepted. They wereAustralia, Canada,
India, Norway, andtheEuropean Communities withnineofitsMember States (Austria, Denmark,
Finland, France, Germany, Ireland, Italy, Netherlands andtheUnited Kingdom). Greece andPortugal
hadaccepted subject toratification.
3. TheChairperson noted thatinaccordance withtheterms oftheSecond Protocol, ifby1July
1996 theProtocol hadnotbeenaccepted byalltheMembers concerned, those Members which had
accepted before thatdateneeded todecide onitsentry intoforcewithin aperiod of30days. Shepointed
outthatitseemed clearthatthisprocedure would havetobefollowed andthatadecision would have
tobetaken bytheendofJuly. InsofarastheThird Protocol wasconcerned, theprocedure wasslightly
different. TheProtocol entered intoforce onthe30thdayfollowing thedateofeachacceptance.
However, ifaMember whose schedule wasannexed totheProtocol hadnotaccepted by30June, the
matter wastobereferred totheCouncil forconsideration andappropriate action. Sheadded thatthus
farthedelays inacceptances ofthetwoProtocols were saidtobeofapurely procedural nature and
thattherewerenosubstantive problems raised withrespect torelated commitments orMFN exemptions.
Under thesecircumstances, shesuggested adecision might betaken bytheMembers which hadaccepted
theSecond Protocol toletitenter intoforce andatthesame timeinvite those whohadnotthusfar
accepted todosoattheearliest possible date. With respect tobothProtocols, shepointed outthat
Members whohadnotthusfaraccepted thencould onlydosoasiftheCouncil wastotakeadecision
extending theacceptance period, sinceformally, acceptance wasnolonger possible after30June1996.
TheChairperson stressed thatitwasveryimportant fortheintegrity andthecredibility ofthemultilateral
trading system toimplement theresults ofthenegotiations inbothareas. Shetherefore urged the
Members concerned todotheirutmost tobeabletoaccept theProtocols within theshortest possible
period oftime.S/C/M/11
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4. Therepresentatives oftheCzech Republic, Mexico andPoland, stated thattheirgovernments
were inaposition toaccept theSecond Protocol andthattheirdelegations would proceed todoso.
Therepresentative ofSwitzerland stated thatalthough hisgovernment remained committed tothe
improvements contained initsschedule annexed theThird Protocol, ithadnotaccepted itsince some
major participants hadnotthusfarcompleted theirinternal procedures foracceptance. Heindicated
thatSwitzerland would accept theThird Protocol immediately upontheacceptance ofother Members.
5. Therepresentative ofIndia stated thathisdelegation hadalways beenintheforefront ofthe
negotiations ontheThird Protocol andthathisgovernment hadaccepted itupon assurance byall
Members concerned thattheywould accept theProtocol. Therefore itcame asamatter ofsurprise
tohisdelegation tolearn ofproblems faced bysome Members inrelation totheacceptance ofthe
Protocol. Headded thatalthough procedures hadtotaketheirtime, itwould beofdeepconcern to
hisdelegation ifMembers weretogivetheThird Protocol alower priority thanother Protocols and
ifthespirit ofgoodfaithinwhich hisdelegation hadaccepted itwerenotreciprocated bysomeMembers.
6. Therepresentative ofJapan recalled thathisdelegation wascriticized during thenegotiations
ontheSecond Protocol forrequesting thatthedeadline foracceptance should beextended until30June
1996. Headded thathisdelegation understood thatprocedural difficulties could arise. However,
paragraph 3oftheSecond Protocol stipulated thatMembers which hadaccepted theProtocol before
1July1996 were tobetheoneswhowould decide within 30daysonitsentry intoforce.
7. Therepresentative oftheEuropean Communities stated thatallMembers concerned were
committed tothecompletion oftheiracceptance procedures andthathedidnotseewhyprocedural
delays insome cases should beamatter forconcern toother Members. Headded thatonprevious
occasions, procedural delays hadcaused some countries toaccept results ofmultilateral negotiations
laterthanhadoriginally beenforeseen. Hestressed thattheMember States oftheECwerecommitted
totheimplementation ofthecommitments annexed totheSecond Protocol. Hedidnotforesee any
difficulties inhaving adecision taken bytheMembers concerned within the30dayperiod toallow
theProtocol toenter intoforce.
8. Therepresentative ofAustralia stated thatherdelegation hadalready accepted theSecond and
Third Protocols, andthatsheunderstood thatthedifficulties faced bythosewhohadnotthusfaraccepted
were onlyofaprocedural nature. However, sheurged those Members toexpedite theirinternal
procedures andaccept theProtocols assoonaspossible.
9. Therepresentative ofCanada stated thathisdelegation hadalready accepted theSecond and
Third Protocols andthatitwasregrettable thatnotallMembers concerned haddoneso.Hesuggested
thatameeting needed totakeplace within thefollowing month totakeadecision ontheentry into
force oftheSecond Protocol.
10. TheChairperson stated thatsheintended tostartinformal consultations onthedecisions that
needed tobemade byMembers which hadaccepted theSecond Protocol andbytheCouncil withrespect
totheThird Protocol. Shesuggested thattheCouncil takenoteofthestatements made andrevert
tothisitematitsnextmeeting.
11. TheCouncil soagreed.S/C/M/11
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ItemA:Matters relating totheconclusion ofthenegotiations onmaritime transport services
12. TheChairperson drew attention todocument S/C/W/15 containing adraftDecision proposed
bytheNegotiatingGrouponMaritimeTransportServicesforconsiderationandadoptionbytheCouncil.
Since delegations werefamiliar withthecontent ofthedraft, shesuggested thattheCouncil adopt the
Decision.
13. TheDecision wasadopted.
14. TherepresentativeofNorwaystatedthathisdelegationhadagreedtotheadoptionoftheDecision
inspite oftheirconcern about thecontinued suspension oftheMFN obligation oftheGATS, onwhich
theDecision prolonged thearrangements stipulated intheAnnex onNegotiations onMaritime Transport
andtherelated Ministerial Decision. Nonetheless, hisgovernment haddecided tobindthebestoffer
ithadsubmitted inthecontext ofthese negotiations.
15. Therepresentative ofHong Kong stated thatthere hadbeengreat disappointment caused by
thefailure oftheUnited States tocome forward withanoffer. Hisdelegation found unacceptable
thestatement made bytheUnited States administration on14Junewhich described theoffers thathad
beenmade byother participants asmerely locking inplace "restrictive, anti-competitive measures".
Healsostated thatwhen ithadbecome certain thattheU.S.would notmake anoffer, other major
participants werenotabletoprovide leadership intheclosing stages ofthenegotiations andadopted
aminimalist approach. Headded thatthedecision thathadjustbeenadopted bytheCouncil dealta
serious blowtothemultilateral trading system bysuspending MFN andhoped thatitwould notestablish
aprecedent. Hestressed thathisdelegation hadaccepted thedecision withgreatreluctance andregarded
itsfourth paragraph, relating tothesuspension ofArticle II,asregrettable. Hestated thathisdelegation
needed toreflect carefully overthefollowing 30daysonwhattodowithrespect totheschedule of
commitments ofHong Kong relating tomaritime transport.
16. Therepresentative ofIceland stated thathisgovernment haddecided tobindtheofferithad
submitted inthecontext ofthese negotiations. Therepresentative ofJapan stated thattheDecision
thathadjustbeenadopted bytheCouncil wasnotacause forcelebration. Thereality wasthatthere
hadbeenafailure byonemajor participant toengage intheprocess.
17. TheChairperson suggested thattheCouncil takenoteofthestatements made.
18. TheCouncil tooknote.