RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/S/M/11 
8 September 2004 
 (04-3791) 
Council for Trade in Services 
Special Session  
 
 
 
REPORT OF THE MEETING HELD ON 28 JUNE AND 2 JULY 2004 
 
Note by the Secretariat1 
  
1. The Special Session of the Council for Trade in Services held a formal meeting on 28 June 
and 2 July 2004.  The agenda fo r the meeting, chaired by Ambassador Alejandro Jara of Chile, is 
contained in document WTO/AIR/2345. 
2. The Chairman
 drew the Council's attention to the record of the last meeting contained in 
document TN/S/M/10.  He said that under "Other Bu siness" the Secretariat would give an update on a 
suggestion made by Australia at an earlier inform al meeting regarding the presence of capital-based 
experts in Geneva.  He suggested that the age nda be adopted with the addition of this point. 
3. It was so agreed . 
A. CHAIRMAN'S  REPORT  TO THE  TRADE  NEGOTIATIONS  COMMITTEE  ON 
30 JUNE 2004 
4. The Chairman  indicated that the Council would begin its work with this item because he was 
obliged to report to the Trade Negotiations Commit tee by 30 June.  He recalled that the General 
Council Chairman, Ambassador Oshima, and the Director-General, Dr. Supachai, had been coordinating work on a "package" for Members to consid er by the end of July that would give overall 
direction to the negotiations.  In this context, the Chairman of the General Council had indicated that 
Negotiating Groups should work on the substantive content of the July package in the areas of their 
competence.  This issue had also been raised by a number of Members at the last formal meeting of 
the Special Session.  He said that, as indicated at th at time, he had held inte nsive consultations on this 
issue, including with individual Members, in sma ll groups and in open-ended informal session.  He 
stated that the Special Session had held two info rmal meetings, the first on 6 May and the second on 
22 June in order to discuss possible recommendations  that the Special Session could forward to the 
Trade Negotiations Committee.  He thought it worthwh ile to recall that the Council had been asked to 
provide operational, rather than policy, recommendations.   
5. The Chairman stated that, on the basis of th e views expressed in these consultations, he had 
prepared and circulated a draft of a report that  he intended to submit to the TNC contained in 
document JOB(04)/86.  With respect to the format of his report, he said that the first part, "Status of 
Work", gave a state-of-play of the negotiations, to which he would add any progress made over the 
course of the meeting in order to complete the repor t.  The second part, "Future Work", provided the 
important context in which the recommendations of the Special Session should be submitted to the 
                                                     
 
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. TN/S/M/11 
Page 2  
 
 TNC.  In outlining this context, he had endeavoured  to include the elements that Members, in the 
course of his consultations, had i ndicated were important to highlight when making his report.  He 
had also sought to include language which had been  largely acceptable to Members contained in the 
so-called Derbez text.  He reiterated that his re port would be made under his own responsibility; 
however, the recommendations he would indicate in th e report were agreed la nguage.  He reiterated a 
point that he had made on several occasions in his consultations:  Members were aware that the 
discussions and a consensus on the recommendations would be made on what others had termed 
"conditional trust".  This was understood to mean that the recommendations the Council intended to 
forward to the TNC could become one part of the Ju ly package and that all delegations reserved their 
right to withdraw their support for these servic es recommendations in the TNC or General Council 
should the overall balance in the July package not be satisfactory to them.  He thought this trust was a 
fundamental element, in order to prevent the Council's work from becoming hostage to progress in 
other areas, while allowing Members to make linkag es at the TNC or General Council as appropriate.  
From his point of view, the six recommendations captured Members' positions in a balanced manner 
and it did not appear to him that, with respect to  the substance, Members' positions had diverged 
significantly.  He hoped that Members could agree to the recommendations that day.  He was aware 
that no text was perfect or could meet perfectly the interests of all Members.  As Members might have 
comments to make of a technical drafting nature, th e Chairman suggested that Members begin with a 
discussion in informal mode.   
6. It was so agreed
. 
7. Recalling the meeting to formal mode, the Chairman  indicated that some more consultations 
and redrafting would be necessary.  It did not theref ore appear that an agreed set of recommendations 
would be ready in time for the 30 J une meeting of the TNC, though he indicated that he would need to 
provide comments orally to that meeting.  He prop osed that the Council take note of his statement, 
leave this item open and revert to it later in the meeting.   
8. It was so agreed . 
9. Reverting to this item on 2 July, the Chairman  recalled that when the Council had met earlier 
in the week, the Council had moved into informal  mode in order to discuss a draft of his report 
contained in document JOB(04)/86.  He drew Memb ers' attention to a revision of this document 
contained in JOB(04)/86/Rev.1.  He further reca lled his comments earlier in the meeting that the 
report, and the recommendations attached to it, were being prepared in line with the approach outlined 
by the General Council Chairman, Ambassador Oshima , with a view to provide the TNC with input 
from the Services Council for the TNC's work on the "July package".  Based on his appraisal of the 
informal discussion the Council had held earlier in th e meeting, Members had been close to reaching a 
consensus on the recommendations, however, a little more  work had been necessary in order to fill in 
the remaining gaps.  He said that he had been e ngaged in consultations over the course of the week 
and thanked all delegations for thei r co-operation and flexibility.  On  the basis of these consultations, 
it appeared to him that the Council was close to a co nsensus.  He reiterated two points he had made 
earlier in the meeting, namely, that the report w ould be made under his own responsibility while the 
recommendations attached to the report he woul d indicate to the TNC were agreed language by 
Members and, secondly, that the recommendations had been agreed to on the basis of the "conditional 
trust", to which he had made reference at the 30 J une TNC meeting.  He said that he had provided a 
detailed oral report to the TNC that generally reflect ed the contents of his draft report and had taken 
the opportunity to outline the main elements contained in the attached recommendations.  He 
expressed to the TNC his hope that the Council would be in a position to agree to these recommendations.   
10. Turning specifically to the recommendations, the Chairman drew attention to three 
modifications to the recommendations attached to  document JOB(04)/86/Rev.1.  The first, in  TN/S/M/11 
 Page 3 
 
 
 recommendation (c), was an addition at the end of the last sentence that read ",  with special attention 
to be given to least-developed countries.".  The sec ond, in recommendation (d), the third line, deletion 
of the word "and" replaced by th e word "of" so that the phrase r ead "[...] to sectors and modes of 
supply [...]".  The third, in recommendation (f), the first line, deletion of the word "shall" replaced by 
the world "should" so that the phrase read "Targete d technical assistance should be provided [...]".   
11. The representative of Tunisia , speaking on behalf of the Afri can Group recalled that Members 
were participating in a development round known as the Doha Developmen t Agenda.  Among other 
elements, an improved participation by the devel oping countries in world trade in services was more 
than necessary in order to fulfil the objectives of the development round.  The African countries were 
encountering serious difficulties both in accessing the world market in order to export services and in 
the negotiations, including in the preparation of initial and revised offers.  Therefore, the group 
understood the importance of having a paragraph on t echnical assistance in th e recommendations.  It 
was for this reason that the African Group had pr oposed the inclusion of recommendation (f).  The 
Group would have wished to have seen a fuller and more precise recommendation that would have 
included a legally binding commitment by developmen t partners with a view to providing increased 
and targeted and technical assistance.  However, in or der to arrive at a consensus, to avoid a situation 
in which the African Group would block consensus and despite the very legitimate nature of its 
request, the Group had accepted an enormous concession in agreeing to the modification read out by 
the Chairman and which had been proposed by one of the Group's partners.  
12. The representative of the Philippines  enquired as to whether the Chairman intended to issue a 
second revision that would reflect the changes that ha d been the subject of discussion in the informal 
session.   
13. The Chairman  said that the portion of the report issued under his responsibility would be 
updated to reflect the discussions that day and, as su ch, did not need to be circulated.  He suggested 
that the recommendations could be made available if  the representative of the Philippines would find 
that useful.  As this was not the case, the Chairman proposed that the Council approve the 
Recommendations of the Special Session of th e Council for Trade in Services to the Trade 
Negotiations Committee as modified, which read: 
14. The Special Session of the Council for Trade in Services has agreed to pursue further progress 
in the services negotiations on the basis of the following  recommendations: 
(a) Members who have not yet submitted their initial offers must do so as soon as 
possible. 
(b) A date for the submission of a round of re vised offers should be established as soon 
as feasible.  
(c) With a view to providing effective mark et access to all Members and in order to 
ensure a substantive outcome, Members shall strive to ensure a high quality of offers, 
particularly in sectors and modes of supply of export interest to developing countries, 
with special attention to be given to least-developed countries. 
(d) Members shall aim to achieve progressively higher levels of liberalization with no 
a priori exclusion of any service sector or mode of supply and shall give special attention to sectors and modes of supply of ex port interest to developing countries.  
Members note the interest of developing countries, as well as other Members, in 
Mode 4. TN/S/M/11 
Page 4  
 
 (e) Members must intensify their efforts to conclude the negotia tions on rule-making 
under GATS Articles VI:4, X, XIII and XV in accordance with their respective 
mandates and deadlines.   
(f) Targeted technical assistance should be provided with a view to enabling developing 
countries to participate effectively in the negotiations.   
(g) For the purpose of the Sixth Ministerial meeting, the Special Session of the Council 
for Trade in Services shall review progress in these negotiations and provide a full 
report to the Trade Negotiations Committ ee, including possible recommendations. 
15. It was so agreed
.   
16. The representatives of Tunisia , Brazil , Thailand , European Communities , China , Philippines , 
United States , India , Canada , Japan , Colombia , Chinese Taipei , Switzerland , Korea , Australia , 
Singapore , Turkey , Venezuela , Malaysia , Peru  and Indonesia  expressed their gratitude to the 
Chairman for his extensive efforts in pursui ng consensus on the agreed recommendations.   
17. The representative of Brazil  stated that as Members had in itiated a discussion on a decision 
about benchmarks or recommendati ons to guide the future work on the negotiations, Brazil had 
repeatedly indicated its understanding of the term  "benchmark".  As opposed to others, Brazil had 
never interpreted a benchmark or recommendation as a mere synonym for "deadline".  Brazil believed 
that it was necessary to expand the lis t of items the Council had to deal  with in order to bridge the 
gaps and find the necessary equilibrium within th e GATS negotiations.  He noted with satisfaction 
that the recommendations that the Council had approve d reflected an expanded notion of benchmark.  
He recalled that paragraph (a) had a reference ab out initial offers and an additional deadline in 
paragraph (b).  In paragraph (c) Members were reiterating the call for higher quality of offers, 
particular in sectors and modes of interest to developing countries.  In paragraph (d) Members recognised the importance developing countries attri buted to mode 4.  In paragraph (e) the Council 
renewed the appeal for further engagement in addr essing rule-making within GATS.  In paragraph (f) 
was included a reference to technical assistance to  enhance the participati on of developing countries 
in the negotiations.  Finally, paragraph (g) containe d an important reference to the role of the Council 
in reviewing these negotiations.  He emphasised that  the use of the demonstrative pronoun "these" 
made absolutely clear that such a review w ould include market access and rule-making alike, 
including possible recommendations on both.  He said that Brazil had not requested a specific 
reference to work that needed to  be undertaken on classification and scheduling issues, as this went 
without saying.  There was no need to recommend a sine qua non  element for any successful 
negotiation:  a clear understanding of what was being negotiated and how commitments should be 
scheduled to ensure clarity, certainty and comparabil ity.  In this regard, he renewed the call for the 
maximisation of the use of subsidiary bodies in su pport of the negotiations.  On the deadline for the 
submission of revised offers, he said that, although the future schedule of the round remained unclear, 
Brazil had shown flexibility in accepting this r ecommendation.  However, he said that Members 
should not loose sight of the links provided by the Doha mandate among all areas of the negotiations.  
He drew Members' attention to Brazil's statement at the previous TNC:  Brazil's level of commitment in market access of the services negotiations, as we ll as the services roadmap, would need to reflect 
the movement that other Members were prepared to undertake in the areas of the negotiations where 
Brazil had a special interest, particularly in agricu lture, which by all standards was the core and the 
raison d'être of the round.   
18. The representative of Thailand
 expressed her support for the statement by Brazil.  On the 
whole, her delegation's interests were captured in the revised text, namely, ad ditional initial offers on 
the table; the establishment of a date for the subm ission of revised offers as soon as possible bearing 
in mind the other key dates of the Doha round nego tiations; the assurance of quality and commercially  TN/S/M/11 
 Page 5 
 
 
 meaningful market access commitments, particularly in modes and sectors of supply of interest to 
developing countries, which for Th ailand consisted of mode 4; a nd the commitment to intensify 
efforts to conclude the negotiations on rule-making u nder the GATS.  In regard to the latter, there was 
a clear expectation on the part of her delegation that concrete disciplines would emerge form the 
discussions on rules.  Her delegation would contin ue to seek a balanced relationship between the 
existence of rules and the level of market opening.  She also welcomed the inclusion of a reference to 
technical assistance within the meaning of Article XXV.   
19. The representative of the European Communities  reiterated his dele gation's concern and 
disappointment with the quality of many offers and he hoped that the recommendations would bring 
new momentum and ambition to the negotiations.  He  further reiterated the importance his delegation 
attached to including a date for revised offers  in the expected outcome in July 2004.   
20. The representative of China  believed the recommendations were  the first agreed contribution 
to the "July package".  China found the current draf t and recommendations to reflect the interests and 
concerns of various Members and represented the best possible compromise.  Although China found that some of the language in the recommendations wa s weak, it believed that it was the most realistic 
language at the present juncture.  China hoped th at the recommendations would be endorsed.  
21. The representative of the Philippines
 sought to offer some insights on the various paragraphs 
of keen interest to his delegation.  With respect  to paragraph (a), he took note of the flexibility 
provided to Members, particularly developing co untries, who had not yet submitted offers.  He 
thought that the language addressed the need for flexibility on account of the difficulties faced by 
developing countries.  These reasons, he noted, we re enumerated in the Chairman's report which 
provided the context for the recommendations.  He  read paragraph (c) as exhorting Members to 
ensure a high quality of offers, particularly in sectors and modes of supply of export interest to 
developing countries, which referred primarily to mode 4 and was what his delegation would look 
forward to in the round of revised offers.  Referri ng to paragraph (e), as Members were aware, his 
delegation had focused much interest on the rule -making aspect of the services negotiations in order 
to achieve the complementary balance required to  achieve an equitable result in the services 
negotiations.  His delegation inte rpreted paragraph (e) to mean that Members would certainly 
endeavour, if not commit themselves, to an effort to  conclude the negotiations on rule-making prior to 
the conclusion of the overall negotiations.  With resp ect to paragraph (g), his delegation read this 
paragraph in the same light as referred to by the representative of Brazil:  reviewing progress "in these 
negotiations" meant that all aspects of the negotiati ons would be reviewed, including the rule-making 
aspects, and at the appropriate time make any necessary recommendations on both the market access 
and the rule-making aspect of the negotiations in preparation for the Sixth Ministerial Conference.   
22. The representative of the United States  believed that the text of the Chairman's report was a 
very useful and positive document and supported the recommendations as they had been amended.  
With respect to paragraph (a), she emphasised th e United States view that Members who had not done 
so should submit their initial offers as soon as possibl e.  With respect to paragraph (b) she echoed the 
remarks by the European Communities on the impor tance of setting a date for the submission of 
revised/improved offers as part of the July package in the TNC.  She also re marked, with respect to 
paragraph (e) and negotiations on  rule-making under GATS Articles VI, X, XIII and XV, that these 
discussions were in accordance with  their respective mandates and dead lines.  In addition, she sought 
to echo comments made by the delegation of India earlier in the week underscoring the importance for 
services to receive sufficient treat ment in the General Council statem ent that would be prepared as 
part of the July package and that particular attention be paid to the form of that statement.  The United 
States remained committed to working with others as to how this would be achieved and remained 
flexible.  Nonetheless, the United States felt that at  the end of the day it was important that the 
services negotiations be recognised as a key aspect of the market access negotiations in the Doha 
Round.   TN/S/M/11 
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 23. The Chairman
 stated that, with respect to the latte r point made by the representative of the 
United States, he had conveyed it in his earlier oral report to the TNC. 
24. The representative of India  welcomed the adoption of the recommendations.  He recalled that, 
in his delegation's view, services was one of the three pillars of market access and that services 
required the same treatment as the other two.  W ith respect to paragraph (c) he noted that a 
substantive outcome and high quality of offers was referred to, particularly in sectors and modes of 
supply of export interest to developing countri es.  He echoed earlier comments by developing 
countries that, in his delegation's view, this included mode 4 as one area that had been identified by developing countries as being of particular importa nce.  With respect to recommendation (g), India 
tended to agree with others that  reviewing progress in the negotiations included both rule-making and 
market access.     
25. The representative of Canada
 said that, given the importance of services trade to productivity 
and innovation in Members' economies, his country w as of view that efforts to pursue liberalization 
should be seen as a core element of the work at th e WTO.  Canada supported efforts to ensure that 
negotiations in this area were highlighted in any description in the future programme of work.  He 
recalled that earlier in the meeti ng Canada had indicated it supported the draft Chairman's report and 
recommendations, and was pleased that all Memb ers were in a position to support the revised 
Chairman's report and recommendations.  He underlined  that, from Canada's perspective, the need for 
Members who had not submitted initial offers to do so as soon as possible, and for a date to be 
established for the submission of revised offers was of importance.   
26. The representative of Japan  reiterated his delegation's view th at it was very important that the 
market access negotiations be based on initial offe rs.  He said that, during his contacts over the past 
week, he had been encouraged by those Members who were working hard to submit their initial offer.  
Japan sought to continue discussions with those Members and hoped to see the initial offers very 
soon.  With respect to the submission of revised o ffers, he felt that this was an important point in 
formulating the future process.  His delegation was willing to consult with Members in order to come 
to a decision on this date.   
27. The representative of Colombia  said that the Council had move d ahead satisfactorily with its 
work on this point.  With respect to paragraph (a), Colombia expressed great interest in those 
Members who had not yet made an initial offer because it felt that it was important that a critical mass 
of initial offers emerge in order to made progress.  Sh e felt that all needed to participate in the efforts 
being made.  With respect to paragraph (c), Colomb ia agreed that the quality of the offers was an 
important element in order to ensure true access to markets for all Members and substantive progress 
would be achieved.  Colombia believed that the qualit y of offers was determined in direct relation to 
both greater coverage in commitments and the sector s and modes of interest to developing countries.  
This had been spelled out in presentations and requ ests made and included mode 4, which was a mode 
of supply of particular interest to Colombia.  Associating herself with the comments made by Brazil 
on recommendation (g), she said that it was fundamental  that the review of progress would take into 
consideration the question of market access in  addition to the question of rules.   
28. The representative of Chinese Taipei  said that it was not an easy task to take into account the 
many concerns and interests of Members.  With  regard to recommendation (c), she underlined the 
phrase "Members shall strive to ensure high qualit y of offers" because Chinese Taipei felt strongly 
that the quality of the offers was of greater im portance than quantity in the negotiations.  Echoing 
comments by the Philippines, she felt that effort s on rule-making needed to be intensified in 
accordance with their respective mandates and deadlin es.  She said that rules related measures not 
conducted in a fair manner could act as  a deterrent to trade.  She therefore felt that efforts to make 
progress on rule-making would contribute to the success of the negotiations in the current round.     TN/S/M/11 
 Page 7 
 
 
 29. The representative of Switzerland  assured the Chairman of his delegation's acceptance of all 
the elements contained in the recommendations th at would be accepted imminently.  Like other 
delegations, he felt that it was essential to indi cate to the governing bodies that it would be 
appropriate that the services portion of the global text under preparation be duly reflected in 
comparison to the other areas that were being handled  within the Doha Agenda.  With respect to the 
date of revised and improved offers , Switzerland felt that this date should be as soon as possible.  He 
knew from bilateral negotiations that a number of delegations were techni cally and substantively 
ready to prepare improved offers and, therefore, th ere was no need to overly postpone this date.  On 
the question of the on quality of o ffers, Switzerland was pleased to see a strongly-worded text.  All 
were aware that one of the expected problems in c onnection with the initial offers was that the quality 
of those initial offers should be raised and improved to  the same level as the best offers on the table.  
He felt that this was an important element to  avoid a levelling downwards  and ensure a levelling 
upwards.   
30. The representative of Korea  said that his delegation was pleased that elements such as initial 
offers, revised offers, quality of  offers, mode 4, negotiation on rule-making, targeted technical 
assistance and a full report for the purpose of the Si xth Ministerial meeting were included in the 
recommendations.  Korea felt that they reflected the concerns of an important negotiating group.  He 
was also pleased that the reco mmendations included improved deve lopment language in comparison 
to the first draft.  He reiterated Korea's hope th at the TNC and General C ouncil would take adequate 
and due attention of the services recommendations.   
31. The representative of Australia  believed that it was important that any July package include a 
clear reference to services and th e need for increased momentum in the services round, particularly in 
the tabling of initial offers and the submission of re vised offers.  Australia believed that setting a date 
for improved offers in July, were dates set elsewher e, would build momentum.  Quality of offers was 
clearly important if effective market access was to be achieved.  Australia had taken note of the strong interest in mode 4, and had liste ned carefully to related proposals discussed earlier in the meeting.  
However, she noted that a successful outcome in services would be one that would focus on all the 
modes.   
32. The representative of Singapore
 sought to highlight that the recommendations were but a 
means to an end, which was a successful outcome  of the DDA negotiations.  He believed that all 
Members were committed to this end.  In this co nnection, he shared the views of others that a 
palatable outcome was necessary in both the specific commitments and rule-making, as highlighted in 
paragraph (e) of the recommendations, for the suc cess of the DDA negotiations.  He pledged that 
Singapore would do its part to fac ilitate this successful outcome.   
33. The representative of Turkey  reiterated his delegation's suppor t of the initiative submitted by 
Tunisia on technical co-operation.  With respect to paragraph (b), he recalled that Turkey had submitted its initial conditional offe r on 30 August 2003 which, in its view, was a high quality offer.  
In terms of sequencing the priority of the issues, he believed that it was more important to emphasise 
the pending offers and to see them on the table as soon as possible.  He said that the July package 
needed to reflect a strong emphasis on services.   
34. The representative of Venezuela
 believed that the initial text in JOB(04)/86/Rev.1 was a good 
text and she confirmed that her delegation could accep t the modifications that had been made to it.  
With regard to paragraphs (a) and (b) she said that Venezuela had always met its international 
commitments, which included complying with the D oha ministerial mandate.  With respect to the 
question of establishing a deadline for the initial o ffers, her delegation believed that it was perhaps 
premature at the present stage of the market access ne gotiations.  As her delega tion had indicted in its 
bilateral consultations with the Chairman, events  experienced by her country since 2001 had led to 
some difficulties.  Within the framework of this  process, her government had been involved in a TN/S/M/11 
Page 8  
 
 number of institutional reforms which would make po ssible a practical assessment of the realities of 
the national market.  She did not think that it was a secret that the consequen ces of events in the oil 
industry had resulted in a decline in Venezuela's GD P that no one had anticipated.  In the light of 
these developments, the Government had found it necess ary to adopt certain measures and to revise 
the role of the private sector in sensitive areas, w hose participation needed to be somewhat limited 
and based on regulations that took  into consideration national inter ests and sovereignty.  Internally, 
there had been an obvious impact on basic servi ces for the general population with respect to 
electricity, food, gas, etc. In addition, externally, there was the responsibility of the guarantee to fulfil 
commitments entered into with certain business partne rs.  She said that this had had repercussions on 
Venezuela's active participation and involvement in the process of the services negotiations and the 
various bodies in which Venezuela had a particular  interest.  Before these events, Venezuela had 
completed more than fifty per cent of the work on the question of requests and offers, which had been 
the result of intense work and co-operation on the part of all players.  As a result, the Government of 
Venezuela found itself obliged to reformulate and redirect its procedures.  It had to examine the reality of its domestic market and carry out a diagnos is and forecast in order to ensure that Venezuela 
could make an appropriate contributio n.  However, she noted that this  would take time and resources.  
She thought it important to note that within this new direction Venezuela would include the principles and benefits granted in the GATS and the Negotia ting Guidelines.  This meant that the greatest 
possible flexibility would be neces sary in the liberalization of trade in services and respect of 
Venezuela's national policies.   
35. The representative of Malaysia
 indicated that her delegation endorsed the recommendations.  
Her delegation believed that the ability to translate the development elements in the recommendations 
into reality would contribute to the development di mension of the DDA.  She reiterated that attention 
should be given to a balanced outcome between market access a nd rule-making and that these 
negotiations needed to move in tandem.   
36. The representative of Peru  felt that the recommendations were balanced and acceptable and 
his delegation gave them its full support.  Peru in dicated that the order in which the recommendations 
were listed did not imply, in his delegation's view , any priority in terms of the importance of the 
recommendations.  He associated his delegation with  the comments made by Brazil and Colombia in 
underscoring a number of issues contained in reco mmendations (d), (e) and (g), which were quite 
obviously related to issues of development.  He recalled that in the services negotiations, as in the 
overall DDA, one of the fundamental objectives was to underscore the concept of development that 
ought to be at the centre of the negotiations.  Peru  attached great importance to mode 4 and other 
sectors of interest to developing countries.  Referring to the pending negotiations on rules and 
disciplines, particularly with respect to safeguard measures and subsidies, technical assistance, and the 
revision of the Negotiating Procedures approved by  all, he recalled that these were fundamental 
elements of the process.  With respect to a date fo r the submission of revised offers, he agreed that 
this was an important element, however, Peru felt th at it was necessary to take into consideration the 
results and process which had been made in other ar eas of the negotiations which were of particular 
importance to his delegation, such as agriculture.  
37. The representative of Indonesia  joined with others and welcomed the adoption of the 
recommendations.  In this regard, he reiterated that the negotiations  should contain a balance between 
market access and rule making.   
38. The representative of the European Communities , making supplemental points, echoed a 
comment by the United States and India on the importa nce of services being appropriately reflected in 
the July decision.  Secondly, with respect to the da te for the submission of re vised offers, he reiterated 
a remark his delegation had made on previous occasi ons that, given the constraints faced by a number 
of Members, a realistic and feasible date for impr oved offers should be three to four months in 
advance of the Sixth Ministerial meeting, as had been appropriately reflected in the Chairman's report.    TN/S/M/11 
 Page 9 
 
 
 39. The Chairman , particularly in the light of the statem ents made by delegations, felt that the 
Council had approved an im portant text and he thanked dele gations for their co-operation and 
flexibility.  He further thanked delegations for thei r kind words, but said that he had simply been a 
facilitator.  He thanked the Secretariat for its assist ance.  He had taken note of the points delegations 
had made, including those that had stressed the importance of the format of the recommendations, 
namely that services should be highlighted or give n equal treatment to that of other market access 
areas in the July package.  He indicated that he would convey these views to the appropriate 
authorities, including the Chairman of the General Counc il.  He invited the Council to take note of the 
statements made.   
40. It was so agreed . 
B. ASSESSMENT  OF TRADE  IN SERVICES 
41. The Chairman  recalled that at the last meeting, the Council had held a preliminary discussion 
on a possible follow-up symposium on trade in services to  one that had been held in March 2002.  He 
further recalled that he had raised this point for pur ely administrative reasons and, as he had indicated 
at that time, had sought to draw attention to the planning constrai nts involved in seeking funding for 
capital-based participants for any su ch event.  Based on a certain level of interest and requests for 
consultations, he had engaged in c onsultations on this point, including at an informal meeting that had 
been held on 6 May.  He said that at that info rmal meeting, Members had expressed a measure of 
hesitation in terms of the value that such an even t would add to work already being conducted in the 
Council.  A number of Members thought that, shoul d such an event be organised, it should avoid 
repetition.  In the light of this hesitation, he ha d suggested that the Council move forward on the basis 
of input provided mainly by Members, as it was not appropriate for the Chairman or the Secretariat to 
propose an agenda on its own initiative.  He informed  the Council that he was not aware of any such 
input. 
42. The Chairman further recalled that, at the l ast meeting, the Council heard two presentations 
under this agenda item, the first from the Organi zation of Economic Co-operation and Development 
on a recent study, and the second from Chinese Taipei  on its experience with the liberalization of 
telecommunications services.  These presentations had expanded on communica tions contained in 
documents JOB(03)/140 and TN/S/W/18 respectively.  As witnessed by the length of the discussion, 
Members appreciated the richness of the experien ces presented.  A number of Members had indicated 
that they might revert to the presentation by Ch inese Taipei.  As for the OECD presentation, it had 
been agreed generally that the Council might wish to  invite a representative of that organization to a 
future meeting to respond to any follow-up comment s and questions.  He invited Members to indicate 
if the next meeting would be an opportune occasion to extend an i nvitation to the OECD.  He also 
recalled that a number of ideas had been suggested to help the Council conduct its work under this 
item.  One Member had urged other Members that  had been involved with other trade-related 
technical assistance programmes to consider shari ng information on those programs, while another 
delegation suggested that a list be compiled of sectors and modes for which no communications or 
presentations had been made to date, for example in  business, audio-visual, construction, education, 
environment and health services.   
43. The representative of Hong Kong, China , in response to the Chairman's comments about the 
OECD, said he could support the suggestion made .  He drew Members' attention to a study 
undertaken by the OECD entitled "Services Barriers and their Economic Impact:  Examples of 
Banking and Telecommunication Services".  It was his understanding that the OECD had undertaken 
a study which sought to take a quantitative a pproach to measure the restrictiveness of 
telecommunications and banking services in selected ec onomies, including a number in transition.  To 
carry out this measurement, the OECD had construc ted a restrictiveness index.  He took note of the 
limitations to the methodology outlined in the pape r, however, he thought that the methodology might TN/S/M/11 
Page 10  
 
 bring new perspectives to the Council's work.  He suggested that, if the OECD were amenable, it 
could present this paper, and that the paper could be  circulated in advance of the next meeting.   
44. The Chairman
 noted that there were no objections to the suggestion made by Hong Kong, 
China to invite a representative of the OECD and to circulate the paper to which the representative 
had referred.   The Chairman invited Members to agree to this suggestion. 
45. It was so agreed .    
46. The Chairman  recalled that at the last meeting, a representative of the International Trade 
Centre had been invited to make a presentation on a pilot project the ITC was coordinating on national 
assessments of trade in services in ten countries.  He welcomed two representatives of the ITC, who 
were the Director of the Division of Product and Market Development and the Chief of the Trade in 
Services Section.  He said that the programme w as funded by the Government  of Canada and sought 
to help increase the participation of these developi ng countries in trade in services.  In October 2003, 
when the same representa tives had been the guests of the Council, they had outlined the methodology 
employed to conduct these assessments.  As he re called the presentation had lead to an interesting 
discussion with numerous questions being posed by Members.  The Council had invited the ITC to 
this formal meeting in order that its representatives  might share their insights into the results of the 
pilot project and, especially, the success of the methodology employed.  He recalled that the Council at its previous meeting had agreed that the presentation would relate to the methodological aspects of the assessment only and not to the c ontent of the reports produced.  He pointed out that the documents 
and reports prepared by the ITC had been done  under its own responsibility and without any 
involvement of the WTO Secretariat. 
47. A representative of the International Trade Centre
 thanked the Council for the invitation to 
discuss progress in the ITC Project to Promote Greater Participation of Developing Nations in the GATS.  He said that the project involved ten bene ficiary countries and had been undertaken between  
autumn 2003 and May 2004.  He said it was a pilot project that had used portions of the ITC's technical assistance programme in collaboration with the WTO.  He said local missions in Geneva 
had also been involved throughout  the programme and that the objective of the presentation was to 
share the outcomes and recommendations of the work.  In this regard, an in-depth survey had been 
undertaken with each of the beneficiary countries  to determine its benefit, follow-up and any 
suggestions.   
48. A representative of the International Trade Centre, reviewing the process of the project, said it 
had involved the following steps:  service sector  capacity study template, a national consultant 
recruited to undertake local research, consultatio ns with the private sector, analysis of input, 
recommendations linked to private sector inputs, the provision of final reports and a mission to Geneva involving the ITC and the WTO.  The latter had involved working sessions on economic 
development models and services trade liberalizat ion; mode 4 issues and links between modes 2 
and 3.  Positive linkages had been observed in the information sharing among participants.  The 
participants had also had a small group meeting to discuss the implications of the reports and answer 
questions and individual meetings with WTO staff.  Sector specific briefings had also been arranged.  
The outputs of the project were ten country-specifi c and confidential reports produced in April 2003, 
as well as some policy recommendations.  The struct ure of each report included sections on:  current 
services exports, domestic capacity building for servi ces exporting, the support needed to increase 
trade in services, linkages with the services negotiati ons, an initial assessment of trade in services, 
offensive interests in services trade negotiations, a nd defensive interests in services negotiations.  She 
said that an in-depth evaluation had been conducted w ith the beneficiary countries to help guide future 
projects.  The evaluation of the project included thr ee elements:  the report, the mission to Geneva and 
future progress, including by maintaining contact  through a network called "services export net".  
Turning to the highlights of the evaluation of the report, she said that six of the respondents had  TN/S/M/11 
 Page 11 
 
 
 indicated little awareness that some 40 to 60 ser vices were being exported,  had found this new 
awareness helpful, had identified modes for the expo rt of services, and suggested ways to approach 
the negotiations.  In response to a question on the impact that the report would have on their conduct 
in the requests and offers process, six said they would use the report as a decision-making tool and 
four as a reference document.  In response to a question as to whether it would change the way in 
which the country would participate in the nego tiations, seven responded favourably.  All responded 
positively to a question on the usefulness of  the offensive and defensive negotiation 
recommendations.  Eight had indicated they had shared the report with other parts of government while the remaining two were still considering this  possibility.  Seven suggested that the assessment 
should be deepened in terms of the difficulties f aced by exporters, current regulatory frameworks and 
service sector performance before and after lib eralization under the GATS.  She said that one 
recommendation would be to increase funding to allo w for such a deepening.  Turning to the second 
part of the evaluation on the mission to Geneva, al l found that it had been useful in providing a 
refresher on the GATS, on the negotiations and on the submission of offers.  The majority had also 
found the group sessions useful, though some had recommended more emphasis be placed on the 
challenges facing developing countries, on schedul ing techniques or on a negotiation simulation 
exercise.  The participants had found useful the presentations on financial and telecommunications 
services, the individual meetings with WTO staff, and the update on the negotia tions.  Suggestions to 
extend the time allocated to these meetings and allow for more specialised briefings were made.  The 
representative then outlined the next steps that the participants had indicated  they would take to 
follow-up on the report, including with respect to th e request-offer process, the preparation of offers, 
further consultations and preparation for the on-goi ng negotiations.  All of the respondents indicated 
that the mission had assisted them in thinki ng through issues related to other services trade 
negotiations (such as regional trade agreements) and that overall the initiative had been useful in 
providing a quantitative approach to the negotia tions and a reminder of the importance of 
participating in the request and offer process.  Turn ing to the third part of the evaluation on how to 
move forward, a few indicated that they might requi re some detailed additional information in certain 
areas.  She said that policy suggestions had also  been collected that were classified under three 
rubrics:  domestic policy issues, domestic regulati ons and services trade negotiation-related.  On the 
latter, some of the issues identified included the n eed for requests to trading partners for temporary 
business entry, the need to negotiate mutual recogn ition agreements and the need for bilateral trade 
statistics by mode of supply.  The recommendations that were being made included a deepening of the 
assessment (using a GATS consultation kit and thor ough a strengths-weakness es-opportunities-threats 
analysis, which had made one report stronger than the others), a clear link between trade promotion 
and policy, and longer consultati ons in Geneva.  She said that the additional funding for this 
deepening would be minimal.  She concluded that the new initiative had been useful for all of the 
participants.  She again thanked Canada for its contribution and the WTO for its support.  She said 
that new projects funded by the European Communities would be undertaken in Peru, Colombia, 
Ecuador, Djibouti and Mozambique.  There were al so planned activities in Malawi, Zimbabwe and 
Swaziland.   
49. The Chairman
 thanked the speakers for their presenta tion and noted the increased awareness 
that the project had given the participants of their export markets and of the linkages with the 
negotiations.   
50. The representative of Canada  thanked the ITC for its work on the project and the presentation.  
He said he had taken note of the elements that the presentation had identified as having worked well 
and those elements that could be improved in th e future.  Canada invited others who had been 
involved in technical assistance to indicate some of  their experiences so that the kind of assistance 
delivered would be further improved.  He encourag ed any Member involved the project to reflect on 
its direct experience.   TN/S/M/11 
Page 12  
 
 51. The representative of Jordan
, noting that Jordan was one of the beneficiaries of the project, 
expressed his Government's sincere gratitude and appreciation to the Government of Canada for 
funding the technical assistance project, the ITC and the international expert involved.  He said that 
the paper would assist Jordan in its participation in the negotiations, and that the project could be 
expanded and deepened.  He felt it was an excellent  basis for a wider study on assessment to give a 
full picture of the impact of liberalization in the services sector.  A follow-up to the project would be 
needed in order to have a full assessment and he  indicated that his delegation would discuss these 
issues bilaterally with the ITC.  He called on othe r potential donors to follow Canada's example in 
order to involve more developing countries in a similar project.  He confirmed that the project had assisted Jordan in the on-going preparation of  its offer and would help it formulate requests 
subsequent to the submission of improved offers.  
52. The representative of Jamaica
, noting that her country was a participant in the project, 
expressed Jamaica's appreciation to the Government and Canada and the ITC for the financial funding 
and the technical support they had provided respectivel y.  Jamaica attached importance to the project 
for two reasons.  Firstly, the initiative was viewed as a means of implementing Article XIX:3 of the 
GATS that required that an assessment be conducte d of trade in services in overall terms and on a 
sectoral basis.  This was reinforced by paragraph 14 of the Negotiating Guidelines which stated that 
the negotiations would be adjusted in light of the results of the assess ment.  She said that the issue of 
an assessment of trade in servi ces was critical to developing countries since, unless there was 
knowledge of the national situation in terms of the capacity of the domestic services sector and their 
development, the effective participation of deve loping countries in the negotiations could not be 
possible.  Secondly, she said that the project ai med at undertaking national assessments that could 
allow Members to identify their interests in the ne gotiations, obstacles faced in export market, and the 
sectors that required further strengthening of domestic capacity.  In this regard, she said that it was fitting that the ITC had been chosen to lead the pr oject given its role as a trade support institution.  
Noting that the project had been undertaken agai nst the background of the on-going negotiations, 
Jamaica had found useful the findings of the report.  She said that the results of the report would be 
taken into account in Jamaica's preparations for participation in the services negotiations.  She 
reported that the Jamaican participant had found th e project quite useful and she hoped the knowledge 
gained would enhance Jamaica's participation in  the services negotiations.  Jamaica hoped that 
funding would be secured in order to continue the pr oject as this would provide for its refinement and 
development and allow the partic ipation of other developing countries.  She indicated that her 
delegation was open to addressing bilaterally any further enquires delegations might have.   
53. The representative of Trinidad and Tobago
 thanked the ITC for their presentation and 
expressed appreciation to the ITC for undertaking th e exercise, the WTO for its collaboration and the 
Government of  Canada for its funding.  She said that a very useful paper had been produced and elements of it could serve to guide, to some ex tent, her country's approach to the negotiations, 
including when examining services with high expor t potential, services requiring foreign investment 
and sensitive services sectors.  One of the expected  outcomes was that the project would assist the 
Members in the elaboration and submission of their offe rs.  In this regard, the project had been useful 
in pointing to a number of areas that needed to be  taken into account before Trinidad and Tobago's 
offer could be submitted.  While Trinidad and To bago was seeking to submit its offer as soon as 
possible, some consideration might be given to  reviewing its draft offer in the light of 
recommendations of the report.  One element that could have been included was the summary of the 
services sector performance prior and subsequent to  liberalization under the GATS.  Having said this, 
she was aware of the constraints of the project and the assessment.  Her delegation commended the ITC for the project and hoped that another cycle would be undertaken to assist more developing countries.   
54. The representative of Barbados
 thanked the ITC for its presenta tion.  She said that, as one of 
the beneficiary countries of this project, her de legation sought to place on record its sincere  TN/S/M/11 
 Page 13 
 
 
 appreciation to the ITC and Government of Cana da for their coordination and financial assistance 
roles respectively.  She echoed comments by Jamai ca in terms of the importance that Barbados 
attached to the assessment and esp ecially in fulfilling the mandate set out in the Negotiating 
Guidelines.  She said that since the completi on of the assessment phase, Barbados had been 
undertaking the results of the study.  Preliminary st udy had indicated that the exercise had been useful 
in helping Barbados develop a mo re coherent information base on  its services export capacity, with 
particular attention to sectoral areas of strength and th ose in need of further development.   The results 
of the study would also serve as a guide for the stak eholder consultative process and by extension, the 
refinement of Barbados's nego tiating positions.  While acknowledging that the project was a pilot 
project and understanding that the main focus w as on highlighting services capacity, she felt that a 
longer timeframe and wider focus might allow for an assessment of how previous commitments had 
impacted on the performance of the services sector.  W ith respect to the workshop, she felt it had been 
useful and relevant complement to the exercise and had started the process of moving beyond the conclusions of the study to concrete action.  She recommended, however, that additional time be 
allocated to this phase.  She looked forward to c ontinued follow up and co-operation with the ITC on 
the project.  
55. The representative of Venezuela
, noting hers was one of the beneficiary countries, expressed 
her thanks to the Government of Canada for its important contribution and to the ITC for its work.  
For Venezuela, the results of the study on the va rious services sectors represented a basic tool to assist 
its practical reflections on its needs and how to strengthen services sectors in its market.  The report would contribute to the task in which her Govern ment was involved, namely, a diagnosis of the 
present market situation in Venezuela.  She echoed comments by Jordan with respect to a suggestion 
for a follow-up to the project which she felt would be  a good basis for work.  She also felt that other 
countries should contribute to similar projects since greater participation of developing countries 
would contribute to work under the GATS.  
56. The representative of Peru
 expressed his sincere gratitude to the Government of Canada for 
its support and to the European Union for the contribution they were making that would build on the 
work already undertaken in Peru.  He thanked th e representatives of the ITC for their presentations.  
He said that the assessment and the workshop ha d yielded useful tools and that one aspect in 
particular, the raising of the level of awareness of e xperts in capital and the private sector, had been an 
important element of the work carried out.  He thought that the ITC had contributed to strengthening negotiating positions.  He recalled that Peru's initial offer had been made in 2003 after a major effort.  
Nothing that the assessment for trad e in services in Peru had come subsequent to the submission of its 
initial offer, he thought that the results of the report assisted Peru by augmenting its ability to improve its services sector.  He exhorted other developing countries to continue to take advantage of the 
project which would cont ribute to progress.   
57. The representative of Switzerland
 recalled that his country had been traditionally a 
contributor to the ITC and, as demonstrated by the presentation, the products it delivered were 
convincing.  He expressed gratitude to the delega tion of Canada for the provision of funding, the ITC 
for its work and the countries that participated for the efforts they had made.  Turning to the 
presentation and the comments made, he thought there was no doubt that both the choice of the ITC to 
oversee the project and its choice of methodologies had been wise.  It was important to see the project in the context of the on-going assessment since it demonstrated that this mandate was being actively 
addressed.   Turning to a few questions and referring to  export flows, he commented that this part of 
the assessment was important because of its relation to GATS work on requests and offers, but also 
because the information was useful to national admi nistrations.  He recalled that the presenter had 
indicated that export flows could go unnoticed a nd that decision makers had discovered new export 
markets.  He enquired as to whether any patterns had been observed in the information deficiency 
about the perception of exports, and specifically, he asked if any geographical patterns, in terms of 
regional markets versus very remote markets, had been observed.  He noted that Switzerland in the TN/S/M/11 
Page 14  
 
 1990s had had some bias in business and policy circl es regarding the patterns of export flows.  He 
also asked if there were patterns in terms of mod es or sectors, for instance, that mode 2 and modes 1 
and 4 flows could go more easily unnoticed.  He thought  that this information could be useful so that 
any possible systemic biases could be identified in future work.   
58. The representative of Tunisia
, thanking the ITC, noted that the interested parties were 
satisfied with the programme.  He sought more in formation on the programme, and specifically on the 
promotion of exports and the improvement of th e participation of deve loping countries in the 
negotiations.  He invited other pa rtners from developed countries to follow Canada's example so that 
other developing countries, and particularly the African countries, could participate in such a 
programme, as they were experiencing considerable difficulty in participating in world trade in 
services as well as in negotiations in services.  His c ountry had asked officially to participate in the 
programme and he enquired into this request.  He thought it disconcerting that only one African 
country had presented its initial offer.  He indicated  that this type of programme fell within the 
framework of 'targeted technical assistance programme s' which were referred to in paragraph (f) of 
the recommendations adopted earlier in the meeting.  Noting that these recommendations would be 
forwarded to the TNC, he urged Members to make e fforts to find other targeted technical assistance 
programmes.   
59. The representative of the United States  commended the ITC for its work on its innovative 
services pilot project as well as the countries that had participated.  She expresse d gratitude to Canada 
for providing funding and taking a leadership role in  enabling the roll-out for this project as well as 
the European Communities for its fo r its support for a new project.  She said that the United States 
was in the final stages of discussions to fund projec ts in additional countries.  She  believed that the 
project and the related work to promote the ability  of developing countries to conduct assessments of 
their services capacities and to determine their prior ities in the negotiations was an important part in 
ensuring broader participation in the request-offer process and in the negotiations overall.  She felt 
that the work and the studies were an im portant contribution to the negotiations.   
60. The representative of Chinese Taipei , thanking the ITC for its presentation, found it 
encouraging to learn that Canada had provided fund ing to the beneficiaries through the ITC to assist 
them in making assessments and preparing their initial offers.  Chinese Taipei appreciated the value of 
technical assistance for developing Members and recognised its importance in achieving a full understanding of the GATS structure.  She said it had been her experience that it could be difficult to 
accommodate all the legal requirements in the prepara tion of an initial offer.  She expressed gratitude 
to Canada for its initiative and to the European Communities for its announcement.  Turning to her 
questions on the ITC presentation and noting that the representative had indicated that 40 per cent of services exporters were unaware that they were c onducting export activities, she enquired about the 
patterns, methodology and modal appli cations that had been used to draw this conclusion.  Secondly, 
noting that references to the active participation in  the negotiations had been made from the exporter's 
perspective, she noted that the input of importing service providers was very important to stimulate 
economic growth and asked if any contribution in th is regard had been observed by the exporter.   
61. The representative of Rwanda
, thanking the ITC for its presentation, noted that the 
beneficiaries had reaffirmed the benefits of the project.  He expressed his gratitude to Canada for 
having funded the project and encouraged others to  do likewise in order to allow more Members to 
benefit.  He appreciated the effort of the Eur opean Communities to finan ce a new project in ten 
countries and had learned with satisfaction that the United States was also discussing with the ITC a 
new project.  He echoed the remarks by the repr esentative of Tunisia abou t the vulnerability of 
African States and the need for them to benefit fro m such projects, not only from trade in services in 
general but also to be sufficiently integrated into the negotiating process.  He hoped that Rwanda 
would be able to benefit from the project.  He sai d that he had had informal discussions with potential 
donors and hoped Rwanda would be able to benefit.    TN/S/M/11 
 Page 15 
 
 
 62. The representative of the International Trade Centre , thanking Members for the comments, 
expressed her hope that the project would continue.  On the question of the lack of awareness of the 
services export capacity within countries, she said th at she had not observed any patterns, including 
among least-developed countries, developing countri es and developed countries.  Often companies 
did not report information to governments because reporting was not specific to services.  
Government assistance programmes such as at trade shows or use of an agent or distributor was 
biased towards goods; hence, service providers we re not working at significant levels with 
government.  Many industry associations that be longed to different umbrella organisations (as 
opposed to solely the chamber of commerce) we re not involved in showcasing services capacity 
globally.  Their focus tended to be domestic, a nd often they had no export support programmes for 
members, for example, leading trade missions, an export committee, entering into friendship 
agreements, etc.  For this reason, the ITC's co re technical assistance was focused on government, 
small businesses and their associations in order to in crease awareness.  She confirmed that the lack of 
awareness was widespread, although she said that the GATS was cont ributing to increased awareness 
of the importance of services.  She said that th e ITC provided technical assistance to over 1000 SMEs 
in developing countries each year, which also help ed contribute to this awareness and on which export 
development strategies were built.  In response to the question from Tunisia, she said that the project 
had targeted one country in Africa and said th at other projects had involved 11 other African 
countries, and possibly another 5 countries in 2004.  With respect to the question on the relationship 
between imports strengthening exports, she said that ITC technical assistance often clustered developing countries that were susceptible to trade with one another.  Industry associations were 
brought together with the hope that they might see areas for co-operation or importing services from 
neighbouring countries.  She said that any additio nal information Members might want could be 
addressed bilaterally. 
63. The second representative of the International Tr ade Centre also expressed his appreciation 
for the statements that had been made and had no ted the suggestions put forth.  Referring to the 
workshop that had been conducted, he said that he had received, without exception, extremely 
positive feedback from this workshop which had reor iented thinking on the request-offer process.  He 
thanked the participants for their efforts.  He hope d that the project had modestly contributed to the 
negotiating process.  He indicated that the ITC remained open to these types of projects and relied on 
funding from Members for projects and he thanked th ose Members who had made funding available.  
Recalling a comment made by one delegation at the October 2003 meeting on the sustainability of the 
comment, he referred to the Services-export-net that  sought to keep beneficiary countries in contact 
through a services network.  It foresaw annual m eetings and endeavoured to contribute to the 
sustainability of the programmes.     
64. The Chairman
 thanked the representatives of the ITC for their substantive and interesting 
presentation.  Noting that the project was a pilot project, he encouraged th e ITC to continue and 
improve its work.  He said that the need for more funding had been highlighted and noted references 
to forthcoming funding.  It had been observed th at the programme was a useful tool for trade 
liberalization and for the participa tion of developing countries in the ne gotiations in the context of the 
assessment.  He recalled the gratitude expressed to  Canada and the European Communities for the 
funding provided and to the governments that had par ticipated in the projects.  He invited the Council 
to take note of the presentation and the statements made. 
65. It was so agreed .   
C. PROPOSALS  RELATING  TO THE  NEGOTIATIONS  UNDER  ARTICLE  XIX  OF THE  
GATS 
66. The Chairman  recalled that at the last meeting the Council had held a preliminary discussion 
on the basis of a non-paper on Logistics Services from a group of Members.  In this regard, he drew TN/S/M/11 
Page 16  
 
 the Council's attention to a formal communi cation on Logistics Services from Australia, 
Liechtenstein, Mauritius, New Zealand, Nicara gua, Switzerland, Chinese Taipei and Hong Kong, 
China contained in document TN/S/W/20.  He furt her drew Members' attention to a recent joint 
statement on the Liberalization of Mode 1 Unde r GATS Negotiations from Chile, India and Mexico 
contained in document JOB(04)/87.  
67. The representative of Switzerland
 noted that many Members had been part of the logistics 
initiative because it covered a wide universe of servi ces.  He said that the logistics chain consisted of 
any chain between two points in the world that invol ved many different logistics services.  This was 
an international chain because the goods transported moved across borders.  He recalled that the paper 
had been distributed as a room document at the last  meeting and he thanked Members for their rapid 
and substantial remarks and noted the important discu ssion that had occurred at that time.  He recalled 
that an open-ended friends meeti ng would be held in the near future at which there would be 
discussion of the advantages of the approach outlined in the communication.  The topics that would be 
discussed included:  the benefits of freight lo gistics for economic development; discussion of the 
value of GATS commitments on freight logistics for logistics suppliers, exporte rs and importers;  the 
checklist as a tool to negotiate liberalization of frei ght logistics services, its aims and its distinctness 
from initiatives which were closely linked; and a qu estion and response session.  He noted that the 
paper had been presented by Members from different continents, of all leve ls of development and 
with different geographical characteristics.  
68. The representative of India , introducing the joint statement on the liberalization of mode 1 on 
behalf of Chile, India and Mexico, apologised for th e lateness of the submission and said that this 
topic had not received the attention it deserved.  He said that cross-border supply was fast emerging as 
an important mode of delivery of a wide range of services growth driven by technological developments.  These developments had spurred the growth of exports of IT services and the whole 
range of Business Process Outsourcing (BPO) that nu merous studies had demonstrated was beneficial 
for both sides.  It was the sponsors' view that ex isting schedules of commitment s as well as the initial 
offers in modes 1 and 2 were limited and uneven.  The emergence of this new phenomenon had led to 
certain backlash.  He said that attempts should be ma de by all Members to lock in the current liberal 
regimes in modes 1 and 2 in the negotiations in order to prevent future such actions.  He also realized 
the legitimate concerns regarding commitments in cross-border supply in certain specific sectors and 
the appropriate flexibility for individual devel oping country Members. The importance of policy 
space for domestic regulations in pursuit of leg itimate objectives was also recognized.  The sponsors 
believed that this was an important market access is sue that needed to be suitably addressed in the 
Special Session.  It was their belief that the nego tiations based on the existin g bilateral request-offer 
approach alone might not deliver broad based commi tments across a wide range of relevant service 
sectors.  Given the uncertainty regarding treatment of electronic delivery of services as mode 1 or 
mode 2, the sponsors believed that the most prac tical way forward was to obtain similar level of 
commitments with respect to both modes in a large number of service sectors and activities. He said 
that these elements combined called for special atte ntion to be paid to this mode and for creative 
approaches for broader and deeper liberalization.  The group hoped to follow-up with more specific 
negotiating proposals along these lines.  They l ooked forward to constructive engagement by 
Members on this issue.  
69. The representative of the United States
, taking note of India's comments on modes 1 and 4, 
said that attention should be given to modes 2 and 3 as well.  He noted that all modes of supply were 
important and crucial to the negotia tions and he urged discussions on all aspects.  With respect to the 
logistics issue addressed by Switzerland, he r ecalled that the United States had welcomed the 
submission of the joint paper at the last Special S ession and had noted that there were many aspects of 
it that the United States could support.  He noted th at the United States had since joined the logistics 
services friends group and had suggested that the gro up hold an open-ended meeting with a particular  TN/S/M/11 
 Page 17 
 
 
 focus on the development benefits of liberalization of  trade in logistics services and encouraged full 
participation in the meeting.   
70. The representative of Switzerland , referring to the intervention by India, welcomed a good 
initiative to remind Members of this mode of delivery.   He recalled that Switzerland was interested in 
all modes of supply, including mode 3.  He agreed that it was a good idea to stress mode 1 at the 
current stage, to encourage Members to give consideration to mode 1 and mode 2 and make 
commitments in their initial or improved offers.  He shared the view that, for substantive and practical 
reasons of distinguishing the two, it was appr opriate to recommend that Members had similar 
commitments in mode 1 and mode 2, and prefer ably full commitments.  Switzerland had found few 
instances where a differentiation between the two was wa rranted.  He noted that in reality, mode 3 and 
mode 4 delivery were often related to mode 1 and mode 2 delivery.  He said that all worked to the 
same end of enhancing trade in services.  Switzerla nd welcomed the paper, which he took as having 
been submitted in the context of the request-offer process.  
71. The representative of Japan  shared the view that logistics were an important part of the 
liberalization of trade in services and would contribute to the welfare of services providers and 
manufacturers through smooth trade in goods.  He fe lt that an important element was maritime 
transport.  He noted that multimodal and maritime services were related topics and he said that, at an 
appropriate time, the maritime friends  would report to the Council.  Noting that the main intention of 
the logistics paper was to capture a wide range of services and ensure liberalization, he felt it was important to recall the scope of the GATS and, in th is context, he noted that the proposal contained 
some services that were not within the scope of  GATS, notably air traffic rights.  Although this 
reference might not be appropriate, he was willi ng to discuss the matter in the announced open-ended 
friends meeting.  With respect to the initiative on m ode 1, he welcomed the joint statement and shared 
the view that it was important, in particular given the development of IT technologies.  He said that 
paragraph 4 of the statement referred to a negotia ting technique:  "the negotiations based on the 
existing bilateral request-offer approach alone ma y not deliver broad based commitments across a 
wide range of relevant service sectors which may be needed for overall growth of the services 
sectors."  He enquired as to what the sponsors of the joint statement meant by this and expressed 
Japan's willingness to participate in any political or technical discussions on this point.   
72. The representative of Australia
, seeking to follow-up on logistics proposal and recalling that 
her delegation was a sponsor, said that freight logistics was very important because it made up a strikingly large proportion of economic activity.  In  developing countries in particular, figures from 
independent authorities indicated that some 40 per cent of the costs of goods were logistics costs 
whereas in developed countries the figure was some 20 per cent.  Given the importance of these 
figures, she felt logistics services deserved attentio n.  The key element of the proposal was that 
movement and storage of goods needed to be tho ught of in a "whole of supply chain", which was how 
industry thought and how governments had started to think in order to maximise the efficiency of 
their economies.  Focussing solely on individual transport modes or facilities was no longer sufficient 
and did not take into account the possibilities and o pportunities available.  She emphasised that, while 
the sponsors were calling on Members to have an ey e to the importance of the whole of the supply 
chain for freight, they were not suggesting that fu ll commitments needed to be made on all elements 
of the checklist.  Rather, the checklist was a fra mework within which Members could consider 
commitments in recognition of the importance of enab ling this whole of supply chain approach to the 
movement of freight.  Referring to a point raised by Japan regarding mention of services outside of 
the GATS, notably the air transport sector, or to a checklist of sectors to which Members would be 
unable to fully commit, the sponsors urged Member s to structure their measures with a view to 
efficiency and minimal disruption to  the rest of the supply chain.  Referring to a further point raised 
by Japan and the relationship to multimodal activities in maritime, she did not see competition 
between work in that area and work on freight logistics, and indeed thought they were TN/S/M/11 
Page 18  
 
 complementary.  It was her delegation's intention to wo rk with Japan and others that had an interest in 
multimodal and maritime.   
73. The representative of Nicaragua
, echoed comments by Switzerland and Australia on the 
importance of achieving more progressive liberaliza tion in logistics and transportation services.  
Nicaragua held the view that this was particular ly important for developing countries since they had 
an exporter's perspective and sought to develop thei r resources.  With respect to the joint statement 
presented by India, Nicaragua considered it important to emphasise the relevance of these modes of supply.  He thought it was particularly important to  consider these modes in the context of tourism.  
He recalled that Nicaragua, along with other de veloping countries, had proposed progressive 
liberalization in the tourism sector.  He felt that th ere were many barriers, including those horizontal 
in nature, in mode 1 and mode 2, which rende red difficult the open supply of tourism and hotel 
services.  Nicaragua had been developing a level of  competition in tourism and related services which 
it hoped would benefit a growing segment of its pop ulation.  He thought that these proposals would 
lead to a discussion to promote further liberalization. 
74. The representative of Hong Kong, China
 said he looked forward to further discussion on 
logistics in the announced open-ended meeting.  He echoed the comments by Australia as to the 
relationship of the checklist and some of the other ar eas alluded to by Japan.   He took note that there 
were significant synergies between the logistics a nd other initiatives being pursued.  He sought to 
highlight the holistic view that the checklist took on  the whole range of services in the whole chain of 
supply of logistics services.  Instead of focussing on one mode of supply or transport, by way of the 
structure of the checklist, the fri ends were attempting to convey a broader view of the services 
encompassed in logistics and how greater liberaliza tion would bring benefits to all Members.  He 
underlined the relevance of the multilateral negotiations to logistics liberalization.  He noted that the 
discussion did not refer solely to autonomous liberali zation to reap the benefits of better and more 
efficient logistics services, but also aimed at a trade-off on concessions in the round in order to 
maximise the liberalization throughout the whole l ogistics chain.  He looked forward to logistics 
liberalization on both a domestic and global basis.  Tu rning to the joint statemen t introduced by India, 
he welcomed it and supported its thrust, especially the drawing of attention to services being provided 
across the border, but he noted that the statement had also referred to mode 2.  In Hong Kong, China's 
view, both of these modes were important, and the growth in the supply of these services had been 
brought about by technological development and the increase of modern enabling services, such as 
telecommunications.  He saw modes 1 and 2 thus as an important part of the negotiations apart from 
mode 3 and mode 4.  He took note that the current  regimes in modes 1 and 2 in many countries were 
relatively liberalised in comparison to other modes of supply and he supported the call to make use of 
the current round to lock in the current liberal regi mes and to guard against any protectionist tendency 
that might arise from the increased supply of these services.  Hong Kong, China also recognised the 
need for proper regulations when liberalising in  mode 1 and mode 2, and thought it might be 
particularly important for these two modes given the cross-border nature of the service and the 
location of the service supplier outside the territory.   He recognised that regulations could be used to 
pursue legitimate policy objectives, such as consumer protection, which was a poi nt all should bear in 
mind both in pursuing market access commitments a nd in formulating regulatory disciplines in the 
on-going work under Article VI:4.  He noted the re ferences in the joint statement regarding the 
possible 'harmonization' of commitments across mode  1 and mode 2 in order to address uncertainty 
regarding the treatment of electronic delivery of services.  He was open to ideas that would help 
address the question of how electronic delivery of services should be treated under the GATS.  From his perspective, he sought a technique to schedule commitments that would enable electronic delivery 
of services to be provided with clarity and certainty.  He thought that the suggestion to have a similar 
level of commitments in mode 1 and mode 2 wa s practical, though he did not rule out other 
approaches, such as a common understanding among Memb ers as to how services could be treated in 
the current scheduling approach.    TN/S/M/11 
 Page 19 
 
 
 75. Regarding the joint statement from Chile, Indi a and Mexico, the representative of Argentina  
said Argentina agreed with the ideas expressed therein.   He thought that mode 1 supply of services, 
along with mode 4, was one of the modes of suppl y where developing countries would be able to 
participate in world trade in services and hence me et one of the GATS objectives, namely the growing 
participation of developing countries.  He had recognised in the communicat ion the concern for the 
need to provide for enough space for public polic y implementation and development of domestic 
regulation in this mode of supply.  Technological  development, which made it more possible to 
deliver services in mode 1 and mode 2, meant that domestic regulation often became obsolete.  From 
this stemmed the concerns of deve loping countries to ensure flexibilit y to apply new regulations in the 
modes of supply.  The document also recognised th at mode 1 delivery occurred in a broad range of 
services sectors and it also referred to IT services and business process services.  He asked the 
submitters whether their statement applied specifi cally to those sectors where they sought new 
commitments and in which sectors they thought that the possibility for services exports in mode 1 existed.  It appeared to him that, as opposed to mode 4, regulation in these sectors would require more 
targeted sector specific action rather than horizontal approaches.   
76. The representative of New Zealand
, referring to the logistics services checklist, noted that 
New Zealand had become a co-sponsor of the docum ent since it had been circulated as a room 
document at the last meeting.  The reasons for this were that there were very  important benefits to 
whole economies from competitive and efficient logisti cs services that reduced costs for exporters and 
ultimately for consumers.  As a considerable goods  exporter, New Zealand benefited significantly as a 
user of efficient logistics services.  She urged Members to attend the annou nced open-ended meeting 
on the communication.  Referring to the statemen t on mode 1, she said her delegation attached 
considerable importance to cross-border supply.  Recent technological developments had enabled 
New Zealand to expand its exports in this mode of  supply considerably.  New Zealand believed that 
progressive liberalization in this mode of supply, as in the other three, would be an important outcome 
of the negotiations and was an appropriate item for discussion by the Special Session.   
77. The representative of Chinese Taipei , like the other co-sponsors of the communication on 
logistics services, echoed the comments by Australia and Switzerland on the importance of these services to economic growth.  She viewed logistics services as one of the most important commercial 
activities because a complete supply chain was conduc ive to optimising efficiency in the delivery 
process.  It also created value-added services, bette r satisfied the needs of consumers and generally 
improve competitiveness.  Logistics services woul d increasingly play a key role in the future 
commercial operations of the private sector.  Regard ing the joint statement on mode 1, Chinese Taipei 
attached importance to this mode and the enhancem ent of service liberalization.  She noted that the 
technological developments raised some regulator y problems.  Referring to the third sentence of 
paragraph 4, she asked whether Members would need a common understanding that electronic delivery of services fell under GATS.  Referring to th e last sentence of this same paragraph, she 
enquired as to what was meant by a critical mass.   She looked forward to a specific negotiating 
proposal on this issue, and particularly on certain important technical aspects.    
78. The representative of Chile
, recalling earlier statements in the same vein, noted her 
delegation's keen interest in the liberalization of trade in services in all modes and in all sectors for 
developed countries and developing countries.  It w as in this context that her delegation had co-
sponsored the joint statement on mode 1.  She noted that a number of recent press reports had 
reflected negatively on off-shoring and outsourcing a nd little had been said about the benefits of these 
practices.  Referring to some recent studies, she said  that for every dollar invested in off-shoring, 
$1.47 worth of benefits was added to the global ec onomy.  Furthermore, jobs were being created in 
computer, financial, back-office, sales, telecommunications and professional services.  She said that gains in productivity had also b een witnessed.  Highlighting the impor tance of mode 1 for Chile, she 
said that more than 35 multinationals had set up ca ll centres in her country.  She thought that the 
statement would allow for a good discussion in the Speci al Session.  As pointed out by Argentina, this TN/S/M/11 
Page 20  
 
 would afford an opportunity to discuss regulati on and the sectors in which Members thought greater 
commitments could be made.   
79. The representative of the European Communities
, referring to the communication on logistics 
services, supported an approach that was in-line w ith his delegation's proposal on transport submitted 
in December 2000.  He saw logistics services as dealing with services auxiliary to all modes of 
transport.  He looked forward to more work on this interesting proposal and indicated that his 
delegation would have a number of  questions on the classification checklist in addition to number of 
reservations, especially with regard to the additi onal commitments it contained.  He said the joint 
statement by Chile, India and Mexico brought focus to this important mode of supply and he looked 
forward to an interesting discussion on it.  He noted, however, that it would lead to discussion on 
mode 3, which was important to IT services a nd business process outsourcing.  Like others, his 
delegation stressed the importance of all modes of supply.  
80. The representative of Canada , referring to the communication on logistics services, said that 
Canada recognised the importance of these services  and looked forward to further discussion.  Noting 
discussions on multimodal services, he thought work should remain complementary and avoid 
overlap.  He further noted the presence of two air tr ansport services in the checklist that were outside 
the scope of the GATS and he wondered about the a ppropriateness of including these services in it.  
On the joint statement by Chile, India and Mexico on modes 1 and 2, he said that it provided a constructive starting-point for future discussion on the i ssue and he agreed that more effort needed to 
be made by Members to undertake commitments in  mode 1 and mode 2.  Commitments across all 
four modes of supply were critical to the growth a nd effective functioning of service industries.  He 
welcomed the opportunity to discuss this issue a nd how it related to the development of services 
economies.  The benefits that Members derived from outsourcing, for example, demonstrated that all 
Members had a variety of interests in services nego tiations.  Canada encourag ed developing countries 
in particular to continue to identify new areas of export and import interest in both cross-border trade 
and investment.  He said that given current technol ogy it could be difficult to draw a distinction 
between modes 1 and 2 for certain types of electr onically delivered services.  For this reason, 
Canada's approach for ITC sectors, including comput er and related and telecommunications services,  
had been to encourage full commitments in mode 1 and mode 2.  Finally, he noted the particular 
importance of modes 1 and 2 to small- and medium-sized enterprises.  Smaller companies faced challenges when attempting to take advantage of export opportunities in the area of services.  Since 
mode 1 and mode 2 were often the preferred way fo r SMEs to export their services, barriers to trade 
via mode 1 and mode 2 could effectively prevent this category of supplier from participating in 
services trade, which he felt was an important issue for which he looked forward to a discussion at a later date.   
81. The representative of Mauritius
, noting that his country was a co-sponsor of the 
communication on logistics services, stated that lo gistics and international transport networks were 
critical to the economic survival of his country.  He  recalled that Mauritius was a tiny island isolated 
from main market centres and highly dependent on th e importation of its basic requirement in terms 
of food, energy and building materials.  It was al so entirely dependent on imports of raw materials and 
inputs for its export-oriented industries.  Efficient logistics services were therefore very important for 
Mauritius with a view to reducing transaction costs.  High transport costs had a serious bearing on the 
socio-economic fabric of Mauritius and on the co mpetitiveness of its export enterprises.  The recent 
increase in shipping freight rates was having a sev ere impact on consumer and economic activities.  
Citing a recent UNCTAD survey, he said that import trade rate increased by 33 per cent in March 2004.  He said that, even in the context of high fre ight rates, operators w ho had been willing to pay 
exorbitant rates could not find vessels available to transport their vital requirements.  Efficiency, 
affordability, reliability and regularity needed to be th e core elements in Member s' collective efforts to 
improve logistics services.  On the statement by Indi a, Chile and Mexico on mode 1, he indicated that 
his country had a strong interest in the export of IT services and the statement appeared to have a clear  TN/S/M/11 
 Page 21 
 
 
 focus on BPO activities.  He said that many devel oping countries had shown particular interest in 
mode 4 access and he recalled that many sensitivities had been noted.  He said that if workers faced 
restrictions in moving abroad to the places where jobs  were available, the least that could be expected 
was that jobs could move to them.  He indicated that he would send the statement to capital and might 
revert to it at the next meeting.  
82. The representative of Colombia  said she found the proposal on logistics services 
comprehensive and interesting and would examine car efully.  Referring to section F of the document, 
she enquired into the proponents' view about the treatment of the elements included as possible 
additional commitments in the light of work done on in the Working Group on Domestic Regulation 
and particularly the elaboration of disciplines under Article VI:4.  Regarding the joint statement from 
Chile, India and Mexico, she thought it was useful  to pursue discussion of these elements and trade 
through mode 1 and mode 2.  She noted that her country had been developi ng this mode of supply, 
especially in certain sectors related to professional services, and therefore she attached importance to 
the paper.  Finally, she underlined the contents of paragraph 3, namely flexibility for developing 
countries in making commitments in the current round of negotiations.  She recalled that this 
flexibility was reflected in the objectives set forth in Article XIX.  She indicated she might revert to 
this communication.  
83. The representative of Singapore  said the communication on logistics services was a timely 
and useful submission for the services negotiations.  He recalled that at the previous meeting Singapore had expressed its views on the paper, incl uding that an efficient and vibrant logistics 
services sector could be critical to the economic efficiency and development of all Members.  He 
noted that one interesting aspect of the paper was its reference to the notion of progressive 
liberalization in paragraph 11(b) and saw that ther e could be complementarities between the logistics 
initiative and the work of the maritime friends.  Re garding the statement by Chile, India and Mexico, 
he indicated he would revert to it and said Singapore shared the view of others that the progressive 
liberalization of all modes of supply was impor tant to the development of all Members.  
84. The representative of China
 sought to register his delegation's interest in both 
communications under discussion.  Making a few prelim inary remarks, China agreed that logistics 
services had emerged as a prominent and promising sector for the integration of services worldwide along with the rapid growth of international trade and spread of modern technology.  He said that 
without efficient and well-organised logistics servi ces no economy could bring fully into play its 
dynamism or competitiveness.  China had paid atten tion, therefore, to the development of logistics 
and welcomed the communication.  He indicated that  capital-based experts were still in the process of 
soliciting opinions from various quarters of the logisti cs industry, however, he was glad to inform the 
Council that the preliminary general reactions we re encouraging.  He hoped that Members could 
explore this communication in a comprehensive a nd detailed manner and that other Members would 
be able to share with the Council their domestic ad ministrative regime regarding logistics and their 
experience with developing these services.  He said he appreciated that the communication on mode 1 
raised the question of outsourcing in the Special Session.  He agreed that outsourcing through mode 1 was increasingly important for developing Member s and benefited the Members who needed and 
provided these services.  Since the commitments related to outsourcing services made by Members in the Uruguay Round were quite limite d and uneven, he encouraged Members, especially developed 
Members, to make substantial commitments under m ode 1 in sectors and sub-sectors with the purpose 
of enhancing the participati on of developing Members in international services trade.  
85. The representative of Korea
 said he hoped the contribution on logistics services could provide 
the necessary impetus for further discussion on logist ics related services in the negotiations.  Korea 
extended its appreciation to the sponsoring Member s and looked forward to more discussion in the 
announced open-ended meeting.  On the joint stat ement on mode 1, Korea  thanked the co-sponsors 
for their communication.  He agreed with earlier speak ers that balanced attention should be given to TN/S/M/11 
Page 22  
 
 all four modes in the GATS.  He noted that t echnological development in ITC services was conducive 
to an environment of increasing cross-border trade in services.  At the same time, Korea acknowledged that the regulations that could ensure  a liberalising environment in cross-border trade 
by preserving legitimate objectives were not keepi ng pace with technological development.  He 
agreed with Argentina for a targeted and sector-s pecific approach.  Given the various regulatory 
implications for mode 1 across sectors, he was of th e view that it could be useful to focus on some 
sectors of interest that could be identified through a discussion with domestic regulators.   
86. The representative of Australia
, referring to the points raised earlier on air transport services 
and their relation to the logistics proposal, said that air transport had been in cluded because they could 
be part of supply chains.  The checklist that wa s attached to the communication aimed to provide a 
comprehensive picture of all of the activities relati ng to supply chains for freight.  However, support 
for the initiative would be without prejudice to Members' views on the GATS coverage of air 
transport related services.  She stated that the friends  of freight logistics services recognised that some 
air transport services were outside of the GATS and th at they had no intention to alter the scope of 
GATS through the initiative.   
87. The representative of Bolivia  said the proposal on logistics services was an important subject 
for countries whose geographical characteristics were similar to those of Bolivia.  She said that her 
officials were looking into this subject together with  relevant experts.   
88. The representative of El Salvador , referring to the joint statement on the cross-border supply 
of services, said that this mode of supply was relevant for her country, as were the other modes of 
supply.  El Salvador thought that it was a good idea to cover this subject in the discussions in the 
Special Session.  
89. The representative of Costa Rica  said that Costa Rica had considerable interest in mode 1.  He 
noted that an important portion of FDI in Costa Rica  was related to outsourcing activities, and that it 
was a sector that was growing quickly as compared to services exports generally.  Echoing comments from Chile, Costa Rica was concerned with the poorly informed debate in the developed countries on 
these activities,  which had seemed to encourage new protectionist sentiments. He indicated his 
delegation's willingness to participate in further discussions.    
90. The representative of Switzerland
 noted the large number of helpful remarks that had been 
made on the communication on logistics services.  He was satisfied with and encouraged by the level of support demonstrated for this services sector.  
91. The representative of India
, responding to comments, said that he was aware that, due to the 
lateness of the submission, reactions had been pr eliminary and that Members needed more time to 
reflect.  Referring to the question as to whether ther e were specific sectors that could be identified as 
particularly important, he said that his delegation was engaged in this type of analysis and noted that, 
in terms of market realities, there were some specific sectors in which the activities under discussion 
were becoming more important than others.  At the same time, he noted that new sectors could 
emerge with the development of technology.  He sign alled his intention to return to this issue in the 
future.  With respect to the relationship between mo de 1 and mode 2 and the question of the need for a 
common understanding, he recalled that the issue of  electronic delivery of mode 1 and mode 2 had 
engaged a number of Members earlier, and that no end-point had been reached.  The paper suggested 
that one practical approach, in areas where market reality was driving trade in these modes, might be 
similar commitments in mode 1 and mode 2 wit hout touching upon the technical question of the 
distinction between mode 1 and mode 2.  He ther efore thought that it would probably not be necessary 
to have a common understanding.  With respect to th e questions on paragraph 4 and the approach that 
was being suggested, he repeated that there was a range of sectors in which cross-border supply was 
becoming important and, while his delegation was a ttempting to identify these sectors, he thought that  TN/S/M/11 
 Page 23 
 
 
 the sector was highly dynamic owing to technological developments.  This might make it difficult to 
clearly identify sectors where trade was important, an d a more indicative illustration might be helpful.  
He clarified that this was the type of approach that  the sponsors sought to transmit in paragraph 4.  He 
looked forward to detailed discussion in the future.   
92. The Chairman  recalled that at the last meeting, due to  a lack of time, the Council had not been 
able to pursue its discussion on a communica tion from a Group of Members on the Proposed 
Liberalization of Mode 4 under GATS Negotiations c ontained in document TN/S/W/14, dated 3 July 
2003.  He further recalled that the delegation of India had requested at that time that the Council 
return to the discussion on this proposal at the present meeting.   
93. The representative of India , referring to the communication from a group of developing 
countries contained in TN/S/W14, noted that inter est had been shown from a broad group of Members 
but that little progress had been made in substance on the proposal, which was of importance to many 
Members.  He noted that a broad group of Memb ers had indicated their interest in discussing the 
issue.  He thought it would be useful to structure future discussions so as to attain more effective 
results.  He recalled that the proposal had raised a number of issues that were relevant to provide 
effective market access.   While there was a need to  have a comprehensive view of all these issues, he 
thought it might be more practical to concentrate on a few issues in a first instance in order to enable a 
more focussed discussion.  For this purpose, he  suggested that the Special Session initially 
concentrate on two issues:  (i) the nature of co mmitments, including the categories of the movement 
of natural persons, which he t hought could be combined with the Secretariat note on categories 
contained in JOB(03)/195, and (ii) administrative pro cedures, particularly related to the entry and stay 
into other Members' territories, such as visa or work permits.  Issues related to transparency and 
procedural delays and hurdles he thought were relevant, including th e possibility of distinguishing the 
temporary movement of service suppliers from perman ent immigration.  In this connection, he drew 
attention to the communication from Colombia subm itted to the WPDR that touched on some of the 
issues related to visas.  While he was open to th e form in which Members wished to hold this 
discussion, it was his feeling that it might be worthw hile to hold the discussion in informal mode for a 
freer discussion.  He hoped Members would consider  his suggestion positively.  He thought that the 
meetings could also indicate any specific work th at the Special Session might wish to entrust to 
relevant subsidiary bodies, and report back to it on progress made.  However, he believed this 
entrustment would be useful only if  the terms of reference were clear  and precise.  Referring to two 
seminars held in Geneva dealing with mode 4 issues, he suggested  that the UNCTAD experts group 
meeting (held in July 2003) report and the joint IOM-OECD-World Bank meeting (held in November 
2003) report be circulated.  He thought it would be extremely useful to have presentations by these 
organisations at the next meeting of the Special  Session.  He hoped Members would agree to the 
suggestions he had made, as in his view they could contribute effectively to the various issues that had 
been discussed in the proposal.  He hoped that Members would discuss these ideas constructively so 
that real progress could be made towards further liber alization of mode 4.  In response to a question 
from the Chairman, the representative of India  said that the informal meeting which he had suggested 
could be held either between clus ters or during the next cluster. 
94. The representative of Brazil  in general terms supported the suggestions by India for more 
focused work and with regard to the invitations to make presentations by the organisations he had 
mentioned and the circulation of the related documents.   
95. The representative of the United States  said her delegation could consider whether to have an 
informal meeting to discuss the el ements the representative of India had proposed without prejudice to 
any Member's right not to discuss it at that time if it did not feel comfortable to do so.  With respect to the circulation of the summaries of the seminars  and the presentations, her delegation could go along 
with those suggestions.  TN/S/M/11 
Page 24  
 
 96. The representative of Kenya
 supported the proposal by India to have follow-up work on 
mode 4.  He thought that reference could be dr awn from work done by UNCTAD and that this could 
be fit into the terms of reference.  His delegati on also welcomed presentations and the circulation of 
the relevant summaries, from UNCTAD  and the IOM-OECD-World Bank.   
97. The representative of Canada , recalling Canada's on-going interest in discussion of mode 4 
issues and referring to the type of meeting that might be held, said that it was his experience that the 
issue was best advanced if capital- based immigration officials participated.  He thought that if the 
meetings were held between cluste rs and attended by Geneva-based o fficials, there might be relatively 
less progress.   
98. The representative of Philippines , echoing comments by Canada, said that, given the value-
added of the presence of capital-based experts or immigration authorities during clusters, it might be 
more useful to hold the meeting in that period.  He thought this would allow more Members to be 
aware of what had transpired in discussion in subs idiary bodies.  He recalled that in the present 
cluster, an initial discussion had been held in a s ubsidiary body on an excellent paper from Colombia 
on administrative procedures in mode 4.  It was fo r this reason that he favoured the suggestion for a 
meeting, and to the extent possible, for it to be held during a cluster.   
99. The representative of the European Communities  recalled his delegation's comments on this 
point in previous meetings.  Referring to th e suggestion to have the UNCTAD and IOM-OECD-
World Bank reports circulated and to invite representatives of these organisations to make 
presentations, his delegation could agree to these sugg estions.  In terms of more in-depth discussion 
on this question in informal or other settings his de legation was open to this idea, and hoped that this 
could also be the case for other sectors of inter est to other Members, such as so-called backbone 
services in addition to other sectors.  
100. The representative of Colombia , referring to the document mentioned by India, called 
attention to the document it had submitted in th e context of discussion on domestic regulation and 
said that the document contained various elements wh ich were of interest to Colombia and probably 
for a number of other Members, particularly with relation to the movement of natural persons.  She 
hoped that there would be a substantive discussion on this matter and she indicated that her delegation 
might put forth a proposal.  
101. The Chairman  took it that, broadly speaking, Members were in favour of an informal meeting 
of the Special Session to discuss the two elements to which the representative of India had referred, 
that the related documentation could be circulated an d presentations made at the next formal meeting.  
He indicated that he would be in touch with dele gations regarding the organi zation of the suggestions 
for the next cluster.  He proposed that the Council take note of the statements made.   
102. It was so agreed .   
D. WORK  OF SUBSIDIARY  BODIES  – REPORTS  BY THE  CHAIRPERSONS 
103. The Chairperson of the Committee on Specific Commitments  reported that, since his last 
report, the Committee held one formal meeting, on 23 June 2004, at which it had addressed its regular 
agenda items of classification and scheduling i ssues.  The delegation of Indonesia had provided 
further answers to questions on its proposal on th e classification of energy services (S/CSC/W/42).  
The Committee had discussed briefly a Resolution of the International Bar Association in support of a 
system of terminology for legal services for the purposes of international trade negotiations (JOB(04)/17).  Further to the circulation of a paper by the OECD Secretariat entitled "Managing 
Request-Offer Negotiations under the GATS:  The Case of Legal Services" (JOB(04)/77), he 
indicated that he would undertake consultations on whether or not this paper should be presented by  TN/S/M/11 
 Page 25 
 
 
 the OECD in the CSC.  In order to facilitate di scussion on classification issu es in the Committee, he 
had informed the Committee that he would pursue the following steps in advance of each formal 
meeting.  Firstly, based on consultations with inte rested delegations, he w ould identify one or more 
sectors for informal discussion at the next meeting of the CSC.  Secondly, the sector(s) would be 
announced sufficiently in advance of the next meetin g in order to permit delegations to submit points 
that they wished to discuss, as we ll as to facilitate the presence of capital-based sector experts.  He 
indicated that he would prepare a non-attributable Chairman's summary of the discussions on his own responsibility and that this summary would not have an y formal status.   He hoped that this approach 
would be pragmatic and flexible enough to give the necessary comfor t to delegations and would allow 
them to engage in substantive discussion of classifi cation issues.  As far as "Scheduling Issues" were 
concerned, he said that his consultations prior to  the CSC meeting had shown that some delegations 
were not in a position to engage in multilateral discu ssions on scheduling issues at present.  He would 
continue to explore possibilities of such a process.   In the meantime, wo rk on scheduling issues, 
which was a core mandate of the Committee, would continue to take place in formal mode among 
interested delegations.  He believe d that a good number of delegations took interest in this work:  two 
contributions from Brazil had been supplemented by a list of sample questions from Hong Kong, 
China (JOB(04)/81), and replies to these sample questions had been offered by Chinese Taipei 
(JOB(04)/82).   Finally, he said that the Secret ariat had updated the Council on its on-going work on 
electronic schedules. 
104. The Chairperson of the Working Party on Domestic Regulation
 said that since his previous 
report the Working Party on Domestic Regulation ha d held one informal meeting, on 8 June 2004, 
and one formal meeting on 24 June 2004.  He said that at the fo rmal meeting on 24 June, the first item 
on the agenda had been an overv iew by the Chairperson of the informal WPDR meeting held on 
8 June 2004.  In his overview, the Chairperson had noted that he had earlier circulated a Chairperson's 
Note regarding the organization of future work as JOB(04)/63, which was dated 26 May 2004.  He 
had reported that there had been a good discussion dur ing the informal meeting.  Delegations had 
indicated they were largely happy with the appr oach suggested in the Chairperson's Note. In 
summary, Members confirmed that they wanted to make progress in the Working Party in this Round, 
and this year, and that the approach should be concre te, practical and deal with substance.  There was 
no need to prejudice the approach, especially on the i ssue of horizontal versus sectoral disciplines.  A 
number of Members believed that some elements fo r regulatory disciplines were missing, and they 
were encouraged to fill the gaps by coming forwar d with papers.  Members also looked forward to 
upcoming papers from several delega tions.  On the subsequent stages of work and the timing of an 
informal meeting to discuss moving to a next stage, there had been some differences of view on when the Working Party would be ready.  There had been , however, general agreement that the move to the 
next stage would depend on receiving further subm issions, the discussion of these, and whether the 
group believed it was time to move.  The dates in th e Chairperson's paper were therefore indicative.  
In terms of follow-up to the very useful March wo rkshop, there had been some interest in regional 
events and the Working Party had agreed to discu ss this further at a future informal meeting. 
Members had also indicated general interest in compiling a bibliography on domestic regulation, as well as in listing the regulatory elements of fr ee trade agreements (FTAs).  Concerning the 
development of regulatory disciplines, the dele gation of Colombia presented a room document on 
examples of administrative measures relating to obtaining visas of entry permits.  This had been 
followed by extensive questions and prelimin ary comments from Members.  The European 
Communities gave responses to questions raised by  Cuba at the 31 March WPDR meeting regarding 
the EC proposal for disciplines on licensing procedur es.   Members further discussed the Hong Kong, 
China paper on the relationship between regulator y disciplines and national treatment.  During 
discussions on the Examples  paper, some delegations suggested that it was time to focus on elements 
for disciplines, while others believed that further discussion of regulatory examples would be useful.  
One delegation suggested that the WPDR discuss transparency issues at  the next formal meeting, and 
further suggested that at the following meeting coul d be held a discussion of the issues regarding the 
application of the accounting disciplines to the architecture and engineering sectors.  Regarding the TN/S/M/11 
Page 26  
 
 development of general disciplines for professional services, the delegation of Australia presented a 
paper at the 24 June formal meeting on professi onal recognition in Australia, which had been 
circulated as S/WPDR/W/28 dated 22 June 2004.   There had been a number of questions and 
preliminary comments from Members.  Due to time pressures, New Zealand had not been able to 
present their written responses to questions on their informal paper, dated 3 December 2003, but had 
said that it would do so at the next meeting of the Working Party.  India also noted they would be 
responding at the next meeting to comments on their informal paper on recognition.  On the consultations with international professional or ganizations concerning the suitability of the 
Accountancy Disciplines  to other professions, the Secretariat presented an updated compilation of the 
elements received to date, which had been  circulated as JOB(03)/126/Rev.2, dated 17  June 2004.  The 
update incorporated comments from the Internationa l Bar Association and the Secretariat noted that 
other professional services associations had indicated they would be making further comments.  The 
next formal WPDR meeting was expected to be  held during the week of 20 September 2004.   
105. The Chairperson of the Committee on Trade in Financial Services
 reported that the CTFS had 
met on Friday, 25 June. In preparation for the meet ing, she had held informal consultations with a 
wide range of representative delega tions, and had prepared an annotat ed agenda highlighting the state 
of play of the regular items in the Committee's ag enda, as well as the suggesti ons made by delegations 
in the course of her consultations for further work  in the area of financial services. The annotated 
agenda was contained in document JOB(04)/72.  With  regard to the Acceptance of the Fifth Protocol, 
she had no new development to report. The three Me mbers that had not accepted the protocol, namely 
Brazil, Jamaica and the Philippines, had reported on the status of their respective domestic ratification 
procedures.  On Technical Issues, no specific t opics had been raised under this agenda item.  
However, some delegations had suggested that the Ch airperson hold informal consultations in order to 
explore whether and how to address some technical issues that might be pertinent for the current 
negotiations, particularly in the fields of classifi cation and scheduling of commitments.  She said that 
she was reflecting on this idea, and would conven e informal consultations as appropriate.  With 
respect to the agenda item Recent Developments in  Financial Services Trade, Members had addressed 
two communications circulated at the request of Norway and Turkey.  The Norwegian communication (contained in document JOB(04)/80) dealt with ma rine and energy insurance; while the room 
document from Turkey highlighted and explaine d e-insurance initiatives carried out by Turkish 
insurance companies.  Both communications had b een highly appreciated by Members.  Interesting 
and relevant questions had been raised concerning, inter alia , the liberalization of cross-border supply 
of marine and energy insurance; the regulation and supervision of transactions carried out on a cross-
border basis; and even the classification of marine  and energy services for the purpose of undertaking 
commitments.  Some delegations had also comment ed on the issues mentioned in the Chairperson's 
annotated agenda, such as the importance of regulat ory transparency, and the benefits and challenges 
raised by insurance liberalization.  Members ha d shown a willingness to discuss these issues further, 
and the Committee would revert to them at its ne xt meeting.  Members had held a second round of 
discussions on the proposal submitted by Antigua a nd Barbuda on behalf of Belize, Fiji, Guyana, 
Papua New Guinea, Maldives, Solomon Islands, and St. Kitts and Nevis (S/FIN/W/29/Rev.1).  Some 
delegations had supported the proposal, which aime d at addressing the concerns of these countries 
with regard to the development of international standards related to fina ncial services by other 
international organizations.  She said she could not  do justice to all the positions expressed had she 
attempted to summarize the discussion, however, it w as fair to say that the issues raised by the 
proposal were important and complex, and that further discussion was needed. Therefore, the Committee would revert to this item at a future  meeting, depending on the availability of the 
proponents, who were all non-reside nts in Geneva.  The next meeting she said would be held during 
the next cluster of services meetings.  In keep ing with regular past practice the CTFS would 
endeavour to schedule the meeting when bilateral me etings were held, namely, in the second week of 
the cluster.   TN/S/M/11 
 Page 27 
 
 
 106. As the Chairperson of the Working Party on GATS Rules  was unable to present her report in 
person, the Chairman  said that he would read the report she had provided him.  The Working Party on 
GATS Rules had held a formal meeting on 23 June  2004.  The three usual issues had been on the 
agenda, namely, emergency safeguard measures, gove rnment procurement and subsidies.  At the 
outset of the meeting, she had noted that she had held informal discussions with many delegations 
regarding the work of the Working Party.  While it was evident that not all delegations attached the 
same priority to each of the th ree issues, she thought delegations had wanted to thoroughly examine 
the three topics, discuss the technical issues w ithout prejudging any given outcome, and not get 
bogged down in procedural matters.  She had i ndicated that she would pursue these informal 
consultations since she had not been able to talk to all delegations.  On subsidies, discussions had 
focused on an informal communication and a room  document from Chinese Taipei on the definition 
of subsidies in services, as well as on an ear lier communication from Chile which had provided 
examples of subsidy programs that might distort tr ade in services, including export subsidies.  The 
discussion had been substantive and technical in nature.  The lack of progress on the sharing of information on subsidies pursuant to Article XV ha d been underscored by some delegations and calls 
had been made to intensify efforts in that area.   Finally, the Secretariat had been requested to update 
an earlier Note which listed limitations in Member s' schedules that related to subsidies.  On 
government procurement, the European Communitie s had presented a new contribution on a proposed 
framework under GATS for government procurem ent in services.  The contribution provided 
examples of how commitments and MFN exemptions relating to procurement could be incorporated 
in the current structure of GATS.  Various ques tions had been raised and the Working Party had 
undertaken to continue this discussion at its next  meeting.  Some Members had reiterated their 
reservations concerning the scope of the mandate contained in Article XIII of the GATS and had 
noted the uncertainty surrounding the work of the Working Group on Transparency in Government 
Procurement.  Because of time constraints, the Wo rking Party had not been able to engage in a 
substantive discussion on emergency safeguard measures and had undertaken to revert to this issue at 
the next meeting.  It had been agreed that the Secretariat would prepare, in the form of a room 
document, a non-attributable summary of the informal  meeting of the Working Party held on June 11 
where, among others, the latest communication from a group of ASEAN Members on ESM had been discussed.   
107. The representative of Hong Kong, China
, in a general statement regarding the role of the 
subsidiary bodes in the negotiations, said that he took note that the WPDR and WPGR were 
negotiating on their respective rule-making mandates in parallel to the market access negotiations and 
he saw them as an important and integral part of  the present round of services negotiations.  He took 
further note that the CSC and CFTS also played im portant roles in supporting the negotiations and 
said that both bodies had terms of reference that coul d allow them to address issues that were relevant 
to the on-going nego tiations.  For example, the CSC had the mandate to address scheduling and 
classification issues as had been stated by the Chairp erson of that Committee.  He believed that these 
issues were of the utmost relevance to the market access negotiations.  He said that addressing these issues was important to ensure th e clarity, certainty and comparabilit y of the specific commitments.  
In addition to the level of commitments that his delegation was aiming for in the market access 
negotiations, the clarity, certainty and comparability of commitments he believed formed an important 
part in the determination of the quality of offers a nd the commitments obtained at the end of the day.  
Hong Kong, China did not intend to enter into a long procedural debate as to how discussion in the 
subsidiary bodies should be organised, and he did not seek to argue about mandates which had already 
been clearly established, however, he appealed to  Members to make better use of the time in 
subsidiary bodies to support the negotiations.  With out wishing to make any specific suggestion, he 
noted that many of the issues that were before the subsidiary bodies,  were they not taken up in those 
bodies, would probably fall to the Special Session.  He recalled statements made by some Members in 
subsidiary bodies that Members should not overburde n the heavy agenda of the Special Session.  He 
said that this was all the more reason for Members to make fuller use of the subsidiary bodies.  TN/S/M/11 
Page 28  
 
 108. The representative of the Philippines
, making remarks on behalf of the Members that had 
tabled a proposal on ESM in the WPGR, noted that  his delegation had always supported the call for a 
dedicated session that would review progress on the rule-making aspect of negotiations.  Pending 
agreement on that proposal, he sought to share a fe w observations about the work of the subsidiary 
bodies.  He shared the thrust of some of the obser vations made by Hong Kong, China.  With reference 
to the work of the WPGR he said that, given the lack of opportunity at the last WPGR meeting to 
discuss the issue of ESM, he agreed with calls for a more equitable allocation of time for discussion of 
the various issues.  While he understood that some of the other issues require d more attention and was 
aware of the particular nature of the schedule of me etings and agendas, he ho ped that future clusters 
would allow for a fuller discussion of negotiating i ssues that had a specific and uncontested mandate 
as contained in the appropriate deci sions and relevant GATS articles.  Echoing others, he said that he 
had consistently accorded importanc e to the work on technical issu es in the CSC.  He was cognisant 
that further understanding Members would deve lop on classification and scheduling issues would 
influence considerably the pace of progress in  that aspect of market access negotiations.  
109. The representative of Japan  expressed general support for the comments made by Hong 
Kong, China and agreed that, in the negotiating pr ocess, it was important to make efficient use of 
subsidiary bodies to encourage the process and s upport technical aspects of the negotiations.  He 
expressed Japan's interest, among others, to pro ceed with the creation of disciplines on domestic 
regulation.  He said that subseque nt to fruitful work on  the accountancy disciplines, Members had not 
been able to make further concrete progress on the balance of the process.  He urged delegations to 
consider of what the next concrete step might c onsist and was interested in participating in those 
discussions.  
110. The representative of the United States  recalled her delegation's interest in the rule-making 
negotiations in accordance with their respective mandates and deadlines and she said appreciated the 
fact that many Members had an interest in seei ng progress in these negotiations.  While the United 
States took note of this interest, it saw a separa tion between the request-offer process and the rule-
making negotiations.  She recognised that many dele gations needed to see progress in the rule-making 
areas in order to move forward on certain areas of the market access negotiations.  She reiterated that 
the negotiating guidelines and procedures made referen ce to the use of the subsidiary bodies, and her 
delegation's interpretation of those guidelines and pr ocedures in this respect emphasised the need not 
to create new bodies in order to cover areas and as pects which could facilitate the negotiations as 
opposed to trying to find work for the subsidiary bodies.  She said that over the previous week, 
Members had been able to identify many areas for constructive engagement in areas of the 
negotiations where there was the possibility of movement forward as opposed to backward.   
111. The representative of Chile , echoing comments by Japan and Hong Kong, China, said that it 
was important to her delegation to  use the subsidiaries bodes as much as possible, and made specific 
reference in this regard to classification and schedul ing issues, for which she felt that greater clarity 
and certainty would help, particularly developing co untries, to obtain better commitments at the end 
of the negotiations.  She therefore favoured more  discussion on these issues in the CSC.  Regarding 
work in the WPGR, she agreed that equitable time needed to be allocat ed to each of the three issues.  
112. Thanking the Chairpersons of the subsidiary bodies for their hard work and reports, the 
Chairman  suggested that the Council take note of  the reports and statements made.   
113. The Council so agreed .  TN/S/M/11 
 Page 29 
 
 
 E. REVIEW  OF PROGRESS  IN NEGOTIATIONS,  INCLUDING  PURSUANT  TO 
PARAGRAPH  15 OF THE  GUIDELINES  FOR  NEGOTIATIONS   
114. Speaking on 28 June 2004, the Chairman  indicated that a request had been made by the 
delegation of Brazil to make an intervention under th is agenda item.  As there were no objections to 
this request, the Chairman recognised the representative of Brazil. 
115. The representative of Brazil  indicated that Brazil would be tabling that day its initial offer in 
services. He said that Brazil was doing so in a pos itive spirit and as a contribution to the on-going 
negotiations.  He expressed appreciation to the Chai rman for his efforts to increase momentum in the 
services negotiations and said Brazil was in a position to share its offer with Members.  He said that 
the offer was the result of an ample process of dom estic consultation, both with individual sectors and 
with civil society groups in Brazil.  In the cour se of these consultations, it had become clear that a 
source of concern among constituencies stemmed from the perception that the GATS might intrude in 
some way on the provision of public services.  He  said that the Brazilian Government had reassured 
stakeholders of its firm determination to consider  trade in services in a broader perspective, namely 
that despite an overall set of development goals a nd objectives that should work together to promote 
the welfare of Brazilian society.  He stated that , as a consequence, nothing in Brazil's initial offer 
should be understood as a limitati on of the Brazilian Government's ability to provide, regulate and 
fund public services such as public education, public health and social welfare services in the manner 
that would best meet Brazil's national policy objec tives.  He sought to reiterate Brazil's understanding 
of the scope of GATS:  public services we re effectively carved-out of GATS.   
116. Turning to the substance of the initial offer,  the representative of Brazil said that improved 
commitments had been offered at th e sectoral level.  Fourteen new sub-sectors had been included.  
These were:  in business services, veterinary ser vices, technical testing and analysis, services 
incidental to fishing, placement and supply of  services of personnel, investigation and security, 
maintenance and repair of equipment, photogra phic services, packaging services, and convention 
services; in construction and related engineering ser vices, building completion and finishing work;  in 
distribution services, commission agents' services; in tourism and travel related services, travel 
agencies and tour operators, tour guide services; an d in recreational, cultural and sporting services, 
sporting services.  He said the offer also contained improvements to existing commitments in:  market 
research and public opinion polling services, manage ment consulting services, services related to 
management consulting, and build ing clearing services.  He said that the offer was based on the 
consolidated schedule of Brazil (S/DCS/W/BRA) and th at the editorial conventions used in the initial 
offer followed the guidelines established by the WT O Secretariat in document JOB(02)/88.  Brazil 
had attempted to follow the W/120 classification list and make systematic reference to the CPC.  
Brazil's list of commitments was therefore sched uled in a manner which ensured clarity and 
comparability.  He welcomed comments Members might  wish to make at any level, including the 
multilateral level - the Council and its subsidiary bodies - or at the bilateral level.  He emphasised that 
Brazil reserved its right to modify, extend, reduce and withdraw in whole or in part its offer at any 
time prior to the conclusion of the current services negotiations.  Brazil further reserved the right to 
make technical amendments to the offer and make corrections to rectify any errors, omissions or 
inaccuracies as well as to clarify and interpret its terms and conditions.   
117. The representative of Brazil concluded by explaining some of the parameters that had guided 
and would continue to guide Brazil's approach in the negotiations.  Brazil presented the offer as an 
indication of its continued commitment to the Do ha mandate and to the pursuit of an enhanced 
multilateral regime governing trade in services a nd goods.  In doing so, Brazil was expressing the 
hope that other Members would maintain their commitm ent  in other areas of the negotiations.  Citing 
paragraphs 47 and 49 of the Doha Declaration, he said that "the conduct, conclusion and entry into 
force of the outcome of the negotiations shall be tr eated as parts of a single undertaking" and that all 
areas of the present negotiations should be conduct ed with a view to ensuring benefits to all TN/S/M/11 
Page 30  
 
 participants and to achieving an overall balanced out come.  He sought to make clear that, bearing in 
mind the paramount principles of the Doha mandate , Brazil's level of commitments in the market 
access in the services negotiations in the final analysis would reflect the movements other Members were prepared to undertake in the areas of the negotiations where Brazil had a specific interest, 
particularly in agriculture, which by all standards wa s the core and raison d'être  of the round.  He said 
that another important point for Brazil was the bala nce between market access and rule-making within 
the GATS.  He said that since Doha the market access track had evolved at a steady pace while rule-
making had lagged behind.  Brazil's commitments in market access would depend on the progress, or 
lack thereof, in developing multilateral disciplin es covering domestic regulation, safeguards and 
subsidies.  The representative again thanked the Ch airman for allowing him to present Brazil's offer, 
pledged his delegation's continui ng support and hoped that steady progress would occur in Members' 
deliberations, in which Brazil was willing to do its part.   
118. The Chairman
 thanked the representative of Brazil for his announcement concerning Brazil's 
offer and his statement.  He said he thought that th is was an important step from an important country 
and that it would greatly contribute to efforts to move forward the negotiations.  He presumed that 
Members would be interested in engaging with Brazil on a bilateral basis in order to examine in detail 
Brazil's offer.   
119. The representatives of the United States , Korea , New Zealand , Indonesia , China , Australia , 
Cuba , Kenya  and the Philippines  welcomed the announcement by Brazil. 
120. Speaking on 2 July 2004, the Chairman  recalled that at the last meeting he had informed the 
Council of his intention to conduct "confessional" bila teral consultations in order to ascertain the 
reasons for the delay in the submission of initial o ffers from some Members, as well as to determine if 
any technical assistance could be provided.  He sai d that he had reported to  the TNC, at its last 
meeting, on the productive and positive nature of th ese consultations and he thanked those delegations 
with whom he had met for their availability and th e helpful nature of the discussions.  He looked 
forward to meeting with the remaining two delegati ons that were not LDCs and resident in Geneva, 
and said that he had been approached by an LDC th at sought to participate in these consultations.  In 
order to avoid repetition of the points contained in hi s report to the TNC, he simply highlighted that 
the consultations had given him a better understanding of the political and technical difficulties faced 
by many Members.  He was pleased to recall that  under this agenda item earlier in the week, the 
delegation of Brazil had made a statement to in troduce the submission of its initial offer.  He 
nonetheless recalled that, to date, 44 offers repres enting some 65 Members had been received.  He 
reiterated his serious concern that this number w as not sufficient and he urged Members who had not 
done so to submit their offers before the summer brea k.  He recalled that sever al Members in the past 
had underlined their disappointment with the qualit y of the offers on the table.  He said that 
information on what stage Members found themselves in  the preparation of their offer would be most 
welcome.  Turning to the first document listed on the agenda under this item, he recalled that at the 
last formal meeting the Council had held a discussion based on a communication from a group of 18 
Members on the Review of Progress established in paragraph 15 of the Negotiating Guidelines contained in TN/S/W/19.   He said that the co-s ponsors of the proposal had expressed a desire to 
pursue more technical and interactive discussions on  the proposal.  Suggestions had also been made 
that the Council might proceed in this review  on  a sector approach or on the basis negotiating 
proposals.  He said that in order to discuss these s uggestions, among others raised at the last formal 
meeting, the Council had held an informal open-ended meeting on 6 Ma y.  On this occasion a number 
Members had shared their reflections on some of th e different approaches they had in mind, although 
more thought was needed in order to determin e how work under paragraph 15 of the Negotiating 
Guidelines might proceed.   
121. The Chairman also drew the Council's attention to a Note by the Secretariat on the Categories 
of Natural Persons subject to Commitments under M ode 4 contained in JOB(03)/195.  He said that  TN/S/M/11 
 Page 31 
 
 
 owing to a lack of time, the Council had not been ab le to fully discuss this document and at least one 
delegation had indicated it wished to revert to it.  He  recalled that the remark had also been made that 
any further discussion on this Secretariat Note might more usefully take place under the agenda item 
relating to Negotiating Proposals.  He further recalle d that, under Item C, a reference had been made 
to this Secretariat Note in the context of a discussion on further work on a negotiating proposal 
relating to Mode 4 (TN/S/W/14).  Finally, he reca lled that a number of references had been made to 
friends groups' meetings that had been held prior to the cluster and during the cluster and he said any 
information the friends' group might wish to provide  would be welcome.  He indicated that updates 
would not be a regular or institutionalised report, but rather an opportunity to update the Council on 
their work or concerns. 
122. The representative of Argentina , referring to the proposal in document TN/S/W/19 on the 
review of progress as established in paragraph 15  of the Negotiating Guidelines, said that his 
delegation agreed with the contents  of the document.  He said it was necessary to conduct the review 
in order to determine the extent to which commitments on market access and national treatment were made in areas of interest to developing c ountries, as was provided for in the GATS negotiating 
modalities in the Doha Declaration and in the stat ements approved by the Council.  Regarding the 
offers on mode 4, particularly in relation to the requests made by Argentina, he said that 41 offers had 
been taken into account.  He said Argentina believe d this constituted a repr esentative sample because 
those offers had been tabled by Members that repres ented 90 per cent of world trade in services.  He 
said that 25 offers, or 61 per cent of offers, did not include any modification of horizontal 
commitments in mode 4, twelve offers had so me improvement, two had improvements that in 
Argentina's view also introduced new restrictions, a nd two introduced new modifications the effect of 
which was not clear in Argentina's view.  He said th at Argentina had made requests in mode 4 to 22 
Members of which 18 had presented their initial of fers.  He said that, of these, only 9 included a 
modification to commitments in mode 4.  He underl ined that these requests had been made to both 
developed countries and developing countries.  He said that the Argentine requests had made 
reference to the categories de-linke d from mode 3 that were also identified in the Secretariat Note 
contained in JOB(03)/195, including contractual ser vice suppliers as employees of juridical persons 
and independent professionals.  In addition, the requests had referred  to the elimination of economic 
needs tests and other criteria, the extension of peri ods for categories identified in the Secretariat Note 
and additional commitments on transparency.  In the changes that were proposed, six were limited to 
the categories already listed, two included at least one of the new categories requested, and one 
modified the limit to categories already listed.  In his delegation's view, at least two of the offers 
submitted contained new restrictions in their commitm ents.  He said he was aware of the limitations 
of the analysis his delegation had carried out give n the different forms in which mode 4 commitments 
were listed.  Nonetheless, given the available info rmation, his delegation's conclusion on the offers 
received to date was that substantial improvement in mode 4 was not present in the existing offers.  
More worrisome was the introduc tion of increased restrictions.  Although these were only initial 
offers, he said that the low level of ambition show n under this mode should be taken into account in 
assessing the progress of negotiations in the review.   
123. The representative of Chile
 reported that the energy friends' group had recently held a 
workshop in which some 50 delegates had participated .  She said that the objective of the informal 
workshop was to further the understanding of all th e Members of the energy services sectors and its 
present and future importance, the understanding of the classification proposals that had been 
submitted, and to hear some private sector view s on the negotiations.  She said that speakers had 
included some of the experts from the friends' group,  including Canada, Norway and Japan, as well as 
private sector speakers.  She said that an interes ting exchange of questions and responses had been 
held after the presentations.  She indicated that papers were available from some friends and she 
encouraged those who had not been able to attend to speak with those who had, for she thought all 
would benefit from further knowledge of the classifi cation proposals.  She indicated that future 
activities were planned and she signalled her intention to share information on those future meetings.   TN/S/M/11 
Page 32  
 
 124. The Chairman
 invited the Council to take note of the statements made. 
125. It was so agreed .   
F.  ORGANIZATION  OF FUTURE  WORK 
126. The Chairman  recalled that at an informal meeting of the Special Session held on 6 May he 
had announced the tentative dates for the remaining tw o clusters of meetings for 2004 and he repeated 
those dates.  He said that, with respect to the Sept ember cluster, the meetings of the Regular Council 
and the subsidiary bodies would meet during the fi rst week, with the exception of the Committee on 
Trade in Financial Services.  He recalled that th e Chairperson of the CTFS had reported that it was 
expected that the CTFS would hold its meeting in the second week.  He said the Council would return 
to the usual practice of holding full-day meeti ngs of the Regular Session of the Council and the 
subsidiary bodies and to the usua l book-ends approach.  He said th at the Secretariat would inform 
Members of the exact schedule in due course.  He  recalled an earlier agreed suggestion that an 
informal meeting to discuss Mode 4 might be held duri ng the next cluster.   As no delegation sought 
the floor, the Chairman invited the Council to take note of his remark. 
127. It was so agreed .   
G. OUTLINE  OF THE  CHAIRMAN'S  REPORT  TO THE  TRADE  NEGOTIATIONS  
COMMITTEE 
128. The Chairman  indicated that his report would be comp rised essentially of the draft he had 
distributed and would be complemented, as appropr iate, by the discussions held over the preceding 
days.  He would report that the Council for Trade in Services in Special Session met on 28 June and 
2 July 2004.  With respect to th e Assessment for Trade in Servi ces the Council agreed to invite a 
representative of the OECD to its next formal meet ing in order to give Members an opportunity to 
pose supplementary questions on a study entitled, "Services Trade Liberalisation:  Identifying 
Opportunities and Gains" and presented by the OECD last April. 
129. Under the item Proposals Relating to the Negotiations under Article XIX of the GATS, he 
would report that the Council had held preliminar y and substantive discussions on the basis of a 
formal communication on logistics services from Au stralia, Liechtenstein, Mauritius, New Zealand, 
Nicaragua, Switzerland, Chinese Taipei and Hong K ong, China.  Seventeen Members intervened, 
with many underlining the benefits that could accrue to both developed and developing country 
Members from increased liberalization of these serv ices.  Possible complementarities with work on 
multimodal and maritime transport services were noted by several Members.  Generally, Members expressed interest in continuing discussion on this proposal, although a few Members noted a 
reservation with respect to some of the services cont ained in a freight logistics checklist annexed to 
the proposal and the scope of the GATS.  Prelim inary discussion was held on an informal joint 
statement made by Chile, India and Mexico on the Liberalization of Mode 1 under GATS Negotiations.  While many Members expressed an in terest in continuing discussion on mode 1, a 
number of delegations reiterated th e importance of pursuing negotiations  on all four modes of supply.  
Lastly, the Council reverted to an earlier proposal on the Liberalization of Mode 4 under GATS from 
a group of 15 developing countries.  The delegation of India made a few practical suggestions to help 
organize and move the Council's discussion forward on this issue.  The Council agreed to begin a discussion on these suggestions at a future informal m eeting.  In addition, th e Council agreed to have 
circulated an UNCTAD report and joint IOM-OECD -World Bank report on mode 4 and to invite 
representatives of these organisations to presen t their reports at the next meeting.  
130. Under the item of the Review of Progress in Nego tiations, Including Pursua nt to Paragraph 15 
of the Guidelines for Negotiations, one  delegation, referring to  an earlier proposal to review the extent  TN/S/M/11 
 Page 33 
 
 
 to which commercially meaningful commitments had been offered to developing countries, presented 
orally a detailed analysis of the quality of propos ed mode 4 commitments in the first forty initial 
offers. 
131. Ministers at Doha agreed that initial offers we re to be submitted by 31 March 2003.  To date, 
44 offers had been received (counting the European Communities as one).  This represented 65 
Members who had submitted an offer, with the most recent having been Brazil on 28 June 2004.  
Apart from least-developed country Members, some 52 Members had yet to submit an initial offer.  In 
the Chairman's view, this was cause for serious concern. 
132. In a previous report the Chairman had info rmed the Trade Negotiations Committee of his 
intention to engage in "confessional" bilateral cons ultations with those Members that had not tabled 
an initial offer in order to ascertain the reasons fo r delays and to determine if any technical assistance 
could be provided.  With the exception of two Memb ers that he planned to meet with soon, he had 
held such consultations with all of the concerne d Members that had represen tation in Geneva and had 
contacted non-resident Members.  Several of the Members with which he had consulted had indicated 
their ability and willingness to submit their initial offe rs before the end of July, while other Members 
had indicated they would require more time.  These meetings had been conducted in a positive 
atmosphere and had provided him with a fuller understanding of the political and technical difficulties 
being faced.  These difficulties included, among othe rs, the technical complexities involved in 
preparing an offer, the necessary domestic coor dination process involving government departments 
and other stakeholders, the overw helming effect of voluminous re quests, and the dampening of 
progress resulting from the missed deadlines a nd the Cancún Ministerial meeting.   
133. In terms of "future work" the Chairman said th at in considering the way forward, Members 
should bear in mind the "negotiating architecture"  to which they had agreed for the services 
negotiations.  In accordance with GATS Article  XIX, Members had adopted Guidelines and 
Procedures for the Negotiations on Trade in Se rvices, the Modalities for the Treatment of 
Autonomous Liberalization and the Modalities fo r the Special Treatment for Least-Developed 
Countries.  These instruments continued to guide and provide the main direction for the negotiations.  
They, inter alia, reaffirmed that the negotiations aimed to achieve progressively higher levels of 
liberalization, required Members to give special attention to sectors and modes of supply of export 
interest to developing countries, and recognized the right of Members to regulate and to introduce new regulations.  In addition, Members remained co mmitted to intensifying their efforts to conclude 
the negotiations on rule-making.  Several Member s had stressed the importance of maintaining a 
balance between negotiations on rules and negotiati ons on specific commitments.  Members also 
acknowledged that full engagement by all participants was of the utmost importance for the success of 
the negotiations.   
134. As he had reported to the Trade Negotiations  Committee on previous occasions, the quality of 
the offers was generally modest and several Memb ers had expressed disappointment in this regard. 
135. Members agreed that an important future step in the negotiations would be the submission of 
revised offers.  A decision on the date for revised offe rs would need to take into account the particular 
nature of the services negotiations which relied main ly on the request-offer approach.  Advancing this 
process towards a succe ssful conclusion might require successive rounds of revisions that would 
consolidate the results of bilateral negotiations as well as work undertaken by Members on technical 
issues.  Several Members had indicated that the da te for the submission of revised offers should be 
three to four months prior to the Sixth Minister ial Meeting.  At present, however, Members had not 
found it feasible to recommend a specific date for the submission of revised offers.  The discussion of 
a date for the submission of revised offers had b een hampered by the uncertainty about other key 
dates relating to the DDA negotiations, including the date  of the Sixth Ministerial Meeting.  A date for 
the submission of revised offers had, however, to  be set, and several Members had expressed the view TN/S/M/11 
Page 34  
 
 that this date needed to be decided by the Trad e Negotiations Committee as part of the expected 
outcome in July 2004.  
136. Members of the Special Session of the Council fo r Trade in Services should review all aspects 
of the negotiations in advance of the next Minist erial Meeting in order to provide a full report, 
including any possible recommendations, to the Trade Negotiations Committee. 
137. Consequently, the Chairman was pleased to report that the Special Session of the Council for 
Trade in Services had agreed to pursue further pr ogress in the services negotiations on the basis of the 
recommendations that would be attached to his report
2, and he would propose that the Trade 
Negotiations Committee endorse them to guide the upcoming phase of the services negotiations. 
138. The Chairman  proposed that the Council take note of this report. 
139. The Council so took note . 
H. OTHER  BUSINESS 
140. The Chairman  recalled that the Secretariat sought to update Members about a suggestion 
made by Australia regarding the presen ce of capital-based experts in Geneva. 
141. A representative of the Secretariat  recalled that at an informal meeting held on 6 May, the 
question had been raised as to how information on the presence of capital-based sectoral experts could 
be communicated among missions in Geneva.  Australia  had suggested the creation of an "electronic 
bulletin board" to help coordinate meetings of e xperts coming to Geneva from distant capitals.  The 
Secretariat had looked into the feasibility of establishing such a board and he outlined the type of information that could be poste d on the board, its privacy and security features and how Members 
could post and update information.  He said that th e Secretariat was in the Members' hands on how to 
proceed.   
142. Noting that the informal nature of the matter, the Chairman
 said that any Member that had a 
concern with this suggestion should contact the S ecretariat before it goes ahead with setting up the 
bulletin board.  The Chairman stated that, in his view, the Council had achieved work of a significant 
nature at the meeting and hoped that the month of th e July would prove fruitful for work elsewhere in 
the WTO.  He suggested that, before he adjourne d the meeting, the Council take note of all the 
statements made.   
143. It was so agreed .   
__________  
                                                      
2 TN/S/16.