./.WORLD TRADE
ORGANIZATIONTN/S/5
20 January 2003
(03-0286)
Council for Trade in Services
Special Session
SPECIAL SESSION OF THE COUNCIL FOR TRADE IN SERVICES
Report by the Chairman to the Trade Negotiations Committee
The Council for Trade in Services met in Special Session on 9 December 2002 and
13 January 2003.
I. STATUS OF WORK
1. Under the item Assessment for Trade in Services a submission was received from China
which outlines the overall development in services liberalization and trade in services in China, and
presents a case-study on the banking sector.  Members noted China's impressive record in this regard.
As well, a detailed oral statement was made by the United States with data on services trade in the
US, including cross border trade, and affiliates trade.  The US signalled its intention to submit a
communication on these issues in the near future.  Finally, in response to a request at the Council'slast meeting, a Secretariat note recapitulating previous submissions made under this item was
circulated and is contained in Job(02)/208.
2. Concerning the Modalities for the Treatment of Autonomous Liberalization, the Special
Session of the Council held two informal meetings on this issue on 25 November 2002 and
13 January 2003 to discuss a new Chairman's text and drafting suggestions.  Despite extensive
consultations between the two informal meetings, a few points of divergence remain, and further
consultations are necessary.  There were some expressions of regret that the draft Modalities could notbe adopted at the formal meeting, as it appeared to some that consensus was within reach.  In this
vein, a number of delegations reiterated that, in a spirit of flexibility, they could support the revised
Chairman's draft.  They hoped that movement in this direction would occur expeditiously.
3. On the Modalities for the Special Treatment for Least-Developed Country Members,
preliminary and substantive discussions were held based on a draft text submitted by Zambia onbehalf of the LDCs (Job(02)/205).  A few concerns  with some of the provisions of the draft were
expressed, although a large number of Members noted that the draft is an important document and a
good basis upon which to move the process forward.  In this regard, Members reiterated their hope
that these modalities could be adopted by 31 March 2003.
4. Under the item Proposals Relating to the Negotiations under Article XIX, a large number of
interventions were made.  Preliminary discussions were held based on a proposal introduced by
Chinese Taipei on Computer and Related Services.  Detailed statements were made on maritime
services by Japan and Panama, and a good number of Members expressed interest in substantial and
meaningful commitments in this sector.  The point was made that audio-visual services is but one
sector which is sensitive to some Members, and that the various sensitive sectors referred to in thediscussion all fall within the scope of the GATS.  A few Members noted that an asymmetry exists
between commitments in mode 4 (movement of natural persons) and other modes, as well as withinTN/S/5
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mode 4.  In this regard, further information on mutual recognition agreements was requested from the
Secretariat.
5. With respect to the item Review of Progress in Negotiations Amongst Participants there was a
good discussion and linkages with the discussion under previous item (Negotiating Proposals) were
noted.  Members generally agreed that market access negotiations in services were moving forwardquickly and some hoped that negotiations in other areas would also do so.  Mention was made of a
number of imbalances characterizing the negotiations, including between progress in market access
versus rules negotiations, interest in mode 3 versus mode 4, and bilateral versus multilateral
approaches.  There were expressions all around of the need for balanced progress in the negotiations,
particularly given the approach of initial offers.  Discussion on an earlier proposal (TN/S/W/7)
pertaining to paragraph 15 of the Guidelines and Procedures for the Negotiations in Trade in Services
(S/L/93) continued with three new Members joining the co-sponsorship of the communication.  Somevery useful clarifications were made, including that the proposal could be addressed through
inscription of a permanent sub-item under this agenda item.  Some requests for clarification of the
proposal remained outstanding, and in the absence of  concensus, Members agreed to revert to this
item at the next meeting.
6. With reference to the item Organization of Futu re Work the point was made that the meetings
of the Council for Trade in Services, Special Session, will be decided upon definitively in light of the
discussions held in this body.  As well, concern was expressed that the heavy load of meetings at the
WTO in 2003 may create logistical difficulties for the organization of Services clusters.
II. OUTSTANDING ISSUES
7. In the case of Modalities for the Treatment of Autonomous Liberalization, given the fact that
some points of divergence remain, consultations will continue with a view to finalising the Council's
work on this item.
III. FUTURE WORK
8. Finally, the Council agreed to hold an open-ended informal meeting in January in order to
exchange views on the draft Modalities for the Special Treatment for LDCs.
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