RESTRICTEDWORLD TRADE
ORGANIZATIONS/CSC/M/11
25 August 1999
(99-3521)
Committee on Specific Commitments
REPORT OF THE MEETING HELD ON 19 JULY 1999
Note by the Secretariat
1. The Committee on Specific Commitments held its eleventh meeting on 19 July 1999 under
the Chairmanship of Mr. Juan Marchetti of Argent ina.  The agenda of the meeting was contained in
airgram WTO/AIR/1139.
I. DRAFT PROCEDURES FOR THE IMPLEMENTATION OF ARTICLE XXI OF THE
GENERAL AGREEMENT ON TRADE IN SERVICES
2. The Chairman indicated that the consultations on Article XXI procedures held over the last
two years had finally come to a fruitful conclusion and that he was in position to propose to Membersof the Committee to recommend to the Council for Trade in Services to adopt the draft procedures by
a decision.  He recalled that the draft decision by the Council was contained in document S/C/W/114
dated 12 July 1999 and the draft procedures in document S/CSC/W/21 dated 16 July 1999.
3. Before proposing to the Committee to recommend to the Council the adoption of the
procedures, the Chairman recalled that following the numerous consultations held on the question ofthe procedures for the modification of the schedules of commitments, he had undertook to provide a
note that would accompany the formal adoption by the Committee of the procedures.  [He therefore
read out the following statement:
"In the course of the work to develop procedures for the modification of schedules of
commitments, divergent views were expressed regarding the scope of the retaliatory measures
foreseen by Article XXI:4(b) of the GATS i.e. whether non-compliance with the arbitrator's
finding by the modifying Member allows or not the affected Member/s to cross retaliateoutside the services realm.  While a large majority of delegations held the view that
Article XXI made no provision for retaliatory measures to be taken outside the area of
services, some considered that there was no provision forbidding cross–retaliation.
Divergent views were also expressed on the existence of the requirement to go back to the
arbitrator before retaliation.  While some delegations considered that there should be a
mandatory provision requiring recourse to the arbitrator before retaliation in every case, other
delegations were of the view that there was no provision in GATS Article XXI requiring this
“second” recourse to the arbitrator.  Among the latter, many could accept the possibility of
having a “second” recourse to the arbitrator as an optional provision, in case an affectedMember wishes to have that recourse.
In order not to prejudge any of these positions, and to preserve the right of the parties in case
of future disputes, it has been agreed by Members to re-state the text of paragraph XXI:4(b)
of the GATS in the relevant part of the procedures.S/CSC/M/11
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This statement will be issued as an S/CSC document after this meeting."]
[Alternatively :  He then read out the this note whose text is contained in document S/CSC/W/23
dated 21 July 1999.]
4. Japan while joining the consensus made three points.  First, it recalled that its position was
that the scope of retaliation was limited to services.  Members countries should achieve a consensus
on this question including by an interpretation of the General Council that is why Japan wished that
discussion would continue on this issue in the Services Council.  Secondly, it wanted to make clear its
understanding of several articles of the draft procedures.  The title of the procedures was referring to
"Article XXI", for Japan this meant paragraphs 1, 2, 3 and 4 of Article XXI.  With regard to
paragraph 7 of the draft procedures, Japan's understanding was that the modifying Member wasguaranteed the right to negotiate with the affected  Members for the period of negotiations described in
paragraph 4.  Finally, Japan understood that these procedures would be used for the modifications or
withdrawals described in paragraph 2 of Article X of the GATS.  Thirdly, Japan wanted to make sure
that the procedure for rectifications on which a consensus had been reached, would be soon adopted
as they were complementary to the procedures for modifications or withdrawals.
5. On this last point the Chairman indicated that he was planning to continue consultation on
those procedures for rectification and to propose them to the Committee for decision as early as
possible.
6. Hong Kong, China also pledged for an early adoption of the procedures for rectification and
sought confirmation that the procedure for modification did not need more than an adoption by the
Council for Trade in Services to enter into force.  The Chairman recalled that Article XXI–5 had
given this responsibility to the Council for Trade in  Services and that therefore no further legal step
was needed.
7. The Chairman then asked the Committee to recommend to the Council for Trade in Services
the adoption of the decision contained in S/C/W/11 4 and of the procedures contained in S/CSC/W/21
annexed to it.  It was so agreed.
II. SCHEDULING GUIDELINES
8. The Chairman recalled that the relevant documents were two informal notes by the
Secretariat, Job No. 4055 "Revision of scheduling guidelines – points of emerging understanding" and
Job No. 4056 "Revision of scheduling guidelines - list of outstanding issues".
9. He suggested to address first the points of emerging understanding.  He recalled that
delegations had already agreed with the merger of the relevant part of MTN.GNS/W/164/Add.1 with
MTN.GNS/W/164.  This merger had been operated by this document.  In addition this document also
included two proposals made originally by the Secretariat in document S/CSC/W/19 and on which a
consensus seemed to emerge.  These points appeared respectively in paragraph 4, page 3 (licencing)
and paragraph 20, page 10 (combination of horizontal  and sectoral entries).  Finally, Annex 1 was
listing a series of document relevant for scheduling purposes and that the members requested theSecretariat to annex to the guidelines.
10. All delegations insisted on the preliminary na ture of their comments.  Hong Kong, China
indicated that this paper was useful as the guidelines should to be as extensive as possible.  The "new
text" on page 3 was useful but was overlapping with the agreed text on licences on page 4.  This
should be merged or redrafted.  Norway drew the at tention of the Members on the existence in the text
of outdated references such as in paragraph 6 the mention of "conditional offers".S/CSC/M/11
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11. Norway suggested that paragraph 11 of MTN.GNS/W/164/Add.1, page 5 should be placed
after paragraph 10 as paragraphs 9 and 10 should be read together.
12. On paragraph 8 of MTN.GNS/W/164/Add.1, page 10, Hong Kong, China felt that the drafting
was unclear on the meaning of "laws of general application" and on the legal consequences of such a
qualification.  The Chairman indicated that the Secretariat could provide examples of such references
to clarify the text.  Norway considered that this was not a difficult point as the GATS was considering
the measure and not the law in itself.  Hong Kong, China was still perplex in the case of  a company
law for instance. Canada asked for additional explanation from the Secretariat.  The Secretariat
recalled that this was drawn from MTN.GNS/W/164/Add.1 and that the Committee had already had adiscussion on this point (reflected in paragraph … of S/CSC/M/  dated ..).  "The Chairman suggested
that Hong Kong, China consults the Secretariat on existing examples of such references."
13. On the list of documents relevant for scheduling purposes annexed to document Job
No. 4055, Canada and New Zealand
 judged this list extremely useful.  The Chairman indicated that
two documents had not been retained because of lack  of consensus:  the guidelines for listing MFN
exemptions and the draft model schedule for mariti me transport.  The European Communities recalled
that as far as the draft model schedule for maritime transport was concerned it was true that the
ultimate version contained proposals on multimodal transport that had not been discussed in depth bylack of time, but that there was a very large consensus on the earlier version of the text, which could
be considered for inclusion in the annex.  The Eu ropean Communities sought also clarification on the
legal effect of the inclusion of those documents of varying status in the annex to the scheduling
guidelines the Chairman indicated each document retained its own anterior status, if it had any.
14. New Zealand indicated that some other relevant documents may be missing.  Colombia  saw a
contradiction between the proclaimed aim of the scheduling guidelines to clarify matters and the
additional doubts raised by the notes on the distinction between mode 1 and mode 2 in financial
services.  The chairman recalled the second of these notes - that could not be read separately from the
first one - was nevertheless containing a suggestion for scheduling and that the exhaustivity was a
condition of clarity.  Colombia reiterated its doubts underlining the difference of nature between those
notes (academic and raising questions) and the rest of the documents in the annex (Chairman's
declaration, draft model of scheduling both implying a certain consensus by Members on certain
solutions).  Norway considered that this annex was containing two types of documents:  background
documents which are in certain manner part of the scheduling guidelines on the one hand and on the
other hand examples of possible scheduling or mixes of scheduling and classificationrecommendations.  All those will have to be discussed anyway even if they are not in the end annexed
to the scheduling guidelines.
15. The Chairman requested delegations to consider if the alphabetical index should be limited to
the guidelines themselves or extended to the all the documents relevant for scheduling purposes.
16. The Chairman then opened discussion on document Job No. 4056 "Revision of scheduling
guidelines - list of outstanding issues".  He underlined that the structure of this document followed
closely the structure of S/CSC/W/19 and of Job No. 3 006, and suggested to address the issues listed in
the table of contents one by one.
17. On the question possible attachment of the guidelines for listing MFN exemptions and of their
status, Japan indicated that after careful consideration it was now against the idea of appending those
guidelines.  The United States indicated that the listing of MFN exemptions should not be discussed
under the item "Scheduling guidelines".  The Chairman recalled that this was an historical
consequence of a question raised by the Secretariat in the first document produced on the scheduling
guidelines (S/CSC/W/19) and that this item could be dropped if there was a consensus to do so.
Norway underlined that the scheduling guidelines th emselves according to their own text did not have
either a legal status, hence the question of the legal status of the guidelines for listing MFNS/CSC/M/11
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exemptions was not an issue.  Norway asked the delegations reluctant to the attachment if that
reluctance meant that this question could not be dealt by the Committee on Specific Commitments
and should be dealt elsewhere for instance in the c ontext of the review of the MFN exemptions.  For
the moment, Norway saw no obstacles in having this question discussed by the Committee, "nor to the
attachment of those guidelines, for the sake of transparency".
18. Colombia was also in favour of the attachment of those guidelines.  New Zealand  considered
that this question deserved further thoughts, on the one hand the legal status of MFN guidelines was
weaker than the one of scheduling guidelines, on the other hand they were an important document to
understand the construction of MFN exemptions, the question of the forum for that discussion was a
relevant one.  The United States indicated that it considered that the question of the scheduling of
MFN exemptions was a distinct one that could be an item of its own for the Committee.  The fact wasthat the guidelines for MFN exemptions had not been agreed and that ideally there should be an
agreed text.  The Chairman concluded that the probl em of the attachment of the guidelines for MFN
exemptions remained outstanding as divergent opi nions had been expressed on this question.  He
indicated that for the next meeting documents Jo b No. 4055 and Job No. 4056 would not be modified
in order to allow their in-depth examination by delegations.
19. On Section III "Meaning of market access restrictions", Norway expressed the view that
words such as pre–entry and post-entry should be allowed in the scheduling manual even if they are
not used in the GATS, because they are helpful clarifying questions.  Hong Kong, China supported
this view as the issues  identified by the Secretariat were real ones.
20. In the absence of preliminary comments on the other sections of the document, the Chairman
concluded that noted the various suggestions made;  for document Job No. 4055:  revision of the
outdated language by the Secretariat, displa cement of paragraph 11 of MTN.GNS/W/164/Add.1,
possible inclusion of examples of references to general legislation, merging of the two texts relating to
licencing requirements; for document Job No. 4056:  divergent points of view on the attachment of
the guidelines for listing MFN exemptions, opinion that the question of scheduling of MFN
exemption could be carried out in the context of the general work of the Committee on scheduling,
support by some delegations to clarify the meaning pre and post-entry and discriminatory and nondiscriminatory measures.  While noting this sugges tion he indicated that the two documents would not
be changed for the next meeting in order to allow their in depth examination.
III. CLASSIFICATION
21. The Chairman recalled that this part of the m eeting was going to be conducted in the informal
mode.  The details of the discussion of this last point of the agenda can be found in document JobNo. 205/Rev 4.
IV. ELABORATION OF CONSOLIDATED ELECTRONIC SCHEDULES
22. At the request of the Chairman, the Secretariat briefly presented the basic thrusts of document
S/CSC/W/22:  listing of the technical differences between the word processing capabilities of the
word processors Word and Word Perfect used for the treaty copies and those of the Sybase data base
software used for the consolidated schedules, mock schedule of an imaginary country presented in the
two versions, Word and Sybase, suggestion of procedures and calendar for the verification andprinting of the electronic schedules, description of the searches allowed by Sybase.  The Secretariat
insisted on the absence of technical alternative to th e use of Sybase available in the short term.  The
Chairman concluded that the Committee would come back to this item at its next meeting.S/CSC/M/11
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V. OTHER BUSINESS
23. Canada inquired about the state of work of the Secretariat on the relationship between old and
new commitments as suggested by Canada at the previous meeting.  Canada was not suggesting to
produce a paper for the next meeting but to revisit the issue by the autumn.  The Chairman undertook
to inscribe the treatment of this issue at the next meeting.
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