WORLD TRADE
ORGANIZATIONS/C/19
5 December 2003
(03-6464)
ANNUAL REPORT1 OF THE COUNCIL FOR TRADE IN SERVICES
TO THE GENERAL COUNCIL (2003)
1. Since its last report to the General Council dated 8 July 2003, the Council for Trade in
Services has held two formal meetings on 3-7 July 2003 and 2,9 and 24 October 2003.  Reports of the
meetings are contained in documents S/C/M/67 and S/C/M/68.  The reports of the meetings should be
read in conjunction with this report.  During th is period, the Council addressed the following matters:
I. PROPOSALS FOR A TECHNICAL REVIEW OF GATS PROVISIONS
- ARTICLE XX:2
2. Substantive discussions on Proposals for a Technical Review – Article XX:2 began in
June 2002 and have continued during the reporting period.  At its meeting held on 3-7 July 2003, the
Council decided to refer this item to the Committee on Specific Commitments for its consideration
and report back at the Council's first formal meeting in 2004.
II. RE-OPENING OF THE FIFTH PROTOCOL FOR ACCEPTANCE
3. At its meeting held on 3-7 July 2003, following the request from the Republic of Poland
contained in document S/C/W/225 the Council decided to re-open the Fifth Protocol relating toFinancial Services for acceptance by Poland.  The Decision is contained in document S/L/130.
III. COMMUNICATION FROM THE EUROPEAN COMMUNITIES AND ITS MEMBER
STATES PURSUANT TO ARTICLE V OF THE GATS – ACCESSION OF AUSTRIA,
FINLAND AND SWEDEN TO THE EUROPEAN COMMUNITIES
4. At its meeting of 3-7 July the Council for Trade in Services held a discussion based on a
communication from the European Communities and Its Member States regarding the accession of
Austria, Finland and Sweden contained in document  S/DCS/W/EEC.  In the light of this discussion
the delegation of the European Communities requested that the Secretariat issue a notification in the
three official languages of the WTO.  The notification is contained in documents S/C/N/231 and
Corr.1, dated 10 July 2003 and 15 August 2003.
IV. NOTIFICATIONS MADE TO THE COUNCIL PURSUANT TO GATS
ARTICLES V:5 AND XXVIII (K):(II):2.
5. At  its formal meeting held on 2, 9 and 24 October the Council took note of two notifications:
(a) the first pursuant to Paragraph 5 of Article V of the GATS (Economic Integration) by
the European Communities and Its Member  States (S/C/N/231, S/C/N/231/Corr.1);
(b) the second pursuant to Article XXVIII (k):(ii):2 of the GATS by the Republic of
Armenia (S/C/N/232, S/C/N/232/Corr.1).
                                                     
1 This report, together with the update in document S/C/17/Rev.1, complete the reporting requirement
for 2003.S/C/19
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V. IMPLEMENTATION OF ARTICLE VII OF GATS
6. At the two formal meetings held during the reporting period, the Council held substantive
discussions on the implementation of Article VII of GATS (Recognition) based on a submission from
India (JOB(03)/120).  The Council has agreed to  revert to this item at its next meeting.
VI. REVIEW OF AIR TRANSPORT UNDER THE ANNEX ON AIR TRANSPORT
7. At the meeting held on 2, 9 and 24 October  2003 the Council held a discussion on the basis
of, inter alia , a submission from Australia and New Zeal and (JOB(03)/193).  The Council decided to
conclude the first review mandated under the A nnex on Air Transport Services and to formally
commence the second review at the last regular m eeting of the Council for Trade in Services in 2005.
This was agreed without prejudice to Members' interpretation of Paragraph 5 of the Annex.
VII. WORK OF THE SUBSIDIARY BODIES
8. The activities of the subsidiary bodies are reflected in their respective reports, which are
annexed to this report as follows:
Annex I Report of the Committee on Specific Commitments (S/CSC/9)
Annex II Report of the Committee on Trade in Financial Services (S/FIN/10)
Annex III Report of the Working Party on Domestic Regulation (S/WPDR/6)
Annex IV Report of the Working Party on GATS Rules (S/WPGR/13)
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ANNEX I
WORLD TRADE
ORGANIZATIONS/CSC/9
5 December 2003
(03-6450)
ANNUAL REPORT1 OF THE COMMITTEE ON SPECIFIC COMMITMENTS
TO THE COUNCIL FOR TRADE IN SERVICES (2003)
1. Since its update to the annual report of 2002 to the Council for Trade in Services, the
Committee on Specific Commitments held two formal meetings on 30 June 2003 and29 September 2003.  Minutes of these meetings are contained in WTO documents S/CSC/M/29; 29
Corr. 1, and 30.
2  In the reporting period, the Committee addressed four items:  classification issues;
scheduling issues;  consideration of issues relating to Article XX:2 of the GATS;  and other topics for
possible future work.
I. CLASSIFICATION ISSUES
2. The Committee continued its discussion on the classification of Legal Services based on a
communication from the European Communities (S/CSC/W/39).  The Committee also exchanged
views on possible work on Mode 4, in particular parameters of a possible Secretariat note on
categories of natural persons subject to commitments under mode 4, or a possible update of the 1998
Secretariat background note on Mode 4, S/C/W/75.  In view of the on-going work in the Special
Session of the Council for Trade in Services, it was agreed, that for the time being, the Committee
would await the discussion in the Special Session, and consider any technical work that mightemanate from these discussions thereafter.  This agreement was without prejudice to the right of any
Member to bring up any technical issue related to Mode 4 at any future meeting.
II. SCHEDULING ISSUES
3. At the request of Members, the Secretariat circulated its presentation on scheduling of
specific commitments, which it had delivered during the 2002 Scheduling Workshop (JOB(03)/186).At the meeting of 29 September, the delegation of Brazil introduced a communication containing
preliminary questions on initial offers (JOB(03)/189).
III. CONSIDERATION OF ISSUES RELATING TO ARTICLE XX:2 OF THE GATS
4. Further to a mandate from the Council for Trade in Services (Regular Session), the
Committee held a first discussion of issues relating to paragraph 2 of Article XX of the GATS at its
                                                     
1 This report, together with the update in document S/CSC/8, complete the reporting requirement for
2003.
2 Meetings of 30 June 2003 (S/CSC/M/29 and Corr 1.), and 29 September 2003 (S/CSC/M/30 – to be
issued).S/C/19
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meeting of 29 September 2003.  It was agreed to convene an additional, dedicated meeting to consider
this issue prior to the next regular meeting of the Committee.
IV. OTHER TOPICS FOR POSSIBLE FUTURE WORK
5. At its meeting of 30 June 2003, the Committee continued its discussion on possible items for
future work.
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ANNEX II
WORLD TRADE
ORGANIZATIONS/FIN/10
2 December 2003
(03-6377)
Committee on Trade in Financial Services
ANNUAL REPORT1 OF THE COMMITTEE ON TRADE IN FINANCIAL SERVICES TO
THE COUNCIL FOR TRADE IN SERVICES (2003)
1. Since its last report to the Council for Trade in Services (S/FIN/9), the Committee on Trade in
Financial Services has held two formal meetings , on 7 July and 6 October 2003. Reports of those
meetings are contained in documents S/FIN/M/41 and 42.  In this period, the Committee addressed
the following matters: the acceptance of the Fift h Protocol to the General Agreement on Trade in
Services; technical issues; recent developments in financial services trade; and a proposal by Antigua
and Barbuda, Belize, the Fiji Islands, Guyana, Papua New Guinea, The Maldives, Solomon Islandsand St Kitts and Nevis.
I. ACCEPTANCE OF THE FIFTH PROTOCOL TO THE GATS
2. In the period under consideration, Dominican Republic, Poland and Uruguay accepted the
Fifth Protocol, in accordance with decisions taken by the Council for Trade in Services. Three other
Members have not yet accepted the Protocol: Brazil, Jamaica, and the Philippines.  Some delegationsexpressed concern that there are still a few Members who have not yet accepted the Fifth Protocol.
II. TECHNICAL ISSUES
3. There were no discussions under this agenda item in the period under consideration.
III. RECENT DEVELOPMENTS IN FINANCIAL SERVICES TRADE
4. Members continued their consideration of issues related to e-finance on the basis of further
information provided by Switzerland (S/FIN/W /26/Add.1). Additionally, Members addressed a
communication from Malaysia, entitled "Challenges in the Financial Services Sector" (S/FIN/W/28).
Finally, a capital based expert from Turkey made a presentation on recent developments in its
securities market.
IV. THE GATS AND THE ANNEX ON FINANCIAL SERVICES - INTERNATIONAL
REGULATIONS AND FINANCIAL SERVICES
5. Members considered for the first time a proposal submitted by Antigua and Barbuda on
behalf of Antigua and Barbuda, Belize, Fiji, Guyana, Papua New Guinea, Maldives, Solomon Islands,
and St. Kitts and Nevis (S/FIN/W/29/Rev.1). The pro posal aims at addressing the concerns of these
countries with regard to the development of international standards related to financial services, and
calls for the modification of certain GATS provisions.
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1 This report, together with the update in document S/FIN/9, complete the reporting requirement
for 2003.S/C/19
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ANNEX III
WORLD TRADE
ORGANIZATIONS/WPDR/6
3 December 2003
(03-6432)
Working Party on Domestic Regulation
ANNUAL REPORT1 OF THE WORKING PARTY ON DOMESTIC REGULATION
TO THE COUNCIL FOR TRADE IN SERVICES (2003)
1. Since the update (S/WPDR/5) to the annual report of 2002 to the Council for Trade in
Services, the Working Party on Domestic Regulation (WPDR) held two formal meetings 1 July and
30 September 2003, both chaired by Mr. Johannes Bernabe of the Philippines.  The Minutes of the
formal meetings are found in WTO documents S/WPDR/M/22 and M/23.  The next formal meeting is
scheduled for 3 December 2003.
2. Formal and informal papers have been submitted to the Working Party.  The formal papers
were circulated by the Secretariat and the European Community and its Member States.2  I nform al
papers were submitted India3 and the Secretariat.4
I. UPDATE TO THE ANNUAL REPORT OF 2002
3. The first item on the agenda of the 1 July formal meeting was the update to the annual report
of 2002 of the WPDR to the Council for Trade in  Services, circulated as S/WPDR/W/24, dated
20 June 2003.  Following comments by several delegations, Members adopted the report, with some
amendments.
II. DEVELOPMENT OF REGULATORY DISCIPLINES UNDER GATS ARTICLE VI:4
4. With respect to the development of any necessary disciplines on domestic regulation, the
Working Party further examined Japan's informal paper, Draft Annex on Domestic Regulation  (the
revised version of which was circulated as JOB/(03) /45/Rev.1, dated 2 May),  as well as a paper from
the European Community and its Member States, Proposal for Disciplines on Licensing Procedures
(circulated as S/WPDR/W/25, dated 10  July 2003).
5. Members also further reviewed the measures, including the additional examples provided by
delegations, in the informal Secretariat paper Examples of Measures to be Addressed by Disciplines
under GATS Article VI:4  (the latest version is JOB(02)/20/Rev.7, dated 22 September 2003).
                                                     
1 This report, together with the update in document S/WPDR/5, complete the reporting requirement
for 2003.
2 S/WPDR/W/24, dated 20  June 2003, and S/WPDR/W/25, dated 10  July 2003, respectively.
3 JOB(03)/192, dated 30 September 2003.
4 JOB(02)/3/Rev.6, 24.06.03;  JOB(02)/20/Rev.6, 24.06.03;  JOB(03)/126, 25.06.03;
JOB(03)/35/Rev.2, 1.07.03;  JOB(02)/20/Rev.7, 22.09.03;  JOB(03)/126/Rev.1, 22.09.03;  JOB(02)/3/Rev.7,23.09.03.S/C/19
Page 7
6. The Working Party also extensively discussed an informal paper by Singapore, GATS
Article VI:5 and its relation to the future Article VI:4 Disciplines  (JOB(03)/113, dated 11 June 2003).
7. No conclusions have yet been reached on any of the issues raised.
III. DEVELOPMENT OF DISCIPLINES FOR PROFESSIONAL SERVICES
8. Members commented on the Secretariat compilation of the results of the consultations with
international professional organizations, concerning the potential suitability of the Disciplines on
Domestic Regulation in the Accountancy Sector  (S/L/64, dated 17 December 1998) for other
professions.  The most recent version was circulated as JOB(03)/126/Rev.1, dated
22 September 2003.
9. Members also made extensive comments at the 1 July and 30 September formal meetings on
an informal paper submitted by India on recognition issues, which was subsequently circulated as
JOB(03)/192, dated 30 September 2003.  The suggest ion by New Zealand that delegations give
presentations on their domestic recognition procedures under GATS Article VI:6 was well received
by Members.
10. No further comments were made on the informal Secretariat paper Synthesis of Results to
Date of the Domestic Consultations in Professional Services  (the most recent version is
JOB(02)/204/Rev.1, dated 21 February 2003).
IV. ORGANIZATION OF THE WPDR WORKSHOP ON DOMESTIC REGULATION
11. At the formal WPDR meeting on 1 July, Members approved the revised Outline for the
workshop, circulated as JOB(03)/35/Rev.1, dated 7 May 2003, and agreed on a date of
6-7 October 2003, which was subsequently revised to 8-9 December to provide further time for efforts
to obtain funding.  At the 30 September 2003 formal meeting, Members stated they were pleased thatthe Secretariat had succeeded in obtaining some funding for developing-country participants.  Due to
the lack of hotel availability, however, the workshop needed to be postponed until a later services
cluster.
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ANNEX IV
WORLD TRADE
ORGANIZATIONS/WPGR/13
3 December 2003
(03-6420)
Working Party on GATS Rules
ANNUAL REPORT1 OF THE WORKING PARTY ON GATS RULES
TO THE COUNCIL FOR TRADE IN SERVICES (2003)
1. Since its last update to the annual report, the Working Party on GATS Rules held two formal
meetings: on 2-3 July 2003 and 1 October 2003.  Reports of these meetings are contained in
documents S/WPGR/M/43 and S/WPGR/M/44.  They should be read in conjunction with this update.
The three negotiating mandates the Working Party is entrusted with were put on the agenda of the two
meetings: emergency safeguard measures (Article X), government procurement (Article XIII) andsubsidies (Article XV).  At its meeting of 2 and 3 July, the Working Party also took stock of progress
made in the negotiations, as reflected in the report of that meeting, and subsequently reported by the
Chairman in his personal capacity to the Specia l Session of the Council for Trade in Services.
2
I. NEGOTIATIONS ON EMERGENCY SAFEGUARD MEASURES UNDER GATS
ARTICLE X
2. At the meeting of July 2003, the question of emergency safeguard measures was not
addressed.  At the meeting of 1 October 2003, delegations continued their examination of issuesrelated to the question of ESM, including desirability and feasibility.  Also, a delegation drew
attention to the usefulness of examining examples of safeguard-type provisions contained in economic
integration agreements and in Members' schedules.  As an answer to a Chairman's suggestion that
Members should examine the hypothetical example presented by ASEAN Members under the
different approaches considered by the Working Party, the Swiss delegation submitted a non-paperwhich goes through the example under approach (e) (i.e. no explicit ESM).  Various points of views,
as well as preliminary reactions were expressed.  The delegation of Thailand, speaking for a number
of other delegations, responded to questions previously asked regarding how an ESM model might
apply to a hypothetical example it presented.  These discussions are reflected in paragraphs 2-22 of
S/WPGR/M/44.
II. NEGOTIATIONS ON GOVERNMENT PROCUREMENT UNDER GATS
ARTICLE XIII
3. The issue of government procurement was not addressed at the meeting of July 2003.  At the
meeting of 1 October 2003, the European Communities explained its proposal to negotiate an annex
to the GATS that would lay down the conditions under which a number of GATS provisions would
                                                     
1 This report, together with the update in document S/WPGR/12, complete the reporting requirement
for 2003.
2 TN/S/M/8.S/C/19
Page 9
apply to government procurement.3  The EC argued that this proposal showed that an agreement was
feasible and could easily be put in place, enabling negotiations of commitments for government
procurement within the framework of the GATS.  A number of delegations commented and asked
questions, while others reserved their position for the time being.  Some delegations recalled their
views on the negotiating mandate under Article XIII, questioning the negotiations on market accessissues, and pointed out the uncertainty arising from work undertaken in other fora.  These discussions
are reflected in paragraphs 23-38 of S/WPGR/M/ 44.  Also, the Secretariat had prepared a note on
government procurement disciplines in economic integration agreements.
4
III. NEGOTIATIONS ON SUBSIDIES UNDER GATS ARTICLE XV
4. The issue of subsidies was discussed at both the meetings of July and October 2003.
Discussions focused on the issue of definition and on ways to obtain more information on subsidies in
services sectors.  Regarding the latter point, a proposal by the delegation of Chile, supported byvarious other delegations, was put forward and several Members referred to UNCTAD's work on a
study on subsidies in services sectors.  In addition, Members mandated the Secretariat to update its
previous Note on subsidy disciplines in economic integration agreements notified under Article V and
to put together a list of studies pertaining to subsidies in services sectors that have been done by other
international organizations.  These discussions are reflected in paragraphs 44-69 of S/WPGR/M/43and paragraphs 39-83 of S/WPGR/M/44.
__________
                                                     
3 S/WPGR/W/42.
4 S/WPGR/W/44.