RESTRICTED
WORLD TRADE S/CSC/W/9
9October 1997
ORGANIZATION(97-4337)
Committee onSpecific Commitments
AQUALITATIVE ASSESSMENT OFTHE RELEVANCE OFTHE CHANGES
RESULTING FROM CPC REV.1 FOR TRADE NEGOTIATING PURPOSES
Note bytheSecretariat
1. Atthe16June1997 meeting oftheCommittee onSpecific Commitments, Members have
requested theSecretariat toprovide, inaddition todetailed studies ofthechanges resulting from
CPC Rev.1 andasummary ofthemain changes, aqualitative assessment ofthose changes fortrade
negotiating purposes.
2. Thepresent document attempts toevaluate forthesectors already studied indocument
S/CSC/W/6/Add.1-Add.5 (energy, construction, distribution, tourism, transport) theimpact andthe
relevance ofthechanges resulting fromCPCrev1bycomparing themtothebroad pattern oftheactual
schedules.
3. Theresults ofthisexamination areofaqualitative andprovisional nature asthepattern ofthe
actual commitments hasbeenapproximated bycomputer searches andsamples andbythegeneral
knowledge oftheschedules bytheSecretariat anddoesnottherefore reflect exhaustively thewayall
commitment havebeenundertaken northewayagiven Member hasformulated itscommitment.
4. Thepattern oftheMFN exemptions hasnotbeenstudied asthere aregenerally noreferences
toCPCintheMFN derogations. However, itisclearthattheadoption ofCPCrev1would havean
impact onthescope anddrafting ofMFN exemptions, anyspecially inthecaseofsectors without
commitments.
5. Thisdocument doesnotconstitute inanywayajudgement onthecharacteristic ofCPCrev1
perse,butsimply discusses itsinterest fortrade purposes.
I. ENERGY
6. CPCrev1essentially creates acompletely newitemforthedistribution ofcoldwater andclearly
separates thedistribution ofhotwater, electricity andgasfrom theincidental services.
7. Asabasisforcomparison, eightcountries haveundertaken commitments on"services incidental
tothedistribution ofenergy" which shows avastpotential forfuture commitments. Among those
eight, twomade noreference totheCPCbuthavetaken thesame titleormade reference toawider
iteminW/120. Among thesixthathave referred toCPC 88700 (defined as"transmission and
distribution services onafeeoracontract basis ofelectricity gaseous fuelsandsteam andhotwater
tohousehold, industrial commercial andother users"),onehaslimited itscommitment togasandtwo
toconsultancy.
8. Inthisparticular caseitmaybenoted thatCPCrev1would enhance thepossibility ofmaking
commitments intheenergy sector andwould clarify them.S/CSC/W/9
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II. CONSTRUCTION
9. Apartfromsplitting"siteinvestigationwork"between"construction"and"architecturalservices"
andaggregating "sitepreparation formining" inawider item, themain change resulting from CPC
rev1isthere-ordering atfourandfivedigitlevels ofthetypes ofconstruction concerned according
tothenewclassification ofconstruction inthegoods partofCPCrev1. Italsoseparates theconstruction
ofpipelines from theconstruction ofpower lines.
10. Asabasisforcomparison 58Members haveundertaken commitments onconstruction services.
Among those 58,37havemade reference totheCPC atthelevelofdetail specified inW/120, that
isthree digits (CPC 511to518), andhaveundertaken commitments onpartorthetotality ofthose
three-digit items. Eight other Members havemade reference toCPCbutinamore detailed manner
down tofourorfivedigits (classically toexclude fromtheircommitments "siteinvestigation work",
"sitepreparation formining" and"construction ofpower plants"). Fourother Members havemixed
fourandfivedigits references toCPC withsuigeneris national definitions andnineMembers have
notmentioned CPCatall,sixofthose mentioning intotality orinpartthedrafting ofW/120 categories.
11. There-ordering ofthetypeofbuildings inCPCrev1would haveaneutral impact asthevast
majority ofthecommitments havebeentaken atthehigher, three-digit level, oralternatively atfour
orfive-digit levelbutwithprecise exclusions thatwould remain. Twoofthemostcommon exclusions
("site investigation work" and"sitepreparation formining") arere-ordered inthenewclassification:
onesplit, theother merged. Thatwould mean inthecaseofaconversion aslight redrafting ofthe
entries tokeeptheexclusion. Theseparation between power linesandpipelines isagood thing in
theabstract, astheyarereally different activities withdifferent legalregimes butwould change little
inconcrete terms astheyhaveoften beenliberalized together.
III. DISTRIBUTION
12. CPCrev1essentially reintegrates thesaleofmotor vehicles asanordinary fourandfivedigit
iteminstead oftwo,separates repair services from distribution, unifies thenomenclature ofgoods
betweenwholesaleandretailandclassifiesretailoutletsbytypeofshops(nonspecializedstore/specialized
store/mail order/other nonstore services) instead ofbytypeofgoods (food/non food/repair).
13. 35Members havetaken commitments indistribution. Fourofthese havemade noreference
toCPCitems buthavemade reference toparts ofW/120. Theothers havemade reference toCPC,
andinfourcases havebeenmore detailed thanthecorrespondence between W/120 andCPC which
isamixofthreeandfourdigits items. Themainfeature ofthecommitments indistribution isthenumber
andvariety ofgoods whose distribution isunbound: themostfrequently quoted aretobacco, precious
metals, firearms andpharmaceuticals butfuelsandalcoholic beverages, liveanimals andgoods sold
inwholesale markets areunbound inseveral schedules; musical scores, audio andvideo tapes, books,
newspapers, certain chemicals, fertilizers, ginseng, rawmilk, wool, rice,salt,grain alloccur once.
Inmany instances those goods whose HSclassification would beeight orninedigits donotfitwith
thebroader categories defined either byCPC provisional orbyCPC rev1.
14. Therefore intheevent ofaconversion toCPCrev1thesame kindofexplicit exclusions would
havetobekept. Inthatrespect rev1isneutral. Theunification ofthenomenclature ofgoods between
wholesale andretail represents progress intheabstract buthasfeweffects inreality ascommitments
areveryglobal andexceptions aresmaller thantheitems ofthisnomenclature.
15. Themove ofrepair services andthereintegration ofsalesofmotor carsatfourandfivedigit
level would notaffect thecommitments, which would simply havetobeplaced elsewhere, andare
therefore neutral ineffect.S/CSC/W/9
Page3
16. Finally thedistinction onthebasisoftypes ofshops instead oftypes ofgoods maybeprogress
asitexplicitly includes mailorder, which wasnotmentioned beforehand butwascertainly included.
Thesame goesfor"nonstoredistribution services" buttherearetwodifficulties toberesolved. First,
thereisnodefinition of"nonstoredistribution services"; secondly, itwould havetobedecided where
electronic distribution should beclassified: whether here,asadatabaseservice orasatelecom service.
IV. TOURISM (HOTELS, RESTAURANTS, TOUR OPERATORS TRAVEL AGENCIES AND
TOURIST GUIDE)
17. Asfarashotels andrestaurants areconcerned theonlychanges aretheaggregation ofhotels
andmotels (only fiveMembers haveoffered onlyoneofthose twoitems andwould havetoredraft
theirentries), andtheaggregation ofbeverages services withandwithout entertainment (noredraft
ofentries needed asthefiveMembers thathavegone intothatdetail haveoffered them both). As
farastravel agencies, touroperators andtourist guides areconcerned theonly change isthe
disaggregation of"travel agencies andtouroperators services "(p74710) intothreecategories: travel
agency (r67811), touroperators (r67812) andtourist information services (r67813). Thismaypossibly
encourage commitments tobemade onthose subsectors astheywould nolonger havetobetaken as
ablock.
18. Asabasisforcomparison 112Members havetaken commitments inthetourism sector (hotels,
restaurants, travel agencies, touroperators andtourist guides). 67havereferred totheCPC atthe
levelofthecorrespondence between CPCandW/120, which isamixofthree-digit items (CPC 641,
642and643)andoffour-digit items (CPC 7471and7472) andthreeMembers havemade commitments
atthelevelofthecorrespondence butwiththeaddition ofsuigeneris items. 16other Members have
referred totheCPCingreater detail, (thatisfourorfivedigitlevel) andfourothers havecombined
more detailed reference totheCPCwithsuigeneris items. 13others havereferred totheW/120 items
without quoting theCPCandonehascombined reference toW/120 withsuigeneris concepts. Finally
eight Members made noreference either totheCPC ortoW/120.
19. Onemayfinally noteinthecommitments made therelatively important number of"suigeneris
concepts" suchas"hotel development", "marinas", "yacht andleisure boatrenting".
20. Intotaltheadoption ofCPCrev1fortourism would notgreatly change thepicture andwould
notnecessarily address theproblems ofclassification revealed bytheproliferation ofsuigeneris
commitments.
V. MARITIME TRANSPORT
21. Themain changes brought about byrevision 1formaritime transport arethefollowing.
Transport isdefined bygeography ("coastal andtransoceanic transport") instead ofbythetypeofvessel
("sea going vessel"); cruises areexplicitly included inpassenger transport; freight isdefined bytype
ofvessel (refrigerator vessels/tankers/containerships/other vessels") instead ofbytypeofgoods
(refrigerated goods/bulk liquids/containerized cargoes/others); andthere issome additional precision
inthedefinitions oftheother cargoes (explicit addition ofmailanddrybulksuchasflours, cereals,
cement, sandandcoal). They donotaffect thestructure orthescope ofcorresponding items inthe
original CPC.S/CSC/W/9
Page4
22. Asabasis forcomparison, among the39Members thathaveundertaken commitments in
maritime transport, 17havereferred totheCPC atthelevel ofcorrespondence given byW/120 (a
mixofthree andfourdigits items); three havereferred totheCPCinamore precise manner; four
havereferred toW/120 alone andfourothers toW/120 adding toitsuigeneris concepts; ninehave
referred tothemodel schedule andonetothemodel schedule adding toitsuigeneris concepts; and
onehasmade apuresuigeneris commitment.
23. Thefactthattherevision doesnotaddress thequestion ofsea-river ships, ortheproblem of
mixte vessels hasbeentreated indocument S/CSC/W/6/Add.5 paragraphs 15and17.Theexplicit
inclusion ofcruises intheformer fivedigititems p72119-r65119 "other passenger transportation
services "would affect onlyoneMember which hasoffered thisitemseparately, the19other Members
offering passenger transport having donesoainaglobal manner. Thespecification ofmailanddry
bulkwould havenoimpact asthe21Members having offered freight transportation inreferring to
theCPC havedonesoinaglobal manner.
24. Intotaltheimpact ofthechanges formaritime transport ofrev1would beminimal andseveral
problems would remain unaddressed. Onemayalsonotetheextreme variety ofmethods usedfor
scheduling inthissector.
VI. INLAND WATERWAY TRANSPORT
25. Themain changes resulting from revision 1forinland waterways transport are:definition
ofthetransport bygeography ("inland water transport") instead ofbythetypeofvessel ("non sea
going vessel"); theexplicit inclusion of"water taxiandsight seeing boatservices" inthe"other
passenger transport" item; thedivision offreight bytypeofvessel (refrigerator vessels/tankers/other
inland water transport services offreight") instead ofbytypeofgoods (refrigerated goods/bulk
liquids/other freight); andtheexplicit inclusion ofcontainers intheother freight transportation item.
26. Asabasis forcomparison, among thetwelve Members thathaveundertaken commitments
forinland waterway transport, sixhavereferred toCPCatthelevelofthecorrespondence withW/120
(amixofthree andfourdigititems), onetotheCPC atthislevelbutadding asuigeneris concept,
twohavereferred totheCPC inamore precise manner andthree toW/120.
27. Theamendments ofrevision 1would haveaneutral impact onthose commitments.
VII. AIRTRANSPORT
28. Thequestion oftheusefulness ofCPCrev1is,inaway,irrelevant fortheairtransport sector,
astheairtransport Annex defines thescope ofapplication ofGATS tothissector inanarrower and
more precise manner thantheCPC(beitprovisional orrevised) ortheW/120 items. Therefore the
CPChaspractically notbeenused(only by2Members among the39thathavemade commitments).
29. Atthisstage therefore therevision ofCPCpresents onlyanacademic interest, asituation that
maychange ifinthecourse ofthereview oftheairtransport annex Members decide toextend the
scope oftheGATS inthesector. Anyhow theonlynoticeable changes inrev1arethedisappearance
oftheseparate classification ofcontainerized cargo within freight transport andaslight elaboration
ofthedefinition ofrental andleasing ofaircraft thatdoesnotchange thescope ofthisitem. Onemay
noteinthatrespect thatcomputer reservation services donotappear asaservice assuchinCPCrev1
(nordidtheyinCPC provisional).S/CSC/W/9
Page5
VIII. SPACE TRANSPORT
30. Inthissector thestructure oftheCPC hasnotchanged, theonlymodification being amore
precise definition: instead of"transportation ofpassengers andfreight byspace" thedefinition ofrev1
is"space transportation services, launching andplacing ofsatellites inspace andservices provided
byspace laboratories". Thisdefinition, which iscloser toreality iscertainly aprogress butasitdoes
notchange thescope oftheitem, itdoesnotaffect thetwocommitments made by2Members. One
maynotetheapparition ofsupporting services forspace transport (asapartofr677"supporting services
forairandspace transport") which could beaninteresting development.
IX. RAIL TRANSPORT
31. ThechangesresultingfromCPCrev1inthissectorareminor:theyconsistmainlyindesignating
thetypeoftransport bythemeans oftransport (forinstance refrigerator cars) instead ofthenature
ofthegoods transported (forinstance refrigerated goods) butthisdoesnotaffect thedefinitions. There
arealsominor changes inthedefinitions: thesuppression oftheexplicit mention ofperishable goods
andtheexplicit addition ofdrybulkfreight, butthescope isunaffected.
32. Asabasisforcomparison, among the23Members thathavemade commitments inthissector,
15havereferred toCPCatthelevelofcorrespondence established byW/120 (amixoffourandfive
digititems) andoneatthislevelbutadding suigeneris concepts. Onehasreferred totheCPC ina
more precise manner, twoinamore aggregated manner, onetoW/120 alone andonetoW/120 adding
asuigeneris concept. Those commitments astheystand would beunaffected byaconversion to
CPC rev1.
X. ROAD TRANSPORT
33. Themain changes resulting from CPCrev1intheroadtransport sector are:theaddition of
courier services (p7512-r6424) which wasformerly partofpostal services; theexplicit inclusion of
"tramway, trolleybus andsimilar" which theVoorburg Group seesasaclarification oftheborder with
railway transport andnotasanaddition; theexplicit inclusion oftaxisreservation; theexplicit inclusion
ofsightseeing buses intheitem"rental services ofbuses andcoaches withoperators"; andthecreation
ofanitem"moving services ofhousehold andoffice furniture andother goods" instead of"transport
offurniture", which again theVoorburg Group seesasaprecision andnotasanaddition. Allofthese
changes takeplace atthefivedigitlevel.
34. Among the40Members thathaveundertaken commitments onroadtransport, 24havereferred
toCPCatthelevelofcorrespondence ofW/120 (amixofthreeandfourdigititems), 10havereferred
toCPC more precisely, fourhavereferred toW/120, onetoamixbetween W/120 andsuigeneris
concepts andonetopuresuigeneris concepts.
35. Theinclusion ofcourier services would beneutral: r6424 "miscellaneous delivery services"
isnarrower thantheoriginal p7512 "courier services" which alsocomprises thenewr6812 "courier
services". Therefore the20Members thathavecommitments under p7512 would havealso(within
thelimitations oftherestrictions scheduled) commitments under thisnewitem. Entries would have
simply toberedrafted. Asalltherestofthechanges areconsidered bytheVoorburg Group assimple
precisions andnotasadditions, theeffects would beneutral ontheMembers concerned (respectively:
19Members fortramways andtrolleys, 20fortaxireservations, 22forsightseeing buses and24for
"moving services ofhousehold andoffice furniture andother goods"). Onemust recognize thatthe
clarifications resulting fromrev1forroadtransport areuseful andcloser toreality; forinstance, such
economically important services astramway transport, sightseeing buses andremovals nowhavein
CPC rev1aclear classification.S/CSC/W/9
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XI. PIPELINE TRANSPORT
36. Rev1brings nochange totheprovisional CPCinthissector. Itsimpact onthecommitments
taken byfiveMembers istherefore nil.
XII. SERVICES AUXILIARY TOALL MODES OFTRANSPORT
37. Themain changes resulting from revision 1arethecreation ofanitem"navigational aids"
extracted from thethree former supporting services items (forrailways, roadandwater transport)
andthemerger ofp748 "freight transport agency "withp749 "other supporting auxiliary services "
inanewitemr679"auxiliary andother supporting services ".Theimpact ofthese changes would
beneutral andwould imply simply aredrafting oftheentries fortheMembers concerned. Their added
value appears marginal.
38. Among the34Members thathavetaken commitments onservices auxiliary toallmodes of
transport 13havereferred totheCPCatthelevelofcorrespondence withW/120, 7havereferred to
theCPC atthesame level butwithadding suigeneris concepts, fourhavereferred more precisely
totheCPC, three havereferred toW/120, onetoW/120 butadding suigeneris concepts andsixhave
referred topuresuigeneris concepts.