WORLD TRADE
ORGANIZATIONS/C/6
7 December 1998
(98-4909)
Council for Trade in Services
REPORT TO THE GENERAL COUNCIL
ON ACTIVITIES DURING 1998
Adopted by the Council for Trade in Services on 24 November 1998
1. The Council for Trade in Services has held eight meetings so far in 1998.  Reports on the
meetings are contained in documents S/C/M/24-31 and should be read in conjunction with this report.
The Council addressed the following matters:
I. ENTRY INTO FORCE OF THE FOURTH PROTOCOL
2. The Council held two special meetings on 16 and 26 January 1998 to address matters relating
to the entry into force of the Fourth protocol to the General Agreement on Trade in Services.  At the
second of those meetings the Council agreed to re-establish the mandate of those Members who had
accepted the Protocol to decide on its entry into force.  Subsequently, they agreed that the Fourth
Protocol would enter into force on 5 February  1998.  The Council took note of this decision.
II. VERIFICATION OF THE SCHEDULES OF COMMITMENTS IN FINACIAL
SERVICES
3. An informal meeting of the Council was held on 30 January and 2 February 1998 to conduct
the technical verification of the Schedules of Commitments and Lists of Article II (MFN) Exemptions
resulting from the negotiations on financial servic es concluded on 12 December 1997.  Following that
meeting, the delegations concerned made technical corrections and improvements to their Schedules
and Exemption Lists.  At the meeting held on 26 February 1998, the Council agreed that the
verification process was concluded, and that the Sc hedules and MFN Exemption Lists as contained in
the Compilation dated 23 February and in the other documents before the Council were the finalresults of the negotiations on financial services, and therefore would be attached to the Fifth Protocol
to the GATS.
III. PREPARATION FOR NEGOTIATIONS UNDER ARTICLE XIX OF THE GATS:
THE EXCHANGE OF INFORMATION
4. At the Ministerial Conference held in Singapore in 1996, Ministers endorsed a
recommendation in  paragraph 47 of document S/C/3 calling upon the Council for Trade in Services
to develop an information exchange programme with the aim of facilitating the access of all
Members, in particular developing country Members, to information regarding laws, regulations and
administrative guidelines and policies affecting trade in services.
5. As part of the information exchange, a series of discussions was held on specific services
sectors.  The focus of these discussions was on the manner in which the services in question were
defined, traded and regulated as well as on the existing trade barriers.  The discussions were aimed atS/C/6
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enabling Members to identify negotiating issues and priorities.  The Council agreed on five questions
which constituted a useful, but not exhaustive, framework for the discussions.  These questions were:
(i) What are the regulatory authorities, governmental and/or non-governmental?
(ii) Are there any special or common problems encountered as regards transparency or 
the application of the most-favoured-nation principle?
(iii) What are the most prevalent types of restriction on market access or national 
treatment?
(iv) Are there other types of regulation - for example in the areas of licensing, technical 
standards or qualification requirements - which commonly restrict trade in the sector?
(v) What are the main barriers exports face in the markets of other Members?
6. The Council asked the Secretariat to prepare background papers on the sectors to be discussed
at each meeting.  These papers were based on information available on each sector and on the analysis
of specific commitments.  They contained information on the economic importance of the service,
issues of definition, the main ways in which the service was traded and regulated, existing regulatory
barriers to trade, limitations commonly found in schedules and sources of further information.
7. The Council meeting of 24 and 25 June 1998 held discussions on Distribution Services;
Construction and Engineering Services;  Postal and Courier Services, and Audiovisual Services.  The
meeting of 22 and 23 July held discussions on Legal Services; Advertising Services; Architectural and
Engineering Services; Computer and Related Services; and Environmental Services.  The meeting of
14 October held discussions on Education Services; Health Services; Tourism Services; and Energy
Services. The meeting of 23and 24 November held discussions on Land Transport;  Air Transport andMaritime Transport Services.
IV. SUBMISSION OF SCHEDULES OF COMMITMENTS IN BASIC
TELECOMMUNICATIONS
8. At the meeting held on 26 February 1998 the Council took note of the Schedules in basic
telecommunications of Cyprus and Barbados
, which had been subjected to the regular certification
procedure. The procedure was concluded for Cyprus on 30 January 1998 and for Barbados on
20 February 1998 and the Schedules entered into force on these date respectively.
V. NOTIFICATIONS TO THE COUNCIL PURSUANT TO GATS PROVISIONS
9. At its meeting of 26 February the Council took note of the following notifications:
(i) Notifications pursuant to Article III:3 of the GATS concerning modifications to
services regulations in sectors where specific commitments had been undertaken:
Uruguay S/C/N/54
Poland S/C/N/56
Poland S/C/N/57
Japan S/C/N/58
Japan S/C/N/59
Japan S/C/N/60Japan S/C/N/61
Japan S/C/N/62
Norway S/C/N/63
Norway S/C/N/64S/C/6
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(ii) Notifications pursuant to Article VII:4 of the GATS concerning recognition measures
and agreements or agreements:
European Communities and S/C/N/43
their Member States Venezuela S/C/N/44
Venezuela S/C/N/45
Venezuela S/C/N/46
Venezuela S/C/N/47
VI. COOPERATION BETWEEN THE ITU AND THE WTO
10. The question of a cooperation agreement be tween the Internatio nal Telecommunication
Union (ITU) and the WTO was raised at several Council meetings during 1998.  The Council
mandated the Secretariat to consult with the ITU Secretariat on the possible form and content of such
an agreement.  A draft reflecting the state of these consultations was circulated at the meeting of the
Council of 14 October 1998.  Although it was the general view that some form of cooperation with
the ITU would be desirable, especially in the fields of technical cooperation and exchange ofinformation, Members still had to agree on the substance as well as on the form of an agreement with
the ITU and in particular on whether it should take the form of a formal cooperation agreement or of
an exchange of letters.
VII. RE-OPENING OF THE SECOND AND THIRD PROTOCOLS FOR ACCEPTANCE
11. Following a request from the European Communities, the Council adopted a decision to re-
open the Second and Third Protocols for acceptance, to allow Belgium to accept these protocols.
Members welcomed as a positive development the fact that Belgium could accept the protocols, but
stressed that deadlines had an important function and that they must be observed.  They agreed that
the re-opening in this case should not constitute a precedent.
VIII.  WORK PROGRAMME ON ELECTRONIC COMMERCE
12. At its meeting on 14 October 1998, the Council started addressing the Work Programme on
Electronic Commerce adopted by the General Council on 25 September 1998.  At that meeting the
Council addressed organizational matters.  At  the following meeting on 23 November, the Council
had its first preliminary discussion of the substantive issues in the Work Programme.  For that
purpose, the Secretariat had prepared a background document focusing on the relevance of GATS
provisions to those elements.
IX. WORK OF SUBSIDIARY BODIES
1
13. The Committee on Trade in Financial Services has so far not held any meetings during 1998.
A meeting is scheduled to take place on 17 December 1998.  The activities of other subsidiary bodies
are reflected in their respective reports which are annexed to this report as follows:
Annex I - Report of the Committee on Specific Commitments (S/CSC/3)
Annex II - Report of the Working Party on Professional Services (S/WPPS/3)Annex III - Report of the Working Party on GATS Rules (S/WPGR/3)
                                                     
1 As agreed at the meeting of the Council for Trade in Services on 24 November 1998, the reports of
subsidiary bodies have been annexed to this report subsequent to its adoption.S/C/6
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ANNEX I
WORLD TRADE
ORGANIZATIONS/CSC/3
2 December 1998
(98-4869)
Committee on Specific Commitments
REPORT OF THE COMMITTEE ON SPECIFIC COMMITMENTS
TO THE COUNCIL FOR TRADE IN SERVICES
1. The Committee on Specific Commitments has held three formal meetings in 1998.  The
minutes of these  meetings appear in documents S/CSC/M/5, 6 and 7.  In its first formal  meeting held
on 2 April 1998, it elected Mr Juan A. Marchetti of Argentina as its Chairman.  Six informal
consultations on the finalization of the procedures for the implementation of GATS Article XXI(Modification of Schedules) have also been conducted by the Chairman of the Committee.  The
formal discussions of the Committee focused on three items:  classification issues, the institution of a
system of electronically consolidated and updated schedules and the possible revision of the
scheduling guidelines.
2. As far as classification issues are concerned the activities of the Committee were twofold.
First the Committee examined the structure of the ongoing revision of the Central Products
Classification, which is the nomenclature established by the UN Statistical Commission, in order to
appreciate its possible relevance for the Committee's future work.  The Secretariat produced detailed
structural and qualitative studies of the changes brought about by the revised CPC in a number of
service sectors: energy, construction, distribution, tourism, transport, research and development, real
estate, rental and leasing, business services, computer and related services, professional services other
business services, agricultural, mining and manufacturing services.  It also heard the views of the UNStatistical  Division and the "Voorburg Group", the collective authors of this new classification.
3. On this basis the Committee concluded that a global conversion to this new classification
would be difficult  at this stage but that the new classification could help to resolve the individual
problems of classification which may be identified by delegations in the future.  It was also agreed
that the question of "ad hoc" classifications, that is of classifications collectively agreed which departfrom the CPC, as in financial services, basic telecommunications and maritime transport, should be
kept on the agenda as another possible means of resolving problems of classification.
4. Subsequently the Committee, in accordance with a mandate given by the Council for Trade in
Services, began the examination of the points on classification raised during the Exchange of
Information Programme, on the basis of a compilation of these points drawn up by the Secretariat andof working documents submitted by delegations.  It was agreed that, at each meeting of the
Committee dedicated to classification, the Secretariat would produce an informal document listing
and updating the suggestions and solutions proposed by Members with regard to the various sectors.
5. Secondly the Committee began discussion of the question of the definition and treatment of
new services.  There was broad agreement that this was more a question of classification than ofS/C/6
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coverage and that a pragmatic approach, based on concrete examples identified during of the
Exchange of Information Programme of the Council, was needed.
6. The Committee approved in principle the establishment of a system of electronically
consolidated and updated schedules of commitments.  It was agreed that these electronic schedules
would not have legal status.  The Committee also considered the calendar, budget, format, circulation,prices and verification procedure applicable to this project and the possibility of assigning dates to
these commitments.  It agreed in particular that the outcome of this work should be published and sold
to the general public in a CD-ROM format and th at, in view of the budgetary constraints, the
elaboration of a CD-ROM version was a priority as compared to an online version.
7. On scheduling guidelines the Committee requested the Secretariat to produce, as a basis for a
future collective reading of the guidelines, an informal and technical document on scheduling
problems emerging from the guidelines themselves and from their implementation.S/C/6
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ANNEX II
WORLD TRADE
ORGANIZATIONS/WPPS/3
4 December 1998
(98-4903)
Working Party on Professional Services
REPORT OF THE WORKING PARTY ON PROFESSIONAL SERVICES
TO THE COUNCIL FOR TRADE IN SERVICES
1. The WPPS has held eleven formal, and several informal, meetings in the period December
1997 to December 1998.  Minutes of the formal m eetings are contained in WPPS documents M/14
through M/24. Discussions of the WPPS  have focused on the development of multilateral disciplines
on domestic regulation in the accountancy sector, together with the issue of the legal form for theiradoption.
2. As a result of discussions and comments in the context of WPPS meetings, the Secretariat
was asked to prepare several revisions of the informal Note,  Disciplines on Domestic Regulation in
the Accountancy Sector  – the tenth revision was dated 17 July 1998.  Discussion on the text of the
disciplines on accountancy was substantially concluded at the WPPS meeting of 29 July 1998, except
for one outstanding reservation.  At the meeting of 4 December Members reached a consensus on the
disciplines.
3. The WPPS  addressed the question of the legal form which the accountancy disciplines might
take.  The following options were discussed:  an  Annex to the GATS;  additional commitments to be
scheduled by Members;  and a decision by the Council to adopt the text of the disciplines with theintention to make them legally binding at a later stage.  Members supported the option of a Council
Decision.  A draft decision was adopted ad referendum  on 4 December.
4. Members discussed issues relating to the relationship between the disciplines on accountancy
developed under Article VI:4 and other provisions of the GATS, in particular Articles XVI (marketaccess) and XVII (national treatment).  It was noted that the new disciplines on accountancy must not
overlap with other provisions already existing in the GATS so as to avoid legal uncertainty.
5. The issue of the future work of the WPPS was discussed.  The Working Party agreed to
continue its work pursuant to its terms of reference;  in doing so it shall aim to develop generaldisciplines for professional services while retaining the possibility to develop or revise sectoral
disciplines including accountancy, taking into account any decisions which may be taken in the
Council regarding work on Article VI:4.  The expa nsion of the Mutual Recognition Guidelines for
accountancy to accommodate other professional services sectors was also suggested as a possible
element of the future work of the WPPS.S/C/6
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ANNEX III
WORLD TRADE
ORGANIZATIONS/WPGR/3
3 December 1998
(98-4857)
Working Party on GATS Rules
REPORT OF THE WORKING PARTY ON GATS RULES
TO THE COUNCIL FOR TRADE IN SERVICES
1. The Working Party on GATS Rules held five formal meetings in 1998.  In each meeting, the
Working Party considered all three negotiating mandates:  emergency safeguard measures under
Article X,  government procurement under Article XIII and subsidies under Article XV.
Negotiations on emergency safeguard measures under Article X of the GATS
2. Differing views have been expressed by Members with regard to the desirability of
developing an emergency safeguard mechanism under the GATS.  Substantive discussions are
continuing on the subject without prejudging the position of any delegation in respect of the
desirability, feasibility or form of any possible emergency safeguard mechanism, with the objective of
concluding negotiations by 30 June 1999.
3. In recent meetings, the Working Party has focused on four key questions identified by the
Chairperson in an informal note (dated 3 June 1997):  (i)  On whose behalf would emergency
safeguard action be taken?  (ii) In what circumstances would emergency safeguard action be takenand what would be the purpose of such action?  (iii) What approach should be adopted in respect of
injury/adverse effects, and the relevant causal link between injury/adverse effects and commitments
under the GATS?  (iv)  What measures would be taken under the emergency safeguard mechanism?
Are some measures deemed more suitable than others?
4. The delegation of Hong Kong, China, made a submission suggesting some broad principles
that might be included as part of any safeguard mechanism (circulated as S/WPGR/W/26).  The
Chairperson circulated an informal note (dated 16 September 1998) containing responses, not
necessarily agreed, to the above four questions.  The questions raised in this note were discussed
during an informal brainstorming session on 1 October 1998 and in subsequent meetings.  Thedelegation of Venezuela made an informal submission (dated 14 October 1998) listing issues for the
organization of future discussions on emergency safeguards. The Secretariat prepared a paper
(S/WPGR/W/27) describing, first, alternative forms that a safeguard mechanism under the GATS may
take and then elaborating on the list of issues identified in the submission from Venezuela.
Negotiations on government procurement under Article XIII of GATS
5. Costa Rica submitted a response to the questionnaire on national procurement regimes
(S/WPGR/W/11/Add.22), adding to the twenty-one responses received during 1997.  An indicative
tabulation relating questionnaire responses to possible elements of multilateral disciplines, presentedS/C/6
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in a note from the Chairperson (dated 21 February 1997), has formed the basis for a structured
consideration of these elements.  In recent meetings, discussion has focused on the scope and
coverage of any disciplines on government procurement on the basis of a non-paper submitted by the
European Communities and Their Member States (dated 13 February 1998).  In this context, the issue
of how concessions should be treated has received particular attention.  Members have emphasizedthe need for the Working Party to continue to coordinate work with the Working Group on
Transparency in Government Procurement .
Negotiations on subsidies under Article XV of GATS
6. Delegations expressed the need to continue the technical analysis of subsidies related to trade
in services.  To this end the Secretariat prepared a note presenting information on the subject
contained in WTO Trade Policy Reviews (circulated as S/WPGR/W/25).  The Chairperson circulated
an informal note (dated 3 April 1998) to facilitate identification of the circumstances in which
subsidies may cause trade distortions.  Discussion on the relevant conceptual and legal issues is
continuing even as efforts are being made to advance the information exchange.
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