RESTRICTEDWORLD TRADE
ORGANIZATIONS/CSC/M/28
24 June 2003
(03-3376)
Committee on Specific Commitments
REPORT OF THE MEETING HELD ON 12 MAY 2003
Note by the Secretariat1
1. The Committee on Specific Commitments held a meeting on 12 May 2003.  The agenda for
the meeting is contained in WTO/AIR/2088.  No points were raised under Other Business.
A. A PPOINTMENT OF A NEW CHAIRPERSON
2. The Chairperson recalled that according to the rules of procedure for meetings of the Council
for Trade in Services (S/L/15), the hand-over of th e chairmanship should have taken place at the end
of the last meeting of the Committee.  However, as consultations on the Chairs of the subsidiary
bodies had not been finalized at that time, it was decided that the hand-over would take place at thebeginning of the following meeting.  He proposed that the Committee elect Mr. Thomas Lambert,
from Belgium, as Chairperson of the Committee on Specific Commitments.
3. The Committee elected Mr. Lambert by acclamation.
B. STATE OF PLAY AND POSSIBLE FUTURE WORK
4. The Chairperson stated that the outgoing Chairperson and he had considered that this meeting
would offer a good opportunity to discuss possible ways in which the Committee could advance
technical work under its terms of reference in the most constructive manner.  Several suggestions on
how future work could be organized were set out in a note that the outgoing Chairperson and he had
prepared, JOB(03)/74.  Any other ideas that were not reflected in the note were highly appreciated as
input to today's discussion.
1. Classification issues
5. The Chairperson mentioned with regard to possi ble work concerning "classification issues"
that there were informal "friends-groups" which, among other things, also discussed such issues in a
sector context.  As not all Members were participating, many delegations had continued to express
interest in being regularly up-dated about progress in these fora.  It might hence be worth considering
whether participants could debrief the Committee about progress and possible differences in approach
vis-à-vis  any of the issues under their consideration.  The content of such debriefs would depend on
developments within the groups.  Such debriefs could be a regular item on the agenda of the
Committee.
6. The second point brought up in the note related to assistance from the Secretariat.  In order to
facilitate discussions on classification of certain services sectors, it might be useful to reconsider the
possibility of asking the Secretariat to produce a short, analytical note on existing classificationproposals.  Such an analysis might also help the work in the small groups and thereby facilitate their
                                                     
1 This document has been prepared under the Secretariat's own responsibility and without prejudice to
the positions of Members and to their rights and obligations under the WTOS/CSC/M/28
Page 2
preparations of debriefs in the Committee about progress made.  The analysis could focus only on
commonalties of the proposals.  If this was considered useful in principle, Members should reflect on
whether such analysis should be made on a horizontal  basis (i.e. on all sectors in one document) or on
a sector-specific basis.
7. In addition to these points, he recalled that some Members had queries regarding bilateral
requests they had received, which followed different classification approaches.  Any questions in this
regard could be addressed under the item of classification issues, particularly since these questions
would be of importance to all Members.
8. The representative of Hong Kong, China stated  that his delegation felt that the subsidiary
bodies were rather under-utilised, and Members should think of ways of trying to better utilise the
resources and time available.  The CSC had made very good use of time and resources in the past
year, and he looked forward to doing the same this year.  His delegation generally supported the threesuggestions concerning classification, particularly since it considered that the overall aim of work on
classification was to arrive, to the extent possible, at a common approach which facilitated the
comparability of Members' schedules.  Hence, a broad discussion of classification issues in a
multilateral forum, preferably the CSC, was essential.  He supported the suggestion of inviting
representatives from small groups to share their latest ideas on classification as and when they feltthey were ready to do so.  He considered that th at process might be facilitated if the Chair had
consultations with delegations involved in the various small groups and invited them to share their
views, this of course being without prejudice to individual delegations' positions.  Such information-
sharing could be done either in a formal or in a separate informal meeting of this Committee.
9. He also supported a technical analysis of classification proposals to be carried out by the
Secretariat, focusing first on common elements of the proposals.  Such work could prove helpful to
Members in formulating their initial offers and deciding on the use of classifications.  Thirdly, an
open agenda for raising classification issues that arose from bilateral processes was useful.  While the
discussions on classification were in practice dealt with bilaterally or plurilaterally, it was worth, not
least under considerations of transparency, to disc uss such questions in a multilateral forum for the
purpose of arriving at as broad an und erstanding among Members as possible.
10. The representative of Poland stated that the Committee was the body responsible for the
discussion of technical aspects of classification proposals, including the interpretation or clarification
of ideas put forward by Members.  He supported the idea to add an item to the agenda to allow
delegations participating in small groups to brief Members on progress in their deliberations.
11. The representative of the United States stat ed that it was important for the Committee to
continue addressing classification issues as they arose and to facilitate discussion when Members had
questions in the course of the negotiations.  She had reservations concerning the proposed Secretarial
analysis of existing proposals, even with a focus on commonalities.  Her delegation would like to
reflect further on that proposal and was interested in other delegations' views.  The idea of having astanding item on the agenda concerning classification issues was interesting, although any delegation
could raise and put them on the agenda at any time.
12. The representative of Thailand supported all three proposals made by the Chairpersons.
Looking at the offers that had been tabled so far, sh e felt that there was a lot of scope for help by the
Committee, especially from the perspective of developing countries which were grappling withclassification issues.  Her delegation was concerned about classification aspects of the offers, for
example concerning Mode 4, environmental services, and legal services.  Many Mode 4 offers
mentioned a category of "contractual service suppli ers," however, each apparently with differences in
scope and definition.  The membership as a whole would benefit from discussions on definitions in
Mode 4, e.g. each Member who made an offer could explain at a multilateral level what it exactlycontained.  Otherwise, smaller delegations might miss out on some nuances or slight differences.S/CSC/M/28
Page 3
Turning to environmental services, she noted th at many Members had tabled their negotiating
proposals concerning re-classification in the CSC and in the Special Session a long time ago.  As
there was no agreement on the ideal classification of environmental services, delegations had
submitted offers that included the changes that they would like to see.  While it was clear that
Members could not be forced to have a common understanding on classification, it would be useful toget a full explanation on the changes contained in the offers.  Another example concerned a Member
who had made commitments on advertising services, without further specification of the scope of that
commitment or any reference to a CPC code.  In its offer, the Member had now listed several
activities under the heading of advertising services.  It was not clear whether this amounted in reality
to a reduction, or roll back of the previous commitments.  She was interested in an explanation.
Lastly, concerning legal services, some Members had changed the scope of their legal services offers
from the way the commitments were set out previously. Also in that case, the question arose how thescope of the offers related to the existing commitments.  While it was unlikely that Members would
agree, at this stage, that the Secretariat carry out an analysis of the classification used in the offers, her
delegation would welcome any opportunity for an in-depth discussion sector-by-sector, in light of the
offers that had been tabled.
13. The representative of Switzerland supported the idea of having a standing item on the
Committee's agenda dedicated to debriefs about discussions in small groups.  Such an exercise was
very important for transparency and would help to advance work towards common classifications.
His delegation believed that analytical work by the Secretariat could be useful, but further thought
should be given to this suggestion to ensure concrete results.  Such work was not a first priority as it
was principally up to Members to carry out the necessary analysis.  He agreed to have a standing itemfor questions on classifications on the agenda.  On the suggestion by Thailand, he concurred that there
would be merit in looking more closely at the definitions used in Mode 4 offers which were indeed
very different.  However, he had doubts about the possible results of such a discussion as it was not
very realistic to think that Members would change th eir definitions in such sensitive areas, as these
were closely linked to national legislation.
14. The representative of Chile believed that a standing item on the agenda on debriefs from
small groups would be a positive step and would achieve greater transparency.  Members not
participating in these groups would benefit.  Such an exchange of information could avoid short-term
problems in analysing offers and requests from Members and could help to address conflicts between
different classification systems.
15. The representative of the Philippines stated that, while almost all Members agreed that the
subsidiary bodies had been under-utilised and everyone wished to resuscitate them, to a large extent
the problem had been to operationalize this notion.  Concerning the informal discussions going on in
friends groups, he thought that these groups woul d naturally come forward and provide additional
insights on the various classification issues once they had arrived at solutions.  For developing
countries, there would be obvious value-added from having the Secretariat build on the existing
Compendium.  His delegation had no problem concerning a note focusing on commonalities of thevarious proposals on the table, although some had evolved since the time they had first been tabled.
Hence, the question was what the basis or raw material to be used by the Secretariat would be, i.e. the
existing classification proposals or the classifications reflected in the initial offers?  He wondered to
what extent the Committee was going to carry forward this analytical exercise.  Perhaps, as a first
step, the focus could be on commonalities.  He agreed with the idea of having on the agenda an itemthat allowed for an opportunity for delegations to ra ise technical issues regarding the classifications in
the offers submitted.
16. The representative of Indonesia supported the proposal of analytical work focusing on
commonalities in the existing classification proposals.S/CSC/M/28
Page 4
17. The representative of Cuba welcomed the idea of a standing item on debriefs by small groups.
This would enhance transparency and facilitate progress in Members' work.  Concerning possible
Secretariat analysis, he thought that this was in pr inciple a good idea, as long as it concentrated on
comparing technical differences in proposals.  Such an analysis would enhance clarity and would not
try to guide or put any pressure on Members' work.  He also supported the idea of a standing item onclassification approaches in offers.
18. The representative of Korea noted big differences in the classification methods applied in
certain sectors in the initial offers.  Those differences needed to be clarified and, if necessary,
harmonized in order to make the new schedules more user-friendly. Therefore, he favoured the idea
that small informal groups be invited to report on progress made on classification issues.  Korea
concurred with other Members that the subsidiary bodies to the CTS should be used to their maximum
capacity.  In this light, the CSC should continue to focus on the technical aspects of the servicesnegotiations to give guidance to Members in the process of drafting requests and offers and,
eventually, final schedules.
19. The representative of Canada questioned the usefulness of having structured debriefs by
informal groups, especially given the status of discussion in many of these groups.  Any Member or
group of Members was free to raise any issue at any time.  Concerning the suggestion that the
Committee request an analytical note from the Secretariat on commonalities in existing classification
proposals, he shared the reservations made by some Members and noted that such a note might
include interpretative assessments by the Secretariat.  On the issue of technical clarifications of
classification proposals, his delegation appreciated the objective of the Chair's suggestion to provide
as much clarity as possible.  In this regard, the Committee should continue to review the proposalspresented to it.  Technical clarifications of specific bilateral requests might ideally be dealt with at
bilateral meetings.  To the extent that Members raised technical questions regarding requests, this
should bear in mind the sensitivity of the documents concerned.
20. The representative of Brazil stated that the note by the Chairpersons addressed one of the
concerns of his delegation, that is the excessive segmentation of the initiatives on classification.
Some classification proposals consisted of reallocating activities from one sector or sub-sector of the
current classification to another, while others proposed the inclusion of new activities not covered in
the present classification system.  His delegation's concerns related to the consequences of an in-depth
modification of the classification list W/1202 in view of commitments already taken under the GATS.
Since the present classification had been used by most Members to formulate legally binding
obligations, alterations in definitions and sectoral coverage could weaken the transparency and
predictability of current and new commitments.  He believed that the proposal made by Hong Kong,China at the previous meeting concerning analytical work on classification by the Secretariat merited
more detailed consideration by the Committee.  The Secretariat could undertake more analytical work
based on the Compendium of classification proposals, and also the new offers that were being
circulated could be used as a basis for further work as had been suggested by Thailand and the
Philippines.  Such an exercise should be regarded as a technical contribution and would not prejudgeany delegations' position on classification.  Concerning a standing item devoted to debriefs by
informal groups, he felt that this could create the impression that these groups were the appropriate
fora to discuss such issues.  This differed from the situation of a Member asking for the floor to give
its point of view on questions that arose in those informal groups.  Having shared its concerns on this
issue, Brazil would not oppose a consensus that may emerge within the Committee on this matter.Finally, he supported the idea of placing a classification item on the agenda of the CSC so that
technical questions, especially on the new offers, could be raised.  Given the dynamic and informal
nature of the request and offer process, perhaps Members might be more comfortable with discussing
classification in a formal meeting based on their official offers rather than talking about their requests.
In the absence of such initiatives, the increased segmentation made it very difficult to evaluate
                                                     
2 MTN.GNS/W/120, 10 July 1991S/CSC/M/28
Page 5
whether undertaking obligations on the basis of different classifications would have a liberalising
effect, or on the contrary would limit an existing commitment.
21. The representative of Colombia stressed the importance of classification for better
understanding schedules of specific commitments.  Debriefs by informal groups should be a standing
item on the agenda of the CSC.  While this would improve transparency in the process, the informaldiscussions should nevertheless be open to all delegations.  Colombia supported the idea of an
analytical note by the Secretariat, but inquired about the exact content of such a document.  Picking
up the suggestion by Thailand on Mode 4, he believed that this extremely important issue could be
discussed at a technical level in the CSC.  The objective of technical discussions of classifications
needed to be clarified.  It was not clear whether the purpose was to improve the classification list or to
broaden or expand commitments.  It was important not to mix technical work with negotiations on
market access.
22. The representative of Egypt stated that her delegation preferred if debriefs by informal groups
were to be made on an informal basis and not as regular items on the agenda, and also without
prejudice to the individual Member's position.  Second, analytical work by the Secretariat could help
Members understand various issues relating to classification; however, any such work must not affect
in any way Members' right to interpret their schedules of commitments.
23. The representative of European Communities, commenting on the suggestion of debriefs by
informal groups, stated that transparency was vitally important to help all Members understand
proposals or intentions concerning classification.  However, the question was how best to encourage
delegations to address the Committee when they had been talking informally in friends' or other
gatherings.  While she would agree with the principle, there were also some hesitations about having astanding item on the agenda, partly because of the points put forward by Brazil, but also because
much of the relevant work might be best addressed as the Committee dealt with individual issues
under the classification agenda item.  The proposal put forward by Hong Kong, China about having
the Chair consult with different groups seemed to give too much weight to the work by some
Members though not by all.  She understood that the proposal concerning an analysis ofcommonalities in classification proposals to be prov ided by the Secretariat, was intended to solve
potential difficulties.  One might have to determine what the commonalites were.  Since many of the
relevant ideas were contained in negotiating proposals, taking a partial view of individual proposals
could in some way skew the ensuing debates.  Her delegation was more than willing to answer
questions on its own proposals.  There was a distinction to be made between a technical discussion of
issues and the actual negotiations.  In relation to Thailand's request for discussion of certain
terminology concerning Mode 4, and in particular in relation to contractual suppliers, the differentnuances in Members' schedules most likely reflected the individual legislation that existed in those
countries.
24. The representative of Japan shared the view of other delegations that transparency concerning
classifications was extremely important.  The proposals presented a good occasion for Members to
reflect on how to utilise this forum for increasing the transparency of work.  The approaches proposed
in the Chairpersons' note, including debriefing, analysis or technical question-and-answer sessions
should be considered by those countries that wished to make new proposals to revise or review
existing classifications.  Those approaches could be very useful for enhancing further understanding
of classification issues.  He suggested that informal consultations between the Chair and the various
protagonists of classification proposals or groups might be a useful way of identifying areas fordiscussion in this forum.  With reference to the suggestion of analytical work by the Secretariat, he
suggested that in order to maximize on the resources  of the Secretariat, agreement should be sought
on a limited number of areas of priority importance, rather than instructing the Secretariat to carry out
an analysis of all sectors.S/CSC/M/28
Page 6
25. The representative of Chinese Taipei stated that for his delegation classification was one of
the most important elements of the current negotiations.  His delegation supported the proposed
debriefings on progress in the informal groups.  The specific issues should be agreed at the preceding
Committee meeting.  His delegation was interested in an analytical note to be produced by the
Secretariat;  however, that note could be prepared after the discussions and debriefings on individualitems.
26. The representative of India shared the view of ot her delegations that it would be useful for the
Committee to invite Members who were participa ting in the small informal group discussions to
update the Committee on progress and approaches.  This was of course without prejudice to Members'
positions on classification proposals.  He concurred that the classification item on the agenda should
remain open for any Member to raise technical questions or definitional issues relating to specific
sectors or modes of supply, as alluded to by Thailand.  In light of the divergent views on the issue ofmandating the Secretariat to undertake further analytical work on classification proposals, he thought
that more clarity on what was actually intended in terms of scope of analysis might help Members
decide the future course of action in this matter.
27. The representative of Venezuela noted that in the Services Council, some Members which
were part of the groups on energy, had made spontaneous interventions on the classification of energy
services.  His delegation had no problem if such an approach, whether it was as an information
exchange, or a debrief on consensus was adopted by any such group.
28. The representative of Uruguay stated that he could generally go along with the proposals
made by the Chairpersons.  In order to reconcile the various views concerning the debriefings by
informal groups, he suggested that rather than having a standing item on the agenda, those delegationswho were participating in these informal groups coul d request, as appropriate, that the item be placed
on the agenda.  Alternatively, a standing item on classification issues could be maintained on the
agenda, and under that item any delegation could intervene, not necessarily only on discussions taking
place in informal groups, but also to raise any classification issue.
29. The Chairperson concluded that there did not seem to be a genuine consensus on any of the
three classification proposals.  Several participants had indicated that they wished to reflect further on
the issues proposed.  He suggested that Members take note of the statements made and revert to the
proposals at the next meeting.  He would consult with delegations and contact those delegations that
had asked more specific questions.  He invited any delegation with further views to contact him or the
Secretariat.
2. Matters relating to the scheduling co commitments
30. The Chairperson recalled that JOB(03)/74 had expressed the view that, for the time being, the
discussion on the consolidation of schedules and on questions relating to additional commitments
appeared to be exhausted.  However, if Members thought it useful to maintain or reintroduce these
items at the appropriate moment, this was of course possible.
31. The representative of Thailand agreed that discussions on consolidation of schedules and
additional commitments could be removed from the age nda for the time being.  She noted that errors
in the consolidation of Thailand's schedule had been corrected.  Concerning additional commitments,
she believed that the item would need to be revisited at a later stage in light of proposals by Members.
32. The representative of Japan asked whether the Secretariat had verified the three schedules that
had been consolidated by the respective Members rather than the Secretariat.  He requested
clarification on how to proceed should there be a need for rectification of the consolidated schedules.S/CSC/M/28
Page 7
33. A representative of the Secretariat recalled that the draft consolidated schedules were only
working documents without any legal status.  The Secretariat had prepared the drafts to the best of its
ability, but the final responsibility for the accuracy of each consolidated schedule remained with the
respective Member itself.  In situations where technical errors had been identified, the Secretariat had
corrected them.  With respect to the verification process mentioned by Japan, he expected such aprocess to take place through the negotiations itself.  Until the end of the negotiations, Members had
the opportunity to examine all schedules, which were presented in the format of an offer and even pre-
existing schedules.  There was no need for an official rectification of those documents, since a
certification of rectifications was only necessary for changes in the legally binding schedules, i.e. the
schedules that were currently in force.  Any erro rs in the working documents would be corrected by
way of a corrigendum, as for other working documents.  The original schedules would only be
changed once the final protocol at the end of these negotiations entered into force.  Anythingpresented in the interim would be no more than a working document.
34. The representative of Hong Kong, China shared the Chairperson's conclusion that discussion
of issues relating to scheduling of commitments had been exhausted for the time being.  He was
confident, however, that such issues would arise in the course of the negotiations, and delegations
should remain free to bring them up.  Concerning the scheduling of additional commitments, heexpected further questions on how it would impact on existing rules and the interpretation of
commitments.  Secondly, it was likely that some delegations had included in their offers
modifications of existing commitments.  He considered that there could be three types of possible
changes.  The first case concerned improvements in commitments subject to negotiations under
Article XIX of the GATS.  The second case related to technical modifications of commitments forwhich a separate procedure had been provided for in document S/L/84.  He noted that when tabling
their initial offers, Members were also allowed to indicate where they were proposing technical
modifications of their commitments.  The third case concerned the modification or withdrawal of
existing commitments which fell under Article XXI of the GATS.  He took note of previous
statements by the Secretariat that it had not yet been settled whether there was still scope foraddressing this issue in the course of the final verification of all schedules of commitments.  However,
there was no mandate for doing so for the time being.  Further discussion would be required on how
to deal with any offers that included modifications or withdrawals of existing commitments.  He
recognised that this might be an issue beyond the remit of the CSC, as it might not simply concern
technical changes.
35. The representative of Indonesia stated that his delegation had discovered a few errors in the
draft consolidated schedule of specific commitments, which he would correct and request the
Secretariat to circulate.
36. The representative of Canada stated that the consolidated schedules by Members who had
undertaken to do their own consolidation were under review in his capital.  He concurred with some
of the concerns related to rectification procedures.  It would be confusing if negotiations for
liberalizing commitments were to be combined with Article XXI procedures.  He reiterated that the
goal of these negotiations should be to ensure that the level of liberalization achieved in previous
rounds of negotiations was increased rather than reduced.  There were several important issues that
would have to be dealt with as part of the discussion under the agenda item "Matters related to the
scheduling of commitments."  In particular, Members should begin thinking about what elements the
Sixth Protocol should contain.  Also, Canada considered that the relationship between existing andnew commitments was an important unresolved issue.
37. The Chairperson concluded that given the interest by delegations, discussions on additional
commitments and consolidation of schedules could be reintroduced on the agenda at a later stage.  He
emphasised that in their informal note, he and the outgoing Chairperson had stressed that flexibility
should be kept for Members to bring up any issue they considered important.S/CSC/M/28
Page 8
3. New issues to be considered
38. Turning to other areas of possible future work, the Chairperson stated that in their informal
note, he and his predecessor had suggested two areas for Members' consideration.  The first related to
the scheduling of commitments.  Doing this in a manner that allowed other Members to fully
appreciate the scope and the exact content of a commitment was not always an easy task.  There werenumerous technical questions that could be addressed and several of them had been flagged at the
scheduling workshop that the Secretariat had organised last November.  It might be useful to request
the Secretariat to prepare a note illustrating - on an anonymous basis – examples of existing
inconsistencies in schedules.  That note could also analyse the pros and cons of various approaches,
and would document the lessons learnt from last years' scheduling workshop.  Such a note could well
assist Members in technical preparations for the ongoing negotiations and could inspire a higher
degree of harmonisation in the scheduling of commitments.  Alternatively, Members themselvescould flag the issues they would like to see addressed by the Committee, and the Secretariat could
then be asked to provide specific inputs as needed.
39. A second issue that he and his predecessor had been thinking of was the scheduling of
economic needs tests (ENTs) and the related underlying criteria.  There were approximately 250
ENTs in the schedules of more than 90 Members a nd in many cases the Members applying ENTs had
not specified the criteria upon which these tests were based.  He requested Members' comments as to
whether the use and treatment of ENTs in schedules could be a topic for further work, and whether
possible ways to better specify the technical criteria underlying ENTs in the schedules of
commitments could be explored in the near future.  An initial basis for discussion of this issue could
be the Secretariat note on ENTs of November 2001 (S/CSS/W/118).  He stressed that anyconsideration of the two topics would remain with in the mandate of the CSC, i.e. be limited to
clarifications of technical aspects of the respective subjects.
40. The representative of India stated that ENTs were major entry barriers preventing free
movement of service suppliers, and were hence an issue important to his delegation.  The conditions
on which ENTs were based were not clearly specified and defined in many cases, thereby leavingcomplete discretion in their application and reducin g the predictability of specific commitments.  He
was flexible in looking at technical aspects of ENTs, and noted that his delegation had submitted a
very comprehensive proposal on Mode 4 in the Special Session of the Council outlining possible
approaches and strategies for undertaking liberalization in this mode of supply.  The paper also
included the issue of ENTs and outlined possible ways to deal with it in the context of ongoing
negotiations.  Other Members also had submitted papers on ENTs in the Special Session and his
delegation would, of course, welcome a substantive discussion and engagement in the Special Sessionto address this issue.
41. The representative of Indonesia supported the proposal that the Secretariat prepare a note
illustrating examples of existing inconsistencies in Members' schedules.
42. The representative of Poland supported the proposal that the Secretariat be asked to prepare a
note illustrating examples of potential scheduling inconsistencies in Member's schedules.  He also
thought that the Committee should be responsible for the discussion of technical aspects of economic
needs tests.
43. The representative of Uruguay welcomed the idea that the Secretariat be tasked to prepare a
factual note giving examples of scheduling inconsistencies.  The note should not be slanted in any
way and should simply identify possible cases.  Secondly, with regard to economic needs tests, herecalled that Mercosur had made a proposal.  He had no problem with having discussions on this
subject, even though he thought that the ultima te objective should be the elimination of ENTs.
Picking up on an issue discussed earlier, he requested further clarification on the relationship between
the procedures under Article XXI and the negotiations underway under Article XIX.S/CSC/M/28
Page 9
44. The Chairperson stated that, staying within the parameters and terms of reference of this
Committee, he had suggested work on scheduling and underlying criteria of ENTs.  This was without
prejudice to any delegation's position on the desirability of removing ENTs in general.
45. A representative of the Secretariat stated that from a legal point of view, the negotiations
under Article XIX had clear objectives as set out in that Article, i.e. to achieve progressively higher
levels of liberalization.  From Article XIX, as well as the negotiating guidelines which were
subsequently affirmed by Ministers, it was evident that the objective of the negotiations was to add on
to what was already contained in the existing schedules of commitments.  Article XXI, on the other
hand, was designed to address the completely different situation of cases where a Member wished to
withdraw or modify an existing commitment.  Neither Article XIX nor the negotiating guidelines
restricted the right of any Member to invoke the pr ocedures of Article XXI at any time.  If the latter
were invoked during a broader round of negotiations, both negotiations would of course be conductedsimultaneously.  As both processes were legally distinct, a Member who wished to withdraw a
commitment was expected to do so transparently under Article XXI.  He noted that at the end of the
Uruguay Round, concerning trade in goods, paragraph 7 of the Marrakesh Protocol refered to three
countries, who had invoked Article XXVIII of the GATT and explicitly stated that those countries
were deemed to have invoked Article XXVIII, and therefore the results of the negotiations in theirtotality reflected also the results of the Article XXVIII negotiations with respect to the tariff bindings
that those three countries had wished to modify.
46. The representative of Chile supported the idea that the Secretariat be asked to prepare a note
referring to certain inconsistencies that may exist in  Members' schedules.  The note could be useful in
helping Members to ask further questions and thereby contribute to the overall debate.  He added thatthe note could also refer to other issues.  His delegation, for example, was holding internal
consultations about the retail distribution sector and had noted that some schedules of other Members
contained restrictions under Article XVI on municipal regulations on the locations or numbers of
shopping centres in urban areas.  Other schedules of commitments did not make any such reference.
Both the delegations who had scheduled limitations and those who had not, thought that they werefree to impose such restrictions.  There was a need to clarify this grey area.  On ENTs, Chile believed
that it would be desirable to do away with these measures altogether.  All technical aspects related to
ENTs could be dealt with in the Committee on Specific Commitments.
47. The representative of the Philippines supported the idea of a Secretariat note pointing to
possible inconsistencies in Members' schedules.  Regarding ENTs, he was mindful that without the
corresponding political commitment on the part of a ll Members to address them as a negotiating issue
in the Special Session, the CSC could only contribute marginally given its terms of reference.
48. Responding to a question from Canada, a representative of the Secretariat  stated that the
documentation that had been prepared for the scheduling workshop was on the Members' web-site.
The exercise sheets were available from the Secretariat.
49. The representative of Canada stated that it was very difficult to draw the line between a
technical analysis of inconsistencies and legal interpretations.  His delegation was uncomfortable with
the idea of a Secretariat paper in this regard.  As the documents that were prepared for the scheduling
workshop were available to Members already, these were perhaps a better basis for Members to
develop their understanding of where inconsistencies might lie.  Turning to the ENT issue, he was not
sure if an analysis was possible on a horizontal basis.  The discussions earlier this morning about
different scheduling approaches in the area of Mode 4 clearly reflected national regulatory regimes.  Itmay be the case that ENTs similarly varied on the basis of domestic regimes.  If ENTs were to be
analysed, maybe a sectoral analysis would be more useful.  He noted that ENTs were a market access
issue and were addressed in the bilateral negotiations.  It might be useful to wait until more offers had
come in before the CSC began a detailed analysis.S/CSC/M/28
Page 10
50. The representative of Thailand agreed with both proposals in principle.  Thailand had always
opted for an elimination of ENTs, and if that was not possible, a reduction of ENTs on the basis of
clear criteria.
51. Further to a question by Thailand as to where to draw the line between a technical change
which did not alter the substance of a commitment and a substantive change, a representative of the
Secretariat stated that the answer  would be found in the procedures relating to the certification of
modifications and rectifications of schedules.  The certification procedure developed and adopted by
the Council in document S/L/84 meant to address cases where the Member introducing the change
claimed that it was only of a technical nature.  The only judge on whether this was actually the case
was the rest of the membership.  Therefore, the procedure in S/L/84 specified that after a period of 45
days, if Members had not objected, the change would take effect.  If any Member objected to the
change on the grounds that it was not just technical but substantive, the procedure of Article XXI wastriggered automatically;  it was designed to deal with situations where a Member introduced a
substantive change.
52. The representative of Cuba supported the idea that the Secretariat prepare a note which would
give concrete, anonymous examples of existing inconsistencies in Members' schedules.  This would
help in the negotiations presently underway and assi st Members in identifying any inconsistencies that
might exist.
53. The representative of the European Communities shared some hesitations expressed by other
Members, and stated that her delegation would like to revert to the issues proposed at a future
meeting.
54. The representative of Switzerland welcomed the suggestion concerning a factual Secretariat
note.  He also supported a discussion on technical issues on ENTs despite the fact that, as it was the
case for other delegations, Switzerland's aim was to reduce or eliminate ENTs.
55. The representative of Brazil supported the idea of a note from the Secretariat regarding
possible inconsistencies in schedules as long as the note did not attribute names of delegations.  Such
a note would enable Members to be more specific in defining their positions in the negotiations andlooking at the offers.  He asked the delegations of Canada and the European Communities to
reconsider their positions.  It seemed that a document such as the one proposed would not imply a
value judgement on measures.  It would be useful particularly to developing countries.  He also
supported technical work on economic needs tests, without prejudice to Mercosur's position on this
issue as presented in a proposal last year.  Mercosur was interested in a complete elimination of
economic needs tests.
56. The representative of Hong Kong, China supported both suggestions for new work.  A note
by the Secretariat on scheduling inconsistencies would be useful as it could built on the basis of last
year's scheduling workshop.  With the caveats indicated by the Chair in his introduction, such a note
would not prejudge Members' positions on how they  applied the scheduling guidelines or how they
scheduled their commitments.  The note would serve as a useful tool for individual delegations and
assist them in avoiding potential inconsistencies when they were drawing up their schedules.  Oneway of preserving anonymity would be for the Secretariat to abstract from  the origin of the examples
and to actually emphasise the key areas where the inconsistency might lie.  On the question of ENTs,
he took note that there were two parallel tracks of discussion, one in the context of the ongoing
negotiations, and addressed in the Special Session of the Council.  The second track would relate to
technical aspects for the purpose of scheduling ENTs in light of what already existed in thescheduling guidelines.  He stressed this because there were clear provisions on ENTs in the
scheduling guidelines.  The question then, for the technical discussions, would be how these
provisions could be properly followed when Members were to include ENTs in their schedules of
commitments.S/CSC/M/28
Page 11
57. The representative of the United States shared the concerns and reservations coming from the
delegations of Canada and the EC.  She wanted to reflect a little more on the thought by Canada to
recompile in some user-friendly manner what had been produced in the exercises for the scheduling
workshop.  She also wished to reflect further on the question of work on ENTs.  She recalled that the
scheduling guidelines were non-binding.
58. The Chairperson noted a widespread interest by Members on further work on technical
criteria of ENTs.  However, some reservations had been expressed as well. He proposed to consult
with the Members concerned.  Likewise, there was substantial interest in discussing scheduling
inconsistencies on the basis of a note by the Secretariat.  Although some delegations had expressed
hesitations.  A practical suggestion had been made to present the problems in a more abstract form to
increase user-friendliness and ensure that anonymity could be preserved.  He invited his predecessor
to comment on the scheduling workshop which had been carried out under his auspices.
59. The previous Chairperson, Mr. Niklas Bergströ m, noted that the scheduling workshop had
been a major technical assistance project, with the participation of many capital-based officials from
developing countries.  Given their positive feedback, he felt that examples of possible inconsistencies
might prove be very helpful for them to have.
60. The Chairperson suggested that the Committee take note of the statements made and revert to
the item at the next meeting.
61. It was so agreed.
C. CLASSIFICATION ISSUES
62. The Chairperson recalled recent discussions on computer- and related services, on the basis of
papers submitted by the European Communities (S/CSC/W/35) and Chinese Taipei (S/CSC/W/37).
Prior to this meeting, the delegation of the European Communities had submitted a paper on the
classification of legal services, contained in document S/CSC/W/39.
63. The representative of the European Communities noted the usefulness of the compendium,
and requested that his delegation's proposal on legal services be included in a future updated version.
He noted that it was not proposing any new classification, but rather tried to bring legal services inline with other services sectors.  The definition of an activity should be separated from the licencing
conditions that had to be fulfilled in order to perform that activity.  The classification contained in
document W/120 had shown enough flexibility for Members to schedule commitments; what was
needed was a common understanding of the commitments so that the current classification could
provide a basis to reflect modern international le gal practice.  The first point in his delegation's
communication was a description of how international legal practice worked at present.  The ongoing
globalisation of commercial activity by business made it imperative that lawyers were able to provideto their clients advice and assistance with respec t to the laws of the jurisdictions in which these
lawyers were qualified to practice, no matter the place or context in which these laws had to be
examined (the jurisdiction of the territory where the client was established, another jurisdiction, or
arbitration procedures).  Whenever a client requested advice or assistance in respect of the laws of
jurisdictions for which the lawyer was not qualified to practice, he should be able to cooperate eitherthrough a network of "best friends" or through a partnership with lawyers qualified in the law of the
jurisdiction.  This possibility of cooperation became fundamental whenever the client had to be
represented in a national court or administrative body that applied the law of a jurisdiction for which
the lawyer was not qualified to practice.  The requirements of contemporary international legal
practice could be easily met by law firms, provided that they were allowed to recruit or enter intopartnership with lawyers qualified to practice in different jurisdictions.S/CSC/M/28
Page 12
64. Most WTO Members that had taken commitments for legal services had limited them to only
legal advice or consultancy.  This was probably the case because Members feared that commitments
on all legal services would imply that a lawyer who had not been admitted to the Bar in their territory,
could represent clients in front of the national court.  In addition, most of the commitments refered to
specific fields of law that they covered.  For that  purpose, the distinction between host country, home
country, third country in international law was used.  This terminology raised many questions: for
example, the concept of home country law which could be defined as the law of the country or
jurisdiction where the lawyer was qualified to practice, might overlap with the concept of host country
law.  Also the concept of third country law could l ead to different interpretations.  If it was meant to
be any third country law where a lawyer was qualified to practice, it was no different from home
country law.  Another interpretation of third country law was that it comprised the law of any country
other than the host country, where the lawyer was not necessarily qualified to practice.  Also thedefinition of international law was fraught with difficulties because it could be defined either by
source (i.e. Body, Treaty), content (i.e. regulations  of international relations between the states) or
even by the jurisdiction in charge of applying that law – an International Court or Tribunal.
65. In his delegation's view, all these approaches unnecessarily mixed the definition of a service
with the qualifications that were necessary to provide that service, and consequently tended tooverlook the situation of law firms.  For classification purposes, the only parameter to be taken into
account should be the nature of the different services that could be provided by legal professionals,
and in this regard the CPC, after the revision of 1997 which added Arbitration and Conciliation
Services, was exhaustive.  It was not necessary to make a further distinction based on different fields
of law, because it was understood that whatever service a supplier wished to provide, whether a legalservice or not, it was a service for which that supplier was qualified.  Commitments should cover all
legal services without further specification of the scope of activities.  As regards the fields of law,
there was no need to reflect them in the schedule.  Members willing to undertake commitments on
third country law on the basis of an interpretation that would cover law for which a lawyer was not
qualified would go beyond the relevant scope of a commitment.  Hence, Members should act on legalservices as they did with any other service sector and distinguish regulatory measures from market
access and national treatment measures.  Some regulatory issues might need to be addressed through
additional commitments, namely the acceptance of non-qualified lawyers, while others had to be dealt
with in the market access and national treatment columns - namely the issues of partnerships and
foreign establishments of law firms.
66. The representative of Australia disagreed with the EC view that maintaining the
undifferentiated entry of legal services in the W/120 would assist in increasing the number or improve
the quality of legal service commitments.  The na ture of commitments made by Members in the
Uruguay Round was a clear demonstration of the problems of a single entry.  One might go as far as
stating that the 44 Members who had made legal services commitments in the Uruguay Round had
done so despite the single entry provided for in W/120.  Instead of using the single entry to identify
the sub-sector, most of those Members had made commitments using a classification that reflected,for them, the reality of transnational trade in lega l services.  Legal services were broken down into
sub-categories that made possible the distinction be tween host country law, home country law, third
country law and international law.  These sub-categories were meaningful to the wider legal
profession and, very importantly, allowed for precision in making commitments.  CPC 861, which the
EC favoured, suffered not so much from a lack of coverage of legal services, but from inappropriate
coverage.  It had a purely domestic, or one-jurisdictional perspective and was not conducive for use in
transnational trade in legal services.  In addition, the sub-categories under CPC 861 were primarily
defined with a strong focus on conducting litigation, i.e. providing both advisory and representational
services in relation to either pleading or preparing for a case in court, including any out-of-court legal
work or preparation of a case.  This did not provide a suitable framework for classifying transnationallegal services under the GATS.  Transnational legal services' providers were primarily interested in
providing advisory services that underpinned business transactions in the commercial sphere with an
opportunity to base that advice on the laws of multiple jurisdictions.  Australia considered that theS/CSC/M/28
Page 13
sub-categories of host country law, home country law, third country law and international law
provided the required degree of flexibility and specificity for Members to make commitments.
67. He was in agreement with the EC on one fundamental aspect, namely that legal practitioners
should be able to provide legal services in relation to the law of the jurisdiction where the service
supplier was qualified.  The term "qualified" here was understood to mean that the service supplierhad a legal right to practice law.  However, it was difficult to see how Members could make
meaningful specific commitments on that basis if the sub-categories identifying the relevant
jurisdictions, ie. home country, third country and host country, were not available.
68. The representative of the United States stated th at as part of its initial requests her delegation
had circulated a document concerning a legal services reference paper, and looked forward to consult
further on that particular approach to making legal services commitments.
69. The representative of Mexico requested clarification regarding paragraphs 8, 9 and 10 of the
definition of international law and third country law.  According to the EC, did the definition remain
in the hands of the Member assuming the commitment?  An answer to this question was very
important when it came to making commitments.  In Mexico, there was no legal definition of "law",
as difficult to understand as this may be.
70. The representative of Switzerland stated that his delegation shared many points of the EC
analysis, particularly as contained in paragraphs 4, 8 and 9 of the EC paper.  A look at modern
international legal practice revealed that a distinction between different fields of law was no longer
appropriate.  Many clients needed legal services in different fields of law, which rendered the
distinction frequently found in Members' schedules between fields of law increasingly artificial.  A
modification of the current classification contained in W/120 was not necessary to improve the qualityof the schedules and commitments.  The example contained in paragraph 21 of the EC paper was very
useful.  In its initial offer, Switzerland had precisely taken this kind of commitment for legal services.
71. The representative of Japan stated that his delegation would consider the modification or
revision of a classification, limited to the minimal extent necessary, if and when there were clear
benefits to be derived from it.  Taking into account the reality of trade in legal services, and alsotaking into account the fact that there was already a certain level of commitments with a certain level
of specificity, he thought that it was important, for the sake of legal stability of existing commitments,
to protect the clarity of schedules.  He had the impression that the level of transparency was not
necessarily enhanced by the approach advocated by the EC which carried the risk of losing the
transparency that already existed in various commitments.  The distinction between home country,
host country, third country and international law, as explained in existing schedules, was useful and
should be conserved for the sake of transparency.
72. The representative of the Republic of Korea agreed in essence with the EC paper that, instead
of the distinction between home country, host country, and third country law, the concept of law of
jurisdiction where the services supplier was qualified could be more appropriate.  He further agreed
that the notion of international law should be limited to public international law.  He had three
preliminary questions to the EC at this point:  firstly, in paragraph 9, with regard to scope of publicinternational law, the EC pointed out that community law was not international law but domestic EC
law.  Was there a separate qualification requirement for being an expert on EC law, other than the
qualification for being able to provide representation services?  Secondly, he referred to paragraph 11,
concerning the distinction between the service supplier and the law firm.  Under Mode 3, the service
supplier was a law firm which was composed of individual professionals with appropriatequalifications.  But service suppliers under Mode 4 were the same individual professionals.  The law
firm was a mode of supply and not a service supplier per se  without the professionals.  Therefore, he
wondered what purpose the proposed reclassification of law firms would serve.  The third question
related to the scope of CPC 861, as discussed in paragraphs 16 and 17.  Did the EC proposal includeS/CSC/M/28
Page 14
areas such as documentation and certification, which were part of CPC 861, and should a Member
inscribe specific limitation in this area if it wa nted to exclude them from market-access commitments?
73. The representative of Chile stated that his delegation did not have a clear position yet on
whether there was a need to open the classification of this sector to the various types of legal services
that may be provided.  As lawyers were providing their services more and more frequently in differentcountries, he wondered whether the necessary licensing requirements could be avoided by means of
mutual recognition agreements (MRAs) and, if th is was the case, whether the European Community
would submit a proposal in order to promote MRAs under Article VII:5 of the GATS?
74. The representative of New Zealand considered that the selectivity contained in the approach
taken during the Uruguay Round was quite useful, pa rticularly with regard  to the flexibility it
provided.  Therefore, breaking legal services down into the four fields of law was quite useful and she
saw no reason at present to abandon that approach.
75. The representative of Brazil noted while it was necessary to distinguish between the services
and the qualification for providing the services, sometimes the qualification to provide a legal service
was related to the field of law.  In this sense, if the qualification was tied somehow to the field of law
in which the foreign lawyer could provide services, there could be effectively discrimination.  He was
not sure whether information was enhanced or in fact lost through a statement indicating that thecommitment was limited to the laws in which th e services supplier was a qualified lawyer.
76. The representative of the European Communities stated that the concepts of host country,
home country, third country and international law might be useful as technical terms, but not as a
classification.  If an Australian lawyer was qualified in the US, and the US commitments only applied
to home country law and not to host country law, this Australian lawyer was not covered by thecommitments.  The whole purpose of the paper was to avoid a definition of categories.  If a lawyer
was qualified, this was always in relation to a certain law.  There was no need to define categories.
He agreed that it was difficult to define international law, mainly because depending on the
interpretation it could conflict with national law and some countries required a specific qualification
to do national law.  For practical purposes, the EC preferred to keep the definition of international lawlimited to public international law to avoid conflict with national law.
77. Turning to a comment by Japan, he explained that the footnote in the EC paper was merely
intended to enhance transparency.  It was clear that whenever a supplier went to a country, he/she had
to comply with the licensing conditions of that country.  When the licensing conditions amounted to
market access or national treatment restrictions, then they had to be inscribed in the relevant columns.
With regard to the first question posed by Korea, he noted that EC law was the domestic law of the
EC and any qualification in any Member State of the EU was sufficient to practice EC law.  This wasset out in the EC offer.  Regarding the question abou t the service supplier, he stated that the EC was
trying to bring legal services in line with other service sectors.  For example, in case of financial
services, banks were service suppliers, but perhaps there were also brokers providing specific
services.  On the scope of CPC 861 – the question of  documentation or certification - he stated that
these were clearly legal services.  However, commitments only extended to those people who werequalified.  If a foreign lawyer had obtained a qualification to perform documentation and certification
services in a country, he should be allowed to supply these services.  If a Member wanted to exclude
specific services, it could always leave it unbound for that specific CPC number, subject to
negotiation.  On the comment by New Zealand, he noted that the Uruguay Round commitments were
not always clear, as was explained in footnote 10 of the EC document.  He concluded that Membersneeded to reach a common understanding of how to address legal services and whether it was
necessary to make a distinction which did not exist in other services areas.
78. The Chairperson said that the EC's contribution would be integrated into in the next revision
of the Compendium.  He suggested that the Committee take note of the statements made and revert toS/CSC/M/28
Page 15
the item at the next meeting.  As there were no items under Other Business, he proposed that the next
formal meeting be held during the week before the next formal meeting of the Council for Trade in
Services in July.
79. The Committee so agreed.
__________