RESTRICTEDWORLD TRADE
ORGANIZATIONTN/S/M/5
21 February 2003
(03-1113)
Council for Trade in Services
Special Session
REPORT OF THE MEETING HELD ON 9 DECEMBER 2002 – 13 JANUARY 2003
Note by the Secretariat1
1. The Council for Trade in Services held a Special Session on 9 December 2002 and
13 January 2003 chaired by Ambassador Alejandro Jara (Chile).  The agenda for the meeting is
contained in document WTO/AIR/1994.
2. The Chair indicated that, under Other Business, the representative of UNCTAD had requested
to make a statement.  He proposed that the Council adopt the agenda as circulated, with the addition
of the item of Other Business he had just referred to.
3. The Council so agreed.
A. ASSESSMENT OF TRADE IN SERVICES
4. The Chair noted that under this item, there were a number of points of information which
Members might find noteworthy.  He drew attenti on to a new source of information Members might
find useful in developing their views on the impact  of services liberalization.  The Development and
Economic Research Division had compiled a bibliography of publications, mostly containing
empirical research, in areas falling under the individual WTO Agreements.  This bibliography also
contained an extensive list of studies on individual services sectors, which had been put together in
collaboration with the Trade in Services Division.  The entire bibliography was to be made available
on the WTO web-site and informal copies of the relevant sections would be made available at the nextmeeting.  He also recalled that in October, Mr. James Hodge of the University of Cape Town had
made a presentation on the experience of services liberalization in Southern Africa.  A room
document on the experience of the electricity and petroleum service sectors had also been introduced
by Norway.  The point had also been made that Members were free to revert to any of the documents
presented under this item, previous or current, and that the Council would reserve time for suchdiscussions.  In this regard, he drew the Council's attention to a list of previous Assessment
documents requested at the last meeting and prepared by the Secretariat, contained in JOB(02)/208.
Finally, he drew the Council's attention to a communication from China that was available as a room
document and was to be circulated as a working document in the near future.
5. Presenting his delegation's communication under this item, the representative of China noted
that the aim of the presentation was to contribute to the discussion on the assessment of trade in
services under the Special Session of the CTS.  He recalled that the title of the assessment was
"China's Services Trade:  Development and Experiences of the Opening-Up" and that it attempted to
make a preliminary assessment of the development of China's domestic services industry and trade in
                                                     
1 This document has been prepared under the Secretariat's own responsibility and without prejudice to
the positions of Members and to their rights and obligations under the WTO.TN/S/M/5
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services as China entered the second year of its WTO membership.  He stated that the introduction of
the document presented a brief history of China's negotiations on trade in services.  China had
formally presented its initial offer of commitments on trade in services in 1991 and negotiated with
the GATT CONTRACTING PARTIES during the Uruguay Round negotiations, which meant that
China's negotiations in trade in services had lasted ten years at the time of accession.  Part I of thepaper described the development of China's services industry from 1978 to 2001.  He noted that due
to its late start, China's services industry was still at an underdeveloped stage and that the ratio of
tertiary industry to GDP was 33.6% and of employm ent in tertiary industry to total industry 27.7%.
These two figures were considerably lower than the world average, and this had made it difficult for
China to make comprehensive and extensive commitments during accession.  China faced a challenge
in coordinating the opening-up process with the development of the domestic services industry.
6. Turning to the rest of the paper, the representative of China noted that Part II analysed FDI in
the service industry in recent years.  Research i ndicated that foreign capital inflows in the services
industry had accelerated and that the market share of foreign investments had increased dramatically.
Although China had witnessed a steady growth in trad e in services, deficits had increased rapidly in
the past decade.  Part III summarised the experiences in the liberalization of the services industry,
which combined both opportunities and challenges.  The opportunities included:  the introduction offoreign capital, advanced technologies, management  experience of foreign investors, competition
mechanism, and the promotion of development and growth of domestic services market; new and
better services for customers; accelerated reform of State-owned enterprises; and opportunities for
Chinese services suppliers to tap into the international market.  The challenges included:  the gain of
foreign services suppliers market share in the Chinese services market; challenges faced by small andmedium sized enterprises dealing with fierce competition from large foreign competitors in some
service sectors; an amplification of the "brain drain" effect wrought by foreign investment; the
potential for a widening imbalance in the economic development to the benefit of eastern China which
enjoyed fast economic growth; and a rapidly increasing deficit in services trade.  He noted that the
paper gave examples of these opportunities and challenges in legal services, advertising services,distribution services, insurance services and banking services.  He recalled that the Chinese
government attached great importance to the liberali zation process, the need to strengthen the legal
framework, the need to build up regulatory capacity, and the need to provide some "breathing space"
for the reform of State-owned enterprises.  Based on the analysis outlined, the paper concluded that
the liberalization of trade in services should be progressive and managed.
7. The representative of China noted that Part IV of the submission consisted of a case-study of
China's banking services.  The current development status, the liberalization process, and foreignparticipation in China's banking sector were being reviewed.  China had also faced opportunities and
challenges in the liberalization of its banking sector.  The opportunities included:  increased foreign
capital inflows and the improvement of the investme nt environment; reforms in the banking sector;
promotion of the competitiveness of domestic banks; and opportunities for domestic-funded banks to
explore international financial markets.  The challenges included:  a loss for domestic banks in marketshare and high-end consumers; the loss for domestic banks of capable executives;  and increased
pressure on the banking regulator with respect to the macro-regulation of the financial system and the
implementation of central bank functions.  He noted that the five-year transition period made it too
early to make final conclusions concerning the impact of the full implementation of China's
commitments on its banking sector.  However, he offered some preliminary conclusions:  compared todeveloped Members, China's banking sector was still in the process of continuous reform and
improvement;  a financial system conducive to the market economy was taking shape and domestic
banks lacked a competitive edge; and a progressive liberalization process that could keep pace with
the reform of State-owned commercial banks was necessary.  In conclusion, seen from a regulatory,
reform and market development perspective, a gradual liberalization process was of the utmostimportance for the development of China's banking sector.TN/S/M/5
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8. The representative of the United States thanked China for its submission and said that his
delegation would review and might revert to it in the future.  Turning to his oral statement, he
affirmed that services industries played an important role in both developed and developing markets,
and accounted for a large and growing share of economic output and employment in the United States
and in developing economies.  While acknowledging that the United States and other developedeconomies accounted for a larger share of the world market for services, he noted that developing
economies' participation in this market had increased in recent years, in part due to new cross-border
delivery options made possible by innovations in communications technology.  US data indicated that
certain developing economies accounted for rapidly increasing shares of US direct investment abroad
or foreign direct investment in the United States , and that US admissions of temporary workers from
middle- and low-income economies were growing at a faster-than-average rate.  Available evidence
suggested that past services liberalizations had a positive effect on the United States and developingeconomies, and he felt that future liberalization would likely yield further benefits.  He signalled the
US' intention to submit a formal, detailed document  on the items it was raising.  With respect to
services in the US domestic economy, he stated that throughout the twentieth century, the service
sector had been both the largest and the fastest growing component of the US economy.  In 1950, the
services sector accounted for about 60% of US output; in 2000, the service industry share of the USprivate-sector GDP had grown to about 79%.  Citing data from the World Bank, he stated that service
sector GDP was the fastest-growing component of total GDP in both low-and middle-income
economies.  Moreover, service sector GDP in such economies was growing faster than the world
average.  He noted that a substantial share of workers in developing economies were employed in the
services sector.  Between 1960 and 1999, the share of workers in Latin America and the Caribbeanwho were employed in service industries increased fr om 31% to over 50%.  Similarly, more than half
of the workers in East Asia were employed in the services sector.
9. Speaking on the topic of cross-border services trade, the representative of the United States
noted that since the establishment of the WTO, middle- and low-income economies' services exports
had increased at a faster rate than services exports by high-income economies.  Between 1995 and2001, exports of commercial services by middle- and low-income economies increased at an average
annual rate of 4.2 per cent, while services exports by high-income economies increased at an average
rate of 3.3 per cent.  He further noted that during the same 1995 to 2001 period, several middle- and
low-income economies experienced remarkably high services export growth.  Economies that
registered annual increases in services exports of more than 10 per cent included Albania (31.9 per
cent), El Salvador (20.6 per cent), India (20.2 per cent), Angola (17.9 per cent), Lithuania (15.5 per
cent), Belarus (14.0 per cent), Cape Verde (13.2 per cent), Kazakhstan (13.0 per cent), Croatia (12.0per cent), Malawi (11.9 per cent), Estonia (11.1 per cent), Morocco (11.1 per cent), and China (10.1
per cent).  By comparison, US services exports grew at an annual rate of 4.8 per cent during the same
period.  He noted that, according to the WTO, middle- and low-income economies accounted for a
growing share of total world services exports.  Their share of services exports had risen from 18.2 per
cent in 1995 to 19.1 per cent in 2001, while the share of total world services exports accounted for byhigh-income economies had decreased from 81.8 per cent to 80.9 per cent.
10. On the topic of affiliates trade, the representative of the United States noted that US cross-
border services trade was a significant component of total US trade and accounted for about 21 per
cent of total US cross-border trade volume in 2001.  Despite the substantial volume of US cross-
border trade in services, transactions carried out by foreign affiliates accounted for a larger share oftotal US services sales to foreign clients.  Moreover, US affiliates purchases from certain middle and
low-income economies had increased rapidly in recent years.  As an example, he noted that during
1997-2001 US purchases from Philippine-, Indian- a nd Brazilian-owned affiliates had increased by 36
per cent, 28 per cent, and 24 per cent respectively.  During the same period, total US purchases from
Eastern European owned affiliates increased by about 38 per cent per year.  With respect to temporaryentry of workers, he recalled that a large number of temporary workers were admitted to the US each
year and that the number of admissions had increased in recent years.  He stated that between 1996-TN/S/M/5
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2000 the number of temporary workers, exchange visitors, and intra-company transferees admitted to
the United States had increased at an average annual rate of about 19 per cent, to over 1.2 million
entrants.  He said that temporary workers from middle- and low-income economies accounted for a
significant share of total US admissions of temporary workers, particularly in the specialty occupation
category.  In 2000, entrants from middle- and low-income economies accounted for about 44 per centof all US admissions of temporary workers, exchange visitors, and intra-company transferees, and that
about 50 per cent of all US admissions of specialty occupations.  In recent years, US admissions of
temporary workers from middle- and low-income econom ies had grown at a faster rate than total US
admissions of temporary workers.  He recalled that this oral statement was in advance of a written
submission which would examine the potential impact of future liberalization on US and developing
economy services trade.
11. Making preliminary comments, the representative of Switzerland stated that he had read the
case study on banking services with interest and that he recognised the Chinese government's policy
of progressive liberalization in this sector.  Referring to paragraph 43 of the Chinese submission, he
underscored that opening the banking sector improved  the investment environment, and that this was
an engine for growth and development, as witnessed by the policies of many Members.  Regarding
labour and personnel, he noted that the arrival of new foreign institutions with different experienceswas a way in which to better train bank staff.  He noted that once training in a foreign bank had been
achieved, the trained staff could return to a local banking institution thereby improving their
competitivity.  He also inquired as to whether in the long-term, opening-up under the GATS would
make it easier for Chinese institutions to establish themselves and serve customers abroad, and he
suggested that such considerations also be part of  the assessment.  He encouraged China to implement
the measures outlined in paragraph 42 in order to move forward in the establishment of Basel
principles in the framework of the Basel Committee's work.  He indicated that he may revert to this
submission at a subsequent meeting.
12. The representative of Norway, noted China's impressive record of services sector
development that was in line with global trends.  He stated that in developing countries, in 1965, 40
per cent of GDP was in services, and that this had increased to 50 per cent in 1999, which constituted
a growth in trade in services which was above the global average.  Referring to the chart on page 6 on
the export-import balance in services trade, he suggested that the imbalance in favour of imports
implied that the sole analysis was quantitative.  On the contrary, imports could have beneficial
qualitative aspects which could contribute to growth through modernisation of an economy.
Regarding regional imbalances stemming from foreign investments, he agreed that this was a
challenge that required an appropriate regional policy that would ensure balanced regionaldevelopment.  He indicated that he would further study the submission and revert to it.
13. Making a few preliminary comments and noting his wish to revert to the Chinese submission
in the future, the representative of India conc urred with the need for gradual and progressive
liberalization at a comfortable pace for developing countries.  He reiterated that the GATS structure
permitted progressive liberalization, and that it appeared from some of the requests received that thishad not been borne in mind.  He agreed with the US in its oral statement that exports in trade in
services had grown at a rate faster in some developing countries than in developed countries, but he
urged that the data given be evaluated in its proper perspective:  the 4-5 per cent annual growth rate
for the United States had a much higher base than did the figures for developing countries which
started at a much lower base.
14. Seeking to respond to the inquiry by Switzerla nd regarding whether liberalization would help
Chinese suppliers tap into foreign markets, the repr esentative of China had three points in this regard.
Firstly, China was in its first year since accession, and membership had helped Chinese service
suppliers to export and had raised awareness among domestic service suppliers of the opportunities
abroad.  The government had made great efforts to raise awareness of the opportunities abroad, asTN/S/M/5
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well as in implementing its commitments.  Secondly, the agreement had created an improved
environment for Chinese exporters, who took advantage of MFN treatment and the fruits of the
Uruguay Round in a stable trading environment.  Thirdly, membership gave China the ability to
actively participate in the current round with a vi ew to gaining further access to the international
market.
15. The Chair suggested that the Council take note of the statements made and that it revert to this
item at its next meeting.
16. It was so agreed.
B. TREATMENT OF AUTONOMOUS LIBERALIZATION
17.  The Chair recalled that at the last formal meeting in October 2002 he reported that, despite
further informal consultations and meetings, divergent views remained on a few outstanding issues:
the provisions for developing countries, the treatment of commitments by recently acceded Members,and other issues raised by some Members.  He recalled that at that time he had noted that more
flexibility and political compromise would be required in order to reach a consensus. He stated that in
the interim and after some reflection, he had produced a new draft, contained in Job(02)/35/Rev.2, in
the hope that it could move the Council towards a consensus.  He had attached a draft statement by
the Chair that addressed the situation of recently acceded Members.  He felt that this was theappropriate way to deal with this particular issue, and it was his understanding that most Members felt
the same.  He recalled that he convened an open-ended informal meeting on 25 November in order to
discuss this new draft.  He regretted that due to lack of time, but also because many Members
maintained their positions, the meeting had been some what inconclusive.  He stated that his intention
had been to reconvene the meeting on 5 December, and that between 25 November and 3 Decemberhe had conducted intense consultations with some Members, including through more restricted
informal consultations, with a view to securing a convergence of views.  He stated that these
consultations led him to realize that another informal meeting on 5 December would have been
unproductive and he did not want to waste delegations' time.  He apologised for any inconvenience
this might have caused.
18. The Chair further noted that there had been some conversations among Members which had
led to some movement, although insufficient, and that any results would need to be communicated to
the wider membership.  He reported that it seemed that the Council was left with two main
outstanding issues (in addition to some other issues), namely the content of the provisions for
developing countries, and the treatment of commitments by recently acceded Members.  He stressed
the importance for all Members to put the modalities in perspective.  As he had reported to the TNC,
in the final account, the modalities would be applied in the context of bilateral negotiations betweenparticipants.  They would not, by themselves, create any substantive legal obligations nor would they
establish any automatic right to credit or recognition.  Agreements among participants bilaterally
would, in the end, prevail.  The modalities could not deprive any developing country Member from
the flexibility already provided for in the GATS, and by the same token, the modalities would not
address any asymmetries in commitments made by Members, both original and recent, in pastnegotiations. He said that, in spite of the progress made, achieving a concensus would require more
time.  The draft statement by the Chair had proven more problematic than foreseen, because some
Members, of all levels of development, had concerns about its text.  Some redrafting would be
required.
19. The Chair felt that he could add little beyond this, and speaking frankly, was disappointed that
agreement had not been reached.  Wishing to maintain the momentum, he suggested a course of
action, given the need for increased flexibility.  He stated that because of time constraints and the
meeting of the General Council, there would not be time before the end of the year to pursue thisTN/S/M/5
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suggested course of action, and thus, he recommended that the Council leave this item open, so as to
allow for further open-ended consultation in Januar y.  This would allow the Council to resume its
session to adopt a draft should consensus be at hand.  He noted that should the situation mature, he
would be able to convene the Special Session prior to the next scheduled formal meeting in February
or March.  He reiterated that the modalities were important in the context of the negotiations.  Finally,he drew the Council's attention to an informal communication from Bulgaria, containing suggested
changes to the current draft modalities.  He recalled that these comments had been made by Bulgaria
at the last informal meeting on 25 November.
20. Agreeing with the Chair's suggestion for future work on this item, the representative of
Bulgaria noted that its informal communication had been made at the request of Members at the last
informal meeting.  He stated that previous drafts contained an imbalance between the interests of theliberalizing Member and its trading partners, and needed to be addressed because the purpose of theexercise was to help Members who had liberalized  autonomously.  The suggested changes took into
account the fact that the trading partner controlled the process of granting credit, and sought to
strengthen the position of the liberalising Member.  He felt that certain changes could be made to
underscore the 'rights' of liberalizing Members, for instance by referring to "measures" in the plural.
He felt that this would capture the totality of ch anges undertaken by liberalizing Members, and not the
individuality of them or the sum of them.  He noted the concern that the procedures not be
burdensome had been considered.  Finally, he drew attention to suggestions concerning developing
country Members and liberalization undertaken by recently acceded Members, and he stood ready to
reply to questions Members might have.
21. Acknowledging the efforts by the Chair on this issue, the representative of Korea sought to
register his delegation's concerns regarding the current draft modalities.  He felt that paragraph 7 of
Job(02)/35/Rev.2 could have misleading implications and sought clarification on its intention.  He
feared that the wording used in paragraph 7 could be applied in a manner that would be advantageous
to some liberalising Members.  He reiterated his delegation's concern over the graduated approach and
its position that differentiating developing countries according to their level of development inrelation to the rights and obligations of WTO agreements contradicted the tradition of self-declaration.
He stated that this approach went against the mandate of the Doha Development Agenda and warned
that such a sensitive issue could have a bearing on it.  Given the serious nature of his concern over the
wording contained in paragraph 7, he requested that the wording be changed, and he hoped that
discussions on this topic could be pursued along with other issues including the situation of recently
acceded Members.
22. The Chair acknowledged receipt of a communication from the Korean Mission to the effect of
the statement made.
23. Thanking the Chair for his efforts in producing a revised text, and sharing his regret that the
text could not be adopted, the representative of the European Communities stated that the revised text
did not fully address all points to which the Communities attached great importance, however, hisdelegation had been ready to move forward on the Chair's text in order to reach concensus.  He hopedthat consensus could be achieved in January.  He appealed to all Members for renewed flexibility on
the basis of a good draft text from the Chair and felt that the time had come to move on to other
aspects of the negotiations.  He reiterated that the current text took into account the many concerns
raised by delegations.
24. Recalling a little history, the representative of Côte d'Ivoire stated that his country had started
autonomous liberalization in various sectors starting in 1995 within a World Bank restructuring
programme.  This programme had called for liberalization without conditions and as a result, some
service sectors had been completely liberalized.  He noted that in some sectors foreign suppliers
participated at a level of more than 97%.  This made it difficult for national SMEs to gain a footholdTN/S/M/5
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in these sectors.  He felt that the Chair's revised te xt helped to shed light on the situation.  He noted
that there would be meetings with suppliers in capital in order to conduct an assessment.  With respect
to paragraph 7 of the draft, he noted that the reference to the level of development and the position of
service providers did not speak specifically to the difficulties for small enterprises to enter a market
ahead of large foreign enterprises and their subsidiaries who blocked access to the market.  He feltthat concerning paragraph 7 the size of suppliers in developing countries should be borne in mind.
25. The representative of Canada stated that he had hoped that agreement could have been
reached on the basis of Job(02)/35/Rev.2.  Although the text was not perfect, his delegation was
prepared to move forward on it in a spirit of comp romise.  He hoped that others would demonstrate
flexibility in order to pave the way for agreement in January.
26. Echoing the statement made by Canada, the representative of the United States noted that his
delegation was not in favour of all parts of the Chair's draft, but had hoped to be able to move forward
based on it.  He expressed disappointment that not all Members were able to move forward.
27. Recalling the submission made on this item by Uruguay and other developing countries, the
representative of Uruguay noted that these delegations had taken an active role in the process towards
consensus.  Noting that developing countries had demonstrated flexibility in this process ofnegotiation on modalities for autonomous liberalization, he called upon others to show the sameflexibility, so that the document would emanate fro m all.  He said that Uruguay would contribute
constructively to the process with a view to achieving consensus by the date indicated by the Chair or
as soon as possible.
28. Thanking the Chair for his sustained efforts on this item, the representative of Australia
expressed support for the draft text contained in Job(02)/35/Rev.2 and hoped that consensus on this
basis could be achieved as soon as possible.
29. The representative of Brazil sought to associate his delegation with the statement made by
Uruguay, and noted that flexibility needed to come from all Members and not just from developing
countries.  He supported Korea's position on graduation.
30. The representative of Japan agreed that the modalities needed to be put in perspective.  He felt
that the text reflected a good approach that was close to consensus.  He hoped that Members would
work constructively and with flexibility in order to achieve agreement quickly.
31. Noting that movement forward had been achieved, the representative of Djibouti hoped that
the draft from the Chair would bear fruit.  He echoed observations made by Côte d'Ivoire and noted
that the specificity of African states was an element which needed to be taken into account.
32. The representative of Mexico noted that cross-cutting issues were being raised, such as
graduation, which exceeded the mandate of the Special Session.  He recalled that in all WTO
instruments, including in the GATS, reference was made to only three categories, namely developing
countries, developed countries, and least-developed country Members.  He felt that it would be
inappropriate for the Council for Trade in Services to consider this issue, which was an exercise
which should be taken up elsewhere and horizontally.  Echoing Korea's statement, he felt that it had
raised a valuable point that this issue could not be taken up in the Council for Trade in Services, andthat the Council could only finalise draft modalities for the treatment of autonomous liberalization.
With regard to the Chair's new draft text, he noted that it was not fully satisfactory in all respects for
Mexico, but that it supported most of its content.  In a spirit of flexibility Mexico could build on it.
33. The representative of Thailand noted her support for the statements made by Uruguay and
Brazil.  She expressed concern with participation in  the informal consultations that had been held.TN/S/M/5
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Realising that not all Members could be invited to these meetings, she nonetheless noted that no
ASEAN Member had been involved in the consultations.  She expressed support for the Chair's
revised text as a good way to move forward, and would look for flexibility from other Members.
34. Noting that the submission referred to by Uruguay had been co-sponsored by his country, the
representative of Malaysia agreed with Uruguay's statement.  He expressed concern over the issue of
graduation, which was being raised in the Special Session and elsewhere at the WTO.  He stated that
this issue was not contained in the Doha Development Agenda, and that its discussion was of concern
to his delegation.  Although Malaysia had not participated in informal consultations on this issue,
Malaysia's concerns were known and he hoped that Members would show flexibility in this regard.
He accepted the Chair's proposal to convene the Special Session as soon as consensus had been
reached on this issue.
35. The representative of the United States stated that his delegation had heard, but had not
necessarily agreed with, all the points made regarding paragraph 7 of the revised draft.  The US had
not sought to bring the issues addressed into the discussion.
36. The representative of the European Communities recalled that his delegation had certain
attachments to some of the points in the draft, in cluding the issue of bindings, for which the text was
not completely clear, but said that the EC had demonstrated flexibility.  He stated that the EC couldforesee the deletion of paragraph 7, but he sought to make clear that it would be unacceptable to
change the GATS structure through the modalities.  He recalled that Article XIX:2 referred to
flexibility for individual Members, including individual developing country Members, and that the
Council should not create new groups.  He reiterated  that the EC had shown flexibility in accepting a
section in the modalities on developing countries which was already addressed in the agreement, andthat changing the structure of the GATS through the modalities was not acceptable.
37.  Regarding the issue of graduation, the representative of Bulgaria stated that he failed to see
this in paragraph 7, that Bulgaria had not proposed the language it contained, but that it could agree to
it given that it was taken from the GATS.  He expressed some confusion about statements made that
graduation was being brought into the GATS, for this did not appear to be the case.  While some feltthat this issue should be handled horizontally, he noted that the issue was blocked from discussion
when raised in other fora.  He said that Bulgaria had not raised the issue of graduation, and that there
was no principle of self-selection, which was simply a practical consequence of a lack of a definition
of who were the beneficiaries of special rights and privileges in the WTO.  He stated that if rights and
privileges were sought for a particular group of Members, this group must be identified.  If the right
holders were not defined, this undermined the legal system from which special rights and privileges
were derived.  This was at the centre of the Doha Development Agenda, and had not been raised byhis delegation in the discussion on autonomous liberalization.
38. The Chair noted that no new elements had been brought forth and feared that the discussion
was counterproductive.  He stated that nothing in the modalities would add or subtract from the rights
and obligations of Members.
39. The representative of Nicaragua noted that since 2000 there had been a plethora of
negotiating suggestions, which had been made use of in order to make progress in other negotiating
bodies.  He felt that the guidelines contained matters which fell within the negotiations on services.
He felt that differences among Members were a function of the development of their economies and
the situation of their suppliers of services.  This was reflected in paragraph 7.  Concerning statements
made by the EC and Korea, he thought that the problems they referred to arose elsewhere and not inthe present forum.  He felt that Members should continue not based on old positions, but on
outstanding issues.TN/S/M/5
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40. The representative of Lithuania responding to the calls made for constructive participation
and flexibility, recalled that the recently acceded Members had made significant concessions and
sought the same from others.  He hoped that the concerns of the recently acceded Members would be
satisfied.
41. The representative of Jordan wished to associate her delegation with the statement made by
Lithuania.
42. The representative of the Kyrgyz Republic sought to associate himself with the previously
made statements.  He noted that newly acceded Members had not been among the drafters of the
GATS and that the needs of this group had not been reflected in the agreement.  He hoped that their
situation would be taken into account, according to their level of development.
43. The representative of Poland stated that her delegation was willing to accept the Chair's
revised draft and that it was willing to move forward.
44. The representative of China associated his delegation with the statements made by Lithuania
and Jordan regarding the position of newly acceded Members.  He felt that China had shown
flexibility and hoped for prompt consensus.
45. The Chair regretted that no new elements had emerged from the discussion.  There was a need
for further work and consultations.  He hoped that there would be more flexibility in the new year.  He
suggested that the Council take note of the statements made, and that it leave this item open so as to
allow the Special Session to resume at any time prior to the next formal meeting to adopt the
modalities.
46. It was so agreed.
C. MODALITIES FOR THE SPECIAL TREATMENT FOR LEAST -DEVELOPED COUNTRY MEMBERS
47. The Chair recalled that at the last formal meet ing held in October, Senegal on behalf of least-
developed country Members, had informed the Council that the least-developed countries were
working on a draft text to be submitted to the Council for Members' consideration.  In this regard, he
drew Members' attention to a communication receive d from Zambia on behalf of the least-developed
country Members, contained in document JOB(02)/205.
48. Introducing a submission on behalf of LDCs contained in Job(02)/205, the representative of
Zambia reiterated that LDCs constituted the weakest group in the negotiations on trade in services and
that modalities for the special treatment for LD Cs were needed to address this imbalance in
negotiating strength.  It needed to be recognised that LDCs merit the highest degree of flexibility in
the process of bilateral and multilateral services negotiations.  He said that Article XIX:3 recognised
the need to establish the modalities and mandated work on this issue.  For LDCs, this was the main
opportunity to establish benchmarks against which the progress in the negotiations could be assessed.In parallel, he saw a similar opportunity in Article IV paragraphs 1 and 2, which also recognised the
serious difficulties faced by LDCs.  He further sought to link special and differential treatment, which
the Doha Mandate reaffirmed as an integral part of the WTO, and its being taken into account when
negotiations involving LDCs were conducted.  He saw Articles IV and XIX as relevant and thus,
according to the language of Doha, should be made more "precise, effective and operational" infavour of LDCs.  He invited Members to recall that for LDCs the importance of services transcends
economic benefits and encompassed broader public objectives.  Services played a crucial role in
addressing poverty and upgrading welfare in many LDCs.  He stated that LDCs considered that the
Guidelines and Procedures for the Negotiations on Trade in Services ought to be blended with the
Modalities for the Special Treatment for LDCs.TN/S/M/5
Page 10
49.   Turning to a few specific points on the proposal, the representative of Zambia noted that
LDCs did not expect requests which would go be yond their developmental, economic and financial
needs, and that this responsibility laid with th e requesting Member.  LDCs expected the Council to
reaffirm that LDCs should be given maximum fl exibility in undertaking commitments in line with
their developmental needs.  This meant that condi tions could be attached for developmental purposes
as recognised by Article XIX of the GATS.  Recogn ising the right to regulate, he said that Members
should not ask LDCs to accept and implement additional measures which would exceed inherently
weak institutional and regulatory capacity.  Full mark et access, he felt, should be extended to LDCs,
and in order to ensure that such access did not remain only a nominal and only a potential benefit,
namely that additional steps might be needed by trading partners to make them more effective and
operational.  Investment, transfer of technology, training and access to distribution channels were at
the core of development concerns for LDCs.  In order to ensure progress in this area, positivemeasures by other Members and cooperation at all levels were of crucial importance.  The temporary
movement of natural persons supplying services, in all categories of persons and beyond those
investment-related ones, he said was of direct trade importance to LDCs.   The group asked Members,
when elaborating new rules, disciplines or any other instrument under the GATS, to take into account
their relevance and to assess their applicability in the LDCs.  Finally, he stated that making availableadequate financial resources should support the implementation of the objectives and measures he had
outlined, as well as the targeted technical assistance by Members and relevant international
organisations.
50. In overall terms, said the representative of Zambia, LDCs as a group would consider
implementation of the modalities as providing legitimacy and credibility to the Doha DevelopmentAgenda and a way to translate it into action.  The adoption of the modalities for the special treatment
for LDCs would serve to ensure that LDCs were not left out of the process of services negotiations
and that their concerns and interests were fully taken into consideration in promoting progressive
liberalization of trade in services.  He noted that a positive outcome at the current stage would ensure
commitment of LDCs towards future partnership in  working towards the balanced outcome in the
services negotiations.  He further noted that the process of services negotiations was gaining speed.
This was taking place at the same time as the TNC recognised the good progress made in services.
LDCs understood that the development of modalities for LDCs were taken into consideration in this
context.  He reiterated that the modalities for the special treatment for LDCs was a way for LDC
Members to convey their interest in playing a more active role in services negotiations.  Services
liberalization was an important tool of development for LDCs, especially where it was leading
towards improving LDC domestic supply and export capacities.  Urging Members to support theproposal, he felt that the March 2003 deadline would be a good benchmark for the adoption of the
modalities, prior to the offers phase.
51. The representative of India noted that the submission presented by Zambia set out in detail the
position of least-developed country Members on services negotiations, and that his delegation agreed
with the 8 points outlined.  He stated that these factors had been taken into consideration when Indiamade its requests.  He agreed that requests to LDCs should be compatible with their economic,
financial and developmental needs and that the sectors in which requests were made should be limited
in terms of the number of sectors, modes of supply and the scope of commitments.  He further agreed
that maximum flexibility should be given to LDCs in undertaking commitments.  Referring to
paragraph 8 of Job(02)/205 which spoke of priority sectors, he looked forward to receiving a list ofthe priority sectors so that India could take this into account when making initial offers.  With regard
to the suggestion on the development of trade in services for LDCs, he agreed with the broad outline
of the proposal and stated that account would be taken in his delegation's requests and offer.  He also
agreed with the special consideration for LDCs regarding credit granted for autonomous
liberalization.  With respect to the references made that, in undertaking specific commitments, LDCs
lack administrative and human capacity to analyse and respond to requests, he noted that this was not
a phenomenon limited to LDCs, but that developi ng countries who participated in the recentTN/S/M/5
Page 11
scheduling workshop had also taken note of the complexity of some of the issues involved.  He
signalled that India would favour the inclusion of this as a standing item on the agenda.
52. The representative of Cuba expressed full support for the contents of the draft, noting that it
clearly set out LDC concerns.  She supported it as a basis upon which to move forward.
53. Recalling that his country was currently responsible for the chairmanship of the
correspondence bureau for LDCs, the representative of Benin expressed his support for this document
and indeed any effort which sought to integrate LDCs into the multilateral trading system.  Citing
paragraph 5 of the draft, he felt that the increased technical cooperation would give LDCs the
possibility to reinforce human and administrative capabilities so as to improve their participation in
trade.  He thanked UNCTAD, ITC, JITAP and the WTO for their assistance in this regard.  He noted
that technical assistance was important in giving LDCs the elements they needed to decide whether to
make specific commitments.
54. The representative of Burkina Faso expressed support for the proposal which encompassed
the needs for special and differential treatment in conformity with Article XIX:3.  Burkina Faso stood
ready to participate in the negotiations on trade in services and sought the understanding of developed
countries in this regard.  He underscored the need for progressive insertion into global trade and the
need for national assessments in trade in services  with the help of the WTO, UNCTAD and the ITC.
He reaffirmed the need to grant LDCs credit for autonomous liberalization and hoped that the special
needs of LDCs  would give rise to concrete pr oposals with trading partners in this regard.
55. Recalling the specific case of LDCs, the representative of Djibouti cited the example of
training managerial staff, and stated that the timing of training seminars should be extended so as to
allow LDCs to better familiarise themselves with the rules of the WTO.  He inquired as to whethermeetings could be held among LDC decision-makers in the area of services in order to see what
concessions would be required in the future.  This was necessary because when requests were made to
LDCs, they were not always fully informed, and the exchange of information could be facilitated by
such meetings.
56. Making preliminary comments, the representative of Japan stated that he shared the view that
the level of development of LDCs should be taken into consideration in the request-offer process.
This was reflected in Japan's requests in terms of the number of sectors addressed and the content of
the requests.  He noted, however, that the flexibility should not be stated in terms of automatic rights
and obligations; an exclusion of certain sectors, disciplines or rules; or the inclusion of elements
outside of the scope of the GATS.  The modalities could not serve to prejudge the outcome of bilateral
or multilateral discussions.  He therefore expressed some concern over some of the wording contained
in the draft, particularly the use of the terms "shall" and "shall not" which would be prescriptive andcould prejudge outcomes in bilateral or multilateral negotiations.  He noted that Japan might revert to
this item.
57. The representative of Tanzania sought to associate his delegation with the statement made by
Zambia, and urged the Council to continue to consistently take into account the situation of LDCs in
the application of the GATS.
58. Noting that the draft text was a good basis for modalities, the representative of the European
Communities indicated her delegation's willingness to work in a constructive manner.  Regarding the
proposal's contents in paragraph 5, she noted that the EC had tried to take into account the situation of
LDCs in preparing its requests and had chosen sectors which it felt would be of mutual benefit.
Citing paragraph 6, she noted that progressive liberalization already existed in the GATS in ArticleXIX:3.  While supporting the use of development conditions linked to commitments in order to
achieve some of the objectives as set out in Article IV, she cautioned that attaching too manyTN/S/M/5
Page 12
conditions to commitments would undermine the va lue of the commitment.  Regarding paragraph 14,
she agreed that the situation of LDCs should be taken into account in negotiations under Articles VI:4,
X and XIII.  Echoing India's statement, she requested  that the list of priority sectors for LDCs be
communicated so as to enable Members to take them into account when making their initial offers in a
few months.  She said that the clauses in the proposal pertaining to technical assistance, althoughworthy of discussion, were perhaps beyond the scope of the modalities, as were some of the other
clauses.  As an example she cited paragraph 8, which seemed to prescribe a result for the negotiations.
Moreover, it did not mesh well with the structure of the GATS as it gave better treatment to some
Members over others.  She felt it was important that the modalities not prejudge the outcome of the
negotiations, but that they should assist LDCs in the negotiations.  Finally, she felt that the modalities
should seek to increase the participation of LDCs in the negotiations and that some provisions
appeared to exclude LDCs from some areas of the negotiations, which was not the purpose of theexercise.  She looked forward to achieving results on this item.
59. The representative of China offered support for the document and echoed preliminarily India's
statements regarding the detailed elements outlined in Part II.  He indicated that China was studying
the proposal and would revert to it at a subsequent meeting.
60. The representative of Norway expressed his hope that the results of the negotiations would
yield increased growth and higher levels of participation in world trade for LDCs.  He reaffirmed that
Norway took seriously its obligations contained in the GATS and the negotiating guidelines to give
special consideration to LDCs.  Responding to paragraph 5 of the proposal on the difficulties faced by
LDCs in undertaking specific commitments, he note d that Norway's requests to developing countries
were in areas that would serve both developing countries' and Norway's interest, and he felt that thisapproach coincided with objectives of the communi cation from Zambia.  He noted that the requests
reflected the interests of companies at present and in the future.  Norway had a set of measures and
financial support mechanisms to ensure that this development did not occur in a vacuum, and through
which Norway supported increase trade and exports from developing countries.  Assistance helped to
strengthen the ability of LDCs to participate in a nd benefit from multilateral trade.  The elimination of
import tariffs for LDC exports to Norway since 1 July 2002, he said would lead to increased
opportunities for LDCs to increase their exports.  Special grant schemes existed to promote feasibility
studies, product development, quality improvement and control, and market development with a view
to establishing businesses in developing countries.  He stated that support should be given to
institutions and associations in developing countries to build capacity and develop market and export
opportunities.  He noted that Norway took a holistic approach to its relations with developing
countries, of which trade was one aspect to further development goals.  He encouraged more requestsfrom developing countries, which would render the offers process more practical and affirmed
Norway's intention to play a constructive role in the modalities for LDCs.
61. The representative of Uganda wished to associate his delegation with the statement made by
Zambia.  He noted that the discussion on special and differential treatment centred on culture and
market access, but felt that it could be extended to services which were an essential component oftrade for LDCs.
62. Expressing support for the initiative, the representative of Colombia agreed in particular with
the need, outlined in paragraph 6, to give maximum flexibility in the taking of commitments.  Citing
paragraph 8, she stated that her delegation looked forward to receiving lists indicating the priority
sectors for LDCs so as to take them into account. Sh e stated that the contents of the proposal would
help Members to comply with Article IV and woul d facilitate the participation of LDCs in the
negotiations.TN/S/M/5
Page 13
63. The representative of Ghana stated his delegation's support for the proposal introduced by
Zambia and urged Members to give very sympathetic consideration to its elements given the situation
of LDCs.
64. Thanking the ITC, UNCTAD and the WTO for their technical cooperation, the representative
of Côte d'Ivoire stated that such capacity building was important in helping public and private sector
partners learn about the complexities of the WTO instruments.  He noted assistance with capacity
building that had be provided by Norway.  He said that bilateral and regional groupings would also
help reinforce efforts to build capacity.  He invited the European Union in the framework of ACP to
support Côte d'Ivoire in its capacity building efforts, notably the need to understand domestic and
regional situations in preparing offers.  In this regard, he suggested workshops and teleconferences
that would allow experts to analyse stakes.  He also sought the opportunity for his country to complete
an assessment of trade in services, which he felt was important in evaluating opportunities andchallenges, and the areas in which Côte d'Ivoire could participate in trade in services.
65. The representative of Switzerland underlined that the submission of the proposal highlighted
the desire of LDCs to participate in the negotiations that should be multilateral and universal.  He was
encouraged by the initiative, as it represented a step to achieving this end.  He expressed satisfaction
with paragraph 3 and the role that the current negotiations could play in fulfilling the developmental,economic and social objectives of LDCs.  Regarding the provisions concerning requests made to
LDCs, he said that these factors had been taken into account in Swiss requests, and that his delegation
had no major objections to this provision.  He also felt that consideration should be given to the
sectors which are of export interest to LDCs in the negotiations.  He said that the replies of LDCs to
requests would play an important role in this regard, and he encouraged them to define their interests.He acknowledged the important role that was played by domestic regulation.  Multilateral cooperation
and assistance he agreed was key and noted that Switzerland supported the ITC financially.  He
believed that the situation of LDCs was difficult and that it justified an approach which took into
account their specific needs, as was the goal of the modalities.  He underlined that they should serve
as a precedent for other cases.  He reiterated Switzerland's concern not to overburden the Council forTrade in Services or the Secretariat with new tasks.  What might be granted in the present discussion
on LDCs was not to be used as precedent in the future.
66. The representative of Kenya agreed that maximum flexibility should be accorded to LDCs
and that there was a need for special and differential  treatment to help them face specific concerns.
He concurred that trade in services was important for the LDCs and needed to be considered along
with the economic and social dimensions of development.  He felt that the proposal highlighted the
elements for the modalities, and expressed support for issues outlined in paragraphs 5 to 15, as well asfor the mechanisms and procedures contained in the proposal.
67. Making a few preliminary comments, the representative of Canada requested clarification
regarding the first sentence of paragraph 10 in which there appeared to be a word missing in the first
sentence.  He suggested that informal consultations on this issue in the new year might prove useful.
68. The representative of the United States stated that his delegation would require some time to
further review the proposal, and that he hoped that agreement could be reached expeditiously.  He
shared some of the concerns expressed about what appeared to be the prescriptive nature of some of
the provisions, which seemed to stretch beyond the modalities.  He inquired as to whether the
modalities should focus on the flexibility available to the LDCs in responding to possible requests
made to them by Members who chose to do so, rather than imposing substantive obligations on non-LDCs.  He reiterated the interest held in strengthening LDCs' participation in trade in services based
on their national economic growth strategies and in the negotiations.TN/S/M/5
Page 14
69. The representative of Senegal stated that he had taken note of the comments and questions
raised and that he would respond to them at a later meeting.  He echoed other Members' recognition
of the important work done by the WTO, ITC, JITAP and UNCTAD in enhancing the role of trade in
services in development.  He agreed with the suggestion for informal consultations, and indicated he
might revert to issues raised.  He recalled that the text sought to ensure maximum flexibility asforeseen in the GATS through Article IV:3, and urged Members to share the goal of achieving
flexibility, notably in bilateral consultations.
70. The representative of Haiti expressed his gratitude to those Members who had recorded their
support for the proposal.  He said that the submission reflected to the expectations of LDCs.
71. The representative of Korea urged LDC Members to submit their requests and offers in due
time so as to allow their trading partners to take into account their areas of interest.
72. Responding to the query from Canada, the representative of Zambia noted that the word
"their" in the first sentence of paragraph 10 should be deleted, and should read "Members shall assist
least-developed countries in obtaining transfer of technology and training, and shall undertake …".
He thanked Members both for their expressions of support and for their comments, and he cautioned
Members against subjective opinions which would hinder movement forward.
73. The Chair remarked that an important step forward had been taken on this issue and thanked
Zambia and the other LDCs for their efforts.  He noted that the interventions made had been positive
and that there was agreement for an open-ended informal meeting in the new year.  He pledged to
engage in informal consultations in preparation of this meeting.  He suggested that the Council take
note of the statements made and revert to this item at its next meeting.
74. It was so agreed.
D. WORK OF SUBSIDIARY BODIES – REPORTS BY CHAIRPERSONS
75. In the interests of time, and for this meeting only, the Chair proposed that reports of the
Chairs of the subsidiary bodies be circulated and incorporated into the report of the meeting.
76. It was so agreed.
77. The Committee on Trade in Financial Services met formally on Monday, 2 December 2002.
No new information was provided by Brazil, Dominican Republic, Jamaica, Philippines, Poland and
Uruguay regarding the status of their domestic procedures for Acceptance of the Fifth Protocol.
Under the agenda item on Technical Issues, Members had a preliminary debate on an issue raised by
Brazil about the scope of Members' obligations under the GATS regarding capital movements
attached to specific commitments on certain financial services. As a result of that debate, the
Committee decided to request the IMF to prepare a list outlining Fund documents that may be
relevant to that discussion.  Concerning Recent Developments in Financial Services Trade, HongKong, China presented a document on e-finance entitled "Market Trends and Regulatory Issues
Relating to Electronic Banking and On-line Trading in the Securities and Futures Market of Hong
Kong, China", and circulated as document S/FIN/W/25.  Additionally, Peru made a presentation on its
regulatory framework for financial services.  The Committee adopted its annual report  to the Council
for Trade in Services, contained in document S/FIN/8.  Under Other Business,  Members were
informed about the replies given to two letters rece ived from the Chairpersons of the Special Session
of the Committee on Trade and Development a nd the Working Group on Trade and Transfer of
Technology.  The Committee will meet again during the next cluster of services meetings.  The World
Bank presentation of its 11
th Policy Report, "Finance for Growth: Policy Choices in a volatile world",
was to be scheduled back-to-back with that Committee meeting.TN/S/M/5
Page 15
78. Since the last report in October on the work of the Committee on Specific Commitments, the
Committee held an informal meeting on classification issues on 19 November 2002, and a formal
meeting on 5 December where it addressed two substantive items:  (a) Classification Issues, and (b)
Matters Relating to the Scheduling of Commitments.  Regarding classification issues, Members had a
very useful exchange of views on the basis of the compendium of classification proposals that was
produced by the Secretariat.  In particular, the classification of computer and related services was
discussed in detail, stimulated by proposals from the European Communities and Chinese Taipei.
Under the item of Matters relating to the Scheduling of Commitments, Members continued their
discussion on approaches to the scheduling of Additional Commitments under Article XVIII of the
GATS.  Upon request by the CSC, the Secretariat organized a workshop on the scheduling of specific
commitments on 27-29 November 2002.  There were some 180 participants overall, of which about
100 capital-based participants from developing countries were financed by the WTO, making theevent one of the biggest technical cooperation events in 2002.  Very positive initial feedback had been
received to the effect that the workshop was well designed and highly relevant for developing country
participants in the services negotiations.  It was al so noted that the Secretariat aimed to complete its
work on the consolidation of Member's schedules before the end of the year. These draft schedules
were meant to facilitate the presentation of offers in one single document.
79. The Working Party on GATS Rules held an informal meeting on 22 November and a formal
meeting on 3 December 2002.  On 3 December, the Working Party on GATS Rules adopted its annual
report.  It was circulated as document S/WP GR/8 and transmitted to the Council for Trade in
Services.  On the topic of safeguards, in order to structure the debate, an Annotated Agenda,
contained in JOB(02)/202, was issued prior to the meeting, which proposed various themes fordelegations' consideration, as they had emerged from previous meetings.  In addition to the question
of "desirability and feasibility" of a services safeguard, Members gave preliminary consideration to
several issues raised in the Annotated Agenda, including:  (i) identifying possible common elements
for an ESM, based on the various proposals on the table;  (ii) examining concrete cases where a
safeguard measure would be needed and how it could be applied;  (iii) considering the idea ofworking out a procedural framework or core mechanism, or possibility of combining different
approaches;  (iv) addressing process-related issues such as transparency, notification, consultation and
surveillance provisions; and (v) further discussing the use of expedited dispute settlement proceedings
in the context of a services safeguard.  As requested by Members at the meeting on 23 October 2002,
the Secretariat prepared a note providing an overview of the various issues raised by Members in their
written proposals,  "Core Elements Contained in  Members' Proposals – Overview of the Synopsis",
contained in JOB(02)/200.  At the meeting, Members further requested the Secretariat to prepare abackground note on safeguard provisions contained, inter alia , in bilateral and plurilateral economic
agreements and Members' schedules of specific commitments, as well as a compilation of economic
needs tests contained in Members' schedules of specific commitments. With respect to the item
Government procurement, due to the lack of time , discussion of this agenda item was postponed until
the next meeting.  Under the item of subsidies, the delegation of Poland circulated an informalcontribution containing some thoughts on the definiti on of subsidies in services (JOB(02)207).  Due
to the lack of time, however, discussion of this document was postponed until the next meeting.
80. Since the October  meeting of the CTS Special Session, the Working Party on Domestic
Regulation held one formal meeting on 4 December 2002.  Discussion during the meeting  focused on
the examination of regulatory measures.  The first item on the agenda was the adoption of the Annual
Report to the Council for Trade in Services (S/WPDR/W/19).  After a brief discussion, Members
adopted the Annual Report, as amended.  The main item on the agenda was the Development of
Regulatory Disciplines under GATS Article VI.4, with the first sub-item being the Discussion of
Concepts Relating to the Development of Disciplines.  An informal paper from China on regulatory
restrictions encountered by its services exporters (JOB(02)/203) prompted a lively discussionregarding the regulatory examples listed in the revised Secretariat paper "Examples of Measures to be
Addressed by Disciplines under GATS Article VI:4 " (JOB(02)/20/Rev.3).  The barriers mentioned inTN/S/M/5
Page 16
China’s paper included the lack of recognition of professional qualifications and onerous visa
procedures, both of which were major issues for developing countries.  Although visa procedures
have not explicitly been a WPDR topic to date, several delegations expressed interest in further
discussions in the Working Party on this issue.  The second sub-item regarding the  Development of
Regulatory Disciplines under GATS Article VI.4 was the Development of General Disciplines forProfessional Services.  China presented a formal reporting on domestic consultations with
professional services sectors (S/WPDR/W/20), which also received considerable attention.  This was
the first formal WPDR document submitted by a Member in 2002.  Canada and Chinese Taipei
reported orally on their consultations, followed by comments from many delegations.  As noted in an
earlier Chair's report on the meeting held on 22 October, developing countries were becoming
increasingly active in the work on domestic regulation, especially regarding regulations impacting on
their efforts to expand services exports via the movement of natural persons.  The next formal WPDRmeeting was to be held in the week of 24 February 2003, with the possibility of also holding an
informal meeting prior the formal meeting.
E. PROPOSALS RELATING TO THE NEGOTIATIONS UNDER ARTICLE XIX OF THE
GATS
81. The Chair noted that at the Council's last meeting there had been extensive discussion on a
proposal from the United States on small and medium-sized enterprises, contained in document
TN/S/W/5.  Two other proposals had also been introduced.  The first from the European Communities
on Computer and Related Services, contained in document TN/S/W/6;  and the second from Mauritius
on Small Economies as Small Suppliers of Services, contained in document TN/S/W/8.  Some
questions had been posed and there were indications that Members might wish to revert to theseproposals. He drew the Council's attention to a co mmunication that had been received from Chinese
Taipei on Computer and Related Services.  He said that this document was available as a room
document and would be made available as a working document.  He was also aware that Japan wished
to make a statement on maritime transport services (MTS).
82. The representative of Chinese Taipei expressed thanks to those Members who had gathered
like-minded delegations in certain sectors, as this would help to move the negotiations forward.
Introducing his delegation's proposal on computer and related services, the representative stated that
these services were a driving force in a knowledge-based economy, were important for efficient
business activities, and enhanced competitivity of those economies who used this technology.  He
noted that the presence of foreign service providers improved developing country Member
information infrastructure and access to skilled technicians.   Enhanced international trade in
computer and related services would benefit importers and exporters of these services.  He noted thatthe paper covered two issues.  Firstly, CPC 84 contained broad coverage of these services, and
secondly, there was overlap between computer and related services with other service sectors.  The
proposal sought to introduce the concept of "value chain" to identify the scope of computer and
related services, which was a concept accepted by the IT industry.  This value chain defined the scope
of these services in four stages:  the pre-implementation stage, the implementation stage, theoperations stage and the maintenance and support stage.  He felt that this approach took into account
the requirements of business because they were expected to give total service to customers, and
therefore, they had to be able to operate at all four stages.  He cited the example that some consulting
services might be required in advance of the implementation stage.  This might include provision of
development and integration services to implement the application, as well as data- processing, based,and connectivity services.  Further along the chain in the delivery of the service, maintenance, support
and training could be necessary.  He noted that business required a solution-oriented approach and
hence the need for commitments in computer and re lated services to be made at the two-digit CPC
level.  He suggested that a dialogue begin in the Special Session to reduce barriers in these services
and that the Committee on Specific Commitments be instructed to examine the issue of convergenceservices.TN/S/M/5
Page 17
83. The representative of Japan noted that his delegation was encouraged by the commencement
of the request-offer negotiations in trade in services, including in maritime transport, in line with the
Doha Ministerial Declaration.  He noted that, based on the Declaration, Members were clarifying
initial requests and preparing initial offers.  He reiterated the importance of maritime transport and
encouraged all Members to actively participate in the on-going negotiations in this sector.  Heunderscored that maritime transport was an important facilitator of world trade, a developing sector,
and carried four-fifths of world trade.  It also made a direct contribution of many Members' GDP.  In
view of maritime transport's importance, he felt that binding substantive liberalization was crucial to
ensuring the overall success of the current round of trade negotiations.  He stated that a global
network of reliable, efficient and cost-effective maritime transport services was beneficial to all
Members, including developing and least-developed country Members whose trade in price-sensitive
goods often comprised a significant component of their economies.  By contrast, restrictions onmaritime transport services could create an adverse effect, including on export and import prices and
the location of foreign direct investments.  He believed that liberalization was key to reducing
maritime transport costs, providing greater choices to shippers, and ensuring fast and efficient
deliveries.  Liberalization in this sector would encourage foreign investment, which would not only
enhance employment opportunities within the sector itself, but would promote the growth of other
related services sectors, such as ship repair-maintenance, ship classification, distribution, professional
services, communications, banking and insurance services.  He recalled that the Decision of the
Council for Trade in Services in 1996 (S/L/24) stipulat ed that negotiations in this sector would resume
on the basis of existing or improved offers.  He noted that the "Compilation of Existing Maritime
Transport Offers" prepared by the Secretariat and circulated in October 2002, showed thatapproximately 50 WTO Members submitted offers in the last round, and about 10 newly acceded
Members had made a commitment in this sector.  He strongly encouraged active participation by
Members in the negotiations with a view to achieving meaningful liberalization of maritime transport
services, and thereby secure broad coverage of this sector in the multilateral trading system and the
GATS framework.
84. The representative of Panama stated that the liberalization of world trade could not be
conceived of without similar activities in trade facilitating sectors.  The opening of markets would
have no meaning unless physical access was improved.  For Panama, MTS had been an important part
of national development.  He noted that since 1925 no nationality restrictions had been applied for
registry in Panama and today it had one of the world's largest fleets.  Taxes and registration fees
meant income for the government and had generated an entire industry that had channelled foreign
investment and promoted growth in other sectors such as banking, insurance and professionalservices.   Although the existence of the canal was key to this strategy, he stated that it did not
generate half of the income Panama derived from maritime services.  The maritime tradition was
based on the canal and the fleet, however, liberalization of certain maritime services was relatively
new, specifically ports.  He recalled that the ports had been handed over to Panamanian jurisdiction in
1978 under the Panama Canal Treaties.  The government had had the exclusive management of theports and the amounts of cargo handed had been reasonably small.  Starting in 1993, Panama initiated
the liberalization of the ports sector and he sa id that less than 10 years later, investment in
infrastructure and ports equipment exceeded US$1,000 million.  Three foreign companies had
established, two of which (Hutchison Whampoa and Stevedoring Services of America) were amongst
the first four port operators in the world, and a third terminal was run by Evergreen Group.  He noted
that the number of containers going through Panamanian ports exceeded 2 million twenty-foot
equivalent units, which was greater than the volume handled in Brazil or Argentina.  Panama was
extending the port of Balboa, which will permit it to increase the total cargo handed to more than 3
million twenty-food equivalent units.
85. The Inter-Ocean Railway, noted the representative of Panama, had also come under
government management in 1978 until it ceased operations at the beginning of the 1990s.  Port
development generated interest in liberalizing railway carriage.  The Kansas City Railway operatedTN/S/M/5
Page 18
passenger and freight services coast-to-coast and had renewed infrastructure an equipment.  He noted
that liberalization had also affected tourism:  whereas for years cruise ships had transited the canal
without stopping over, liberalization had permitted private capital to build two cruiser terminals in the
Atlantic and a marina and terminal for medium-sized cruise ships on the Pacific coast.  These
terminals generated investment in other tourist infrastructure and cruise passengers made use of therailway.  In 2002, 800,000 tourists were expected to come ashore from cruise ships.  For Panama, the
impact of liberalizing maritime services had created jobs, generated investment and infrastructure, and
developed professional services, financial services and had made Panama a tourist centre.  Panama
affirmed its interest in the development of these negotiations, and noted that it had presented 56
requests and had held bilateral consultations with 45 Members.  MTS were a central part of its
requests and it invited Members to participate actively in order to achieve meaningful liberalization of
MTS.
86. Thanking Japan for its statement the representative of Norway concurred that there was a
need for more movement in maritime transport services.  He noted that the value of the services
rendered by the shipping sector to world trade and economic development and welfare had been
demonstrated in a number of reports.  Competitive and unrestricted MTS fostered trade and economic
development through the reduction of costs and improved service quality.  Restrictions fed into importand export prices and hindered foreign direct investment.  World sea-borne trade had increased two-
fold between 1970 and 2000.  UNCTAD statistics for 2001 showed that liner freight rates in the same
period had been stable in real terms; whereas tanker and tramp rates had decreased by 50 per cent on
average.  Liberalization was a precondition for such improvement, and he felt that this liberalization
should occur within the framework of the GATS.  He cited the World Bank publication on globaleconomic prospects and the developing countries (2002), which stated that "the new round of services
negotiations in the GATS offers the possibility of creating a rules-based services regime  for maritime
transport."  He noted that a reliance on dispute settlement for this sector would be important for
smaller nations.  He recalled that paragraph 1 of the Decision on Maritime Transport Services
(S/L/24) adopted 28 June 1996 stated that negotiations were to "be resumed on the basis of existing orimproved offers".  He said that bilateral consultations  to date had sent positive signals in this regard and
he encouraged Members to participate in the negotiations in this sector in the current round.
87. Thanking Chinese Taipei for its submission on computer and related services, the
representative of Switzerland noted the technical nature of the communication and sought to revert to
it after further analysis.  Regarding Japan's statement, Switzerland expressed strong support for it, inpart because it was a trading nation with over half of its production being exported.  He noted that
liberalization in this sector was important for trad e in general, both to developing and industrialised
economies.  He recalled that Switzerland was active in this sector, as witnessed by its conditional
offer in the last round, and it signalled that it included this sector in its requests.  Switzerland had the
fifteenth largest merchant fleet in terms of its transport capacity and was a modern fleet.  He recalled
the systemic dimension to this sector which acted as an engine for growth.
88. The representative of Hong Kong, China thanked Chinese Taipei for its proposal on computer
and related services, noted that it had been presented in the Committee on Specific Commitments, and
recalled that Hong Kong, China had raised questions about the proposed exclusion of convergence
services in that forum and looked forward to furt her discussion in the Council.  He expressed full
support for the statement made by the delegation of Japan.  He emphasised that the benefits of
achieving binding liberalization commitments in maritime transport services would be enormous to allcountries.  Such benefits were not limited only to countries which had substantial interests in shipping
fleets, but were relevant to the majority of countries who rely on maritime transport as their major
means of exports as well as import of goods.  He noted that there were many benefits that could be
brought about by binding liberalization commitments in maritime transport services.  He agreed with
Japan, Panama and Norway with respect to the economic benefits of liberalization.  He added that forboth export and import in goods, and for both developed and developing countries, access to aTN/S/M/5
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competitive, efficient and cost-effective network of maritime transport services could bring
tremendous benefits.  The making of binding liberalization commitments would serve to lock-in such
benefits and ensure that the improvement trend could be sustained.  This was particularly important to
developing countries who had a share of 50% of total sea-borne exports (in 2000) and where export in
goods often represented a significant component of the economy.  He also stressed that maritimetransport services did not refer only to transportation by vessels, but also auxiliary services and other
related services essential to maritime transport, such as port facilities, cargo-handling, storage and
warehousing, container station and depots, transport agency, freight forwarding, and reasonable and
non-discriminatory access to essential facilities and other modes of transport.  All these were
important components of the transport chain and all added to freight costs of trade in goods.  He stated
that many of these services embraced the concepts of modern logistics services which aimed at
optimising all activities to ensure the delivery of products through a transport chain from one end tothe other.  Efficient door-to-door transportation and distribution of goods and integrated management
of global and regional supply and distribution chains were thus essential to support a truly globalized
and competitive system of trade in goods and ensured that the benefits of trade liberalization could be
fully realised.  In this regard, Hong Kong, China had previously proposed the logistics checklist in an
attempt to capture the wide range of services that would be essential to the flow of trade in goods.  Henoted that his delegation was working further on the checklist, specifically the scope and definition of
the sub-sectors included in the checklist, and l ooked forward to discussing it with Members.
89. Regarding the negotiations on maritime transport services, the representative of Hong Kong,
China recalled the Decision on MTS adopted by the Council for Trade in Services in 1996 (S/L/24).
He further noted that the Guidelines and Procedures for the Negotiations on Trade in Services(S/L/93), stated in paragraph 5 that "there shall be no a priori  exclusion of any services sector or
mode of supply".  It was clear to his delegation that the negotiations on MTS should be resumed in the
current round, concluded at the end of this round of services negotiations, and should be conducted on
the basis of existing or improved offers.  In this regard, Hong Kong, China expected that initial offers
for the maritime transport services sector should be based on those existing offers or anyimprovements made to them.  In view of the importance of MTS to all Members, he urged Members
to indicate their interest in achieving substantial liberalization binding commitments in this sector by
supporting the statement made by the delegation of Japan and include this sector in their initial offers.
90. Turning to audio-visual services, the representative of Hong Kong, China noted with interest
the recent UNCTAD expert meeting on these services and reiterated that, according to paragraph 5 of
the negotiating guidelines, there should be no a priori  exclusion of any service sector or mode of
supply.  He believed that the audiovisual services sector should be treated no differently from otherservice sectors in the current round of negotiations, and that there should be no suggestion that
liberalization of the audiovisual sector could not be  negotiated, pursued, addressed or discussed either
in the bilateral or multilateral context.  He said  there should be no pre-condition for the negotiations
of liberalization in this sector.  In accordance with the negotiating guidelines, he stated that the
negotiations of services liberalization shall be conducted pursuant to the objective of GATS, includingrecognition of the right of Members to regulate.  In this regard, he felt that it was not the intention of
any negotiations of services liberalization to question the national policy objectives that a Member
government might wish to be pursued in any particular sector.  He said that the purpose of
negotiations of trade liberalization under a multilatera l trading system was to ensure that trade could
be liberalised and conducted on the basis of a framework of clear, multilaterally agreed andenforceable rules, and that measures were taken in pursuit of national policy objectives within the
framework of such rules.  Hong Kong, China could not see any convincing argument as to why any
particular services sector should be put above the multilateral trade rules or carved-out from the
application of such rules, when all other service sectors were subject to them.  He firmly believed that
liberalization of the audiovisual services sectors was within the scope of the current round ofnegotiations for liberalization in trade in services.  He believed that such liberalization was possible
without unduly impinging upon the right of Members to pursue their national policy objectives.  TheTN/S/M/5
Page 20
GATS framework, he felt, was flexible enough to accommodate a wide range of possible policy
measures in the audiovisual sectors, as with any other services sectors.  Finally, he urged Members to
undertake a substantive discussion on whether and how measures that Member governments may take
or may wish to take in the audiovisual sector in pursuit of its national policy objectives, including any
cultural policies, could be accommodated under the existing GATS framework, and whereappropriate, identify if any new trade rules within the multilateral trading system were required to
accommodate the national policy objectives of Member governments.
91. Expressing support for the comments made by Japan, the representative of Australia noted the
vital role that maritime transport services played in the world economy:  80% of world exports by
volume were transported by sea.  He concurred that safe, efficient and competitive maritime transport
services remained important for the world economy and that of all Members.  A more efficient and
competitive provision  of maritime services would promote investment and facilitate trade expansion.He noted that these efficiency gains would see an increase in the value of trade, including in areas
such as transport logistics, port-terminal, -handling and -management services, and a multiplier effect
in other sectors.  Greater competition would result in lower freight rates and increased access to
shipping companies to a greater volume and variety of cargo.  Greater competition would result in
safer transport, and, were multimodal services included, more efficient in point-to-point services.  Hestated that over 90% of Australia's goods by volume were transported by sea and access to a sufficient
volume and competitively-priced services was vital for its economic well-being.  Australia supported
the resumption of negotiations in this sector in the current round and urged all Members to participate
in them in order to achieve meaningful liberaliza tion.  Australia took a whole supply-chain view of
freight transport and urged those Members making commitments to include elements which facilitatemultimodal services.
92. Associating his delegation to the statement made by Japan, the representative of Singapore
noted his support for liberalization in this sector.  He stated that it was necessary for world growth and
would enhance integration of world economies.  He noted that Singapore had an open policy from
which it had reaped great benefit and which had attracted industry.  He recalled that Singapore hadmade substantive commitments in MTS in the Uruguay Round.  He urged the active participation by
all Members in MTS in the current round.
93. Noting the technical nature of the communication on computer and related services from
Chinese Taipei, the representative of Pakistan sought more time to analyse it.  He requested
clarification on paragraph 10 of the proposal to initiate a dialogue aimed at starting the negotiations inmarket access and the elimination of barriers in the services mentioned.  Did this mean that market
access issues in computer and related services could not be discussed without the approval of theCouncil for Trade in Services despite the existence of their inclusion in some requests?  He further
inquired as to whether the Council for Trade in Services needed to instruct the Committee on Specific
Commitments to begin an examination or classification of convergence services.  On maritime
transport services he supported the statement made by Japan, and expressed Pakistan's support for
negotiations in this sector, which would act as an economic boost to developing and developedeconomies.  It was a trade facilitating sector and an engine of growth.  His delegation associated itself
with the statements made by Japan; Hong Kong, China; Switzerland; Australia; Singapore and other
delegations who had expressed support for a resumption of negotiations in the maritime transport
sector.
94. The representative of Korea agreed that maritime transport services were crucial to world
economic infrastructure, which in turn had a bearing on other economic sectors.  He fully supported
the statement made by Japan and urged all Members to take active part in negotiations in this sector,
which he expected would be of benefit to all Members.TN/S/M/5
Page 21
95. The representative of Indonesia recalled that his was a maritime services country and that this
sector was a benefit to the whole economy.  He wished to study the issue further and sought to discuss
this issue further with Japan.
96. The representative of Mexico noted his intention to further analyse the submission from
Chinese Taipei.   He expressed support for the statement by Japan and noted the importance of this
sector.  He recalled that Mexico had made a conditional offer embracing the entire sector and was
willing to contribute commitments if there were strong participation in this sector.  He said Mexico
had 10,000 kilometres of coastline and that it was depe ndent on the shipping i ndustry.  Although it did
not have a large merchant marine, Mexico felt that liberalization would allow it to better compete
internationally.  He noted that shipping provided development in other areas, and he hoped that
negotiations in this sector would be completed at the same time as the other areas under the Doha
Development Agenda.
97. The representative of Côte d'Ivoire shared the points made in the statement by Japan.  He
noted that, with the exception of Cameroun, there were practically no merchant fleets remaining in
West Africa.  He said that 97% of trade was shipped by foreign fleets, which was a major concern for
these Members, especially because this implied the provision of insurance, port services, land
transport services and logistics. He noted that these Members were often urged to liberalise the entirechain of services, but cautioned that, without appropriate planning, this could threaten the functioning
of the transport infrastructure.  This had an impact on the transport of goods such as coffee and cocoa.
He asked whether the concept of value-chain in maritime transport would be a link in the total chain
of transport or would maritime transport encompass the services previously mentioned.  He urged
caution, therefore, in undertaking liberalization.
98. The representative of China associated himself with the statement made by Japan and agreed
that maritime transport was a facilitator of world trade and commitments could yield benefits.  He
recalled that, as the world's fifth largest shipping nation, this was an important sector for China.  He
noted his delegation's wish to revert to this statement in a future meeting.
99. Welcoming the submission from Chinese Taipei and indicating his reservation to revert to it,
the representative of India stated that his dele gation had been engaged with other Members and had
had a series of bilateral meetings on issues related to services negotiations.  Based on discussions
from these meetings, he sought to highlight some issues which India felt required multilateral focus
and discussion in the Special Session.  He noted that there existed an asymmetry in the commitments
between different modes of supply with minimu m level of commitments having been taken by
developed countries in mode 4, which was of extreme importance to his delegation and for which
liberalization remained quite limited.  Furthermore, the low level of commitments in mode 4 wasfurther diluted by a number of limitations inscribed in Members' schedules.  He recalled that India
attached high importance to the liberalization of mode 4 in the current round of negotiations.  India
had accordingly made requests in mode 4 to its trading partners and expected a meaningful
commitment in mode 4.  He recalled that India's approach had been enumerated in its proposal
S/CSS/W/12.  He said that paragraph 15 of the Doha  Ministerial Declaration noted that negotiations
in trade in services shall be conducted with a view to achieving the objectives of the GATS as
stipulated in the Preamble, and Articles IV a nd XIX of GATS.  In paragraphs 2 and 5 of the
negotiating guidelines, it was noted that special attention shall be given to sectors and modes of
supply of export interest to developing countries.  The negotiations shall aim to increase the
participation of developing countries in trade in services.  India specifically sought market access forindependent professionals de-linked from commercial presence.  In the Uruguay Round, there had
been minimal commitments in mode 4, and those commitments made had been largely linked to mode
3 (intra-corporate transferees, business visitors, etc.).  India wished to see not only the asymmetry of
mode 4 vis-à-vis other modes of supply corrected in these negotiations, but also the asymmetry,
within mode 4, of movement of natural persons linked to mode 3.  India believed that horizontalTN/S/M/5
Page 22
commitments for independent professional suppleme nted by specific sectoral commitments would
provide predictable and certain market access.
100. The representative of India noted, however, that sectoral commitments alone would not
provide the required market access unless these were backed by actions on four additional fronts.
First, transparent, simplified and timely visa proce dures and requirements to ensure that fulfilment of
horizontal and sectoral commitments to be undertaken by Members.  Movement of temporary service
providers should be separated from permanent labour flows.  Adequate procedures could be
developed so that normal immigration procedur es would not hinder the commitment made for
temporary movement.  India felt that this issue needed to be discussed fully.  Second, the issue of
recognition of qualifications, especially for facilitating the movement of professional services, he
noted, was of importance.  Unless a mechanism for such recognition could be established by
Members, commitments on market access could be nullified.  The issue also needed to be addressedin the multilateral discussions.  Third, the operationalisation of Article VII relating to mutual
recognition agreements (MRAs) was another important issue, which needed to be tackled at the
multilateral front.  He suggested that the Secretariat compile a list, by sector, of all MRAs notified
under Article VII.  It was also India's belief that all existing MRAs, including the opening of
negotiations, had not been notified to the WTO.  He urged concerned Members to do so as soon aspossible.  Effective opportunities needed to be provided to developing country Members to join in
negotiations for establishment of MRAs.  He also  looked forward to Members' encouragement to
establish MRAs, especially with developing countries.   Fourth, India also sought to flag its concern
regarding widely prevalent, non-transparent and discretionary ENTs, which acted as a significant
barrier.  There was a need to establish multilateral norms to reduce the scope for discriminatorypractices in the use of ENTs.   He recalled that India had already outlined possible approaches in its
proposal and looked forward to Members' suggestions .  He further recalled that India's interventions
were based on its discussions in bilateral meetings with its trading partners held to date.  India
believed that mode 4 was one of the modes of expo rt interest to many developing country Members
which required special attention as had been agreed to by Members in paragraph 5 of the negotiatingguidelines and procedures.  He expected that in the current negotiations, a balanced outcome and
meaningful liberalization in mode 4 would be achieved, which would contributed to effective
implementation of Article IV of the GATS.  Apart from undertaking sector-specific commitments in
mode 4, it was his belief that issues raised in India's paper be addressed meaningfully to give effect to
commitments in this mode.  In this regard, Indi a looked forward to constructive engagement with
Members.
101. Noting that he might wish to revert to the submission by Chinese Taipei, the representative of
Brazil stated that he agreed with the academic arguments expressed on maritime transport services,
but felt that it was important for these same arguments to be genuinely applied to trade in agriculturalproducts.  Expressing broad support for the portions of the statement by Hong Kong, China pertaining
to audio-visual services, he noted his delegation's concern that some Members had refused to
exchange information on this sector in bilateral co nsultations.  He said that they argued that any
commitment in this sector would lessen their regulatory autonomy through which they achieved
national policy objectives.  He recalled that every Member had sectors which were sensitive and in
which it was difficult to make a commitment.  However, as had been often repeated, the GATS
structure took into account these sensitivities.  It was therefore difficult to accept the argument that
one specific sector was more sensitive than any other sector, and that advancing this argument was adangerous precedent.  He suggested that it would be best to find a way to take these sensitivities into
account within the structure, since it would be very difficult to define which sectors were more
sensitive than others.  It was normal that services be so heavily regulated since they tended to be
sensitive.  Developing countries, for instance, were cognisant of the possible spin-off negative effects
of liberalization in the financial services sector.  He invited delegations to explain why the GATS andthe multilateral system was incapable of taking into account their concerns.TN/S/M/5
Page 23
102. Noting that his delegation shared the negotiation objectives outlined in the proposal from
Chinese Taipei, the representative of the European Communities agreed that full liberalization of the
computer and related services sector with commitm ents at the two-digit level was desirable for the
reasons outlined in the EC's proposal for this sector.  He stated that he had no doubt that the paper
raised issues already discussed and which would be raised in the CSC.  He reiterated the distinction tobe made between content or core services from enabling services.  Core services needed not be carved
out of CPC 84 because services such as financial services were not in the covered under CPC 84;
enabling services, such as e-banking platforms were computer services and needed not excluded from
CPC 84.  He noted that the preferred approach would be to make commitments at the two-digit level
in order to allow for the coverage of computer services which combine several functions.  He sought
to avoid a differentiation in commitments which could create a lack of clarity.  Regarding maritime
transport services, he recalled the important role that this sector played as a trade facilitator, especially
for economic development in both developed and developing economies.  Therefore, the EC hoped
there would be significant liberalization bindings in the negotiations, all the while taking into account
the need for sustainable development, security and safety.
103. Responding to the proposal from Chinese Taipei, the representative of the United States
agreed that computer and related services were important business services.  He further agreed that it
was important to cover all modes of supplies, individuals and companies, as well as trade through
commercial establishment and electronic communication.  He expressed support for the call for all
WTO Members to make new and deeper commitments in  this sector.  He said that the US would study
further the concept of a "value chain".  Regarding the other oral statements made, he stated that the
US would participate in the negotiations on these two sectors referred to in addition to all other
sectors.
104. The representative of Canada expressed support for the statement by Japan and recalled that
his country had participated in negotiations in this sector in the Uruguay Round and would do so in
the current round.  He said that, given the technical nature of the submission by Chinese Taipei,
Canada would revert to it at a later stage.  With respect to the statements by Hong Kong, China andBrazil on audio-visual services, he stated that Canada's views were well-known and had been
expressed in a March 2000 negotiating proposal.  He recalled Canada's negotiating proposal on mode
4 which highlighted the importance of looking for commitments which were not necessarily linked to
mode 3.  He said that both developed and developing country Members had an interest in mode 4.
105. The representative of Thailand stated that the fact that Thailand had not taken the floor on
computer and related services should not be interpreted as a lack of interest on its part;  it was
listening attentively to other views.  She agreed with the thrust of the statement made by Japan andsaid that Thailand would participate actively in the negotiations on MTS, since no sector should be
excluded from the negotiations.  With respect to audio-visual services, she supported the statement
made by Hong Kong, China and shared many of the points raised by Brazil.  She agreed that the
sector was not excluded from the negotiations and that Thailand did not wish to see subsidies become
a first-best policy in this sector because it had trade distortive effects.  Moreover, developing countriesdid not have the same financial resources to provide such subsidies.  She had no desire to see a build-
up in subsidies in services and reaffirmed that audio-visual services did not merit special treatment.
For Thailand, retail services were extremely sensitive, but this had not led it to request a sector
exclusion or subsidies for this sector.  Regarding SMEs, she recalled the proposals tabled by Canada
and the US.  She said that in Thailand, the definition of what constituted an SME varied by sector, andfelt that little purpose would be served by pursuing a definition in the Council.  Thailand would
welcome offers in certain sectors of benefit to developing country SMEs.  With respect to mode 4, she
noted its importance to her delegation and sought to see it delinked from mode 3.  Her delegation had
an interest in independent professionals and looked forward to initial offers on a sectoral basis in
mode 4 as opposed to the horizontal commitments made in the previous round.  She shared theinterest expressed by India on recognition, qualification, and ENTs.TN/S/M/5
Page 24
106. The representative of Costa Rica recalled that computer and related services was a sector of
interest for Costa Rica, thanked Chinese Taipei for its submission, and indicated he would revert to it.
107. Making some preliminary comments on the submission from Chinese Taipei, the
representative of Argentina stated that he was not sure that all parts of the "value chain" would come
under CPC 84, especially the operational phase.  Regarding convergence services, he felt that a
certain confusion could arise through the attempt to clarify the scope of the heading and he stated that
any examination of this issue could not have an impact on the scope of existing commitments.  He
expressed support for the statement by India on mode 4.
108. The representative of Pakistan noted his country's interest in mode 4, expressed total support
for and associated itself with the statement made by India, and sought to see meaningful commitments
in mode 4.  He also wished to see further discussion on SMEs in future sessions.
109. The representative of South Africa associated her delegation with the statement made by India
on mode 4 and noted the asymmetry that existed in commitments between the different modes of
supply.  She also expressed concern over the use of ENTs as a barrier to trade, and the lack of
transparency in the obtaining of visas and work permits.
110. The representative of Peru noted his delegation's support for the statement made by India
concerning the asymmetries which existed in relation to mode 4, both in its relation to other modes
and within mode 4.  He reiterated the difficulties faced by service suppliers in obtaining visas, which
put unreasonable and non-transparent requirements on applicants.
111. The representative of Chinese Taipei reiterated its support for the statement made by Japan
and thanked those delegations that had asked questions.  In preliminary response to questions from
Pakistan and Hong Kong, China, he agreed that the current request-offer process empoweredMembers to conduct negotiations in this sector on a bilateral basis.  He reiterated liberalization in this
sector was important and of benefit to both developing and developed economies.  He recalled that
commitments would be most appropriately made at the two-digit level, since this best conformed to
the reality of the business world.  He hoped that  the Council could reach an understanding on these
two points, as this would assist them in their bilateral consultations.  Regarding convergence, he citedthe examples of multimedia services bundled with digitised text, and audio and visual information,
which could be consistent with computer and rela ted, telecommunications or audio-visual services at
the same time.  A second example was that of internet telephony that could be consistent with
telecommunications and computer services.  He did not exclude any possibility, but felt that the CSC
would be best equipped to discuss thoroughly this technical issue and define the sector to which these
services belonged.
112. The representative of Japan thanked delegations for their comments on its oral statement and
looked forward to further discussion.  He echoed the points raised by Hong Kong, China on audio-
visual services, which he agreed was an important sector in the negotiations.
113. The Chair noted that many delegations had signalled their intention to revert to a
communication from Chinese Taipei on computer and related services at the next meeting.  On the
presentation from Japan on maritime transport services, he noted the great deal of support and interestthat had been expressed by some Members.  Comments had also been made on audio-visual services.
Mode 4 issues were touched upon by a substantial number of Members, and a request had been made
that a list of notifications made under Article VII:4 be made available.  He proposed that the Council
take note of the statements made and revert to this item at its next meeting.
114. It was so agreed.TN/S/M/5
Page 25
F. REVIEW OF PROGRESS IN NEGOTIATIONS AMONGST PARTICIPANTS
115. Recalling the scheduling workshop recently organised by the Secretariat, the Chair noted that
feed-back had been positive and reminded delegations to return the evaluation forms circulated at the
CSC.  He recalled that at the meeting in Octobe r the Council had held extensive discussions on a
number of points raised.  As well, a few Members had made preliminary comments on a submissionintroduced by Colombia on behalf of a number of developing country Members on the
Implementation of Paragraph 15 of the Guidelines and Procedures for the Negotiations on Trade in
Services, contained in document TN/S/W/7.  Some Members had indicated their intention to revert to
this submission.  He recalled that the purpose of this item was to promote transparency in the
negotiations in general and to give Members the opportunity to communicate their impressions on the
progress in the negotiations.
116. Speaking on the proposal contained in document TN/S/W/7, there representative of Peru
noted that the Dominican Republic, Honduras and Gu atemala had indicated formally that they wished
to become co-sponsors of the proposal.  He sought in his oral statement to inform the Council about
some of the points taken up in recent bilateral consultations regarding the proposal.  He clarified that
the main purpose of the proposal was to ensure that the Special Session complied with the mandate
contained in paragraph 15 of S/L/93.  It sought to initiate a multilateral process to ensure effectiveimplementation of Articles IV and XIX:2 and to recommend the ways and means required to promote
the objectives indicated therein.  He stated that the review and possible recommendations were meant
to be a positive supplement to bilateral consultations and not substitute for them.  He recalled that the
bilateral negotiations, as indicated in the procedures, were one of the means of carrying out
negotiations.  To this end the recommendations of the Council would give guidance to the negotiating
process in the light of the application of Articles IV and XIX:2, for example, improved access to
distribution and information networks to developing  countries, liberalization in sectors and modes of
supply of special interest to developing countries, and special consideration given to the needs of
small suppliers of services.  The proposal sought not to create a machinery, but rather to define an
instrument to guide multilateral discussions and to facilitate follow-up on the process outlined inparagraph 15 of the negotiating guidelines, including by placing it as a standing item under the current
agenda item, "Review of Progress in Negotiations Amongst Participants".  He clarified that the
consideration of this item one month after the circulation of initial offers was an indicative date, and it
was not intended to increase the number of meetings.  He suggested that the item be considered at the
first formal meeting following the circulation of init ial offers.  He felt that concrete results would be
facilitated by using as a basis for discussions a number of reference indicators which would be
objective, non-exclusive, and multilaterally-agreed to criteria.  These reference indicators containedcertain relevant questions which could be taken up in order to determine the extent to which the
specific and concrete interests of the developing countries, in terms of sectors and modes of supply,
had been included in offers.  He cited for example trade by the temporary movement of natural
persons.  The discussions could also include specific difficulties faced by developing countries in the
negotiating process with a view to suggesting measures which would ensure effective participation ofall Members, as well as issues pertaining to the enhanced application of the objectives of Articles IV
and XIX:2.  The result of these discussions might, in turn, fold into the report to the Cancun
Ministerial Conference for political orientation.  With  respect to procedure, he noted that this work
would be done on the basis of contributions by Members and that the role of the Secretariat would be
in-line with its normal duties.  Reference in the proposal to the work of other international agencies,particularly UNCTAD, was intended to recognise the interest in the work of organisations in
supporting developing countries with respect to Articles IV and XIX.  He reiterated that the proposal
was meant to fulfil the obligation set out in paragr aph 15 of document S/L/93.  He looked forward to
hearing Members' views.
117. The representative of Brazil stated that he agreed that the implementation of paragraph 15 of
the negotiating guidelines could be made a permanent sub-item under this agenda item of the SpecialTN/S/M/5
Page 26
Session.  He thanked the representative of Peru for informing the Council of his informal
consultations on how the process would unfold, including that it would be based on contributions by
Members.  Brazil reiterated that, under paragraph 15 of document S/L/93, the Council had an
obligation and that it should be pursued.  He noted that this was important with respect to the
implementation of Article IV of the GATS.
118. The representative of Thailand stated that the negotiations in services were moving forward,
but that there were imbalances and that these needed to be addressed in the course of the negotiations.
She noted that there was more progress in services  than on issues such as agriculture, special and
differential treatment, and TRIPs-health-related, which where issues that needed to move forward.
She further noted an imbalance between market access and rules services negotiations.  Thailand
supported an emergency safeguard measure and hoped to see progress.  There was also less
movement on domestic regulation, which had been initially enthusiastically supported by manydeveloped countries, and she urged Members to devote the same energy to rules negotiations as to
market access negotiations.  She said that since June discussion had increased at the bilateral level at
the expense of multilateral discussions and she urged Members to engage in more multilateral
negotiations and discussions.  She recalled the lack of transparency in this process particularly on the
part of Members which were often demandeurs of transparency in domestic regulation.  She regrettedthat they were not more transparent in their dealings in-house.  She noted a further imbalance with
respect to emphasis on mode 3 over mode 4, noting that Members were reluctant to make meaningful
commitments in mode 4.  She encouraged Members to focus on mode 4 and to take on a meaningful
level of commitment similar to that in other modes.  She believed that in the current round, rather than
focus on horizontal commitments, Members should endeavour to make sectoral commitments in mode4 and to expand coverage to include not only intra-corporate transferees and skilled labour, but also
semi-skilled and unskilled labour.  She reiterated that this was within the scope of the GATS and had
been excluded from commitments, especially in areas of interest to developing country Members.
She hoped this imbalance would be redressed in the current round.  With respect to the number of
meetings, she expressed concern, in particular the parity with agriculture.  Finally, she stated that therules negotiations ought to be given the necessary attention in the multilateral setting and not be set
aside in order to create more time for bilateral consultations.
119. Requesting clarification, the representative of Canada referred to paragraph 8(v) of the
proposal, and inquired as to whether what was in tended was an evaluation separate from the one
outlined in paragraph 15 or the same.
120. Responding to Canada's question, the representative of Peru noted that the intention of the
passage was to refer to the evaluation noted in paragraph 15 and not to have a further mechanism.
This would involve one assessment at the end of the negotiations.
121. Speaking on the proposal from a group of developing countries, the representative of the
European Communities expressed reservation over the need for a mechanism, but he noted the
usefulness of the clarification that what was requested was a sub-item under the current agenda itemthat would create a more structured debate.  With respect to the review of progress in the negotiations,he noted that it had not been possible in the present cluster to organise as many bilateral consultations
with capital-based experts, owing to the large number of meetings.  Nonetheless, he stated that he had
received indications that a number of delegations were preparing their requests, would submit them by
March, and he encouraged them to do so.  He shared a number of points raised by Thailand with
respect to important work on the bilateral and multilateral fronts.  The EC attached importance toclassification issues, as well as to negotiations on rules, for instance on government procurement.  He
agreed on the need for there to be balance between the two processes in order for healthy progress to
be made.TN/S/M/5
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122. Noting that more than six months had passed since the first requests were made, the
representative of Mexico confirmed that bilateral consultations had been productive.  He stated that
Mexico played an active role in the multilateral process and hoped to make progress.  He underlinedthat a number of concerns raised by developing countries focussed on modes and sectors of interest to
them.  He said that movement forward and Mexico's strong commitment to negotiations wouldrequire balance in all areas, such as in rules and the indicators of benefits.  He noted that the next set
of clusters was an opportunity to present a framework in which offers would be made.  He said that
his delegation attached importance to the bilaterals process and that Mexico's commitment would
hinge on what would be obtained bilaterally.
123. Commenting on the proposal contained in document TN/S/W/7, the representative of the
United States sought clarification that the intent ion was to implement paragraph 15 of S/L/93.  It
appeared to propose modalities to implement modalities.  He felt that if the intention was to create
new modalities, it might be more logical to discuss modalities to implement the objectives of the
negotiating guidelines rather than to  implement the existing modalities.
124. The representative of Switzerland noted that Peru's statement demonstrated flexibility in the
clarifications it provided and was a step forward.  He reaffirmed that the legal provisions contained in
Articles IV and XIX:2 of the GATS were to be taken seriously by Members and his delegationconfirmed its intention to abide by them.  However, it was first to be determined whether there were
actually problems in implementing these provisions before proceeding.  On the question of the
capacity of the Special Session and of the Secretariat to undertake recurrent, increased work, in light
of Peru's clarification he was optimistic that movement was being made in the right direction and
Switzerland was willing to discuss this further.
125. The representative of Uruguay expressed general agreement with the proposal.  He recalled
the various negotiation procedures and guidelines approved by the Council, and the fact that the
proposal sought to review the procedure embodied in paragraph 15.  He felt the mechanism was
important and he agreed with statements made to the effect that it was important for developing
countries to make requests.  He noted that many Members had done so and other Members would doso.  Far more important, he felt, were the replies to developing country requests, which he hoped
would be positive.  He said that the mechanism w ould help ensure that there was progress in the
negotiations.  He wished to revisit the question of the wording of this item of the agenda because, he
recalled, all Members were participating in one form or another, and it was important not to imply that
the negotiations were only open to some.
126. The representative of Honduras noted that the negotiations had so far been characterised by
two dynamics:  vigorous in specific commitments and bogged down in discussions on Articles X, XV
and XIX:3.  Regarding document TN/S/W/7, he stated that it was motivated by a concern for the
effective implementation of Articles XIX:2 and IV regarding flexibility for developing countries.  He
stated that it was not an issue of creating new guidelines, but rather of implementing existing ones,
which referred to the Council for Trade in Services' work on the overall evaluation of results in
achieving objectives at the conclusion of the negotiations.  He urged developed countries to considerthe principle of flexibility contained in Article XIX:2 and in paragraph 12 of the negotiating
guidelines, which permitted reduced liberalization in line with development status.  He hoped that
trading partners would accept commitments in sectors and modes of interest to developing countries,
including mode 4 on a sectoral rather than horizontal basis.  With respect to domestic regulation he
recalled that this issue fell within the scope of Article VI:4, and although he did not exclude thepossibility of taking additional commitments, he cautioned against the proliferation of specific
disciplines being adopted in this manner.  Regarding GATS rules, he recalled that the negotiations on
ESMs had commenced seven years earlier and were at a standstill, despite the mandate contained in
Article X.  He noted that it was important for developing countries to know that a clear ESM would
be available to them in an emergency situation on the basis of clear criteria, particularly if special andTN/S/M/5
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differential treatment was taken into account.  He further noted that there had been no movement
forward regarding subsidies, information on when they were granted, and if they had a distorting
effect which could have an impact on the taki ng of specific commitments.  Such information
exchange, he felt, would play a positive role before the circulation of initial offers.
127. The representative of Hong Kong, China stated that the healthy progress made in the services
negotiations demonstrated that there were important stakes involved.  He reminded Members in this
regard of what would be missed if a balance in the negotiations could not be achieved.  He urged
Members to give substantial initial offers in order to keep the strong momentum in the negotiations
and in order to highlight the opportunity cost in services if there was not movement forward overall.
He reiterated that initial offers were a starting-point and that they could be withdrawn if the other
offers were not substantial enough or if there was not movement in other areas.  With respect to the
emphasis to be given to bilateral and multilateral negotiations in rules, he associated his delegationwith the comments made by Thailand.  He noted that many delegations had referred to recognition
measures and mode 4, and that this was perhaps one example of domestic regulation acting as a
barrier to trade.
128. The representative of Peru noted that the reactions to the proposal had been positive and
reiterated that its intention was to implement what already existed and not to create any new
mechanism.
129. The Chair noted the a good discussion on this item and the linkages with the discussion under
previous item.  He further noted that Members generally agreed that market access negotiations in
services were moving forward quickly and that some had expressed the hope that negotiations in other
areas would join pace.  The level of progress in the services negotiations would be reflected in initialoffers.  Mention was made of a number of imbalances characterizing the negotiations, including
between progress in market access versus rules, interest in mode 3 versus mode 4, within mode 4, and
bilateral versus multilateral approaches.  There were expressions all around of the need for balanced
progress in the negotiations.  Discussion on an earlier proposal (TN/S/W/7) pertaining to paragraph 15
of the Guidelines and Procedures for the Negotiations on Trade in Services continued with three newMembers (Dominican Republic, Honduras and Gu atemala) joining the co-sponsorship of the
communication.  He said that on this proposal, some very useful clarifications were made, including
to the effect that the proposal could be addressed through a standing sub-item under this agenda item.
Given that some requests for clarification of the proposal remained outstanding and the absence of
concensus, he proposed that Members revert to this item at the next meeting.
130. It was so decided.
G. OUTLINE OF THE CHAIRMAN 'S REPORT TO THE TRADE NEGOTIATIONS COMMITTTEE
131. In the interest of time and for this meeting only, the Chair suggested that he report to the
Trade Negotiations Committee on the discussions of this formal meeting.  He said that the outline was
available to any Member who requested it.
132. It was so agreed.
H. ORGANIZATION OF FUTURE WORK
133. The Chair noted, with respect to the agreement at the last meeting for the Secretariat to
suggest sectors for the presence of sectoral-based experts in Geneva, that this approach had not met
with success.  Given that two different appro aches in this regard had now been attempted, he
suggested that delegations coordinate among themselves for the organisation of these meetings.TN/S/M/5
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134. Speaking on behalf of the Mercosur countries, the representative of Brazil wished to address
two points:  the organisation of the meetings of the Special Session in 2003 and the work of the
subsidiary bodies.  He recalled that earlier in the year when the Secretariat had broached the issue of
meetings in 2003, it had indicated that the rooms were being reserved on a provisional basis, and that
Members would still need to take a decision on this matter.  He requested that this understanding beconfirmed.  He stated that the Mercosur countries felt that the frequency and number of meetings held
should be based on similar decisions by other negotiating bodies, and he suggested in this regard, that
the Council wait until March 2003 to make this decision when it would have information on the
organisation of other meetings at the WTO.  He reaffirmed the guidelines read out by the Chair of the
General Council, which stated that two negotiat ing groups would not meet simultaneously.  In the
same vein, services meetings should not coincide with other negotiating bodies.  Secondly, on the
issue of subsidiary bodies, he noted that their work consisted of carrying out mandated negotiationsthat were contained in the negotiating guidelines and reaffirmed by paragraph 15 of the Doha
Declaration.  He expressed concern that the services negotiations were taking time away from the
subsidiary bodies, particularly those which had only had a half-day to meet in the present cluster in
order to make time for bilateral consultations.  He agreed that time should be given to bilateral
consultations, but should not be done so in a manner prejudicial to bodies responsible for mandatednegotiations.  He felt that a balance between the two should be sought for the 2003 clusters of
meetings.
135. The Chair confirmed the Brazil's understanding on the organisation of meetings of the Special
Session for 2003.
136. The representative of Peru expressed support for the comments by Brazil concerning the need
for the number of services meetings to be agreed upon in a broader context.
137. The representative of Thailand expressed support for the comments by Brazil concerning the
time devoted to subsidiary bodies and to the Council.  She also sought to reiterate that the time
between clusters had, in some instances, been too short.  By way of example, she said that the time
between the October and December 2002 clusters had not allowed her delegation to plan andcoordinate consultations with the sectoral-based experts from developing countries.  She suggested
that there be earlier coordination in advance of meetings in this regard.
138. The representative of the European Communities said that there was little hotel room
availability in Geneva for the beginning of March.  Given this would make it difficult for sectoral-
based experts to  participate, she suggested that the dates of the meeting be advanced.
139. A representative of the Secretariat stated that one option would be to inverse the order of the
meetings in February, with the Special Session meet ing in the week prior to that of the subsidiary
bodies.  He suggested, given some difficulties in re-booking the dates for the subsidiary bodies, that
the Special Session meet on the week of 17 February and the subsidiary bodies the week of 24
February.   He stated that if Members preferred this arrangement, time would be available for bilateral
consultations between the opening meeting of the Special Session at that beginning of the week and
the wrap-up session towards the end of the week.
140. The representative of Brazil inquired as to whether the World Bank presentation scheduled to
take place in the Committee on Financial Services might be postponed.
141. The representative of Canada inquired as to whether all the subsidiary bodies need meet on
the same week or if some could meet on the same week as the Special Session.  For instance, he said
that all subsidiary bodies except the Committee on Financial Services might meet on the week of 3March, while the Special Session, bilaterals and the CTFS might meet on the week of 24 February.TN/S/M/5
Page 30
142. A representative of the Secretariat stated that meetings had been organised to date on the
assumption that Members wished to reserve time during the week in which the Special Session was
held to bilateral consultations.  Members, however, were free to decide differently, for instance, they
could allocate a day normally reserved for bilaterals to the Committee on Trade in Financial Services.
He noted that meetings on the week of 24 February might conflict with other meetings.
143. The Chair summarised that hotel availability could be a problem in the week of 3 March;  that
meetings on agriculture were scheduled for the week of 24 February which, due to the rules regarding
meetings, reduced the Special Session's options; and that the remaining possibility seemed to be to
hold the Special Session and bilaterals on the week of 17 February.
144. The representative of the United States said that she would need to verify with capital whether
such a change in dates would conflict with the travel plans of experts.
145. Expressing his delegation's willingness to remain flexible and trust in the Chair's judgment,
the representative of Uruguay recalled the rule that no two negotiating bodies were to meet
concurrently, including for instance, a meeting on agriculture and services at the same time.  He statedthat his delegation would want to be present at both of these meetings and that there should be no
competition between meetings.
146. The Chair suggested that the Council leave the date of the next meeting open in order to give
him time to verify time room availability on the week of 17 February, which seemed to be the
preferred week.  He said that he would consult and that, as a last resort, the Special Session would be
held on the week of 3 March.  He also informed the Council of his intention to convene an open-
ended informal meeting to discuss the draft text of the Modalities for the Special Treatment for LDCs
on the morning of Thursday, 30 January 2003.  Finally, he suggested that the Council take note of thestatements made under this item and return to it at the next meeting.
147. It was so decided.
I. OTHER BUSINESS
148. In the interests of time, the Chair suggested  that a statement by UNCTAD be incorporated
into the report of the meeting in  order to inform Members of the results of an Expert Meeting on
audiovisual services entitled "Improving Participation of Developing Countries" and which was held
on 13-15 November 2002.
149. The representative of UNCTAD stated that the Report of the Expert Meeting had been
available in English and contained the Chairman's summary as the main substantive item.  This
summary presented good insight into the issues considered, and the views, positions and concerns
expressed in the area of trade in audiovisual services.  The contribution by UNESCO to the
organization of this meeting was recognised.  The Expert Meeting had been preceded by the highlevel panel which was a unique opportunity for Gene va-based delegates to obtain insight into the
policy concerns in the area of audiovisual services.  The panel debate emphasised the growing
importance of concerns other than trade liberalization in this area and the need to find different ways
and venues for addressing them.  The Expert Meeting provided for a rich debate on the whole
spectrum of issues and positions, which cut across the development divide.  One of the maincontributing factors to the success of the meeting were the shared interests and concerns by both
developing and developed countries.  The meeting provided an opportunity for an open exchange of
views against the backdrop of the on-going GATS negotiations.  The session dedicated to WTO-
related issues attracted particular attention and active participation from the experts, due in part to the
contribution by the Director of the Trade in Services Division.  The session also demonstrated thechallenge in establishing criteria to delineate regulations affecting trade and culture, the importance ofTN/S/M/5
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identifying elements which might fall under trade consideration, and what pre-conditions at large
were necessary.  The debate demonstrated how limited the dialogue had been among countries with
different treatment of and approaches to trade in audiovisual services.  Throughout the discussions
experts kept returning to the question of trade and culture, which to some extent limited the possibility
of deeper analysis of the specific aspects of the industry, trade liberalization in this area, and theassociated role of developing countries.  Nonetheless, presentations by a number of developing
country experts demonstrated the importance of audiovisual services for their socio-economic
development and their interest in pursuing the ac cess and increasing participation of developing
countries.  Some other developing countries emphasised the importance of protection and
development of their indigenous cultures, the crucial role of co-production and other preferential
agreements, including bilateral agreements.  Participants made numerous written contributions to the
meeting, which totalled over 20 papers, available on the UNCTAD web-site.  In the report, expertsasked UNCTAD to provide a follow-up forum for c ountries to continue their debate on different
aspects of audiovisual services and trade.
150. Thanking UNCTAD for its statement, the representative of the United States added that,
although mention had not been made of it by the representative of UNCTAD, the United States had
participated in the Expert Meeting and had found it useful.
151. Thanking UNCTAD and UNESCO for the interestin g and stimulating discussion the meeting
had fostered, the representative of Canada noted the benefit of having trade and cultural policy
officials participating in a common meeting.
152. The Chair suggested that the Council express its gratitude to UNCTAD for the organization
of the Experts meeting, that it take note of the statements made and that the meeting be adjourned.
153. It was so decided.
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