WORLD TRADE
ORGANIZATIONS/CSS/W/16
5 December 2000
(00-5275)
Council for Trade in Services
Special SessionOriginal:  English
COMMUNICATION FROM SWITZERLAND
Guidelines for the Mandated Services Negotiations
The following communication has been received from the delegation of Switzerland with the
request that it be circulated to the Members of the Council for Trade in Services.
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I. INTRODUCTION
1. The mandated services negotiations have started at the beginning of February 2000.
Substantial work has been done in the Council fo r Trade in services (CTS ) and in the subsidiary
bodies, based on numerous written and oral contributions by Members. With this paper, Switzerlandwould like to provide an update of its views in the context of the current discussion on the guidelines
for the mandated services negotiations. It builds on previous contributions by Switzerland: "Preparing
for the GATS 2000 negotiations" (S/C/W/103 dated 22 March 1999) and "Negotiations on Trade in
services – Negotiating Guidelines and Procedures" (S/C/W/123 dated 17 September 1999). It also
refers to more recent submissions by other Members.
2. The "roadmap", on which Members agreed on 26 May 2000, is meant to guide work primarily
in the first phase of the negotiations. For the further proceedings, agreed negotiating guidelines andprocedures need to be elaborated, following GATS Article XIX. Switzerland believes that, in the
absence of a definition of the term "negotiating guidelines and procedures", the CTS should avoid any
abstract debate and concentrate its efforts on the elaboration of brief and purposeful guidelines. GATS
Article XIX offers guidance with respect to the aim and modalities of the negotiations and the
assessment of trade. From Article XIX, it is clear that the assessment of trade in services should not
be part of the guidelines, but rather of the process leading to their elaboration.
II. OBJECTIVES FOR THE NEGOTIATIONS
3. Based on Article XIX of the General Agreement on Trade in Services, the negotiations on
trade in services shall aim to achieve a higher level of liberalisation of trade in services. They shall be
directed to the reduction or elimination of the adverse effects on trade in services of measures as ameans of providing effective market access. The negotiations shall take place with a view to
promoting the interests of all participants on a mutually advantageous basis and to securing an overall
balance of rights and obligations.
4. In particular, negotiations shall aim at:
• deepening and broadening the existing commitments, thereby securing a higher level
of legally-binding liberalisation;S/CSS/W/16
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• ensuring effective market access through appropriate rules and disciplines for trade in
services and by ensuring transparency, pred ictability and certainty in the respective
regulatory regimes of the Members.
III. MARKET ACCESS NEGOTIATIONS
(i) Coverage
5. The concept of progressive liberalisation contained in the GATS refers primarily to a process
of gradual improvement of the overall level of specific commitments. Therefore, negotiation of
specific commitments should be at the heart of the current services negotiations.
6. For Switzerland, the negotiations of specific co mmitments should not exclude any sector or
mode of supply a priori . The mandate for the negotiations provided by Article XIX of the GATS is
formulated in general terms. A comprehensive approach offers the most prospects of trade-offs and
facilitates thereby negotiations which are conducive to substantial gains for all Members, includingdeveloping countries.
(ii) Negotiating modalities
7. Switzerland tends to support the proposal on negotiating modalities made by some other
Members, according to which the development of liberalisation formulas, clusters or model schedules
could help bringing the negotiating process further. For Switzerland, such formulas arecomplementary to the more traditional approach of request/offer; they should not replace such
negotiating methods. These alternative approaches should be used on a voluntary basis. Switzerland
expects a more homogenous level of commitments from the more intensive use of clusters or
negotiating formulas. This would make the GATS more readily understandable and help reinforce its
role as a legal benchmark for operators. Switzerland believes that the ongoing discussion in CTS andin the Committee on Specific Commitments (CSC) has been very useful for helping to understand the
practical implications of such cluster approaches.
(iii) Treatment of autonomous liberalisation
8. As far as the treatment of autonomous liberalisation is concerned, Switzerland notes that so
far, attempts at establishing concrete modalities for this issue have failed. Switzerland believes thatthis is primarily due to the difficulty of defining the notion of credit. Obviously, the value of a credit
that reflects the value of a measure of autonomous liberalisation by a Member would be different for
each Member. It would vary according to the density of trade relations between the Members
concerned, the nature of the measure at stake, the respective interest of each Member in the given sub-
sector. Many more factors could be thought about to determine the value of a credit. But even if theright valuation criteria were identified, the need would arise as to whether any useful figure or proxy
would be available to assert the effective value of a credit.
9. In fact, it seems that any objective measurement of the value of a liberalisation measure is
nearly impossible. What remains is to leave it to direct negotiations among the Members concerned to
yield the correct value of an autonomous liberalisation measure. But this in turn raises the question
whether any special scheme for autonomous liberalisation measures in addition to the bilateral
offer/request negotiation, is necessary at all.S/CSS/W/16
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(iv) Starting point for negotiations
10. Unless a satisfactory solution to the question of the treatment of autonomous liberalisation
can be found, Switzerland holds the view that the logical starting point for the negotiation of specific
commitments should be the currently applicable schedules.
(v) Article II exemptions
11. The GATS Annex on Article II exemptions (MFN exemptions) prescribes that the CTS shall
review all MFN exemptions no more than 5 years after the entry into force of the WTO Agreement.
This review has been conducted during the year  2000, in conformity with the GATS-Annex. It has
shown that most of the exemptions are justified by national policy objectives and hence are not in
contradiction with the spirit of the GATS. According to the GATS Annex on Article II exemptions,
the exemptions shall be subject to negotiation in subsequent trade-liberalisation rounds. Therefore, the
negotiation of MFN exemptions may be integrated as part of the bilateral offer/request processprovided for the negotiation of specific commitments.
(vi) Classification, scheduling guidelines
12. Regarding the ongoing work of the Committee of  Specific Commitments (CSC), Switzerland
believes that the priority should be given to the completion of a revised version of the scheduling
guidelines. Decisions are needed in this regard.
13. The classification issues are also important and have to be advanced as quickly as possible, as
it appears to be necessary that classification issues be settled on time in order to ensure a clear
technical background for the negotiation of specific  commitments. But Switzerland also believes that
new questions regarding classification will arise along with the market access negotiations, that will
need to be addressed. Therefore, Switzerland expects that classification issues will be on the agendaof the CSC for some time.
IV. STANDSTILL
14. Switzerland shares the view of many other delegations that Members should not take any new
measures affecting trade in services that would improve their negotiating position or be used as
leverage through the conclusion of the negotiations. This seems to be a principle that is usual to suchnegotiations. It ensures a predictable environmen t for the negotiators and thereby favours the
successful conclusion of negotiations. Therefore, Switzerland supports a standstill as a usual notion in
negotiations.
V. GATS RULES
15. The work mandated by the GATS should be part of the negotiations. Switzerland considers
the establishment of a well-developed framework of rules and disciplines as equally important as
specific commitments for ensuring effective market access. The GATS rules have therefore to betreated with a sense of priority, whilst recognising that, as a part of the global package, rule work will
probably be finally completed together with other issues under negotiations.
(i) Safeguards
16. Whilst keeping in mind that the basic questions of feasibility and desirability are yet to be
answered, Switzerland considers that useful work has been undertaken during the past few months.Switzerland is willing to continue to contribute to th e ongoing process and to pursue the analysis of a
possible safeguard mechanism for the GATS during the coming 15 months.S/CSS/W/16
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(ii) Subsidies
17. Switzerland attaches a great importance to the issue of subsidies. It regrets therefore that, as
of today, little progress could be registered in this field. Switzerland believes that the elaboration of
subsidies disciplines under the GATS will prove to be a demanding exercise that will require a lot of
effort. We expect that, once the discussion on general disciplines will have advanced, a more sectoralfocus will be required in order to develop workable  disciplines. These efforts are yet to be undertaken
and we hope that the WPGR will be in position to do so in the near future.
(iii) Government Procurement
18. The negotiations on government procurement in services need to be pursued, if need be in
connection and co-ordination with other mandated work under the WTO. Switzerland could for
instance support the idea of holding joint sess ions between the WPGR and the Working Group on
Transparency on Government procurement for discussing common issues.
VI. DOMESTIC REGULATION
19. Current work in the Working Party on Domestic Regulation (WPDR) had shown that
domestic regulation issues are becoming an increasingly important aspect of liberalisation of trade in
services if effective market access is to be secured. Experience clearly shows that measures pertaining
to the definition and implementation of licensing and qualification requirements and procedures aswell as of technical standards can seriously affect the effective conditions of access for foreign
services or foreign services suppliers. With a growing level of market access and national treatment
commitments, the relevance of GATS Article VI measures for effective market access will inevitably
become greater.
20. The ongoing discussion in the WPDR on the clarification of the concepts of necessity and
transparency is very useful in view of the development of regulatory disciplines. Switzerland believes
that both concepts are equally important, since necessity needs transparency in order to be properly
enforced. The discussion on the two aspects should be pursued in parallel with a view to developing a
general discipline in the sense of Article VI:4, applicable to all sectors.
21. In addition to the general principles that Article VI is meant to provide, discussions held so
far has shown that specific disciplines in individual sectors will be needed, especially in sectors where
particular regulatory constraints do exist and substantially affect the condition of business. The
services industry is known as highly regulated, so that effective access to foreign markets by services
suppliers may, at least in some sub-sectors, require some degree of specification of the general
principles contained in GATS Article VI. Existing examples are the reference paper for the
telecommunication services, as well as the Article VI disciplines on accountancy services. We believe
that further disciplines of this kind should be envisaged in other sectors and could provide a basis foradditional commitments. Recent consultations with professional services organisations tend to show
that the disciplines on accountancy services could be transposed, with some changes, to other sectors.
VII. FLEXIBILITY FOR DEVELOPING COUNTRIES
22. Switzerland believes that GATS Article IV and XIX provide for a sound basis for ensuring an
increasing participation of developing countries. We fully subscribe to these provisions and are readyto take them fully into account in the course of th e negotiations by providing the necessary flexibility,
especially for least-developed countries. More specifically, we support ideas put forward by other
Members to allow flexibility to least-developed countries for the submission of their schedules as well
as to allow for the longer transitional periods when phasing in commitments.S/CSS/W/16
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VIII.  TIME-FRAME FOR THE NEGOTIATIONS
23. The timetable for the initial phase of the negotiations up to March 2001 is contained in the
"Roadmap". With respect to th e timetable suggested by some Members, Switzerland could support
holding a mid-term review. However, the date of th at review, as well as the final deadline for the
negotiations need to be decided in the broader context of a comprehensive round of negotiations.Switzerland believes that, at this time, it is not appropriate to establish additional deadlines.
IX. PRACTICAL ARRANGEMENTS REGARDING THE ORGANISATION OF WORK
24. The services negotiations during the current year have taken place in five special sessions of
the Council for Trade in Services. The most important part of the discussion have so far been devoted
to essentially procedural issues. We believe that after this year of “warming up”, the CTS should now
concentrate its work on more concrete issues. A more sectoral perspective could provide for such a
focus. This process should be driven by Members’ contributions and proposals. In this regard, theAnnex on Tourism, which has been proposed by th e Dominican Republic, Honduras and El Salvador,
is a valuable example of such initiatives.
25. Practically, we believe that the work of the CTS and the subsidiary bodies should be
organised in less sessions than it was the case in the current year, but that these services sessions
should last two weeks instead of one. This woul d lead to a more focussed and productive work.
X. CONCLUSION
26. The present contribution presents an update of Switzerland's view to the mandated services
negotiations. Switzerland favours an elaboration of negotiating guidelines on this basis, that are
comprehensive, but also concise and purposeful.  We are confident that the Council for Trade in
Services will be in a position to do so in the near future.
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