RESTRICTEDWORLD TRADE
ORGANIZATIONTN/S/M/6
25 April 2003
(03-2216)
Council for Trade in Services
Special Session
REPORT OF THE MEETING HELD ON 3 – 6 MARCH 2003
Note by the Secretariat1
1. The Special Session of the Council for Trade in Services held a formal meeting on
3-6 March 2003.  The agenda for the meeting, chaired by Ambassador Alejandro Jara of Chile, is
contained in document WTO/AIR/2040.
2. The Chair proposed that the agenda be adopted as circulated.
3. It was so agreed.
A. ASSESSMENT OF TRADE IN SERVICES
4. The Chair recalled that at the meeting held in December, he had announced that a new source
of information, which could prove useful in developi ng views on the impact of services liberalization,
was to be made available by the Secretariat.  The Development and Economic Research Division had
compiled a bibliography of publications, mostly containing empirical research, in areas falling under
the individual WTO Agreements.  This bibliography  also contained an extensive list of studies on
individual services sectors, which was put together in collaboration with the Trade in Services
Division.  In total the bibliography listed some 220 titles, 105 of which pertained to services.  The
entire bibliography was available on the WTO web-site, and could be accessed through the Economic
Research and Analysis gateway.  He also recalled that at the meeting held in December China hadpresented a communication under this item.  This communication was contained in document
TN/S/W/9.  A number of delegations had made preliminary comments at that time, and some
Members indicated their intention to study the note and perhaps revert to it.  The Chair invited
delegations to make any comments under this item.
5. The representative of Pakistan noted that the substantial submission made by China was an
objective depiction of China's services trade liberalization and he attached great importance to its
conclusions.  In addition to Thailand's paper under the same item, he believed that these submissions
were valuable contributions that outlined national experiences and from which developing countries
could learn.  He recalled paragraph 32 of China's paper, which stated that "liberalization of trade in
services should be progressive and managed";  paragraph 49 of Thailand's communication, whichstated that "liberalisation, while desirable, should take place at a pace commensurate to the economic
(and perhaps, social) readiness of a country […] this  is completely congruent with the principles of
progressive liberalisation and the right to regulate – the two cornerstones of the GATS"; as well as
                                                     
1 This document has been prepared under the Secretariat's own responsibility and without prejudice to
the positions of Members and to their rights and obligations under the WTO.TN/S/M/6
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paragraph 63, which stated that "the 'fast and furious' liberalisation approach seemed not to have
worked well".  He highlighted that Thailand had arrived at these conclusions despite the fact that, as
noted in its paragraph 22, Thailand was among the top 30 exporters and importers of trade in services.
He stated that Pakistan's concerns had been thus compounded by the conclusions of these two
important players in trade in services.  He recalled that in June 2002 Pakistan had co-sponsored asubmission containing similar conclusions, which were contained in document TN/W/S/3.  In this
regard, it was with some surprise that he had taken note of the statistics quoted by the United States
with respect to the increase in exports of middle- and low-income economies at the previous meeting,
contained in paragraph 9 of document TN/S/M/5, wh ich stated that middle- and low-income countries
accounted for a growing percentage of world services exports.  He said that his surprise stemmed
from the fact that Pakistan had co-sponsored a subm ission, contained in S/CSS/W/114, that quoted the
same source ( International Trade Statistics  by the Secretariat) as the United States.  However,
paragraph 15 of the this paper cited the conclusion that "Many services markets are dominated by
only a few large firms from developed countries and a number of small players. The top 20 service
exporters are mainly from developed countries. In spite of GATS, developed countries account for
80% of world exports of services, and developing countries' share of services export is about 20%,
even though they make up 90% of WTO membership".  He felt that these figures, quoted from thesame source but apparently contradictory, needed to be reconciled.  He believed that an early
conclusion of the assessment was warranted, given that the Council had been engaged in it item for a
long time.  Quoting the report of the meeting held on 15 December 1998, he recalled paragraph 6,
which stated that the assessment should last for a few meetings, given the fact that in the following
year the Council was to undertake important work under Article XIX, including the negotiatingguidelines.  He noted that the Council had been engaged in this exercise for over four years, and drew
attention to paragraph 14 of the negotiating guidelines and procedures, which stated that the
negotiations would be adjusted in light of the results of the assessment.  The numerous submissions
from various International Organizations and concerning national experiences he believed providedexamples of experiences in overall and sectoral terms.  He felt the time had come for the Councildraw conclusions in order enable Members to adjust the negotiations on services.
6. Responding to China's submission the representative of the European Communities stated that
she had read with interest the analysis in Part III, which concluded that the opening of the services
sector had brought investment, accelerated the development of the services industry, and introduced
technology and management skills.  She had also noted that foreign suppliers had taken market share
from national competitors, which was to be expe cted when the market was opened to foreign
investment. Regarding the references to a "brain drain", she felt that the taking up of work by
qualified Chinese workers in locally-based foreign fi rms was partly attributable to more flexible and
transparent promotion and incentive mechanisms in foreign companies.   She questioned the often-
drawn link between the opening of the banking sector to foreign competition and the stability of
capital flows.  She reiterated her delegation's view that one activity concerned the current accountwhile capital in- and out-flows were registered in the capital account.  She emphasised that this was
an important distinction worthy of further discussion and noted that the liberalization of the banking
sector did not require the opening of the capital account.
7. Introducing a paper which his delegation had announced at the last meeting that it was
preparing, the representative of the United States noted that, in an effort to further discussion within
the WTO on the importance and potential effects of services liberalization, his delegation hadsubmitted a paper entitled, "An Assessment of Services Trade and Liberalization in the United States
and Developing Economies."  Through the use of both qualitative and anecdotal evidence, the paper
examined the relative size and growth of United States and developing economy services sectors,discussed the effect of past services liberalization, and presented evidence regarding the potential
impact of future service sector liberalization.  He stated that the service sector was the largest and
fastest-growing component of economic output in the United States and in middle- and low-income
economies.  The service sector accounted for over 80 per cent of private sector employment in theTN/S/M/6
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United States and over half of the total employment in East Asia, in Latin America, and in the
Caribbean.  Data indicated that developing economy participation in the global services market had
increased since the establishment of the WTO.  For example, the share of services exports accounted
for by middle- and low-income economies rose from 18.2 per cent in 1995 to 19.1 per cent in 2001.
He further noted that during the period from 1996 to 2000, United States admissions of temporaryworkers from middle- and low-income economies increased at a faster rate than total United States
admissions of temporary workers.  Available evidence suggested that both the United States and
developing economies had benefitted from past services liberalization.  These benefits had taken
various forms, such as lower consumer prices, increases in the stock of infrastructure, and increased
market competition.  Further, recent studies predicted that future services trade liberalization could
have a significant and positive impact on the economic welfare of both the United States and
developing economies.  He concluded that the Un ited States found these discussions productive, as
well as the submissions made under this item, and it believed that the opportunity should be given for
all to contribute.
8. The representative of Uruguay noted that his statement was made with a view to contributing
to the discussion on the assessment and that it was based on the most recent trade statistics published
by the WTO for the year 2001.  He noted that the statistics used by the Secretariat were based on
balance-of-payments, the coverage of which was limited to modes 1 and 2, and that the most dynamic
mode, mode 3, was not covered.  He noted that in 2001 there had been a decrease of 1.5 per cent in
world production, subsequent to an increase of 11 per cent in the previous year.  For the first time
since 1982, there had been negative growth in world trade.  Exports of goods decreased by 4.5 percent, while exports in services, which between 1990 and 2000 had increased in parallel to goods,
decreased slightly in 2001 and for the first time since 1983.  He noted that an examination of the
figures for 2001 indicated that world trade in services represented approximately one-fourth of world
trade in goods and services.  Exports and imports  world-wide of goods represented US$6,155 billion,
and US$6,441 billion respectively, while exports and imports in services represented approximatelyUS$l,460 and US$1,445 respectively.  With respect to the statistics on the importance in world trade
of each of the supply modes defined in the GATS, he recalled that, at the symposium held in March
2002, the approximate breakdown of percentages for services trade provided by the Secretariat in the
four modes was:  mode 1 (cross-border) –  28 per cent of world trade in services; mode 2
(consumption abroad) – 14 per cent; mode 3 (commercial presence) – 56.3 per cent; and mode 4
(movement of natural persons) – 1.4 per cent.
9. The representative of Uruguay then turned to the participation of developing countries in the
present negotiations.  The figures for 2001 showed that trade in services in developing countries had
stagnated.  He repeated that trade in services represented one-fourth of world trade in goods and
services, and the participation of developing countries in world services trade was also approximately
25 per cent of the total.  In the case of commercial services, exports from developing countriesrepresented 23.4 per cent of world trade in services while imports represented 26.4 per cent.  He felt
that the launching of a new trade round at Doha represented a challenge and an opportunity for
developing countries to improve trade by way of improved access for their service suppliers through
national and regional markets.  From the perspective of developing countries, it was important in the
current negotiations to apply the fundamental prin ciples in the GATS and the negotiating guidelines
and procedures, including those of autonomous liberalization, appropriate flexibility and the right of
governments to change and introduce new regulations in order to achieve national policy objectives,
and the need to grant special attention to sectors and modes of interest to developing countries.
10. Referring to the challenges faced by developing countries in the context of the negotiations,
the representative of Uruguay noted that these generally included the lack of research to help identify
the sectors and supply modes of interest to them in the context of the assessment on trade in services,
as well as difficulties in conducting a cost-benefit analysis of liberalization.  He also cited the lack of
resources of the developing countries for participation in concurrent regional, hemispheric, andTN/S/M/6
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multilateral negotiations, in addition to the responsibility to coordinate with the private sector on
various sectors and modes.  There was also a need to achieve greater awareness among public and
private partners on the role that services play in exports.  He also noted the lack of appropriate
statistics on trade in services meant that developing countries were engaged in market access without
important negotiating tools.  For example, mode 3 was not covered by the IMF manual on balance-of-payments.  He also said that there was the need for developing countries to identify the sectors and
modes in which they could possibly make commitments.  Although the GATS was designed to allow
flexibility for Members prior to binding their commitments, these became more concrete once bound.
The only way to then withdraw or modify a co mmitment was through Article XXI, which provided
that such a Member would start negotiations with any affected Members in order to reach agreement
on any necessary compensation.  Furthermore, he pointed to the need to establish policies and
regulatory frameworks for the various service sectors at the national level.  He drew Members'attention to the fact that after seven years of  negotiations on GATS Rules, namely on emergency
safeguard measures, subsidies and government procurement, as well as on domestic regulation, work
in these areas had not been completed.  He felt that the lack of results in these negotiations contributed
to the lack of clarity in the negotiations on market access.  With respect to the negotiating modalities,
he said that the modalities on request-offer had been applied at the bilateral level, including bydeveloping countries.  Without prejudicing these guidelines he felt that, with regard to the
negotiations on rules and domestic regulation, it would be suitable to develop these disciplines at the
horizontal level within the respective working groups, since it was in these fora that developing
countries could best contribute and have an impact on the possible outcomes.   Finally, he noted that
since the end of the Uruguay Round, developing countries had taken a defensive position onnegotiations in market access in trade in services.  He felt that the relevance of trade in services to
developing countries in terms of GDP, sectors and modes, should be borne in mind, and that a more
offensive strategy should be considered in sectors and modes of interest which could contribute to
development and growth.
11. Turning to the issue of increasing participation of  developing countries as foreseen in Articles
IV and XIX, an important first step was the preparation of negotiating proposals and concrete
requests.  He recalled that a good portion of the proposals made to date were from developing
countries, including in tourism, computer-related, distribution, construction and engineering,
professional, audio-visual, and transport services and the movement of natural persons.  He noted that
several developing countries had presented proposals on horizontal issues, such as economic needs
tests, MFN exemptions, and classification issues on, for example, the postal and energy sectors.  Hesaid that this round presented an opportunity for de veloping countries to break with the pattern of the
Uruguay Round in which proposals and requests were made mostly by the developed Members.
12. Making comments on the assessment communication from China, the representative of
Thailand said that she shared many of the views that China had elaborated on its experience with trade
in services liberalization, including on the conclusions drawn on opportunities and challenges.  She
noted that, like China, Thailand had acknowledged in its assessment submission the benefits that
liberalization had brought, including investment, t echnology, management experience and increased
access to the international market.  Thailand's own assessment contained parallel challenges to the
ones outlined by China, particularly those faced by SMEs in adjusting to competition and particularlyin retailing.  She stated that, like China, Thailand had experienced a "brain drain", but in the medical
field.  Like China, Thailand had also experienced imbalances in the rates of economic development
seen in different regions of the country, although given China's diversity, she imagined that these
imbalances would have been more pronounced in China.  She fully shared the observation on the need
to strengthen economic regulatory frameworks.  She noted that many developing countries facedsimilar challenges in building the appropriate regulatory framework around their liberalization
strategies, and in particular increasing qualified human resources.  With regard to China's mention of
the required breathing space for the reform of st ate-owned enterprises (SOEs), she acknowledged that
SOEs played an important role in the Chinese ec onomy in terms of both production and employment.TN/S/M/6
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In fact, she recalled reading that up to 1 million SOE workers would lose their jobs in the coming
years as a result of liberalization.  She recognised in China's experience the same employment
problems faced in Thailand.  Despite these challenges, she said that developing countries remained on
the path of liberalization, but underscored that the process must be one of progressive liberalization at
a reasonable pace, rather than wholesale.
13. Turning to her comments of a more general nature, the representative of Thailand recalled the
low percentage, 1.4 per cent, of trade in services accounted for by mode 4, as well as the 50 per cent
accounted for by mode 3.  In this regard, she felt that mode 4 held great potential for increasing trade
in services and hoped that efforts would be made by developed Members to increase mode 4 access
for developing countries.  She echoed the statement by Uruguay that market access negotiations were
moving forward without clear progress in rules negotiations, and she hoped that the lack of activeparticipation with respect to subsidies, emergency safeguards and domestic regulation would be
redressed.  She regretted that debate on the services negotiations tended to focus on the market access
aspect to the detriment perhaps of rules.  She also regretted that in the broader negotiations solely the
market access aspect of services was referred to along with agriculture and tariff negotiations, when in
fact market access was only one aspect of the services negotiations.  Responding to Uruguay'ssuggestion that developing countries change their strategy, she agreed that they must try to be more
offensive and submit requests and negotiating proposals.  However, she noted that Thailand had
required nine months to produce its initial requests, and thought that there might be other Members
requiring more time.  She stated that, for her government, the services negotiations and the
preparation of requests were resource intensive becau se of the work involved in identifying sectors of
interest.  In this regard, she noted that her delegation had based its requests on areas which had been
identified as being of interest to Thailand, rather than on blindly making a request on sectors not
bound in trading partners' schedules.  She agreed that the negotiations provided developing countries
with an opportunity to reap benefits.
14. Speaking on behalf of the African group, the representative of Morocco sought to
communicate some of the concerns of the African group regarding the market access negotiations in
services.  He noted that the negotiations in services were moving forward at a faster pace than in other
areas and, although they had received less media exposure than agriculture or TRIPS, they
nonetheless played an important economic role and had important implications for the African
continent.  He noted that, of all the areas of international trade, services were the fastest growing and
contributed significantly to growth in gross domestic product, representing between 40 and 50 percent of GDP in a number of countries on the continent.  However, he noted that the participation of
Africa in world services trade amounted to a mere 2 per cent per annum.  He noted that more than
three years into the negotiations on trade in services , the results remained mixed for African countries.
Their participation was marked by a number of disequilibria which disadvantaged the African
continent.  For example, its participation was modest in terms of the number of negotiating proposalsit had presented, in large part, he emphasised, due to the lack of economic studies in liberalized
sectors and the inability to identify sectors of interest.  In this respect, he emphasised that a critical
point for African countries was the weakness of technical capacity and of resources to undertake
analyses and assessments of national situations that would allow Members to identify their interests
and evaluate the results of past liberalization.  He stated that the effective participation of Africancountries in international trade in services depended on the application of the provisions contained in
Articles IV and XIX of the GATS as well as those contained in the negotiating guidelines and
reaffirmed in the Doha Declaration.  These provis ions emphasised the need to take into account
national policy objectives with respect to trade in services, as well as the level of development of
country Members.  They accorded to developing countries, inter alia , appropriate flexibility "for
opening fewer sectors, liberalizing fewer types of transactions" and "extending progressively market
access" in line with their degree of development (S/L/93 paragraph 12).TN/S/M/6
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15. The representative of Morocco recalled that during the Uruguay Round, the industrialised
countries had obtained commitments in important services sectors of interest to them, such as
financial services and telecommunications services, which privileged mode 3 to the detriment of
mode 4.  In this regard, the wish of Africans for the free movement of workers was increasingly
hindered.  Rich countries continued to impose draconian conditions for the issuance of visas, andrefused to recognise the qualifications of developing country workers even though the softening of
these restrictions would contribute to poverty reduction, including through expatriate transfers, the
reduction of an oversupply of employment and the transfer of skills.
16. The representative of Morocco said that the vast majority of African countries had not yet
elaborated their proposals in the current negotiations due to their inability to conduct national
assessments in services sectors and due to the lack of compensation given for efforts in pursuingautonomous liberalization of trade.  He said that according to paragraph 14 of the negotiating
guidelines, the Council for Trade in Services was to continue to carry out an assessment for trade in
services in overall terms and on a sectoral basis with reference to the objectives of the GATS and of
Article IV in particular.  This was to be an on-going activity of the Council and negotiations would be
adjusted in the light of the results of the assessment.  In accordance with Article XXV of the GATS,technical assistance was to be provided to developing country Members, on request, in order to carry
out national and/or regional assessments.  He recalled that the African group had always expressed the
view that such an assessment could help African countries identify the obstacles they encountered in
their export markets and to improve statistics on services.  They demanded that the impacts of the
agreement be studied with a view to guiding the ne gotiations.  In order for Members' decisions to be
well-informed, a number of questions needed to be addressed, including whether jobs had been
created, whether the advantages of trade in services promised at the time of the signing of the
agreement had been realised, whether the GATS since 1995 had promoted economic growth, and
what had been its influence on other areas of the negotiations.  He said that the significance of the
modalities and the credits granted for autonomous liberalization were a major concern for Africancountries.  Although none denied the need to accord flexibility to developing countries as outlined in
the GATS, particularly in Articles IV and XIX, he said that the principle of granting of credit should
not turn against the developing countries in the form of required reciprocity for credit received from
developed trading partners.  Finally, he recalled that among the African Members, more than twenty
were least-developed and deserved particular attention and special treatment in the negotiations on
trade in services such that their legitimate concerns were taken into consideration as a condition of
their engagement in the negotiations.
17. Indicating that he might revert to the submission from the United States, the representative of
China acknowledged the benefits of trade in services liberalization.  However, he underscored that
China's assessment of this process had not touched upon benefits only.  It also raised questionsconcerning the process and pace of liberalization.  Its conclusion was that the liberalization of trade inservices should be gradual and managed in order to accommodate the different levels of development
of Members.  Based on this conclusion, he hoped that the assessment discussion would focus on these
issues in order to allow Members to participate in  the negotiations in a more effective manner.  He
sought to underline the focus areas of the assessment which could be useful in the on-going
discussions.  Firstly, services industries as a whole were underdeveloped and only accounted for 33per cent of GDP.  This begged the question as to the best way to nurture these industries with a view
to strengthening domestic services capacity.  He noted that domestic industries lagged behind foreign
competitors and, like other developing Members, questioned the value of a "big bang" approach and
favoured an approach which provided the appropriate breathing space.  Liberalization to date had
affected China as reflected by the rapid growth of market shares for foreign companies in distributionand advertisement services.  Liberalization had also exacerbated the position of SMEs competing with
multinational corporations and the "brain drain" in services sectors.  He indicated that these would be
China's areas of focus in the next stages of liberalization.  Secondly, he said that due to the low level
of services sector development, Chinese authorities had little supervisory history of these activitiesTN/S/M/6
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and many new laws governing them had not been implemented.  For example, the family car industry
had recently grown in China and auto-finance services were hence fledgling.  He said that, to date, no
banking institution was involved in auto-financing , and that should China decide to liberalize this
sector, it would retain the right to regulate it, and formulate new regulations.  This was an example of
the managed liberalization referred to in its assessment report.  Developing Members, he said,required progressive liberalization that allowed for the completion of time-consuming legislative
work.  Thirdly,  he said that the practical situation of Members needed to be taken into account, which
for China included time to reform of SOEs, includ ing state-owned commercial banks.  He indicated
that post-reform restructuring would require more time, since reform in this area included the
challenge of laid-off workers.  He reiterated that, although his delegation believed that liberalization
of trade in services was movement in the right direction, the best approach remained managed and
gradual liberalization.
18. The representative of Indonesia noted the impressive nature of China's development in
services liberalization, and felt that its assessment was a model which could allow others to explore
the areas of interest to them.  He underlined that it was important for developing Members to make
such assessments before pursuing further liberalization.  The assessments helped to identify whetherthe liberalization process had brought benefits and in which sectors.  Although he recognised the
potential benefits of liberalization in trade in services, the question remained as to whether developing
countries had gained from services liberalization, whether gains had been nullified through limited
access in sectors and modes of interest to developing countries, and whether expanded export capacity
had contributed to employment.  He recalled that the assessment should be conducted in overall termsand on a sectoral basis, with reference to the objec tives of the Agreement, including in Article IV:1.
His delegation was of the opinion that movement forward without an assessment would lead to an
unbalanced result.  The solution, he felt, was for th e Council to continue the assessment with a view to
ensuring its effectiveness and the adjustment of the negotiations in light of its results.  He saw in
Indonesia's experience parallels with the opportunities and challenges outlined by China, andparticularly the impact of services liberalization on SMEs.  He had taken note that after China's
accession, 28 new retail chain stores had opened and small retailers had collapsed as a result.  He
thought it could be helpful for China to share its experience in this regard.  He believed this to be a
key issue with far-reaching economic and social implications that needed to addressed, as was the
question of uneven economic development in a Members' regions.  He understood the assessment to
be an on-going exercise that would allow the negotiations to be adjusted in light of its results.
19. The representative of Djibouti associated himself with the comments made by Morocco,
which had outlined the scenario faced by African c ountries in the negotiations.  He agreed that there
was a need to train managers and to follow up on technical assistance in order to improve
development of the African continent.  He understood  the concerns highlighted by China, namely that
Members required time after accession to adapt to the rules of the WTO.  He indicated that he mightrevert to the statement made by the European Communities.  Finally, he requested information with
respect to the inclusion of documents in English in the French compilation of documents for the
meeting.  He understood the constraints linked to the circulation of documents in all three WTO
languages, but he felt that it would be confusing for a newly-arrived delegate to find that the package
of meeting documents in one language contained documents in another language.  He suggested that amention in the compilation could avoid any confusion.
20. The representative of Korea noted that the as sessment from China summarised the efforts it
had made in implementing its commitments as well as the challenges which accompanied this
process.  He fully recognised that the process of liberalization should take place at a pacecommensurate with the strengthening of regulatory capacity, and he expressed sympathy for the other
challenges described in the assessment.  Regarding paragraph 51 of the submission, which stated that
the process of liberalization and domestic reform should be mutually reinforced, he noted that this
proposition was not limited to the financial services sector, but should be applied to all servicesTN/S/M/6
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sectors.  He emphasised that liberalization played the role of accelerating the domestic reform
process.  For example, in Korea, new commitments to liberalize had encouraged policymakers to
initiate and implement necessary reforms in a timely fashion.  He acknowledged that total forward
planning for comprehensive adjustment policies was not always feasible, as Korea had observed in the
case of liberalization in the retail services sector.  He observed that Korea had almost completelyliberalized the retail services sector in 1996, but that the competent Ministry had only recently
implemented a number of adjustment policies for small retailers, including support for store
renovation, training in modern marketing techniques, support in creating joint purchasing networks,
and policies similar to those mentioned by Thailand in its contribution.  He felt that the key lesson to
be drawn from Korea's experience was that, in making liberalization adjustments, it was of the utmost
importance to retain a reflexive policy, which could prove a better alternative to a gradual approach.
21. The representative of Malaysia associated himself with some of the points raised by Thailand,
and felt that they should be borne in mind in the bilateral and multilateral contexts.  He stressed the
importance that Malaysia, like other developing country delegations, attached to the mandated
assessment exercise and regretted that it had not produced an outcome that could be useful in the
negotiations.  Turning to the intervention by China, he felt that it had expanded on the importance ofgradualism and progressive liberalization.  He said that the assessment of some developed countries
gave a pro-liberalization perspective which, although appropriate for some sectors, was not the case
for all sectors.  Indeed, some sectors had had negative experiences.  With respect to the assessment on
trade in services, he stated that, without more information it would be difficult to negotiate in a
bilateral context.  He noted that the submissions, as had been mentioned, were based on limitedstatistical information, and that this made envisaging commitments difficult.
22. The representative of Malaysia sought to highlight some important points in the context of the
overall services negotiations.  He felt that the perception of some was that the negotiations were
making progress at the expected pace.  However, he observed that developing countries were not fullyprepared for the negotiations.  He said that it was known why the requests from developing countries
were minimal and limited in scope and content.  Many developing countries were not fully engaged in
the bilateral negotiations and multilateral services negotiations.  These facts pointed to asymmetries
between developed and developing country Members, which he felt could lead to imbalances in the
negotiations if they were not addressed.  He believed that the negotiations needed to take better
account of the reality of the situation.  In this regard, developed country requests were too
comprehensive and it was unrealistic to expect developing countries make such comprehensivemarket access commitments.  He recalled the need to respect the principles of progressive
liberalization, account for national policy objectives, and the right of developing countries not to
make commitments if they were unable to do so as embodied in Article XIX:2.  He recalled that
Article IV, which spoke of increasing participation of developing countries, apart from granting
access for services of interest to developing countries, also emphasised the need to assist developingcountries in strengthening their domestic capacity.  He noted that market access was not solely the
interest of foreign service suppliers, but included the strengthening of the capacity of the Member
concerned.  Market access was but one element of a larger picture in the negotiations.  He echoed the
reminders stated by others concerning horizontal issues that remained outstanding.  He was concerned
that these horizontal issues would take second place to the market access negotiations.  For hisdelegation rule-making was at least as important as market access issues.  He noted that the stalemate
on emergency safeguard measures, characterised by little movement since 1994, did not auger well.
He regretted the apparent loss of progress in the past week.  He reiterated that the lack of an
emergency safeguard would dampen confidence to open services markets.  He agreed that there
should be no a priori  exclusion of services sectors in the negotiations, and noted the resistance by
some on maritime and audio-visual services.  He noted that this reflected a situation in which there
were requests to developing countries for liberalization in industrial products and service sectors,
while protection and distortions in agriculture persisted.TN/S/M/6
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23. A representative of the Secretariat, responding to the question from Djibouti, said that the
French package contained two documents in English, namely the submission by China and the
minutes of the last meeting.  As delegations were aware, there was a considerable backlog of
documents to be translated, and priority was assigned with the hope of meeting delegations' needs.
He noted that the submission by China had been made available that day in French.  The report of the
last meeting was extensive and he hoped that they would be available in the near future.
24. The Chair noted that this last point would be looked into in the hopes of avoiding any
confusion.  Summarising the discussion, he noted that the exchange of views on the assessment had at
times slipped into the review of progress in the negotiations to be discussed under item F.  He
acknowledged that it could be hard to separate th e two and he invited Members to reflect on the
organization of the Council's work.  Given the importance of some of the statements made, hewondered if the Council might wish to reflect on them  in an informal mode.  He noted that comments
of considerable importance had been made on China’s submission as well as on the objectives the
assessment exercise as mentioned in the negotiating guidelines.  He also had retained from the
discussion that Members generally recognised the benefits of liberalization, but that there was
discussion about the ways, the pace, and the links to capacity building and regulatory frameworks thatthis process entailed.  He noted the introduction of the submission from the United States and
presumed that Members reserved the possibility to revert to it.  A number of points were raised to the
effect that the quality of statistics, among other factors, made an assessment of liberalization more
difficult.  He observed that Morocco, on behalf of the African group, had noted that the challenges
they faced made it difficult for the African group to fully participate in the negotiations.  The rate ofprogress in horizontal rules negotiations had also been mentioned.  He proposed that the Council take
note of the statements made and revert to this item at its next meeting.
25. It was so agreed.
B. MODALITIES FOR THE TREATMENT OF AUTONOMOUS LIBERALIZATION
26. The Chair noted that consultations had intensified and headway had been made on this matter
with a view to reaching a consensus.  He informed  the Council that he had held consultations in many
forms, including two open-ended informal meetings.  Because he was encouraged with the progress
arising from these consultations, he had recently circulated new draft texts, contained in document
JOB(02)/35/Rev.3, with the hope that it would be a good basis on which to reach an agreement, and
that it would be the final one.  He recalled that at the informal session held on 27 February, the vastmajority of delegations had expressed a willingness to accept the draft modalities and Chairman’s
statement.  He further recalled that some of these Members had underlined that their ability to move
forward hinged on adopting the text and statement as circulated.  A few Members stated that they
were favourably inclined to support the draft texts, but that they needed to finalise consultations with
capitals and were awaiting instructions.  Two delegations stated that they could not accept themodalities and statement as proposed.  They had been encouraged to demonstrate flexibility.  He
stated that the relevance of these modalities in the current round of negotiations had been noted on
many occasions and he felt that recent important progress had led the Council to a crucial point.  From
the vantage point of the negotiations, he felt that the Council should try to reach consensus, otherwise
it could face a situation of diminishing returns in which negotiations would continue without themodalities, thereby affecting the interests of many Members.  In the interests of time, he requested
that those Members who had indicated at the informal session that they were awaiting instructions
from capital or that they remained reticent update th e Council on developments in order to determine
how to proceed.
27. The representative of Bulgaria stated that his delegation was quite disappointed with the draft
modalities for autonomous liberalization contained in JOB(02)/35/Rev.3.  The modalities for
autonomous liberalization were meant to have been an effective tool for claiming and receiving creditTN/S/M/6
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for liberalization measures undertaken autonomously.  He regretted that the present draft did not serve
that purpose in a meaningful and practically useful way.  The text was unbalanced in favour of the
interests of the "trading partners" who were anyway in control of the process of granting of credit for
autonomous liberalization measures.  He recalled that this had not been the initial purpose of the
modalities.  They should have been an instrument fo r the "liberalizing Members" to help them receive
that credit.  Furthermore, the draft modalities did not take sufficiently into account the concerns of
recently acceded Members, like Bulgaria.  Also, they were ambiguous on the question of the
treatment of developing countries, as that category of Members was not clearly defined in the WTO.
He recalled that Bulgaria had offered a number of suggestions aimed at redressing these imbalances,
but unfortunately, its proposals were not included in the draft, although there had been no substantive
and open objections to them.  The objections which had been raised were that the Council had to
adopt the modalities quickly; that the modalities, because of their very legal nature, were not of greatvalue anyway, because it depended on the bilateral negotiations and the agreement of the parties to
those bilateral negotiations as to whether they would be implemented; and that it was better to have
done with the modalities and move on.  The objections were, in fact, an expression of the approach of
some Members not to agree on meaningful, substantive modalities which would be a useful practical
tool for the granting of credit for liberalization undertaken autonomously.
28. The representative of Bulgaria stated that his delegation had had much more ambitious
expectations for the modalities for autonomous liberalization in the areas of services.  Since his
delegation's ambitions could not be met and Bulgaria would probably not be able to receive the
expected benefits in the negotiations on services, he stated that his delegation should not be expectedto include in its offer commitments going beyond those in Bulgaria's present Schedule.  Furthermore,
he said that Bulgaria should not be expected in other areas of the negotiations, for example the
modalities for agriculture where others were the demandeurs, to agree with their ambitions for one-
sided or unbalanced concessions without tangible benefits for his country.  He reiterated that Bulgaria
could not agree to the present draft, which was unbalanced and did not take into account its interests.However, he stated that he would not formally object to it or to its adoption, on the understanding that
Bulgaria, in accordance with its statements made at the Doha Ministerial Conference and contained in
documents WT/MIN(01)/SR/9 and WT/MIN(01)/ST/122, be treated as a recently acceded Member
and that it would enjoy the benefits provided in the draft modalities for developing country Members.
29. The representative of the Kyrgyz Republic wished to express his appreciation to Members and
the Chair for their efforts in the work surrounding the difficult but necessary work for further
negotiations in services embodied in the modalities.  He highly appreciated the work which had been
underway for more than a year.  This work was to be finished as soon as Members of the Council had
agreed on the text of the modalities and the Chairman's statement.  He was aware that a delay in
reporting to the Trade Negotiations Committee could negatively affect the negotiations.  However, he
wished to underline the concern held by his delegation regarding the approach toward the negotiationsin services and to highlight some facts arising from the accession of the Kyrgyz Republic to the WTO
in the months prior to the Seattle Ministerial Conference.  He noted that since its accession, the
Kyrgyz Republic had demonstrated its commitment to continue the further expansion of predictable,
lawful and liberal trade among Members.  He assured Members that, at all levels of the state
hierarchy, movement was in the direction of fairer and internationally beneficial trading practices.  Hesaid that Ministers at Doha had agreed to a balanced and broad work programme.  He recalled that
Article 49 of the Doha Declaration stated that the negotiations "shall be conducted with a view to
ensuring benefits to all participants and to ach ieving an overall balance in the outcome of the
negotiations."  He also stated that paragraph 9 of the Declaration recognised that countries
enumerated in that paragraph have undertaken extensive market access commitments.
30. The representative of the Kyrgyz Republic stat ed that his country's Schedule of Commitments
in both services and goods trade was equal to those mentioned in paragraph 9 and were at times more
liberal.  He recalled that, out of the 99 sectors and near 600 sub-sectors elaborated in the UN CPC, theTN/S/M/6
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Kyrgyz Republic had bound 545 sub-sectors as the result of its accession.  This was the quantitative
part of the Schedule; the qualitative part was more than remarkable in terms of openness both in
horizontal and specific commitments.  He then sought to elaborate on the factual situation his country
was facing as a player in the trading system.  According to the estimates of many international
financial institutions, the share of trade involving the Kyrgyz Republic remained insignificant and was
thus sensitive in some areas.  He noted that paragraph 10 of the Chairman's statement contained a
reference to paragraph 9 of the Doha Declaration.  While he had no doubts about the extensive
market-access commitments undertaken by the group of countries enumerated, he expressed concern
over the overall balance of interests of other recently acceded countries, and emphasised in this regard
the concern of his country.  He stated that the implication of such a move would prove extremely
painful to his delegation.  He said it would create a situation in which his delegation could not agree
with the text of the Chairman's statement.  He pr oposed that the existing text of paragraph 10 of the
Chairman's statement be amended through the addition of an asterisk after the last word of the last
sentence.  The proposed asterisk would refer to a footnote which would explain that the Kyrgyz
Republic had made equal or sometimes more extensive commitments to those included in paragraph 9
of the Doha Declaration both in market access and national treatment upon accession to the WTO.
This decision would be agreed by Members of the Council.  He reiterated that the Kyrgyz Republicwas committed to further trade liberalization and would continue to remain a reliable trading partner
to all Members of the WTO.  His delegation attributed high importance to the relationship it held with
the Chair and Members of the Council and looked forw ard to cooperation that would lead to a suitable
and  acceptable solution on this issue.
31. The Chair repeated the proposal tabled.  He suggested that it was perhaps not appropriate in
this type of document to make this type of reference and was not sure that it was possible, given that it
pertained to a statement by the Chair.
32. The representative of Oman sought to reco rd her delegation's disappointment with the
modalities and the Chairman's statement, especially with the modalities which did not satisfy and
reflect all Members' concerns, including the recently acceded Members.  She indicated that her
delegation would join the consensus and agree to the adoption of the text of the modalities, however,
she reminded the Council that some Members had been excluded from the document, and that it did
not serve the purpose of Article XIX to promote the interests of all participants on a mutually
advantageous basis and to securing an overall balance of rights and obligations.  She reiterated her
disappointment with this exclusion and stated that  it would affect her delegation's position in these
negotiations and in other negotiating groups.
33. The representative of the European Communities, responding on a preliminary basis to the
statement by the Kyrgyz Republic, stated that the proposed amendment might not be accepted,
because she was not sure that it was appropriate for a Chairman's statement to add a new name to alist adopted at the ministerial level.  The list of Members referred to had been adopted by Ministers at
Doha and her delegation voiced strong reservati ons about adding a name that would change this
declaration.  She understood the reasons for the Kyrgyz Republic's request and considered it to have
made extensive commitments.  However, she wondered if another option would be for the delegation
to make a statement after the adoption of the draft m odalities to the effect that it considered itself to
have made commitments as extensive as those made by the countries indicated in the relevant
paragraph of the Ministerial Declaration.
34. The representative of Uruguay thanked the Chai r and participants for their efforts in the
process over the past two years.  Recalling a Chinese proverb, he said that a long trip starts with the
first step and that the adoption of the modalities would be the first step of a long trip.  He stated that
delegations, having referred the present draft back to capitals, had their goal within reach, and that any
modification would disrupt the balance achieved.  He said that he had listened closely to the
statements by Kyrgyz Republic and others, and echoing the comment make by the EuropeanTN/S/M/6
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Communities, suggested that, rather then move an addition to the texts, the Kyrgyz delegation might
consider the possibility of making a statement indicating its position and without reference to any
agreement among Members.  He considered it legitimate to express matters of concern to its
delegation in this manner.  He said that his position could offer a choice and that it might allow the
Council to close this chapter during the meeting.
35. The representative of Chile expressed his support for the draft modalities and statement.  As
the Chair had mentioned, many Members had joined the consensus on basis that there would be no
further changes.  He acknowledged that not all Me mbers were completely satisfied with the contents
of the texts, however, he noted that they were the fruit of lengthy and complex consultations.  The
end-product, he said, struck a balance and he invited all Members to join in the consensus and for the
suggestion of the European Communities and of Uruguay to be considered.
36. The representative of the Kyrgyz Republic said he had taken into account the concerns
expressed by the EC, Uruguay and Chile.  He recalled that Doha Declaration called for further
liberalization in trade in services and left room for flexibility for Members.  He recalled that during its
accession process the Kyrgyz Republic had opened its market significantly through extensivecommitments, which, he agreed, was the natural way of liberalizing its trade in services.  He noted
that, in some areas, the Kyrgyz Republic had gone far beyond the commitments made by original
Members.  In response to the statement by Uruguay, he agreed that significant efforts had been
devoted to the modalities.  He suggested that his delegation would require further consultations on
this issue.
37. The representative of Jordan stated that her delegation had participated in numerous
consultations in which it had shown every possible flexibility.  She expressed her delegation's
disappointment with the text of the modalities as it did not take into account Jordan's concerns as a
recently acceded Member.  She noted that her delegation had proposed changes to the text of themodalities in this regard, but that they had not been kept.  She stated that Jordan, in a spirit of
compromise, would go along with the consensus.  She said that Jordan would accept the statement by
the Chairman and hoped that Members would seriously consider this statement when applying the
modalities.  Finally, she hoped that this would not be used as a precedent in other areas of the
negotiations.
38. Expressing his delegation's gratitude for those delegations which had demonstrated flexibility,
the representative of Canada stated that, in the event that consultations were held, he hoped that those
with outstanding concerns would show the flexibility necessary to  allow the Council to adopt the
modalities and Chairman's text before the conclusion of the meeting.
39. Summarising the discussion, the Chair noted that there had been some expressions of very
deep disappointment, but also of an understanding that the Council needed to proceed with its work
and that a consensus should not be blocked.  However, he said that the Kyrgyz Republic had
requested further consultations.  In light of this request, he proposed that the Council take note of
statements made and leave the item open with th e hope that the Council could come to a successful
conclusion when it resumed later in the week.
40. It was so agreed.
41. The Chair, resuming the meeting on 6 March 2003, recalled that earlier in the week a large
number of delegations had been prepared to adopt the modalities and approve the statement by the
Chairman.  He further recalled that there was a request for more time to engage in consultations.  On
the basis of the consultations held and the numerous referrals to capital, the Chair stated that he was of
the understanding that the Council was in a position to adopt the modalities for the treatment of
autonomous liberalization and the statement of the Chair.  He stated that it was his understanding thatTN/S/M/6
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it was the intention of some delegations to make statements on this occasion.   He thanked delegations
for their flexibility and willingness to compromise.  He said that the document was not perfect in the
eyes of many, but that it was a point of convergence that could be a useful instrument in the
negotiations.
42. The representative of the Kyrgyz Republic expressed his appreciation for the efforts made in
finding a solution to its situation, so as to allow his delegation to accept the texts of the draft
modalities and attached Chairman's statement.  His delegation highly appreciated the efforts of the
Chair, the Members of the consultative group, the Secretariat and the Director-General.  He
recognised that the statement by the Chairman  was made on his own responsibility, without any
prejudice to the rights and obligations of any Member in the context of the negotiations, including in
services.  He reported that his delegation, despite its concerns on the draft text of the modalities andattached Chair's statement, could nevertheless agree with the texts.  It was his delegation's
understanding that there was a view among all Members that the Kyrgyz Republic was a recently
acceded Member with extensive market-access commitmen ts equal to those referred to in paragraph
10 of the Chair's statement.  He noted that this fact had not been objected to by any Members of the
Council when his delegation had delivered its statemen t earlier in the week.  He noted that the consent
of the Kyrgyz Republic to join the concensus on this issue was based on the explicitly articulated
decision of Ministers at Doha, which paved a progressive path to improvement in trade in services
and, being guided by the Minister's view, he said that his delegation would meet the deadline for the
submission of initial offers indicated in the work programme.
43. The representative of Turkey, expressing satisfaction that consensus had been achieved,
recalled that Turkey had been a Member of the working party in the accession process of the Kyrgyz
Republic and noted that the level of its commitments were quite high and hoped that they would
accelerate its economic development.
44. The representative of Switzerland expressed satisfaction that the Council had been able to
reach agreement prior to the deadline and felt the modalities would be useful in the negotiations.  He
recognised the efforts made by all Members, incl uding the Kyrgyz Republic and he agreed with its
statement regarding the quality of its commitments.  He also felt that it set an example for future
accessions.  He further expressed his agreement with the statement by the Chairman with respect to
the quality of the Schedules of the recently acceded Members.  He underlined the provisions of the
modalities which referred to the fact that the measures for which credit was requested ultimatelyshould be scheduled.  He signalled this was important to his delegation and would arise in the bilateral
negotiations.  Recalling the broader perspective in which the modalities should be viewed, he said that
they were an effective way for Members to gain confidence in the liberalization process, since they
would know that they could start it autonomously, gain experience in the liberalized sector, and be
rewarded multilaterally for their experiences.  He  recalled that in a previous meeting the GATS
process had been likened to going through a tunnel:  one went in and did not know where one would
come out of it.  He hoped that, with the adoption of the modalities, those Members would see a
binding as the result of a more positive internal process that had led to successful conclusions.
45. The representative of India thanked Members for their efforts and commitment in developing
consensus on the modalities, as mandated in the GATS and the negotiating guidelines.    He agreed
that these modalities were an important element of the Doha work programme, and said that all the
principles enumerated by Ministers at Doha in th e Ministerial Declaration should be fully taken into
account in the application of the modalities.  He noted that in the statement by the Chairman referred
to paragraph 9 of the Doha Declaration in which Ministers noted the extensive market accesscommitments already made by newly acceded Members upon accession.  In this context, his
delegation underscored that the level of commitment of WTO Members in different modes of supply
varied considerably.  The level of commitments in mode 4, for example, was relatively low in
comparison to other modes of supply.  He stated that his delegation was actively engaged in the newTN/S/M/6
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round of negotiations and he hoped that this imbalance would be addressed in this round.  India
expected meaningful liberalization under mode 4 in the current round and would expect all Members
to respond to requests for liberalization in this m ode from this perspective.  He stated that the
adoption of the modalities was timely and he hoped that they would be applied in such a manner as to
encourage Members to undertake autonomous liberalization measures.
46. The representative of China thanked the Chair for his efforts in bringing about this package
relating to the treatment of autonomous liberalization and recently acceded Members.  She stated that
these negotiations could not be entirely delinked from the market access negotiations, which was
demonstrated by the forms of credit provided for in the modalities.  China had always supported the
early completion of the relevant negotiations.  She noted that several market access requests addressed
to her delegation included a request for credit for autonomous liberalization measures.  As a recentlyacceded Member, China also expressed appreciation for the recognition by other Members of the
particular situation of recently acceded Members in the organization at this stage.  Recalling
comments made at an earlier informal meeting, China understood that the package contained
something for all Members and that it was design ed to achieve the objectives of the GATS and
paragraph 49 of the Doha Declaration, namely that negotiations "shall be conducted with a view toensuring benefits to all participants and to ach ieving an overall balance in the outcome of the
negotiations."  Her delegation understood that Members would take into account the elements
contained in the text of the modalities and the Chair's statement in the context of the negotiations.
China supported, on the basis of the understanding she had outlined, the consensus to adopt the
package at the meeting.  She hoped that its adoption would facilitate the negotiations.  Finally, shesaid that the way in which Members and the Special Session had treated recently acceded Members
should not constitute a precedent in other areas of the negotiations.
47. The Chair stated that the Council had come to a very advanced stage of a rather long and
laborious journey.  It had been discussing issues related to autonomous liberalization for almost three
years, actually since the start of talks on the establishment of negotiating modalities and procedures.
He  believed the Council was close to an agreement, thanks to everybody's involvement and
commitment.
48. Liberalization of trade in services was a continuous process, that went further and quicker
than GATS negotiations, which by their very natu re, were held at intervals.  In the meantime,
countries continued to liberalize and introduce significant domestic regulatory reforms.  How to treat
such autonomous liberalization once negotiations were resumed was an important question allMembers faced.  As had been repeatedly stated – and rightly so – the development of specific
modalities for the treatment of autonomous liber alization in the context of the current round of
services negotiations was of prime importance to WTO Members, particularly the developing ones.
49. The adoption of these modalities would be a timely and important event.  Since the
submission of initial requests at the end of June, the negotiations had taken a crucial step forward.Members had moved from a purely multilateral exercise to a more direct one, which relied heavily on
bilateral negotiations.  He did not need to elaborate on the bilateral negotiations as such, and how
important they were for the final outcome and success of this round of negotiations.
50. The modalities that Members were about to adopt had a number of very significant
components which provided the necessary balance.  All the aspects of these modalities were equallyimportant.  Nevertheless, he felt compelled to address and underline certain elements related to these
modalities.
51. These modalities were an important element of the Work Programme established by all
Ministers in Doha.  As such, all the principles and arrangements agreed upon by Ministers were
applicable to these modalities.  Therefore, as stated in paragraph 49 of the Ministerial Declaration, theTN/S/M/6
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negotiations – and in fact these modalities as an integral part there of –  "shall be conducted with a
view to ensuring benefits to all participants and to achieving an overall balance in the outcome of the
negotiations."
52. Also, as stated in paragraph 50 of that Declaration, "the negotiations and the other aspects of
the Work Programme shall take fully into account the principle of special and differential treatmentfor developing and least-developed countries".
53. In applying these modalities, therefore, Members were to be guided by these principles, and
act accordingly.  The enunciation of important principles, like the ones he had just evoked, would not
represent much unless Members translated them into appropriate results in bilateral negotiations.  In
fact, the modalities did not create any legal obligations nor did they establish any automatic right to
credit or recognition.  After all, it was not by chance that Article XIX of the GATS, which provided
Members with the original negotiating mandate, carried the title of "negotiation of specificcommitments".  Equally important, as clearly indicated in Article IV of the GATS, "the increasing
participation of developing country Members in world trade shall be facilitated through negotiated
specific commitments".
54. As Members might have remembered, during the course of discussions on these modalities,
concerns had been raised by recently acceded Members in relation to their participation in this roundof negotiations.  However, questions had also been raised by other Members regarding the
appropriateness of addressing such concerns in the context of the modalities for the treatment of
autonomous liberalization.
55. As he had already said, both the GATS and the Doha Ministerial Declaration recognized that
these negotiations shall aim at promoting the intere sts of all participants on a mutually advantageous
basis, at ensuring benefits for all of them, and at securing an overall balance of rights and obligations.
56. It was fair to acknowledge that in several cases liberalization measures bound by recently
acceded Members in their accession processes were more extensive than commitments of original
Members. In fact, Members might have recalled that in paragraph 9 of the Doha Ministerial
Declaration, Ministers noted the extensive market-access commitments already made by thesecountries on accession and stated that these accessions would greatly strengthen the multilateral
trading system.  The fact that those commitments were recent and extensive might have implied, in
some cases, significant effort and adjustment-related cost and, therefore, less room to undertake many
more commitments at this stage.
57. Recognizing the particular situation of these Members, it was understood that the provisions
he had evoked earlier – particularly paragraphs 9 and 49 of the Doha Ministerial Declaration – should
be taken into account in the course of the ongoing negotiations, when requests were made to recentlyacceded Members.
58. The Chair then proposed that the Council take into account this statement and consequently
adopt the text of the modalities for the treatment of autonomous liberalization measures.
59. The Council so decided.
60. The representative of Japan felt that the adoption was important in giving renewed momentum
to the request-offer process.  He stated that in bilateral consultations his delegation would take due
account of the modalities and the Chair's statement, as well as in the context of treating the
autonomous liberalization measures of developing and the least-developed countries.  He recalled that
the GATS, in terms of the treatment of autonomous liberalization, did not make a distinction betweendeveloped and developing country Members or the di fference in the level of development.  He hopedTN/S/M/6
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that the status of the modalities would be taken into account in their application.  With respect to the
points raised regarding recently acceded Members, he paid tribute to those Members which had made
a high level of commitment upon accession and he thought that neither the modalities nor the
Chairman's statement altered the interpretation of paragraph 9 of the Doha Ministerial Declaration.
He welcomed this development and looked forward to active negotiations with the newly accededMembers to pursue further liberalization.  He felt that the Council had taken an important step.
61. Expressing her thanks to all concerned, the representative of the European Communities
stated that her delegation had taken note of the declaration made by the Kyrgyz Republic on the
quality of its commitments in services.  She stated that the modalities could be applied in bilateral
consultations, and in the context, she noted the importance to which her delegation attached to the
question of binding measures.   Binding commitments, in the view of the Communities, was anessential element of the GATS and maintain their importance in the application of the modalities.
62. The representative of the United States stated that his delegation was pleased to join in a
consensus after a very long period of work.  The United States had been consistent in its approach
throughout; it sought to produce a workable set of modalities, consistent with the letter and spirit ofthe mandate in Article XIX.  In that light, he sought to restate for clarity five points that reflected the
United States' understanding.  First, the phrase "since previous negotiations" in Article XIX in his
delegation's view referred to the period follow ing the post-Uruguay Round extended negotiations.
Autonomous liberalization included in a Member's commitments in those four negotiations, in the
view of the United States, was not eligible for credit.  These commitments had been fully credited inthose negotiations.  Second, commitments by Members that acceded after the Uruguay Round, in the
view of the United States, were not eligible for credit.  These had been fully credited upon the
Members accession.  Third, positive preferences in the Chair's statement to extensive market-access
commitments of certain recently acceded Members, as stated by WTO Ministers, referred to the seven
countries named by Ministers.  Fourth, he reminded Members that the United States had conceded onan important point in paragraph 7 of the modalities, regarding those Members with existing extensive
commitments and the limits this placed on their capacity to offer credit.  Regardless of the status of
that provision, he said that it remained nevertheless true.  Fifth and finally, as stated in footnote 1 of
the modalities, they were without prejudice to the rights and obligations of WTO Members under the
GATS.  Again, the United States was pleased to join  with others in completing this part of the
required steps under Article XIX.
63. Speaking on behalf of the group of co-sponsors, the representative of Uruguay thanked to the
Chair and the Secretariat for their work.  Speaking on behalf his own delegation, he noted the work
and constructive attitude shown by the group of co-sponsors, who submitted a large number of
proposals on this issue.  He reiterated the close relationship between autonomous liberalization and
developing countries.  He stressed that the important reforms undertaken by developing countries inrecent years should receive credit and recognition in the negotiations.  He hoped that the modalities
would be an adequate instrument, which would fa cilitate the obtaining of credit and recognition.
64. The representative of the Philippines, sought to reiterate a point that his delegation had
maintained throughout the course of the negotiations on autonomous liberalization.  He noted that a
number of Members had drawn distinctions between developed and developing countries in the
application of these modalities by Members, and he agreed that they were to be applied on a
multilateral basis.  However, he stated that the treatment of autonomous liberalization was a notion
conceived in favour of developing countries as reflected in the language of paragraphs 13 and 14 of
the text.  His delegation, in interpreting the application of the modalities, believed it was understoodthat, in the course of negotiations developed countrie s, when tabling their requests for credit for their
autonomous liberalization measures, would exerci se due restraint in demanding credit.  His
understanding remained that developing countries should not be compelled to grant credit forTN/S/M/6
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autonomous liberalization undertaken in the deve loped sphere since the conclusion of previous
negotiations.
65. The representative of Thailand expressed her gratitude to the representative of Uruguay for
his efforts in coordinating communication among the group of co-sponsors and Members for their
flexibility.  She noted that since previous negotiations Thailand had liberalized autonomously and she
hoped that its trading partners would take this into account.  She said that the liberalization process
had been difficult for developing countries and she hoped that, although the modalities were not
legally binding, all Members would take into account the guidelines, criteria and procedures set out in
the modalities.  She hoped that the modalities would facilitate the negotiations.
66. The representative of Lithuania, speaking on behalf of Albania, Croatia, Georgia, Jordan,
Moldova and Oman, expressed her appreciation for the efforts made by all and shown by the Chair for
the concerns raised by recently acceded Members.  She noted that recently acceded Members had
agreed to the texts for the sake of flexibility.  She felt obliged to say that this group was disappointed.
She recalled that, at the starting-point of the negotiations, recently acceded Members had expressed
their legitimate concerns and had asked that appropriate reflection be given to them.  She observed theresult arrived at and emphasised the margin between the two.  She felt that the Council had come a
long way, however, and the recently acceded Members had exercised enormous flexibility in arriving
at the end-point.  With this in mind, she urged Members to take into account the lead recently acceded
Members had achieved and meaningfully interpret the Chairman's statement to the benefit of them in
the course of the negotiations.  She further noted the minor way in which the concerns of the recentlyacceded Members had been treated and stressed that this should not be taken as a precedent in other
areas of the negotiations.
67. Noting that the modalities represented a delicate balance, the representative of Canada said it
was the result of the flexibility demonstrated by all.  She said that the fact that not all were pleased
with it perhaps explained why it was acceptable.  She expressed satisfaction that a two-year process
was being brought to a close and that the modalities could be used in the next phase of the
negotiations.  She emphasised that Canada placed importance on the binding aspect of the modalities.
68. The representative of Hungary, noting her delegation's pleasure in joining the consensus,
thanked Members and particularly recently acceded Members for demonstrating flexibility and hoped
that the modalities would be used in a favourable manner.
69. The representative of Paraguay noted that the work of the Chair and the representative of
Uruguay had been key to reaching agreement.  The result was an instrument which was valuable in so
far as it would be effectively applied.  He stressed the close relationship between autonomous
liberalization and the developing countries.  He noted that for Paraguay, progressive liberalization oftrade in services was important and believed that these modalities, if applied effectively would give an
incentive towards this goal and ensure greater participation of developing countries in trade in
services.
70. The representative of Peru noted that his delegation had actively participated in the
negotiations through the representative of Uruguay and thanked him for the time devoted to obtaining
common interests for an important number of developing countries.  He said that, since prior
negotiations, Peru had undertaken enormous reforms which he felt should be recognised, particularly
since it was a developing country.  He underscored the close link that existed between credits for
autonomous liberalization and special instruments for developing countries.  He said that themodalities were adopted without prejudice to what Peru understood to be its rights and obligations
within the framework of the GATS with reference to autonomous liberalization.TN/S/M/6
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71. The representative of Korea stated that the text of the modalities accommodated the various
positions of Members in a balanced manner.  He recalled that the method for granting credit for
autonomous liberalization measures and the level of credit would be decided on a bilateral basis.  He
said that the efforts of Members, including Korea, were not intended to present a single criterion but
to provide benchmarks or yardsticks for assessing autonomous liberalization measures in bilateralnegotiations.  He emphasised that efforts by Members to take further autonomous liberalization
measures should not be undermined.  In this context, he felt it important that Members make every
effort to grant credit for autonomous liberalization in the course of the negotiations.
72. The representative of Ecuador associated his delegation with the comments made by Uruguay
regarding the importance that the modalities hold for developing countries.  For his delegation, the
modalities could have a benefit for all Members, so long as special and differential treatment fordeveloping countries, which he regretted was not clearly specified in the document, was recognised
when countries would make a request for credit.  He stated as well that a request from developed
Members should not imply obtaining a credit from deve loping countries.  Ecuador considered that for
the mechanism to be viable, it should be based on a commitment that recognition from developed
Members for developing Members would be an essential condition.  This recognition would be aninstrument to help smooth out differences between Members in the negotiations.  He hoped that the
modalities would be a benefit for all those in the negotiations.
73. The representative of China, responding to the intervention by the United States, expressed its
deep regret with the comments made by the United States on paragraph 10 of the Chairman's
statement.  She said that it was widely recognised among Members and business communities that
China had made extensive and deep commitments in its accession process.  She said it was known
that Ministers at Doha, including from the United States, had noted with "particular satisfaction"
China's entry into the WTO, and stated that its accession would greatly strengthen the multilateral
trading system.  She said that China's commitments had been described by some as the most far-reaching commitments in GATS history.  She quoted former US President Bill Clinton, who
described the agreement with China as the best deal that the United States had ever achieved with any
of its trading partners in history.  She found it difficult to comprehend why the United States had
earlier made a statement to the contrary.  She asked whether the United States intended to re-write this
portion of the history of China's accession, and if so, she said that this would be an extremely
discouraging message to the various service sectors in China which were trying to implement China's
commitments.  She said that paragraph 9 of the Doha Declaration was designed to cater to the needsof recently acceded Members, including China, and implied that these Members were in a particular
situation in the negotiations under the Doha work programme.  She felt that all Members needed to be
fully aware as to why these Members were in a particular situation.  Like other recently acceded
Members, China was still in the process of implementing its accession commitments, which were
extensive and deep relative to other Members' co mmitments made in the multilateral negotiations.
Such implementation, she recalled, not only required great effort, but also entailed large adjustment
costs.  China's ability to make further substantia l commitments in some sectors, she said, was rather
limited.  She stated that the GATS and paragraph 49 of the Doha Declaration provided that
negotiations "shall be conducted with a view to ensuri ng benefits to all participants and to achieving
an overall balance in the outcome of the negotiations."  In order to achieve such objectives, Memberswould need to be given particular consideration in the negotiations.  She reiterated that China's
support for the adoption of the whole package was based on the understanding that China's particular
situation, as a recently acceded Member that had made extensive commitments in its accession
process, was recognised and would be taken into account in the current negotiations.
74. The representative of Mexico thanked the Chair and the representative of Uruguay for their
efforts in bringing these modalities to fruition.  Mexico had taken due note of the Chair's statement
and the fact that it had been made at the time of the adoption of the modalities.  Hearing some of the
comments made, he sought to make it clear that decisions at the WTO were made by consensus andTN/S/M/6
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thus interpretations could only be made by jurisdictional bodies, the Ministerial Conferences or the
General Council according to Article IX of the Marrakesh Agreement.  The modalities adopted only
consisted of one element of interpretation, namely their application, based on the text adopted.  He
reiterated that these modalities were adopted by consensus and Members would need only implement
that which they were agreed on.
75. The representative of Morocco felt it important to reiterate that developing countries had
taken important autonomous liberalization measures without receiving reciprocal benefits.  He felt it
was necessary for all Members to survey the general balance of rights and obligations with respect to
sectors and modes, as well as to grant credit to developing countries for their liberalization efforts
undertaken after the Uruguay Round.
76. The representative of Bulgaria stated that his delegation's understanding was that statements
made after the adoption of the modalities could not affect the legal status of the modalities, the
Chairman's statement, and those statements made before the adoption of the modalities, including the
understandings included in such statements, on the basis of which the readiness was expressed to
accept or not to object to the adoption of the modalities.  Statements made after the adoption of themodalities, simply explained Members' own understanding.  They did not form part of the negotiating
history of the modalities and could not affect their interpretation or the legal implications which
followed from the understandings expressed in statements made before the adoption of the modalities.
Hence, such statements made after the adoption could not affect the legal relationships based on the
modalities and his delegation's statement made before their adoption.
77. Recalling the joint statement made by Lithuania, the representative of Oman sought to
highlight his delegation's extreme disappointment that its concerns were only reflected in the
Chairman's statement, despite having shown maximum flexibility in other areas in order to achieve an
agreement on the modalities.  He recalled that Oman had taken commitments during its accessionwhich went beyond the commitments made by most Members of the WTO.  Oman had made
scheduled and bound commitments in 10 sectors and some 100 subsectors, including sensitive sectors.
He stated that on mode 4 his country's commitments included the non-executive category, which to
his knowledge, was unmatched by any developed country.  In view of the commitments made by
Oman since the previous Uruguay negotiations, he requested that Members take this into
consideration during the bilateral consultations.
78. The Chair thanked all delegations for their flexibility.  He hoped that the modalities would be
used constructively.  He proposed that the Council take note of the statements made.
79. It was so agreed.
C. MODALITIES FOR THE SPECIAL TREATMENT FOR LEAST -DEVELOPED COUNTRIES
80. The Chair recalled that at the last formal meeting Zambia, on behalf of least-developed
country Members, had presented a draft text, contained in document JOB(02)/205, to the Council for
Members' consideration.  He further recalled that this document had been considered at an open-ended
informal meeting held on 30 January 2003.  Following a helpful and substantive introduction by theAmbassador of Bangladesh, Members conducted focussed and constructive discussions.  A number of
suggestions, both of a general nature and more specific, were made with a view to improving the text
and moving the process forward.  It was the Chair's understanding that the group of LDCs was in the
process of preparing a revised draft.  He invited LDC Members to provide the Council with an update
in this regard.  The Chair also recalled that at th e meeting held in October the representative of the
United States had stated that, at the request of some LDCs, his delegation was preparing a list of
points of contact in United States Embassies located in least-developed country Members.  He drew
Members' attention to this list, circulated as JOB(03)/33.TN/S/M/6
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81. The representative of the United States stated that the information contained in JOB(03)/33
responded to a proposal from LDCs to improve access to the contact points mentioned in Article IV
regarding access by service suppliers to information about services trade and regimes for services.
This provision, he said, highlighted the important role of the private sector in the Council's work.  Hestated that government representatives could open doors to trade negotiations, however, for trade to
expand, the private sector needed to walk through those doors.  He hoped that the expanded access to
Article IV contact points for LDCs would help the private sector to take advantage of new
opportunities.
82. The representative of the European Communities noted that her delegation intended to follow
the United States' example and would provide commer cial consular contact points in LDCs.  She
renewed the European Communities' invitation to Me mbers to use their missions in capital to this
same end.
83. The representative of Djibouti, while thanking the United States and the European
Communities, stated that it was important to bear in mind levels of development.  He felt it was a
positive step for LDCs to have access through these contact points, and he sought to suggest ways to
underscore the importance of this issue.  He stated that, after consultations with the United States and
the European Communities he had spoken with his Minister.  He had wanted to know the objective of
liberalization.  Although the contact points were helpful, he felt that it was equally important for those
requesting and those responding to the requests to understand the issues at stake, so that those inGeneva were in a position to better brief their ministers and colleagues in capital.  He suggested that,
in order to move forward, it was necessary to ensure that officials understood what were the benefits
referred to by Members.
84. The representative of Senegal thanked the United States for making available the points of
contact, contained in Job(03)/33, and said that the list was of critical importance for LDCs in
obtaining information necessary for the requests process and about domestic regulation in the United
States.  He stated that both the private sector  and government administrations would require the
information contained in the list.  He noted that in  general, there was a need for greater dissemination
of information to the private sector regarding the rules of the WTO, which national administrations
were attempting to fulfil.  With reference to the intervention made by the representative of Djibouti,
he expressed his view that it was incumbent on delegations to draw capitals' attention to theimportance of this list in order to use it to the greatest advantage.
85. The representative of Bangladesh thanked the United States for its submission, which it felt
would be helpful in the negotiations.  Regarding the modalities, he stated that the LDCs had received
a number of requests for amendments and were analysing these in the hopes of circulating a reviseddraft in the near future.
86. The Chair suggested that the Council take note of the statements made and that the Council
revert to this item at its next meeting.
87. It was so agreed.
D. WORK OF THE SUBSIDIARY BODIES – REPORTS BY THE CHAIRPERSONS
88. The Chair of the Committee on Trade in Financial Services, Mr. Syed Habib Ahmed of
Pakistan reported that the Committee had met in the afternoon of Wednesday, 26 February.  The
Committee meeting was preceded by a presentation by the World Bank of its 11th Policy Report
entitled "Finance for Growth: Policy Choices in a Volatile World".  This presentation was highlyTN/S/M/6
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appreciated by Members, who found the Bank's research and insights useful and pertinent for the
current negotiations.
89. Under the item Acceptance of the Fifth Protocol, he informed the Council that the Dominican
Republic and Uruguay had completed their domestic ratification procedures, and would shortly be in aposition to formally accept the Protocol.  Indeed, he noted that the Dominican Republic had already
requested the re-opening of the Protocol for its acceptance.  Additionally, Poland was also in the last
stages of its domestic procedure.
90. Under the agenda item on Technical Issues, and as decided at the last meeting, the
International Monetary Fund presented an annotated list of relevant IMF documents on "Financial
Sector Stability, Reform Sequencing and Capital Flows".  The IMF presentation, together with theissues raised by Brazil at the previous meeting, stirred up an interesting debate about the scope of
Members' obligations under the GATS regarding capital movements attached to specific
commitments on certain financial services.  The debate was very interesting and proved the
seriousness with which Members were approaching the negotiations of specific commitments on
financial services.  He indicated that the Committee would revert to this issue at the next meeting.
91. Concerning Recent Developments in Financial Services Trade, he reported that delegations
sought further clarifications and information regarding a submission made by Hong Kong, China on
e-finance.  The discussion showed not only how important it was for the Committee to have up-to-
date information on e-finance trends, but also to what extent the developments in e-finance mighthave an impact on the current negotiations of spec ific commitments in financial services.  There was
certainly a need to continue discussing this issue, both from a regulatory and a trade perspective.  In
the Chair's view delegations understood that need, and were prepared to contribute to that exchange.
In fact, Switzerland announced its intention to share its experience with e-finance regulation with the
Committee Members in future meetings.
92. Under Other Business,  he had commented under his own responsibility about the World Bank
presentation already referred to.  He informed the Council that the Committee would meet during the
next cluster of services meetings.
93. The Chair of the Committee on Specific Commitments, Mr. Niklas Bergström of Sweden,
reported that the Committee had held a formal meeting on 27 February 2003 in which it addressed
two substantive items:  classification issues, and matters relating to the scheduling of commitments.
In addition, he had made a statement concerning "Procedures for the submission and circulation of
initial offers."
94. He said that there had been no substantive discussion on classification issues.  One delegation
suggested that the Secretariat undertake analytical work relating to the various classification proposalslisted in the classification compendium, containe d in document JOB(01)/42/Rev.1.  It was suggested
that the Chair explore the possibility of holding an informal meeting ahead of the May cluster and he
said that he would consult with the in-coming Chair and Members on how to organise and structure
future work on classification issues.  Under the item of "Matters relating to the Scheduling of
Commitments", the Secretariat reported that it had concluded the preparation of draft consolidatedschedules to facilitate the preparation and submission of initial offers in one single document.
95. He recalled, in light of the approaching date for the submission of initial offers, a few points
that had emerged from earlier discussions in the Committee concerning the technical side of the
submission and circulation of these initial offers .  These points did not touch on the substance and
content of the negotiations, but merely sought to clarify the mechanics of submission and circulationof the documents containing the offers.  Inter alia , he had stated that:  initial offers would be
submitted on the basis of the draft consolidated schedules which were issued in January 2003;TN/S/M/6
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Members were encouraged to use the editorial conventions contained in the Secretariat note
JOB(02)/88; initial offers would be circulated to all participants, and remain restricted, unless
otherwise indicated by the participant concerned, unti l Members decide to derestrict them; they would
be translated into all official WTO languages and would be circulated in a new document series with
the symbol TN/S/O/, followed by the ISO-Alpha-3 code for the respective participant.  He noted thatthe full text of his statement was contained in JOB(03)/38.  The Committee, he said, would meet
during the next cluster of services meetings.
96. The Chair of the Working Party on GATS Rules, Mr. Thomas Chan of Hong Kong, China,
reported that the Working Party had held a formal meeting on 25 February 2003.  It had also held an
informal meeting on 29 January.  In order to structure the debate, an Annotated Agenda had been
issued to propose various themes for delegations' consideration as they had emerged from previous
meetings.
97. On emergency safeguard measures, delegations were invited to continue their discussion on
concrete examples in which a safeguard measure might be needed, and how it could be applied.  At
the meeting, Members discussed an example presented by a group of delegations.  Issues raised
during the meeting also included modal application of an ESM, safeguard-type provisions containedin economic integration agreements and in WTO instruments, as well as desirability and feasibility of
an ESM.  As requested by Members at the meeting on 3 December 2002, the Secretariat had prepared
three background notes:  a Compilation of References Made by Delegations to Safeguard-Type
Provisions , contained in JOB(03)/20;  a revision of the note on Core Elements Contained in Members'
Proposals – Overview of the Synopsis , contained in JOB(02)/200/Rev.1;  and a note on Safeguard-
Type Provisions in Economic Integration Agreements  contained in S/WPGR/W/4/Add.1.
98. At the meeting, he had drawn attention to the work programme on emergency safeguard
measures adopted in July 2002, under which the Chairperson would circulate a note by 15 March
2003 "to report on the results of work under item (a) [of the work programme], identifying areas ofconvergence and divergence among Members, with a view to providing a basis to facilitate further
negotiations".  Item (a) referred to Members' task "to identify elaborate and consolidate elements for
an ESM and to address the question of feasibility and desirability of ESM".  His current assessment
was that the Working Party had not gone very far and that work on these two issues had yet to bring
forth tangible results.  There was very little convergence on the fundamental issues, and many
questions remained open.  He also observed that, even if the Working Party had decided to start
drafting an emergency safeguard mechanism, there would be no common basis from which toproceed.  For example, there seemed to be no consensus on the form of a possible ESM or on the
question of whom should be protected.
99. With respect to government procurement, one delegation proposed to work further on
transparency-related issues.  Members stressed the need to avoid duplication between the WPGR andthe Working Group on Transparency in Government  Procurement (WGTGP) when dealing with such
issues under GATS Article XIII.  Furthermore, Members were of the view that the WPGR should be
aware of the relevant issues raised in the WGTGP and information exchanges between the two
Groups on a flexible basis should be allowed for.
100. With respect to subsidies, delegations continued their examination of a written contribution
submitted by the delegation of Poland on Definition of Subsidy in GATS  (JOB(02)/207).  Issues
addressed included the need for, and possible elements of, a definition of a subsidy; categorisation of
subsidies; and relationship between the GATS and the SCM Agreement, and suggestions were made
to revise the Checklist on Subsidies  (Job No. 4519/Rev.1, 6 October 2000) accordingly.  The need for
more information on services subsidies from Members as well as other sources such as other
intergovernmental organizations was also stressed by some delegations.TN/S/M/6
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101. Finally, he reported that, at the time of the meeting, the Chairperson of the Council for Trade
in Services was still consulting on the slate of Chairs for the services subsidiary bodies.  The election
of the Chairperson would thus take place at the beginning of the next meeting.
102. As the Chair of the Working Party on Domestic Regulation was not present, the Chair
delivered this report on behalf of the Chair of the regular session of the Council for Trade in Services,
who had chaired the Working party meeting.  He repo rted that, since the previous Chair's report, the
Working Party on Domestic Regulation (WPDR) held one informal meeting on 28 January, and one
formal meeting on 24 February 2003.  Discussion during both meetings focused on the examination of
regulatory measures, as well as the consideration of future work and the organization of a possible
seminar on domestic regulation.
103. The Chair noted that there were two items to report on under the item Development of
Regulatory Disciplines under GATS Article VI:4.  Regarding the first, Discussion of Concepts
Relating to the Development of Disciplines, he said that on the examination of regulatory measures,
delegations made detailed comments at both the formal and informal meetings on the measures listed
in the Secretariat Examples paper, the most recent version of which was circulated as
JOB(02)/20/Rev.4.  A summary of the discussions on regulatory measures was contained in Annex IIIof the Examples  paper.  At the 24 February formal meeting, the discussion of regulatory examples
was followed by Japan’s submission of a draft Annex on Domestic Regulation, circulated as an
informal paper.  The draft Annex drew extensiv e comments from Members, and was likely to be a
main focus of future discussions in the Workin g Party.  Under the second item, Development of
General Disciplines for Professional Services, he said that on the development of general disciplinesfor professional services, Canada and Chinese Taipei introduced reports at the formal meeting on their
domestic consultations with professional services organizations, regarding the suitability of the
Accountancy Disciplines  for other professions.  These reports were circulated as documents
S/WPDR/W/21 and S/WPDR/W/22,  respectively.
104. At the request of Members, the Secretariat spoke briefly at both the informal and formal
meetings regarding the status of consultations with international professional organizations, noting
that the response rate had been low, but was slowing increasing.
105. Regarding the organization of a possible workshop on domestic regulation, the Secretariat
prepared a draft outline for consideration by Members, based on comments received at the previous
informal and formal meetings.  The outline was circulated as JOB(03)/35.  At the February meeting,
Members had made extensive comments, and agreed to invite UNCTAD and the OECD to make
contributions.  Members were not able to reach agreement on all issues, however, and the Chair wouldconduct further consultations.
106. Also at the February meeting, the OECD had been invited by the Working Party to give an
informal presentation of their recent paper on MRAs, which had been circulated in advance of the
meeting as JOB(03)/28.  A representative of the OECD gave the informal presentation, which was
very well received, prompting many comments from delegations.
107. The formal meeting on 24 February was chaired by the Chair of the Council for Trade in
Services, as the current WPDR Chair, Mr. Sérgio Santos from Brazil, had been assigned a new
posting, and was consequently unable to preside.  Regarding the appointment of the new Chair, the
Chair of the Council for Trade in Services was still holding consultations on the Chairmanships of the
four subsidiary bodies to the Services Council and was not yet in a position to make concreteproposals.  He said that the new Chair would assume his/her functions at the next formal meeting.
108. Finally, he stated that the next formal WP DR meeting would be held in the week of
24 May 2003, with the possibility of also holding the seminar on domestic regulation either before or
after the formal meeting.TN/S/M/6
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109. The Chair of the Special Session, on behalf of the Council, extended to the Chairs of the
subsidiary bodies warm appreciation for their hard work.
110. The representative of Norway, referring to the report made by the Chair of the Committee on
Specific Commitments and specifically paragraph 1 of JOB(03)/38, which stated that initial offers
would be based on the draft consolidated schedules, recalled that according to the Decision of the
Council, S/L/24 dated 28 June 1996, "[i]t is agreed that negotiations will be resumed on the basis of
existing or improved offers".  In this regard, he stated  that this would be the basis for presenting offers in
maritime transport services.
111. In response to the report by the Chair of the Committee on Specific Commitments, contained
in JOB(03)/38, the representative of the United States agreed that the comments made by Norway
regarding document S/L/24 were correct.  He sought to make an additional point regarding the role
the Special Session had played in the circulation of requests and it appeared that a similar decision
would be required for offers, which to his recollection had not been taken.  He agreed with Norway
that there were some technical aspects outlined JOB(03)/38 which needed to be addressed, and that
the Special Session, in its role as the negotiating body, could provide some guidance in this respect.He suggested that the Council discuss this issue at a later point in time.
112. The Chair suggested that the Council take note of the statements made and revert to this item.
113. It was so agreed.
E. PROPOSALS RELATING TO THE NEGOTIATIONS UNDER ARTICLE XIX OF THE GATS
114. The Chair recalled that at the Council's mee ting in December, the delegation of India had
requested that the Secretariat prepare a list of recognition agreements which had been notified to the
Council for Trade in Services pursuant to Article VI I:4 of the GATS.  He indi cated that this list was
available to delegations as a room document.  He further recalled that the delegation of Chinese
Taipei had introduced a note on computer and related services, contained in document TN/S/W/10,
which had led to a preliminary discussion.  A fe w Members had indicated that they might wish to
revert to the proposal at this meeting.  He drew the Council's attention to a communication from a
group of 52 delegations regarding Maritime Transport Services, contained in document TN/S/W/11.
He suggested that the Council proceed by dividing its discussion into two parts.  The floor would first
be open for comments on any previous submissions made under this item, including the submissionfrom Chinese Taipei, to be followed by discussion on the Joint Statement on the Negotiations on
Maritime Transport Services.
115. The representative of Japan introduced document TN/S/W/11 on behalf of 52 Members,
namely Australia, Canada, Chile, the People's Re public of China, Croatia, Cyprus, Czech Republic,
Dominican Republic, Estonia, European Communiti es and their Members States, Gambia, Georgia,
Guatemala, Hong Kong, China, Iceland, India, Japan, Republic of Korea, Kyrgyz Republic, Latvia,
Lithuania, Malaysia, Malta, Mexico, New Zealand, Nigeria, Norway, Pakistan, Panama, Papua New
Guinea, Peru, Poland, Romania, Singapore, Slovenia, Switzerland, and the Separate Customs
Territory of Taiwan, Penghu, Kinmen and Matsu.  He said these delegations hoped that they
represented a common view among many developi ng, least-developed and developed Members in
reminding all Members of the importance of maritime transport services as a trade facilitator and in
calling for the active participation of all Members in the negotiations in this sector.  He regretted that
the negotiations on maritime transport services had been suspended by the Decision of the Council for
Trade in Services in 1996 despite the sincere efforts and substantive discussion of many Members and
that, as a result, the overall level of commitment to liberalization in this sector remained low and the
application of the MFN discipline continued to be suspended.  He said that the co-sponsors, against
this background, were extremely encouraged by the commencement of the request-offer negotiationsTN/S/M/6
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on trade in services, including in maritime trans port, in accordance with the Doha Ministerial
Declaration of 2001.  Based on that declarati on, WTO Members were going through the process of
clarifying each other's initial requests and preparing their initial offers.  He stated on behalf of the co-
sponsors that access to a global network of reliable, efficient and cost-effective maritime transport
was beneficial to all WTO Members, including de veloping and least-developed Members whose trade
in price-sensitive goods often comprised a significant component of their economies.  He fully
believed that this could be valid for all WTO Members, regardless of whether they were littoral or
landlocked, for the common goal of trade facilitation.  He also sought to remind Members that
restrictions on maritime transport services could have an adverse effect on all WTO Members,
including export and import prices and the location of foreign direct investments.  Liberalization, he
said, was the key to the reduction of maritime transpor t costs, to ensuring fast and efficient deliveries,
and to encouraging foreign investment, with a multiplier effect on many other sectors.  The co-sponsors recognised that, in view of its importance, achieving substantive liberalization of maritime
transport was crucial to ensuring the overall success of the current round of WTO trade negotiations.
His delegation sincerely believed that many Members whose names were not on the joint statement
shared his views.  In this regard, the "Compila tion of Existing Maritime Transport Offers" prepared
by the Secretariat in October 2002 showed that approximately fifty WTO Members submitted theiroffers in the last round, and about ten newly acced ed Members have made their commitment in this
sector, which was very encouraging.  The co-sponsors sought to sincerely and strongly call for the
active participation of all WTO Members in the on-going negotiations with a view to achieving the
meaningful liberalization of the maritime transport service sector, and thereby securing broad
coverage of this sector in the multilateral trading system and the GATS framework.
116. The representative of Australia noted that maritime transport services played an essential role
in international trade and the importance of having an efficient and competitive maritime transport
sector as an infrastructure for increasing global trade and hence the importance of liberalizing this
sector in order to promote economic growth and the international economy.  She called on the activeparticipation in this sector by all Members.  She recalled that at the end of the sectoral negotiations
some Members had frozen their offers, and she encouraged them to reinstate these offers and for
others to make new commitments, including in the three pillars and in multimodal transport.  She said
that since the suspension of the negotiations, this sector had become ever more important and that
precious time had been lost, which could be made up for in the initial offers.
117. The representative of Norway stated his satisfaction that so many Members, including a
substantial number of developing country Members, had subscribed to the joint statement.  He felt
that, with the approach of the initial offers stage in the negotiations, it was opportune to underline the
importance and relevance of this sector.  He was convinced that this statement would be duly noted
and hoped that offers from all participants would take it into account.
118. The representative of the United States believed that all Members should participate actively
in all aspects of the negotiations and in all sectors.  He recalled at the last meeting that some Members
had expressed the view that this had not been thei r experience in their bilateral contacts in other
important sectors, such as audio-visual services.  He urged the co-sponsors of the document,
TN/S/W/11 to meet their own standards.  He wondered whether nearly half of the co-sponsors fellinto this category.  He urged that Members assure the Council that they were open to responding to
requests in all sectors with no a priori  exclusion.
119. The representative of Colombia stated that for her country, maritime transport was the main
type of transport for international trade and she at tached high importance to achieving good results in
this sector.  She expressed general support for the points made by Japan, and she highlighted the need
to achieve effective liberalization in the negotiations in this sector.  To this end, she considered it
fundamental that market access barriers be removed and national treatment limits on foreign capital,
cargo reservations and restrictions on cabotage be removed.  Recalling her delegation's proposalTN/S/M/6
Page 26
contained in document S/CSS/W/123, she stated that effective liberalization of maritime transport
services would eliminate price and frequency cartels which would result in lower prices and improved
service.
120. The representative of Chile felt that this was a fundamental sector and that it was very
important for Members to make commitments wit hout limitation in the transport of passengers or
cargo, crew, maintenance, embarkations and towing operations.  Beyond the support services
connected with maritime transport, he highlighted the importance of the a multiplier effect.
Liberalization in this sector would permit growth of other services clustered around maritime
transport, such as insurance services.  He stated that, for a country like Chile, characterised
geographically by a long coastline and mountain range, the opening and strengthening of this sector
was fundamental because efficient maritime transport allowed for imports and exports of its products.In response to the question put by the delegation of the United States, he said that Chile supported
liberalization of maritime and air transport services and agreed that no sector was a priori outside of
the scope of negotiation.
121. The representative of Turkey stated that maritime transport services were an important sector
for world trade and for his country.  It was essential that this sector operate efficiently, reliably and at
low cost.  Liberalization was particularly important in order to attract foreign investment.  He said that
Turkey had made a high level of commitment and hoped that others would also make commitments
commensurate with levels of economic development.
122. The representative of Oman sought to associate his delegation with the joint statement on
maritime transport services and reminded Members that Oman's vast commitments, made as a
recently acceded Member, included those in maritime transport services.
123. The representative of Korea stated that he firmly believed that maritime transport services
were a vitally important facilitator of world trade.  He noted that substantial and meaningful
liberalization in this sector was important to ensure the success of negotiations in maritime transport
services and the overall negotiations in trade in services.  He hoped that more Members would join in
co-sponsoring the statement and that all would take active part in the negotiations.   In order to ensure
the success of the negotiations in this sector, he suggested that Members submit, as a minimum basis,
the best offers submitted in past negotiations.
124. The representative of New Zealand did not seek to add anything to the statement, but wished
to highlight its paragraph 2, which concentrated on the role of maritime transport services as a
facilitator of world trade and the great importance that this aspect held for a small and remote island.
125. The representative of Nigeria recalled that his delegation had submitted an offer in maritime
transport services during the Uruguay Round, and he nce associated itself with the joint statement.
The importance of these services to world trade and the economies of nations could not be over-
emphasised.  He welcomed the interest shown to resume the negotiations and promised to participate
actively in the negotiations.   He looked forward to the inclusion of these services that would take into
consideration sustainable development, security and safety, technical assistance and capacity building,and transfer of technology in the negotiations.
126. The representative of Canada noted that her country depended on maritime transport services
for a great deal of its overseas trade and supported substantial liberalization.  She urged Members to
consider this sector when composing their offers.
127. The representative of Thailand, citing UNCTAD st atistics, noted that in terms of ownership of
the international fleet, calculated in dead-weight to nnes, Thailand ranked thirty-sixth and owned 0.33
per cent of the world fleet.  Although Thailand was pe rhaps not a significant player in this sector, sheTN/S/M/6
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stated that this would not discourage her delegation from participating in these resumed negotiations.
Thailand was a major trading nation whose exports depended on low-cost and efficient transport
system that could be achieved by a liberalized transport regime.  She fully supported the statement
made by Japan on behalf of 52 Members.  She reiterated that her delegation would participate actively
in the negotiations in this sector and agreed that no sector should be excluded a priori  from the
negotiations.
128. The representative of China stated that greater liberalization of maritime transport services
was conducive to improving the quality and efficiency of these services.  He said that the goals of
reducing the cost of trade in goods, ensuring reliab le delivery, and promoting the growth of related
industries explained why China co-sponsored the statement.  He hoped that all Members would
participate actively in the negotiations in maritime transport services on basis of existing or improvedoffers as spelled out in the Council's Decision of 28 June 1996.  He drew the attention of all
delegations to the point in the guidelines and procedures for the negotiations, which provided that the
negotiations would not preclude any sector or mode of supply.  In this respect, maritime transport
services should not be excluded.  Furthermore, his delegation believed that the liberalization of
maritime transport should not be confined to modes 1 to 3, but should include mode 4, especiallyships' crews.  He believed that an open market  in mode 4 would help crews to improve their
qualifications, and subsequently provide safe and environmentally sound services.  He hoped that
Members, especially developed Members, would consider this point positively in preparing their
offers.
129. The representative of India noted with satisfaction the commencement of negotiations in trade
in services, including in maritime transport serv ices, in accordance with the Doha Development
Agenda.  With respect to mutual recognition agreements, he stated that India had previously drawn
attention to this issue at the last meeting as well as in the proposal contained in document
S/CSS/W/12, relating to the effective implementation of  Article VII.  He thanked the Secretariat for
the list of notifications it had circulated and noted that only two Members had made Article VII:4
notifications in the last three years.  He felt it would be helpful to know how many MRAs were
indicated under each notification and for the Secretariat to compile a list indicating the sectors in
which notifications had been made.  He requested that the Secretariat compile such a list and circulate
it as a formal document.  It seemed to him that perhaps not all agreements, including the opening of
negotiations on possible agreements, had been notified, given that only two agreements had been
brought to the attention of the Council in the past three years.  He urged concerned Members to notifypromptly.  He said that effective opportunities needed to be provided to developing country Members
to join in the negotiations for the establishment of MRAs.  He recalled that at a recent presentation by
the OECD at a WPDR meeting, it was noted that Article VII allowed Members to enter into MRAs.
The OECD paper suggested a number of possible  approaches for improving the framework for
MRAs, such as scope of improving the implementation of Article VII through greater transparency,among other mesures.  It was clear that much remained to be done in order to operationalise Article
VII.  India had already outlined possible approaches  in its proposal and looked forward to Members'
input.
130. The representative of Mexico felt that the number of co-sponsors indicated a real interest to
incorporate into the negotiations this important services sector.  He noted that the liberalization of the
transportation sector was becoming increasingly urgent since it would reduce costs.  The opening of
this sector to competition would offer possibilities for efficiency gains in other areas of trade in
services, such as auxiliary and port services, container services, and maintenance services.  These
numerous areas explained Mexico's interest in having maritime transport sectors integrated into thecurrent negotiations.  He agreed with the United States that all service sectors should be included in
the negotiations and stated that Mexico stood ready to incorporate any sector, including audio-visual
services.  It was important to take into account that all sectors would be subject to negotiations, and
none should be excluded a priori .TN/S/M/6
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131. Noting his delegation's support for the joint statement, the representative of Peru noted that
his country had participated in the suspended negotiations on maritime transport and would continue
the current negotiations with enthusiasm.  He felt that it was crucial for all countries to participate in
the negotiations without any a priori  exclusions, and in this regard, supported the position expressed
by the United States.  He also sought to highlight the comprehensive approach contained in the joint
statement, which was important for other aspects of economies.  He said that for developing countries
the inclusion of mode 4 was an important element of the process of liberalizing the cluster of maritime
transport services.  He noted that services suppliers required better market access in terms of maritime
transport, repair and maintenance, crews, and technically qualified personnel trained in maritime
activities.  All of these aspects should be incorpor ated into the specific commitments that would be
negotiated in the future.  Lastly, he emphasised that Peru had undertaken a major reform in openingits maritime transport services in a framework of progressive liberalization as established in Articles
IV and XIX of the GATS.
132. Expressing his delegation's satisfaction with the joint statement, the representative of Panama
noted the possibilities presented by this sector were unlimited, and enabled smaller Members to be
main players.  He noted that Members without access to the sea could have major fleets.  Maritime
transport services was one sector in which smaller Members could be major winners.
133. The representative of Latvia emphasised that his country had a long history of maritime
transport and had an interest in future liberalization of this sector, particularly given Latvia's broad
commitments in this sector undertaken upon its accession.  He indicated Latvia's desire to compete in
this market and would be seeking reasonable reciprocity and fair trade conditions from its trading
partners through multilateral commitments.
134. The representative of Chinese Taipei sought to associate her delegation with a number of
previous speakers regarding the negotiations on maritime transport services.   Although Chinese
Taipei had not participated in the extended negotiations on maritime transport services and had not
scheduled commitments in this sector, it recognised  that maritime transport played an important role
in promoting economic development and in ensuring the comprehensive success of the current round.
She indicated that her delegation was preparing its initial offer in this sector and hoped to circulate its
offer by the end of March.  She encouraged other Members to make similar efforts to include
maritime transport services in their offers.
135. The representative of Switzerland recalled his delegation's conditional offer tabled in the
extended negotiations.  He emphasised that, despite its landlocked condition, Switzerland could see
direct benefits from its liberalization of this sector, which fostered trade, made trade more efficient
and would benefit all exporting Members in terms of commodities, industrial and agriculturalproducts.  He said it also would benefit importers, because their costs would also be lowered.  He felt
that there was a case to make for a systemic approach to this sector.  He said that it was worth
underlining that benefits in this sector were not limited to coastline Members.  He recall that
Switzerland's 25 vessel fleet had an average age of four years and that it was exclusively active in
international trade and the sectors covered by the GATS.  Switzerland had a keen interest in thissector and hoped that a large number of Members would consider this sector in their offers.
136. The representative of Guatemala recorded his support for proposals intended to liberalize
maritime transport services, as it brought benefits to all through increased efficiency and
competitiveness.
137. The representative of the European Communities welcomed the fact that all of the previous
speakers had stressed the importance of active participation in this sector.  She underlined that the list
of co-sponsors included many users of maritime transport services, thereby demonstrating the keyTN/S/M/6
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importance this had for many sectors in the economy.  She noted that at interventions in Doha, there
were a number of landlocked Members who indicated the importance of this sector for their
development.
138. The representative of Cyprus noted that, as an island, her country was dependent on this
sector for its trade with the world.  She looked fo rward to the negotiations and hoped that they would
result in real liberalization to the benefit of al l Members, including through unimpeded trade, the
attraction of foreign investment, the transfer of technology, security and development.
139. The representative of the United States thanked India for raising the issue of mutual
recognition agreements, and noted that his delegation had prepared a short document on the United
States' experience in negotiating MRAs and which gave contact information for responsibleauthorities in the relevant sectors.  To the best of his knowledge the document was available on the
United States Trade Representative's web-site and he said that he would arrange to have it circulated.
He expressed appreciation to those who had responded to his earlier request for clarification on the
inclusion of sectors, and regretted that not all had responded to it.
140. Summarising the discussion, the Chair noted that there had been a good number of
interventions, based a presentation by Japan, which introduced a joint statement on maritime transport
services negotiations from a large number of Members.  He felt that it was fair to acknowledge that it
had received widespread support.  He also referred to a question raised by India regarding the need for
more detail on the sectors concerned by notifications pursuant to Article VII:4.  He noted that theSecretariat was in contact with the Indian delegati on on this matter.  The Chair suggested that the
Council take note of the statements made.
141. It was so agreed.
F. REVIEW OF PROGRESS IN NEGOTIATIONS
142. The Chair noted that at its meeting in December the Council held extensive discussions under
this item.  It had been noted that there were some interlinkages with the previous item, namely,
proposals relating to the negotiations under Article XIX of the GATS.  Members had generally agreed
that the market access negotiations in services were moving forward at a good pace, and a number of
imbalances in the negotiations were mentioned.  Responding to a number of questions posed about a
proposal from a group of developing countries, contained in document TN/S/W/7, concerning theimplementation of paragraph 15 of the Guidelines and Procedures in the Negotiations in Services, he
recalled that the delegation of Peru made a statement providing a number of useful clarifications,
including that the proposal could be addressed through the inscription of a permanent sub-item under
this agenda item.  He also recalled that the purpose of this item was to promote transparency in the
negotiations in general and to give Members the opportunity to communicate their impressions on theprogress in the negotiations.  He also stated that earlier in the week and under the Assessment of
Trade in Services some statements had been made which could have appropriately been made under
this item.
143. The representative of Norway noted that the GATS negotiations were entering an important
phase in which Members would present their initial offers.  These offers would give a clearer
indication as to the commitments Members were willing to undertake, as well as the scope of progress
in the services negotiations in the context of the broader round.  He hoped that there would be positive
offers by many delegations in as many areas as possible.  He stated that his delegation's intention was
to present a package by 31 March and that it was meant to be a constructive contribution to the
negotiations.  He noted that his delegation had held over 50 bilateral consultations in which requestsand offers were discussed in a comprehensive, positive and result-oriented atmosphere that had
provided his delegation with input for the preparat ion of Norway's offer.  He hoped that Norway'sTN/S/M/6
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offer would encourage Members to make corresponding offers.  Norway did not see the negotiations
as a zero-sum game.  He thought that the negotiations offered an opportunity for Members to create a
modern framework for trade in services by widening their commitments.  He hoped that developing
countries would see the negotiations as an opportunity to reap more benefits from globalisation.  He
noted his satisfaction that many developing countries had presented requests and hoped that thenegotiations would proceed to their benefit as outlined in the guidelines.  In addition to bilateral
meetings, he said that a number of informal meetings had also been held among Members with
common interests, and he was encouraged by the activity and broad participation by delegations in
this regard.  He hoped that these activities would help move the negotiations forward.  He said that it
was important that all delegations be able to pa rticipate in these activities and that they ensure
transparency.  The discussion under this agenda item was an important contribution in this respect.
He stated that in earlier meetings, he had presented studies and findings that supported the argumentthat liberalization in infrastructural services could contribute to growth.  He noted that his delegation
was working with others to move forward the negotiations on maritime transport services, which was
one sector with the potential to sustain and increase growth in world trade.  He was pleased that over
50 developing and developed Members had expressed support for liberalization in maritime transport
services.
144. Turning to energy services, the representative of Norway said his delegation saw this as an
area of great potential in the world economy.  Reliable, efficient and competitively priced energy was
fundamental to the social and economic development of any country.  He was pleased that a number
of developed and developing countries had made pr oposals and requests in the energy field.  He was
particularly appreciative of an initiative from Venezuela to examine with others the variety of services
comprising the energy sector.  He said that the Venezuelan initiative and the view points of others had
provided a better understanding of the interconnectedness of these services to a well-functioning
market.  He felt a broad approach should be taken when defining energy services, both on-shore and
off-shore, and said that his delegation intended to submit an offer which would include all the sub-sectors necessary to realise the full benefits of efficient and competitive energy services.  Finally, he
mentioned a third infrastructural sector, telecommunication services, which was key to the
development of all sectors of Members' economies, in both goods and services alike.  He said that
feedback received on Norway's requests from more than 25 Members in this area gave reason to be
optimistic.  He said that the telecommunications industry was global and needed a predictable and
sustainable regulatory and business environment in order to benefit businesses and consumers.  He
was aware of the constructive offers in many other service sectors and that others had clear prioritiesin this respect.  He stated that his delegation woul d take part in informal meetings in these areas to
learn more about the priorities in order to see how they might be operationalized in the negotiations.
145. The Chair said in his own capacity that many representatives of the services private sector
industries had come to Geneva to learn about progress in the negotiations, and that they had wanted to
meet with himself, the Secretariat and delegations.  He had been impressed by their level of interest
and hope for liberalization.  He said that in general these representatives were from developed
countries and less so from developing countries, although he was aware of the extensive investments
made by the former in some cases.
146. The representative of Uruguay noted that his comments were linked to his earlier intervention
under item A and that progress was linked with other negotiations in the WTO.  He stressed that it
was important for WTO Members to comply with the deadlines agreed upon by Ministers at Doha,
and that one essential step in this regard was to agree on the modalities in agriculture with a high level
of ambition.  He said that this issue was key to all negotiations, not in the least because satisfactoryresults in agriculture would give momentum to all areas of the negotiations, including services.
Secondly, he noted the need for consistency in the degree of ambition in all areas of the negotiations,
not simply in services.  He felt that the trend should be avoided whereby some Members would
present an ambitious offer in areas where they had a competitive advantage, such as in services, whileTN/S/M/6
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presenting modest proposals in highly protected areas such as agriculture.  Thirdly, he felt that
Members should be committed to including a development dimension in all areas of the negotiations.
In services, for example, better market access should be granted in the areas of export interest to
developing countries.  Fourthly, he thought that it was important to bear in mind paragraphs 47 and 49
of the Doha Ministerial Declaration, which stated that in all areas the present negotiations should beconducted with a view to ensuring benefits to all participants and to achieving an overall balanced
outcome.  For this multilateral trade negotiation round, he felt it important to maintain a balance in the
overall negotiations, and not in one particular sector, for example agriculture and services.  He
expressed concern that this element was not being taken on by all Members, which jeopardised the
achievements of results which would be acceptable to all parties.  Finally, he said that Uruguay was
participating actively in services negotiations, as witnessed by the various negotiating proposals co-
sponsored along with Mercosur, and Uruguay's presentation in June 2002 of its initial requests.  Withrespect to the presentation of initial offers, he stated that his delegation was working on these offers.
He emphasised that links between negotiations in various areas would be inevitable.  He hoped that all
delegations would keep this situation in mind and work to this end.
147. The representative of Peru, turning to the proposal from a number of developing countries
contained in TN/S/W/7, reiterated the interest that this group of countries had in finding the most
effective way to implement the contents of paragraph 15 of the negotiating guidelines.  This proposal
had been presented at the Council's meeting in October and was supported by a large number of
delegations.  He recalled that in December his delegation had made a statement to clarify a number of
concerns expressed by some Members.  His perception was that the initial proposal, along with theclarifications, had not given rise to major difficulties and he proposed that the agenda for the next
meeting of the Special Session have inserted under this item, a standing sub-item called
"Implementation of paragraph 15 of the Guidelines and Procedures for the Negotiations on Trade in
Services".  He recalled that the purpose of the proposal was to allow for discussions concerning
Articles IV and XIX:2 to be more focussed and effective.  He said that the goal would be torecommend the ways and means required to promote the objectives of these Articles.  He said that the
assessment of the negotiating process would be conducted on a general basis and concentrate on the
identification of shared concerns which affect developing and least-developed countries.  The
discussions would be held on the basis of proposals that Members would put forth.  Specific proposals
would be needed to promote discussion.  He reiterated that the purpose of the proposal was not to
create new mechanisms or procedures, but was intended to ensure compliance with the mandate
established in the negotiating guidelines.
148. The representative of Pakistan said that his delegation was actively engaged in the
negotiations, that it had submitted its requests to both developed and developing country Members,
that it had received over 20 requests from other delegations, and that it had participated in bilateral
consultations.  In this regard, he stated that some requests from important trading partnersdemonstrated that little consideration had been given to the provisions of the negotiating guidelines
and procedures and to Articles IV and XIX:2 relating to developing countries.  He said that, as a
developing country, his delegation was committed to full participation in the negotiations in a positive
and constructive manner, and that he was concerned by an attitude, which he characterised as a global
takeover of trade in services, by certain Members.  In order for the negotiations to be mutuallyadvantageous, he stated there was a dire need for important and large Members to be realistic in terms
of their level of ambition and commercial interests.  He hoped that the offers that would be made by
major trading partners would balance out or give compensation in order to keep the negotiations on a
scale where developing and least-developed countries felt they could gain from the negotiations.  He
reiterated that the negotiations formed part of a development agenda in the full sense of the terms ofthe Doha Declaration.  He urged major trading partners to give due consideration to sectors and
modes of supply of export interest, particularly mode 4.  Regarding the timeframes for requests and
offers laid out in paragraph 15 of the Doha Declaration, he said that his capital was aiming to
formulate its offers for the earliest possible date.  He reiterated that the timeframe was tentative forTN/S/M/6
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the submission of requests and offers and that an interpretation to the contrary could prove
counterproductive.  He expressed his delegation's full support for the proposal referred to by Peru for
the inclusion in the agenda of a sub-item of this item as a way to implement paragraph 15 of the
negotiating guidelines.
149. The representative of Australia felt that the negotiations were characterised by steady progress
and goodwill.  She said that over past eight months her delegation had been engaged intensively in the
request-offer process.  She said that the Special Session was about to take a significant step in the
submission of initial offers and was encouraged that Members were making efforts to meet the
deadline.  She thought that this was indicative of the economy-wide benefits of services liberalization
and she said that Australia would endeavour to meet this deadline.  She said that Australia's offer
would take into account the requests received.  She hoped that Australia's offer would make aconstructive contribution to the negotiations and she urged all Members to make their best endeavour
to meet the deadline.  However, she said that the goodwill and steady progress which characterised
the services negotiations should not be taken fo r granted and that cooperation would ensure there
would be a critical mass of initial offers across a broad spectrum of Members.  It was also important
that market access gains be achieved in all sectors.  She said that the level of ambition in thenegotiations would naturally be influenced by progress in other sectors.  She said that many Members
would wish to bind liberalization initiatives carried out since the Uruguay Round and that the
modalities approved would be a significant step in advancing the request-offer process in this regard.
Australia looked forward to using them in the negotiations.  She also stated that her delegation took
seriously the aspirations of developing countries, and in this regard said her delegation was reflectingon the statement made by Peru.  Australia looked forward to work on the modalities for the special
treatment for LDCs as well as the circulation of offers.  She looked forward to pursuing the process
ahead with a view to accruing benefits to individual and the global economies.
150. Seeking to make a few general comments on Colombia's view of the requests process as well
as the phase ahead, the representative of Colombia noted that an important element for achieving
consensus at Doha had been agreement on timelines.  He was concerned to see that deadlines invarious negotiating groups were not being met and the strategic sequencing among the various areas
of the negotiations was being disrupted.  He said that a lack of ambition in the modalities submitted in
agriculture was no doubt a crucial element of the negotiations, and could have a negative impact on
maintaining the current pace and achievement of ambitious results in other areas of market access.  He
recalled statements made at the TNC that, in his opinion, the scenario the Council was facing wasdifferent from the one Ministers had had in mind when they launched the round.  He said that a high
level of expectation to achieve concrete results in agriculture was a linked to a level of active
participation and greater commitments in other areas, such as services.  He recalled that Colombia's
active participation had been demonstrated through the nine negotiating proposals it had presented.
He reported that while formulating its negotiating proposals, Colombia had also started internalconsultations with a view to elaborating initial requests, which would be circulated shortly, and he
hoped that Members would bear in mind the effort this had entailed.  The preparation of requests
taxed already limited capacity, and highlighted the need  to strengthen this capacity including through
strategic and tailored technical assistance programmes designed to provide better support to Members.
This fact needed to be borne in mind if one considered that the majority of developing countries hadparticipated rather late.  He said that Colombia fa ced a number of obstacles, including the shortage of
human resources, the complexity of determining trad e interests, and a lack of familiarity with the
GATS among stakeholders.  As well, other important negotiations required preparation, such as the
creation of a system of coordination between the private sector and the government, a shortage of
resources for capital-based experts to participate in  meetings, and the need to assess the impact of
liberalization in the Uruguay Round on trade in services.  These were just some of the obstacles which
had led to delays.TN/S/M/6
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151. The representative of Colombia believed that it was key to keep these obstacles in mind as
Members approached the next phase, as well as the need for more technical assistance which would
assist his delegation's work.  He emphasised UNCTAD's considerable role in services and that had
fostered involvement by Colombia.  With regard to the process which lay ahead, he said that
Colombia attached importance to the multilateral negotiations on GATS disciplines, and in particularthose on emergency safeguard measures and subsidies.  He said that the discussion on domestic
regulation was intended to create and maintain the appropriate conditions for ensuring market access
for service suppliers that was not encumbered.  While recognising that bilateral and sectoral
discussions were necessary in order to clarify interests shared by groups, he stated that an appropriate
balance was required between bilateral and multilateral discussions.  Regarding offers, he stated that
Colombia would carefully assess the positions put forth by other Members in their offers.  He had
listened carefully to the presentation by Hong Kong, China made earlier to the TNC on makingservices offers conditional on concrete results in other areas, in particular in agriculture.  He requested
that Hong Kong, China expand on this proposal and perhaps illustrate it.  With respect to the
comments made by Peru, he felt that the proposal it had referred to was a simple and effective way to
assess progress in the negotiations by comparing the results with the objectives outlined in Article IV
and to ensure the application of paragraph 15 of the negotiating guidelines.
152. The representative of Kenya noted that participation in the negotiating process required
extensive involvement by the concerned stakeholders, complex technical analysis to identify current
and potential trade interests, and the study of the impact on services providers of liberalization and
development prospects.  He said that his government was encountering difficulties in this regardbecause of limited institutional capacities, both human and financial.  Also, many domestic
stakeholders were not well-informed about the GATS and technical cooperation to improve this
situation would be welcome.  Kenya had compiled and submitted its initial requests, but would have
difficulty in preparing the much more complex undert aking that was an initial offer.  He stated that
certain Members had presented comprehensive requests and it was difficult for his delegation,because of limited capacity, to undertake a full evaluation of the requests.  He noted that
comprehensive requests significantly undermined the principle of progressive liberalization as
envisaged in Article XIX, and he hoped that flexibility would be demonstrated for developing
countries to open fewer sectors in line with level of development.  He stated that some of the requests
seemed to give less attention to the boundary that lay between the bilateral request-offer process and
issues to be handled at the multilateral level and in the relevant subsidiary bodies.  He felt that
developments in the request-offer process should be evaluated in the light of the lack of progress in
GATS rules on emergency safeguard measures and subsidies, which would make it difficult to
evaluate specific new commitments and elaborate offers.  He emphasised that it was important that
the negotiations on rules be completed before end of the negotiations on specific commitments as
provided for in the negotiating guidelines.  In order to not hinder the market access negotiation, it was
of crucial importance that issues of importance to developing countries, such as these, be addressed.He attached great importance to the fulfilment of  the mandate in paragraph 15 of the negotiating
guidelines regarding the progress review that sh ould aim to ensure the effective implementation of
Articles IV and XIX:2.  He felt that Members needed to agree on the procedure to determine the
extent to which Article IV was implemented in the negotiations as well as the ways and means of
promoting its objectives.  He noted that he was k een to hear the views of other Members on how to
proceed on the proposal put forth by a number of developing countries in this respect.  He believed
that the proposal could form the basis of the implementation of paragraph 15 of the negotiating
guidelines and supported it.
153. The representative of Argentina stated that the analysis of requests received and the process of
preparing an offer were complex undertakings.  Determining trade interests and the possible
consequences of making new commitments consisted of engaging in a process in which the public and
private sectors analysed the impact of the GATS.  This process was taking more time than had been
expected.  He agreed that complying with dead lines was important in services and indeed allTN/S/M/6
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negotiations, and said that his delegation intended meet the deadline, give or take a few days.
Regarding the content of the offers, he was concerned with the lack of progress in rules and
disciplines in horizontal issues.  He emphasised that these were important because it was difficult to
make an offer without knowing what rules would be applied to commitments.  He recalled an
occasion when Chile had alluded to the link between rules on subsidies in services and the possibilityof improving existing schedules.  Like other developing countries, he expressed his delegation's
interest in supply through mode 4 that was not limited to experts and executives but included any
category of natural person.  With respect to the proposed sub-item referred to by Peru, he favoured its
insertion into the agenda.  He said that provisions of paragraph 15 of the negotiating guidelines were
to be complied with and he had not seen to date how the Council intended to fulfil them.  He felt that
the proposal was a first step in implementing one of the many useful tools for developing countries
included in the guidelines.  Commenting on Norway's  intervention, about the negotiations as being an
opportunity to modernise Members' trade in services and benefit from globalisation, he said that the
goal was to modernise trade in general, including in goods and agriculture.  In this regard, the
negotiations were an opportunity for both developing and developed countries to benefit from
globalisation.  He agreed with others that there was a direct link between the level of ambition in this
negotiation and other negotiations.  He stated that the level and content of offers would be directlyrelated to the level of ambition seen in other negotia tions.  He recalled that in the Trade Negotiations
Committee some delegations had suggested that it would be beneficial to seek a dual approach with
respect to deadlines in order to take advantage of progress in some negotiations.  His delegation did
not favour a dual approach and noted that balance was needed in both the process and the result.
154. The representative of China informed the Council that his delegation had held ten bilaterals
that week, which brought the total of preliminary bilaterals it had held to 22, including seven with
developed Members and 15 with developing Members.  He explained that they had promoted mutual
understanding and trust and would be important in the presentation of initial offers.  He expressed
concern with an imbalance in favour of developed Members that put developing Members in adisadvantaged position on market access negotiations.  Developing Members lagged behind in the
requests process by some six months in comparison to developed Members, which testified to the fact
that developing countries found it difficult to identify export interests, conduct national consultations
and hold negotiations.  Developed Members had already carried out several rounds of bilateral
consultations while developing Members were requesting consultations for the first time.  Moreover,
because of limited capacity and financial resources, many developing Members were unable to send
experts from capital to participate in the consultations.  He said this situation restrained them fromactively engaging in the negotiations and dampened the possibility of gaining beneficial results.  He
said that, even for those developing Members who had submitted requests, in general only a few
sectors and modes had been targeted on the basis of concrete interests rather than middle- or long-
term considerations.  In light of these features, China sought to raise three proposals.  Firstly,
developing Members should be given more time to make requests and present offers.  Secondly,noting that some developed Members had indicated th ey would present their initial offers by the end
of the month, he said that, because some developing Members had only made their requests recently,
developed Members should take fully into account these requests in their offers.  Thirdly, developed
Members should give priority to the sectors where developing Members had a competitive advantage
in particular the movement of natural persons.  The consideration of these proposals was crucial toreduce the imbalance in market access.  Finally, on the proposal regarding paragraph 15 of the
negotiating guidelines, China supported the proposal and encouraged Members to make a contribution
to this exercise.
155. The representative of Hong Kong, China stated that his delegation was preparing its offer with
a view to meeting the benchmark mandated by Ministers and urged other Members to do the same.
He felt that it was important for all Members to make substantial, meaningful and timely initial offers
in order to maintain momentum.  He said that this included both those who had high ambitions as
reflected in their requests, as well as others who had strong interests in other areas of the negotiationsTN/S/M/6
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and who would want to see a balance in the overall negotiations agenda.  He stated that initial offers
were initial and, as such, it was understood that they were subject to modification or withdrawal.  He
believed that a substantive services initial offer would be a positive signal that demonstrated to other
Members the possible opportunity cost of a lack of progress in other negotiations.  In this sense,
linkages could be made in a positive sense.   He expected that the request process would continueafter the submission of initial offers and hoped to receive requests from all trading partners.  He said
that initial offers were only a start to the negotiations and that they would continue to be adjusted in
the light of further negotiations and the concessions made.  He emphasised the importance for
Members to dedicate substantial effort in preparing their initial offers on time and with a set of
substantive offers that would demonstrate the momentum of the negotiations in services.   Turning to
the adoption of the modalities for the treatment of autonomous liberalization, he said it was important
for all Members to faithfully implement the modalities and grant credit for autonomous liberalizationmeasures.  He emphasised that doing so would provide a strong incentive for Members to bind
measures and to undertake further autonomous liberalization measures in the future.
156. Turning to the progress in the negotiations, the representative of Hong Kong, China expressed
concern over the reluctance by some Members to engage in negotiations in certain sectors.  He
reiterated that according to paragraph 5 of the negotiating guidelines, there was to be no a priori
exclusion of any sector or mode of supply and that all service sectors were to be treated equally in the
negotiations.  There should thus be no suggestion that liberalization of any services sector could not
be negotiated, pursued, addressed or discussed in a bilateral or multilateral contexts, nor should there
be any preconditions for the negotiation of liberalization in any sector.  He said that he was pleased tosee the level of support Members had indicated for negotiations in maritime transport services, which
were an important infrastructure and facilitator of world trade.   On audio-visual services, he said that
he had received no response from certain Members as to why they were reticent to discuss
liberalization and expressed grave concern over this  reaction.  He appealed to Members to adhere to
the negotiating guidelines agreed to by all Members.   He recalled that at the previous meeting his
delegation had suggested ways to take audio-visu al services forward and he looked forward to
substantive discussions with trading partners on this basis in bilateral and multilateral contexts.  He
stressed the need for balance between the bilateral negotiating process and multilateral rule making
work undertaken in the subsidiary bodies in subsidies and domestic regulation.
157. The representative of Paraguay stated that the negotiations in services were moving along
well, but that it was also important for there to be progress in rules negotiations.  These rules needed
to be commonly agreed upon and transparent in orde r to ensure that the liberalization of trade in
services would be effective.  He noted that his country's services sector was developing and that
Paraguay was a net importer of services.  He said that when his delegation had committed to move
forward in the Doha Round, this had required Paraguay to initiate a series of reforms in order to adapt
the country's economic structure.  Paraguay continued to improve its legal infrastructure andregulatory framework in order to strengthen its tr ade in services and improve conditions for foreign
investment.  He stated that his delegation, his colleagues in capital and various partners in the private
sector had mobilised their efforts in order to meet the initial offers benchmark in a timely fashion.  He
confirmed that his delegation had received a number of initial requests and had held a large number of
bilateral meetings, which had provided an opportun ity to exchange views and become aware of the
ambitions of the developed countries.  He reiterated the importance of establishing a general balance
in all areas of the negotiating mandate under Doha, and in particular the link of the level of ambition
with the degree of liberalization in agriculture, which was a cornerstone of the negotiations for his
delegation.  His understanding was that at Doha, Members had agreed to a single undertaking and that
this would mean that a balanced and global approach would be necessary in the negotiating process.He noted the taxing efforts required by developing countries in order to present their initial offers as
well as the need for balance in the whole negotiating process to observe deadlines.  He reiterated his
delegation's support for the proposal referred to by Peru, including the suggestion to insert this item as
a permanent sub-item.TN/S/M/6
Page 36
158. Noting the preliminary nature of her comments, the representative of Oman stated that she
was concerned about the level of rights and obligations among Members.  Her delegation intended to
follow the progress in the negotiations in order to  ascertain the level of other Members' commitments
in comparison to her country's.
159. The representative of the Philippines stated that his delegation and capital-based experts had
participated in comprehensive bilaterals on the basis of requests received from 15 partners.  He said
that only some 40 out of 145 Members had tabled requests, which suggested that several developing
countries were at a disadvantage due to a lack of capacity.  He said that the progress could not be
taken for granted, since there were other contexts in which progress in services should be considered.
He said that he was aware of the agriculture negotiations the preceding week, work on special anddifferential treatment, as well as the impasse on TRIPS, and he saw these as a source of concern in the
services context.  All of these could cast doubt on the overall balance in the progress of the
negotiations undertaken at Doha.  He said that progress made in services should also be assessed in
context of ongoing work elsewhere.  He note d the lack of movement on emergency safeguard
measures, which needed to move beyond the academic level through the demonstration of politicalwill on the part of those who were making comprehensive requests.  With respect to domestic
regulation, he stated that, with the exception of a recent proposal from Japan, there had not been
movement on this issue.  In this regard, he felt that the progress noted could not be taken for granted.
Indeed, he felt that doing so could affect the abil ity of some Members, particularly the developing
countries, to present equivalent substantial offers.  He thought that the positive linkage posited bysome Members, i.e. that the presentation of substantial offers would encourage flexibility, contained a
grain of truth for other critical negotiating areas.  It was his sense that an indispensable element of
these positive linkages would be that the offers of major trading partners be more substantial in order
to overcome the perceived lack of balance in other negotiating issues.  He associated himself with
comments made by China.  His delegation was committed to constructive negotiations.  He expressedhis full support for the statement by Peru, and stated his delegation's understanding that,
notwithstanding the tabling of initial offers, developing countries could continue to submit requests.
160. The representative of Thailand stated that her delegation had submitted initial requests by the
end of January to some 15 developing and developed Members and that these represented the result of
intensive and time-consuming work in capital.  She encouraged other Members to prepare requests for
their trading partners and shared the observations made by China regarding the difficult nature of thisexercise for developing countries who might require additional time.  With respect to offers, she said
that their preparation was more complex, required internal consultations and could mean that some
Members would require more time.  She welcomed the initial offers that would be circulated by
developed trading partners and hoped that they would demonstrate understanding for the difficulties
faced by developing countries in doing the same.  She also sought to register her concern regarding
mode 4 and the disappointment her delegation had with the response in bilateral consultations to this
issue.  She said that she had reported to capital that her delegation's request on this issue had not been
well received.  She said that she understood that mode 4 was sensitive for developed countries, and
had attempted to explain that mode 3 was sensitive for developing countries.  She hoped that there
would be flexibility and that requests would be considered in a positive light.  Furthermore, sheexpressed disappointment about the lack of progress on rules and on emergency safeguard measures.
She recalled that one Member in the Working Party on GATS Rules had stated that developing
countries should be aware that an ESM could be used by developed Members with respect to mode 4,
and she hoped that she had misinterpreted this comment.  She said that appropriate rules for ESMs
would not lead to abuse in any mode and expressed confidence that such a result could be achieved.She said that she did not understand why the question of the desirability of and ESM remained in
doubt, given that for goods ESMs had not stopped the flow of goods and for agriculture they had not
had the impact that subsidies had.  The desirability of rules for ESMs seemed clear to her delegation,
as did the linkages to other issues.TN/S/M/6
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161. The representative of Chile stated that his delegation was pleased with the process of requests
and bilateral consultations was successful.  Chile had held many bilaterals and was presenting its
requests. He said that their was perhaps a ne ed for improved linkages between the bilateral
consultations, the Council, the groups of friends, as well as sub-groups.  His delegation was workingvery intensely to prepare its offers and hoped that it would meet the deadlines.  He stated that Chile
had also brought in experts to participate in these groups of friends in various services sectors.  He
said that there had been many internal consultations, which had been strengthened by the fact that
experts were abreast of the situation in Geneva.  As others, his delegation considered that the process
of the negotiations should not exclude any sector a priori .  He said that the ambition of Members in
offers on market access needed to go hand in hand with the work being done on rules, domestic
regulation and subsidies.  He reiterated the point that some Members were making market accessrequests in sectors for which there was no information regarding subsidies.  In this regard, an
information gathering exercise seemed necessary in order to promote transparency at the same time as
market access negotiations were being conducted.  He agreed that the negotiations needed to be
balanced in terms of agriculture, but also in terms of modes of supply, particularly for developing
countries with a little developed services sector for whom mode 4 was an important mode of supply.He felt that access in mode 4, independent of access under mode 3 and intercompany transfers, was an
important avenue for trade in services.  It was important to point out that better work was needed on
mutual recognition agreements and in this regard  he agreed with the comments expressed by some
delegations.  He added his voice to those of others which drew a link between services and
agriculture.
162. The representative of Brazil felt that there was reason to be proud of the work done in
fulfilling the negotiating mandate.  He stated that there was reason to be confident about the future
given the record to date.  He stated that the GATS negotiations were not an isolated endeavour, as
noted by several Mercosur delegations.  He recalled that the theme of realism had recurred in anumber of recent meetings, and he felt that this could perhaps be applied in the Special Session as
well.  He hoped that, as the benchmark of 31 March approached, the progress in services would spur
Members forward, but he felt some apprehension since this had not been the first deadline under the
Doha mandate.  Comprehensive negotiations had been committed to in order to remove imbalances
and obstacles to trade for developing countries.  He recalled that Ministers had given a strong mandate
to streamline agriculture into the WTO, as they did for implementation measures, the strengthening of
special and differential treatment in order to make them more precise, effective and operational.Progress, however, had been disappointing, as witn essed by the passing of the deadline on special and
differential treatment, and TRIPs and health.  He noted that another deadline was approaching at the
end of the month.  He said that there was strong resistance to issues which were central to the Doha
Round, for example, in agriculture with referenc es to non-trade concerns, and in special and
differential treatment, with best endeavour pro posals.  His delegation remained committed to the
integral fulfilment of the Doha mandate, even in those areas in which it was not a demandeur, in order
to achieve ambitious results.  It was ready to undertake adjustments at home in order to improve the
multilateral system, even though Brazil had many stakeholders who might wish to have an opt-out.  In
services, for example, Brazil had many non-trade concerns and many stakeholders would want its
involvement to be on a best-endeavour basis.  He noted that Brazil had presented requests,participated in bilateral meetings, and was preparin g its initial offer.  However, he said that some
recent events had called into question the commitment of some major players in the services mandate.
He recalled paragraph 5 of the negotiating guidelines which stated that there should be no a priori
exclusion of any service sector or mode of supply and that special attention should be given to sectors
and modes of supply of export interest to developing countries.  Recent announcements, it appeared,seemed to disregard this part of the mandate, and he was discouraged by the reluctance of some
Members to discuss sectors which were of great importance for developing countries.  He took note of
this precedent with concern.  He reiterated Brazil's commitment to move forward, and expressed his
concern with the state of affairs in the Doha negotiations which could have spillover effects on theTN/S/M/6
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services negotiations.  He recalled that the outcome of the services negotiations would be evaluated as
part of an overall package.  Responding to the comment made by Hong Kong, China that those with
ambitions in other areas should put forward substantial initial offers, he noted this point with interest.
163. The representative of India stated that at the last meeting, his delegation had highlighted a
number of issues related to mode 4 which required multilateral attention.  As a mode of interest to
developing countries, he felt that mode 4 should be given special attention as stated paragraph 5 of the
negotiating guidelines.  In the current round, India expected a balanced outcome and the meaningful
liberalization of mode 4, which would contribute to the effective implementation of Article IV.  He
urged all Members to actively participate in the negotiations on mode 4 in order to achieve concrete
results in the context of the Doha round.  He took note of the reference by Hong Kong, China
regarding trade in audio-visual services.  He also wished to underline his delegation's interest in this
sector, and he referred to paragraph 5 of the negotiating guidelines to underscore the point made by
others.  Regarding the proposal highlighted by Peru, he expressed his delegation's support that the
implementation of paragraph 15 of the negotiating guidelines become a permanent sub-item under this
agenda item.  He also emphasised the need for balanced progress in the context of the services
negotiations as well as in all the elements of Doha work programme.
164. The representative of Mexico said that many issues raised by previous delegations covered
Mexico's concerns to a large extent.  He noted that all were engaged in the negotiating process, to the
extent of each participant's possibilities and pursuant to Articles IV and XIX.  He said that many
participants had met deadlines and objectives, included the submission of requests, which Mexico hadfulfilled by presenting requests to some of its trading partners and received from its trading partners.
He said that the requests had been given consideration and led to a number of bilaterals.  Mexico was
committed to the multilateral negotiations as witnessed by its requests and the receipt of requests.  He
felt that there was time for Members to correct any delays that they might encounter in this process.
Mexico intended to comply with the benchmark fo r offers and was working very hard in capital,
without excluding any sector, to prepare a broad offer.  He felt that there should be a similar response
from trading partners, both with respect to the balance and coverage of sectors and modes of supply.
One area with potential for Mexico was in one mode in particular, which had been included in its
requests, and he stated that his delegation had not received the expected response.  He felt that if there
were no balance in this regard, that it would be to the detriment of Mexico's offer and its final position
at the end of the process.  He acknowledged that  the process was one of negotiation that involved
give-and-take, but emphasised that the process should be balanced.
165. The representative of Indonesia said that his delegation was involved in comprehensive
bilaterals.  Based on the requests, Members would soon be expected to present offers.  He sought to
report on his delegation's experience of recent bilateral meetings and reiterated that the request-offer
process should aim to increase the participation of developing country Members, which should bebased on modes of supply and sectors of interest to them.  He said that developing countries should be
aware of their comparative advantage with respect to their trading partners.  In addition, it was his
view that the major trading partners should take into account the constraints of developing countries
in conducting assessments and preparing requests.  He reiterated that issues of interest to developing
countries, such as ESMs, be resolved at earliest point in time and before finalising the negotiations onspecific commitments.  He associated his delegation with the expressions of support for the proposal
outlined by Peru, including the insertion of a permanent sub-item in the agenda.
166. The representative of Chinese Taipei said that her delegation intended to adhere to the
deadline for the submission of initial offers in order to maintain momentum.  She associated her
delegation with the comment by Hong Kong, China to the effect that there be no a priori  exclusion of
modes or service sectors in the negotiations.  She invited Members to take the successful conclusion
of their work on modalities for the treatment of autonomous liberalization as a model to discuss ESMs
and classification issues for certain sectors.TN/S/M/6
Page 39
167. The representative of the United States wished to give his delegation's perspective on the
state-of-play of the negotiations.  He felt that  the process was moving forward, although perhaps not
as fast as some would like.  Concrete participation through the submission of requests was not as full
as some would like, but progress was noticeable, as demonstrated by the proportionately high level ofparticipation by developing countries through their requests and the strong participation of capital-
based officials.  He said that work had been completed on the modalities for autonomous
liberalization and that important differences had been bridged, including with respect to interpretation
of the Doha Ministerial Declaration.  He realised and reiterated that these differences were not trivial,
but he said that Members would need to continue to accommodate their different perspectives and
pledged the United States' intention to work to this end.  He said that the United States, as others, was
participating in the assessment, which was an important tool that allowed Members to individuallyand jointly review the impacts of services trade li beralization.  His delegation also looked forward to
discussing a new draft text on the modalities for the special treatment for LDCs.  In his delegation's
perspective progress was being made on difficult rules issues.  In bilateral consultations his delegation
had heard reports on the plans for the submission of offers.  The United States was working towards
meeting the 31 March deadline agreed to by Ministers and hoped others would do the same.Regarding Peru's intervention of the proposal contained in TN/S/W/7, he stated that his delegation
would appreciate the opportunity to consult on this statement.
168. The representative of the United States, seeking to give a status report on the work of the
energy friends group, stated that this group had started meeting more than a year earlier in order todevelop a common approach to scheduling specific co mmitments relevant to this sector.  The work,
which she stated was in progress, was not a new classification of energy services, but rather aimed to
provide a structure to the different elements comprising the sector through the use of the W/120
classification list and the provisional CPC.  The proposal, when tabled, would attempt to serve as a
basis for discussion of a complex set of issues in a sector undergoing significant evolution in anumber of countries.  The proposal would be open to comment by all.  The work of the friends group
was a testimony to the importance of the energy sector as a basic infrastructure sector that supported
economic growth and the creation of wealth in other segments of the economy.  This was especially
the case for developing countries.  It was expected in the next 20 years that they would have the
greatest share of growth in energy demand, which was expected to increase by 50 per cent.  The
availability of various sources of energy at reasonable prices was a significant determinant of a
nation's ability to compete in the world marketplace.  Without reliable, efficient, competitively pricedand environmentally sustainable energy, road and air transport, financial markets, computer,
broadcasting and telecommunications systems and the millions of jobs associated to these sectors,
could not function.  Turning to her comments on the audio-visual sector, the representative stated that
the reports on the negotiations had shown progress in bilateral discussions, with the exception of the
audio-visual sector.  She said that this was not because there was no interest in negotiating on audio-visual services or that it only concerned developed countries.  On the contrary, several Members were
reported to have made requests in this area, including a fair number of developing countries.  Several
Members who had tabled audio-visual services request s reported having been told in bilateral contacts
that their trading partner was not permitted to discus s this issue.  In some instances, interest was
expressed, but also indications that there could be reprisals if the sector were discussed.  Thisresponse, she concluded, froze the possibility of scheduling commitments for these services and
effectively narrowed the scope of the negotiations that were to extend to all services sectors as agreed.
Refusal to discuss a specific services sector was an a priori exclusion of the sector.
169. The representative of Venezuela said that his delegation was still working on its future
position and the timelines established for initial offers.  He endorsed the statement by Uruguay and
others as to the linkage that existed between autonomous liberalization and developing countries.
Reforms undertaken, he stressed should be given credit and recognition in the current negotiations.
Recalling the statements made by Norway and the United States on energy services, his delegationTN/S/M/6
Page 40
stated that there was considerable interest in including these services in this round.  This arose from
the vital role that energy played in sustaining life a nd development, but also as a result of the growing
trade in these services.  The eight Members (Canada, Chile, the European Communities, Cuba, the
United States, Japan, Norway and Venezuela) who had submitted proposals in this sector, had been
holding consultations since March 2001 in order to draw up a description of the energy servicesmarket and to determine which activities could be included.  The proposed classification of energy
services contained in the annex of Venezuela's proposal had been the basis for the group's work.  He
said that the delegations of the group were reviewing the documents that were submitted and that
useful results had been achieved.  He pledged that Venezuela would make efforts to ensure that
progress could be made towards including energy services in the present round.  He hoped that in the
future, all Members would take an interest in the matter.
170. The representative of Korea stated that his delegation was working to meet the initial offers
deadline and hoped others would do the same.  He drew the attention of Members to MFN
exemptions and stated that they had been granted on a temporary basis, and were not to intended to
exceed ten years in principle.  They were also subject to the multilateral negotiations and he
encouraged Members to present offers which included indications of MFN terminations.  He alsosuggested that MFN exemptions be given a high priority in bilateral consultations with a view to
terminating them.  Based on Korea's experience in the bilateral consultations held since July he felt
that two and a half days was not sufficient to ca rry out meaningful discussions with many Members
and hoped that this would be taken into account for the planning of the next cluster.
171. The representative of the European Commun ities informed the Council that her delegation
was working on its initial offer with the deadline of 31 March in mind as well as the requests received
from developed and developing Members.  She encouraged other Members to do the same, although
she was aware of some of the difficulties involved  for developing countries.  Turning to multilateral
issues she stated, with reference to statements made on the lack of progress in rules negotiations, herdelegation's interest in government procurement and services.  She said that work on the modalities
for the special treatment for LDCs should proceed.  Finally, she agreed that energy services was an
important sector which merited a clarification of its classification.  Venezuela's contribution in that
regard could improve Members' understanding of this area.
172. The Chair invited the Council to take note of the statements made and to revert to this item.
173. It was so agreed.
G. OUTLINE OF THE CHAIRMAN 'S REPORT TO THE TRADE NEGOTIATIONS COMMITTEE
174. Outlining his report to the TNC, the Chair said that, with respect to the Assessment for Trade
in Services, he would report that preliminary and substantive discussions had been held based on
communications from the United States and China.  While Members recognised the benefits obtained
from the process of liberalization, questions had been raised regarding the speed with which this
process moved forward, particularly given capacity restraints and the need to adapt regulatory
frameworks.  Comments of a more general nature were also made concerning the objectives and the
results of the assessment.  Specific reference wa s made to the Guidelines and Procedures for the
Negotiations on Trade in Services, which call for the negotiations to be adapted in light of the results
of the assessment.  Some Members mentioned the limitations they faced in conducting their
assessments, including the lack of accurate statistics on trade in services, as well as the limits on their
ability to collect information on areas of export interest to them.  A statement was made on behalf of
African Members highlighting some of the difficulties  that they face in participating fully in the
assessment.  Finally, there had been some "spillovers" noted between this part of the Council's work
and its Review of Progress in the Negotiations.TN/S/M/6
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175. Concerning the Modalities for the Treatment of Autonomous Liberalization, the Council
adopted the draft modalities and took note of a Statement by the Chairman in this regard.  A few
delegations chose to make statements on this occasion which would be reproduced in the report of the
meeting.
176. On the Modalities for the Special Treatment for Least-Developed Countries, he would report
that the Council had held an open-ended informal meeting on 30 January 2003, in which Members
discussed a draft text prepared by the least-developed countries.  The discussion had been focused and
constructive and resulted in a good exchange of vi ews.  At the formal meeting, the Council was
informed by the least-developed countries that they were reviewing the comments made by Members
at the informal meeting.  Bangladesh, on behalf of the LDCs, informed the Council that work on a
revised draft was moving forward and that the LDCs hoped to circulate it in the near future.
177. Under the item Proposals Relating to the Negotiations under Article XIX a substantive
discussion was held on the basis of a joint statement by 52 Members on Maritime Transport Services.
There were a large number of interventions which expressed widespread support for the joint
statement, as well as the importance of this service sector to Members' economies.  A question was
also raised by India regarding the need for more information on notifications made to the Council
pursuant to Article VII:4, recognition agreements.
178. Finally, under the item Review of Progress in Negotiations, the Council had substantive
discussion  with a large number of delegations making interventions.  Overall, Members noted that the
negotiations in services had been making good progress.  Many noted that they had held a number of
bilateral meetings, which had generally been construc tive and positive.  In this context, it was recalled
by some that there should be no a priori  exclusion of any service sector or mode of supply in the
negotiations.  Some delegations wished to highlight areas of particular interest to them, including
audio-visual services, energy services, maritime transport services, telecommunications services the
supply of services through the movement of natural persons, and the reduction and termination of
MFN exemptions.  At the same time, a growing num ber of references were made to the need for
balanced progress in the negotiations in two respects.  The first was for balance with regard to thepace of progress between negotiations on market access and negotiations on GATS rules and
disciplines on domestic regulation.  The second was a call for overall balance in the various areas
under the Doha Development Agenda between Serv ices on the one hand and Agriculture and TRIPS-
health related issues on the other.  With respect to the approaching 31 March benchmark for the
circulation of initial offers, a number of Members, both developed and developing, indicated their
intention to circulate their offers by this date and encouraged others to do so as well.  Other Members
signalled that their capitals were actively engaged in domestic consultations, and that the complex andadministratively taxing nature of the offers process would require more time.
179. Under "Outstanding Issues" the Chair said th at he would report that Members had been
invited to respond to a proposal made by a group of developing country Members regarding paragraph
15 of the Guidelines and Procedures for the Negotiations on Trade in Services, which referred to an
evaluation of the results obtained in the negotiations in terms of the objectives of Article IV(Increasing Participation of Developing Countries) of the GATS.  Specifically, a proposal had been
made to include this item as a permanent sub-item on the agenda under "Review of Progress in the
Negotiations".  Some Members expressed their support for this proposal while others stated their
internal consultations were continuing.
180. Finally, under "Future Work" he felt that the Council's work was proceeding at a good pace.
A few Members noted their interest in building on the success of the Modalities for the Treatment of
Autonomous Liberalization by turning next to a revised draft of the Modalities for the Special
Treatment for LDCs.TN/S/M/6
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181. The Council took note.
H. ORGANIZATION OF FUTURE WORK
182. The Chair stated that, he had taken note of the comment by Korea regarding the lack of
sufficient time for the organization of bilateral consultations during clusters of meetings.  He informed
the Council that the next cluster of meetings w ould be held on the week of 19 May 2003 in a fashion
similar to the present meeting.  In the interests of time, he encouraged any Member that had thoughts
on the organization of future work to consult with him in order to take up those points at the next
meeting.
183. The Council took note.
I. OTHER BUSINESS
184. A representative of the Secretariat, responding to a request made by India earlier in the week
regarding information on recognition agreements and specifically their sector-by-sector breakdown,
stated that the hectic nature of the work conducted that week had prevented consultations from
proceeding with India.  He requested that the Secret ariat look into the matter and come back to India
with some suggestions.
185. The Chair proposed the that the Council take note of the statements made and that he adjourn
the meeting.
186. It was so agreed.
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