RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/S/M/12 
9 November 2004 
 (04-4754) 
Council for Trade in Services 
Special Session  
 
 
 
REPORT OF THE MEETING HELD ON  27 SEPTEMBER AND 1 OCTOBER 2004 
 
Note by the Secretariat1 
 
 
1. The Special Session of the Council for Trade in Services held a formal meeting on 
27 September and 1 October 2004.  The agenda for the meeting, chaired by Ambassador Alejandro 
Jara of Chile, is contained in document WTO/AIR/2389. 
2. The Chairman  drew the Council's attention to the report of the last meeting contained in 
document TN/S/M/11.  He said that under "Other Bu siness" the Secretariat would give an update 
regarding the e-bulletin board on the presence of capital-based experts in Geneva during meeting 
clusters.   
3. The representative of Chile  said he wished to raise a point regarding a communication on the 
application of GATS Article V that had been circulated to the Committee on Regional Trade Agreements.   
4. The representative of Canada
 indicated his delegation would wish to speak about a 
forthcoming proposal. 
5. The Chairman  suggested that the agenda be adopted with the addition of these points. 
6. It was so agreed . 
A. ASSESSMENT OF TRADE IN SERVICES  
7. The Chairman  recalled that at its last meeting th e Council had agreed to request that a 
representative of the OECD respond to any follow-up questions delegations might have about a paper 
the OECD had presented to the Council on 6 Oct ober 2003.  This paper, entitled "Services Trade 
Liberalization:  Identifying Opportunities and Gains"  had been circulated in document JOB(03)/140.  
The Chairman recalled that the presentation and qu estions had touched upon a number of issues, 
including:  the importance of services trade in worl d trade (relative to trade in manufactured goods 
and agriculture); patterns and flows of services trade;  the role of a well-developed domestic market in 
promoting services exports; the potential impact of th e removal of barriers, and; questions relating to 
the sampling and modelling methodological appro aches used in the study. He thanked the 
representative of the OECD for accepting the Council's invitation. 
8. The representative of the OECD , referring to follow-up work undertaken subsequent to the 
paper, said that two projects were underway and th at both related to the quantitative portion of the 
earlier study.  This follow-up work attempted to m easure and model the impact of the removal of 
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. TN/S/M/12 
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 barriers to trade in services.  The first paper had b een commissioned by a consultant and looked at the 
costs of protection in services on other parts of th e economy.  It examined both OECD and selected 
non-OECD countries depending on data availability.  The sectors it examined included air transport, banking, distribution, electricity supply, mar itime, telecommunications and some professional 
services.  The second was a project that attempted to determine how the protection of services might 
affect the effective rate of protection in manufacturing sectors.  It would draw on some of the most 
recent estimates of barriers to trade in services th at had been developed,  and would look into 
telecommunications, financial, distribution and some of the professional services.   
9. The representative of Hong Kong, China
 said that the OECD study strongly reinforced Hong 
Kong, China's belief that liberalization in servi ces trade was important to all WTO Members, both 
developed and devel oping ones.  Therefore, all Members had a stake in the services negotiations and 
stood to gain by actively engaging in the negotiations  to pursue areas of interest to them.  She sought 
to make several observations about the study.  Sh e noted that developing countries were increasing 
exports in a wide range of services across various  sectors.  Port services, audiovisual services and 
tourism services were noted to be of particular pr ominence in developing countries' services exports.  
Developing countries had been able to reap bene fits from their comparative advantage in labour-
intensive services in a wide range of the skills chai n.  This underscored the growing importance of 
exporting services for developing countries, thro ugh different means in cluding outsourcing, and 
especially in modes 1, 2 and 4.  Another impor tant observation, which had been a recurrent 
observation in various discussions under this item, was that services trade liberalization had the 
potential to achieve bigger gains than merchandise  trade, especially in the case of services that 
provided inputs to other goods and services.  This  underscored in particular the importance of 
infrastructural services, such as telecom services,  logistics services, financial services, and business 
services, which performed pivotal functions in all economies and supported a wide spectrum of 
economic activities.  Asking a specific question, sh e said that the study noted the difficulties of 
measuring the level and effect of barriers to service s trade and that indexes had been constructed to 
produce tariff equivalents.  She also noted a sepa rate study by OECD entitled "Services Barriers and 
their Economic Impact:  Examples of Banking and Telecommunications Services", which also 
attempted to take a quantitative approach to me asure the restrictiveness of telecom and banking 
services of selected economies.  She sought to know whether the same index had been used in both 
studies and generally expressed her interest in th e methodology used in these studies.  She believed 
that, despite the limitations of any methodology employed, the information would bring useful 
insights for the Council's work under this item.   
10. Turning to the ways forward,  the representative of Hong Kong, China noted that a large 
number of studies and research related to assessme nt of services trade had been undertaken on a 
national basis, sectoral basis, modal basis or hor izontal basis across different economies.  Various 
agencies, including the WTO and International Trad e Centre (ITC), had assisted developing countries 
in conducting assessments of services trade.  As the convenor of the APEC Group on Services, she 
said that Hong Kong, China had been working with  APEC Members on how the APEC context would 
be able to support the work of the WTO on assessment  apart from other areas.  She said there was 
little doubt that many of the assessment efforts, such  as those of the ITC, other organizations or by 
individual countries should continue.  In parallel, Hong Kong, China thought it was time for Members 
to think about the way forward.  She said that so me conclusions could perhaps be drawn from all the 
assessment studies examined by the Special Session.  In  this regard, she noted that, first, all studies 
generally reaffirmed the significance of services to all Members, both developed and developing ones, 
both in economic and trade terms.  She noted fro m these studies that services often represented the 
bulk of the activities in an economy and was potentially or already a significant proportion of trade.  
Secondly, the studies affirmed the benefits of liber alization of trade in services, both specifically in 
areas of niche services export interests to individu al countries, as well as generally in infrastructural 
services that supported other economic activities of  the economy, for example, as inputs to goods 
trade or as factors attracting FDI. Thus, in many ways, the development of services trade and the  TN/S/M/12 
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 enhancement of export potential in services trade w as merely a question of "what, when and how", 
but not "whether".  Thirdly, an equally important conclusion in many of the studies was that an appropriate regulatory framework was essential to reap the benefits of liberalization.  The features of 
an effective regulatory framework included transparency, impartiality , pro-competition, etc.  She said 
that many of these elements were being discussed or  explored in the WTO, especially in work on 
domestic regulation.  In Hong Kong, China's view th erefore, there was a strong need to press on with 
the Council's work in this area.  Lastly, her de legation noted the studies' emphasis on the importance 
of progressive liberalization, both in the sense of  having a well thought-out plan for progressively 
liberalizing specific services sectors which took into account of domestic needs and world trade 
patterns, as well as committing to such a plan through  legally binding commitments so as to provide 
sufficient clarity and certainty in the regulatory a nd investment environments for the services industry 
to develop and flourish.   
11. The representative of Hong Kong, China was awar e that other themes that Members sought to 
draw upon existed.  Her delegation me rely sought to flag the need to  precipitate these themes, so that 
the assessment exercise could serve its purpose of providing guidance for Members in pursuing 
progressive liberalization of trade in services under the Article XIX mandate of the Council.  She said 
these themes would provide guidance for further and mo re targeted technical assistance activities, for 
instance in terms of providing support to assist c ountries in improving their regulatory capacity and 
formulating their reform and liberalization progra mmes.  She believed that such themes would be 
useful inputs to regional or sectoral co-operation fo rums, such as various working groups at APEC or 
ITU Global Symposium for Regulators.  Secondly, apart from the macroeconomic aspect, there was 
the negotiations aspect of liberalization of trade in services.  Members were not simply engaged in an 
exercise to demonstrate the economic benefits aris ing from liberalization, in which many countries 
had already been engaging autonomously.  Member s were engaged in an exercise that sought to 
secure a more certain and liberal global environm ent on services trade based on legally binding rules 
and obligations and through the exchange of liberalization commitments as concessions and 
formulating necessary rules for trade.  As Memb ers approached a more intensive stage of the 
negotiations, there was a need to incorporate uni lateral progressive liberalization and negotiation 
efforts so that the two would be complementary and w ould lead to a result to the benefit of all in the 
negotiations.  She noted that the efforts by various organisations to help countries identify their areas 
of strength and interests in the negotiations, as well as that by the WTO Secretariat to provide targeted 
services-specific training with a particular fo cus on the on-going services negotiations had been 
helpful.  She asked whether more could be done.  She noted, for instance, that most free-trade 
agreements had a services component and she w ondered whether these could spur the interests of 
domestic policy-makers and regulators in different services sectors and whether these players could be mobilized and their interests channelled into th e WTO negotiations process.  She also wondered 
whether international, regional and sectoral co-operation forums or bodies, despite their non-
negotiating nature, could serve to provide the necessary technical input into the Council's on-going 
negotiations in respect of the relevant sectors.  She thought that the most important question surrounding the assessment exercise was perhaps how to make the negotiations more relevant to 
developing Members.  She recognised that services were not being negotiated in isolation and that 
there were negotiations dynamics cutting across differe nt areas of negotiations.  However, given the 
significance of services economies and services trade as revealed to date by the assessment efforts, 
she thought it might be over-simplistic or off-targe t to assume that the services negotiations outcome 
should merely be a side product of agriculture or NAMA or any other negotiations under the DDA.  It 
would be unfortunate to turn a blind eye to th e rich and potentially positive internal dynamics and 
linkages within the services negotiations. 
12. The representative of the OECD
, responding to the question about the methodology used in 
assessing services barriers, said that the methodology had been developed by a number of economists 
looking at services liberalization, and in particular  by the Australian Productivity Commission and the 
Australian National University.  The proposed work  and the paper the representative of Hong Kong, TN/S/M/12 
Page 4  
 
 China had referred to used the sa me type of methodology, which increasingly sought to factor in 
modes 3 and 4.  She said that, in a word, it examin ed the frequency and restrictiveness of barriers and 
distinguished between rent-creating and cost-increas ing barriers.  It sought to demonstrate that the 
removal of cost-increasing barriers had a greater impact than the removal of rent-creating barriers, although the research indicated that both brought benef its.  She agreed that there were limits to this 
methodology, which involved a de gree of subjectivity and raised questions about how accurately 
barriers could be assessed and turn qualitative measures into a quantitative index.  With reference to 
the first study she had mentioned, she said that the author of this paper had been requested to provide 
a detailed explanation of the methodology, and in pa rticular any subjectivity and weaknesses in order 
to allow Members to assess the studi es for themselves.  She thought it was fair to say that, at the 
current stage, the modelling of services liberalizati on in comparison to agriculture or manufacturing, 
was at an earlier stage and suffered from methodol ogical limitations.  From her point of view, the 
work was useful to pursue and provided some general indicators, if not accurate ones, and she said that only through this process could progress be ma de and, over time, a more powerful measure of 
services liberalization developed.   
13. The Chairman
 thanked the representative of the OECD  for her contribution, looked forward 
to the new studies and making use of them.   
14. The representative of Brazil  noted that his delegation had benefited from the OECD 
representative's presence at previous meetings and thanked her again for the OECD's work.  Referring 
to the intervention by Hong Kong, China, which ha d touched upon aspects of the negotiations, he said 
that he would share with Member's his delegation' s views on the July package, new challenges ahead, 
future work, links with other areas and the areas Br azil considered were the outstanding lacunae of the 
GATS negotiations.  He said that he would revert to  some elements in this regard under agenda item 
D.  He suggested that, at a future meeti ng the Council invite UNCTAD to present its World 
Investment Report.  This report was entitled, "The  Shift Towards Services" and was devoted in its 
entirety to the pattern of FDI in developing countries that was con centrated mainly in services.  It 
addressed questions about privatisation, servi ces regulation and re-regulation as well as about 
sequencing and the challenges faced by developing c ountries when negotiating in the services realm.  
He was aware of other suggested presentations at futu re meetings and thus left the timing of any such 
presentation by UNCTAD in the Chairman's hands, t hough he thought it would be most helpful for 
developing countries to be exposed to this document prior to May 2005.  
15. The representative of Mexico  said that the various presentations and studies had been very 
useful and had awakened greater interest in cert ain sectors in Mexico.  In some cases there was 
neither awareness nor knowledge that some developing countries could be competitive in certain areas.  He said it was known that there were a limited number of companies that were competitive at the national level, however, it was not clear how compe titive they could be at the international level.  
He said that on the basis of the studies and inte rnal discussions, his delegation was considering 
moving forward in certain sectors in the near future.  Referring to the first page of the document, he 
said that some of the sectors in which developing co untries could have a greate r role in international 
trade were cited, and included audio-visual, port ser vices, maritime transport, construction and health 
services.  He said these were some of the areas in wh ich developing countries could play a greater role 
in international trade.  Mexico was reflecting upon where it would seek greater detail and depth in the 
studies and where it would seek more information from the OECD.  Referring to the statement by 
Hong Kong, China, he wished to address a point on regulation and deregul ation for developing 
countries.  He said a major exercise had been carried  out at the OECD with r espect to this topic and 
with its relationship to competition, and that Mexico  had flagged some of its experiences in regulation 
and competition.  Although there was no specific relationship to services, much was related to services.  Finally, he said that the deregulation and competition exercise was a joint discussion 
between the OECD and APEC.    TN/S/M/12 
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 16. The representative of the OECD  said that the study pointed to the importance of labour-
intensive services in mode 1 and the role of el ectronic supply and the wide-range of forms of 
outsourcing as a growing area.  The OECD was doing some work on outsourcing in the context of an OECD study on trade and structural adjustment, which looked at some of the impacts of outsourcing for both importing and exporting countries and how be nefits for both could be maximised.  Some of 
the sectors mentioned might be examined. 
17. The Chairman
 said that some additional questions a nd comments had been made about the 
OECD paper.  He said that some new contributions  had been foreshadowed on the cost of protection 
in services trade and how this might affect other sectors of the economy.  He thanked the representative of the OECD for her contributions an d her presence.  With respect to regular business 
under this agenda item, the Chairman reminded the C ouncil that at the last meeting it had been agreed 
that the Council would invite the OECD to pr esent a study entitled "Services Barriers and their 
Economic Impact:  Examples of Banking and Teleco mmunications Services".  He said that the 
Secretariat had been in contact with the OECD rega rding this matter.  The study was not in the public 
domain, but would become so in the coming months , and hence, the OECD would be available to 
present it at the Council's next meeting.  Finally, he  recalled that one delegation had suggested that 
UNCTAD be invited to present its World Investment Report, which had a services focus.  As to the 
timing of the presentation, if the Council agreed to  one, he said that contact would be made with 
UNCTAD, that the organization of work at the next cluster would be taken into account, and that the 
request had been made with a measure of flexibilit y.  He proposed that the Council agree to invite 
UNCTAD to make the presentation as outlined a nd to take note of the statements made.  
18. It was so agreed
. 
B. PROPOSALS RELATING TO THE NEGOTIATIONS UNDER ARTICLE XIX  OF THE GATS 
19. The Chairman  recalled that at the previous meeting and in the course of a discussion on a 
Negotiating Proposal from a group of Members pertaining to Proposed Liberalization of Mode 4 under GATS (TN/S/W/14) the Council had agreed to tw o suggestions put forth by the delegation of 
India.  The first had been to hold an open-ended informal meeting to discuss two issues relating to 
mode 4.  As he had indicated at that time, he had held consultations regardin g the organization of this 
forthcoming informal meeting.  He indicated that , at the end of the discussion under this item, any 
business that might flow from the informal meeting could be addressed in formal mode as necessary.  
He further recalled India's second suggestion, to whic h the Council had agreed and which had been to 
have circulated and presented the summaries of two mu ltilateral meetings related to mode 4.  The first 
had been organised by UNCTAD in Geneva from 29-31 July 2003.  He said that the "Report of the 
Expert Meeting on Market Access Issues in Mode 4 and Effective Implementation of Article IV on 
Increasing the Participation of Developing Countries"  was contained in JOB(04)/139.  The second had 
been jointly organised by the IOM, the OECD and the World Ba nk in Geneva from 12-14 November 
2003.  The "Report of the Trade and Migration Semi nar" was contained in JOB(04)/138.  Suggesting 
that  the Council proceed chronol ogically, the Chairman introduced  the representative of UNCTAD. 
20. The representative of UNCTAD
 said that she wished to report not only on the Report of the 
Expert Meeting, but on its entire body of work a nd thinking on mode 4.  She indicated that mode 4 
liberalization was an issue on which UNCTAD had been  conducting considerable work to substantiate 
Article IV of GATS on the increasing participation of  developing countries in international trade in 
services.  Referring to a point raised by Hong  Kong, China, she agreed that services trade 
liberalization was positive and that it brought devel opment gains.  The question was not whether it 
brought gains, but rather "what, how and when" it brought development.  She believed that, for the 
entire liberalization of trade in services and in  order to make good progress in negotiations, it was 
important to focus carefully on this "what, how an d when".  She noted that, apart from the services 
context, mode 4 was key to UNCTAD's twin missi on, one of which had been reaffirmed at the TN/S/M/12 
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 UNCTAD XI São Paulo conference, which was to en sure development gains from the international 
trading system and trade negotiations.  Secondly,  she said it was important to uphold an open non-
discriminatory, rule-based, predictable and equitable multilateral trading system.  She said that all of 
these elements at present, owing to the infirmities of the mode 4 negotiations and commitments, were 
missing in the multilateral system.  The strengthening of mode 4 trade would in turn reinforce this 
system.  She said that the "gurus" of international trade had been advocating that, in order to make 
globalisation more inclusive and to create stakes  for developing countries in globalisation and trade 
liberalization, mode 4 was the best way to move forward.  UNCTAD had also emphasised this point 
in its studies and through its expert meetings.  It had also had been noted that mode 4 trade was not 
about "winners" and "losers", but rather was a win- win combination in terms of efficiency gains, 
welfare gains or trade gains.  She said that res ponding to market realities through negotiations would 
reinforce the market.  She noted that the market s were far ahead of the multilateral rule-making 
process.  She said that, if the negotiations took into  account the current level of mode 4 movement and 
trade, they would be responding to the demands of the market.  In this rega rd, special and differential 
treatment or a pro-development effort in the multilateral system did not depend on governmental 
intervention or any market distorting intervention.  Rather, there existed an incentive to respond to 
existing market forces.  Referring to the current pers pective, and notwithstanding the fact that mode 4 
represented unfinished business of the Uruguay Rou nd, she recalled that the DDA negotiations had 
development at its their heart.  Although mode 4 had not been specified, sh e noted that, since the 
beginning of the Doha Round, the proposals and re quests of developing countries had focused on this 
area and indicated that mode 4 was a key element of the DDA.  She said that, according to the São 
Paulo consensus, effective multilateral commitme nts on services sectors and modes of supply of 
export interest had been highlighted.  The importa nce to developing countries of mode 4 and its 
effective liberalization had also been underscore d.  She said that São Paulo had taken up and 
highlighted the point.  Referring to the Annex C of the General Council Decision of 1 August, she 
recalled that all countries had an interest in eff ective market access and said that high quality of 
offers, substantive outcomes, progressive and higher co mmitment levels should be forthcoming in this 
mode.  She recalled the Modalities for the Special Treatment for LDCs as well as the May deadline 
for a package of offers.  She said that progress to wards these targets would rest considerably on 
progress in the mode 4 issue.  Referring to UNCTAD' s work on this issue, she said that it had not 
been limited to the Expert Meeting in July 2 003.  Sectoral work, which examined sectors of 
importance to developing countries, had also been  conducted.  The work sought to examine sectors 
where there existed or could exist comparative adva ntages.  The findings indicated that, in order for 
this comparative advantage to emerge and in almo st every sector examined, it was necessary for mode 
4 liberalization to occur.  UNCTAD had also carri ed out work on assessment that would no doubt 
draw a similar picture.   
21. Turning to the Expert Meeting held in July  2003, the representative of UNCTAD said that 
this meeting had recognised that mode 4 liberali zation was and would continue to be a win-win 
situation.  She said that estimates of gains ra nged from $100 to $300 billion, and that, apart from these 
figures, increased trade would be beneficial to developing countries, de veloped countries and the 
multilateral system.  She also highlighted that estim ated gains would exceed the gains arising from all 
the other items in the negotiations.  Citing Professor Danny Roderick at UNCTAD's Trade Commission Meeting, she said that his presentation ha d pointed out that gains from trade in goods and 
capital would be modest because of a modest price di fferential of two-to-one.  The gains form mode 4 
movement, however, could be expone ntial because the labour cost differentials ranged from a factor 
of ten-to-one or higher.  For this reason, mode  4 was a key development benchmark for the DDA and 
liberalization of mode 4 would have a very benefi cial effect on the trading system.  In terms of 
efficiency gains, she said liberalization enhanced  competitiveness and productivity in both developing 
countries and developed countries.  Apart from these we lfare effects, gains in terms of transfer of 
technology, poverty reduction and ge nder benefit in developing countries needed to be included in the 
assessment of benefit.  She said that developed country economists had questioned the myth that 
efficiency and competitiveness of developing countr y economies and firms in terms of mode 1 had  TN/S/M/12 
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 hurt jobs.  The evidence suggested the opposite, namely that this trade led to job creation, increased 
investment and had a positive effect on other areas of  trade, such as trade in manufactured goods.  She 
recalled  that increasing the participation of deve loping countries in trade in services was a key 
objective of the negotiations and was important, not for altruistic reasons, but because developing 
countries brought value to the negotiating table.   She said it would be important to increase their 
participation in terms of scale, scope and quality of  their integration into trade in services.  She said 
that increased diversification, value addition and re turns from their participation in trade in services 
would also be assured through mode 4 liberalization.  She said that once develo ping countries, through 
mode 4 liberalization, had increased their particip ation and gains from services trade, had increased 
confidence and had a stake in services liberalization a nd trade, they would then be more amenable and 
have the necessary political support to make commitmen ts in other areas of services.  She underlined 
the importance of this dynamic.  Turning to the imperatives to liberalize, she said that a number of 
"push" and "pull" factors drove mode 4 trade and in turn should drive wider liberalization, higher 
wages, higher returns and higher cost-quality compe titiveness.  Some of the "pull" factors included 
democratic deficit and the aging of populations.  With respect to professional services, she said that 
studies predicted that by 2010 in the United States, there would be skills shortages of up to 10 million 
persons.  She said that these also predicted a s hortage of persons with the needed skills and 
educational background.  The liberalization of mode 4 trade could help to bridge this "skills gap".  
She emphasised that mode 4 was a unique instrument  for the orderly movement of services suppliers 
that were needed by markets.  It was the best an tidote to illegal and permanent migration.  She sought 
to highlight the distinction between migration and mode 4 movement, both in the political and 
psychological aspects.   
22. Turning to the issue of remittances, the represen tative of UNCTAD said that in mode 4, as in 
other areas of services trade, there persisted statistical  gaps.  She said that remittances were often used 
to measure mode 4.  Although acknowledging th at it was an imperfect measure, remittances did 
provide some evidence of mode 4 related trad e and of export revenues accruing to developing 
countries.  Although the numbers did not specifica lly measure trade related to the movement of 
intracorporate transferees or existing commitments, it nonetheless demonstrated a certain potential.  
Remittances gave an indication of the magnitude of existing and possible revenues.  She reiterated the 
point that movement was a cost-free way of genera ting development-related finance and noted that 
remittances through official and unofficial cha nnels represented more than double the amount of 
development aid.  She said that home country deve lopment gains were enorm ous and positive.  She 
said that national and international policies were ne eded to complement the transfer of remittances 
and to ensure that such transfers were conducive to generating resources for sustained development.  
UNCTAD had emphasised that the revenue from remitta nces needed to be channelled into long-term 
and sustainable development in the home count ry and lead to necessary economic, social and 
technological improvements.  With regard to the of t-cited phenomenon of "brain-drain", and referring 
to Thomas Friedman in the context of a lecture on outsourcing, she said that the opposite side of the 
coin to "brain drain" was "brain gain", in that human resources that shifted to another country would 
return home.  She said that, while there could be pr oblems such as nursing staff in the Philippines or 
doctors in India, the net result was brain gain an d brain circulation.  She said that studies had 
indicated that not only remittances had an impact, but that much of the skilled labour returned home, which contributed to brain creation in the devel oping countries.  She said UNCTAD's work in eight 
sectors and other modes demonstrated that efforts were  needed to bring legal and definitional clarity 
to mode 4, as it was a prerequisite to good progress.   She said that it was important to distinguish 
between permanent migrants and job- seekers and mode 4 services suppliers in terms of definition.  It 
was also important to identify those sectors and o ccupations where mode 4, alone or in conjunction 
with other modes, played an indispensable part in trade in services.  Turning to some concerns with 
mode 4 liberalization, she said that the discussion in the Expert Group had revolved around the very 
specific character of mode 4 liberalization as co mpared to tariff liberalization in goods or 
liberalization of other modes in services.  Whilst it could be true that cultural and political sensitivities 
could be involved, particularly if mode 4 was conf used with migration, many experts noted that in TN/S/M/12 
Page 8  
 
 fact, the economic sensitivities about employme nt issues were no more sensitive than for 
liberalization in developing countries which caused  unemployment and lay-offs.  These impacts were 
magnified because of the lack of a social safety net in developing countries and could lead to starvation in some cases.  These special sensitivities were not insurmountable, particularly if mode 4 
was seen as temporary movement and if the adjust ments were understood to be those that accompany 
any liberalization context.  She underlined that  from an economic viewpoint the liberalization of 
mode 4 trade made eminent sense.  With respect to  regulatory issues, she agreed that these were 
crucial and determined the market entry conditio ns and could constitute barriers through increased 
delays and costs.  This could harm the competitivene ss of suppliers or even block their entry and thus 
needed to be addressed.  She said that some leve l of harmonization based on best practices therefore 
would be very useful, including through a GATS visa  or services suppliers visa, which was a proposal 
that needed to be developed.  It could help to lib eralize considerably while at the same time regulate 
market access in mode 4 in a reasonable fashion.  In terms of best practices, she cited an example from the United Kingdom that had been presented at the Expert Meeting.  Best practices could be 
included with other elements in a model schedule and implemented in dom estic regimes.  With 
reference to economic needs tests, she said that these  were seen as a market barrier pervasive in most 
existing mode 4 regimes that ideally should be remo ved, and in any event, the application of which 
should be limited to specified categories and objec tive criteria.  One could also imagine ENT-free 
numerical ceilings similar to tariff rate quotas.  Referring to recognition issues, she said these were 
protracted because of the inherent asymmetry be tween institutional, tec hnical and organizational 
capacities of exporting developing countries and thos e of developed countries which had the capacity 
for standard-setting, certification and recognition.  She said that this issue existed not only between 
developed countries and developing countries, but al so between developing countries.  Some work 
was necessary to set multilateral benchmarks to whic h all countries could adhere and from which they 
could benefit.  The problems that developing countri es faced in relation to product standards in trade 
in goods could be replicated in trade in services in  the form of mutual recognition agreements.  She 
noted that most MRAs were between developed c ountries and that often developing countries lacked 
recognition systems.  This made the developi ng countries "standard take rs" and not "standard 
makers".  She said that some ideas and solutions ha d been proposed by the experts to deal with the 
complexity and multiplicity of recognition agencies and delegated authority.  With respect to mode 4 
and labour market recognition, she said that labour  rights advocates and unions had advanced issues 
such as mandatory social security contributions by temporary works.  The Expert Group felt that it 
was important not to simply ask the employer to pay this contribution of the receiving country, but to 
recognise the portability of the so cial security of the temporar y worker, since otherwise cost-
equalisation would nullify any cost-quality advantag e of the temporary worker.  With respect to 
minimum wages, the Expert Group recognised that these were desirable and should be enforced, but 
that a requirement for wage parity would make temporary workers redundant.  She said that a number 
of suggestions had been made on how mode 4 commitments could be broadened, through, for 
instance, common definitions, categories of occupati ons, common lists of occupations, use of a model 
schedule and the setting of specific liberalization targets.  She said that UNCTAD had done much 
work on the interaction of the modes and the synergi es between them, and specifically with mode 4 in 
rendering developing countries' trade more vibran t.  Some developing countries had evolved and 
presented elements of a model schedule and concrete  ways to move forward had been provided by 
this approach.  With regard to intermodal linkag es, outsourcing and the new economic relations that 
were being formed, she said that the relationship between mode 1 and mode 4 encompassed questions 
about substitutes and complements.  If mode 4 we re restricted, businesses would go abroad to seek 
competitive manpower, or mode 4 and mode 1 coul d be used together to do business.  Both 
approaches had been successful for developing countries, and she said that unfortunately more 
barriers were appearing.  It was important that th e win-win aspect of these forms of trade be stressed, 
as had been cited in UNCTAD's report on e-commerce.  She said that UNCTAD had promoted the 
tapping of synergies between mode  1 and mode 4, the preventing of protectionist reflexes and 
allowing developing countries to be part of "24-h our global knowledge factories".  She said that the 
recommendations that had been put forth laid out  a challenging work programme and she welcomed  TN/S/M/12 
 Page 9 
 
 
 any input based on national experiences from both deve loped countries and developing countries that 
would contribute to this work programme.   
23. Turning to the question of offers, the re presentative of UNCTAD said that UNCTAD had 
been working with developing coun tries involved in the services negotiations to analyse offers on an 
individual basis.  UNCTAD had been studying how  the offers had measured up to the requests and 
requirements for mode 4 liberalization.  It had b een noted that there were some improvements to 
mode 4 in the offers of Norway, Canada, Europ ean Communities, Japan and Switzerland, but that 
there remained gaps and inadequacies in multilatera l commitments and more needed to be done.  She 
said that the focus areas for improvements included commitments for contractual services suppliers and the addition of the low-skilled category of supp liers.  She stressed that the most gains would 
accrue to developing countries and developed c ountries if the lowest category of skills were 
liberalized.  Mode 4 liberalization should occur in sectors of interest.  The duration of stay and the 
provision of the service needed to be increased.  The professional qualification requirements needed 
to be made suitably flexible so that they did not act as a barrier to developing country services 
suppliers.  She reiterated the desirability and need  for effective multilatera l commitments, as opposed 
to bilateral commitments, for market access.  As had been mentioned in the Expert Group, this 
approach would make for greater predictability an d strengthen the value of the multilateral trading 
system.  The commitments bound governments and help ed insulate them from political pressure to 
take protectionist measures.  It was important that  mode 4 liberalization took place in the multilateral 
context, which was an important value of the sy stem for developing countries.  Progress in mode 4 
liberalization was indispensable for increasing the participation of developing countries in services 
trade.  It was important for the credibility of the Doha negotiations and it demonstrated that what was 
good for developing countries was also good for devel oped countries and the trading system.  Finally, 
she said that increased mode 4 trade through multila teral commitments that gave effective market 
access to developing countries services suppliers was one of the best contributions that trade could 
make to "people-centred development".   
24. The Chairman
 thanked the representative of UNCTAD for her comprehensive presentation of 
the Experts Report and he anticipated that delegations  would have many reacti ons.  He had taken note 
of the extensive work programme that UNCTAD had on questions relate d to trade in services and in 
particular to mode 4.  The representative had high lighted the various gains, improvements in trade 
efficiency, the importance of remittances, and issu es related to transparency, recognition, minimum 
wages and social security.  He did not seek to summ arise her remarks and conveyed, on behalf of the 
Council, his gratitude for her presentation.  The Ch airman introduced the presenters of the Report of 
the Trade and Migration Seminar from the IOM, the OECD and the World Bank.   
25. The representative of the OECD  said that all three organisations had worked closely together 
in the preparation of the meeting.  She said that the meeting had sought to bring the trade and migration communities together in order to star t a dialogue and promote progress.  The publication 
which had been produced subsequent to the m eeting was entitled, "Building Bridges for Global 
Labour Mobility".  She said that concrete progress on mode 4 required the participation of migration 
officials and trade negotiators, which had been a ch allenge.  Four fundamental issues needed to be 
addressed.  Firstly, mode 4 as a term was familiar to trade negotiators but was unfamiliar to the migration community and was a category which cut across many migration categories.  Secondly, multilateral trade was characterised by the most-fa voured nation principle, whereas for migration 
countries were treated differently through different  arrangements.  Thirdly, binding commitments 
were sought in trade, whereas migration officials sought flexibility.  Fourthly, in trade circles, 
agreements were reached through negotiation and discussion, whereas migration policy was largely an 
autonomous area of national policy.  For migration o fficials, the idea that agreements were reached 
through a negotiating process was somewhat novel.  Gi ven this context, there was some work to be 
done in order to build dialogue and trust.  Turning to  the contents of the meeting, she said that it had 
tried to identify mode 4 in terms of the universe of  migration.  Temporary migration included tourists TN/S/M/12 
Page 10  
 
 and students in this context and the sub-set of temp orary labour-related migration.  The realities of 
managing movement was examined in order to gi ve the migration community the opportunity to 
explain their approaches, either under unilatera l schemes, such as the United States and United 
Kingdom national schemes, under bilate ral agreements such as those by Honduras and Germany, or 
under regional schemes such as NAFTA, CARICOM and APEC.  This gave the migration community 
an opportunity to explain work permits schemes, how workers were selected and the mechanics of the 
system with a view to determining if approaches c ould be used at the multilateral level.  Managing the 
issues related to migration for both sending and receiving countries was also examined.  The overarching message that emerged was that there were issues which could be managed through 
creative and practical tools, some of which were u sed in other circumstances of adjustment to trade 
liberalization.  Others were tools that migration re gulators had at their disposal.  Issues such as how to 
turn "brain drain" into "brain circulation", how  to manage remittances so that income was not 
channelled solely into private consumption but coul d be channelled into public investment also had 
been addressed.  Mexico had provided useful expe riences in this regard.  Also explored was the 
question of how developing countries could leverage mode 4 into othe r forms of trade.  Perspectives 
of the union movement, employers and governme nts in receiving countries were given about 
managing labour market impacts.  Examined too were the forms of co- operation between home and 
host countries that was necessary in order to ensure the temporary nature of mode 4 stay and building 
the kinds of coordination in government to create this co-operation.  The last day of the meeting 
looked at the GATS and the prospects for making progress.  Issues discussed included the kinds of workers that should be focused on, issues related to skill level, duration of stay, issues related to the 
nature of service provision, such as through a contract or an intra-corporate tran sferee.  The usefulness 
and implementation questions related to a GATS vi sa were addressed, including how to ensure that 
such a visa would be faster, cheaper and easier than  existing visa schemes.  Regulatory transparency 
to improve access, areas susceptible to progress in the short- and medium-term and necessary 
complementary policies were also discussed.  In essence, the question asked was how to move from 
the current situation to a predictable multilateral fram ework.  In this regard, three priorities for the 
future were identified.  The first was to find  a common language, since it was difficult to make 
progress if stakeholders were not using common term inology.  The harmonization of the terminology 
was a long-term goal, not solely between the trad e and migration communities but also between the 
migration communities in different countries. Howe ver, understanding the terms used by others could 
be useful.  A clear understanding of what was meant by mode 4 in a practical sense would be helpful 
particularly for government.  The second area th at would require work was on understanding the 
potential impacts of mode 4, the issues and tools re lated to its management and the policy responses 
available governments.  Building bridges in this  sense would make a difference in successfully 
liberalizing mode 4.  In order to make informed  choices, more research was needed on the benefits, 
the costs and the impacts on developing countries with different pools of skills in different sectors.  
There could be sectors with and without short-term pr essures that needed to be managed as required.  
The types of technical assistance and capacity build ing that might be needed to support countries in 
devising complementary policies such as visa mana gement or recognition of qualifications was 
another possible area identified.  More work was also needed on identifying practical ways of 
facilitating movement, such as the type of visa sche mes which might be effective in comparison to 
current schemes.  There existed many bilateral agre ements and regional arrangements to build into 
this work.  She said that businesses would continue  to recruit skills globally and against this 
background, the GATS negotiations could create th e sense of urgency to bring the stakeholders 
together to find solutions to real-world challe nges.  The GATS provided an opportunity to address 
these challenges in a more regulated, predictable and beneficial manner. 
26. The representative of the International Organization for Migration
 said that the IOM was 
prepared to conduct additional work with regard to areas outlined by previous speakers.  She recalled 
that a second seminar was scheduled for 4-5 Octobe r and on the heals of the Special Session's meeting 
in the hopes that many capital experts would be in  Geneva.  She said that the seminar was being 
jointly organised with the WTO and the World Ba nk with support from colleagues from OECD and  TN/S/M/12 
 Page 11 
 
 
 UNCTAD.  The meeting would seek to take the work  a step further and deeper to understand the 
regulatory framework that had been referred to and to focus discussion on the temporary movement of 
persons and the tools that governments used to effect uate this movement.  She said that these topics 
would be examined at the national, bilateral and regional levels through a series of case studies to 
explore the legislative frameworks, administrativ e mechanisms and policies governments used to 
facilitate the movement of persons for temporary wo rk and to identify, within the broader movement, 
mode 4 related movement.  It was hoped that the examples could provide insights for the mode 4 
context about what might and might not be possible or better pursued through other fora.  The seminar 
sought a practical focus and brought the trade and migration communities together with a view to 
helping fill gaps in terminol ogy and language and promoting the understanding of each group's 
priorities.  She agreed with the representative of  the OECD that the migration community saw the 
issue from a very different vantage-point than the trade community.  GATS mode 4 commitments 
were the only multilateral treaty commitment with respect to the movement of people. While the scope was limited in terms of migration, for the migration community it was significant owing to its 
uniqueness.  The rest of migration management t ook place principally through  national level schemes, 
secondarily through bilateral agreements and, in  a much more limited manner, through regional 
agreements.  She said that only in the last few y ears had the migration community begun to examine 
the possible win-win situations referred to by the representative of UNCTAD and benefits in light of 
demographic and labour market projections.  Howeve r, she said that there was no running impetus on 
the part of the migration community with respect  to the full range of migration management.  
Nonetheless, she said that there might be room fo r some progress in the WTO context, although the 
migration community needed to better understand the WTO agenda, as well as the implications for 
their national immigration schemes.  She said that the seminar was meant to be informal and a learning exercise and not meant to become part of the negotiations.  The objective was to bring trade 
and migration officials together so that they unde rstood each others' priorities and created some clarity 
to serve as a backdrop to the work of the WTO.  It  was not meant to be a forum for negotiation, but 
rather provide an opportunity to examine practices of migration management and ask whether any of 
the information exchanged could be of use to the mode 4 negotiations.   
27. The representative of the World Bank
 sought to underline two points that were fundamental 
and explained why the World Bank was participati ng in work to better understand the relationship 
between mode 4 and migration.  He agreed with his colleagues that the trade and migration communities used very different language.  He recalle d that one of the points that had struck him at 
the seminar in 2003 was the position held by a num ber of experts from the migration community, 
namely that there was nothing more permanent than  temporary labour movement.  This was a very 
different perspective from the trade perspective.  Therefore, to seek more clarity and common terms 
across the two communities would be very helpful fo r those in the trade community to learn about 
best practices that could be used effectively in  the context of the negotiations.  Secondly, on the 
relationship between mode 4 and m ode 1, he said that the World Bank had recently released a study 
on the Indian services economy, which supported othe r findings that the complementarity of these 
modes of services supply was significant, particularly  the higher the value-added of the service.  He 
said that countries should take this reality into account when making commitments or making requests 
of their trading partners, as well as consider how th ese commitments might result in efficiency gains.  
In this respect, he said the discussion went beyond mode 4.  Drawing a parallel, he recalled having 
taken part in seminar on the phase-out of the Ag reement on Textiles and Clothing, which had also 
broached issues on trade facilitation and services wh ich supported exports to better prepare countries 
for the transition.  The importance of taking into account all portions of the negotiations in a holistic 
manner with a view to improving the welfare of each country and the world economy as a whole had 
been emphasised.  He said he looked forward to discussion at the Trade and Migration Seminar on 
how to further improve the possibilities of gain s through mode 4 and learn from the migration 
community.   TN/S/M/12 
Page 12  
 
 28. The representatives of India
, Ecuador , Pakistan , Colombia , Chile , Peru , Kenya , China , United 
States , Mexico , European Communities , Indonesia , Venzuela , Norway , Philippines , Thailand , Brazil , 
South Africa , Japan , Australia , Switzerland , Chinese Taipei  and Canada  expressed their appreciation 
to the representatives of UNCTAD, the OECD, the IOM and the World Bank for their interventions. 
29. The representative of India  recalled that a group of developing countries had presented an 
earlier proposal on mode 4 in the Special Session and th ey had thought that it might be useful to draw 
some lessons from the two seminars dealing with m ode 4.  It was in this context that the two 
presentations had been made.  Referring to some of the points that had been raised in the presentations and included in the group's proposal, he stated that one point that came across clearly was that the 
issue was not limited to developing countries, although the interest of others in mode 4 had been 
noted.  He recalled that the discussion included cons ideration of world welfare and efficiency gains 
that concerned all.  A second i ssue raised was the relationship between permanent migration and 
national migration policies and legitimate concerns that Members had with mode 4.  The need to 
examine these two issues more closely was appare nt, and from the angle that there was a close link 
between them.  National, bilateral, regional a nd multilateral experiences provided food for thought on 
how the two could be distinguished and separated .  He thought this would help Members identify 
practical ways forward in the current round.  He  said that improved ma rket access commitments 
where central, but not the whole story, because if ot her regulatory issues were not considered market 
access commitments would be made less meaningful to that extent.  Rather, a combination of market 
access and regulatory issues were important to ensu re effective market access in mode 4.  The 
complementarity of the two was an issue India sought to draw upon.  In terms of market access 
commitments, he reiterated the need for categori es, though he refrained from going into detail on this 
point given the forthcoming informal meeting of the Council.  While a harmonization of categories 
was perhaps not feasible, he said that an unders tanding, and preferably a common understanding, of 
these categories would be a contribution to work.  The studies and seminars indicated that the category of contractual service suppliers was an issu e which should be explored much further in the 
round.  Finally, he said that issues related to regulatory transparency and those related to 
administrative procedures (such as ENTs, work perm its, recognition etc.) had been raised, and it was 
clear that progress on these complementary issues w as necessary to avoid nullifying or impairing 
benefits negotiated.  Some balance in these two area s was a message he sought to highlight.  He said 
he would reserve further comments for the scheduled informal meeting.   
30. The representative of Ecuador
 reaffirmed the vital importance of mode 4 liberalization to 
Ecuador.  She said that 16 per ce nt of Equator's population was work ing on a temporary basis and that 
remittances were the second most important source  of revenue, after oil production, and totalled 
$1.4 billion to date in 2004.  She said that there ha d been mode 4 liberalization outside of the GATS 
because countries had worked to establish rules in ar eas that the WTO should have been working on.  
She said that in Ecuador, through such processes,  a number of neighbouring countries were accepting 
workers in construction, tourism and software progr amming.  The most affected countries were Peru 
and Colombia.  Referring to the trade and migrat ion seminar, she said that, subsequent to the 
publication of documents from the seminar, Ecuador  had set up a commission to explore trade and 
migration issues, which had engaged in a dialogue .  She hoped that the forthcoming seminar would 
provide further input for this commission.   
31. The representative of Pakistan , referring to comments about workers' skill levels, noted that 
Pakistan was known for its ability to manufacture match-quality footballs wh ich required a special 
skill that Pakistan was in fact imparting to manufact urers in other countries.  Secondly, she said that 
remittances not only increased GDP, but had additiona l beneficial effects since families receiving the 
funds could extend the development gains to their fa milies.  This was the shortest route through which 
gains from world development could trickle down to poor portions of society.    TN/S/M/12 
 Page 13 
 
 
 32. The representative of Colombia  reiterated the considerable intere st that this topic had raised 
among developing countries.  Colombia felt that it was important for a step forward to be taken in this 
area.  The main reason was that Colombia was a skills, and not a capital, exporter.  Progress was 
fundamental in order to increase Colombia's trade in services.  She said that studies had shown that 
interesting progress had been made bilaterally and regionally.  What was needed was a multilateral 
framework and effective liberalization in mode 4.  Effective liberalization would imply better market 
access and national treatment commitments, but al so would imply an elimination of regulatory 
barriers to trade, which hampered an increase in trad e.  In this respect, she said it would be interesting 
to examine examples of best practices, such as in the United States and the United Kingdom, as 
mentioned by the representative of UNCTAD, as well as the example of the business travel card 
agreed to through APEC.   She said that these exampl es could be further explored in the negotiations.  
She said that a recent World Bank study had demonstr ated that, in Colombia, remittances constituted 
the second source of earning after oil income, or 3.5 per cent of Colombia's GDP.  Referring to some detailed studies undertaken in Colombia, she said th e greatest barriers to trade were administrative 
measures resulting from visa application procedures.  In this regard, her country had been working to 
find solutions to some of these issues.  Echoing comments by the representative of the OECD, she 
said that confidence needed to be built between trade negotiators and migration experts.  She also 
agreed that Members should consider trade facilitation in services.   
33. The representative of Chile
 agreed that the papers highlighted the important relationship 
between mode 4 and migration rules.  He und erlined the relevance of good channels of 
communication between migration authorities and trade officials.  He said that there was a great deal 
of work that was yet to be achieved on this i ssue.  He supported continued initiatives for dialogue 
between the trade and migration communities, includ ing on a regional basis, as these could contribute 
to an improvement in the understanding and awaren ess between the two.  Chile  was pleased to note 
the development of the Council's discussions on th e importance of mode 4 liberalization and the 
problems and characteristics associated with it.  The time devoted in formal and informal mode 
constituted important steps towards greater awar eness of the importance of making progress on the 
liberalization of mode 4.  Referring to the eff ective use of access opportunities under mode 4 and its 
relationship with migration aspects implicit in mode  4, he said it was important, as outlined in the 
UNCTAD paper, to have an in-depth assessment an d analysis of national and regional experiences 
regarding the temporary entry of business persons a nd service suppliers.  He said there were a series 
of elements with respect to the facilitation of ad ministrative migration procedures and in terms of 
setting up principles of transparency which could be useful in the context of the multilateral 
negotiations.  He noted that Chile had addressed thes e issues in the WPDR and in Chile's experience 
through the inclusion of chapters on the moveme nt of business persons in trade agreements and 
through APEC's use of the business card.  He said th e experiences were useful and could be analysed 
and used in the context of the negotiations.  Referri ng to the relationship betw een mode 1 and mode 4, 
he said this relationship required more analysis and would become more relevant in the negotiations.   
34. The representative of Peru  supported fully the initiatives, seminars and studies undertaken.  
He said that the aim was to increase awaren ess and improve understanding between trade and 
migration officials.  Another issue to be bor ne in mind was the positive approach that these 
organizations had, particularly UNCTAD, and specifically the win-win nature of mode 4 
liberalization.  Echoing comments by Ecuador and Co lombia, he said that many Peruvian families had 
benefited from the remittances sent by those using de facto  mode 4 movement in other countries.  He 
said that these countries benefited from the greater ef ficiency and improved costs, a fact which should 
be borne in mind.  He said that, in order to en sure the round was a development round and increase 
the participation of developing countries in trade in  services in particular, Me mbers needed to ensure 
meaningful results in mode 4.  He agreed with the comments made by India that market access and 
national treatment commitments in mode 4 were im portant objectives, however, sight should not be 
lost of domestic regulation.  Pe ru supported initiatives to improve transparency and good practices.  
Peru also supported any initiative related to trade facilitation in services.  He thought that all should TN/S/M/12 
Page 14  
 
 bear in mind that business travel was one aspect c overed by the GATS, however, it was not limited to 
this aspect and included other categories of services suppliers that were not necessarily connected to 
mode 3 or business travel.   
35. The representative of Kenya
 said the presentations, particularly that of UNCTAD, had 
highlighted a number of points his delegation sought to emphasise.  Kenya shared the view that the 
liberalization of the movement of natural persons o ffered the greatest benefits to developing countries 
and was a most effective tool to develop the increa sing participation of deve loping countries in trade 
in services and to reduce poverty.  Commercially m eaningful liberalization in mode 4 was a litmus 
test for the development content of the DDA work pr ogramme.  He noted that, in comparison to other 
factors of production, the liberalization of the move ment of the natural pers ons lagged behind.  He 
said that it was important that the existing asymmetr y for labour and the ability for natural persons to 
supply it across boundaries should be effectively addr essed in the current negotiations.  He took note 
of the need to distinguish between the temporary movement of natural pers ons as it related to GATS 
and migration issues.  He said that confusion on this account had led to reticence to liberalize in 
mode 4.  He said that for progress to be made the tw o needed to be differentiated.  He agreed with the 
point made by the OECD for an improved dialogue between trade and migration communities in order 
to reach a common understanding and avoid confusion.  Referring to comments on brain drain and its 
consequences in the context of the liberalization of mode 4, he said that these consequences were 
often exaggerated.  In the case of Kenya, 30 pe r cent of professionals were unemployed and he said 
that mode 4 liberalization, accompanied by appropria te national regulations, and the question of brain 
drain could be resolved.  He underlined various factors raised in the UNCTAD presentation that 
affected the liberalization of mode 4 and were n ecessary to achieve meaningful progress in mode 4.  
These included regulatory issues, ENTs, recognition and various recommendati ons.  He recalled the 
recommendation to adopt similar procedures in the ar eas of visas and work permits.  He said that 
these issues should be taken up in the same manner in which similar customs procedures were being 
discussed in the area of trade facilitation.  He also  felt that a common list of occupations would add 
predictability, improve comparability and enhance the value of commitments.  He suggested that work 
in the ILO in this regard would be an appropriate starting point.   
36. The representative of China  fully agreed with the points made and said it would provide a 
sound basis for the forthcoming informal meeting and for the future negotiations on mode 4.  
Referring to the OECD paper that ha d been discussed under the previous agenda item, he said that this 
paper pointed out certain services sectors in which developing countries appeared to be successful.  
However, he said that the presentation on mode 4 gave further direc tion and guidance on how 
developing countries could increase their participation in trade in services a nd contribute to the world 
economy.  He said that were positive results to  be achieved on mode 4 in the current round, 
developing countries would make big step forward in  increasing their participation in world trade and 
the world trading system.  On the specific issues raised, China sought to emphasise the point that with 
respect to mode 4, regulatory issues, including vi sa procedures, were of as much importance as 
market access and national treatment.  He felt that the IOM-OECD-World Bank paper would be 
useful in future discussions.   
37. The representative of the United States  took note of the interest that had been expressed in 
mode 4, as the United States had done in the past in  the Special Session and several other bodies.  She 
noted that mode 4 was of interest to developed countries and developing countries alike.  She sought 
to highlight the fact that, in pursuing the interests of mode 4, in particular for developing countries, 
Members did not to render mode 4 a panacea in the negotiations.  She said that there were a number of sectors and modes of supply that were highly important to the technological and infrastructural development of the economies and ma npower of developing countries.  She said that without this type 
of emphasis in the negotiations, it could appear that remittances could eventually enter into a vacuum.  
Economies could not survive on mere remittances, esp ecially given that, for many of the developing 
countries, services represented over 50 per cent of GDP.  For many countries the litmus test was much  TN/S/M/12 
 Page 15 
 
 
 broader than mode 4.  Referring to the relationship between mode 4 and mode 1, she said that she had 
perceived two layers in this discussion.  She stated  that it was important for developing countries not 
to be left behind in the negotiations and that they participate effectively and actively in the 
negotiations.  She said that, were developing countri es to focus exclusively on mode 4 in the belief 
that it would be the shortest and fastest path to  success in the services negotiations and with the 
intention to investigate at a later point in time areas of importance to their investment and 
infrastructural development and manpower enhancement,  an unfortunate skew of  imbalanced benefits 
from the services negotiations for developing countri es would occur.  She recalled that when the 
negotiations began in 2000 an emphasis from deve loping countries had been put on tourism and 
several other sectors, for whic h there was less emphasis, although she did not believe that the 
proponents of those proposals were any less interested  in those sectors.  She said that she had heard 
much information from developing countries on ener gy services and hoped to hear more about other 
sectors in addition to the interest in mode 4.  Sh e said that many developing countries were at the 
incipient stages of the negotiations and had re gistered their concern about falling behind on 
assessment and identifying where th eir strengths and weaknesses were in the negotiations.  She hoped 
that Members would not become distracted and c onclude that mode 4 was all that the services 
negotiations had to offer. She had taken note of the points raised by  Ecuador and Peru, namely that 
sight should not be lost of the economic, political a nd social regional concerns with respect to mode 4 
which included the fact that many developing countries were dependent on neighbouring trade flows 
and that South-South trade flows were not a developi ng-developed country issue.  It was an important 
issue for all countries and the trade flows were  multifaceted.  She said that mode 4 was not 
exclusively a mode which touched upon mode 1, but also involved local employ ment benefits through 
mode 3, which brought the technological input and the recognition and qualification elements that 
others had referred to.  In conclusion, she sai d the discussion had been a good one and she looked 
forward to the comments by other delegations re garding their enthusiasm on this issue.   
38. The representative of Mexico  sought to highlight a few points of interest that had been raised 
by the speakers.  He said that a clear dialogue n eeded to serve as the basis for a better understanding 
between trade and migration officials at the national level.  He said that Members should tackle in a 
clear and objective manner the relationship between the two topics with a goal of improving the image of the free movement of persons for the provision of services.  He said that the presentations by prestigious personalities from various  institutions who would participat e in the seminar would serve to 
build a closer relationship.  He said that Mexico w ould share an experience that it had in its region on 
this issue.  He said it was necessary to seek a positiv e effect within government  to try and demonstrate 
that the facilitation and liberalization of mode 4 would not mean a loss of sovereignty or decision-
making power with respect to migration polic y, both in terms of policy elaboration and 
implementation.  He reaffirmed that Mexico was open to dialogue that aimed to contribute to the 
improved understanding of various issues.  He sai d that processes and dialogues had been initiated 
within sectors and among stakeholders in Mexico.  As some of the preceding speakers, Mexico was 
also interested in other modes and sectors and no t only mode 4.  Mexico had demonstrated its 
interests in various modes and sectors through its par ticipation in friends groups.  He said that another 
topic which should be tackled in depth, and perhaps w ith the participation of the institutions that were 
present, was mode 1 and its relationship to liberaliza tion of international trade in goods and services.  
He said it might be useful to explore the results of  extent greater liberalization in trade in services 
with participation by developed countries and developing countries.  Mexico would naturally express 
the most interest in developing country issues in line with the mandate in Article IV in order to 
achieve progress in sectors and modes of interest to developing countries.   
39. The representative of the European Communities
 recognised that mode 4 was an important 
issue for the round and looked forward to the forthcoming seminar.  As a previous speaker had 
pointed out, he thought it was important not to make mode 4 the sole litmus test of whether the round 
was a success or not.  The European Communities was convinced that important progress could be 
made in the round on the question of mode 4, but believed that it was important in this regard to TN/S/M/12 
Page 16  
 
 manage expectations and in partic ular not to raise expectations to the level that would lead to 
disappointment, in particular in the area of uns killed labour.  He echoed comments from Kenya that it 
was important in the debate to continue to make a clear distinction between temporary movement and 
migration.  Confusion on this point would risk  setting the discussion back considerably, and thus, 
clear terminology was critical to make progress.  Referring to the presentations, he thought that two 
points could be added.  Firstly, with regard to intermodal linkages, the linkage to mode 3 was not 
highlighted, particularly in the outsourcing cont ext, the role of which he said should not be 
overlooked.  Secondly, he wondered if any speaker could elaborate on the importance of South-South 
trade in mode 4.    
40. The representative of Indonesia
 considered that the presentations had been beneficial and 
added to the discussion on mode 4.  He shared the finding from the UNCTAD Expert Meeting that 
services supplied through mode 4 could be a win–w in welfare situation for both developing countries 
and developed countries, insofar as the right polic y and regulation framework at the national and 
international levels were present.  He also shared the observation that liberalization of mode 4 was an 
effective tool in addressing the primary developmen t needs of developing countries, and particularly 
in terms of alleviating poverty and creating other be nefits.  He said that these benefits would only be 
realised through a strong political commitment at th e multilateral level to establish a framework to 
which Members, especially developed countries,  would provide comprehensive and commercially-
meaningful market access commitments in mode 4,  particularly in sectors of export interest to 
developing countries.  In this regard, he recalle d paragraph (d) of Annex C of document WT/L/579.  
Referring to paragraph 7 of the UNCTAD Expert M eeting Report and the scope of mode 4 under the 
GATS, he recalled that the experts had advocated that GATS cover all categories of natural persons 
supplying services in order to achieve commercially meaningful market access.   In contrast, some 
Members, mostly developed country Members, main tained that the liberalization of mode 4 should 
not be interpreted in too wide a scope.  In th is regard, he referred to the GATS Annex on the 
Movement of Natural Persons, and in  particular paragraph 3, that a Member had the right to negotiate 
specific commitments implying the removal of all categories of natural persons supplying services 
irrespective of their skill level.  Indonesia welc omed the further work suggested at the UNCTAD 
Expert Meeting as outlined in paragraph 53 of the re port, especially in the areas that would facilitate 
the movement of natural persons to supply ser vices and would contribute to a comprehensive 
understanding of the matters discussed.  He ur ged UNCTAD to carry out a further and deeper 
assessments on mode 4 in co-operation with othe r relevant international organisations.   
41. The representative of Venezuela  said that for her delegation liberalization and mode 4 were 
important issues for developing countries.  She said th at the elements at play and the consequences of 
the liberalization of mode 4 needed to be examin ed.  She had been struck by the linkages between 
modes and how these linkages led to export potential under mode 1.  Some delegations had referred to 
the absence of mode 3 in the studies and, in th is regard, she recalled the proposal submitted by 
Colombia and other developing c ountry delegations which called for a de-linking of mode 4 from 
commercial presence.  The difference in approach required further reflection as Members sought to 
achieve a convergence of their interests.  Venezuela said that an assessment of the conclusions of the 
studies was needed in the Special Session and within countries which took into account national legal 
frameworks.  Development policy objectives should be in cluded, she said, in this analysis.  In this 
respect, she welcomed the statement by Kenya.  She thought that a sharing of national and regional 
experiences could be a further cont ribution to the negotiating process. 
42. The representative of Norway  said that efforts should be expende d to define different kinds of 
migration in order to have a common basis for discussion.  Administrative practices were very important as was transparency.  Hi ghlighting the international maritim e transport sector, he said that 
this sector was open for migration and constitu ted a good example from which lessons could be 
learned.  He encouraged Members to take commitments in and learn from this sector.  TN/S/M/12 
 Page 17 
 
 
 43. The representative of the Philippines , referring to the presentation by UNCTAD, said that it 
had spoken to the economic importance of mode 4 as a tool for sustainable economic development for 
developing countries and insofar as the political cont ext of the round.  From his perspective, the 
negotiating round offered an opportunity to conclude  in a satisfactory manne r the unfinished business 
of the Uruguay Round.  He did not view mode 4 as the "be-all and end-all" of the negotiations, 
however, for most developing countries, which we re drawing upon a preliminary assessment of trade 
in services, this area held the most potential benefit.   He recalled that under the assessment of trade in 
services a number of developing countries had pr esented a paper that had found that there was 
potential for trade in mode 4 for the proponents.  While other Members had underlined the importance 
of other sectors and modes, he said that for many developing countries the liberalization and 
regulatory reform of mode 4 would remain the litmus t est of the balance in the interests of developing 
countries that had been achieved in the negotiations .  He could not overemphasise the point that the 
round was a developmental round.  Referring to th e second presentation, he underlined the need to 
establish a level of common language.  Although this was a long-term goal, in the context of the 
negotiations it was an essential element for agreemen t in order to achieve liberalization and regulatory 
reform.  The potential impact and benefits from mode 4 liberalizati on had been clearly established.  
Finally, he underlined the need to facilitate moveme nt in mode 4.  With reference to the issue of 
common language, he said that the Trade and Mi gration Seminar had helped to initiate contact 
between migration and regulatory authorities and tr ade negotiators.  While he welcomed the follow-
up session and the informal Special Session, he said it was necessary to continuously engage, in the 
period between these major events, in order to cont inue to further understandi ng between the various 
communities.  He said this could help inform tr ade negotiators and provide comfort to them to 
undertake commitments because they would have been based on a common understanding.  He said 
he would revert to the papers in the forthcoming informal meeting. 
44. The representative of Thailand  said the movement of persons was a natural corollary of trade 
and particularly developing countries stood to gain  from the social and economic gains that would 
flow from mode 4 liberalization.  She concurred that mode 4 was an important instrument in 
furthering the object and purpose of Article IV and th e DDA.  In this regard, she strongly agreed with 
UNCTAD on the suggestion for a model schedule, the key role played by recognition of experience 
and non-formal education, and about  the inclusion of other categories of natural persons.  With regard 
to the report of the OECD-IOM-World Bank, she said that she had noted the rivalry between, on the 
one hand, indiscriminating trade interest of ma ximising profit and efficiency gains through free 
mobility and, on the other, discriminating socio-political  interests, in particular social integration and 
security concerns.  She said it contained valid ar guments, such as recognition, for greater market 
access in mode 4 that were worth pursuing.  The paper also delineated between service suppliers and 
generic job seekers.  She endorsed the idea that common ground could be reached through increased 
transparency, the reduction of administrative and pr ocedural requirements and in particular visa 
requirements, and increasing national and internatio nal co-operation between the trade and migration 
communities.   
45. The representative of Brazil  had noted two main challenges in the debate on mode 4.  He 
endorsed the comments by Mexico, namely that Members should seek to avoid a prevalent tendency to portray mode 4 as containing a uniqueness within trad e in services that would, at the end of the day, 
be used to justify a lack of commitments.  Ther e was a difference in perceptions between regulators 
and trade negotiators in terms of migration and GAT S movement of persons.  He did not think that 
this difference in perception was any different from th e one in relation to mode 3 or other sectors.  He 
said that a few years earlier, in Brazil, allowing access through commercial presence in telecommunications was looked upon negatively.  Ho wever, working together, this perception had 
changed.  Other sectors remained sensitive due ma inly to misperceptions such as in education, 
environmental or audio-visual services.  Similar problems persisted in these areas.  The difference in 
perception between trade negotiators and regulator s was a horizontal issue and was not unique to 
mode 4.  This fact needed to be borne in mind so th at this misperception was not used to justify a lack TN/S/M/12 
Page 18  
 
 of commitments.  He reiterated that the movement of natural persons needed  to be de-linked from 
mode 3 and could stand alone as a mode of supply.  Referring to co mments made by the United States 
and the European Communities that mode 4 should not be seen as a panacea or litmus test for the 
round, he said that each country was capable of id entifying their interests and that a number had 
identified mode 4 as their main trading interest.  He sa id that this was legitimate and did not think that 
they should be advised repeatedly to seek another set of issues and not focus their efforts on one issue.  
Brazil was willing to broaden its portfolio of demands  and said that, with others, Brazil would shortly 
be tabling a proposal in tourism services and hope d to do the same for distribution and computer 
services, including in terms of mode 4.  The fact that developing countries had concentrated their interest in mode 4 was very positive and he did not think that its importance should be diminished by 
suggesting that other interests should be found.  He also took issue with the notion that proposals 
needed to take into account all Me mbers.  He said that the pattern of trade among Members flowed 
from different interests:  trade might involve a limi ted number of partners, tr ade with these partners 
might be addressed through a free-trade or preferential agreement.  The Special Session in this context 
might be used to focus in on certain restrictions  applied by certain Members.  It was not his 
impression that a proposal needed to address Members in  a universal fashion.  The fact that bilateral 
consultations during clusters focused on a limite d number of Members, as opposed to all Members, 
testified to the fact that each Member's interest s concentrated on a particular set of Members and 
sectors.  He said it was important to raise this issue and to remind Members that this process was legitimate, and that there was no requirement to dilu te requests over a broader range of Members.  He 
requested that the presentation from UNCTAD be circul ated as a job document.  He further requested 
that UNCTAD indicate the events related to mode 4 that were planned until May 2005 so that his 
delegation could benefit from them to indicate its expectation of offered commitments in mode 4 in 
the revised offers.   
46. The representative of South Africa
 said her country was one of the developing countries that 
had been working with other developing countries to  reiterate that meaningful commitments in mode 
4 formed a centrepiece of its developmental objectives.   It was an issue that it would examine with 
keen interest.  Referring to the issue of South-South migration and agreeing with India, she said that it was not an issue for developing countries alone, nor was it a North-South issue.  South Africa received and sent persons and therefore was both gaining and losing skills.  Her delegation was 
therefore interested in discussing the management of the movement of persons in an honest and 
creative dialogue.  Like India and Peru, she agreed  with the need to differentiate between the 
permanent and temporary movement of people.  Turn ing to an example that pertained to the health 
sector, she said that South Africa had signed a b ilateral agreement with the United Kingdom.  Skilled 
professionals were going abroad and the government was unable to keep these professionals in South 
Africa owing to attractive pull factors.  She said that the health ministries had discussed how to 
manage this movement, which had led to a pilot ag reement in which some professionals could travel 
to the United Kingdom.  However, the United Ki ngdom would identify the areas in which they 
required skills and the South African government, in  collaboration with the relevant associations, 
would identify people who could be  made available.  Moreover, th e movement would not be one-way, 
but professionals needed in South Africa would come from the United Kingdom in a managed fashion.  She underlined that the arrangement was only a pilot project.  However, she said that these 
types of examples could be discussed to find wa ys to advance the discussion on the managed 
movement of persons that would be a win-win for those involved.   
47. The representative of Japan
 recognised the importance of mode 4, however, he said that the 
liberalization of mode 4 should not be pursued separ ately from other areas, as it was one element of 
all economic activities.  From Japan's standpoint as a net importer of services, liberalization of trade in services was not necessary for th e purpose of exports of certain sectors.  Liberalization of services 
sought to create a sound environment for business persons to carry out activities, including 
investment.  He agreed that mode 4 was an importa nt aspect in this regard and noted that Japanese 
industries were willing to allow some movement, incl uding with developing countries.  However, he  TN/S/M/12 
 Page 19 
 
 
 said that this was not the sole objective of liberaliza tion, but rather was one of the activities needed to 
create a favourable environment for future investme nt, including FDI.  He said this was an important 
basis for future development, growth, and employment.  With respect to the UNCTAD reference to the interlinkages between modes, and particularly the interlinkage between mode 1 and mode 4, he 
said that more analysis of other interlinkages, incl uding in mode 3, was necessary.   Japan thought that 
the interest of developing countries in mode 4 need ed to be taken into account, but also that mode 4 
alone should not be a litmus test.  Echoing a comm ent by the European Communities, he recalled the 
limited aspects of movement of natural persons as defined in the GATS, and that the movement of 
natural persons did not incl ude migration or job seekers.  He further recalled that Members had certain 
rights as outlined in the Annex on the Movement of Natural Persons to ensure orderly movement.  
These features needed to be taken into account.   
48. The representative of Australia
 agreed with the comments that had been made regarding the 
gulf that existed between the trade and migr ation communities in the way each operated and 
approached the issues.  He said that he had f ound the Trade and Migration Seminar an extremely 
useful bridge-building exercise.  He said that progress was being made, although slowly, in bridging 
the conceptual gulf between the two communities.  He  said that Australia was constantly reviewing its 
immigration and temporary entry programmes to ach ieve greater simplification, efficiency and 
transparency.  He believed that further progress could be made on mode 4.  He agreed with those that 
had urged caution in terms of how much progress w as likely and how quickly it would be made.  He 
pointed to certain national interests in Australia th at remained paramount in regulating the temporary 
movement of natural persons a nd included safeguarding labour ma rket opportunities for Australian 
residents, the need to maintain a skilled workforce, and ensuring th at access to social welfare systems 
was restricted to citizens and permanent residents.  Despite this word of caution, scope for work on 
mode 4 remained. 
49. The representative of Switzerland  agreed that harmonisi ng language and facilitating 
communication between the trade and migration communities was a important step to a common 
understanding of the meaning of mode 4 and a differentiation between temporary and permanent 
migration.  She recalled the comment from the re presentative of UNCTAD that the question was not 
whether gain would occur, but rather how mode  4 would bring gains.  She acknowledged that 
regulatory issues played an important role, such as wi th regard to questions of wage parity.  She said 
that linkages between mode 1 and mode 4 and betw een mode 3 and mode 4 were important, as were 
some linkages outside of the GATS, for instance  with relation to trad e in industrial goods.  
Switzerland agreed with the win-win aspect of mode 4 with respect to all Members.  Mode 4 was not 
simply a North-South question and vehicle for trade,  but had important North-North, South-South and 
neighbouring countries trade implications.  Referri ng to the request-offer process, she said that, 
although much work could occur horizontally with regard to streamlining administrative procedures 
or transparency aspects, progress need ed to occur in the request-offer b ilateral process.  She said that 
if mode 4 was to be of benefit to every Member, every Member should endeavour to participate in the 
request-offer process.  It was through this cha nnel that was pursued the objective of increasing 
commitments in a number of categories of services providers, including with regard to mode 4.     
50. The representative of Chinese Taipei  agreed, as indicated in th e UNCTAD paper, that the 
liberalization of the movement of labour across borde rs was unfinished work of globalisation.  There 
were a variety of trade barriers in the supply of servi ces.  He recognised that there was a lack of detail 
regarding the means through which services deliv ery could be achieved through the presence of 
natural persons.  He said that the papers under di scussion would be the basis for structuring future 
work in the negotiations.  He emphasised that, a lthough mode 4 interacted with other modes and 
included regulatory issues, sight should not be lost of other modes.  He considered it important to 
differentiate between the temporary and permanen t movement of services providers through natural 
persons. TN/S/M/12 
Page 20  
 
 51. The representative of Canada
 said that the work of the organisations which had made 
presentations was helping to make progress in mode 4.  It was important that trade and migration policy officials better understood each other's persp ective.  Along with the proposals that several 
delegations had made forma lly and informally in the negotiations, the work of these organizations and 
the reports were helping Members to focus on the di versity of issues in mode 4.  They were also 
helping because they suggest ed ways to move forward.  He said that a challenge in the negotiations 
laid before Members if they sought to make progress in mode 4.  He agreed with the representative of 
the OECD that building trust between migration and trade policy makers was important and that this 
trust would improve dialogue a nd understanding.  Although this was a good first step, more was 
required and he did not think that it alone would necessarily lead to sufficient progress in mode 4 in 
the negotiations.  He suggested that the reports a nd proposals made by Members should be read with a 
view to identifying specifi c issues and practical ways that were susceptible to leading to an outcome 
in the negotiations.  He stated that not all migr ation issues related to the temporary movement of 
people could necessarily be negotiated or reso lved in the Council's discussions.  The GATS 
negotiations did not contain all solutions related to  the management of foreign workers.  He thought 
that Members were at an early stage of stock-taki ng.  In taking up the reports and looking at specific 
areas it was important to bear in mind the May 2005 deadline for impr oved offers.  Several 
delegations had cited transparency with regard to mode 4 as one area  of importance, in addition to 
liberalization with respect to mode 4.  Some de legations had stressed that mode 4 should not be 
viewed as a litmus test.  Many had said that mode 4 was important and Canada agreed in this regard.  
The UNCTAD presentation had stressed the win-win possibility and Canada agreed in this regard 
with respect to all the modes, which were interrela ted.  Mode 4 was not the whole story, but was as 
important as the other modes.    
52. The representative of UNCTAD
 thanked delegations for the comments and said they would 
be taken into account.  She sought to respond to some of the issues raised and which had been 
discussed in the Expert Group and elsewhere in UNCTAD about the future work of UNCTAD in 
mode 4.  On the issue of South-South trade in m ode 4 and commitments, she stated that there was a 
clear difference between  the South-South context of mode 4 and the North-South context of mode 4.  
The Southern context included situations where one  country had higher productivity, wages and job 
opportunities than the surrounding countries.  In Asia and South Asia, inter alia , there was not mode 4 
movement per se , but rather important levels of economic migration.  Most  of this movement was not 
temporary.  By way of contrast, she pointed out that mode 4 commitments involved 66,000 or 
125,000 persons or 1.2 milli on temporary worker permits in the United States.  The scale of economic 
migration in the South was tremendous and moveme nt was fluid since it was difficult to patrol 
borders or enforce regulations.  South-South movement  of services providers was a different universe.  
Commitments could and should be undertaken with  respect to mode 4 that concerned movement 
between developing countries, however, the different context of this movement needed to be taken 
into account.  She recalled that the GATS framework  allowed for countries to set their own pace and 
conditions for liberalization, particularly for deve loping countries, and said that this should be taken 
into account.  She said that there were excelle nt examples of movement between contiguous 
countries, particularly in West Asia from South Asia, and was an important source of remittances for 
the countries concerned.  It was conceivable that  this movement could come under the purview of 
mode 4.  With respect to the increase in productiv ity gains, she said that most of the remittances 
received from mode 4 type trade were transferred from developed countries to developing countries.  
This was explained by the fact that not the volume of trade, but rather the productivity and wage gap between developing countries and deve loped countries was a factor of 1 to 10 or more.  The gains for 
both the developed countries who would hire the service supplier and the developing countries was 
much greater. While South-South movement was important and should be addressed in terms of 
research, commitments and migration, mode 4 was lik ely to remain focused on its North-South aspect.  
With regard to the intermodal aspects, she recalled that she had emphasised this point and its relation 
to promoting trade in services, and said that the key issue was the role of the different modes in 
promoting the participation of developing countries in trade in services.  A first question in this regard  TN/S/M/12 
 Page 21 
 
 
 could be posed:  did developing countries have a competitive advantage in a particular mode?  
Mode 4 was the clear comparative advantage of deve loping countries.  For mode 3, it was true that 
many developing countries were exporting through  this mode, however, they were not capital 
exporters and this was not an area of compar ative advantage for them.  UNCTAD had advocated 
openness in all modes, however, the importance of mode  1 had only come to the fore in the past two 
years.  As the competitive advantages of developing countries in a particular mode became apparent, 
it flowed from this that it would become an importa nt element for promoting their participation in 
trade in services.  She said that mode 2 was important for developing countries and that UNCTAD had done much work in this area.  With resp ect to mode 3, UNCTAD  had conducted and would 
continue to conduct work in terms of its linkages with  the other areas and in terms of sectors.  Mode 3 
was under careful examination, both in terms of FDI and trade in services.  She sought to point to two 
imbalances that had occurred in mode 4.  The fi rst was the unfinished business of the Uruguay Round.  
In this regard, she recalled that mode 4 on th e one hand and telecommunications and financial 
services on the other had been put on the table as  items of interest to developed countries and 
developing countries.  She said that there had b een tremendous movement on telecommunications and 
financial services.  A second imbalance concerned the existing share of trade covered by GATS.  
According to statistics complied by the WTO and UNCTAD, mode 1 represented 25 per cent, mode 2 approximately 15 per cent, mode 3 was nearly 60 per cent and mode 4 between 1 to 5 per cent of 
services trade.  In this light and borrowing the expr ession used by one of the experts in the meeting, 
she said there was reason to believe that mode 4 had received an "orphan's treatment" in the negotiations and in trade covered by GATS.  It was therefore a question of rectification and what 
value mode 4 liberalization could bring.   
53. The representative of UNCTAD announced that from 17-19 January 2005 would be held an 
UNCTAD Expert Meeting on Trade and Development Aspects of Professional Services and Regulatory Frameworks.  This meeting would touch upon many of the issues that required 
clarification in the context of mode 4, such as definitional issues, scope, visa regimes, contractual 
employment arrangements, the features of the global market for professional services, the particularity 
of regulatory issues for professional services, the role of professional associations and how global 
market and regulatory trends were developing in deve loping countries.  It would also look at different 
regional schemes in this area, the contribution of professional services in deve lopment, developed and 
developing country agendas and the positive experien ces and constraints faced.  Questions related to 
the broader GATS negotiations would be discussed, including market entry barriers, visa and work 
permit issues, domestic regulation, mutual rec ognition agreements, and th e relationship between 
GATS Articles V and VII.  She said that a number of studies would be prepared for this meeting and she encouraged those Members which had carried out national assessments of their experiences in the 
area of professional services to share these studies w ith them.  She further announced that an Expert 
Meeting on Strengthening the Participation of Deve loping Countries in New and Dynamic Sectors of 
International Trade in the first week of February  2005.  She said that one section of the programme 
would look at outsourcing in terms of ICT, telecomm unications and the intermodal issues involved.    
54. The representative of the IOM
 said she had been struck by the number of positive comments 
about seeking and achieve greater clarity.  She fo und particularly encour aging Members' willingness 
to find common language between the trade and migration communities.  She agreed with the 
comment by Canada that this was a necessary condi tion, but not a sufficient one; work beyond this 
dialogue was not enough on its own.  She agreed w ith the comments made by the Philippines for the 
need to have an on-going dialogue between the trade and migration communities since annual meetings might not be sufficient to build confid ence and tackle the challenges.  She encouraged 
Member to think of mechanisms along these lines.   She also underlined the comments of the need to 
"narrow the field", since the GATS was not a migra tion agreement.  Trade negotiators needed not 
address the full range of migration management in dealing with mode 4.  She agreed that overlap 
should be limited and should be defined was that which was possible and appropriate in a trade 
context and what was more appropriately accomplishe d outside a trade negotiation.  One line that had TN/S/M/12 
Page 22  
 
 been mentioned was between temporary and permanen t migration, however there were others.  She 
thought it might be useful to consider what was best accomplished through a treaty framework and 
what was best accomplished through more flexible mechanisms, be they bilateral, regional, or 
migration mechanisms outside the issue of servi ce suppliers.  Though she in no way was implying a 
limit to the Council's discussion with respect to service suppliers, she thought it was important to 
draw a line around this and examine mechanisms that  applied to non-service suppliers in order to seek 
ways to make progress in this area.  She said that the example raised by South Africa with respect to 
healthcare  workers and the United Kingdom was a good  and innovative agreement, which held much 
potential and promise.  She thought this could be cited as a good example of innovations as a corollary of GATS negotiations.  She agreed on th e importance of transparency and administrative 
procedures and said much good work could be done between the trade and migration communities.  
She was optimistic that the dialogue could produce good results, both in terms of the implementation 
of existing commitments, and by opening possibilities for further liberalization.  In this regard, she 
informed Members that the IOM wa s conducting work to compile a data base of the tools, mechanisms 
and legislation that covered the movement of pers ons, including the subset of temporary services 
suppliers.  In terms of analytical work, the IOM was also engaged in studying best practices, 
particularly in the regulatory area.  Referring to the gulf between the trade and migration communities 
on one level, she said that there was a growing inte rest in the latter on managed movement of persons 
and cooperative mechanisms.  Although she could not claim that this would translate into greater 
multilateral treaty commitments, nonetheless, there was greater willingness to explore ways to 
effectively manage migration to achieve a range  of objectives that included notions of win-win 
results.   
55. Referring to the example of the agreement between South Africa and the United Kingdom, 
the representative of South Africa
 sought to clarify that her intention had not been to imply that that 
bilateral agreements were the best way to move fo rward on mode 4, but rather, to highlight that her 
country was interested in the lessons that might  be multilateralised in the Special Session.  She 
thought that the sharing of bilateral and regi onal experiences could contribute to multilateral 
discussions in terms of transparency, MRAs, and the implementation of less burdensome 
administrative procedures.   
56. The representative of the OECD  noted the many policies that were involved in the successful 
movement and management of persons, including th e operation of an entry and permit system, the 
types of qualifications required, and other compleme ntary policies.  She said that mode 4 required a 
range of expertise and input from many players and that the discussion could broaden the toolbox 
available to governments.  She had been heartene d by the comments of Colombia, Ecuador and Chile 
that at the national level this dialogue was underway .  She agreed with Brazil that, when confronting 
the difficulties that accompanied liberalization, it was important to include the regulators as 
stakeholders in the discussions.  With respect to  how the trade community thought about modes, she 
recalled that she had heard a very different persp ective from an Indian IT services exporter.  He had 
said that the business model was the global value chain.   The company, based in India, had an office 
in Mauritius for the French-speaking market and a base in the United States with human resources 
constantly rotated between sites.   
57. Turning to the separate issue of the measuremen t of mode 4, the representative of the OECD 
said that a technical sub-group on mode 4 statisti cs had recently been created and was a sub-group of 
the Inter-agency UN task-force on statistics for interna tional trade in services.  She recalled that this 
interagency task-force had develope d the manual on international trade in services statistics.  This 
manual had tried to see how balance of payments coul d be used to measure trade in services and had 
considered how balance of payments data might be mapped against GATS modes of supply, bearing 
in mind that any services transaction, from a business point of view, probably included numerous 
modes of supply.  She said that the chapter on mode 4 in the manual was unfinished because it was 
recognised that balance of payments data on its ow n was insufficient and that other data, such as  TN/S/M/12 
 Page 23 
 
 
 migration and employments statistics, were needed to supplement.  She said the sub-group had begun 
to consider how to measure mode 4 more accurate ly.  The interagency group was composed of the 
UN Statistics Division, WTO-OMC, WTO-OMT, th e IMF, UNCTAD, OECD (both statistics and 
trade), ILO, WHO and Eurostat.  She explained that the balance of payments framework and the system of national accounts were to be revised by 20 06.  This left a twelve-month window to design 
new data tools for mode 4.  The next step was to determine the indicators that would be best suited to 
measure mode 4, and whether the statisticians c ould provide this in the foreseeable future.  An 
example of one of the suggestions was to remove  the current exception for students, which were 
considered as non-residents beyond twelve months of  residency in a foreign country.  For trade policy 
experts, this was an important suggestion because it concerned data relati ng to mode 2 education 
services.  She hoped that real progress for measuring mode 2 and mode 4 would be made in the next 
year.   
58. The Chairman
, on behalf of the Council, thanked the representatives for their participation 
and their interesting and exhaustive presentations.  Though he did not attempt to summarise the 
discussion, he thought that it had helped to illust rate the importance Members attached to the 
negotiations and to mode 4 in partic ular.  He noted that delegations had spoken about the need to start 
a dialogue, build bridges and increase trust.  One de legation had also said that this was not enough 
and that more practical approaches and results s hould be explored where feasible.  He said the 
forthcoming informal meeting would be an ideal setting to look at these practical approaches.  Turning to the remaining points under this item, th e Chairman drew Members' attention to two recent 
formal communications from the delegation of Swit zerland relating to the Importance of Improving 
the Scheduling of GATS Commitments and E-Work Pe rmits in Switzerland, contained in documents 
TN/S/W/21 and TN/S/W/22 respectively.   
59. The representative of Switzerland
, referring to document TN/S/W/21, underlined that the 
timing of the submission of the paper came shortly after July package and we ll ahead of the deadline 
for the submission of revised offers.  This timing wa s not a coincidence, but rather the paper had been 
presented at the present stage in order that the consid erations it contained would flow into the revised 
offers.  He reiterated that these considerations we re the core of the submission.  Referring to the 
provision in the July package on quality, he sai d it was a strong one, and he assumed was supported 
by the entire membership.  For Switzerland, quality referred to its core aspect of market access and 
national treatment commitments taken, in terms of liberalization, which was the core of the 
negotiations.  He stressed that the quality of the schedules, as legal acts that bound Members' 
commitments, was also an aspect of the quality of  the offers.  For this reason, Switzerland had 
indicated in the document how Members might im prove quality in terms of the clarity of the 
schedules.  From the list it was evident that there were a number of ways in which to improve the 
quality of the schedules.  He said that some elemen ts of the list recalled provisions of the Scheduling 
Guidelines, while others did not refer to the Guid elines, however, in Switzerland's view, were equally 
efficient in improving quality.   He said the list wa s illustrative and not exhaustive, since many other 
aspects could be taken into account.  The submission did not to seek to present a technical paper, but 
rather policy orientation and policy guideline.  In th is regard, his delegation sought to raise awareness 
(1) about the issues at stake, (2) about the bene fit that could accrue from clarity, since it improved 
quality, which in turn was of benefit to all, and (3 ) the ways and means to ach ieve this clarity.  While 
many of the issues referred to th e Scheduling Guidelines were well-know n, he said that in practice, of 
the many guidelines set-out, some were forgotten in practice.  Switzerland thought it necessary, ahead 
of May 2005 deadline, to recall them.  He said that his country would take them into account in 
preparing its own revised offer.  He expected th at the recommendations on clarity of schedules would 
be taken into account by delegations wherever appropriate in the Doha round.  His delegation 
reiterated its intention to focus its attention on this aspect in all sect ors where it had offensive interests 
with its main trade partners because it had realis ed that clarity of commitments in sectors of its 
interest was crucial.  He sought to underline what th e paper did not seek to do:  it was not a revision or 
extension of the Scheduling Guidelines, which Switz erland found appropriate, it did not seek to give a TN/S/M/12 
Page 24  
 
 mandate to the Council, and it did not refer to ma rket access or national treatment.  His delegation 
remained available for any questions of a technical nature. 
60. Turning to the submission contained in TN/S/W/22, the representative of Switzerland said 
that he had hoped to have had immigration officials of the canton of Zurich present at the meeting and 
he regretted that they were not available.  His de legation felt that this exam ple was an important one, 
particularly in the context of the World Summit on Information Society (WSIS).  He recalled that 
Switzerland had been a promoter of WSIS, whose ai m was to extend the information society into all 
aspects of life, including mode 4 services suppliers with respect to communication.  He further recalled that e-government had been an important theme in the WSIS.  He said that the canton of 
Zurich had made considerable efforts to implemen t e-government and that the example could serve as 
a bridge between the WSIS discussions and GATS.  The paper presented the canton's system and its 
advantages.  In a word, the system had paid o ff.  It had been viewed positively by the business 
community and authorities by easing their workload  and increasing their efficiency.  For both 
companies and authorities, it had freed resource s previously devoted to paperwork for more 
substantive work.  Financially, it had also been a pos itive experience.  Switzerland viewed this type of 
system as a relevant accompanying measure in term s of the work of the negotiations, which focused 
on market access, national treatment and mode 4 issues, and as such, was very relevant to the Council's work.  He said that the aim of the paper was to stimulate reflection on this issue, to 
encourage comments and suggestions from delegations  to the authorities in Zurich, and to encourage 
other partners to examine this system with a view  to implementing a similar experience.  He recalled 
that Switzerland had offensive interests in mode 4 a nd he thought that it was to the benefit of any 
mode 4 supplier, especially Swiss ones, to have this  facility expanded worldwide.  He reiterated that 
the core of the negotiations was market access and a high level of commitments, however, he said that 
the elements outlined in the communication would be taken into account.  
61. The representative of Hong Kong, China
, referring to the proposal in TN/S/W/21, stated that a 
timeline for revised offers had been established and therefore, it was an appropriate juncture to look 
into the clarity of commitments and offers.  She said that a high quality offer would be both 
commercially meaningful and clear and understandabl e by negotiators and users.  From Hong Kong, 
China's perspective, the Scheduling Guidelines were the basis of Members' work in the Council and 
the CSC.  A number of the elements in the communication could also be found in the Scheduling Guidelines and hence, she encouraged Members to engage in the discussions.  She noted that the 
Swiss communication suggested that the list of elemen ts in the paper and in Article XX be used as a 
tool in bilateral request-offer negotiations.  While  her delegation was open to this question, it noted 
that some elements, such as classification and sch eduling clarity might benefit more from multilateral 
efforts.  She recalled that Hong Kong, China had also encouraged Members to further work on the 
clarity of schedules and to find ways to schedule commitments that enjoyed a common understanding from all Members in the CSC context.  The Sw iss paper provided and excellent link between 
discussions in the CSC and the Special Session.  Hong Kong, China looked forward to working with 
Switzerland and others on this issue.  She sough t to reserve the right to revert to document 
TN/S/W/22. 
62. The representative of Peru
 said that the Swiss communications addressed two topics of 
priority for his delegation, namely improved clar ity of schedules, including revised offers, and e-
 permits.  Referring to document TN/S/W/21, he stated Peru shared the views and approach of 
Switzerland in that it was important to ensure that  specific commitments would appear in a clearer 
and more comparable text.  Peru agreed that such effort should facilitate gra dual liberalization of trade 
in services, the comparability of offers and work in bilateral phases.  He agreed that improved 
schedules would increase legal certainty, which was of benefit to all, and in particular developing 
countries.  Turning to drafting suggestions in the doc ument and referring to Section A, page 3, and the 
recommendation to refer to the W/120 classification, he  said that, while this was generally correct, for 
sectors where disaggregation was not ideal, he thought that Members might seek a multilateral  TN/S/M/12 
 Page 25 
 
 
 approach that would enjoy broad acceptance.  With respect to the recording of commitments, he said 
that his delegation could follow the recommendations  made, for example the use of "None, except" 
followed by the measure, instead of the measure alone.  Specifying the criteria for ENTs and the 
recommendations related to Article XX were also u seful.  Referring to page 3, section B, paragraph 
(d), he said that portions of this paragraph might  be covered by Article VI.  Citing a fictitious 
example, he put forth the case where in a Member's  schedule, the mode 4 horizontal commitment had 
omitted "unbound except for" before a listing of co mmitments for intra-corporate transferees and 
directors, however, the specific sectoral commitm ents, under mode 4, the Members indicated "except 
for commitments in the horizontal  commitments".  He wondered how  this combination would be 
understood.  Was the sector committed, except for th e categories referred to in the horizontal sector, 
or rather, committed only for the categories indicated in the horizontal commitment?  He thought 
there was the possibility for inconsistencies of this  type.  With respect to document TN/S/W/22, he 
thought the example was a good one, and he wondere d if this system would be applied to other 
cantons in Switzerland.  He said the system reduced costs and processing time. He said there was great interest on the part of his officials about this system and in receiving any technical co-operation 
in this regard.  
63. The representative of Cuba
, referring to the communication contained in TN/S/W/21, said she 
agreed with the assessments in paragraphs 1 and 2,  namely that increased transparency in offers 
would assist the negotiations.  Referring to paragra phs 5 and 7, she agreed that Members needed to 
make better use of the Scheduling Guidelines in orde r to ensure legal certainty.  Cuba felt that the 
technical discussions were an important complement to bilateral sessions as they would contribute to 
an improved understanding a bout how to interpret the offers.  With respect to the recommendations in 
paragraph 8, Section B, paragr aph (a), her delegation agreed that Members should follow the 
benchmarks indicated in Article XX:1 (a) and (b).   She acknowledged that this was complex because 
of various inconsistencies.  She agreed with th e proposals contained in paragraphs 9 to 11.  She 
reserved the right to revert to some specific points at  a later point in time, particularly with reference 
to paragraph 8(a) and (b).  Refe rring to paragraph 6, she observed a link between clarity and quality, 
and she added that the application of Article XX would be relevant for developing countries only if 
Articles IV and XIX were fully respected.   
64. The representative of Japan , referring to document TN/S/W/21, agreed that in order to prepare 
for high quality revised offers it wa s important to have im proved scheduling.  He further agreed that it 
was important for commitments to be easy to read , compare and interpret for the purpose of legal 
certainty and transparency.  He t hought that technical modifications could be made to meet this 
objective.  Japan sought to accelerate discussions on th ese matters in the appropriate forum.  He said 
that the Scheduling Guidelines were an important tool for the scheduling exercise and he invited 
Members to refer to them in the preparation of thei r revised offers.  Referring to Section A, paragraph 
8(a) and (b), reference to the CPC was extremely im portant in order to make a clear definition of the 
services.  Japan sought, with others, to improve the offers from the technical point of view.  He also 
looked forward to the discussion in the CSC on this matter. 
65. The representative of Korea , referring to document TN/S/W/21, said it was a timely reminder 
in preparing revised offers.  His delegation broa dly accepted the substance of the communication and 
sought to put forward a few suggestions in this re gard.  He emphasised that the proposals should be 
applied to MFN exemptions, as well as to specifi c commitments.  In many cases, MFN exemptions 
lacked clarity, certainty and comparability.  For some exemptions, the approval of a licence, 
authorisation of commercial presence, or expansi on of existing operations were subject to the 
discretion of the relevant authorities.  His delegati on was of the view that increased transparency and 
reduced ambiguity with regard to MFN Exemptions were equally important to that of specific commitments to the services providers of devel oped countries and developing countries.  Drawing 
attention to the issue of scheduling ENTs, he agre ed that the absence of specific criteria concerned 
many of the ENTs scheduled and gave rise to diffi culties.  He shared the view that specific and TN/S/M/12 
Page 26  
 
 detailed descriptions of the nature of the quantitative limitations of ENTs would help raise the degree 
of legal certainty of ENTs.  Clearly specified EN Ts, with quantitative limitation criteria, could be 
more transparent than any ex-post trade remedy measur e.  He recalled that Members' right to regulate 
should be preserved.  While is was important to improve the transparency of schedules, the right of Members not the schedule those measures related to  regulation should be respected.  For example, 
Korea's initial offer, with respect to  financial services, indicated that a number of measures that fall 
under the prudential carve-out were to be deleted.    Korea believed that prudential measures should 
not be an obstacle to making an offer in financial services.   
66. The representative of China
, referring to document TN/S/W/21, said that the points raised on 
classification and sectoral coverage in paragraphs 7(c)  and 8(a) and (b) were particularly relevant to 
the on-going negotiations.  He noted that a number of Members had used new classifications in their 
initial offers, which, in his delegation's view, did not enjoy broad support or, in some cases, very 
limited support or use.  China had voiced its concer n over the application of new classifications used 
in offers tabled to date, as they tended to reduce cl arity, comparability and legal certainty of Members' 
schedules.  Classification should reflect the devel opment of industries and be updated accordingly.  
However, he reiterated China's position that, unless technical discussions ha d been exhausted and a 
general level of support ach ieved, Members should refrain from us ing it. With respect to sectoral 
coverage, he had noted that the Schedules and o ffers of some Members contained entries which 
referred to "part of CPC 1234" with no detailed e xplanation of which part of the sector had been 
committed.  He thought that this type of ambigui ty would reduce the value of commitments and he 
urged Members to readjust these.  With regard to ENTs and Section B, paragraph 8(d), China 
supported the suggestion to make the criteria applied in ENTs and LMTs transparent, predictable and 
objective.  He indicated that his comments were prelim inary and sought the right to revert to this issue 
with more substantive comments in future meetings.   
67. The representative of Chile , referring to document TN/S/W/21, said he thought it provided 
valuable input for work to improve the schedules of commitments.  It was of value to Members in the 
preparation of initial or revised offers and put fo rth useful recommendations.  Chile agreed that the 
quality of schedules was reflected not only in te rms of market access and national treatment 
commitments, but also in the clarity of the sche duled commitments.  Secondly, it was of relevance 
from a systemic standpoint, since, notwithstanding th e role the submission might play in the request-
offer process or bilateral consultations, the input sh ould be examined at the multilateral level in order 
to reach a shared understanding of the meaning of co mmitments undertaken by Members.  Hence, the 
suggestions could provide important  input to multilateral work.  Turning to some of the specific 
recommendations and referring to pa ge 3, section B, paragraph (d), he supported the comments on the 
scheduling of ENTs and LMTs.  He said that any cr iteria and requirements related to the application 
of these tests needed to be as speci fic, objective and transparent as po ssible.  Finally, he echoed the 
comment by Korea, namely, that the effort to increase clarity in the scheduling of commitments 
should be extended to Article II Exemptions of th e GATS.  With respect to document TN/S/W/22 he 
said he would refer it to migration experts in cap ital.  He was pleased to have read the paper, 
particularly in view of Chile's professionals' interest in entering this market.   
68. The representative of th e European Communities , referring to document TN/S/W/22, inquired 
as to when other cantons might be in a position to follow suit, as they appeared to account for 80 per 
cent of work permits.  She further inquired whether,  under this scheme, there was a way in which to 
fast-track applicants who were not required to fulfil labour market tests.  With respect to the reference 
to the nature of commitments, also cited in doc ument TN/S/W/14, she recalled a suggestion that a 
reference to a law might be added to a commitm ent for transparency reasons.  She expressed a 
concern with referring specifically to legislation in  the commitment itself on the grounds that it could 
subsequently create questions, should the legisla tion change, about whether a deconsolidation was 
involved.  The European Communities therefore pref erred that the measures themselves be specified 
in line with the Scheduling Guidelines.  Legislation could be referred to in discussions with partners,  TN/S/M/12 
 Page 27 
 
 
 and possibly in a footnote.  In terms of commitmen ts, references to authorisations, licences or any 
other form or approval, for the European Co mmunities would apply whenever the licensing 
requirement was discriminatory in nature rather than being non-discriminatory in nature.   
69. The representative of Norway , referring to document TN/S/W/21, said that it covered 
important technical issues, and in substance had an  important bearing in the negotiations on specific 
commitments.  Clarity was important to improve the quality of GATS commitments, and he noted the 
list of elements that Members should take into account to improve the clarity of their offers, 
particularly in paragraph 7.  He said there were great differences in the scheduling of commitments.  
He had seen offers where market access restric tions were listed in the Additional Commitments 
column.  He also noted offers which made referen ce to domestic laws in the market access column 
without explaining the market access restriction.  He had great concern for Members requiring 
technical assistance, however, the problem often related to Members that did not need technical assistance.  He encouraged Members to take the Swiss recommendations into account in their work on 
the revised offers.  He stated that the docum ent should also form the basis for scheduling 
commitments in the negotiations with countries seeking to accede to the WTO.   
70. The representative of Colombia
, referring to document TN/S/W/21, said its content was very 
relevant at the present stage of the negotiations .  She agreed that the proper scheduling of 
commitments and proper classification would allo w for a better understanding of the obligations 
undertaken by Members and would facilitate the inte rpretation of the scope of the commitments and 
decrease the degree of ambiguity of commitment s, thereby limiting any difficulties with legal 
interpretations.  Greater transparency and eff ective scheduling of commi tments would generate 
greater legal certainty and would ensure the quality of the commitments.  Colombia believed that the 
quality of offers could not be measured solely by th e number of sectors.  One element to measure the 
quality of commitments was their content and thei r scope.  In this respect, the invitation by 
Switzerland to increase transparency in scheduling commitments was welcome.  The 
recommendations in Part II of the document she sai d were useful and her de legation would endeavour 
to use them.  In this regard, she agreed with the delegation of Peru that th e level of aggregation in 
some sectors made it difficult to bind in sectors or sub-sectors of export interest to Colombia.  She said that contributions by Hong Kong, China and Br azil in the CSC were a complement to the Swiss 
proposal.  Colombia believed that the CSC was th e appropriate forum for technical discussion.  
However, the Special Session should also engage in an exercise to ensure that this object was being 
satisfactorily met.  Referring to document TN/S/W/22,  she suggested that such  mechanisms be used 
for the issuance of visas or entry requirements for services suppliers. 
71. The representative of Brazil
 noting the many contributions relating to transparency, noted 
such a submission from the United States in the WPDR , as well as a paper on transparency related to 
mode 4.  While everyone agreed to the principl e of transparency, the detail lied in the nuances of 
application.  He said that the Swiss paper had th e merit of focussing attention on the way in which 
Members were handling classification and scheduling issues.  He noted that it had been one year since 
Brazil had presented its initial questions  related to these same issues in the CSC.  He said that many of 
the concerns raised in the Swiss paper had been addressed with respect to the offers in Brazil's 
communication.  He said that, with the exception of bilateral discussions with Canada and the United 
States, no other delegation to da te had addressed the concerns Brazil had raised.  He noted his 
delegation's preference to discuss these issues in a mu ltilateral forum so as to allow all to benefit.  He 
said that the commitment to transparency would be measured through actions.  He also said that much 
of the conventional wisdom about the flexibility of  the GATS in this respect had been brought into 
question by the recent decision of the dispute settl ement body.  Recent cases had proven that the 
flexibility in interpreting the value of the Schedulin g Guidelines was not very large.  His delegation 
had shared the conventional wisdom that the m eaning of "guidelines" should be taken literally, 
namely that they helped to orient delegations, while  allowing them to retain flexibility.  He said that 
many developing countries that were in the pro cess of negotiating commitments should study this TN/S/M/12 
Page 28  
 
 case and the flexibility the guidelines gave.  The Swiss paper had the merit of bringing this issue to 
the fore.  Referring to document TN/S/W/21 and para graph 7(f), in which Switzerland suggested that 
Members "Make schedules user friendly, clear enoug h for non-GATS-experts to understand them", he 
said this was a valuable objective, however, he doubted whether a non-GATS e xpert could understand 
a schedule.  Continuing to cite the remainder of this  same paragraph, he said that developing countries 
would not take full commitments across the board in  the current round.  While Members could work 
towards increased transpar ency, comparability and clarity, with re spect to the extent of commitments, 
Brazil would need to assess the extent of its sensitiv ity.  He agreed with the European Communities' 
comment regarding references to laws, namely that  these might not be appropriate since legislation 
could change and the type of restriction was importa nt.  As well, some issues related to licensing 
might not need be scheduled, as scheduling depende d on restrictions or discriminatory criteria.  
Referring to document TN/S/W/22, he inquired whether the system aimed at improving access or the procedural process only and whether Switzerland had a ny data about the number of requests made via 
the e-permit system and how many had been accepted and denied.   
72. The representative of Chinese Taipei
, referring to document TN/S/W/21, said that the purpose 
was not to change the Scheduling Guidelines but rath er to underline the importance of using them in 
the preparation of revised offers.  She shared the views outlined in paragraph 3 and said that Chinese 
Taipei services industries had found existing specifi c commitments complex and that determining the 
level of market access had been difficult.  The difficulty was magnified for small- and medium-sized enterprises.  Chinese Taipei shar ed the view that Members' schedule should provide clarity, 
comparability and certainty, as this would provide  potential investors with a sound investment 
environment.  She agreed as well that commitments should not make reference to relevant provisions 
or laws and that the criteria applied in an ENT or other limitation should be recorded in the schedule.  
Requesting clarification and referring to paragraph 7(c), she inquired as to the implications of making 
schedules comparable by using customary or comm only agreed to terms and phrases.  Referring to 
paragraph 7(f) she asked whether, given discussions on the relationship between mode 1 and mode 2, 
undertaking the same commitment for both modes w as preferable.  She requested that Switzerland 
outline its rationale in this regard.  Referring to paragraph 7(g), she asked for specific examples of 
situations where none of the activities described in the CPC could be supplied under mode 1 and 
mode 2.  Referring to document TN/S/W/22, she said it was her delegation's view that the procedures 
for obtaining a work permit could act as a barrier to mode 4 trade.  The system could increase transparency.  She echoed the question by Brazil.   
73. The representative of India
, referring to document TN/S/W/21, said India agreed that the 
quality of commitments was governed by the clarity  of scheduling and merited discussion.  With 
respect to the points raised in Section II and on a pr eliminary basis, he appreciated the clarification 
that the intention was neither to revise the Schedu ling Guidelines nor to seek a separate mandate.  In 
this regard, drawing a distinction between those el ements in the Scheduling Guidelines and those that 
were add-ons he found useful in terms of the focu s it brought to the issue.  Referring to section B, 
paragraph (f) and noting that the issue was include d in a paper listed separately on the agenda, he 
recalled an earlier proposal from a group of Member s in which the practical suggestion had been 
made with respect to some cases where definitional issues arose about electronic delivery in mode 1 
and mode 2.  He recalled that the communication sai d that a more practical approach consisted of a 
similar level of commitments, and he thought that it might be in this context that paragraph (f) had 
been included.  He welcomed more  reflection and deliberation.  With respect to document TN/S/W/22 
and referring to paragraph 11,  which indicated that the application procedure had three steps, he asked 
whether any data was available about the timefra mes taken by these three processes prior to the 
process and in the light of the new initiative.   
74. The representative of the Philippines , referring to document TN/S/W/21, said it was 
meritorious insofar as it sought to increase transp arency and predictability of schedules of 
commitments.  He emphasised the need for Memb ers to achieve clarity and understanding of the  TN/S/M/12 
 Page 29 
 
 
 commitments undertaken in their schedules, othe rwise the entry could be made subject to 
interpretation by a panel, rather than Members.  Referring to paragraph 5, the last sentence which 
referred to some commonly used terms, he requested clarification as to implication of the use of these 
terms and concepts.  Referring to S ection II, paragraph 7, while he fe lt that sub-paragraphs (a) and (d) 
were appropriate suggestions, the Philippines ha d some questions about these sub-paragraphs, 
particularly (f).  With respect to Section A, para graph (a), which referred to alternative classification, 
he requested clarification of "alternative classi fication" which had been the subject of broad 
acceptance.  Referring to Section B, sub-paragraph (e ), he requested clarification on the relationship 
between this sub-paragraph and pa ragraph 45 of the Scheduling Guidelines.  While he noted that the 
Scheduling Guidelines were not legally binding, in th e specific instance raised in sub-paragraph (e), 
paragraph 45 seemed to reflect the principle of prog ressive liberalization.  With respect to document 
TN/S/W/22 and making some preliminary comments, said that the e-permit system was not limited to 
GATS-related permits but all types of work permits.  He inquired whether any data was available 
about permits processed for temporary versus non-tem porary movement.  He further inquired whether 
the system of application could be made from abroad or was limited to services suppliers present in 
the canton of Zurich.   He asked if there were an y procedures foreseen in the case of an application 
being rejected, and in particular a review.  He indica ted that his delegation wished to revert to the two 
proposals at a subsequent meeting.   
75. The representative of Thailand , referring to document TN/S/W/22, noted from the figures in 
paragraph 4, that one in four workers was a forei gner and that foreigners in the workforce accounted 
for some 18.75 per cent of the active population, wh ich she said was significant.  She welcomed 
information on the work permit procedures which s ought to reduce red tape and the certainty of 
timing and transparency of these procedures.  She hoped that the remaining work permit applications 
would be captured in any phase of the system's e xpansion.  Referring to paragraph 6, she asked 
whether it was accurate to say that everyone coul d apply for a work permit.  She inquired whether 
Switzerland had a unified entry system in which visas and work permits were issued by the same 
authority.  As the paper indicated that the competen cy to issue a work permits was devolved to a local 
authority, was it correct to assume that the visa was also granted by the same authority?  Referring to 
paragraph 12, she asked whether authorities provided an  explanation for a rejected application.  With 
reference to document TN/S/W/21 she sought to reser ve the right to revert to it as it addressed an 
issue of importance to her delegation. 
76. The representative of Singapore  said that document TN/S/W/22 provided useful information, 
had been relayed to capital and might be reverted  to by his delegation.  Referring to document 
TN/S/W/21, he agreed that Members should aim to ensure clarity, comparability and certainty in their 
offers and subsequent commitments.  In this connect ion, he noted the useful paper submitted by Hong 
Kong, China in the CSC.  Referring to paragraphs 8(a) and (b), he said that Switzerland had provided 
some pertinent guidelines for the scheduling of offers.  He noted that most of the guidelines were not 
new, but served as a timely reminder, given that the July decision foresaw the submission of revised 
offers by May 2005.  He sought to highlight a number of further points.  (1) Members should endeavour to follow the classification containe d in the W/120 list and the corresponding CPC 
numbers.  (2) Commitments should be spelled out cl early and avoid references  to national laws and 
regulations, as this would be prudent.  (3)  ENT a nd LMT limitations should not be stipulated in the 
additional commitments column.  (4) The criteria fo r ENTs and LMTs should be clearly spelled out.  
He stated that his comments were preliminary and i ndicated he might revert to the submissions at a 
subsequent occasion.   
77. The representative of Argentina
, referring to document TN/S/W/21, agreed that it was 
important to have greater clarity in the scheduling of commitments in order to augment their quality.  
Argentina agreed with the recommendation regardin g ENTs, and the critical importance to improve 
the clarity, transparency and speci ficity of these restrictions.  Making a general comment regarding 
the Scheduling Guidelines and recalling that the document stated it did not intend to amend the TN/S/M/12 
Page 30  
 
 Guidelines, he said that the Guidelines had been vi ewed as a rigid document by some and recalled that 
the possibility to improve or amend them existe d.  Referring to document TN/S/W/22, he asked 
whether, were a services supplier to move, a work  permit in one canton could be transferred to 
another or would the entire process need to be re -launched.  He also asked about the complete 
timeframe that was involved in the applicati on process under the e-work permit process and the 
traditional process applied in other cantons.   
78. The representative of Canada
, referring to document TN/S/W/21, shared Switzerland's view 
that the current negotiations offered all Members the opportunity to provide for greater clarity and transparency with respect to scheduling and particul arly in the context of the preparation of revised 
offers.  Canada believed that the Scheduling Gu idelines, in addition to Article XX, provided 
comprehensive guidelines for Members with respect to scheduling.  The problem often lied in the 
implementation and use of those guid elines.  In this regard, Switzerland's paper was a useful reminder 
of the need to pay attention to th ese guidelines in the preparation of revi sed offers.  In the light of the 
comments made by other delegations, he requested  further clarification from Switzerland about the 
relationship between its proposal a nd the Scheduling Guidelines.   
79. The representative of Australia
, referring to document TN/S/W /22, supported and endorsed 
the increased use of electronic means for managing mode 4 access and was encouraged by the development of electronic procedures for processing work permits.  In Australia's view, electronic 
technologies had significant potential to enable individua ls to apply on-line, easily and at any time.  It 
could overcome difficulties inherent in many visa systems, especially where great distances were involved.  He said that Australia had extensive experience with electronic visa processing and it had 
found that it could lead to greater objectivity, certa inty and could minimize inconvenience.  Citing an 
example, he said that this tec hnique had allowed authorities to reduce three separate applications into 
one process.  He said that a significant portion of immigration resources were spent on data entry and that the benefit of on-line applications was that th e applicant entered data directly, leaving officials 
more time to make the related decisions.   
80. The United States
 agreed that all Members should strive  to ensure that their GATS schedules 
were as clear and as readily understandable as possible.   She also agreed that there were a variety of 
valuable resources that Members could turn to in  trying to achieve scheduling clarity, including the 
Scheduling Guidelines, the W/120 sectoral list, a nd the important work in relation to scheduling 
issues within the friends' groups in sectors such as co mputer and related services, energy services, and 
express delivery and logistics services.  It was impor tant to remember that the Scheduling Guidelines 
were neither binding nor were they to be viewed as authoritative sources of legal interpretation with 
respect to the obligations or schedules of commi tments under the GATS.  While the United States 
agreed that the W/120 list was a useful benchmark for Members' commitments, it was not tied to the 
CPC.   The United States had made it very clear th at, in referring the W/120 list, it viewed the CPC as 
a separate and distinct document that was not legall y binding.  With respect to the CPC, the United 
States believed that it was widely recognised that  there were serious limitations in its use for 
scheduling purposes, especially since it had been pr incipally developed for statistical rather than 
scheduling purposes.  Furthermore, the provisional CPC in a number of sectors, such as energy 
services, express delivery and logistics services, a nd audio-visual services did not reflect current 
business models and market realities.  Moreover, the provisional CPC was an unfinished document as 
reflected by the fact that, since its creation in 1989, there had been two revisions, and neither the 
original CPC nor the revisions had ever been adopted  by Members.  In this light, the United States 
welcomed some of the ideas provided by Switzerla nd in document TN/S/W/21 and looked forward to 
further discussions.   
81. The representative of Kenya , speaking on a preliminary basis and referring to document 
TN/S/W/21, said that it was an important contribution in the context of the negotiations.  It 
highlighted a number of recommendations that could ensure clarity, transparency, predictability and  TN/S/M/12 
 Page 31 
 
 
 comparability of the specific commitments made  by Members.  Speaking to some specific 
recommendations, Kenya agreed with the need to  follow the W/120 classification list, although it 
might not be feasible to follow this list, particul arly in sectors which had experienced technological 
changes.  He sought to emphasise that any depart ure from the W/120 list needed to be agreed to 
multilaterally.  He took note of the recommendation regarding ENTs and said it was an important one, 
since ENTs undermined commitments and there was the need to ensure th eir application occurred 
through transparent and predictable procedures.  He indicated that he might revert to the submissions 
at a subsequent meeting.   
82. The representative of Switzerland , in the interests of time, sought to recapitulate a few points 
arising from the discussion and revert later in the w eek with more complete answers to the extensive 
questions posed by delegations.  With regard to  the communication on the importance of improving 
the scheduling of GATS commitments, he had noted  the importance many had attributed to the 
Scheduling Guidelines and their use in the negotiati ons.  He had further noted the need to attach 
criteria to ENTs, as well as to avoid references to national laws.  He thought there was a broad 
convergence on many of the suggestions.  With re spect to the communication related to e-work 
permits, he warned that he might not  be able to provide the specific data requested.  He had taken note 
of the view of many delegations that the scheme was helpful and useful. 
83. The Chairman , noting the hour, suggested that the Council keep this item open, revert to 
when it reconvened, and begin by giving Switzerla nd the opportunity to respond more fully to the 
questions posed.   
84. It was so agreed . 
85. Reconvening the meeting on 1 October, the Chairman  recalled that on 27 September, the 
Council had left this item open and that the Council had been discussing two proposals from Switzerland contained in documents TN/S/W/21 and TN/S/W/22.   
86. The representative of Switzerland
, referring to document TN/S/W/22 and the question on the 
division of competencies between the cantons a nd the Swiss Confederation, responded that the 
Confederation was responsible for visas and for the stay and residency confirmation for foreigners, 
while the canton accepted and ruled on work permit app lications.  He elaborated that, in addition to 
this division of coverage, there existed a division in  terms of procedural flow, since the decision of the 
canton was forwarded to the Confederation.  Respon ding to Argentina's question about differences in 
the processing time between an e-permit and paper pr ocess, and he said that, as indicated in paragraph 
13, the cantonal portion of the procedure took 48 hour s once the application had been completed.  
With respect to the paper applications, by definiti on it was more difficult to determine the timeframe 
with precision, since the processing depended on human factors.  He recalled that the e-permit portion 
of the process was applied only at the cantonal le vel, and that the remaining portion in which the 
canton submitted its decision to the Confederation w as done in paper.  This meant that the process 
could take as long as two or three weeks in the worst case.  Responding to a question from Peru and 
the European Communities about the process in othe r cantons, he said that Zurich had used this 
system most fully and that the canton of Basel-La ndschaft also had an e-permit system, although less 
developed.  No other cantons used a similar system .  He recalled that 20 per cent of the applications 
were submitted in Zurich and the remaining 80 pe r cent were submitted in the other cantons.  He 
noted, however, that an electronic process reaped e fficiency benefits only once a critical mass of 
applications was reached  In smaller cantons wher e there was a limited number of applications, the 
paper application remained more efficient.  He agr eed that there remained a few cantons that did have 
a large number of applications.  Responding to the European Communities question about fast-track processing, he responded that a fast-track procedure had been developed and tested, but not retained, 
perhaps because a 48 hour processing time was judged efficient.  In response to Brazil's question 
regarding the number of applications accepted and rejected in order to determine the system's TN/S/M/12 
Page 32  
 
 effectiveness in increasing market access, he regr etted that, because data relating specifically to e-
permits was not collected, he could not provide this number.  He sought to clarify that the system was 
not intended to give greater access and, as such, it was not surprising that it did not improve access.  In response to a question by India, he responded that  he process normally took one to two weeks, but 
could be longer for the reasons he outlined earlier.  In response to a question from the Philippines, he 
said that the system was accessible from abroad and available to anyone who had access to a 
computer at any time of day.  This person could learn what forms were needed, fill out the application, send it, trace it and ask questions in an  interactive manner on-line.  The system put all 
applicants on an equal footing.  In response to a question from Thailand, he c onfirmed that any person 
could apply electronically and ther e was no requirement to be a company or represented by a lawyer.  
He said that the visa and work permit procedures were not unified, but separate, and the visa was 
handled by the Swiss embassy abroad.  Moreover , subject to approval in a referendum, the visa 
procedure would be integrated into the Schengen area, which would mean that Switzerland would not 
have full sovereignty in this regard.  In respon se to another question from Argentina about whether a 
work permit in Zurich could be transferred to anot her canton, he responded ne gatively and referred to 
the nature of Switzerland's sub-federal system.  He  noted that Switzerland's offer attempted to make 
the system more flexible and to a llow for work permits to be transfer able.  This would be considered 
further as the negotiations continued.   
87. Turning to document TN/S/W/21, the representative of Switzerland, noting the technical 
nature of many of the questions, said that for these questions, his delegati on would respond through 
an addendum to the communication.  Responding to questions of a more gene ral nature and Korea's 
query as to whether the paper applied to MFN exem ption lists, he responded positively.  In response 
to Peru's question as to whether the W/120 list was optimal, he noted that the issue was intensively 
discussed in other fora, and he did not think it was a ppropriate for his delegatio n to take a position in 
the paper in this regard.  On the question of th e conditions for licences, he said that licences were 
covered by Article VI, however, if a country had indicated in the market access or national treatment 
column that a licence was obligatory, the logical assumption was that the licence was relevant in the 
context of Article XVI, otherwise it would not have been scheduled.  Anticipating a possible 
supplemental question regarding the relevance of the paper's reference to transparency and clarity for 
licensing given the fact that licences were covered by  Article VI, he said that he would wonder in this 
case whether the entire entry should be removed.  In this regard, he highlighted that the paper had 
indicated that entries should only be inscribed when relevant to Articles XVI or XVII.  If a licence 
was scheduled, he would assume that it was related to  Article XVI, though he realised that in practice 
there might be some work needed.  In respon se to Brazil's comments about making the schedules 
more intelligible for non-GATS experts, he said that Members were in the process of preparing offers 
and that not all those involved were GATS experts.  In this light, there was some interest in rendering 
the schedules clearer.  With regard to Brazil's questio ns circulated to the Members of the CSC, he said 
it had been indicated that the CSC was not the pr oper forum to address specific questions about 
specific country offers, nor did he believe that the Council was the appropriate forum.  He said that 
these questions were handled in bilateral consulta tions.  In response to a question from Norway, he 
said the document could be used for accessions.  He st ressed that the paper could also be included in 
Secretariat technical assistance provided for countri es preparing an offer, and also by the ITC.  
88. The Chairman
 said the Council might wish to return to these two communications at its next 
meeting.  Turning to a joint statement from th e delegations of Chile, India and Mexico on the 
Liberalization of Mode 1 under GATS negotiations contained in JOB(04)/87, he said that this 
communication had been circulated just prior to the Special Session's meeting in June, and as a result, 
many delegations had indicated that their comments we re preliminary and that they wished to have an 
opportunity to revert to it.   
89. The representative of Japan  said it was important to recognise the development of technology 
including information technology and the many servi ces that could be provided through mode 1.  He  TN/S/M/12 
 Page 33 
 
 
 noted that this had not previously been the case, and that it was therefore appropriate to draw attention 
to these activities in the negotiations.  It was inter esting to hear from the sponsors the approaches to 
this issue in the negotiations in more detailed ma nner.  Japan was interested in further discussion on 
these issues.   
90. The representative of India  recalled that at the previous meeting Chile, India and Mexico had 
introduced the joint statement and the Council had en tertained some preliminary discussion.  He said 
that, based on those discussions, it might be useful  to pursue further discussion in a more focused 
manner.  He suggested that one approach that c ould be taken for commitments in cross-border supply 
could be to identify the sectors and activities in which cross-border supply was becoming increasingly 
commercially meaningful.  He recognised at the same  time, that new sectors and activities were being 
created and this needed to be taken into account.  He recalled that work was being done on developing 
a list of sectors and activities and he indicated that he hoped he could revert to this at the next 
meeting.  In this regard, he solicited sugg estions from Members as to where liberalization 
commitments would be important and in what ar eas trade through cross-border supply was becoming 
possible.  He was also open to seeing whether more  focused technical work could be done and where 
it would be appropriately done.  A second suggestion was to look into the level of commitments in 
mode 1 and mode 2 given the uncertainty on the treatment of electronic delivery of services.  He recalled that the statement had suggested that, as a practical way forward and in order to have greater clarity, for areas of interest, it might be useful to consider similar level of commitments.  A third area in which Members had shown interest was the im portance of policy space for domestic regulation in 
the pursuit of legitimate objectives such as consumer pr otection, safety and quality.  He recalled that a 
number of Members had pointed out that this ra ised a number of regulatory issues that Members 
might wish to explore further in the forum they woul d agree to.  Given the complexity of the issue and 
the dynamism of the sector, he suggested that it might be useful to organize a symposium on cross-border supply, the parameters of which would naturally need to be discussed further.  
91. The representative of Peru
 agreed that the liberalization of mode 1 was important to the trade 
interests of developing countries.  He said that advances in information technology had wrought 
important progress for all countries, and particularly developing countries.  He agreed with Japan that 
Members should continue to focus attention on this  issue through more fine-tuned discussions on this 
sphere of activity.  He supported the suggestion by India for a seminar or symposium on mode 1 and 
the implications of mode 1 and mode 2.  He sugg ested that the Secretariat identify sub-sectors that 
would have particular potential unde r mode 1.  Finally, with respect to the suggestion for further 
discussion, he agreed on the need to include the question of space for domestic regulation. 
92. The representative of Switzerland  said that his country was interested in all modes of supply, 
including in mode 1 and mode 2.  He agreed with  the negotiating objective of the paper, which was to 
lock in the current liberal regime, which was an  important, practical and reasonable objective.  
Echoing the related comments by India, he agreed th at, for drafters and users, the most convenient 
manner to schedule was to have similar commitments  in mode 1 and mode 2, which was often quite 
feasible given the existent legal regime.  Full commitments would be welcome.  Referring to a comment from Japan, Switzerland thought it was impor tant to have the opportunity to explore the 
issues raised, and others, in the paper.  The nego tiating framework should be borne in mind in the 
course of this exercise in order to ensure it woul d be conducive to improved offers.  He favoured a 
discussion to address problems, exchange views and suggest solutions.   
93. The representative of Chinese Taipei
 agreed with the view that technological developments 
increased the range of services that could be traded internationally.  Chinese Taipei recognised that 
transportation through electronic me ans helped to reduce transaction co sts in international trade and 
had the potential to generate benef its particularly for small- and me dium-sized service suppliers.  He 
sought clarification on a number of points.  Firstly,  he said that the joint statement touched upon mode 
1 and mode 2 classification issues by suggesting that, given the uncertainty regarding the treatment of TN/S/M/12 
Page 34  
 
 electronic delivery of service, the most practical way forward was to obtain a similar level of 
commitments with regard to both.  He inquired into the precise meaning of a "similar level of 
commitments" with regard to these two modes, a nd specifically, asked whether the suggestion was to 
harmonize commitments in mode 1 and mode 2 or to  merge the two.  Secondly, in regard to the 
distinction of these two modes and domestic regu lations, he asked how the implementation of 
domestic regulation affected the liberalization of mode 1 in the negotiations.  Offering some initial 
thoughts, he said that one possibility would be to  provide a clear manner in which to distinguish 
between mode 1 and mode 2 under GATS Article I: 2 by establishing that mode 2 transactions occur 
only when the person receiving the service was physically present in another Members' territory.  Such a distinction would make it clear that all cross-border supply through electronic means would 
fall within mode 1 and, as a result, the scope of mode 1 would be increased and that of mode 2 
reduced.  Given that Members' existing mode 2 commi tments were generally more liberal than their 
mode 1 commitments, the market access of some sectors would become more restricted.  It would become imperative for Members to achieve higher  levels of liberalization in mode 1 in the 
negotiations.  By contrast, the other possibility woul d be to attempt to classify most cases of services 
supply through electronic means as mode 2.  Given the generally greater level of liberalization under 
mode 2, this approach would generally enhance th e market access of IT services and the whole range 
of business process outsourcing.  Chinese Taipei t hought either of these preliminary possibilities 
could lead to significant benefits for all Member s and therefore encouraged them to examine the 
issues raised in the communication.   
94. The representative of Chile
 said that one of the purposes of the joint statement was to involve 
Members in discussion on the various elements it contained, in terms of the identification of sectors, 
as well as to recall the close relationship that existed between mode 1 and mode 2 and all the 
regulatory aspects linked to services provided through mode  1.  With regard to the need to continue to 
study the implications of liberalization in this mode, he said one way forward would be to hold a 
seminar in which regulators, for whom the mode was relevant, could participate.  This would give as 
comprehensive a view as possible on the implica tions and impact that would occur following 
liberalization under this mode.      
95. The representative of South Africa  noted that a whole new range of service activities was 
being generated through the advancement of tec hnology and internet commerce.  South Africa had 
begun to examine the commitments no t made because, at the time examined, were not possible but 
had become so through these technological advancemen ts.   She said that some of the regulators had 
expressed some anxiety about the regulatory issues at pl ay in the course of liberalization of this mode.  
She recalled that some of these had been raised  in the CTFS in a discussion concerning insurance 
services.  South Africa thought more discussion would be useful and supported the suggestion by India to hold a symposium on this issue, including the recommendation by Chile to include regulators.   
96. The representative of Hong Kong, China
 recalled his comments at the last meeting about the 
importance of cross-border supply through mode 1 or  mode 2, and he agreed with the key issues 
identified by India.  He supported the suggestion fo r a symposium as it could help to identify some of 
the issues involved in the supply of services cross-borde r.  He agreed as well that questions regarding 
the agenda and the target audience would need to be developed.  Recalling a point raised by Peru 
regarding the provision by the Secretariat of certain  information, he recalled that the Secretariat had 
prepared a note on the structure of commitments by Members in modes 1, 2 and 3.  He wondered 
whether the Secretariat could refresh Members' me mory about this note and whether it could be a 
useful reference point to examin e the commitments undertaken by Members in modes 1 and 2.  His 
recollection of it was that there was a general tende ncy for Members to be more willing to undertake 
full commitments in these two modes.   
97. The representative of the European Communities  thought the paper brought focus to two 
modes of supply that were of increasing importance in international trade.  They were two among the  TN/S/M/12 
 Page 35 
 
 
 four important modes covered under the GATS agreement.  He looked forward to engaging in more 
focused technical work and found the idea of a sym posium interesting.  He recalled that the paper 
noted that the importance of the two modes was driven by technological developments and by 
changes in business practices that had led to growth , particularly in business process outsourcing.  In 
order to facilitate this development, the paper noted, it was important to secure more consistent 
commitments in mode 1 and mode 2.  He recalled that, as pointed out by the OECD at an earlier 
meeting, in the business outsourcing context, mode 3 also played an important mode and he hope that, 
as work became more focused, this aspect of  outsourcing could also be examined.   
98. The representative of the United States  welcomed in particular the recognition of the 
importance of technological neutrality in modes of supply.  She recognised the importance and value 
of strong mode 1 commitments, as well as the importance in all other modes of supply and all sectors 
in order to spur meaningful econom ic growth and development, partic ularly in developing economies.  
She emphasised that these gains could only be rea lised if developed and developing Members alike 
made meaningful commitments in key sectors such as telecommunications, financial, distribution and 
delivery services, all of which were essential to bu ild a strong infrastructure and to promote a healthy 
business and investment environment.   
99. The representative of Norway  supported the idea to organize a symposium to discuss in an in-
depth manner modes 1 and 2.  
100. The representative of Brazil  agreed that more clarification was required on this issue.  His 
delegation had made it clear that a particular concern it had with rega rd to mode 1 and mode 2 was in 
financial services, for which more clarity was requi red on Article XVI and footnote 8 of GATS which 
could lead to capital account liberali zation.  He thought that any initiative to shed some light would be 
of useful.  He highlighted that the World Investment Report (2004) contained a specific chapter on off-shoring.  This did not preclude any ot her type of initiative in the Council.   
101. The representative of the Philippines
 expressed his delegation's support for the general thrust 
of the joint statement.  As a country benef iting from the growing activity in business process 
outsourcing, he wished to see further discussion, par ticularly given recent protectionist backlash.  He 
agreed that the substance of the paper might best be  explored in an informal session or symposium.  
He looked forward to a prompt holding of such a symposium.   
102. The representative of India , seeking to clarify a number of points raised by Chinese Taipei, 
said that the communication was not suggesting to me rge the modes.  Rather, given the fact that 
technological developments had made cross-border s upply possible, he said it would be practical to 
enter similar levels of commitments, which meant concretely that the same commitment would be 
entered under the two modes.  This would avoid a more technical and drawn-out discussion on how to 
classify services as being supplied under mode 1 or  mode 2.   The sponsors were specifically 
suggesting that this path might not prove very fruit ful, and thus it would be best to choose a more 
practical path that would be helpful to the negotiatio ns.  With respect to specific suggestions that had 
been made, he welcomed them and thanked those Members that had expressed support for this idea.  
He inquired whether, while the parameters rema ined to be discussed, the Chairman could hold 
consultations on the input delegations  had given.  In terms of refresh ing Secretariat note S/C/W/99, he 
said it might be useful to explore whether any type of  update might be required.  He indicated that he 
hoped to come back with a more substantive proposal in the future.  
103. The Chairman  thought that more clarification shou ld be sought on these issues and that 
perhaps a symposium might be a useful forum, alt hough there could be other approaches.  He said that 
any such activities would not be possible before the end of the year, but might prove helpful if held before May 2005.  Unless Members objected, he suggest ed that he hold bilateral consultations on this 
point.  Recalling the presentation by UNCTAD and Brazil's request to have the slides for that TN/S/M/12 
Page 36  
 
 presentation circulated as a job document, and as no delegation had opposed this, he presumed it was 
agreed.  Finally, he stated that the Council had held  an open-ended informal meeting on mode 4 on 30 
September at which Members discussed the nature of commitments, including the categories of natural persons and administrative procedures.  Delegations made reference to the Secretariat Note 
contained in JOB(03)/195 as well as a communication by fourteen Members contained in 
JOB(04)/142.  There was great interest in the discussion and in follow-up.  He proposed that he 
undertake the appropriate consultations to determ ine the appropriate follow-up.  He invited the 
Council to take note of the statements made. 
104. It was so agreed
.  
C. WORK OF SUBSIDIARY BODIES – REPORTS BY THE CHAIRPERSONS  
105. The Chairman , in keeping with what had been agr eed concerning the regular reporting from 
the subsidiary bodies to the Special Session, invited th e Chairpersons to make their oral reports.    
106. The Chairperson of the Working Party on GATS Rules  reported that the Working Party had 
held a formal meeting on 20 September 2004, where the three usual issues had been on the agenda: 
government procurement, emergency safeguard measures, and subsidies.  On government 
procurement, delegations pursued their discussion of  a proposal by the European Communities for a 
framework under GATS for government procurement in  services.  The delegation of Hong Kong, 
China presented an informal communication which rai sed questions with respect to the proposal, and 
the European Communities provided some answers to questions previously raised.  The Secretariat 
also presented a Note that, as requested by the Working Party, provided greater information on 
government procurement-related pr ovisions in economic integration agreements.  Members discussed 
a series of issues related to the European Commun ities' proposal, such as the application of the MFN 
principle, relationship to the Government Procur ement Agreement, modal application, ways to 
schedule commitments, possibility of distinguishing between goods and services, and procedural rules.  Further discussion of these points seemed warranted.  A number of delegations stressed that, in their view, the relevant negotiating mandate under Artic le XIII did not entail mark et access issues.  In 
addition, some noted that Members had decided, in  July, not to negotiate on the Singapore issue of 
transparency in government procurement, while ot hers pointed to the recommendation of the Special 
Session, adopted by the General Council, to intens ify efforts to conclude rule-making negotiations, 
including on Article XIII.  Finally, the Working Pa rty requested the Secretariat to prepare a Note on 
approaches to the scheduling of government proc urement commitments in  economic integration 
agreements.  On emergency safeguard measures,  a group of Members from ASEAN presented a room 
document which provided answers to questions rais ed about these delegations' proposal, contained in 
JOB(04)/4.  Issues touched upon included acquired rights, modal application, availability of 
appropriate statistics, definition of domestic industry and the proposed 'limited window' of 
application.  Many delegations preferred to comme nt at the next meeting since there had not been 
enough time to closely examine the document before  the meeting.  With respect to subsidies, 
Members focused their attention on an informal communication from the delegation of Hong Kong, 
China, contained in JOB(04)/127.  It contained some thoughts on the possible way forward on such aspects of the negotiations as the information exchange , other sources of inform ation about subsidies, 
the definition of subsidies, and the concept of trad e distortion.  Noting the lack of progress in this 
area, some delegations called for a target date to be set for the exchange of information on subsidies 
pursuant to GATS Article XV, while others raised doubts about the precise meaning of the relevant 
mandate.  Some stressed the relevance of working on a definition of subsidies.  Delegations undertook 
to come back to the suggestions made by Hong Kong , China at the next meeting.  The Secretariat had 
prepared, for the meeting, an update of a previous  Note which listed the limitations in Members' 
schedules relating to subsidies (S/WPGR/W/13/Add.2).    TN/S/M/12 
 Page 37 
 
 
 107. The Chairperson of the Working Party on Domestic Regulation  reported that since his 
previous report to the June meeting of the C TS Special Session, the Working Party on Domestic 
Regulation had held one formal meeting, on 24 Se ptember 2004.  At this meeting the Working Party 
discussed two new papers.  The United States pre sented an informal paper entitled, "Proposal for 
Transparency Disciplines in Domestic Regulation".  Mexico circulated a paper, entitled, "Mexico's 
Experience of Disciplines on Technical Standard s and Regulations in Services".  He said that 
Members had made extensive initial comments on both these new papers, and the Working Party 
would revert to them at its next meeting.  The United States indicated that it planned to submit a negotiating proposal at the next meeting.  The Working Party extensively discussed the paper by 
Colombia entitled, "Examples of Measures Relating to Administrative Procedures for Obtaining Visas 
or Entry Permits", presented at the previous WPDR meeting.  There were also further comments on an 
earlier paper from Hong Kong, China on the Relati onship of Regulatory Disciplines with National 
Treatment, and an informal discussion on the Exam ples paper.  Under the Examples paper, Brazil 
indicated that it would be presenting some examples for discussion.  The delegations of Australia and 
New Zealand provided some written responses to thei r previously circulated papers on Professional 
Recognition Agreements and Implem enting Article VI Obligations in Engineering Services.  India 
noted they would present at a later meeting some further ideas to follow-up their informal paper on 
recognition.  On the consultations with internati onal professional organizations, the Secretariat again 
presented an updated compilation of the comments recei ved to date.  The comments incorporated ones 
from the International Actuarial Association, the In ternational Council of Nurses and the International 
Union of Lawyers.  No Members reported updates on their own domestic consultations.  The next 
formal WPDR meeting was expected to be held during the week of 22 November 2004.  As at the 
previous WPDR meeting, several Members indicated it was time to move to a next step, i.e. the 
consolidation of negotiating proposals and giving gr eater focus on specific elements for disciplines on 
domestic regulation.  Some delegations expressed cauti on and stated that this might be premature.  It 
was the case that at least one negotiating proposal was being awaited, and there could be others under 
preparation as well, without which it might be difficult to move to any next stage.  In conclusion, the 
WPDR was making steady progress, although perhap s not the speedy progress that Members had said 
they wanted to make at the beginning of the year.   
108. The Chairperson of the Comm ittee on Specific Commitments
 reported that since his last 
report in June, the Committee had held one form al meeting, on 28 September 2004, where it had 
addressed its regular agenda items of classification and scheduling issues.  Under the agenda item of 
classification issues, the OECD presented its paper on the management of the request-offer 
negotiations in the field of legal services (JOB (04)/77).  The Committee agreed to invite a 
representative of the International Bar Association (IBA)  to its next meeting to  reply to questions on 
its "Resolution in support of a system of te rminology for legal services for the purposes of 
international trade negotiations" (JOB(04)/17).  On the classification of energy services, the 
delegation of Indonesia informed the Committee that it would submit its revised proposal at the next 
meeting, taking into account the various comment s by Members on its original proposal.  The 
Committee then switched to informal mode for an exchange of views on classification issues in the 
areas of consulting services, as well as computer- a nd related services.  Several interesting points had 
been raised during the discussions, which would be continued at the next meeting.  Under the second 
standing item on its agenda, scheduling issues,  the Committee continued its examination of a series of 
questions by Hong Kong, China (JOB(04)/81) to which written replies had been received by Chinese 
Taipei (JOB(04)/82).  Several other delegations exchanged views on the issues raised, and the 
delegation of Hong Kong, China presented a follow up paper (JOB(04)/133).  The same delegation 
presented a room document with questions on the initial offer of Brazil.  It was his belief that the 
submissions and discussions on scheduling issues woul d prove useful for delegations preparing their 
initial or revised offers, or countries drafting services  schedules in the process of accession.  Various 
Members highlighted that the purpose of the discussi ons was not to change the existing guidelines for 
the scheduling of commitments, but rather seek to bring greater clarity to their application.   It was his TN/S/M/12 
Page 38  
 
 hope that a larger number of de legations, both from developed a nd developing country Members, 
would engage in the substance of this dialogue at future meetings. 
109. The Chairperson of the Committee on Trade in Financial Services
 reported that the 
Committee had met on Tuesday, 28 September.  With regard to the Acceptance of the Fifth Protocol, 
she had no new development to report.  The thr ee Members that had not yet accepted the protocol 
were Brazil, Jamaica and the Philippines.  No spec ific topics were raised under the agenda item on 
Technical Issues.  She noted, however, that Members had shown a preference for discussing any technical issue, such as classification or schedu ling of commitments, on the basis of concrete 
proposals. With that in mind, the Committee would revert to this standing agenda item at the next meeting.  Concerning Recent Developments in Fina ncial Services Trade, Members had an interesting 
discussion on the issues raised by the communica tions submitted by Norway and Turkey at the 
previous meeting.  Members discussed inter alia  the possibilities of further liberalizing the cross-
border supply of marine and energy insurance, and the development and use of Internet by insurance 
companies.  In addition, Mexico made a thorough presentation on the Modernization of the Mexican Financial System, in which the most recent chang es to the Mexican legal fra mework were explained. 
She expressed, on behalf of the Committee, her a ppreciation for the thorough presentation given by 
the capital-based experts.  The Committee would reve rt to this standing agenda item at the next 
meeting.  As agreed at the previous meeting, the proposal submitted by Antigua and Barbuda on 
behalf of a number of Members was included as a separate item in the agenda of this meeting.  Given the absence of formal interventions on this proposal, and following her suggestion, the Committee 
turned briefly to informal mode in order to discuss how  to proceed on this matter in the future.  It was 
her impression from this informal discussion that furt her treatment of this issue along the current lines 
in the Committee might not lead the Committee much further, and that interested Members would 
better first meet and explore any other possible options.  Depending on the outcome, the Committee 
would then take up the issue again at an appropriate  time in the future.  The next meeting would be 
held on Tuesday 23 November. 
110. Thanking the Chairpersons for their reports and hard work, the Chairman
 proposed that the 
Council take note of these reports. 
111. It was so took note . 
 
D. REVIEW OF PROGRESS IN NEGOTIATIONS , INCLUDING PURSUANT TO PARAGRAPH 15 OF THE 
GUIDELINES FOR NEGOTIATIONS  
112. The representative of the Dominican Republic  wished to present her country's initial offer.  
She said that the Dominican Republic was submitting its  initial offer as a contribution to the round of 
negotiations and as an indication of its commitment to carry out the mandate contained in the Doha 
Ministerial Declaration.  She said the offer was th e result of a lengthy consultative process in the 
Dominican Republic with the representatives of the various sectors which were included in the offer 
individually and collectively.  She said the first consu ltations had been held in June 2003.  As well, a 
national seminar provided through WTO technical assi stance had given information on the theoretical 
principles that governed trade in services as well as on the stage of negotiations and the procedures for 
preparing the offers.  The seminar was followed by  a workshop to prepare the offer provided through 
UNCTAD technical assistance.  The first consultations had resulted in an outline for the initial offer in 
which the sectors that were consulted proposed ne w commitments which improved or consolidated 
existing ones.  This outline had been twice revised:  the first after the failure at Cancun and the second 
subsequent to the decision contained in the July p ackage.  The offer that was being submitted was the 
outcome of these consultations and it reflected the queries and concerns that the sectors had expressed 
in the consultations.  Specifically, these queries and concerns included, the general evolution in the 
WTO and taking account of the need to ensure general balance in the results of all the negotiations in 
the context of the ministerial meeting at Doha.  Th ey also included the quality of the offers submitted 
by the other Members of the WTO taking into accoun t the level of commitments offered by partners,  TN/S/M/12 
 Page 39 
 
 
 particularly the industrialised countries in the sectors and modes of supply of interest to the 
Dominican Republic.  Thirdly, they included progr ess in other areas of the services negotiations, 
notably the outcome of the negotiations on emergenc y safeguard measures and rules in the context of 
GATS Article VI:4.  Fourthly, they included the possibility of promoting at all times national economic objectives through measures to regulate public  and private services, regulate investment, 
diversify the national economy, regulate competiti on, protect the consumer, alleviate poverty and 
improve living conditions for citizens to ensure sust ainable management of natural resources and the 
transfer of technology.  Fifthly, they included the possibility of promoting at all times non-economic 
objectives of domestic policy through measures to regulate universal access to various services to 
ensure and protect public health, to  protect the cultural values and national identity, and to ensure the 
protection of the environment.   
113. Notwithstanding the reflection of these elements, the representative of the Dominican 
Republic said that the offer contained broad and ne w commitments, both horizontal and sectoral.  She 
stated that there were improvements in commitm ents on the movement of natural persons, which 
echoed the interest of developed countries and deve loping countries on this issue that was of prime 
importance for the economy of the Dominican Republic .  It also contained new specific commitments, 
inter alia , in financial services and professional services.  The offer was prepared on the basis of the 
consolidated schedule of commitments of the Do minican Republic and the editorial conventions 
outlined in the Secretariat note JOB(02)/88.  It r espected the order of classification contained in the 
W/120 list and made reference to CPC codes.  She invited Members to take note of the Dominican 
Republic's offer and her delegati on remained at partners' dispo sal for bilateral and multilateral 
consultations.  She sought to emphasise the need of  developing countries and in particular of the 
Dominican Republic to receive technical assistance in order to meet the challenges posed by the 
process of negotiation.  She recalled that in the cons ultations for the prepara tion of the offer, great 
short-comings and deficiencies had been noted, in particular the need for a general and sectoral 
evaluation in order to determine the consequences for the Dominican Republic of wider liberalization 
since the Uruguay Round.  She said the offer would be  submitted to the Secretariat for circulation to 
Members. 
114. The Chairman
, on behalf of the Council, thanked the Dominican Republic for its offer and 
appreciated the efforts that had been made to pr oduce it.  He said Members would examine it with 
interest and no doubt hold consulta tions.  He said he had taken note of the urgent need for technical 
assistance.  The Chairman then we lcomed the Permanent Secretary of the Ministry of Trade and 
Industry of Kenya.  
115. The representative of Kenya  wished to inform the Members that Kenya was tabling its initial 
offer on services.  Kenya was taking this positive step in the spirit of constructive engagement in the 
services negotiations and to demonstrate its commitme nt to the effective implementation of the Doha 
work programme and to the decision adopted  by the General Counc il on 1 August 2004.  He 
encouraged and looked forward to other Members, particularly those that had not submitted their 
initial offers, to do so as soon as practicable.  He em phasised that Kenya had worked hard to prepare 
its initial offer.  The process of evaluating offers was a complex and challenging, particularly in the 
face of technical and financial difficulties that  confront many developing countries.  The 
comprehensive review of requests and the extensive consultations with stakeholders at the national 
level had taken up considerable time and resources.  He expressed appreciation for the assistance 
provided by the WTO, UNCTAD and ITC that had made it possible to submit the initial offer and to 
participate actively in the negotiations.  As the negotiations advanced, he appealed for increased 
assistance, both financial and technical so that all Memb ers could effectively engage in the process.     
116. Turning to the substance of the offer, the representative of Kenya said it included 
improvements at both the sectoral and horizontal levels.  He said that architectural services was newly 
included.  While he welcomed comments by Member s in the bilateral and multilateral consultations, TN/S/M/12 
Page 40  
 
 he sought to clarify that Kenya reserved the right to m odify or withdraw in whole or in part its offer at 
any time depending, among others, on the progress as we ll as the outcome of the negotiations in other 
areas of Kenya's interest.  In this respect, his de legation would continue to monitor developments in 
services and in other areas of the negotiations, while  taking into account the fact that the overall 
outcome of the negotiations would be adopted as a package under the principle of a single 
undertaking.  He said that the services sector was a key component of the Kenyan economy, and its 
contribution to GDP had risen from 46 per cent in 1970 to 55 per cent at present.  It was a major employer and contributed significantly to the coun try's foreign exchange earnings.  Kenya therefore 
attached much importance to the liberalization of trad e in services, particularly in the context of these 
negotiations.  Kenya expected Members to give special attention to sectors and modes of export 
interest when undertaking market  access commitments.  Among other areas, he sought to express 
Kenya's interest in the liberalization of the movement of natural persons, which, Kenya was 
convinced offered the greatest benefit to developi ng countries and could be an effective tool for 
achieving increased participation of developing count ries in services trade and reduction of poverty.  
In this connection, Kenya expected that the ex isting asymmetry between the liberalization of capital 
movements and labour movement would be addressed effectively in the negotiations.  He underscored 
the need for Members to accord the appropriate fl exibility to developing countries as provided in the 
GATS.  He hoped that due attention would be given to this important principle so that commitments 
undertaken by developing countries would not un dermine their national policy objectives.   
117. The Chairman
, on behalf of the Council, thanked Kenya for the tabling of its offer and 
thought that it was a very important step.   
118. The representative of Jordan  stated that her country was tabling its initial offer in services 
pursuant to GATS Article XIX and took into account the need to secure an overall balance in the 
outcome of the WTO negotiations pursued under the Doha Ministerial Declaration and the decision 
adopted by the General Council on 1 August 2 004, which included the recommendations of the 
Special Session of the Council for Trade in Servi ces.  The offer was submitte d in a positive spirit and 
as a contribution to the on-going negotiations.  She stated that the offer had been the result of 
intensive domestic consultations, both with public and private sector representatives embodied by the 
national committee for trade in services negotiations .  The offer also took into account the recent 
accession of Jordan to the WTO.  Referring to the substance of the initial offer, she said that, in 
addition to the extensive commitments made by Jordan during the accession  process, Jordan had 
extended its commitments in the offer to include a new sector, passenger rail transportation, that 
covered commitments in the four modes of supply.  The offer improved Jordan's commitments in life 
insurance services, non-life insurance, and reinsura nce and retrocession services to allow new forms 
of commercial presence to be established in Jord an and extended the commitment under technical 
testing and analysis services to include educationa l services, specifically designing, administrating 
tests and evaluating test results.  Jordan had also fully implemented all of its phase-out commitments 
that were due for phase-out to date and included: courier services, mobile voice and data services, 
commission agent services, educational services, insu rance and insurance-related services, and health 
and social related services.  Notwithstanding these comments, Jordan reserved the right to modify, 
extend, reduce and withdraw in whole or in part its offer at any point prior to the end of the current 
services negotiations.   Jordan further reserved the ri ght to make technical amendments to the offer 
and corrections to rectify any errors, omissions or  inaccuracies, as well as to clarify and interpret its 
terms and conditions.  She indicated that the offer represented tremendous efforts made in Jordan and 
with the highly professional technical assistance by  the Secretariat.  Jord an welcomed any comments 
Members might wish to make at any level.  Sh e encouraged Members having not done so to submit 
their initial offers and to request that those havi ng submitted initial offers to improve them.     
119. On behalf of the Council, the Chairman  thanked Jordan for the submission of its initial offer 
and anticipated that it would ge nerate considerable interest.  TN/S/M/12 
 Page 41 
 
 
 120. The representative Gabon  sought to underscore that, in order to prepare its initial offer in due 
form, his delegation had requested technical assistance in the form of a national activity.  He thanked 
the Secretariat for having responded positively to this  request.  Referring to the call by the Dominican 
Republic for increased technical assistance, he agreed that, without this technical assistance, he was 
not certain that the various national stakeholders in  the negotiations would have been able to conduct 
their work on the offer.  He said that Gabon had b een approached by the Un ited States, the European 
Communities and Norway for bilateral meetings and he said that Gabon had prepared its initial offer 
for telecommunications and was in the process of pr eparing its offer in other areas.  He sought to 
inform partners that this work would be done caref ully.  He reiterated the call for further technical 
assistance, which countries such as Gabon require d in order to respect the deadlines for the 
submission of offers, including assistance to meet the May 2005 benchmark.  
121. The representative of the United States  applauded and commended the Dominican Republic, 
Kenya and Jordan for the submission of their offers, the depth of those offers and the care and effort 
required to prepare them.  The United States announ ced that it had reached an agreement with the 
International Trade Centre to extend a grant wh ich would, among others, fund services capacity 
assessments in Bangladesh, Indonesia, Kenya and Rw anda.  She hoped that the United States would 
be able to provide further assistance in the forthc oming fiscal year in orde r to assist others in 
preparing their offers and requests.  She encourag ed other developed countri es to support this process 
and the programme as well.   
122. The representative of Rwanda  said that Rwanda was preparing to submit its offer soon.  
Referring to the United States intervention, he welc omed that the programme would include a services 
assessment in Rwanda.  He said it came at a prop itious time as Rwanda was preparing to submit its 
initial offer.  He said that a number of sectors, in cluding financial, telecommunications and tourism 
services had been identified, and that the programme  might help to identify others.  He said his 
government was studying the potential benefits to and weakness of these sectors in order to submit an 
offer.  He said that services as a percentage of GDP was 46 per cent, which demonstrated the 
importance that his country attached to services development.  He said that his government 
appreciated the United States initiative and hoped to make good use of it.  He recalled that a delegation was present in Geneva for a Trade Po licy Review, of which the portion on services was 
important.  He encouraged others donate so th at other countries could benefit from assistance. 
123. The representative of Indonesia
, responding to the announcement by the United States, 
expressed his delegation's gratitude for the technical assistance to be provided through the ITC.  With 
respect to offers, he informed Members that  Indonesia, in order to undertake progressive 
liberalization, was preparing its offer.  Indonesia was sparing no effort in this regard in consultations 
with stakeholders.  He emphasised that the Indon esia's offer would be submitted as soon as practical. 
124. The Chairman  thanked the delegations for thei r statements and explained that, 
notwithstanding their positive announcements, he wished  to make a some comments about the overall 
situation.  Seeking to make a few frank comme nts on his own responsibility and referring to the 
question of initial offers, the Chairman indicated that some 44 offers representing some 65 Members, 
including an LDC Member, had been tabled.  He said that, apart from LDC Members, there were 
some 52 Members who had not and were overdue in submitting an initial offer.  Recalling a previous 
report to the TNC, he had met with all Members w ho were in "arrears" and had a resident Mission in 
Geneva.  He had also met with one non-resident Member, and had sent written communications to the 
governments of non-resident Members.  Since thes e contacts with these governments, the situation 
had improved somewhat, however, the total remained very modest.  He noted that, at the rate at which initial offers were appearing, it could take some three years to see a complete set of initial offers.  
More fundamentally, he thought it should be recogni zed that the overall situation with respect to 
offers had worsened, because the situation was not a st atic or stationary one and, as time went by, the 
fact that so many countries had not presented an initial offer had an increasingly negative impact.  TN/S/M/12 
Page 42  
 
 Elaborating on his view, he said that government s negotiated on the assumption that all would play 
according to the rules of the game.  If some did not , it reflected poorly on the credibility of the entire 
process.  Like inflation, it devalued the currency,  and affected the trust people had in a set of 
economic policies.  Slippage eroded confidence in the system, its rules and procedures.  He did not mean to suggest that the current situation would bring about the colla pse of the process, but it did not 
serve the process.  He said that in his contacts with delegations, particularly with those of many 
developing countries, the low number of initial offers from developing countries made it more 
difficult for them to prepare for the round of revised  offers.  He said that he had been told that 
pressure by capitals and trade authorities on other ag encies and stakeholders was often met with the 
response that there was in fact less pressure since many others had not taken the first step.  Urgency, 
at the present stage, was needed on the road to the May benchmark for revised offers.  He said that, as 
Chairman, he could not let the situation drift and linge r, for if he remained passive, he would send the 
wrong message and encourage the deterioration of a pr oblematic situation.  Paradoxically, he said that 
those who might most lose from this situation could be  those who had yet to make an initial offer.  He 
said that he had heard many of these countries repeatedly state how important liberalization of trade in 
services was to them generally or in specific sector s, their concern about the negotiations on rules, and 
their interest in opening markets for their exports.  The logic of any negotiation was that it was quite 
unlikely that one party would obtain satisfaction of its  interest, total or partial, if it was unwilling to 
make concessions.  The same could occur if an offer came too late in the process when the other party 
had no more time to change or improve its offer.  As all were aware, the political economy of services 
was complex and movement, however small or modest, took effort and time.  He said that this could 
be detrimental to those that had made an initial offe r, but who had not been able to obtain satisfaction 
for their export interests because of the lack, overall, of initial offers.  He recognised that each 
situation was different, as had been communicated  to him in his consultations. While he was 
sympathetic to those facing extraordinary domestic political situations, this was clearly not the case 
for all Members, some of whom had indicated that th ey were close to being able to submit an offer.  
He was puzzled as to why those Members had not cho sen to submit those initial offers.  He suggested 
that, in order to ensure the integrity of the ne gotiations and as a courtesy to fellow negotiators, it 
would be appropriate for those not  having submitted an initial offer to provide the Council with some 
information in this regard.  He reiterated that, in sharing his thoughts, he had been very frank and to 
the point.  As Chairman and from his vantage-point, fo r the benefit of all he had sought to provide an 
overview of what he had heard from Members.  In  his view, the situation was becoming serious and 
required a response.  In this regard, he sought the po ints of view of Members as to what he could do 
as Chairman, what the Chairman of the TNC could do, or what role targeted technical assistance 
could play in the short term, to be of assistan ce.  The Chairman then drew attention to a 
communication relating to the Council's work unde r this item and Touris m services from Brazil, 
Colombia, Dominican Republic, El Salvador, Indi a, Indonesia, Nicaragua, the Philippines and 
Thailand contained in document TN/S/W/23.
   
125. The representative of Colombia  on behalf of the delegations of Brazil, Colombia, Dominican 
Republic, El Salvador, India, Indonesia, Nicaragua, the Philippines and Thailand wished to introduce 
document TN/S/W/23 pursuant to the Special Sess ion's review of progress in the negotiations and 
specifically pursuant to paragraph 15 of the Procedur es for Negotiations.  She indicated that Peru was 
also a co-sponsor of the document.  The co-spo nsors intended the document to be part of the 
continuing discussions on the extent to which the mandate of Article IV of the GATS was being 
implemented in the on-going negotiations.  She reca lled that several developing countries had taken 
the initiative to examine the extent to which th e initial offers had operationalised, or had not 
operationalised, the objectives of Article IV with re spect to mode 4, the supply of services through the 
temporary movement of natural persons.  The gr oup hoped that the discussion Members had held on 
this issue would provide an additional basis for trad ing partners to make s ubstantial improvements to 
their offers on mode 4 when preparing their re vised offers.  The group further hoped that the 
submission she was presenting, related to Members' initial offers and tourism services, would lead to 
a re-examination by Members of their initial offers  in these particular sectors with a view to  TN/S/M/12 
 Page 43 
 
 
 improving their revised offers in Ma y.  By way of the submission, the group was responding in part to 
the point made by some trading partners recently, namely that there existed other sectors and modes of supply which merited attention in the negotiations .  She said that developing countries intended to 
look at other services sectors of interest to them in the context of paragraph 15 of the Negotiating 
Guidelines.  She said that the group had identified tour ism services, as reflected in the initial offers, as 
one of the first sectors to examine because of its well-known economic significance to many 
developing countries and because interest in this sector represented a perceive d developed-developing 
country divide.  Members' initial offers in touris m services, as indicated in the paper, had been 
examined in relation to the elements containe d in negotiating proposals and requests tabled by 
developing countries.  These included, but were not limited to:  the facilitation of movement of 
natural persons supplying services in tourism and recognition of their qualifications, the elimination 
of anti-competitive practices and unfair competition, the elimination of requirements for commercial 
establishment or presence, and the elimination of national residency requirements.  The group had 
also reviewed Members' commitments undertaken in the Uruguay Round in order to assess the extent 
to which improvements had been made.  The ines capable conclusion was that, while a few Members 
might have endeavoured to undert ake further commitments in the in itial offers, in general the level 
and quality of offered commitments in initial offers  of developed countries in the tourism services 
sector left much to be desired.  She called upon Memb ers to seek ways to redress this situation in their 
initial offers and give substance to  the mandate contained in Article IV in this sector by addressing 
this issue raised in the communication she was presenting.   
126. The representative of Cuba
 noted that tourism was one of the most dynamic sectors of Cuba's 
economy and was an important element of its development plan.  It had become a structural factor of 
the economy over the preceding decade.  The partic ipation of international tourism and its revenue 
had risen from 4 per cent in 1990 to 43 per cent currently and accounted for 25 per cent of investment.  The number of jobs created had been doubled and to talled 100,000.  She cited these statistics in order 
to underscore Cuba's interest in the proposal subm itted by the co-sponsors.  Cuba agreed with the 
issue raised, particularly the elimination of outst anding limitations, and said that further liberalization 
in this sector was necessary.   
127. The representative of El Salvador
  said it was important to broach tourism under the present 
agenda item, including through the evaluation pursua nt to paragraph 15 of the Negotiating Guidelines.  
El Salvador believed that significant liberalizati on in this sector coul d generate revenue for 
developing countries.  She recalled that El Salvador had demonstrated its support for this issue in the 
past through proposals for liberalization.  The current  submission was a continuation of this support.  
The tourism sector was a priority for her govern ment, and in 2004, the country had seen the 
establishment of the vice-ministry for tourism.  El Salvador was promoting this sector in order to generate employment.  She noted that it was a labou r-intensive sector that also created employment 
indirectly because of various links to other sector s of the economy.  The target was to double the 
weight of this sector in El Salvador's GDP by  2009.  As a result, her delegation thought it was 
necessary to liberalize in the four modes of s upply for tourism services, as well as reduce and 
eliminate the limitations to tourism trade.  Res ponding to the points made by the Chairman in his 
opening statement, she underlined that El Salva dor was committed to the multilateral forum.  Her 
country recognised international trade as a developm ent tool which would lead to economic growth 
and improve the standard of living fo r its population.  It was for this reason that El Salvador had made 
commitments in the Uruguay Round in some 50 per cent of the services listed in the W/120 
classification list and had subsequently undertaken commitments in financial and telecommunications 
services through the adoption of the Fourth and Fifth Protocols.   Notwithstanding commitments at the 
multilateral level, El Salvador pursued different optio ns in bilateral fora which presented different and 
legitimate interests.  With regard to El Salvador's initial offer, she said that efforts were being made, 
despite the difficulties she had indicated on previous occasions.   TN/S/M/12 
Page 44  
 
 128. The representative of Guatemala
 said that the tourism sector was important for his country 
and sustained efforts had been made to spur econom ic development and growth .  He echoed some of 
the legitimate elements that had been outlined in th e document and which needed to be tackled.  He 
said that the commitments offered in the initial offers did not sufficiently address the need for 
liberalization in this sector.  He said that gove rnments to which requests had been made should 
consider them in the light of the proposal.   
129. The representative of China  appreciated the paper as a useful contribution that would 
facilitate the assessment of the extent to which th e Article IV of the GATS had been implemented.  
Tourism services was an important sector of great ex port interest for many developing countries.  In 
China, the export of tourism services accounted for more than one-half of China's services exports.  
He said it was appropriate to review the existing in itial offers presented by developed Members in the 
sector with a view to operationalising the obligation contained in GATS Article IV.  He noted that the 
paper raised a number of issues, including the impr ovement of mode 4 commitments, which should be 
taken into consideration and addr essed properly in the negotiations.  China fully agreed that the 
facilitation of natural persons supplying services in tourism and the recognition of their qualifications 
could be used as criteria to assess the extent of the commercial meaningfulness of market access and 
national treatment commitments offered in the initial offers.  
130. The representative of Mexico  stated that tourism was of paramount importance to many 
developing countries, including for Mexico.  Referri ng to a presentation his delegation had made at a 
seminar on culture and trade, he recalled that tourism was the third most important sector in the Mexican economy.  Liberalization of this sect or was extremely important and he said that 
liberalization and the undertaking of commitments in tourism would have a very beneficial effect on 
the economies of developing countries.  Mexico agr eed with findings in the document, for instance in 
paragraph 5.  However, the effort made by the co -sponsors could be supplemented by an analysis of 
all initial offers.   He invited all Members that had not done so to submit thei r offers and to undertake 
commitments in tourism services.  With respect to  those preparing revised offers having not proposed 
to undertake commitments in tourism services he encouraged them to do so at that time.   
131. The representative of Korea
 agreed that tourism represented for many developing countries an 
important contributor to economic development.  It was for this reason that Korea had included 
proposed commitments in all sectors in tourism and travel related services in its initial offer.  
Highlighting the points in the proposal of particular interest to Korea, he cited the elimination of 
ENTs in all sectors and modes of supply, the elimination of the requirement for commercial 
establishment, the elimination of anti-competitiv e practices and unfair competition, and access to 
technology distribution channels and information networks.  He indicat ed his delegation's interest in 
pursuing discussions on this item. 
132. The representative of South Africa  said it had been useful to reiterate a number of issues that 
had long been on the negotiating age nda.  Her delegation supported ma ny of the issues listed and 
recalled that there were many inter-sectoral issues  that needed to be taken into account.  She 
highlighted the asymmetry that existed in commitments in mode 4, and in particular the disproportionate level of commitments on ICTs, and said more discussion was appropriate on this 
point.  Referring to the Chairman's introductory statement, she said she would faithfully communicate 
his views to capital and that her delegation would take them into account.  She also indicated her 
delegation's interest in particip ating in consultations regarding mode 4 issues and a symposium on 
mode 1.     
133. The representative of Switzerland
 agreed that tourism was an important sector, and that it was 
an engine for growth, particularly for developing countries.  Tourism was an internationalised sector 
that merited increased commitments in the current round.   In this light, he thought that the paper was a 
positive initiative to focused on this key sector.  Sw itzerland had an interest in this sector and an  TN/S/M/12 
 Page 45 
 
 
 improvement in partners' market access and nationa l treatment commitments, both near and afar.  He 
wondered whether, in relative te rms, tourism had been the subjec t of fewer new commitments than 
other sectors, or in absolute terms were insufficien t.  In this regard, he referred to the lack of 
dynamism in the round overall and the lack of of fers.  In sectors where Switzerland had a strong 
interest, such as financial services, he could envisage a similar conclusion.  He said that tourism, by 
definition, was highly internationalised with importa nt regional markets for exports and imports in all 
modes, and for which modern transportation allo wed for easy movement.  From this market 
perspective, he was struck by the North-South conclusion drawn.  Taking the example given of 
sending a home country tourist guide with a group to  the host country, he agreed that there existed 
entry barriers, because, despite having the correct  visas, the guide might not obtain the necessary 
work permission.  He said that, while this would be  true for markets abroad, it was perhaps even more 
true, in terms of market size, for neighbouring co untry destinations.  While he agreed that the 
provision of hotel and restaurant services abroad was favourable for development, greater benefits 
flowed from welcoming in-coming tourists, for which th e relevant mode was mode 2.  In this regard, 
he said that the scope of the study could be e xpanded in order to assess the link between tourism 
services and growth.  He recalled that the best mann er in which to reap benefits from the negotiations 
was through participation.  He referred to an  earlier communication from three Members who had 
submitted and offer and had subseque ntly underlined the need to move forward.  He noted that the 
majority of the co-sponsors of the paper under discussion had not tabled an offer.   
134. The representative of Peru  stated that his country had decided to become a co-sponsor of 
document TN/S/W/23.  He sought to make a few point s.  Firstly, Peru's interest in co-sponsoring the 
proposal reflected its interest in having substan tial commitments for liberalization in the tourism 
sector and eliminating anti-competitive barriers in the sector.  Peru thought that the point, raised in 
paragraph 4 of the proposal and which reflected fact s and observations that had been made by other 
developing countries, set guidelines that could be ta ken into account in a meaningful way with the 
circulation of revised offers, in particular to f acilitate the movement of natural persons and recognise 
their qualifications.  He said that these types of services in the revised offers should include 
contractual services providers, as this would cover sh ort-term services suppliers in the tourism sector 
not limited to professionals.  Regarding unfair competition, Peru thought that Members should 
analyse these practices to understand how they operated and limited the revenue and resources to developing countries.  He said that different studies carried out by UNCTAD and the WTO-OMT 
could be useful in this regard.  He appealed fo r a special effort to be made for the benefit of 
developing countries in the next round of offers that took into account an earlier communication from 
a group of Members that included a model schedule. 
135. The representative of Japan
 said that tourism services were  important for the co-sponsoring 
countries and other countries, particularly develo ping countries.  He said it would contribute to 
understanding and wished to revert to it as necessar y.  Japan welcomed any bilateral consultations 
with any Member that might be interested in Japan 's commitments in tourism services.  Referring to 
the Chairman's earlier statement on initial offers, he  thanked and welcomed those delegations that had 
indicated they were presenting an initial offer and w as encouraged by these offers.  He said that in 
bilateral consultations, a number of  delegations had indicated they were making the utmost effort to 
present their initial offers.  In this regard, he shar ed the view expressed by the Chairman that it was 
important to follow the rules to which Members ha d agreed.  He encouraged Members who had not 
presented their initial offers to do so as soon as possible.   
136. The representative of Antigua and Barbuda  indicated his delegation's support for the paper 
contained in TN/S/W/23.  He said that the touris m industry had contributed to the development of 
small countries like Antigua and Barbuda and that it c ontinued to do so.  He said that in his country, 
tourism contributed, directly and indirectly, to over 75 per cent of GDP.  He noted, however, that 
continued growth had suffered from a variety of rest rictions, some of which were elaborated in the 
document.  These were challenges and hampered deve lopment against the spirit of paragraph 2 of the TN/S/M/12 
Page 46  
 
 Doha Ministerial Declaration and Articles IV and XIX of the GATS.  His delegation appreciated the 
Chairman's statement regarding the submission of in itial offers.  He said that his country's offer was 
ready for discussion at cabinet level and he hoped that  an offer would be forthcoming.   He recalled 
that his country was involved in a regional integr ation process, which needed to be taken into 
consideration in the preparation of an offer.  He understood the urgency a nd said he would endeavour 
to communicate it to capital.  He also wished to lend his delegation's support to a symposium on 
mode 1, which had been an area of diversifica tion, growth and employment.  He said that the 
technology industries trading through mode 1 ha d proven to be resilient in times of natural 
devastation.  He said that this mode seemed to have the ability to remove, to some degree, the 
vulnerability faced by small economies, for instance in the face of natural disasters.  He said that the 
participation of capital-based representa tives might be worth exploring.  
137. The representative of Barbados
, referring to document TN/S/W/23, said her delegation 
believed it not only helped to fulfil the objectives of  paragraph 15 of the Negotiating Guidelines, but 
also reinvigorated the debate on tourism services.   As a small developing country whose primary 
source of foreign revenue was derived from tourism,  Barbados shared a number of the concerns 
identified in the paper, particularly with respect to the issue of the movement of natural persons 
supplying services in tourism and recognition of their qualifications, the elimination of anti-
competitive practices and unfair competition, and the elimination of nationality or residency 
requirements.  Her delegation would review the submission closely and looked forward to 
participation in future discussions.  Referring to th e general issue of the review of progress and the 
Chairman's statement, she regretted that Barbados  was one of the developing countries that had not 
been able to submit its initial offer.  She referre d to the critical importance of the services sector to 
Barbardos' economy and underscored that there ha d been no unwillingness to submit an offer, but 
rather the delay was related to the complex undert akings involved in the preparation of offers, 
including assessment and extensive stakeholder cons ultations, at both the na tional and sub-regional 
level.  In continuing its efforts to prepare its in itial offer, Barbados was mi ndful of the May 2005 date 
for the tabling of revised offers, which it viewed as an indicative target, recognising that a significant 
number of developing countries were yet to submit th eir offers.  Her delegatio n would continue to be 
guided by the principle of feasibility, as outlined in the second paragraph of Annex C of document 
WT/L/579.  She thanked the concerned delegations for the joint statement on Mode 1 liberalization 
and indicated her delegation's support for a seminar or symposium on this topic.   
138. The representative Chile , referring to document TN/S/W/23, said it contained useful 
information on the offers presented that contained commitments in this sector.  He said that sight 
should not be lost of the fact that, for many deve loping countries, the development of this sector was 
key for comprehensive economic development.  For Chile in particular, tourism represented a sector 
in which liberalization of trade could be a powe rful motor for economic development in Chile.  He 
said that the presentation of the document came at a very useful point in the negotiations, and he 
hoped that many countries that were revising their o ffers would respond to the elements it contained.  
He agreed with the inclusion of the points in  the second part of the document, which contained 
suggested elements for determining whether Memb ers were undertaking important commitments in 
this sector.  Finally, he noted the importance for a dditional contributions to be tabled that addressed 
the way in which progress could be made in this sec tor.   Turning to a few comments on the general 
process, he pointed out that of two important seminars had taken place in that last few days, the first 
on logistics services and the second on the relations hip between culture and trade.  He said that both 
had been extremely useful, the first in addressing th e benefits that could emerge from commitments in 
logistics services, and the second in permitting an ex change of views concerning the importance of 
progress in liberalizing trade in services falling with in the scope of culture and related to the 
development of a convention on culture at UNESCO.  He said that the informal meeting on mode 4 
had also been useful.  It had addressed the nature of commitments within mode 4 and the question of 
transparency in mode 4.  He said that many de veloped countries and devel oping countries had taken 
part.  The discussions revealed a series of elemen ts which he said required Members to continue to  TN/S/M/12 
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 reflect on how the liberalization of the provision of  these services could be furthered.  However, he 
noted some concern about the market access negotia tions.  He had the impression from in bilateral 
consultations there had not been much progress and th at the current stage of the negotiations was at a 
standstill.  He said that this situation could be redressed through the submission of outstanding initial 
offers.  He thanked the Dominican Republic,  Jordan and Kenya in this regard.  It was very important 
for Chile that all Members present initial offers, and pa rticularly those in his hemisphere.  It was only 
in this manner that a critical mass could be achieve d that would give Members an indication of their 
priorities and how to move forward with the submis sion of revised offers.  He urged Members that 
required technical assistance to approach the Secret ariat in order to try a nd resolve any outstanding 
details.   He said that priorities needed to be id entified for the period from the present to May 2005.  
Members' goal should be to comply with the timeframe  outlined in the July package.  Subsequent to 
May 2005 and depending on the quality of the revi sed offers, Members would also examine the 
progress made in rules and disciplines negotiations.  He recalled that for Chile the quality of offers 
was determined by the readability and clarity of commitments and the content of the commitments 
made.  He pointed out that the good work of the clus ter demonstrated that there was much more to be 
done and the elements for which more work was needed, and he said that Members should 
constructively contribute to issues that were of interest to everyone.   
139. The representative of Hong Kong, China  said the communication presented would be referred 
to capital.  His preliminary reaction was that tourism services were economically important, which was why his delegation had given attention to this sector in Hong Kong, China's initial offer.  He said 
that the issues which it raised were pertinent and he wished to have an opportunity to revert to them.   
Turning to a few comments on the general process and echoing the comments by Chile, he said that 
during the cluster there had been signs that activ ity was intensifying.  He noted that the August 
package had infused the negotiations with momentum, and in this regard, he recalled that it referred 
not only to the date for revised offers, but in cluded the other elements that the Council had 
recommended, including the submission of outstanding offers, of revised offers, the high quality of 
offers, rule-making work, technical assistance, an d the review of progress by the Council for the 
purpose of preparing for the next ministerial meeting in Hong Kong.  Given the intensification of the 
negotiations and the road map envisaged in the August package, he said it might be useful for 
Members to reflect on how to organise work until the next ministerial meeting.  Hong Kong, China expected the services negotiations to intensify on every front, which included the bilateral request-
offer process, the friends groups process and multilate ral work, including the rules negotiations.   He 
said that many friends groups were becoming more proactive and inclusive in terms of sharing with 
the membership their ideas and work .  He encouraged all friends groups to emulate recent examples.  
He said this was particularly important in the lead -up to the May date for the submission of revised 
offers.  In order for Members to take into acc ount any discussion in the friends groups, these groups 
would need to allow for sufficient time for this  progress to be measured in domestic processes.  
Activity was intensifying at the multilateral level, in cluding through the informal meeting on mode 4.  
He said that the multilateral process should be u sed to pursue the discussion of certain issues which 
could be usefully addressed horizontally.  This could include discussion on mode 1, mode 4, or 
classification and scheduling issues, for instance, in th e CSC.  Turning to the issue of offers, he said 
that one of the main conclusions that could be drawn from the assessment exercise was that engagement in the services negotiations was impor tant for everyone, both developed countries and 
developing countries.  He called for engagement a nd participation in the request-offer process, which 
was the main vehicle for the services negotiations.  He welcomed the initial offers that had been 
tabled by Dominican Republic, Kenya and Jordan.  He urged those Members who had not done so to 
submit their outstanding initial offers as soon as po ssible.  The Chairman had rightly noted that 
governments negotiated on the understanding that a ll Members played by the rules, and this was 
especially true in the case of Hong Kong, China, si nce in the preparation of its revised offer, the 
number and quality of offers would be  a consideration.  He agreed w ith Chile that the revised offer 
should be of high quality, and the absence of qu ality would make steps aimed at maintaining 
momentum difficult for Members to justify to domestic constituencies. He recalled the TN/S/M/12 
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 recommendations that the Council had made, whic h included an emphasis on sectors and modes of 
export interest to developing countries in revised offers, as well as no a priori exclusion.  With respect 
to the quality of offers, this referred to both substa nce in terms of the level of the commitments, and 
form in terms of their clarity, certainty and comp arability.  His delegation would be reflecting on any 
possible benchmarks for the quality of offers, especia lly in advance of the review of progress that the 
Council would hold in the course of next year.  With regard to benchmarks for the level of ambition, 
he said that one of the obvious benchmarks was to  assess the level to which progress had been made 
beyond the Uruguay Round commitments.  This was th e starting-point for his analysis, and based on 
it thus far, he was not overly impressed with progress.  On the issue of offers, he said that there should 
be not roll-back, not only in overa ll terms but in terms of specific commitments in sectors and modes, 
and he said his delegation would be referring to this  point in bilateral consultations, and as necessary, 
in a broader context.  With r espect to the rules negotiations, he  was pleased to see the constructive 
movement on domestic regulation and he agreed th at some possible elements for disciplines could 
still be identified.  In this regard, he welcomed more proposals, especially from developing Members.  
He encouraged Members to take advantage of the current momentum in order to move to the next 
stage of work.  Rule-making was a key element in  the services and in underpinning market access 
from his delegation's point of view.  He said it woul d be an important item in the review of progress 
by the Council and his delegation would expect to  see a balance between rules and market access 
negotiations.      
140. The representative of Brazil
, referring to the note on tourism, acknowledged that there was 
room for comments and adjustment and said that these comments in the present and future sessions 
would help the proponents.  He sought to highlight one  particular point about this paper.  As was the 
case for the communication contained in TN/S/W/19 on mode 4 under the item of paragraph 15 of the 
guidelines, the present communication sought to he lp the membership id entify areas in which 
developing countries had placed their interests.  In this regard, he said they were useful input for 
discussion in the Council in addition to bilateral consultations.  He echoed comments by Peru that 
flagged some of the areas of concern to the propon ents.  For Brazil, two points were of particular 
importance.  The first, in para graph 5(b), regarded the elimination of anti-competitive practices and 
unfair competition, which needed to be tackled.  His delegation was open to discussing alternatives in 
order to solve what it viewed as anti-competitive practic es in this sector.  Secondly, he identified the 
movement of natural persons, which was labour-intensi ve and seasonal.  This meant that when labour-
intensive services were required in one area of the wo rld, it was not needed in another.  This was one 
area which could be further discussed.  He said that  some interesting comments had been made by 
Mexico as to whether it would be useful to incl ude other initial offers in the assessment.  His 
delegation was attempting to focus on markets in wh ich it had an interest, which was not limited to 
the countries that had been assessed in the present case, and he said that it might assess other offers in 
the future.  Notwithstanding its approach, the pape r had merit and he said it was valid for Members to 
focus on certain markets because they  did not necessarily face the barriers identified in other markets.  
Turning to his general comments on the review of progress, he sought to identify certain elements flowing from the work of the past two weeks and hoped that this might be of use to the Chairman.  He 
said that there had been an interesting discussion on ESM to which the Philippines on behalf of a 
group of Members had contributed through responses to  questions on the feasibility and desirability of 
an ESM.  His delegation had noted with interest two new submissions in the WPDR that, along with 
the large number of previous communications, w as helping to give work an increased sense of 
direction.  He foresaw that it would be possi ble, when reviewing progress in advance of the 
ministerial meeting, to move to the next phase of work in the Working Party.  In the CTFS a useful 
discussion had been held on a paper about insurance.   The CSC had, for the first time, held an 
informal discussion on an issue to which his delegation attached great importance, namely 
classification.  He said that an interesting debate  had been held on scheduling, although perhaps not 
with the degree of participation that Brazil would ha ve liked.  He indicated that his delegation would 
make a further contribution to these discussions in the near future.  He informed the Council that his 
delegation had also held bilatera l consultations, including with Ca nada, New Zealand, Switzerland,  TN/S/M/12 
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 Japan, Korea and the United States, and he said that his delegation was willing to participate in more 
bilaterals.  He said that a one -hour bilateral had not allowed for a complete discussion of each 
participant's offer and that the discussion had touched upon telecommunications, financial services 
and mode 4.  He said that the structure of the bila teral consultations would n eed to be considered in 
order to allow for more time to deepen the discussions.  He suggest ed that indication prior to the 
meeting of the issues to be discussed might help delegations prepare.  He sought to highlight two 
issues of importance to his delegation regarding th e benchmarks in May and in the future.  With 
regard to Article XXI, he said that this was an impor tant element for systemic reasons and that the end 
result of this process would be taken into considera tion in Brazil's ability to take steps in the market 
access negotiations.  Secondly, he said that schedu ling the review of progress in the negotiations was 
important.  He recalled that, in the context of th e July package, his delegation had indicated that, 
along with market access, it was interested in review ing the progress in rule-making work in order to 
allow for elements to be submitted to Ministers for their instructions.  Finally, he expressed his 
satisfaction with the announcements by the Domini can Republic, Kenya and Jordan that they were 
tabling their initial offer, as well as the announcemen t by the United States of its financial assistance 
in order to help delegations ove rcome the technical aspects of preparing for the negotiations.   
141. The representative of South Africa , echoing comments by Brazil on the need for progress in 
the rule-making aspect of the negotiations, said th at market access could not be divorced from the 
rule-making process.  Referring to the statement by  the Chairman, she surmised that one of the 
objectives of the statement was to seek suggesti ons from the Members on how to move the issue 
forward.  As a sign of her delegation's commitment, she was willing to take part in any initiatives the 
Chairman might wish to organize.  She took note of the disappointment with the delay in South 
Africa's submission of its initial offer, and assured Me mbers that this was not intended to signal a lack 
of interest on the part of South Africa.  She hope d that Members could appr eciate the considerable 
logistical effort and multi-faceted nature of trade in services negotiations that rendered the preparation 
of offers and requests challenging.  In this regard , the technical assistance programmes that had been 
alluded to were important and sh e thanked and urged contributions.  She reiterated her delegation's 
commitment to the negotiations.    
142. The representative of Costa Rica , referring to the communication on tourism, said this was a 
sector of the greatest important to Costa Rica and explained why his county had made past contributions.  The paper revitalised the discussion a nd his delegation was anxious to pursue it.  With 
regard to the activities in the clus ter, he informed Members that his delegation had held a number of 
bilateral meetings, all of which had taken place in  a positive sprit.  He thanked those Members who 
had submitted their initial offers.  He sought to hi ghlight the importance of tourism and maintenance 
and repair services for aircraft for his country.  With  respect to the latter, his country had developed 
capacity with the highest levels of quality, security a nd safety.  However, he said that Costa Rica had 
faced barriers in accessing the markets of important  trading partners.  Although requests had been 
formulated for these sectors, they  had not been dealt with satisfa ctorily and he hoped that Members 
could comply with the provisions of Article IV by giving appropriate attention to those sectors 
identified by developing countries.  He said that in order to continue the liberalization effort to which 
Members were committed, it was important to dem onstrate to stakeholders the benefits that 
developing countries could obtain from this effort.   
143. The representative of Venezuela
 said he had taken note of the concern expressed by the 
Chairman in his opening remarks and appreciated his comments about the submission of offers.  He 
agreed with the Chairman about the different cha llenges faced by Members and said that they were 
often related to the structural problems, transfer of  resources and the lack of technical assistance.  It 
was for this reason that his dele gation had underlined on past o ccasions the difficulties in applying 
agreements.  For Venezuela, the health of the mu ltilateral system was related to the transparency 
necessary for undertaking commitments which woul d facilitate consensus in all areas of the 
negotiations.  In this regard, he drew attention to a certain degree of lack of transparency that TN/S/M/12 
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 surrounded the determination of the date for the submi ssion of offers in the July package.  Venezuela 
continued to encounter structural difficulties arisi ng from the events in the petroleum sector in 2003 
and 2004, which had affected the entire economy.  Despite domestic and external difficulties, he 
assured Members that every effort was being made to comply with Venezuela's commercial and trade 
commitments.  He reiterated Venezuela's position ad opted at Cancun and his delegation's remarks at 
the 12 July 2004 meeting of the Special Session record ed in document TN/S/M/11.  He indicated that 
the concern of the Chairman would be transmitted to his highest authorities.   
144. The representative of Cuba
, referring to the progress in negotiations, shared some of the 
concerns with regard to how the Council might better ch annel its efforts.  The liberalization of trade in 
services was not an end in itself but a means to  obtain development objectives, and hence, any 
opening up of the market should be set in devel opment context.  Recalling that Cuba had been a 
founding Member of GATT and had strove to impl ement its commitments, despite internal and 
external limitations common to developing countries,  and others which only a ffected Cuba.  Cuba had 
endeavoured to implement its commitments despite  enormous difficulties which had often hampered 
its development activities.  Cuba needed access to  markets through reduced barriers and it thought 
that services had a tremendous potential.  Cuba  hoped that the proper implementation of GATS 
Articles IV and XIX would have the desired results because this would influence Cuba's approach to 
the negotiations.  She said that negotiations  on rules and market access should proceed 
simultaneously.  She said that the rules created conf idence and security and, if properly undertaken, 
would lead to greater liberalization.  She said that domestic regulation a nd clear scheduling would 
produce an improved negotiating atmosphere.  She ca lled on the Council to redouble its efforts in this 
regard.  From a developing country perspective, she said that it was necessary to  evaluate the benefits 
resulting from previous meetings and determine the interests of developing economies.  Stock should 
be taken so that the appropriate political decisions would be taken.  She said that this position would 
guide her country's conduct.  She reiterated Cuba's position that it w ould participate actively in the 
negotiations, and she said that efforts would be  renewed in order to present its offer.  She 
acknowledged the useful nature of the technical assistance provided by the Secretariat.   
145. The representative of Norway , adding a few general points on the progress in the 
negotiations, said that the July package had given a clear signal that the multilateral system could 
deliver the real needs of all WTO Members and mainta in an ambitious round that was broad in scope.  
With reference to the Chairman's introductory co mment that some 50 Members had not presented an 
initial offer, Norway supported his analysis of the current situation and agreed with the urgent need 
for Members to reconsider how to move forward.   His delegation was committed to supporting all 
initiatives that could bring results in this regard .  He strongly urged Members who had not presented 
initial offers to do so soon, and said that, were they  not to do so, there would be an imbalance between 
those that had submitted an offer and those that had not.  Norway welcomed the offers from the 
Dominican Republic, Kenya and Jordan, as well as  the willingness of Gabon, Rwanda and Indonesia 
to table offers soon.  He said this was a positive sign that demonstrated the will to contribute to a 
successful continuation of the negotia tions.  He said that one idea that might further the process would 
be to request that Members that had not submitted an  initial offer inform the Membership of the stage 
of preparation of their offers at each meeting of the Council.  He recalled that considerable 
liberalization had occurred since the Uruguay Round, while a large number of Members had only reflected a small portion of their domestic liberaliz ation process in the offers.  While he understood 
that Members withheld offers for negotiation purpo ses, he was concerned that weak offers would 
lower the ambition for the services negotiations.  He was also concerned that the large number of 
requests had not been met in the initial offers and would cause further delay.  With respect to the 
Council's discussion on mode 4 and in relation to maritime transport services, he said that the 
maritime industry was fully globalised with two-thirds  of the world fleet in open registries and that for 
those vessels no restrictions existed as to the nationa lity of sea-farers.  Norway encouraged Members 
to take a new and positive look at requests and hoped to see more offers that, combined with existing 
commitments, would yield commercially meaningful market access.  Finally, he said that all were  TN/S/M/12 
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 aware of the number of processes that took place dur ing the clusters, including bilateral negotiations, 
friends groups and meetings in subsidiary bodies.  However, his delegation felt that the time was near 
when Members should discuss how these processes coul d come together for a comprehensive result of 
the services negotiations.  While he recognised the comp lexity of this undertaking, he said that it was 
an issue which needed to be addressed  within the next few meetings.   
146. The representative of Switzerland , speaking on general issues on the review of progress, said 
that the meetings had been interesting and the spir it open.  He said the additional events held over the 
cluster were interesting and instructive.  Work was moving forward in the formal meeting.  His 
delegation had held only six bilate ral consultations, which was the fe west it had held in a cluster, 
however, they were characterised by a business-oriented and open atmosphere.  With regard to the 
content of the offers, he said that in the light of  the May 2005 deadline, it was appropriate to note that 
the level of progress in financial services was extr emely limited.  He hoped that Members would have 
an opportunity to revert to this issue, and, for hi s delegation, this needed to be redressed.  Echoing a 
point made by Costa Rica regarding their interest in maintenance and repair of aircraft and the lack of 
success thus far in that sector, he said that Switzerland had received similar requests and he informed 
the membership that they had been favourably received by sector representatives and authorities in 
spite of the competition faced by SR Technics from the Costa Rican company Coopesa.  He said that 
a number of well-qualified companies existed in this  sector which were certified internationally and 
that the requests should be taken into account in th e preparation of offers, as Switzerland had done in 
its offer, which included a three-month entry for st aff supplying the relevant services on aircraft.  He 
said recalled that the May 2005 deadline and Article IV  should be borne in mind.  With respect to the 
mode 4 informal meeting, he said two interesting papers had been discussed and he hoped there would 
be an opportunity to revert to them and similar fo llow-up on mode 4.  Referring to the Secretariat note 
in JOB(03)/195, he recalled that another category w as that of installers and servicers for machinery 
and equipment.  Switzerland had not included this ca tegory in its requests, but had been included in 
some of the requests it had received.  He informed Members that Switzerland had been working on its 
revised offer and it had been decided that this categ ory would be offered for commitment.  He further 
informed Members that Switzerland had requested that trade partners commit in this sub-sector and he hoped that these would be made available prior to th e next cluster.  He hoped to elaborate on this 
point on that occasion.  He stated that this was the only category that was very specifically linked to a piece of hardware and a specific piece of machiner y or equipment.  This fact made the category 
unique and identified this categor y of persons.  The provision involved a business-to-business service 
between the machine producer and the machine owne r who wanted the qualified person to perform 
the installation or maintenance of the hardware.  He said that a second particularity was that a 
functionary might not be able to check whether th is staff had the adequate university degrees.   
147. Turning to comments on the different areas under negotiation, the representative of 
Switzerland said that his delegation was active and ha d offensive interests in the market access, while 
in rules Switzerland also had a number of offensive in terests.  He agreed that all areas were important 
and required balance, however, he  reiterated that his delegation believed there was no link between 
the two.  Referring to the comments by the Chairman, hi s delegation agreed that the lack of offers was 
a serious problem that could be detrimental to, at a minimum, the image of the negotiations.  
Referring to the Chairman's request for suggestions, he said that it would be useful to hear from those 
that had not submitted an initial offer as to where th e concrete problem lied.  Referring to the general 
remark that there was insufficien t capacity building and assistance, he  inquired into the type of 
seminars they had received from the Secretariat or  assistance they had received from other sources.  
He said that it would be interesting to determine if  there had been gaps.  Members needed to explore 
the ways in which the situation could be redre ssed and as quickly as possible.  Alluding to an 
argument that he had heard outside of the meeting th at the GATS could be a threat to development, he 
did not view Switzerland's requests as a threat to the development of the countries that had received 
them.  He said that much effort and resour ces had been devoted to a well-conducted assessment 
exercise.  Input from many stakeholders including in ternational organisations and individual Members TN/S/M/12 
Page 52  
 
 from both hemispheres had been received.  In light of  the assessment exercise, one could only come to 
a more nuanced view.  He was not suggesting th at undertaking foolish commitments would not be 
problematic, however, he said that, in the vast universe of services and with respect to market access and national treatment, good commitments and win-wi n solutions that benefited everybody could be 
found.  Switzerland had not considered the subm ission of an initial offer as a breach of its 
sovereignty, but rather as an opportunity to ex ercise its sovereignty to negotiate.      
148. The representative of the Philippines
 welcomed the submission of the offers of the Dominican 
Republic, Jordan and Kenya.  The Philippines was continuing an in tensive process of consultations 
and the capital-based officials pres ent at the meeting had had the opportunity to assure other Members 
of the on-going efforts the Philippines was making w ith a view to submitting its offer as soon as 
possible.  Given his country's difficulties, like others , in preparing their initial offers, he recalled that 
the Philippines was among several delegations that ha d expressed a serious concern, in the course of 
the negotiations in July, about the date set for May 2005.  However, it had taken comfort from the statement by the General Council Chairman that this date was indicative.  He sought to reiterate his 
delegation's understanding, like others, that the indi cative date was related to the various problems 
and specific circumstances of each country.  He sai d that the prospects for a successful agreement in 
services would not necessarily depend on the quantit y of existing offers, but rather on the quality of 
existing offers.  He said that, in this sense, for de veloping countries it was the quality of offers from 
developed countries that his delegation was exam ining, and it looked forward to a constructive 
revision of offers by developed countries so as to make the offers of more interest to other 
delegations.  He welcomed the Swiss delegation' s constructive approach in assisting with other 
delegation's requests.  Nonetheless, his delegation ac cepted the language in the July package, with the 
understanding that the May 2005 date was a target date that played a role in leading to the ministerial 
meeting in Hong Kong.  He said that the date w as a useful benchmark, as was the stock-taking 
exercise planned prior to or shortly after the summer break and in the lead-up to the Hong Kong 
meeting.  He said it was equally useful as a benchm ark for the rule-making aspect of the negotiations 
and he reiterated that the Philippines saw the su ccess of the services negotiations as predicated on a 
satisfactory conclusion of the work undertaken on an emergency safeguard mechanism in services, 
subsidies and disciplines on Article VI:4 on domestic  regulation, and not only on market access.  
Referring to the reports by the Chairs of the subs idiary bodies, he agreed that steady progress was 
being made in rule-making work.  The May be nchmark should provide impetus towards more 
intensive engagement in the work of the work ing parties on GATS Rules and Domestic Regulation 
with a view to producing draft agreements for Member s' consideration at approxi mately that time.  He 
shared the view that a draft agreement or a work ing text was very useful for making progress.  The 
Philippines would continue to move the rules nego tiations forward and it expressed its appreciation on 
the seminars and technical assistance related to mode  4.  He looked forward to more of the same, 
especially with regard to the market access aspects  of the negotiations in this regard.  He noted 
increasing interest in the mode 4 aspect of the negotiations.  A number of countries needed to fully 
understand various aspects of the services negotiations a nd the stake that the developing countries had 
in expanded services and liberalization in trade in  services.  He welcomed continuing progress and 
complimented the Chairman on his hard work, whic h he pursued in spite of the numbers for the 
completion of the total number of offers.  He reitera ted that the more interesting the offers and revised 
offers would be, the more promptly the number of offers and revised offers  would be filled.   
149. The representative of Colombia
, thanking delegations that had made comments on document 
TN/S/W/23, said that the comments indicated the im portance of the sector and the need to address the 
issues raised under this agenda item with a view  to identifying the elements in bilateral and 
multilateral settings.  She invited all delegations ta ke up the elements that had been identified as 
elements of interest.  She recalled that Colombia had participated actively in the sectoral discussions 
that had taken place and had found them useful, both those in the friends group and in the debate on 
mode 4 in the informal meeting of the Special Sessi on.  She said that this demonstrated that there 
were many elements which remained to be addressed  and that this was the appropriate framework for  TN/S/M/12 
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 moving forward the discussion.  Her delegation had al so taken part in the working parties and would 
continue to do so.  She had no doubt as to the importance for the discussion on domestic regulation to 
move forward and for Members to take stock of progress of work on disciplines and market access.  She supported Chile's and Hong Kong, China's comment s that there was a need to focus multilateral 
negotiations on horizontal cross-cutting issues.  She congratulated the delegations that had announced 
the presentation of their initial offers and encour aged the Council to explore whether technical 
assistance could support the process in the coming months.  She sai d that much work lied ahead, 
including in preparing initial offers and with respect to disciplines.   
150. The representative of India
 congratulated the Dominican Republic, Kenya and Jordan on the 
submission of their initial offers and others for the fi rm promises that had been made.  On the overall 
process, India was satisfied with th e July package in services, and he recalled that his was one of the 
delegations that had called for importance to be attr ibuted to services in the decision.  India believed 
that each and every element of the package was intrin sic to it.  While the date was one element, he 
reiterated that each element was of equal importance a nd that taking one element in isolation might be 
improper and counterproductive.  In this connection, he referred to in itial offers, the date of revised 
offers, the quality of offers and commitments in sec tors and modes of export interest to developing 
countries.  He said that the presentations, seminars, informal session on mode 4, discussion on a possible seminar on mode 1 and the submission on tourism services were contributing to the identification of areas that would n eed to be looked into in adva nce of the submission of revised 
offers.  He indicated that his delegation had engage d in bilateral, plurilate ral and multilateral work.  
He agreed that a combination of all of these woul d be required in the coming months and, although 
for a specific issue one approach might lend itself be tter than others, it would not be to the exclusion 
of other approaches.  He said that a combination would help to lead to achieving the objectives set out 
in the July package.   
151. The representative of Gabon
 urged the Chairman to continue his difficult work and said it was 
important for him to remind delegations of the Ma y 2005 deadline.  He affirmed that initial offers 
needed to be presented before then.  He said that th e Chairman's statement had been welcome in that it 
sought to encourage Members to make progress.  Re ferring to his earlier intervention under this item, 
he recalled that the tourism sector was of interest to  his delegation.  Gabon was seeking to diversify its 
economy and he said that the development of touris m services would be welcome.  He said that 
conducting the internal consultations required to prepare an initial offe r was not an easy process.  He 
did not think that the delay was necessarily due to a la ck of political will or lack of desire for progress.  
He encouraged those in this position to pursue thei r efforts and submit their offer as soon as possible.  
He indicated that he had very recently received in structions to formally submit Gabon's initial offer, 
which would be forwarded to the Secretariat for circulation to Members.  He congratulated the 
Dominican Republic, Kenya and Jordan on the submission of their initial offers.   
152. The Chairman , on behalf of the Council, thanked Gabon for the submission of its initial offer 
and appreciated the efforts made and difficulties faced  by his delegation in preparing its offer.   
153. The representative of Mexico , making a few specific points on the work during the meeting, 
said that there had been numerous meetings of fri ends groups, informal meetings and bilateral 
consultations.  With respect to the revised offers, Mexico hoped that they would contain substance.  
He said the offers should respond to the comments and the needs identified by many countries.  There 
needed to be balance in market access, particul arly with respect to Article IV.  Substantial 
improvements in these sectors and modes of suppl y was of particular importance to developing 
countries and would act as an incentive to make improvements.  The positive dynamic was preferable 
to its opposite.  Referring to initial offers, he said that all of the su bstance that had been discussed, for 
those Members that had not made their initial offers, should be integrated into the basis of their initial 
offer.  He thanked the Dominican Republic, Gabon,  Jordan and Kenya for the submission of their 
offers, and his delegation would ex amine the substance of those offers.  Referring to a few specific TN/S/M/12 
Page 54  
 
 topics and rules in particular, Mexico thought that wo rk in this respect should be intensified as it was 
of interest to many countries.  The discussions needed  to intensify with a view to ensuring that access 
was provided on fairer grounds between the participan ts.  With regard to domestic regulation, he 
recalled that Mexico had presented a document which it thought should continue to be the basis for 
discussion on the elaboration of disciplines under Article VI.  He noted that it contained elements 
included in the intervention by the United States.  He hoped that these would appear in the document 
it had indicated it would be submitting.  He hoped that these submissions would help Members pursue their work more effectively.  With regard to mode 4 and in the light of the informal discussion the day 
before, it appeared to him clear that the results of the July package were impor tant in creating a basis 
on which Members could demonstrate that liberalizati on responded to the needs of all countries.  On 
friends groups, his delegation believed that the work that had been carried out in many of them was a 
sufficient basis upon which to move to the next st ep and integrate these issues into the Council's 
formal discussions.  He hoped that this would take place shortly in the Council in a more 
comprehensive and formal manner with a view to reaching agreements on the issues agreed to in 
friends groups and resulting from the formal discussions.  
154. The representative of Malaysia
 congratulated the Members that had announced the 
submission of their initial offers.  She assured th e Chairman that her delegation put the utmost 
urgency on the preparation of Malaysia's initial of fer, however like others, it had faced unavoidable 
final hitches that required the convincing of industry.   In this regard, she th anked the Secretariat for 
organising a forthcoming seminar in Kuala Lum pur on domestic regulation.  She hoped that 
subsequent to this seminar, her de legation would be able to submit its offer.  She said that she would 
communicate the Chairman's strong message to capital.  Her delegation wished to associate itself with 
the statement by Hong Kong, China that rule-mak ing was a key element that underpinned market 
access.  In this regard, it was important to see progr ess in rule-making and domestic regulation.  She 
agreed with the statement by th e Philippines that the May 2005 benchmark should be accompanied by 
a substantive outcome on the negotiations on an ESM, wh ich was of interest to her delegation.  With 
regard to paragraph 15 of the Negotiating Guide lines, her delegation lent support to document 
TN/S/W/23, which identified the areas of interest to developing countries and had added to the rich 
discussion on the mode 4 proposal contained in TN/S/W/19. 
155. The representative of Indonesia  wished to congratulate the Dominican Republic, Gabon, 
Jordan and Kenya for the submission of their initial offers.  He associated his delegation with the 
statement made by the Philippines.  Indonesia shar ed the concern expressed by others that the Special 
Session would determine how to follow-up the reco mmendations.  From his delegation's point of 
view, this follow-up needed to be integrated in the on-going work of the Special Session and its 
subsidiary bodies.  With respect to offers, he echoed the comments by others that Members should 
pay attention to a substantive outcome and the high quality of offers, particul arly in sectors and modes 
of supply of export interest to developing countries and especially mode 4.  To this end, Indonesia 
expressed great interest that further deliberations  on mode 4 would be undertaken with a view to 
increasing the participation of developing countries in  services trade.  Referring to rule-making, he 
underlined the importance of these negotiations in the present round.  Indonesia believed that 
considerable effort needed to be made in order to ensure that a balanced outcome between market 
access and rule-making, including an emergency safeguard measure, would be achieved.  His 
delegation was of the view that these issues could be appropriately addressed in future work.   
156. The representative of Pakistan , referring to the remarks from the Chairman and the valid 
concerns raised by other Members, informed Me mbers through the Chairman that, since the adoption 
of the July package Pakistan had redoubled its efforts to submit its initial offer.   
157. The representative of Australia , referring to document TN/S/W/23 on tourism, said that 
Australia had a keen sense of the importance of  the tourism industry and the importance of 
liberalizing it.  He welcomed the initiative and indi cated that it was under study in capital and that he  TN/S/M/12 
 Page 55 
 
 
 might revert to it at a future meeting.  Thanking  the sponsors of the joint statement on mode 1, his 
delegation was interested in this work and looked forward to engaging in this aspect of the Council's 
work.  He expressed his delegation's congratulations  to the Dominican Republic, Kenya, Jordan and 
Gabon on the announcement of the lodging of their offe rs.  He said it was a fitting end to a successful 
cluster, which had been characterised by the produc tive and positive outlook that Members had shared 
in a spirit of moving forward towards meeting the re quirements of the July framework agreement.   
He said that, exceptionally, Australia had not request ed any bilateral consultations on market access 
during the cluster.  He explained that the reason for this was that Austra lia was working towards 
preparing a high-quality revised offer in time for the May 2005 deadline.  As part of this process, his 
government was consulting with its industry in orde r to establish its priorities in the market access 
negotiations.  With these consultations in process, his delegation did not see any need for bilateral 
consultations at this point, however, his delegation did think that bilaterals would be held in the 
months ahead.  In this regard, he requested that the structure of future clusters allow for adequate time 
for Members to participate in bilateral consultations .  He also thanked the Secretariat for setting up the 
electronic bulletin board and he hoped Members could use this tool productively in forthcoming 
clusters.  Australia shared completely the concerns  the Chairman had expressed with regard to the 
number of outstanding initial offers .  He urged those Members who ha d not done so to endeavour to 
do so as soon as possible, in order to ensure that th ey were not left behind in the negotiations and that 
work would commence in the new year with the Me mbership generally being at the same point in 
terms of the negotiations.  He thanked those Me mbers who had shared information regarding the 
preparation of their offers, and he wished them  speedy success in overcoming the hurdles they had 
identified.  Speaking specifically on freight logisti cs services, he recalled that the seminar held that 
week had been very well-attended and said that the feedback he had received indicated that attendees 
had found it useful in explaining the freight logistics industry, the services it provided and how 
Members might move forward in this sector.  He sought to highlight one impressive remark from the 
representative of the Fontera company, who had stated that development costs and increasing 
environment constraints meant that freight logi stics costs were likely to increase and that 
liberalization would be of increasing importance in orde r to maintain the cost status quo.  He thanked 
those who had attended the seminar and encouraged  all to consider undertaking commitments in 
freight logistics services in their initial and revised offers.  
158. The representative of the European Communities  said that the cluster had been a busy one.  
Her delegation had the impression that there was progress in the formal meetings and in friends 
groups and on a variety of fronts.  As others, she sai d that seminars, particularly on freight logistics, 
and the informal meeting on the movement of natu ral persons, had been particularly helpful in 
exploring how further progress might be made.  Her delegation looked forward to the proposed 
symposium on mode 1 and the presentation by Cana da on an informal communication on mode 3.  
She said that Members were moving across a broad range of modes and sectors.  She remarked that it 
had taken time to build momentum owing to the tec hnical work that had been needed.  She thanked 
the Dominican Republic, Gabon, Jordan and Kenya fo r the announcement of the submission of their 
initial offers.  She had also taken note of the stat ements by Antigua and Barbuda and Rwanda.  She 
was aware that a number of other Members were fi nalising their initial offers  and looked forward to 
progress in this regard.  Referring to the issue of t echnical assistance, she recalled that the discussions 
in the Council for Trade and Development were focuss ing, as had been agreed in the July package, on 
targeted technical assistance.  She said it would be important to encourage the Secretariat, with its 
limited resources, to endeavour to provide as much  of this technical assistance as possible.  She 
understood, owing to the need to prepare offers a nd requests, that delegations were seeking country-
specific or sector-specific input and she encouraged  this process, including possibly through the use of 
capacity available in other organisations in te rms of facilitating policy decisions.  She expressed 
thanks for document TN/S/W/23, which was under st udy and to which her de legation might revert.  
She said that tourism was an area of interest to many Members as judged by the number of commitments made in the previous negotiations.  She thought this was an area where all could 
benefit.  Regional aspects were im portant to look at as well.  She said that the submission of the TN/S/M/12 
Page 56  
 
 document demonstrated the ability of Members to ta ble proposals at any stage in the negotiations.  
With respect to work in rule-making, she said this  was also important and recalled the discussion and 
sense of progress in some of the areas over the cour se of the cluster.  She hoped that more progress 
would be made at the next cluster of meetings.   
159. The representative of New Zealand
 said her delegation had detected renewed momentum 
subsequent to July and in the current cluster.  She said the seminars on logistics and trade and culture 
had been of particular interest, especially for he r delegation's capital-based representatives.  Friends 
groups had also been reviewing their objectives a nd examining ways to use their time and joint 
resources more effectively.  With respect to ru le-making, her delegation had been particularly 
encouraged by the desire for concrete progress on domestic regulation expressed by many.  Having 
listened carefully to the Chairman's opening re marks about progress on market access, she said these 
were appropriate and timely and her delegation appreciated their frankness.  She said that New 
Zealand had started its work toward the May 2005 d eadline with an analysis in capital of the response 
of Members to New Zealand's requests.  While this  work was not completed, one clear pattern had 
emerged, namely that management of the concer ns about the GATS negotiations that existed among 
New Zealand's civil society groups would be much easier  with more initial offers on the table.  In this 
regard, she welcomed the offers tabled by th e Dominican Republic, Gabon, Jordan and Kenya in 
addition to the indications from other delegations that they were close to completing their work in this 
regard.  She stated that the quality of offers was an area of key importance to her delegation.  New 
Zealand had front-loaded its initial offer and had ma de additions to a comprehensive existing schedule 
in order to signal its ambitions for this round.  She said that the period leading to May 2005 was the 
right time for others to give a clear indication of their level of ambition for services.  While these were 
obvious points, her delegation felt the need to reiterate  them.  With respect to any role the Chairman 
might play, she urged him to continue his consulta tions with Members that had not submitted an offer 
and to encourage others with respect  to the quality of the revised offers.  Her delegation stood ready to 
work constructively toward this end.  
160. The representative of Japan  congratulated the Dominican Republic, Gabon, Jordan and Kenya 
on the submission of their initial offers.  He said that the process in 2005, which included the Hong 
Kong ministerial meeting and May deadline for revised  offers, was important for trade in services.  
He recalled the comments by a number of Members that the process was intensifying.   His delegation hoped to see a further intensification of work in Ge neva and in capitals.  Referring to comments by 
India, he recalled the bilateral, multilateral and sectoral activities that were important, as was 
combining these processes in order to achieve Memb ers' objective.  He noted the active nature of 
friends groups and seminars and he expected that this would contribute to the process in the coming 
year, including with respect to revised offers.  He  said that the importance of the services negotiations 
was and should be recognised at the political level.   Progress relied on a combination of technical and 
political activities.  In this regard , Japan wished to see progress to ach ieve goals.  With respect to 
rules, his delegation did not belie ve that this was connected with the negotiations on market access 
and were separate, though nonetheless, an impo rtant process.  His delegation had observed 
enthusiasm in this regard, in particular in th e WPDR.  His delegation associated itself with the 
delegation of Brazil and Hong Kong, China that it was time to change gears.  Japan believed that the 
processes on both market access and rules would be very important.  It would also be important for governments to bring sectoral experts from capital for the remaining clusters, and in particular before 
May.  He sought to underline the importance of maritime transport services, and he recalled that his 
delegation with others was working in the maritime  friends group.  He indicated that the group might 
wish to give more information about its work at the next cluster.  He reiterated that maritime services 
was an important element in the services negotiations.   
161. The representative of Thailand
 thanked the Dominican Republic, Jordan and Kenya for the 
submission of their initial offers.  Thailand expect ed that the services negotiations would heed the 
guidance outlined in Annex C of the July package w ith special emphasis on the high quality of offers,  TN/S/M/12 
 Page 57 
 
 
 particularly in sectors and modes of supply of e xport interest to developing countries and especially 
the mobility of natural persons.  In this regard , her delegation had found that dedicated sessions, 
similar to the meeting held that week, had been very useful, and she suggested that more of these 
sessions could be organised to follow-up on the em erging common understanding on the categories of 
natural persons.  She stressed that the rules nego tiations needed to progress in tandem with the market 
access negotiations.  Her delegation would remain engaged in the discussions under the WPGR, and 
in particular those on subsidies and an emergenc y safeguard mechanism.  She hoped that concrete 
progress would be made towards the May 2005 benchm ark and the forthcoming ministerial meeting.  
She noted that these rules in this regard did not exist.  She emphasised the important role of the 
WPDR and the CSC had to play in making GATS commi tments comparable and relevant to the real 
world.   
162. The representative of Singapore  expressed his delegation's appreciation to the Dominican 
Republic, Jordan and Kenya for the submission of thei r initial offers.  These of fers facilitated progress 
in the Doha Development Agenda services negotiations.  Echoing earlier comments by some Members, he highlighted that the July package had specified a timeframe for the submission of 
revised offers.  Singapore expected these revised offers to be an im provement over the initial offers.  
While he noted that the various elements in the July decision were envisag ed as a package, he said 
that, were progress to be made in the various areas, they would need to be treated on their own specific merits.  He said that it was Members' co llective responsibility to facilitate progress in the 
services negotiations, including through the submission of the initial offers and the revised offers by 
the May 2005 timeframe.  His delegation recogni sed the importance of the rules negotiations.  
Singapore had always participated actively in these negotiations, would contin ue to do so and would 
work with other Members to facilitate progress in th e rules areas.  His delegation welcomed the paper 
from Chile, India and Mexico on cross-border trade in  services and a paper from Canada on mode 3.  
Taking both of these papers together, it was clear th at the various modes of supply were important of 
the economic development of all count ries, developed and developing.   
163. The representative of the United States
 said her delegation was encouraged by the work and 
the atmosphere over the course of the services meet ings, especially following the results of the July 
package.  She had echoed India's comments on the need to keep the prominence of the services 
negotiations in the round.  She had heard from ma ny developing countries, especially from Africa and 
the Caribbean, about the increasing and high importan ce of services trade to GDP, especially in light 
of the percentage of GDP services enjoyed.  Her de legation had been engaged at all levels of work 
during the cluster and looked forward to organisi ng the work ahead.  The United States aimed for 
further refinement in the next cluster in order to  set the course for work in the coming year.  Her 
delegation thanked the delegation of Gabon for the a nnouncement of the tabling of its initial offer.  
She appreciated the indications from other delega tions, including Malaysia, the Philippines, Rwanda, 
Antigua and Barbuda, and Barbados.  She expresse d her delegation's full support for the Chairman, 
however, she stated that the United States reserved it s ability to reserved its position in the future on 
issues he might present.   
164. The Chairman , while not seeking to give a summary but rather an indication of some of the 
points he had noted, said that 30 interventions had been made under this agenda item which was a 
good indication of the degree of interest and commitm ent by Members.  He recalled that four new 
initial offers had been announced and he thanked the Dominican Republic, Gabon, Jordan and Kenya 
for their submissions.  Some Members had updated the Council in terms of the preparation for the 
submission of their initial offers.  He had heard some delegations echo his opening remarks and urge 
those Members who had not submitted their initial o ffers to do so as soon as possible, as well as the 
need to provide targeted techni cal assistance in this regard.  He said the Council had held a good 
discussion on the paper related to tourism from a group of Members that indicated the proposed 
commitments were insufficient from their point of view.  They also indicated the importance of 
tourism to the economies of developing countries.  There had also been expressions of satisfaction TN/S/M/12 
Page 58  
 
 and gratitude to the United States for its contribution to the ITC for a programme which would aid 
with the assessment of the services s ector in certain developing countries.  Overall, there had been a 
sense of satisfaction with the new momentum.  Many had said that there had been intense work.  He 
had also noted that there had been a degree of progr ess on all fronts, including in terms of the work of 
friends groups that had become more proactive.  He had noted that the seminars held on freight 
logistics and on trade and culture, and the inform al meeting on mode 4 had met with a degree of 
satisfaction.  There had been indications of the need  to continue work that had been initiated that 
week.  He was aware that Members needed to think in terms of the future, how to build on 
momentum, the objectives to be sought by the end of 2005 and how to organize this future work.  For example, a number of delegations had indicated that  work in the friends groups was becoming more 
proactive and structured.  In add ition, work was being pursued in the subsidiary bodies.  At some 
point in time it would be necessary to bring the va rious elements together and examine the broader 
picture.  He said that this would need to be done  in good time in order to carry out an assessment of 
progress.  Governments would then wish to comp are work in services with the work of other 
negotiating groups in discussions in the TNC.  In the absence of rules on how these elements would 
be brought together, he said that Members would need  to exchange ideas and strive to be as efficient 
as possible.  He said that by December Members should have a clear idea, although perhaps imperfect 
one, about how to proceed in the negotiations and br ing the elements together in good time in order to 
make progress.  The Chairman suggested that the Council take note of the statements made. 
165. It was so agreed
. 
E. OUTLINE OF THE CHAIRMAN 'S REPORT TO THE TRADE NEGOTIATIONS COMMITTEE  
166. The Chairman  stated that, with respect to the Asse ssment for Trade in Services, he would 
report that the Council had benefited from the partic ipation of a representative of the OECD in a 
questions-and-responses session on a study presente d in October 2003 by the OECD and entitled, 
"Services Trade Liberalisation: Identifying Opportu nities and Gains".  The Council had agreed to 
invite a representative of UNCTAD to present th e World Investment Report (2004) entitled, "The 
Shift Towards Services", possibly during the next cl uster.  Under the item "Proposals Relating to the 
Negotiations under Article XIX" the Council receive d representatives of UNCTAD and the IOM, the 
OECD and the World Bank who presented the outcom es of two expert meetings related to the 
movement of natural persons held by these organi sations in 2003.  The Summary Records of the 
meetings had been circulated to Members for purposes of information and discussion.  The presentations allowed for an exchange of views on issues related to the migration, trade and the 
movement of natural persons and touched off a rich discussion among Members, with some 
23 delegations intervening.  A number of delega tions underlined the interest they continued to 
demonstrate in Mode 4 trade as well as its importance to the Services negotiations generally.  Other delegations, while reiterating their own interest in negotiating mark et access and national treatment 
commitments in Mode 4, stated that other modes of trade were also of importance in the negotiations.  
One delegation, while noting that the exchange of views provided a rich overview of the issues related 
to migration and the movement of persons, stated that Members needed to focus on specific issues 
that would be susceptible to commitments in the GATS negotiations.  Under this same agenda item, 
the delegation of Switzerland presented two proposal s.  The first related to the importance of 
improving scheduling techniques in order to ensure th e clarity and legal certainty of commitments.  A 
number of delegations agreed that clarity and cer tainty were important elements in assessing the 
quality of initial and revised offers, in the sense of  paragraph (c) of Annex C of document WT/L/579.  
The second Swiss communication proposed, through the practical example of e-work permit procedures in the canton of Zurich, that Members implement their commitments in an efficient, 
predictable and transparent manner.  The proposals led to a good discussion with numerous questions 
relating to the implementation and functioning of the e-work permit system, as well as complete 
answers.   Finally, the Council held a substa ntive discussion on an informal communication from 
Chile, India and Mexico on the Liberalization of  Mode 1 in GATS negotiations.  Some eleven  TN/S/M/12 
 Page 59 
 
 
 Members made interventions reiterating their negotia ting interest in this mode of supply.  A few 
Members identified a number of issues the Council could address in order to focus and advance work 
in a practical manner.  A number of concrete sugg estions were also made, for which he would indicate 
he intended to hold informal consultations.   
167. Under the item of the "Review of Progress in Negotiations, Including Pursuant to Paragraph 
15 of the Guidelines for Negotiations", he woul d report that four Members had announced the 
submission of their initial offers, namely, Domi nican Republic, Gabon, Jordan and Kenya.  The 
Council welcomed the submission of these initial offers ; a total of 48 initial offers had been tabled.  
He hoped that these newest offers w ould be a harbinger of the submissi on of outstanding initial offers.  
He would state that in this regard and in his role  as Chairman of the Special Session, he had made a 
frank statement to delegations about the pitfalls that might lie ahea d should a substantial number of 
overdue initial offers not come forth in the comi ng weeks.  From his vantage point as Chairman, a 
lack of engagement in the lead-up to the May 2 005 benchmark for the submission of revised offers 
could dampen progress to the particular detriment of developing country Members.  Following his 
comments, some ten delegations provided the Council w ith an update on the status of the preparation 
of their initial offers.  This demonstration of transp arency, if it would result in the speedy submission 
of the balance of the outstanding initial offers, woul d in no small measure contribute to the confidence 
Members had in the negotiating process, and to the co nstructive working atmosphe re that continued to 
characterise the services negotiations.  In this re gard, many delegations had reported, since the 
General Council's Decision of 1 August, a renewe d sense of satisfaction and engagement, increased 
activity in friends' groups, and signs of progress in th e work of subsidiary bodies.  He would indicate 
that he intended to follow-up on the suggestion of a number of delegations to explore ways in which 
areas of work in these fora might be brought togeth er to draft a road-map for the Council's work until 
the next Ministerial Meeting.  It was also his sense, from the interventions made, that delegations 
were preparing for a heavy slate of work in the ne w year.  He would reiterate, however, that, in his 
view, progress inexorably remained linked to the tab ling of outstanding initial of fers.  Under the same 
agenda item he would report that a group of ten developing country Members had submitted a 
communication (TN/S/W/23) relating to the Counc il's work under paragraph 15 of the services 
Guidelines for Negotiations.  The communication assessed  the extent to which initial offers had taken 
into account the interests of developing countries, and in this case specifically, proposed commitments 
in tourism services.  In the proponents' view, the o ffers made to date were insufficient.  Numerous 
Members made positive preliminary remarks and the Counc il would revert to this proposal at its next 
meeting.  This was the second specific proposal rela ted to the Council's work under paragraph 15 of 
the Guidelines for Negotiations.   
168. Under "Outstanding Issues" he would indicate that he had nothing to report.  Under the 
heading "Future Work", he would report his inte ntion to hold consultations, both with groups of 
Members and in an open-ended setting, in order to se ek Members' views on how best to ensure closer 
coordination between the work occurring in the differe nt fora to which he ha d referred.  He would 
also indicate that he would hold consultations re garding next steps subsequent to an open-ended 
informal meeting on 30 September at which Member s discussed the specific issues of the nature of 
commitments and administrative procedures relating to  the temporary movement of natural persons.   
The Council would also take the opportunity to di scuss the schedule of meetings for the Special 
Session in 2005.  The next cluster was scheduled to be held from 22 November to 3 December.  He 
invited the Council to take note of the outline of his report. 
169. The Council so took note . 
F. ORGANIZATION OF FUTURE WORK 
170. The Chairman  sought to address two points under this item:  the organization of the next 
cluster and of work in the coming year.  He r ecalled that the next cluster would be held from TN/S/M/12 
Page 60  
 
 22 November to 3 December 2004.  As has been reported by the Chairperson of the Committee on 
Trade in Financial Services, this subsidiary body  would meet on Tuesday, 23 November.  He recalled 
that the Regular Session of the Council would meet  on Friday, 26 November, and that a dedicated 
session on the Review of MFN Exemptions would be  scheduled.  He said that he would consult 
regarding a presentation on the World Investment Report.  He recalled that, from the comments by 
Members under the item Review of Progress, it appeared  to him that the forthcoming cluster would be 
a busy one.  It seemed to him that the Council should preserve the "book-ends" approach, but he wondered whether meeting time could be reduced to one and a half days if feasible.  He said that if 
Members thought that work could be done through informal meetings, these could be scheduled.  
Secondly, with respect to the organization of the meetings in 2005, as delegations knew, there was a 
shortage of meeting space at the WTO.  As in the past, advance bookings would be made for purely 
administrative reasons and did not prejudge any decision by the Council about the number of meetings or the dates of those meetings.  As Me mbers were well aware, there were two important 
dates in the services negotiations in 2005:  the subm ission of revised offers in May and the ministerial 
meeting in Hong Kong, China in December.  He  said that he had been speaking to Members 
individually and in small groups on this topic.   He sought Members' views on the question of 
meetings in 2005.  For example, three clusters c ould be organised.  Given that a stock-taking or 
review with a view to making a contribution to th e Ministerial Declaration should be necessary, he 
said that a Special Session, though not a cluster, that would last a day or two to consider the 
negotiations from an overall point of view and to co nsider the Council's contribution, might be held in 
the autumn.  He said this with a measure of hesita tion as the preparations for the ministerial meeting 
had not yet been decided.  He indicated some po ssible dates for the three clusters for delegation's 
consideration.  With reference to the first cluste r of 2005, he asked for Members' views on a possible 
extended cluster. 
171. The representative of Korea
, with reference to the cluster in September 2005, expressed his 
preference to avoid meetings on 19-21 September.  His delegation remained flexible and could go 
along with the suggestion for an extended cluster earlie r in the year.  This would allow for additional 
time for bilateral consultations in advance of May 2005.   
172. The representative of Australia , referring to the first cluster, anticipated that much time would 
be needed for bilateral consultations.  He noted th at the current cluster had not left much time for 
consultations.  While his delegation pr eferred for two clusters to be he ld in the first third of 2005, he 
could entertain the Chairman's suggestion of an ex tended cluster.  He thought that this would leave 
time for the consultations, seminars, friends groups  and meetings that were being planned.  He 
expressed a further preference for this ex tended cluster to occur in February. 
173. The representative of Colombia  said her delegation could be flexible.  However, she 
expressed concern with the suggestion of an extended cluster.  Hers was a small mission responsible 
for many other areas and it would be difficu lt to dedicate so much time to one event. 
174. The representative of European Communities  said that if only one cluster were organised 
before May 2005, it would be preferable to have an  extended cluster.  He also preferred that this 
meeting come sooner in the year so as to give Memb ers sufficient time to prepare their revised offers 
before May.  With respect to the other dates proposed , these appeared to be reasonable.  He said that 
an opportunity would be required thereafter to discuss the preparations for the Ministerial Meeting.  
175. The representative of Switzerland  could agree with the dates pr oposed by the Chairman.  In 
order to demonstrate his delegation's flexibility, he said it could go along with a reduction in the 
number of clusters from the four or five held in  a year.  He said that his delegation would have 
preferred two clusters before the May deadline,  however, he could accept one extended cluster 
instead.  TN/S/M/12 
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 176. The representative of Brazil  indicated that his delegation would prefer the first cluster to be 
held in April.  He expressed concern that not all delegations would be able to agree to an extended 
cluster, and he said that some creativity might be necessary in order to take into account the needs of 
smaller delegations and of other me etings.  He said that the suggestion for an extended cluster would 
need to be approached in a flexible manner, for example, with smaller dele gations holding bilateral 
meetings within two weeks while ot hers could stay on for three weeks.  He said that it was his 
understanding that, should there be an extended clus ter, this would include additional time for rule-
making and there would not be an imbalance since rules would also be reviewed.  He said that time for the regular bodies would need to be extended in to the second week should there be a demand more 
time could be provided for rules. 
177. The Chairman
 noted the point made by the representative of Brazil and thanked him for his 
suggestions.   
178. The representative of Hong Kong, China  said that his delegation could agree to the second 
and third clusters proposed and to the additional meeting of the Special Session for a review.  With 
regard to the first cluster, his delegation preferred th at it be held sooner in the year.  He said that the 
first cluster could be extended as meeting time was n eeded.  He said that all fronts of the negotiations 
were intensifying and, therefore, it was important to  plan the use of time, including for regular bodies.  
He said that, for the rules discussions and as necessa ry, further work in informal meetings could be 
envisaged. 
179. The representative of India  sought to reflect on the suggestion of  an extended clus ter.  He said 
that many delegates covered a number of areas and an extended cluster devoted  to one activity could 
be difficult.  While recognising that more time mi ght be required, he also sought an opportunity to 
reflect on creative approaches.  
180. The representative of Venezuela  recalled the dates of the second World Summit on 
Information Society. 
181. The representative of the Philippines  said that his delegation could be flexible in moving 
away from three meetings before the summer break and accommodating the envisaged situation.  He 
echoed the concerns by others about an extended cluste r.  With respect to the cluster in September, he 
saw no barrier to having a stock-taki ng meeting appended to this meeti ng.  He did not feel that the 
preparations for the Ministerial meeting n eeded to occur in a separate "cluster". 
182. The representative of Japan  said his delegation was flexible but recognised that time was 
required for bilateral consultations and friends groups, particularly be fore the May deadline.  He said 
that his delegation preferred two cl usters before May, but could be flexible and agree to one meeting 
if it were extended.  Otherwise, he preferred for the Council to meet twice, owing to the time needed 
in order to carry out the negotiations.  With regard to the other clusters and a separate meeting for a 
stock-taking, his delegation could go along with this.  He said that, while some discussions about the 
ministerial meeting could take place in September,  that month would be too early to have a full 
discussion and it would be preferable to have a meeting of the Special Session later in the fall.   
183. The representative of the United States  said her delegation was flexible about the various 
scenarios.  Given the many creative suggestions that  had been made, she said she would reserve any 
comments for consultations. 
184. The Chairman  said that there would be no perfect solution.  He sought an opportunity to 
consult with the other Chairpersons to avoid any over laps to the best extent possible.  He said that 
various elements needed to be ta ken into account.  In order to keep  the Council's options open, he said 
that he would have space reserved.  Once he ha d had such an opportunity, he would consult with TN/S/M/12 
Page 62  
 
 Members.  He thanked delegations for their ideas and he said that he remained available to them for 
any further points of views.  He said that he would keep delegations informed.  The Chairman proposed that Members take note of the statements made. 
185. It was so agreed
.  
G. OTHER BUSINESS  
186. The Chairman  recalled that the delegation of Canada  had requested to raise a point under 
other business.  The Secretariat also wished to make an announcement.  
187. The representative of Canada , recalling the comments by Brazil under the item Assessment of 
Trade in Services, said that they had been usef ul and had identified the recent World Investment 
Report authored by UNCTAD.  His delegation had also studied the report and shared the comments 
made by Brazil in this regard.  He drew atten tion to a communication from Canada contained in 
document TN/S/W/24.  It was his understanding th at the Chairman would help facilitate the 
organization of a presentation of the report, as outline d in the paper.  As this was the case, Canada 
wished to take up a more detailed discussion on th is issue at the next meeting when UNCTAD should 
make its presentation. 
188. The Chairman  said it was his intention to attempt to organize this presentation for the next 
meeting. 
189. A representative of the Secretariat  recalled that an electronic bulletin board had been set up 
concerning the presence of capital-based experts during the clusters.  He reminded delegations that the 
board was available for their use. 
190. The Chairman  said that it had been a rewarding meeti ng.  He proposed that the Council take 
note of all of the statements made. 
191. It was so agreed . 
 
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