WORLD TRADE
ORGANIZATIONS/CSS/W/4
13 July 2000
(00-2883)
Council for Trade in Services
Special SessionOriginal:  English
COMMUNICATION FROM THE UNITED STATES
Framework for Negotiation
The attached communication has been received from the delegation of the United States with
the request that it be circulated to Members of the Council for Trade in Services.
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I. INTRODUCTION AND MANDATE OF THE WTO SERVICES NEGOTIATIONS
1. The scope of the negotiations is comprehensive, mirroring the scope of the GATS itself.
WTO Members agreed in the Uruguay Round to a far-reaching additional negotiation beginning in
2000 aimed at producing significant liberalization in services trade.
2. The mandate of the negotiation is ambitious: to remove restrictions on trade in services and
to provide effective market access, subject to certain specified limitations.   Our challenge is to
accomplish significant removal of these restrictions across all services sectors, addressing measures
currently subject to GATS disciplines and potentially measures not currently subject to GATS
disciplines, and covering all ways of delivering services.  Not included in the negotiations are air
transport services excluded from the GATS under the Annex on Air Transport Services, and services
supplied in the exercise of governmental authority.  And, the GATS makes clear that Members retainthe right to regulate to meet national policy objectives, consistent with existing or potential new
GATS disciplines.
3. A wide range of countries have already stated their interests in the negotiations.  Thus, all
countries, including developing countries, should have an important stake in outcome of these
negotiations, both as parties seeking and as parties providing GATS commitments.   In this regard, wewelcome the first comprehensive negotiating proposal in the Council in special session from several
developing countries – the Dominican Republic, El Salvador, and Honduras – relating to tourism
services.
4. The United States submits this proposal as a framework for accomplishing the mandate in
Article XIX. This comprehensive paper provides specific proposals for procedures, timetables,guidelines, and objectives.  This proposal is submitted in accordance with paragraph 2(c) of the
“roadmap” document agreed at the May 26, 2000, meeting of the Council for Trade in Services in
special session and addresses, inter alia , items identified in that subparagraph.
5. Some of the issues addressed in this proposal also would be appropriate for inclusion in the
negotiating guidelines and procedures called for in Article XIX.  Members have agreed, in the
roadmap, to give priority to completion of the ne gotiating guidelines and procedures.  The United
States therefore proposes that this work be completed by the October 2000 special session.S/CSS/W/4
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II. BUILDING ON PROGRESS TO DATE
6. Work in the Council for Trade in Services before the launch of the services negotiations in
early 2000 has laid a solid basis for the negotiations.  As instructed by Ministers at the second
Ministerial Conference, this preparatory work became more intensive after June 1998, when the
Council exchanged information and conducted an assessment of trade in services required byArticle XIX.
7. In the view of the United States, the assessment has achieved its central objective.
Nevertheless, some Members may wish additional opportunities to present their views.  The United
States supports including the assessment on the agenda of the Council in special session.  In doing so,
the United States requests those Members with additional perspectives on the assessment to present
them at the earliest opportunity.
8. The Council’s subsidiary bodies also have made progress in broadening a consensus among
Members on issues including transparency, classification, and scheduling guidelines.  For the latter
two issues, Members have agreed to aim to complete work by March 2001, and we should make every
effort to do so.  And, in the negotiating guidelines and procedures, Members should provide guidance
on how to proceed with other work in the Working Party on Domestic Regulation and the Working
Party on GATS Rules.
9. Agreement to the May 26 roadmap was a significant event demonstrating Members’ shared
interests in moving forward in an ambitious ma nner in the negotiations.  Importantly, the roadmap
sets the stage for moving topics from the technical subsidiary bodies up to the special session of the
Council for Trade in Services for substantive negotiations.
10. In view of the broad, complex, and ambitious scope of the negotiations, the United States
advocates a strong guiding role for the Council in  special session.  As the designated negotiating
body, it is important that the Council in special session provide an opportunity to assess progress in
the negotiations, assess balance in this progress,  and provide a forum for transparency in the
negotiations.
11. Finally, the United States notes the work that has been done on the relationship between
services trade and environment and welcomes future consideration of this issue in the appropriate
fora.
III. OBJECTIVES FOR THE NEGOTIATIONS
12. Consistent with the above mandate, the United States proposes the following specific
objectives for the negotiations to elaborate on those contained in Article XIX.  New GATS
obligations consistent with these goals would co ntinue to ensure the right of Members to set,
maintain, and enforce high levels of protection for consumers, health, safety, and the environment.
Market Access:  Members should take on full bindings aimed at reduction or elimination of
measures inconsistent with Article XVI.
National Treatment:  Members should take on full bindings aimed at reduction or
elimination of measures that discriminate between domestic and foreign services or servicesuppliers.
MFN Treatment: Members should aim to ensure full application to all WTO Members of
treatment that is no less favorable than treatmen t accorded to any other Member, to the extent
not inconsistent with non-trade objectives.S/CSS/W/4
Page 3
Modes:  Members should take on bindings by mode that allow service consumers and
suppliers freedom to choose commercially desirable ways of purchasing and selling services.
Domestic Regulation: Members should reach agreement on GATS disciplines to promote
greater transparency in regulation of services and to address other, identified, trade-restrictingaspects of regulation.
Progressive Implementation:  According to individual circumstances, Members may
undertake liberalization in a phased manner.
13. To accomplish these objectives, the United States proposes the following:
Achieving meaningful liberalization : Many GATS commitments made during the Uruguay
Round consisted of standstill bindings.  While in some cases a standstill binding can represent
a significantly open services regime, too often these bindings merely lock in place relatively
restrictive existing regimes.  Meaningful liberalization should occur in this negotiation.
Broader sectoral coverage:  The sectoral coverage of Members’ country schedules often is
incomplete: subsectors, modes, or even entire sectors are excluded from schedules, with the
result that trading partners -- and more importantly service providers -- are unable to
determine restrictions in force.   S cheduling  transparency  – setting out clearly for
governments and commercial actors the rules of the road in a particular area of services trade
– is extremely important.  GATS scheduling should be broader and more transparent .  This
can be accomplished without changing the fundamental architecture of the GATS.
Improved classification:   The United States advocates an improved  classification scheme
that better reflects the realities of trade in services to which all Members will adhere. The
classification scheme that many Members use to schedule their commitments, contained inMTN.GNS/W/120, served a useful purpose in the Uruguay Round, allowing negotiators to
move quickly into market access negotiations.   Significant improvements can be
accomplished with limited, specific changes to W/120 as it now stands.  We intend to work
with other Members to meet the agreed deadline of March 2001 to conclude classification
work in the Committee on Specific Commitments, as this will provide a stronger basis for
more meaningful market access negotiations.  The GATS classification system should better
reflect the reality of the marketplace.
IV. PRINCIPLES GOVERNING THE NEGOTIATIONS
14. To achieve these goals and objectives, the United States proposes adoption of the following
approaches for the negotiations:
Standstill:  Members should not take any new measures affecting trade in services that would
improve their negotiating position or be used as leverage through the conclusion of the
negotiations.
Timetable for the negotiations: The May 26 roadmap provides that members will submit
negotiating proposals by December if possible, with flexibility for further or more detailedsubmissions thereafter.  Building on this timetable, Members should  establish two additional
deadlines: (1) to conclude the negotiations within three years, by December 2002 ; (2) to agree
on modalities for liberalization by the 2001 midterm of the negotiation; for example, on the
approach for tourism now under considerat ion in the Council in special session.S/CSS/W/4
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Starting point for the negotiations:  This negotiation is about new liberalization and
removal of market access restrictions.  Therefore, the starting point for requests in these
negotiations should be current restrictions sector by sector .   We do not rule out, however,
that Members may consider a trading partner’s offer to bind at current levels of openness as
sufficient.  This might be one way, for example, to account effectively in the negotiations forautonomous liberalization measures.
Treatment of autonomous liberalization: According to GATS Article XIX,  the negotiating
guidelines should establish modalities for the treatment of liberalization undertaken
autonomously by Members since previous negotiations.  The United States proposes the
following such modalities:
• First, any Member that has liberalized autonomously in a particular sector, mode, or
type of measure since the end of the Uruguay Round and through the end of thecurrent round should make the nature of the liberalization known to interested trading
partners.
• Further, that Member and any interested trading partner should discuss and seek
agreement on their respective bindings relative to the autonomous liberalization.  The
liberalizing Member could discuss the issue of credit with more than one trading
partner.  Additionally, it may be possible to set agreed targets for multilateral
liberalization (e.g., in the form of model schedules) against which the value of
particular autonomous liberalization measures might be gauged.
Modalities for Liberalization:  There are several different ways to liberalize substantially
across a broad range of services sectors.  We continue to support request-offer as one way to
achieve targeted results – that is, to focus a bilateral partner’s attention on a specific
restriction in a specific sector or subsector.  A request-offer approach helps ensure that each
WTO Member has the ability to highlight any and all specific issues it wishes to raise fornegotiation; regardless of any broader approach to the negotiations, request-offer preserves
the ability of each Member to include issues on which it places particular importance.
The United States does not view the request-offer approach as the only means of achieving
substantial liberalization.  Based on past experience, other modalities already have been
developed to supplement request-offer or be in corporated into the request-offer approach to
ensure a more efficient and comprehensive achievement of the negotiation’s agreed
objectives.  Moreover, the proposal on tourism services from several developing countries is a
further example of these supplemental modalities.  We expect to say more about this at a
future date.
One such method is through creation of “model” sets of GATS commitments for key sectors.
These models, or templates, would provide meaningful liberalization through removal in
given sectors of as many restrictions as possible.
A second approach is to use clusters of services activities, to break out of the sometimes
restrictive categories created in W/120.  A third approach might be to negotiate cross-sectoral
or  “horizontal” commitments in one or more modes across sectors.
Some Members at this stage seem inclined to rely on request-offer.  However, this approach
has limitations.  For example, it presumes that all Members have a comparable capacity todevelop requests.  If this is not the case -- and, in view of the scope of these negotiations and
the nature of trade in services, it may not be the case – then Members with greater resources
may dominate the negotiations, and Members with fewer resources will obtain fewer benefits.S/CSS/W/4
Page 5
Moreover, limiting the current negotiations to request-offer would be a step backward, since
Members already have demonstrated flexibility in post-Uruguay Round negotiations by
supplementing request-offer with such approaches as model schedules, clusters, and common
horizontal scheduling by mode – as a means of specifying shared expectations.
Therefore, the United States proposes that Members work now to identify their common
expectations for the negotiations.  These expectations could constitute benchmarks or
yardsticks for assessing progress and results in the negotiations.  They could cover a range of
issues of interest to different Members and thus build more balance into the negotiations.
Use of a full range of negotiating modalities will comply with Article XIX’s mandate that
progressive liberalization be advanced through bilateral, plurilateral or multilateral
negotiations.
Needs assessment for developing countries and others:  Assisting all Members to
participate fully in the negotiations should be established as a regular item on the agenda of
the Council.  For some Members, this could involve identifying sources of assistance that
would, for example, allow them to specify their interests in the negotiations, or that would
allow them to develop the regulatory capacity to accompany greater market openness.
Providers of such assistance, whether WTO Members, international organizations, or otherpublic or private entities, could be invited to make presentations on how their programs might
address Member interests in the context of the GATS negotiations.  Members who are
recipients of assistance may wish to provide information on how it has or has not supported
their interests in the GATS negotiations.
Special treatment for least-developed countries:   Least-developed countries should be free
to choose their participation in any plurilateral or multilateral GATS initiatives.  Timeframes
within the negotiations should be sufficiently  flexible to allow least-developed countries to
identify their interests in the negotiations and respond to requests of trading partners.
Members should be responsive to proposals by least-developed countries to phase in new
commitments and establish transition periods.  The concluding date for the negotiation willallow for submission of final country schedules by least-developed countries six months later.
Possible new GATS disciplines:
Working Party on Domestic Regulation:  The United States proposes bringing to
conclusion by the midterm of the negotiations ongoing work on possible new GATS
disciplines on domestic regulation so that results may be incorporated into the market
access negotiations.
Safeguards :  The United States expects to work productively with others in pursuit of
the December 15, 2000, deadline.  The United States believes that the question of
emergency safeguards should be considered in the context of the degree of flexibility
that is likely to remain in other parts of  the Agreement, including in the schedules of
commitments, and the feasibility of applying safeguard measures in particular sectors.
Subsidies :  Members could consider whether existing disciplines on national
treatment are sufficient to address the most trade-distortive effects of subsidy
programs.
Government Procurement :  Members could consider the potential for specific rules
and commitments under the GATS.
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