RESTRICTEDWORLD TRADE
ORGANIZATIONS/CSC/M/10
15 July 1999
(99-2937)
Committee on Specific Commitments
REPORT OF THE MEETING HELD ON 14 JUNE 1999
Note by the Secretariat
1. The Committee on Specific Commitments held its tenth meeting on 14 June 1999 under the
Chairmanship of Mr. Juan Marchetti of Argentina.  The agenda of the meeting was contained in
airgram WTO/AIR/1101.
II. SCHEDULING GUIDELINES
2. The Chairman opened the debate on document Job No. 3006, dated 26 May 1999.  It had been
prepared at the request of the Committee and attempted to sum up the positions expressed by
Members on the suggested revision of the scheduling guidelines (the suggestions are contained indocument S/CSC/W/19).  He proposed proceeding sect ion-by-section and, in that context, identifying
areas of consensus to be incorporated in a revised version of the scheduling guidelines.  (All
references to paragraphs given below relate to documents Job No. 3006 and S/CSC/W/19, which have
the same numbering.)
3. The representative of Switzerland noted the link between scheduling methods and negotiating
techniques.  The present revision of the scheduling guidelines should not preclude the adoption of
new negotiating techniques.  However, it was wort h continuing the current process with a view to
agreeing as soon as possible on a set of guidelines.  On paragraph 7, his delegation supported the idea
of developing an alphabetical index and attaching various sectoral guidelines, but was reluctant as to
the attachment of the guidelines for MFN exemptions.  The latter issue had not been agreed on during
the Uruguay Round and needed to be solved in the next round of negotiations.  The representative of
Australia shared these concerns.  Attaching the guidelines for the scheduling of MFN exemptions
might be viewed as an encouragement to perpetuate  these exemptions, although they were destined to
be phased out.
4. The representative of Hong Kong, China felt that the current process was sort of a
transparency exercise.  It needed to be as comprehensive as possible even if not all problems could be
solved.  Cross references to relevant documents, such as the note on the relationship betweenArticles XVI, XVII and VI, or minutes of Committee meetings could prove useful.  The
representative of Colombia expressed a similar position concerning the scope of the guidelines.  The
representative of Brazil stressed that the guidelin es should not attempt to reinterpret the agreement
and that user-friendliness should not be achieved at the expense of legal clarity.
5. The representative of Canada stressed that the guidelines should not seek to clarify
ambiguities contained in the GATS itself or resulting from the Uruguay Round negotiations.  He
indicated support for the suggestion to include cross references and endorsed  the position expressed
by Brazil.  The relationship between new and old schedules should be studied, given the implicationsS/CSC/M/10
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for classification and scheduling and the need to ensure that new commitments actually improved on
existing commitments.  Hong Kong, China shared this view.  The representative of India,  noting that
this was an important issue, suggested looking in to the treatment of similar problems in the GATT
area.  The representative of Canada pointed out the rudimentary nature of past verification exercises.
The representative of the European Communities felt that, for the sake of legal clarity, the guidelines
should be as extensive as possible;  user-friendliness was a secondary consideration.  She recalled that
the MFN scheduling guidelines did not have the same legal status as those governing the scheduling
of specific commitments and, thus, needed further work.  Like Canada, she argued for the
strengthening the verification process in order to prevent the deterioration of commitments.
6. The representative of New Zealand agreed with the suggestion contained in paragraph 7, with
the exception of the attachment of the MFN scheduling guidelines.  The representative of the United
States, on a preliminary basis, noted that neither the MFN scheduling guidelines nor the draft model
schedule for maritime transport should be attached.  The representative of Hong Kong, China
indicated his delegation was still considering its position on the attachment of the MFN scheduling
guidelines.  The representative of India reserved his rights to comment in future and cautioned against
any reinterpretation of the Agreement and/or prejudgement of future negotiations.
7. The Chairman summarized that several delegations had emphasized the need to improve the
guidelines which should be as extensive as possible.  However, they should not seek to reinterpret the
Agreement.  Moreover, there was agreement to include  cross references to relevant documents, create
an alphabetical index, merge documents MTN.GNS/W/164 and 164/Add.1, and annex certain sectoral
model schedules.
8. On the relationship between old and new commitments, the Secretariat noted that all new
commitments had to comply with the objective, spelled out in Article XIX, of a higher level of
liberalization.  However, there may be questions of interpretation:  should this objective be met in
overall terms or on an item-by-item basis?  This was to be decided by Members.  The Secretariat also
saw the need to upgrade the verification process, which was currently conducted on a consultative and
informal basis, to ensure that only improvements were included.  The procedures, jurisprudence and
practices relevant for goods might provide inspiration, but were not necessarily transposable.
9. With regard to paragraph 9, the representative of Brazil supported a proposal made by the
United States.  Accordingly, the first two sentences would be replaced by:  "Since the schedules are a
record of legal commitments, nothing should appear in them which a Member does not intend to be
legally binding".
10. Concerning paragraphs 9 and 10, the representative of Switzerland indicated that his
delegation was not convinced of a proposal by Egypt which would create a fifth column, not legally
binding, providing explanations for transparency purposes.  Members would at least need to agree
unanimously that this additional column had no legal value.  The representative of Egypt suggested
differentiating between the legality of the schedules themselves and their content.  The suggested fifth
column would indeed not have any legal value.  He felt, however, that transparency should not be
sacrificed for the sake of legal clarity;  additional information might prove extremely important.  The
representative of Japan did not want to take position on the proposed inclusion of a fifth column.
However, since it might require a change to the GATS itself, the proposal seemed to go beyond a
mere revision of the scheduling guidelines.  The representative of Colombia recalled that footnotes
were useful instruments, which had often been included to clarify issues raised during negotiations.They were legally binding whenever they defined the scope of a concession.
11. With regard to paragraphs 10 and 11, the representative of Hong Kong, China agreed in
principle with the idea that all entries should be in the four columns/four modes format.  However,
headnotes and attachments had often been used in schedules;  they helped to save space.  Hence,S/CSC/M/10
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rather than eliminating them, Members should work towards a common understanding of their legal
value.  As a preliminary comment, the representa tive of the European Communities underlined the
difficulties of separating legally binding elements from transparency elements in existing schedules.
This would have to be decided on a case-by-case basis which, however, would be far too resource
intensive.  Rather than negotiating general solutions for the guidelines, it was probably wiser to clarify
relevant questions in the context of the submission of offers in the next round.
12. The representative of the United States expressed concern about the use of footnotes and
headnotes.  On the other hand, he acknowledged that there had been complaints about the lack of
transparency in current commitments.  A fifth column might not be a solution, however.  It would be
used mainly by telecom and financial services regulators to explain and justify their mandates.
Ideally, footnotes should be merged in schedules when they related to both market access and national
treatment, and headnotes if they defined scope or coverage.  As a practical matter, however, there was
no point in renegotiating footnotes.  Existing footnotes might probably have to stay and begrandfathered, while the inclusion of new notes should be prohibited.  However, the relevant
decisions needed to be taken in their proper context and not in conjunction with the revision of the
scheduling guidelines.  Transparency would be enhanced if delegations were allowed to submit an
explanatory document.  The representative of New Zealand recalled that his delegation considered
any element in a schedule to be legally binding, whether it was a footnote headnote or an attachment,
and doubted the relevance of a fifth column.  However, transparency was a real problem.
13. With regard to paragraph 11, the representative of Switzerland stressed the importance of
headnotes in the context of formula approaches.  Since such approaches might gain prominence in
future, he proposed further exploring the idea of developing guidelines which defined the content of
headnotes.  The representative of the European Communities felt that many headnotes were intended
to have legal effect and, at the same time, enhance transparency.
14. With regard to paragraph 12, the representative of Switzerland agreed with the Secretariat's
view that attachments had the same legal value as the part of the schedules they were referring too.
15. With regard to paragraph 13, he agreed that, since the entry into force of commitments was a
relatively straightforward issue, Article XX:1 e) of the GATS had little significance.  However, it waspart of the Agreement and could not be suppressed through changes in the scheduling guidelines.  He
proposed inclusion of the relevant provisions in a "check list" for future negotiation in the Committee
on Specific Commitments.  The representative of Canada reserved his delegation's position with
regard to the forum dealing with  such a "check list".  The representative of Hong Kong, China,
referring to questions surrounding the treatment of autonomous liberalization, noted that the date of
entry into force of commitments could be a relevant factor.  Further discussion might be needed.  On a
preliminary basis, the representative of the European Communities indicated that this question was
more complex than it appeared on the surface, given the existence of protocols and phased-incommitments.  It might thus be worth considering amendments to Article XX:1 e) in future
negotiations.
16. With regard to paragraph 14, the representative of Switzerland supported the Secretariat's
suggestion of including in this paragraph information on the treatment of limitations on the
geographical scope of commitments.  Such information was contained in MTN.GNS/W/164/Add.1.
17. With regard to paragraph 15, the representatives of Canada and Switzerland  indicated that
they did not favour the inclusion of the words" pre-entry" and "post-entry".  The representative of
Hong Kong, China felt that there was a real problem which was worth being included in the "check
list".S/CSC/M/10
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18. With regard to paragraph 16, the representatives of Canada and Switzerland  disapproved of
the inclusion of the words "nationals" and "foreigners".  The latter delegation saw merits, however, in
clarifying the fact that non-discriminatory measures should be scheduled under Article XVI when
they fell under one of the six categories.  It might even be necessary to include additional categories in
Article XVI as the actual list did not fully capture all relevant obstacles:  for instance, the requirement
that clearing services might only be provided by an official body would neither fall under Article XVI
nor Article XVII although it limited business opportunities.  The creation in the new round of an
additional category of Article-XVI:2 measures "having equivalent effect to the limitations listed under
Article XVI" might solve such problems.  The representative of Hong Kong, China agreed with the
Secretariat that it would be worth clarifying that non-discriminatory measures might also fall underArticle XVI.  Previous statements by delegations had only criticized the terms used by the Secretariat
(foreigners versus nationals), but not denied the existence of a problem.
19. With regard to paragraph 18, the representative of Switzerland agreed on the need to further
clarify the scheduling of licensing and qualifications requirements, such as financial soundness or
membership of professional organization.  However, he shared concerns expressed by other
delegations about the wording proposed by the Secretariat which seemed to suggest that such
requirements did not discriminate in general.  More neutral and precise language was required.  In
addition, he proposed redrafting the last but one sentence in the following manner:  "Nor should theybe scheduled under Article XVI as long as they do not contain a numerical limitation;  a numerical
limitation on the membership of professional organizations would require scheduling under
Article XVI".  Although the quality of the guidelines was a key concern, it was also important to
ensure compliance.  The representative of Hong Kong , China felt that the Secretariat had identified a
real problem in paragraph 18 but, like other delegations, he would prefer the use of more neutral
language.
20. With regard to paragraph 19, the representative of Switzerland saw no need to change the
actual wording of MTN.GNS/W/164 to cover minimum requirements.
21. With regard to paragraph 21, he interpreted the word "total" as referring to maximal
limitations.  However, it was not useful to discuss such interpretation issues in the current context.
22. With regard to paragraph 23, he agreed with the Secretariat's proposal to include the relevant
part of document MTN.GNS/W/164/Add.1.
23. The Chairman summarized that paragraphs 15, 16 and 19 to 21 would be included in the
"check list", paragraphs 17 and 23 be listed among the agreed issues, and paragraph 18 be redrafted in
a more neutral manner.
24. With regard to paragraph 24, the representative of Switzerland agreed with the idea of listing
typical national treatment restrictions provided that  such a list would only be used to exemplify cases
clearly falling under Article XVII.  In that respect, the examples given were not entirely convincing
and needed further work.  In particular, his delegation agreed with Hong Kong, China that the
residency requirement referred to might well be justified under Article VI;  a similar requirementapplying to all directors could be a more pertinent example.  In the same vein, qualification and
technology-transfer requirements might fall under Article VI rather than Article XVII as they could benon discriminatory in nature.  The example used for performance requirements would possibly fall
under the proposed new category under Article XVI:2  ("measures having equivalent effect to the
limitations listed under Article XVI") and did not necessarily affect national treatment.  The
representative of Brazil agreed with the idea of setting up an illustrative list of national treatment
restrictions.  Listing measures which might fall either under Article VI or Article XVII would be
worth considering as well.S/CSC/M/10
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25. With regard to paragraph 25 the representative of Switzerland considered the clarification
suggested by the Secretariat to be useful.  It was appropriate to use such terms as de jure and de facto
even if they were not contained in the Agreement;  they had already been used in paragraph 7 of the
scheduling guidelines.
26. The Chairman, concluding the debate on this section, stated that the additional examples for
paragraph 24 had been judged useful, but that some more work on drafting was needed.  The relevant
part of MTN.GNS/W/164/Add.1 would be merged with paragraph 25, while paragraphs 26 and 27
would be included in the "check list".
27. With regard to paragraph 29, the representative of Switzerland considered it inappropriate to
single out prudential measures in a paragraph dealing with exceptions in general.  Moreover, if
prudential measures were an exception to the agreement, as stated in paragraph 13 of the guidelines,
they could not be the subject of an additional co mmitment.  In summing up, the Chairman noted that
there was agreement not to modify paragraph 13 of the guidelines.  The problem raised in
paragraph 28, the possibility of taking an additional commitment on a modal basis, was to be
inscribed in the "check list".
28. With regard to paragraphs "1" (the number is due to a typographical error) and 31, the
representative of Switzerland considered it premature to discuss classification issues at present.  This
could prejudge the outcome of other work in this area.  He also felt that it was not useful to mention
the possibility of using CPC rev.1 in the last sentence of paragraph 1.
29. With regard to paragraph 32, he suggested that the Secretariat drafted a paper on the
distinction between modes 1 and 2 on the one hand and modes 3 and 4 on the other, and set up an
illustrative list of examples.  Switzerland was of the view that the scheduling of identical entries under
both modes should not be encouraged as this would significantly expand the scope of limitations.  Itwould be preferable, where feasible, to reach a common understanding on the differences between
modes.  The representative of India stressed that commitments on modes 3 and 4 should be de-linked
in order to enhance the substance of the latter.  India welcomed any clarification in that respect.
30. With regard to paragraph 33, the representative of Switzerland agreed with the proposal per
se but suggested moving it to the following sect ion ("How to record commitments") or a new
section D dealing with "special cases".
31. With regard to paragraph 34, he considered the proposed clarifications on the use of
horizontal and sectoral entries as extremely useful.
32. With regard to paragraphs 36 and 46, he wondered on what basis an entry would
automatically be converted to "unbound" if a mode of supply suddenly became technically feasible.Would it be for the individual Members to decide what was feasible or not?  He suggested setting up
an indicative list of sectors where supplies could be considered unfeasible under certain modes.  The
entry "unbound*" was useful, notably for transparency and negotiating purposes.
33. The Chairman concluded that paragraph 32 dealing with the modes of delivery should be
inscribed in the "check list".  The Secretariat notes on the distinction between modes would be
annexed to the guidelines.  The creation an illustrative list of sectors and modes where supplies would
not be considered to be technically feasible might warrant further consideration.
34. With regard to the bolded paragraph 4 of document MTN.GNS/W/164/Add.1, the
representative of Switzerland suggested moving the first two sentences to paragraph 20 of W/164
("Horizontal commitments") and deleting the two last sentences.S/CSC/M/10
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35. The Chairman noted that the treatment of commitments with general, but unspecified time
limits - raised in paragraph 40 and bolded paragraph 4 (W/164/Add.1) - needed further discussion.
This was also true for paragraph 45 relating to the scheduling of foreign exchange controls.
36. Although differing views were expressed on the competence of the Committee to deal with
"check list" issues and on the timing of such work, it was agreed to request the Secretariat to set up
such a list.  It would include the comments made by  delegations on relevant issues.  Delegations also
opted for a revision of the guidelines which would contain all points of agreement, whether in current
draft language or at least in substance.  The relevant scheduling documents will be annexed to this
revision.  Finally, with regard to a request by Canada for a Secretariat paper on the relationship
between old and new commitments, it had been agreed that the Secretariat should give thought to theissues involved without necessarily producing a submission for the next meeting.
III. CLASSIFICATION
37. The Chairman recalled that the discussion on classification issues was to be conducted in
informal mode.  As agreed at the last meeting, it  would be recorded in an informal document which
was to be updated on a regular basis (see document Job No. 205/Rev.3).
IV. ELABORATION OF CONSOLIDATED ELECTRONIC SCHEDULES
38. The Secretariat gave a progress report on the development of the consolidated electronic
schedules;  they would be without legally binding effect.  The content of the data base had been
checked and updated between February and May 1999 and the relevant software (Sybase) adjusted to
the specific needs of searches in electronic schedules.  The Secretariat thus suggested, following the
procedures described in document S/CSC/W/5, to provide each delegation with a draft electronic
version of the relevant schedule.  The delegation would then have sixty days to comment and suggestmodifications.  If no comment was made, the schedule would be considered fit for printing.  In case of
comments, it would be modified accordingly.  As it was not envisaged to conduct a collective
verification, other delegations would be free at any time in the Committee on Specific Commitments
to raise questions concerning the accuracy of the consolidation made.
39. The Secretariat drew Members' attention to two questions.  First, in the case of the European
Communities it was felt that the creation of a consolidated schedules could prejudge future
Article XXI negotiations.  Therefore it might be preferable not to aggregate the various schedules
concerning the EC and its three most recent Members.  Secondly, as far as financial services were
concerned, the Secretariat suggested including only the schedules that had been ratified by the agreed
cut-off date of 15 June 1999.  Members so agreed.
40. The Secretariat indicated that it would circulate to Members the draft schedules with an
accompanying letter explaining the technical constraints of the compilation process (eg no italics, no
underlining, footnotes pushed into a fifth column) as well as possible uncertainties encountered during
this process.  The aim would be to have the fu ll set ready by fall 1999 in order to produce the CD
ROM and a paper version by year-end.  An internet  version would follow in the course of 2000.
41. The representatives of Canada and Hong Kong, China  suggested that before any mass-mailing
took place, a draft format should be circulated to Members to inform them of the basic lay-out of the
electronic version.  The representative of European Communities felt that the sixty-day period for
comment might be too short, given the summer break.S/CSC/M/10
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42. The Chairman concluded that the Secretariat would circulate a draft electronic schedule
accompanied by technical specifications and procedural suggestions.  A formal decision would then
be taken on this basis.
V. OTHER BUSINESS
43. The Chairman indicated that his consultations on the draft procedures for the modification of
the schedules had made significant progress.  A recommendation which the Committee could submit
for adoption to the Council for Trade in Services s eemed to be ready.  It would be inscribed on the
agenda of the next meeting of the Committee.
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