RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/M/36
15 June 1999
(99-2390)
Council for Trade in Services
REPORT OF THE MEETING HELD ON 18 MAY 1999
Note by the Secretariat
1. The Council for Trade in Services held a meeting on 18 May 1999.  The agenda for the
meeting is contained in WTO/AIR/1091.  The Chairman raised two points under other business. The
first concerned the circulation of two informal papers, one from the European Express Organizationon Postal and Express Delivery Services and the other from the International Chamber of Commerce
on Air Cargo Services.  The second point concerned a request received from the OECD to attend, as
an observer, the Council’s Special Session on Telecommunications scheduled for 25 June 1999.
A. ELECTRONIC COMMERCE – IMPLEMENTATION OF THE PROGRAMME
ADOPTED BY THE GENERAL COUNCIL
2. The Chairman recalled that at the previous meeting, on 26 April, the Council focused on five
of the ten issues identified in the Interim Report to the General Council as needing substantial further
work.  At this meeting he proposed to take up the remaining five issues, namely: (i) classification of
certain electronically delivered products as services or goods; (ii) “likeness” of electronically
delivered products in relation to MFN and National Treatment; (iii) implications of Article VI for
domestic regulation affecting electronic commerce; (iv) application of custom duties on electronic
transmission; (v) the valuation of electronically transmitted products in the context of encrypted
electronic payments.
3. The Chairman proposed that as from this meeting the discussions on electronic commerce be
held formally so that statements would be recorded  in the Reports of the meetings.  The delegation of
Brazil said that although they had no strong views on this point, it would have been awkward to have
discussed the first five items in the Interim Report in informal mode and then discuss the remaining
five formally.  He suggested that the Council complete discussion on all ten items in informal mode
and then held formal discussion as from the next meeting.  The representative of the United States
said that his delegation could accept Brazil proposal, provided that it was the common understanding
that as from the next meeting discussions would be held in formal mode.
4. The Chairman proposed that for this meeting of the Council the discussion be conducted in
informal mode as in previous meetings, on th e understanding that there would be a Chairman’s
summary for the record when the C ouncil switched back to formal mode.  He said that as from the
next meeting the discussions would be held in formal  mode.  On the basis of the informal meeting the
Chairman provided the following su mmary under his own responsibility:
(a) Classification of certain electronically delivered products as services or goods
5. Introducing the first issue, the Chairman said that at the Council meeting of December 1998,
Members agreed that all services delivered electronically were covered by the GATS.  Several
delegations, however, had said that they had not fully developed a position on the classification of
certain electronically delivered products which if delivered by non-electronic means would not beS/C/M/36
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considered services.  Some delegations had argued that electronic commerce could involve two
categories of products, services and intangible goods and that while it was beyond doubt that the
former were subject to the GATS, the latter would probably escape the GATS disciplines and
therefore might be subject to the GATT.  In contrast, other delegations had argued that all electronic
transmissions in which products were ordered and delivered electronically were services, andtherefore fully covered by the GATS.  The Chairman  suggested that this issue could benefit from a
more focused discussion in which Members examine some specific examples of those electronically
delivered products which might not be classified as services.  He added that the Council should also
try to appreciate the relative importance of this question in terms of whether this issue concerned a
considerable part of electronic transactions or only a small portion of it.
6. At this meeting of the Council all speakers endorsed the view that all services, whether
supplied electronically or otherwise, were covered by the GATS, and that the GATS made nodistinction between services provided electronically or by any other means.  Many delegations also
observed that the vast majority of all products delivered electronically are services, but it was
suggested that there may be some doubt as to whether a small number of specific products, even when
provided electronically, should rather be classified as goods.  It was pointed out that, in some cases,
the same content could be delivered either electronically or in physical form – the case of computersoftware was mentioned –  and that while the impor tation of the product in physical form would be
subject to GATT, the electronic form would be subject to a different regime.  It was also suggested by
one delegation that the concept of "intangible goods" might help to throw light on the question.
However, some delegations stated that they had not heard anything to persuade them that all contents
of electronic transmissions were not services.  Several delegations expressed the view that theclassification of any such products should be dealt with as a technical and legal issue, not as a matter
of negotiation.
7. Several delegations observed that while the number and trade share of electronically
transmitted products whose classification might be difficult was very small, uncertainty regarding
their status could bring obligations and commitments into question.  One delegation suggested that itwould not be sufficient to leave decisions on cla ssification to the discretion of individual Members
because classification had implications for the interpretation of legal obligations.  For example, one
Member might view its WTO obligations as permitting it to apply tariffs or quantitative restrictions to
magazines, whether supplied into its territory in physical or electronic form, while others might not.
It was noted that neither GATT nor GATS contai ned definitions of goods or services, but one
delegation suggested that the lack of a definition should not make it impossible to deal with the issues
arising.
8. It was suggested that a distinction might be made between transmission, which would
certainly be a service, and the content transmitted, which might not.  The issue of classification
therefore concerned the content of a limited number of transmissions.  Some delegations said that they
did not believe that there existed any category of "virtual goods" or "hybrids", but suggested that it
would only be possible to address the question logically if specific examples were put forward.  It wasalso said that if it was agreed that such a catego ry of "hybrids" existed, in could not be assumed that
GATT law would apply to them.  Ot hers suggested that it would probably be impossible, and was
perhaps premature, to agree on an ex-ante classification, and that if this was so it might be best to wait
and deal ad hoc  with any real problems if and when they arose.S/C/M/36
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9. In discussion of the differences between "tangible" and "intangible" products the point was
made that the distinction does not provide a clear frontier between goods and services, since many
services take tangible form.  It was also argued that many of the problems arising from the electronic
delivery of products, such as the ease of downloading and copying, were intellectual property issues
and were not affected by the classification of the product as a good or a service.  Furthermore, nolegal distinction could be made on this basis between the broadcasting of films or music or their
transmission by internet, for example, since copying was also possible from broadcasts, whose status
as services was unquestioned.
10. One delegation suggested that it might be desirable to apply to the content of some electronic
transmissions, while not calling into question their status as services, certain additional disciplines
over and above those of the GATS – for example, full national treatment and MFN obligations and a
prohibition of quantitative restrictions.  This would obviate some of the differences between the traderegimes applying to the electronic and physical versions of the same material.  Another delegation
supported this idea, pointing out that the electronic and physical forms of certain products are for all
practical purposes identical.  A number of delegations argued however that to apply different legal
treatment to certain services when supplied electronically would conflict with the fundamental
principle of technological neutrality, and it was also suggested that such additional disciplines wouldimply a higher level of GATS commitments – analogous to a formula approach  – for some digitalised
products than for other services, or for similar services delivered by non-electronic means.  Several
delegations nevertheless stressed that they favoured the most liberal regime possible for services
supplied electronically, consistent with the principle of technological neutrality.
(b) “Likeness” of electronically delivered products in relation to MFN and National Treatment
11. The Chairman recalled that at the Council meetings of December 1998 and February 1999,
when the issues of MFN and National Treatment were discussed, Members had noted that the
question of likeness was central to the application of these two principles.  It was the general view that
the principle of technological neutrality applied to MFN and to all GATS specific commitments andtherefore the likeness of products should not be affected by the technological means of delivery.  It
had been noted, however, that in addressing the question of whether electronically delivered products
and those delivered by more traditional methods should be considered  “like products”, account
should be taken of the important role of customisation in electronic commerce and of the fact that the
customisation process included a wide range of operations which might have a bearing on the likeness
of products.  The Chairman stated that the issue of likeness was probably one of the most complex
legal issues, not only in the GATS but also in the GATT and that there was considerable GATTjurisprudence which established that a determination of likeness could only be on a case-by-case
basis.
12. At this meeting of the Council several delegations said that the concept of "likeness" of
services was not affected by electronic delivery, either in terms of national treatment or of the MFN
obligation.  One delegation however noted that the issues of likeness and technological neutralitywere closely related, and suggested that Members might find it useful to make distinctions among
products based on the technique of delivery, in a similar way to the distinctions between modes of
supply contained in Article I of the GATS.  Other delegations noted that this would be inconsistent
with the technological neutrality which was a characteristic of the GATS and pointed out that there
was an important difference between the technical means of delivery of a service and the legalconcepts of the modes of supply, insofar as the first did not change the nature of the services being
supplied.S/C/M/36
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(c) Implications of Article VI for domestic regulation affecting electronic commerce
13. The Chairman reminded delegations that at the Council meeting of February 1999, some
delegations had noted that electronic commerce was an area where rapid economic growth had been
fostered by the existence of very little regulation and that the emphasis in the field of domesticregulation should be on keeping regulation to a minimum in order to favour further growth.  A
question had been raised as to whether it would be desirable to agree under Article VI on a group of
regulatory policy objectives justifying the imposition of regulatory measures on electronic commerce.
The idea of course being that this could minimize unnecessary barriers to trade.  It had also been
pointed out that the development of Article VI disciplines and their effective application was
important in order to ensure that existing specif ic commitments relevant to electronic commerce were
not nullified or impaired by measures of domestic regulation.
14. At this meeting of the Council one delegation said that Article VI:4 disciplines on domestic
regulation would affect services trade through electronic means in areas where specific commitments
had been undertaken as well as in areas where there were no commitments.  The delegation stressed
the fact that electronic commerce has so far thrived because Members had imposed little regulation
and that restrictive regulations in one country could have effects in many other countries due to thenature of the technology involved.  It was the general view that Article VI:4 disciplines on domestic
regulation should achieve a balance between WTO Members’ right to regulate and ensuring that
regulation, including regulation affecting electronic commerce, should be no more trade restrictive
than necessary to achieve policy objectives.  One delegation argued that approval systems and
mandatory standards were examples of unnecessarily restrictive domestic regulation.
15. Some delegations said that since Article VI applied to electronic commerce as to other forms
of services trade there was no need for special rules on domestic regulation in relation to it, and one
delegation argued that such special rules might undermine the principle of technological neutrality.  In
response another delegation pointed out that electronic commerce gave rise to certain issues which
had no counterparts elsewhere, and suggested that technological neutrality should not preventMembers from undertaking some work under Article VI:4 specific to electronic commerce, especially
with respect to matters such as ensuring the secur ity of transactions or electronic signatures, which
were specific to electronic commerce.  It was noted that work on policy objectives under Article VI:4
should also take account of the role of Article XIV of the GATS and of the policy objectives which
justified recourse to the general exception.
(d) Application of customs duties on electronic transmissions
16. At the Council meeting of March 1999, although in principle it had been noted that it was
possible to apply customs duties to trade in servic es, it was widely recognized that in the case of
electronic transmissions this could present serious technical difficulties.  Some delegations had
stressed that the discussion of customs duties s hould be kept separate from any discussion of tax
issues, as domestic taxation was within the regulatory competence of Members and onlydiscriminatory taxation was subject to WTO rules.  One delegation had argued that the current
standstill on customs duties on electronic transmission should become permanent and legally binding.
However, other delegations asked for further examination of this issue.  Some had argued that the
debate on customs duties had important implications for revenues and fiscal policies of developing
countries.  It had also been noted that there was a close relationship between the issues ofclassification and customs duties.
17. At this meeting of the Council a number of delegations intervened to support an indefinite
extension of the current standstill on customs duties on electronic transmissions.  Other delegations
said that they could support the extension of the standstill, but not indefinitely, as a decision could be
reached only when all outstanding issues had been addressed, including the issue of lost revenues forS/C/M/36
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developing countries.  Other delegations stated that the decision to further extend the standstill was a
political one, which could only be taken by the General Council, while the debate in the Services
Council should focus on the technical and legal issues  involved in the possible application of customs
duties to electronic transactions.  It was noted that the discussion of technical and legal issues in the
Services Council might help the General Council  to take a political decision on the standstill oncustom duties.
18. Some delegations argued that the concept of customs duties was alien to the GATS and that,
considering that technological neutrality included in the coverage of the GATS all electronically
delivered services, customs duties would become a relevant issue only if it was accepted that the
category of electronically delivered goods existe d.  One delegation requested that those who espouse
the standstill on customs duties should define what they mean by "customs duties" in the context of
services where no physical border is involved.  Others however pointed out that in the absence ofnational treatment commitments, the GATS did not prevent Members from imposing customs duties
on electronic transactions or other services, and that for this reason, even assuming that all electronic
transactions were services, the standstill on customs duties was important.
(e) The valuation of electronically transmitted products in the context of encrypted electronic
payments
19. At the Council meeting of March 1999, one delegation suggested that it was necessary to
study the proper valuation of electronically transmitted products in the context of encrypted electronic
payments and related issues.  Doubts were, however, expressed as to the relevance of this question in
the context of the work programme.
20. At this meeting of the Council one delegation said that this was an important issue, closely
related to the issues of classification and customs duties, and informed the Council that they would
submit a paper on it.  Another delegation pointed out that if the standstill on customs duties were to
become permanent there would be no need to deal with the concept of customs valuation.  However,
the delegation who spoke first under this item noted that on customs duties no conclusion had beenreached that customs duties were not applicable to electronic transactions.  It was noted that general
questions relating to the taxation of electronic transactions were being handled by the OECD and that
it would be useful to see the results of this work.
21. After the conclusion of the discussion of the issues identified in paragraph 5 of the Interim
Report, the Chairman raised the question of how to proceed next and proposed to address this
question at three levels: (i) the structure of the final product;  (ii) its content;  and (iii) the organizationof the final stage of the work programme.
22. Concerning the structure, the Council was cal led upon by the General Council to examine and
report on a set of issues identified in the work programme.  As the final report to the General Council
should be structured according to those items, the Chairman proposed that the Council conduct its
discussions as of the next meeting along the line s of the items of the work programme.  Delegations
agreed that the Chairman’s proposal on structure represented an acceptable way to proceed on thisissue.
23. Concerning the content of the report  to the General Council, the Chairman
 suggested that
wherever possible the Council aim at agreeing on conclusions in order to assist the General Council in
considering the issues, although it was realistic to envisage that on some issues it might have been
inevitable to register different views.  Delegation supported the Chairman’s proposal on this issue.
24. The representatives of Switzerland and Argentina  asked clarifications on the meaning of the
word “agreement” in this context.  It was explaine d that any agreement in the Services Council on thisS/C/M/36
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matter, although not legally binding on the General Council or the Ministerial Conference, who had
the power to change it, it would carry strong authority given the technical expertise expressed by the
Services Council.  The representative of Canada said that although his delegation had no problems
with the word “agreement” in this context, th e Council might find it appropriate to devise other
formulas such as “emerging consensus.”
25. In so far as the organization of the remaining stage the work programme was concerned, the
Chairman recalled that the Council was required to report to the General Council by 30 July 1999.
According to the normal frequency of meetings of the Services Council, there were only two meetings
in June and July prior to that deadline.  At the last meeting of the Council it was suggested that an
additional special meeting on electronic commerce be held to discuss all issues raised under the work
programme.  The Chairman pointed out that such a meeting would provide an excellent opportunity to
advance work and be in a position to report to the General Council in time as well as facilitating fuller
participation by capital-based experts.
26. A number of delegations including Argentina, Brazil , Canada , Hong Kong , Japan  and the
United States supported the idea of scheduling additional time on electronic commerce to complete
substantive discussions and complete drafting of the report although all were flexible on whether or
not it should take the form of a special session.  The representative of the United States stressed that
in the meanwhile it was important that the Gene ral Council completed the Interim Review.  Other
delegations including Barbados, Cuba , Egypt , India , Mexico  and Switzerland  expressed systemic
concerns about the idea of scheduling a special session on electronic commerce, considering thatseveral other meeting were already scheduled for the period ahead of 30 July 1999, including a special
session on telecommunications.
27. On the issue of the report to the General Council the delegations of Brazil and India
 noted that
this was not required to be a final product, but rather a progress report.  India added that as the
General Council  had not held yet the Interim Review it was not appropriate to set deadlines for a final
report, which did not exist.  The representative of Egypt noted that on this matter the work programme
was rather flexible as it required the Services Council to “report or provide information.”  The
representative of Hong Kong said that due to time constraints it was important that a draft report be
available in time for the special meeting on electronic commerce.  India objected that this was
necessary and pointed out that an additional meeting should concentrate on substance, as for the
purposes of reporting the Council would have the Chairman’s summaries of the informal discussions
as well as the records of the future formal discussions.
28. The Chairman noted that delegations still held different views on the issue of organization of
future work.  He pointed out, however, that considering that there was still substantial work to be
done on electronic commerce it would have been desirable to schedule at least some additional time
devoted to more substantive discussions, which could lead to the drafting of a report.  For this purpose
something short of a draft report would have been useful to structure the discussion.
B. ASSESSMENT OF TRADE29. The Chairman recalled his concluding remarks on the assessment of trade at the previous
meeting of the Council.  He had said that he would explore with the Secretariat what could be done in
terms of additional work, and what possibilities existed for interaction with other organizations, in
particular UNCTAD, with the aim of identifying materi al that might be relevant to the assessment.  In
this vein, the Secretariat had prepared an informal Note, circulated as Job. No. 2748.
30. The Note is based on Background Papers previously prepared for the Information Exchange
Programme.  As with these papers, the information presented in several areas incorporates work done
in recent years by the UNCTAD Secretariat.  In keeping with requests from various delegations, theS/C/M/36
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Note discusses liberalisation effects from a developing country perspective.  It refers in particular to
five services sectors (tourism; health; construction; maritime; software development and
implementation) and one mode of supply (mode 4) where liberalization might prove particularly
relevant to at least some developing countries.
31. Mr Hartridge drew attention to Table A.1 on page 9 of the Secretariat Note, which contains
some flawed information on the status of market access in financial services.  He invited delegations
to disregard this Table.
32. Many delegations said that they had just received the Secretariat's paper and needed more
time to study it;  the delegations of Guatemala and Mexico  added that they were looking forward to
having the Spanish translation.
33. The representative of India felt that trade conditions under mode 4 were more restrictive than
described in paragraph 11 of the Note, referring in particular to the use of vague language and the
absence of criteria for economic needs tests in schedules.  She further said that developing countries
had taken important commitments under the GATS, but there was not clear evidence that they had
benefited from liberalisation.
34. The representative of the European Communities sa id that more services sectors than the five
identified in the Secretariat's Paper could be of interest to developing countries.  In this context, he
referred to the possibility of developing services functions for wide economic regions and the
importance of infrastructural services in underpinning the competitiveness of the overall economy.
The information presented in Section IV of the Note showed that trends in services trade were similar
for developed and developing countries, which, in turn, suggested that all Members had benefitted
from the growth of services trade.  The representative of Japan pointed to the economic role of the
infrastructural services referred to in paragraph 6.  The representative of Guatemala said that the
identification of sectors of interest to developing countries was a useful approach for the assessmentexercise; and the representative of Hong Kong, China noted that developing countries might identify
other relevant sectors, in addition to the five mentioned in the Secretariat Paper.  The representative ofthe United States drew attention to the economic value of standstill commitments, in increasing
transparency and predictability, and of autonomous liberalisation.
35. The representatives of Uruguay, Brazil , Cuba , the Dominican Republic , Guatemala , Indonesia
(speaking on behalf of ASEAN), Mexico, and Egypt  called for the WTO and UNCTAD Secretariats
to intensify their contacts with a view to carrying out a joint assessment of trade in services, since
1995, in order to assist the forthcoming negotiations.  The representatives of Uruguay and Egypt
noted that in September 1998, UNCATD had been given a mandate for a joint study with the WTO onthe assessment of the impact on developing countries of liberalisation under the GATS;  the Egyptiandelegation also suggested asking a representative of the UNCTAD Secretariat to give a presentation at
the next Services Council meeting.
36. The representatives of the European Communities, Switzerland
, the United States  and Japan
expressed reservation about UNCTAD's involvement in the assessment of trade, which is to be carried
out by the Council for Trade in Services.  The WTO Secretariat had already produced a great deal ofinformation on the subject, which also incorporated UNCTAD's work.  It was noted that precise
guidance from delegations was essential before additional work could be requested of the WTO
Secretariat.  These delegations, as well as those of Canada and Norway
, considered it useful, however,
if the WTO Secretariat contacted the UNCTAD Secr etariat with a view to identifying additional
documents and studies.
37. The representatives of Egypt, Venezuela , Hong Kong, China , Uruguay , Cuba , the Dominican
Republic, Barbados  and Turkey  expressed concern about the reluctance of some Members to involveS/C/M/36
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UNCTAD in the assessment of trade.  The representatives of Venezuela and Hong Kong, China
considered UNCTAD's contribution as complementary to the WTO Secretariat's work;  the
representative of Uruguay felt that it could add a developing country perspective; and the
representative of Egypt believed that it could help stimulate national contributions.  The delegations
of Cuba, the Dominican Republic  and Barbados  noted that developing countries often lacked the
expertise and resources to carry out their own assessment.
38. The representative of India drew Members' attention to the fact that in the Committee on
Customs Valuation it had been agreed, at the request of developed countries, to investigate whether
the work of UNCTAD and other organizations could be of help to the Committee's discussions.  She
also noted that many developing countries had entered the Uruguay Round without adequate
preparation, and that it was vital to ensure that this would not happen in the new round of services
negotiations.  The representatives of Hong Kong, China, Switzerland  and Turkey  also noted that the
assessment should not be conducted as a one-off exercise, but rather be considered an on-going
process.
39. The delegations of Switzerland, the United States , Japan , Canada  and Norway  stressed the
importance of Members' own contributions to the assessment.  The representative of the United States
further observed that submissions along the lines of those produced by India and Pakistan would be
useful.
40. In summing up the discussion, the Chairman noted that many delegations required more time
to study the Secretariat Note and prepare detailed comments.  There was no unanimity of views about
the need for cooperation with other international organizations, and in particular with UNCTAD;
some delegations were asking for a joint study, but others did not consider it appropriate.  However,the WTO Secretariat was in contact with, and had already drawn on the work of, the UNCTAD
Secretariat.  In addition, he undertook to invite the UNCTAD Secretariat to provide an overview of
their work in this area for the next Council meeting.  This would also provide an opportunity to
discuss any additional contribution which might be requested from the UNCTAD Secretariat.  While
recognizing that not all Members had the necessary resources and expertise, the Chairman noted thevalue of national contributions and encouraged all those Members, which were in a position to do so,
to come forward with their own assessment of trade in services.
C. PREPARATION OF NEGOTIATIONS UNDER ARTICLE XIX  - NEGOTIATING
GUIDELINES AND PROCEDURES
41. The Chairman recalled that at its previous meeting the Council held a first discussion on the
negotiating guidelines and procedures, required by Article XIX of the GATS.  Written submission had
been presented by Switzerland, Japan and Hong Kong, China.  In addition, several delegations had
expressed their views on what the negotiating guidelines should contain.  The discussion had been
extremely useful as it provided delegations with an  opportunity to exchange views on the substantive
agenda for the next round of negotiations.  Due account had also been taken of the process underway
in the General Council in terms of the overall preparation for the Ministerial conference at the end ofthe year.  The Chairman stressed that it was important that the Services Council could provide its
input to the General Council process at a suitable time before the summer break, which entailedconcluding work on a draft text of the guidelines and procedures at the July meeting.
42. At this meeting of the Council the delegations of Norway and the European Communities
submitted papers on the negotiating guidelines and procedures contained in document S/C/W/109 and
Job No. 2836 respectively.
43. The representative of Norway introduced the paper by his delegation and argued that they
placed importance on the negotiations irrespective of the commitment contained in Article XIX toS/C/M/36
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negotiate specific commitments.  He said that the Services Council should be able to provide input to
the General Council by July 1999 and that the negotiating guidelines and procedures should be
flexible and open to new negotiating issues.  He flagged a special concern that the negotiating
guidelines and procedures take account of environmental issues.  On procedures, he argued that at
least at the outset, there was no need for a negotiating structure separate from the services standingbodies.  He supported the idea of asking the Secretariat to prepare a draft of the negotiating guidelines
and procedures, based on delegations inputs in the Services Council.
44. The representative of the European Communities introduced the paper by his delegation,
which was based on two important principles: (i) the negotiating guidelines and procedures should not
question the present architecture and principles of the GATS; and (ii) the preparation for the next
round should remain an open ended exercise.  Regarding the specific commitments negotiations, the
European Communities supported comprehensive coverage of sectors and modes of supply.  Theyalso underlined coverage in the guidelines of the revision of the Annex on Air Transport Services and
of the MFN exemptions.  They suggested that the guidelines should address domestic regulation
(Article VI and pro-competitive principles) GATS rules and the functioning of the GATS
(understanding and interpretation of Articles V and XXI).  In the drafting of the guidelines account
should be taken of the needs of developing countries on the basis of Article IV.
45. The representative of Brazil reserved his rights on this subject.  He said that his delegation
was still considering holding a discussion on the negotiating guidelines and procedures in the Services
Council.  He underlined the importance of running a parallel process with respect to other mandated
areas.  He added that in the agriculture Committee, it was felt that beginning work on the guidelines
corresponded to beginning the negotiations.  Other delegations, including Cuba, Mexico  and Uruguay
expressed similar positions and reserved their rights.  The representative of Uruguay said that his
delegation’s position remained the same as expressed at the previous Council meeting, that hebelieved that the General Council  was the leading body in the preparations for the third WTO
Ministerial Conference, including all work on the forthcoming negotiations.  The representative of
Hungary said that paragraph 9 of the Ministerial Declaration was clear on the role of the General
Council  with respect to the negotiating guidelines and procedures and reserved its rights to come
back to this issue at the next meeting.  The delegati on of India also said that they would revert to this
issue at the next meeting of the Council.
46. The representative of Hong Kong, China expressed strong support for the proposal contained
in the paper by the European Communities on Article VI and on the pro-competitive principles.  He
also supported the reference to Article V in both papers from the European Communities and from
Norway.  The representative of Canada, supported by Switzerland , expressed concern for the
reference to Article XXI contained in the paper by the European Communities.  He pointed out that
work on Article XXI in the Committee on Specific Commitments was close to reaching a consensus
and that it was important to consolidate this work, rather than jeopardize it.  The delegation of
Switzerland expressed support for the main thrust  for the paper by the European Communities and
stressed that the negotiating guidelines and procedures should be open ended.
47. The representative of the United States said that his delegation was working on a contribution
to the process in the Services Council.  He argued that discussions in the Services Council on the
negotiating guidelines and procedures were valuable and that the roles of the Services Council and of
the General Council  were complementary.  He su ggested that in order to advance work in the
Services Council on this issue it would be useful to hold informal meetings.  The representative ofGuatemala said that her capital was still examining the proposals.  She asked elucidation of the
European Communities on the meaning of the word “comprehensive”, which was used several timesin their paper.  The representative of the European Communities explained that “comprehensive”
coverage meant that no sector was excluded a priori  from the negotiations.  The representative of
Argentina said that his authorities were still examining the submissions and that he would come backS/C/M/36
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to this issue in the competent forum to work on the negotiating guidelines and procedures, as it
appeared that there was still some disagreement in that respect.
48. The representative of Japan noted that there was an high degree of convergence between the
papers submitted so far by delegations on this issue and that it might be desirable to draft a common
list of issues for the negotiating guidelines and procedures.  He supported the role of the ServicesCouncil in this process, in that it should provid e the technical expertise, while the General Council
would maintain its decision making role.  The representative of Korea made some preliminary
comments reserving his rights to come back with a full assessment of the papers at the next meeting.
Regarding the reference to Article V in the Norwegian paper he noted that a clarification was
necessary in the GATS context.  He expressed concern about the reference to environmental issues in
the Norwegian paper. He said that his delegation believed that the next negotiations should proceed in
conformity with the principles set out in the preamble to the GATS.  Among the negotiating issues heemphasised the revision of the MFN exemptions, domestic regulation, GATS rules and the treatment
of autonomous liberalization.  Regarding the duration of the negotiations he said that a period of three
years would be an adequate timeframe.
49. The Chairman noted that some delegations had expressed doubts concerning the appropriate
forum to work on the negotiating guidelines and procedures, while others had argued for the
complementarity of the roles of the Services Coun cil and the General Council.  He stressed that any
work undertaken in the Services Council on the ne gotiating guidelines and procedures would in no
way diminish the role of the General Council.  He proposed to ask the Secretariat to prepare a paper
containing draft elements for the negotiating guidelines and procedures, which would be of an
explanatory nature.  This would be on a no comm itment basis and would not prejudice the procedural
issue concerning the respective roles of the Services Council and of the General Council.  He thanked
the European Communities and Norway for their pape rs and invited delegations to come forward with
more contributions on this issue.
50. A number of delegations supported the idea of a draft paper by the Secretariat taking account
of all proposals so far made by delegations whether in written papers or in their oral statements.According to some, the process could also benefit from an informal meeting of the Council.  Other
delegations, however, questioned whether it was appropriate to ask the Secretariat to prepare a draft at
this point in time, considering that only some delegations had submitted papers or expressed views on
this matter and while other submissions could be made at following meetings of the Council.
51. The Chairman noted that there were differing views on the issue of a draft paper by the
Secretariat and suggested that the Council take note of the statements made by delegations and revert
to this subject at the next meeting.
52. It was so agreed.
D. SYSTEMIC ISSUES ARISING FROM ARTICLE V OF THE GATS
53. Due to time constraints the Chairman suggested that the discussions of this item be postponed
to the next meeting of the Council.
54. It was so agreed.
E. OTHER BUSINESS
55. The first point concerned two papers which the Secretariat had received from the European
Express Organization (EEO) on postal and express delivery services and the International Chamber ofCommerce (ICC) on air cargo services.  The Chairman noted that as private organizations, the ICCS/C/M/36
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and the EEO could not circulate documents directly to Members of the Council for Trade in Services.
However, considering that these papers contained useful information, the Chairman suggested that it
might be desirable to make them available to all Members and circulate them as informal papers.
56. It was so agreed.
57. The second point raised by the Chairman concerned a request that he had received from the
OECD to attend the Council’s special session on telecommunications as an observer.  The request had
been circulated in a note dated 18 May 1999.  He suggested that the Council respond positively to the
request by the OECD.
58. It was so agreed.
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