RESTRICTED  WORLD TRADE  
ORGANIZATION  S/C/W/247  
19 November 2004 
 (04-5034) 
Council for Trade in Services Original:   English 
  
 
COMMUNICATION FROM HONG KONG, CHINA 
 
Review of Article II (MFN) Exemptions
 
 
Questions from Hong Kong, China 
  
 The following communication, dated 16 Nove mber 2004 from the delegation of Hong Kong, 
China is being circulated to the Member s of the Council for Trade in Services. 
 
_______________ 
 
1. For the purpose of the review of the MFN exemp tions by the Council for Trade in Services in 
accordance with the Annex on Article II Exemptions of the GATS, specifically for the purpose of 
examining whether the conditions which created the need for the exemptions still prevail, we would 
request the Members concerned to provide answers to the following questions in respect of their MFN 
exemptions. 
I. GENERAL QUESTIONS  
General Questions 
 
2. For each of the MFN exemptions listed in  the Secretariat’s sectoral compilation 
(JOB(04)/114), we would appreciate if the Me mbers concerned would respond to the following 
questions put forward in the communication JOB(04)/ 131 of 22 September 2004 by the delegations of 
Chile; China; Hong Kong, China; Japan; Korea; Mexico and Chinese Taipei - 
Q1. Please confirm if the exemption has expired or  will terminate on reaching a period of 10 
years.  If not, please indicate when the exemption will terminate. 
 Q2. Please indicate whether the exemption has been used for any actual measure since its 
introduction and if so provide information on the use. 
 
Q3. For those exemptions still in force, plea se explain whether the conditions which created 
the need for the exemption still prevail.  Please explain why if so. 
 Q4. Please describe whether any action has been taken or is being contemplated to eliminate 
the conditions which created the need for th e exemption.  Please explain why if not. 
Less Favourable Treatment 
 
3. Some Members have listed MFN exemptions for measures which purport to grant less 
favourable treatment than those accorded by specific commitm ents inscribed in their respective 
schedules of specific commitments.  As set out in pa ragraph 14 of the explanatory note for scheduling S/C/W/247 
Page 2  
 
initial commitments
1 and paragraph 5 of the draft guidelines for listing MFN exemptions2, an MFN 
exemption taken in a sector where specific commit ments have been undertaken would only allow the 
Member concerned to extend to certain countries treatment which is more favourable than that 
specified in the schedule.  Accord ing treatment less favourable than  that specified in a Member’s 
schedule would undermine the Member’s comm itments under GATS Articles XVI, XVII or XVIII 
and cannot be justified under Article II and A nnex on Article II Exemption of the GATS.   
4. We would appreciate if the Members concerned of each MFN exemption listed below could 
respond to the following questions, in addition to Q1-4 - 
Q5. Please confirm if the exemption is intended to cover measures that grant less favourable 
treatment than that accorded by the respecti ve market access and national treatment 
commitments. 
 Q6. If so, please explain how the less favou rable treatment under the MFN exemption can be 
reconciled with the respective market a ccess and national treatment commitments. 
 
Member MFN Exemption (page  number in JOB(04)/114) 
Jordan movement of natural persons (page 15) 
USA  taxation measures (page 34, 1st bullet) 
Bulgaria  legal services (page 36)  
Dominican Republic  legal services (page 37) 
auditing and accounting services (page 37) architectural and engineer ing services (page 38)  
Panama  professional services (page 38) 
Thailand  auditing services (page 39)  
Turkey  professional  services (page 39) 
accounting, auditing an d book-keeping services (page 39);  
Venezuela  professional services (page 39) 
Israel  film, video and television programming co-production and 
distribution (page 63) 
Indonesia  construction services (page 76)  
 
Reciprocity 
 
5. Some Members have taken MFN ex emptions for measures based on reciprocity .  Such 
exemptions defy the basis for participation in  the multilateral trade system based on the MFN 
principle.  We note that some of these exemptions are related to general and unspecified conditions of 
reciprocity, while others are based on reciprocity in  sectors where the Members concerned have made 
specific market access or national treatment commi tments. As noted above, a Member must grant 
unconditionally to any other Member treatment no l ess favourable than that accorded by the specific 
commitments inscribed in its schedule, notwithst anding any MFN exemption.  Any MFN exemption 
based on reciprocity must not result in less favourable  treatment for some Members than the treatment 
accorded by the specific commitments.  Even in cases where no specifi c commitment has been 
undertaken, these MFN exemptions must not prevent the negotiations for further liberalization and 
specific commitments in the respective sectors in  accordance with progressive liberalization under 
Article XIX of the GATS. 
6. We would appreciate if the Members concerned of each MFN exemption listed below could 
respond to the following questions, in addition to Q1-4 - 
                                                      
1  MTN.GNS/W/164 of 3 September 1993. 
2  Job No. 2061 of 15 September 1993.  S/C/W/247 
 Page 3 
 
 
Q7. Please indicate if the exemption pertain to any international agreements or 
arrangements, and if so, please specify the sp ecific agreements or arrangements and the 
provisions therein requiring the exemption. 
 Q8. Please explain the rationale behind mainta ining such an exemption under the existing 
multilateral framework for trade in serv ices, and how such measures based on 
reciprocity can be considered compatible with the multilateral trading system. 
 Q9. Please indicate if any market access and national treatment commitments have been 
undertaken in the corresponding sector; if so, whether the exemption is intended to 
cover measures that grant less favourable trea tment than that accorded by the specific 
commitments; and if so, please explain ho w the less favourable treatment under the 
MFN exemption can be reconciled with the respective commitments.  
 
All Sectors  
 
Member MFN Exemption (page  number in JOB(04)/114) 
Chinese Taipei  purchase an d lease of land (page 4) 
Costa Rica  bilateral investme nt agreements (page 4)  
Croatia  real estate (page 5) 
Estonia  labour market integration agreements (page 8) 
EC  real estate (page 9, 2nd entry)  
Jordan  purchase of land (page 16)  
Liechtenstein  presence of natural persons (page 18) 
Macedonia, Former Yugoslav 
Republic of real estate and land ownership (page 20) 
Peru  movement of natural persons (page 23)  
Philippines  bilateral trade and investment, movement of natural persons (page 
23)  
Poland  commerce and navigation agreements, business and economic 
relation agreements, bilateral investment agreements (page 24)  
Singapore  Commonwealth tax credit (page 25, 3rd entry)  
Turkey  consulat e duties (page 30) 
real estates acquisition (page 30) 
USA movement of natural persons, longshore work by crew of foreign 
vessels (page 31, 2nd entry) 
taxation - reciprocal reduction of tax (page 33, 1st bullet) 
taxation - reciprocal deduction for expenses (page 34, 2nd bullet) 
land acquisition or inheritance (page 36) 
 
Business Services  
 
Member MFN Exemption (page  number in JOB(04)/114) 
Bulgaria  medical and dental services (page 37) 
Costa Rica  professional  services (page 37)  
Dominican Republic  legal services (page 37)  
auditing and accounting services (page 37) 
dental, physiotherapy, medical, paramedical and nursing services (page 37) 
architectural and engineer ing services (page 38) 
Honduras  professional services (page 38)  
Jordan  auditors and pharmacists (page 38) 
geologists/geological engineers (page 38)  
Macedonia, Former Yugoslav Republic of  legal services (page 38)  
Panama  professional services (page 38) S/C/W/247 
Page 4  
 
Member MFN Exemption (page  number in JOB(04)/114) 
Thailand  auditing services (page 39) 
publishing newspapers (page 42) 
Turkey  professional  services (page 39) 
accounting, auditing an d book-keeping services (page 39)  
Venezuela  professional services (page 39) 
Costa Rica  business services - advertising (page 41) 
EC  publishing (page 41) 
Georgia  fishing related services (page 41) 
 
Communication Services  
 
Member MFN Exemption (page  number in JOB(04)/114) 
Argentina  telecommunication services (page 42)  
Australia  audiovisual services (page 48, 1st entry) 
Brazil telecommunication services (page 43) (see also Q63 below)  
Brunei Darussalam  radio and television (page 49) 
EC and their Member States a udiovisual services (page 58, 1st & 2nd entries; page 60, 3rd entry)  
New Zealand  audiovisual services (page 68)  
Pakistan  telecommunicati on services (page 44, 1st entry)  
Switzerland  audiovisual services (page 73, 3rd entry) 
Turkey postal services (page 42) 
telecommunication services (page 45, 2nd entry) 
USA telecommunication services (page 45) 
 
Construction and Related Engineering Services  
 
Member MFN Exemption (page  number in JOB(04)/114) 
Liechtenstein  construction and related engineering (page 76). 
 
 
II. SPECIFIC QUESTIONS ON HORIZONTAL EXEMPTIONS 
7. Further to the general questions of Q1-9, we would like to request the Members concerned of 
the following horizontal MFN exemptions to respond to the following specific questions (page number refers to JOB(04)/114) - 
Q10.  Brunei Darussalam (foreign equity  participation, page 3, 1
st entry) : It is noted that the 
exemption purports to allow discretionary no n-MFN treatment in respect of all countries on 
foreign equity participation, which appears to be a major blanket carve-out from the MFN 
principle.  Please advise if any action has been taken or is being contemplated to eliminate the conditions which created the need for the exemption.  Please explain why if not. 
 
Q11. Brunei Darussalam (movement of natural persons, page 3, 2
nd entry) :  It is noted that the 
exemption is subject to periodic review in  the light of domestic and national policy 
considerations.  Would Brunei Darussalam provide information about the latest review and its 
results? 
 
Q12. Chile (bilateral investment agreements, page 4) : It is noted that the intended duration of 
this exemption would be subject to the durati on of the relevant agreements on the protection 
of investment.  Would Chile provide an update  on the latest position of the countries with 
which it has entered into agreements, and pr ovide the exact duration of the agreements 
concerned?  Does Chile have any plan of en tering into similar agreements with other 
countries?  S/C/W/247 
 Page 5 
 
 
 Q13. Chinese Taipei (purchase and lease of land, page 4) : We note that the condition that 
created the need for the exemption is “reci procity”.  Would Chinese Taipei please explain 
whether the measure is established in accordan ce with any domestic legislation?  Apart from 
reciprocity, are there any other factors that Chin ese Taipei has taken into consideration for not 
implementing the relevant measures on a MFN basis? 
 Q14. Costa Rica (bilateral investment treaties, page 4) : Would Costa Rica provide an updated 
list of the countries with which it has entered into  bilateral treaties, further to the 14 countries 
reported at the Meeting of the Council Review  of MFN Exemptions held on 29 May 2000
3?  
Does Costa Rica have any plan of entering in to similar treaties with other countries?  
 Q15. Croatia (real estate, page 5) : What are the measures on real estate that “reciprocity 
requirement for foreign persons and approval of the minister fo r foreign affairs” is referring 
to?  It is noted that the exemption is intende d for a temporary duration.  We would like to 
know the rational behind this temporary ex emption and the intended duration of the 
exemption in more exact terms. 
 Q16. Cyprus (movement of natural persons, page 5; commercial presence, page 6) : Please 
confirm whether it is still necessary to maintain  the exemptions with Cyprus’ accession into 
the EC in 2004. 
 
Q17. Egypt (national treatment to foreign personnel, page 7) : It is noted that the exemption 
would be maintained so long as the agreements with Members set out in column 3 remain in 
force.  Would Egypt advise whether the agreemen ts concerned still remain in force, and the 
exact duration of these agreements? Does Egypt have any plan of entering into similar 
agreements with other countries? 
 Q18. EC (access procedures in France, page 9, 4
th entry) : It is noted that the intended duration of 
the exemption is 10 years.  At the Meeting of the Council Review of MFN Exemptions held on 29 May 2000
4, the EC again confirmed its intention to have a validity of 10 years for this 
exemption.  We would like to know whethe r the EC would terminate the exemption as 
scheduled.  
 Q19. EC (movement of natural persons, page 11) : It has been provided that the exemption would 
be needed for certain counties only until an ec onomic integration agreem ent is concluded or 
completed.  Would EC please advise whether the conclusion/completion of any recent 
economic integration agreement(s) would make  it possible to remove the exemption for 
specific countries?  
 Q20. Jordan (movement of natural persons, page 15, 2
nd entry) : It is noted that Jordan has made 
national treatment commitments under mode 4 for all sectors in its schedule of specific commitments in that access is committed for cer tain categories of services suppliers. Please 
confirm whether or not this exemption on movement  of natural persons is intended to apply to 
the scheduled categories of services suppliers. 
 Q21. Jordan (purchase of land, page 16, 2
nd entry) : While the condition that created the need for 
the exemption is “foreign policy and security considerations”, would Jordan please explain 
how the measures on land use which is “subject to a reciprocity requirement” could achieve 
the intended purpose of the exemption?  
 
                                                      
3  Paragraph 13 of S/C/M/44 of 21 June 2000. 
4   Paragraph 33 of S/C/M/44 of 21 June 2000. S/C/W/247 
Page 6  
 
Q22. Liechtenstein (movement of natural persons, page 17) : At the Meeting of the Council 
Review of MFN Exemptions held on 29 Ma y 2000, Liechtenstein mentioned that the 
exemption was no more necessary and depending on the outcome of further analysis, it would 
notify the deletion of the exemption
5.  We note that Liechtenstein has proposed to delete this 
exemption in its initial offer.  We appreciate Li echtenstein’s offer and would like to know the 
timetable for the removal of this exemption. 
 Q23. Liechtenstein (presence of natural persons, page 18) : It is noted that the condition that 
created the need for the exemption is to ensu re adequate market access to services providers 
from Liechtenstein.  Please explain how the rele vant measure which is based on reciprocity 
could achieve the intended purpose of the exemption.  Apart from adequate market access, are 
there any other factors that Liechtenstein has taken into considerati on for not implementing 
the relevant measures on a MFN basis?  
 Q24. Malaysia (foreign equity participation, page 19) : It is noted that the exemption purports to 
allow discretionary non-MFN treatment in r espect of all countries on foreign equity 
participation, which appears a major blanket carve-out from the MFN principle.  Please 
advise if any action has been taken or is being contemplated to eliminate the conditions which 
created the need for the exemption.  Please explain why if not. 
 Q25. New Zealand (movement of natureal persons, page 21, all entries) : It is noted that New 
Zealand had undertaken at the Meeting of the Council Review of MFN Exemptions held on 5 
October 2000 to notify formally the Council of the removal of the two exemptions in due 
course as it was not necessary to maintain them
6.  New Zealand has now proposed to remove 
these exemptions in its initial offer.  Would New Zealand please update the latest position of 
the exemptions and the timetable for their removal? 
 
Q26. Peru (movement of natural persons, page 23) : At the Meeting of the Council Review of 
MFN Exemptions held on 29 May 2000, Peru indicat ed that it would be prepared to consider 
whether to phase out the exemption in the light of 10-year period7. We would like to know 
whether the exemption would be remove d on reaching a period of 10 years.  
 
Q27. Philippines (bilateral trade and investment, movement of natural persons, page 23) : We 
would like to know the exact duration of the re levant bilateral treaties on entry rights for 
traders and investors.  Does Philippines have an y plan of entering into similar treaties or 
agreements with other countries? 
 Q28. Poland (commerce and navigation ag reements, business and economic relation 
agreements, bilateral investment agreements, page 24, 1
st entry) : Please update the lists of 
countries with which Poland has entered into intern ational agreements as set out in its earlier 
communication S/C/W/1558. Does Poland have any plan of entering into similar agreements 
with other countries? 
 
Q29. Sierra Leone (national treatment to foreign personnel, page 24) : It is noted that the 
exemption would be maintained so long as the ag reements with Members set out in column 3 
remain in force.  Would Sierra Leone please confirm whether the agreements concerned still 
remain in force and provide the duration of the agreements concerned? 
 
                                                      
5  Paragraph 20 of S/C/M/44 of 21 June 2000. 
6  Paragraph 11 of S/C/M/47 of 17 November 2000. 
7 Paragraph 40 of S/C/M/44 of 21 June 2000. 
8  Paragraphs 12 to 14 in S/C/W/155 of 30 June 2000.  S/C/W/247 
 Page 7 
 
 
Q30. Singapore (presence of natural perso ns, bilateral investment agreements, 
Commonwealth tax credit scheme, page 25, all entries) : It is noted that Singapore would 
periodically review the exemptions.  Would Si ngapore provide information about the latest 
reviews and their results? 
 
Q31. Sweden (bilateral investment agreements, page 26, 1st entry) : We note that the EC has 
proposed to delete this exemption in its initial offer.  We appreciate EC’s offer and would like 
to know the timetable for the removal of this exemption. 
 Q32. Thailand (bilateral agreement, page 28) : The intended duration of the exemption is 10 
years.  At the Meeting of the Council Revi ew of MFN Exemptions held on 29 May 2000
9, 
Thailand advised that liberalization measures taken by their government would eventually 
render the exemption unnecessary.  Would Tha iland give an update on measures taken to 
eliminate the exemption and advise whether th ey intend to eliminate the exemption as 
scheduled? 
 
Q33. Turkey (long-term insurance scheme, employment of foreign workers, page 29, 2nd 
entry) : At the Meeting of the Council Review of MFN Exemptions held on 29 May 200010, 
Turkey advised that the exemption was related to  the situation that a large number of Turkish 
nationals were working in Libya in 1980s.  We would like to know whether the condition that 
created the need for this exemption still preva ils and would Turkey also confirm whether the 
exemption has been applied de facto. 
 
Q34. United States (movement of natural perso ns, bilateral investment agreements, page 31, 
1st entry) : Please provide an up-to-date list of countries that have a Friendship, Commerce 
and Navigation Treaty (FCN) or Bilateral Investment Treaty (BIT) still in force with the US 
and the date of entry into force of those FCNs and BITs.  Please explain the conditions 
creating the need for the MFN exemption and why the conditions still prevail.  In particular, 
with the provisions for economic integration agreements in GATS Article V, please explain 
why the MFN exemption is still maintained. 
 Q35. United States (taxation measures, page 32, 1st & 3rd bullets) : Please provide an up-to-date 
list of countries which are considered contigu ous to the United States and which or whose 
residents are accorded more favourable treatment under the US Internal Revenue Code (IRC).  
If the MFN exemption is intended to cover measur es applicable only in respect of countries 
contiguous to the United States, please explain why the exemption specifies that the countries 
to which the measure applies are "All". 
 
Q36. United States (taxation measures, page 33, 1st bullet) : Please indicate what measures are 
being covered by the MFN exemption that are c onsidered not covered by Article XIV:(e) of 
the GATS.   
Q37. United States (taxation measures, page 34, 1
st bullet) : Please indicate what taxation 
measures are referred by “the less favourable taxa tion for citizens, corporations or products of 
a foreign country”.  Please also clarify the mean ing of “discriminatory or extraterritorial 
taxes, more burdensome taxation, or other discr iminatory conduct”.  At the Meeting of the 
Council Review of MFN Exemptions held on 29 May 2000, the United States mentioned that 
the rationale behind this exemption was deterre nce of discriminatory tax practices against US 
corporations and individuals11.  Please explain how it relates to the condition creating the 
need for the exemption listed in column 5, i. e. “to foster efficient international taxation 
policies”, as well as to the relevant measures.   
                                                      
9  Paragraph 36 of S/C/M/44 of 21 June 2000. 
10  Paragraph 37 of S/C/M/44 of 21 June 2000. 
11 Paragraph 25 of S/C/M/44 of 21 June 2000. S/C/W/247 
Page 8  
 
 Q38. United States (sub-federal tax measures, page 35) : Please indicate what is the 
inconsistency with Article II of the GATS of the measures described in each of the bullets. 
 Q39. United States (taxation measures, pages 32-35) : It is further noted that the United States has 
made certain national treatment commitments for “All Sectors: Taxation Measures” in its 
schedule of specific commitments.  Please confir m whether or not this exemption on taxation 
measures is intended to apply to the scheduled services. 
  III. SPECIFIC QUESTIONS ON SECTORAL EXEMPTIONS 
8. Furthermore, we would appreciate the Members concerned of the following sectoral MFN 
exemptions could respond to the following specifi c questions (page number refers to JOB(04)/114)  
1. Business Services 
 (a) Professional Services
 
Q40. Brunei Darussalam (legal services, page 36) : It is noted that Brunei Darussalam will keep 
the possibility of removing this exemption under review. Would Brunei Darussalam please 
provide information about the la test review and its results?  
 Q41. Bulgaria (legal services, page 36) : What exactly are the types of less favourable national 
treatment that are being/will be granted to co mpanies not established in, or non-citizens of, 
the countries listed in column 3?  It is not ed that Bulgaria has committed full national 
treatment in modes 1 to 3 for “foreign legal consultants’ advisory services on international 
public law and law of jurisdiction (home count ry law) where the services supplier is a 
qualified lawyer” in its schedule of specific commitments.  Please confirm whether or not this 
exemption on legal services is intende d to apply to the scheduled services. 
 Q42. Costa Rica (professional services, page 37) : It is noted that the condition that created the 
need for the exemption is “to ensure minimum standards of quality for professional services”. 
We would like to know how such reciprocal agreem ent or reciprocal treatment as described in 
column 2 could achieve the intended purpose of  the exemption and whether Costa Rica has 
given thought to other alternative means (e .g. recognition agreements or arrangements 
provided by GATS Article VII) that may better address the need for the exemption.  
 
Q43. Dominican Republic  (legal services, auditing and accounting services, dental, 
physiotherapy, medical, paramedical and nu rsing services, page 37; architectural and 
engineering services, page 38) : At the Meeting of the Council Review of MFN Exemptions 
held on 29 May 2000, Dominican Republic men tioned that other than reciprocity, the 
condition that affected the exercise of the pr ofessions covered by the four exemptions in 
question was “the requirement to have something from the executive power”
12.  Would 
Dominican Republic further clarify the meaning of this condition?   
 
Q44. Besides, it is noted that Dominican Republic has made market access and national treatment 
commitments for certain services areas under legal services, auditing and accounting services, as well as architectural and engineering services in its schedule of specific commitments.  Please confirm whether or not the exemptions  in question are intended to apply to the 
scheduled services. 
 
                                                     
 
12 Paragraph 74 of S/C/M/44 of 21 June 2000.  S/C/W/247 
 Page 9 
 
 
Q45. Honduras (professional services, page 38) : Apart from reciprocity, are there any other 
factors that Honduras has taken into considera tion for authorizing the exercise of professional 
services in Honduras?  It is understood from the Meeting of the Council Review of MFN 
Exemptions held on 29 May 2000 that another purpose for the exemption was to ensure competence in the capacity of professionals exercising their profession
13.  In this regard, has 
Honduras given thought to other alternativ e means (e.g. recognition agreements or 
arrangements provided by GATS Article V II) that may better serve this purpose? 
 Q46. Macedonia, Former Yugoslav Republic of (legal services, page 38) : It is noted that the 
condition that created the need for the exempti on is “reciprocal coordination of the legal 
profession within the overall regional develo pment of judicial and administrative 
institutions”.  For clarify purpose, would M acedonia please elaborate the meaning of “the 
overall regional development of judicial and ad ministrative institutions”, in particular the 
region that is being referred to.  If condition is meant to confine to a particular region, please 
explain why the exemption needs to apply to “all countries”.   
 
Q47. Panama  (professional services, page 38) : Apart from reciprocity, are there any other factors 
that Panama has taken into consideration for authorizing the exercise of professional services in Panama?  It is also noted that Panama has made market access and national treatment commitments for certain services areas under legal services, accounting services, taxation 
services, architectural services, as well as e ngineering services in its schedule of specific 
commitments.  Please confirm whether or not this exemption on professional services is 
intended to apply to the scheduled services. 
 Q48. Singapore (legal services, page 38) : It is noted that the condition that created the need for the 
exemption is that the establishment of foreign law firms in Singapore is based on case-by-
case approval. Please explain why the relevant measures cannot be implemented on a MFN 
basis.  Besides, it seems that the condition on ly relates to measures under mode 3, we would 
like to know why it is necessary to maintain an exemption covering all measures
 pertaining to 
the provision of legal services.  It is also not ed that Singapore will keep the possibility of 
removing this exemption under review.  Please provide information about the latest review, 
its results, as well as details of any liberaliza tion measures taken further to those reported at 
the Meeting of the Council Review of MFN Exemptions held on 29 May 200014. 
 Q49. Thailand (auditing services, page 39) : At the Meeting of the Council Review of MFN 
Exemptions held on 29 May 2000, Thailand advise d that the relevant provision of the Thai 
Auditor 1962 which gave rise to the need  of the exemption was in the process of 
amendment
15.  We would like to know the latest posi tion of the legislative requirement and 
whether the condition that created the need for the exemption still exist following the change 
of relevant regulation.  
Q50. Besides, it is noted that Thailand has made certain market access and national treatment 
commitments for accounting, auditing and bookkeeping services in its schedule of specific commitments. Please confirm whether or not this exemption on auditing services is intended 
to apply to the scheduled services.  
 Q51. Turkey (professional services, accounting,  auditing and book-keeping services, page 39) : 
We note that the condition that created the need  for the two exemptions in question is to 
create favourable circumstance for Turkish c itizens to perform the relevant professional 
services under equal conditions in the other countries.  Would Turkey please explain how the 
relevant measures which are based on reciprocity could achieve the intended purpose of the 
                                                     
 
13 Paragraph 73 of S/C/M/44 of 21 June 2000. 
14 Paragraph 65 of S/C/M/44 of 21 June 2000. 
15  Paragraph 66 of S/C/M/44 of 21 June 2000. S/C/W/247 
Page 10  
 
exemption?  Apart from equal condition, are th ere any other factors that Thailand has taken 
into consideration for not implementing the relevant measures on a MFN basis?  
 Q52. Besides, it is noted that Turkey has made  certain market access and national treatment 
commitments for legal services, accounting, auditing and bookkeeping services, as well as 
engineering and architectural services in its schedule of specific commitments. Please confirm 
whether or not these exemptions on professiona l services, as well as accounting, auditing and 
book-keeping services are intended to apply to the scheduled services.  
 Q53. Venezuela (professional services, page 39) : While the condition that created the need for the 
exemption has been left blank, it is understood from the Meeting of the Council Review of 
MFN Exemptions held on 5 July 2000 that the reason for the exemption was a reciprocity requirement contained in the domestic legislation in force
16.  Apart from reciprocity, are there 
any other factors that Venezuela has taken into consideration for not implementing the 
relevant measures on a MFN basis?   
 
Q54. Besides, it is noted that Venezuela has made market access and national treatment 
commitments in mode 2 of legal advisory  services, accounting and auditing services, 
architectural services, engineering and integr ated engineering services, as well as urban 
planning and landscape architectural services in its schedule of specific commitments.  Please confirm whether or not this exemption on professional services is intended to apply to the 
scheduled services. 
 (b) Other Business Services
 
Q55. Canada (services incidental to agriculture, page 40, 2nd entry) : We note from the Meeting 
of the Council Review of MFN Exemptions he ld on 29 May 2000 that this exemption seemed 
to stem from the domestic demand for the services17.  We would like to know the selection 
criteria for countries that are given the more favourable treatment under this exemption, and 
why the treatment could not be extended to other WTO members if the service is demand-driven. 
 Q56. EC (publishing services, page 41) : Would the EC please advise whether the measure is 
established in accordance with an y domestic legislation?  Please also explain if the conditions 
that created the need for this exemption still exist. 
 Q57. New Zealand (interpretation services, page 41) : Please provide an updated list of countries 
with which New Zealand has entered into arra ngement for more favourable entry conditions 
for interpreters.  Please advise why the exemp tion is needed, given that the objective of the 
measure as stated seems to be to allow entry of  candidates with requisite skills as interpreters.  
Please also advise if the arrangement can be  covered by mutual recognition arrangements 
under Article VII of the GATS.  
 Q58. Poland (fishing and fishing-related services, page 41) : For the purpose of clarification, 
please advise whether preferential treatment gr anted under this exemption is based on 
reciprocity i.e. preferential treatment would be gi ven to a country only if the same treatment is 
accorded to the fishing services and service providers of Poland. 
 Q59. Thailand (publishing newspapers, page 42) : It is understood from the Meeting of the 
Council Review of MFN Exemptions held on 29 May 2000 that, the exemption on publishing 
                                                     
 
16 Paragraph 142 of S/C/M/45 of 18 August 2000. 
17 Paragraph 69 of S/C/M/44 of 21 June 2000.  S/C/W/247 
 Page 11 
 
 
newspapers was based on the Thai Publishing Act18.  But following changes in regulation, 
foreigners were able to invest in newspape r and publishing services, though representatives of 
that juridical person must be Thai citizens for security purposes.  Would Thailand please 
advise the latest legislative requirement with r espect to foreign investment in newspaper and 
confirm whether the condition that created the n eed of the exemption still exist following the 
change of relevant regulation?   
 
2. Communication Services 
 
(a) Postal Services  
Q60. Turkey (page 42) : At the Meeting of the Council Review of MFN exemption held on 29 May 
200019, Turkey advised that they would remove this MFN exemption since the conditions 
creating the need to have this exemption had been  eliminated.  We note that in its initial offer 
Turkey has offered to terminate this MFN ex emption.  We appreciate Turkey’s offer and 
would be interested to know the timetable  for the removal of this exemption. 
 
(b) Telecommunication Services  
Q61. Argentina (page 42) : We note from the Meeting of the Council Review of MFN exemption 
held on 29 May 200020 that this MFN exemption was based on contractual obligations 
concluded between the Government and the sat ellite company, Nahuelsat, for establishing, 
operating and providing system for Argentina.   We would like to know whether there is any 
change to the above-mentioned condition.  We would also appreciate an update on countries 
whose suppliers have been authorized unde r this exemption and the progress of the 
development of domestic satellite systems. 
 Q62. Bangladesh (pages 42 and 43, 1
st and 2nd entries) : It is noted that the intended duration of 
the two exemptions maintained for telecommuni cations services – international services is 10 
years.  We would like to know whether Ba ngladesh would terminate those exemptions as 
scheduled. 
 Q63. Brazil (page 43) : Please confirm if this MFN exemption exist in Brazil's list of MFN 
exemptions and if so, why.  Specifically, we note that Brazil withdrew its revised 
telecommunication offers in 2001 and has not ratified the Fourth Protocol.  Its MFN 
exemption on telecommunications services shoul d not have been entered into effect.  
 Q64. Sri Lanka (page 45, 1
st entry) : We note that in its initial offer Sri Lanka has offered to 
terminate this MFN exemption.  It seems th at the conditions creating the need for this 
exemption no longer prevail.  We appreciate Sri Lanka’s offer and would like to know the 
timetable for its removal. 
 Q65. Turkey (page 45, all entries) : It is noted that Turkey has offered to terminate the two MFN 
exemptions on telecommunication services in its in itial offer.  It seems that the conditions 
creating the need for these exemptions no longer prevail.  We appreciate Turkey’s offer and 
would be interested in knowing the timetable for the removal of these exemptions. 
 Q66. USA (page 45) : We note that in its initial offer the US has offered to terminate this MFN 
exemption.  It seems that the conditions cr eating the need for this exemption no longer 
                                                     
 
18 Paragraph 66 of S/C/M/44 of 21 June 2000. 
19 Paragraph 89 of S/C/M/44 of 21 June 2000.  
20 Paragraph 87 of S/C/M/44 of 21 June 2000. S/C/W/247 
Page 12  
 
prevail.  We appreciate the US’ offer and would like to know the timetable for the termination 
of the relevant exemption. 
 Q67. Venezuela (pages 45 and 46, all entries) : During the last Review, in response to HKC’s 
question on why Column 5 (Conditions creating the need for the exemption) was left blank, 
Venezuela replied that they were holding the necessary consultations to determine whether 
they could do away with some of the exemptions  in their list and the consultations in the area 
of telecommunications were yet to be concluded
21.  We are interested in the results of those 
consultations.  Specifically, we would like to ask  Venezuela to provide the conditions creating 
the need for these two exemptions if they are to be maintained. 
 
(c) Audiovisual Services  
Q68. Australia (page 48, 1st entry) : For clarify purpose, would Australia advise whether 
preferential treatments granted under this exemption is based on reciprocity? 
 
Q69. Australia (page 48, 2nd entry) : At the Meeting of the Council Review of MFN exemption 
held on 29 May 200022, Australia indicated that the exemption had never been applied in 
practice so no examples existed.  Would Australia please advise us whether this exemption has ever been activated since the Review in 200 0?  We are interested in knowing the types of 
unreasonable unilateral actions referred by Austra lia.  On the condition that this exemption 
has never been invoked, would Australi a consider terminating the exemption? 
 
Q70. Brunei Darussalam (page 49) : We note that Brunei Darussalam would keep the possibility 
of removing its exemption on radio and televi sion under review.  Would Brunei Darussalam 
please provide information about the latest review and its results?  
 
Q71. EC and their Member States (page 58, 1
st and 2nd entries) : At the Meeting of the Council 
Review of MFN exemption held on 29 May 200023, the EC advised that these two entries 
meant to be defensive MFN exemptions.  At that  time the EC was of the view that these two 
MFN exemptions should be maintained because  the situation of international trade in 
audiovisual services did not justify eliminati on of those measures.  Would the EC advise 
whether, and how many times, they have invoked these two exemptions?  We are also 
interested in knowing what exactly are those adverse, unfair or unreasonable conditions or 
actions that the EC has been subject to. 
 Q72. EC and their Member States (page 58, 2
nd entry) : We note that the EC considers that the 
need for this exemption will lapse togeth er with corresponding exemption from other 
Members.  This was an uncommon entry.  For clarity purpose, could the EC be more precise 
on what is “corresponding exemption from other Members” and explain why this entry is different from the other exemptions that the EC has maintained?   
 Q73. Israel (page 63) : We note that differential treatment is accorded to works and natural persons 
of countries with which Israel may have co -production arrangements, and to natural and 
juridical persons engaged in f ilm and video distribution.  C ould Israel please indicate how the 
treatment is differentially applied, and confirm whether or not this exemption is intended to 
apply to Israel’s specific commitments in this sector? 
 Q74. Jordan (page 64, 2
nd entry) : We observe that in the exem ption relating to “production and 
distribution of television programs and cinemat ographic works”, Jordan has not specified the 
                                                      
21 Paragraph 72 of S/C/M/44 of 21 June 2000 and paragraph 142 of S/C/M/45 of 18 August 2000. 
22 Paragraph 97 of S/C/M/44 of 21 June 2000. 
23  Paragraph 98 of S/C/M/44 of 21 June 2000.  S/C/W/247 
 Page 13 
 
 
conditions creating the need for this exemption (Column 5 is left blank).  For transparency 
purpose, would Jordan please provide such piece of  information if it is to maintain this 
exemption? 
 Q75. Singapore (page 70) : It is noted that Singapore will keep the possibility of removing this 
exemption under review.  Would Singapore pl ease provide information about the latest 
review and its results?  We would also be inte rested to know whether preferential treatment 
granted under this exemption is based on reciprocity. 
 Q76. Venezuela (page 74, 1
st entry) : In the “Intended duration” column for the exemption relating 
to the co-production agreement with Chile, Venezuela has inscribed  in “Ten years, 
automatically extended for the same period”.  Could Venezuela advise on whether Venezuela 
intends to terminate this MFN exemption after 10 years as scheduled and be more specific on the meaning of the phrase “automatically extended for the same period”?  At the Meeting of the Council Review of MFN Exemptions held on 29 May 2000, Venezuela specified three 
conditions creating the need for its four exemptions including this one
24.  We would like to 
know which one is the condition that created the need for this specific exemption.   
 
3. Construction and Related Engineering Services 
 
Q77. Liechtenstein (page 76) : At the Meeting of the Council Review of MFN Exemptions held on 
5 July 2000, Liechtenstein informed that no applicant for commercial presence and presence 
of natural person had been denied access due to the lack of reciprocity since it became a WTO Member in 1995
25.  We would like to know whether this exemption has been used since the 
last Review, and if not, whether the conditions that created the need for this exemption still 
prevail.  
 
4. Distribution Services 
 
Q78. Liechtenstein (page 77) : At the Meeting of the Council Review of MFN Exemptions held on 
29 May 2000, Liechtenstein mentioned that the conditions for this exemption seemed not to 
prevail any longer and that it would probably soon notify the withdrawal of the exemption26.  
We note that Liechtenstein has proposed to delete  this exemption in its initial offer.  We 
appreciate Liechtenstein’s offer and would be interested to know the timetable for its 
removal.  
 Q79. Switzerland (page 77) : As confirmed by Switzerland at the Meeting of the Council Review 
of MFN Exemptions held on 29 May 2000, the exemption was simply a precautionary 
measure vis-à-vis the EFTA convention
27.  While Liechtenstein might notify the withdrawal 
of its exemption of the same nature and scope28, would Switzerland re-consider whether the 
need to keep such a precautiona ry exemption still prevails?  
 Q80. Venezuela (petroleum related services, page 77) : At the Meeting of the Council Review of 
MFN Exemptions held on 5 October 2000, Venezuela mentioned that as indicated by a 
preliminary analysis, the bilateral agreements mentioned in column 2 did not grant any type 
of privileges with regard to petroleum rela ted services and the subject exemption could 
                                                     
 
24  Paragraph 16 of S/C/M/47 of 17 November 2000.  
25  Paragraph 126 of S/C/M/44 of 21 June 2000 
26 Paragraph 126 of S/C/M/44 of 21 June 2000. 
27  Paragraph 125 of S/C/M/44 of 21 June 2000. 
28  Paragraph 126 of S/C/M/44 of 21 June 2000. S/C/W/247 
Page 14  
 
therefore possibly be removed
29.  Would Venezuela confirm whether it will remove the 
exemption, and if so, the timetable for its removal? 
 
__________ 
  
                                                     
 
29 Paragraph 16 of S/C/M/47 of 17 November 2000.