RESTRICTED
WORLD TRADE S/CSC/W/5
30May 1997
ORGANIZATION
(97-2263)
Committee onSpecific Commitments
PROCEDURAL AND COST IMPLICATIONS OFTHE DEVELOPMENT
OFALOOSE-LEAF SYSTEM WITH ORWITHOUT LEGAL VALUE
Note bytheSecretariat
1. Atitsmeeting of10October 1996, theCommittee onSpecific Commitments requested the
Secretariat toexamine theprocedural andcostimplications ofthedevelopment ofaloose-leaf schedule,
either with orwithout legal status. TheSecretariat wasalsorequested tokeep theCommittee abreast
ofthelatest developments regarding thecomputerization ofschedules. Thetwoquestions arelinked.
2. What isunderstood bytheconcept ofaloose-leaf schedule system having legal value isthat
such asystem would replace theonly existing form having legal value, which isthe"treaty copy"
maintained bytheWTO legal services. This istheversion oftheschedules which, intheevent of
disagreement about thecontent ofaschedule, would beregarded asdefinitive. The"treaty copy"
comprises theschedules negotiated intheUruguay Round andtheresults ofallsuccessive negotiations
andaccessions andtherefore takes theform ofaconsiderable number ofdifferent documents. The
prime value ofa"loose-leaf" system would bethatitwould provide asingle document which would
becontinually updated; itwould nolonger benecessary fordelegations orothers tosearch through
successive protocols toascertain theexact content ofacountry 'scommitments, since each country 's
schedule would beconsolidated andregularly updated. However, thebenefits ofsuch consolidation
could besecured without giving theloose-leaf schedules thelegal status ofthecurrent "treaty copy",
andthere arestrong arguments (seeparagraph 16below) formaintaining thetreaty copy initscurrent
form. Inthiscasetheloose-leaf schedules, which would beidentical incontent butnotinform tothe
treaty copy, would beavaluable working toolbutnotthedefinitive record ofcommitments.
3. Thechoice between aloose-leaf system which would have alegal value andonewithout legal
value would have certain costimplications forthefollowing reasons. Schedules without legal value
could beconsolidated bytheSecretariat onthebasis oftheexisting database. Thecostofdoing this,
though itwould notbeheavy, would fallupon theWTO budget. Inthecase ofloose-leaf schedules
with legal value however itwould benecessary forMembers toconsolidate their own schedules then
submit them foracertification procedure. Much ofthecostofthisprocess would therefore fallon
Members andwould notappear intheWTO budget.
4. However, itshould besaidattheoutset thattheterm "loose-leaf" isprobably amisnomer and
ananachronism. Ithasalways been understood tomean, inthephysical sense, adocument onpaper
whose pages canberemoved andreplaced when updating isnecessary. Butthisconcept seems tobe
outdated. IntheGATT context loose-leaf tariff schedules were introduced atatime when electronic
updating wasnotpossible, butinfacttheywere never used asintended; schedules have been completely
reprinted after each modification. Such asystem isalsosomewhat costly, involving editorial work
inreformatting andnumbering ofpages, andiscomplicated tomaintain andupdate. Progress in
computing nowmakes possible much simpler andcheaper updating ofschedules maintained inelectronic
form;theonlyphysicalmanipulationwhichisstillnecessaryistheprintingofupdatedcompleteschedules.
Itshould therefore beunderstood thatthisnote discusses thefeasibility notofaloose-leaf system inS/CSC/W/5
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theclassical sense butofthemaintenance ofconsolidated schedules inelectronic form. This would
mean thatforeach Member there would beasingle schedules showing allthecommitments ithad
undertaken inthesuccessive negotiations which have taken place, andallother changes inthe
commitments overtime. Though theschedule would bemaintained andupdated electronically, itwould
ofcourse stillbepossible, andindeed easy, toprovide hard copies ofschedules byprinting from the
computer.
5. Intheremainder ofthispaper adistinction ismade between theproduction ofconsolidated
schedules with orwithout "legal value". Strictly speaking, theonly form inwhich theschedules have
legal value isthe"treaty copy", inthesense that, inthelastresort, questions about thecontent ofa
schedule would beresolved byconsulting thesigned official version. However, afacsimile ofthetreaty
copy conveys exactly thesame information andinthatsense alsohas"legal value". Inasking whether
consolidated schedules should have legal value, therefore, wearereally asking whether they need to
beidentical to,orfacsimiles of,thetreaty copy. This would imply post-facto alignment ofthetreaty
copy with theconsolidated schedules (seepara 16(iv) below).
I. Aspects common totheestablishment ofconsolidated schedules with andwithout legal
value
(a) Content ofthecompilation
6. Ifconsolidated schedules aretobeproduced onechange intheir content andformat would be
required, whether ornotthey were tohave legal value. Article XXI:1(a) oftheGATS provides that
aMember may modify orwithdraw anycommitment initsschedule, atanytime after three years have
elapsed from thedate onwhich thatcommitment entered intoforce. Thedate ofthecommitment
therefore needs tobeclear. Furthermore GATS Article VI:5(a)(ii) provides thata"Member shall not
apply licensing andqualification requirements andtechnical standards thatnullify orimpair suchspecific
commitments inamanner which:... could notreasonably have been expected ofthatMember atthe
time thespecific commitments inthose sectors were made."
7. Atpresent, thedateofcommitments ismade clear bythedateoftheProtocol orwhatever other
document they arerecorded in.Inconsolidated schedules these dates -typically onthecover pages
ofProtocols -would disappear. Itwould benecessary toinclude thedate, andthename oftherelevant
legal instrument (e.g. theFourth Protocol) inacolumn tobeadded totheschedules. This would be
essential iftheschedules were tohave "legal value" butwould beextremely important information in
anycase.
(b) Material presentation oftheconsolidated schedules andcostimplications
8. Asfarastheform ofthepublication ofconsolidated schedules isconcerned themost practical
solution seems tobethecombination ofthecirculation ofcompiled schedules under normal WTO
procedures andofon-line electronic access.The advantages ofthisformula are:
- itwould entail nospecific additional costs. Thecirculation ofpaper documents would
bedealt with under normal WTO procedures andwould notnecessarily more expensive
thanatpresent, andmaintenance ofelectronic schedules would have tobedone anyhow
inthecontext oftheservices data base.
- maintenance andupdating oftheschedules would bemuch easier through computer
dataentry andprinting thanthrough theheavy manipulations implied bytheupdating
ofaphysical loose-leaf system, which entails theelimination ofoutdated pages andS/CSC/W/5
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their replacement with newones. These manipulations would have tobeundertaken
byeachdelegation individually; thework ofmaintaining theschedules physically would
fallonthem. Inthatrespect Members may wish toconsider theexperience ofthe
goods sector where thephysical actualization ofloose-leaf hasbeen abandoned due
tolack ofpracticability andreplaced bythere-printing oftheschedules.
Themain shortcoming ofthissolution istherelative fragility ofvery long documents issued inclassical
WTO document form i.ewithout covers. Individual national schedules arenotvery long, butthetotality
ofschedules now amounts towell over 4'000pages. Weshould presumably envisage four volumes.
Covers could beadded, butthiswould increase thecostofproviding thedocuments byanamount which
would depend onthenumber ofcopies delegations wished tohave. These considerations arenotaffected
bythequestion whether consolidated schedules would have legal value ornot.
II. Procedural andcostimplication oftheestablishment ofconsolidated schedules without
legal value
(a) Amount ofwork implied bythecompilation
9. Inthecaseofconsolidated schedules without legal value theSecretariat could undertake this
taskrather easily asthetechnical work ofputting together inonesingle schedule allcommitments
made byaMember haslargely already been done intheframework oftheservices databasepreparation
(formore precision onthisdatabaseseedocument S/CSC/W/3 of4October 1996). Commitments have
been gathered andaggregated byadding orcomplementing theUruguay schedules with thecontents
oftheprotocols resulting from thepost-Uruguay round negotiations andoftheprotocols ofaccession.
10. However asthis dataentry wasoriginally intended foranalytical purpose andnotforrecord
keeping, avery detailed checking procedure would have totakeplace internally before itcould be
submitted toMembers. This taskandthedata entry fortelecom (which hasnotyettaken place) can
beestimated atsixman/months. Thedataentry andthechecking oftheresults ofthesecond financial
services negotiations duetoendinDecember 1997 would imply anadditional twomonth delay.
(b) Procedural aspects
11. There arenoprecedents inthegoods sector foraloose-leaf without legal value. Theloose-leaf
tariff schedules were conceived form thestart hashaving legal value andasreplacing inthatrespect
theformer commitments scattered invarious documents. Much ofthedebate about thematter related
toaquestion thathasnoequivalent intheservices sector, therecording ofinitial negotiating rights.
12. Members may wish toconsider thepossibility ofrequiring theSecretariat tocompile the
commitments. Afirstdraft would becirculated forcomments either bythedelegation concerned only
orbyalldelegations. If,asaresult ofthisprocess, thefirstdraft wastobeamended, therevised version
would becirculated toalldelegations before definitive publication.
III. Procedural andcost implications ofconsolidated schedules with legal value
13. Inthiscasethere isclearly aprecedent: theprocedure fortheinstitution ofaloose-leaf system
fortariffs whose lastversion iscontained indocument G/L/38 dated 14January 1997. Inthishypothesis
theworkload fortheelaboration andthechecking ofthecompiled commitments islargely borne by
thedelegations andtheadoption ofcomplementary procedures isneeded. Thequestion oftherelationshipS/CSC/W/5
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between these consolidated schedules with legal value andthetreaty copies ofthecommitments intheir
previous forms (Marrakesh agreements, protocols) arises.
14. Inthecaseoftheestablishment oftheloose-leaf tariff schedules aGATT Council tookadecision
(26March 1980) which iffollowed literally would
- require theMembers tosubmit their draft schedule inaloose-leaf form byacertain
date (within sixmonths inthecase under reference)
- provide apossibility oftechnical assistance onrequest bytheSecretariat forthe
establishment ofthecompiled schedule
- setaformat fortheschedules andgivelegal value totheaddition ofthecolumn tracing
thelegal instruments generating thecurrent concession
- make itclear thatthemention ofunbound items intheschedules does notimply any
commitment andisjustthere todefine bycontrast what arethebindings
- provide foraprocedure ofverification after acertain number ofweeks following the
submission oftheschedule. Theendofthisverification procedure would then launch
thedelay forobjections inthecertification process. Ineffect inGATT practice and
jurisprudence acompiled schedule canonlyreplace former commitments ifitiscertified
bytheDirector General. Such aprocedure ofcertification does notexist asyetfor
services.
- giveafulllegal value totheconsolidated schedules andsubstitute them, legally speaking,
forthetreaty copies oftheMarrakesh agreement andoftheprotocols, asthecase in
thegoods sector.
15. Ifconsolidated schedules were tohave legal value itwould also benecessary toadopt a
certification procedure forthemodification andrectification ofcommitments. Such aprocedure would
bedistinctfromtheguidelinesforArticleXXI,whichareconcernedwiththewithdrawalandrenegotiation
ofcommitments. Itwould rather bedesigned tomake changes intheauthentic texts when amendments
andrearrangements donotalter thescope ofaconcession. Thecertification procedure forgoods is
contained inthedecision L/4962 dated 26March 1980 (BISD, S27, 25).This procedure provides for
athree month period forobjections byMembers, failing which theDirector General certifies thechanges.
This delay ofthree months might need tobeextended inthecase ofservices duetothecomplexity
ofthecommitments.
Summary conclusions
16. Thefollowing broad conclusions appear tofollow from theanalysis above.
(i) Itwould make little sense tomove toloose-leaf schedules intheclassical sense of
documents which would bephysically amended andupdated byMembers. This isa
clumsy andexpensive procedure which hasnotbeen found towork well inthepast.
(ii) Itwould however beincreasingly unsatisfactory, asnegotiations andnewcommitments
proceed, tomaintain theexisting system inwhich each Member 'scommitments have
tobesought inseveral different documents, thecurrent commitment onaparticular
service being identifiable only bythedateofthelegal instrument giving effect toit.S/CSC/W/5
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Itwould clearly bepreferable thatallcurrent commitments ofeach Member should
beavailable inasingle document -thenational schedule.
(iii) Itisrelatively easy toprovide such aconsolidated schedule onthebasis ofthework
already done inproducing theservices database. Such consolidated schedules would
beavailable on-line inelectronic form andcould alsobeprinted forpaper distribution.
Thecostofproducing them would benogreater, andmight besmaller, than thecost
ofproducing schedules intheir current form.
(iv) Itisfordecision whether consolidated schedules should have legal value, inthesense
ofbeing identical with thetreaty copy. Ifitwere decided thatthey should have legal
value, itwould benecessary toconsolidate thetreaty copies themselves, combining
each Member 'scommitments inallexisting schedules, protocols, etc.inasingle
document which would bepresented bytheMember andsubjected totechnical
verification bytheServices Council.
(v) The view oftheSecretariat isthattheprocedure outlined in(iv)above would be
unnecessarily burdensome. There isnooverriding reason why consolidated schedules
andthetreaty copies should beidentical inform; their content should ofcourse be
identical, butincaseofanydifficulty thetreaty copy would remain theonly authentic
reference. Consolidated national schedules would thenbenolessuseful todelegations
andthepublic asasource ofinformation. What would beundesirable would beto
give legal value totwodifferent documents -i.e.tothetreaty versions intheir current
form andtotheconsolidated schedules; inthatcaseanydisparity resulting from the
process oftransposition ordataentry would become alegal problem andthere would
benosingle point ofreference bywhich toresolve it.S/CSC/W/5
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ANNEX
Present location ofthecommitments
Thecommitments asthey stand now exist intwoforms.
1. Inapaper form, they comprise
- Volumes 28,29and30ofthelegal instruments embodying theresults oftheUruguay
Round, dated 15April 1994.
- Volume 32comprising the schedules ofleast developed countries, dated
20December 1995.
- SecondProtocoltotheGATSembodyingtheresultsofthefinancialservicesnegotiations
dated 6October 1995.
- The withdrawals offinancial services commitments made bytheUnited States
(GATS/SC/90/Suppl.1,GATS/EL/90/Supp1.1,30June1995),Mauritius(GATS/EL/55,
28July 1995) and Colombia (GATS/SC/20/Suppl.1 and GATS/EL/20/Suppl.1,
27July 1995)
- Third Protocol totheGATS embodying theresults ofthenegotiations onthemovement
ofnatural persons, 6October 1995.
- Thenewormodified final commitments inmaritime transport services made byCanada
(S/L/34, 30September 1996), Malaysia (S/L/32, 12September 1996), Iceland (S/L/29,
12September 1996) andNorway (S/L/33, 12September 1996).
- Thewithdrawal ofmaritime commitments bytheEuropean Community (S/L/26,
30July 1996) andDominican Republic (S/L/27, 30July 1996).
- Theservices schedules contained intheProtocols ofAccession ofSlovenia (volume 34,
1February 1996), Ecuador (16August 1995), Grenada (15November 1995), Saint
Kitts andNevis (15November 1995), Papua New Guinea (15November 1995), Qatar
(15November1995),UnitedArabEmirates(6February1996),Mongolia(18July1996),
Bulgaria (2October 1996) andPanama (2October 1996).
- TheFourth Protocol containing theresults ofthetelecommunications negotiations,
certified copies 15April 1997, ratification pending.
- TherectificationofscheduleforHungarycontainedintheDirectorGeneral'snotification
WT/LET/87 dated 22May 1996.
2. Inacomputerized form thecommitments exist intwoforms
(a) CD-ROM
TheCD-ROM containing theresults ofUruguay round negotiations (now onsaleattheprice
ofSwF 1000.- with arebate of30% fordelegations) comprises thecontent ofvolumes 28,29,30,32
plus thewithdrawals offinancial commitments made bytheUnited States, Mauritius andColombia.S/CSC/W/5
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(b) Material gathered fortheservices data base
Thematerial gathered fortheservices database(seedocS/CSC/W/3 of4October 1996 paras 2-
7)comprises allexisting commitments with thetemporary exception ofthetelecommunications
negotiation results.