RESTRICTEDWORLD TRADE
ORGANIZATIONS/CSC/M/9
1 June 1999
(99-2206)
Committee on Specific Commitments
REPORT OF THE MEETING HELD ON 27 APRIL 1999
Note by the Secretariat
The Committee on Specific Commitments held its ninth meeting on 27 April 1999 under the
Chairmanship of Mr. Juan Marchetti of Argentina.  The agenda of the meeting was contained in
airgram WTO/AIR/1062.
I. SCHEDULING GUIDELINES
1. In view of the preliminary nature of the comments made during the first discussion of the
Note by the Secretariat on the revision of scheduling guidelines (S/CSC/W/19), the Chairman
suggested conducting a full discussion of the text.
2. On paragraph 6, Canada indicated that it considered that revising the scheduling guidelines
should be an evolutionary process which should continue during the preparation for the new services
negotiations and throughout the negotiations to come.  The goal of this process should be to develop
one set of guidelines which will incorporate the results of the next services negotiations.  The
development of revised scheduling guidelines should not, however, affect the possibility of recourseto earlier versions of scheduled commitments in or der to clarify elements of Members' commitments.
In the event of ambiguity, Canada believed that previous versions may indicate the "common and
ordinary meaning of the commitment" as expressed by the Member.  It was apparent that different
approaches to scheduling commitments existed.  Th e discussion to revise the scheduling guidelines
will likely make these differences even more apparent.  Canada believed that it was appropriate to
discuss these differences in this Committee.  Canada  also considered that several of the suggestions
for revision in the Secretariat document appeared to reinterpret the GATS Articles and expressedconcern about making any revisions to the scheduling guidelines that may have the effect of
reinterpreting the GATS Articles.  Such matters would be best addressed in the next services
negotiations and not in the CSC.  The European Communities supported in general the Canadian
comments.  The revised guidelines should not have a negative impact on existing commitments;scheduling guidelines were an issue to be discussed during the negotiations.  The EuropeanCommunities, while convinced of the need and utility of the scheduling guidelines, had no position
yet on their future status and level of details.
3. Reacting to the comments by Canada, Hong Kong, China, considered that the revision of the
guidelines had no legal status, but was an aid to Members to help them identify unclarities in the
schedules and in the guidelines.  Before dismissing any suggestions by the Secretariat as affecting thesubstance of the GATS itself, as requested by Canada, one should consider very carefully each of
these proposals for the sake of transparency.  India was also opposed to any a priori deletion in the
text of the Secretariat.S/CSC/M/9
Page 2
4. On paragraph 7, answering queries by Japan, the Secretariat explained that the envisaged
alphabetical index would be a simple table.  Members could find for instance the number of the
paragraphs in which terms such as "residence" had been mentioned and thus identify all relevant rules
regarding the scheduling of residency requirements .  Japan considered that the guidelines for MFN
exemptions were an important issue and that the existing guidelines should therefore be attached.
Japan enquired also about the status of the work of the Secretariat on the revision of those guidelines.The Secretariat stated that these guidelines did not have the same status as the guidelines governing
the drafting of specific commitments (lack of formal character indicated at that time by a "green
band") and indicated that no further work had been undertaken in that respect.
5. On paragraph 9, Canada agreed with the Secretariat's statement that, since schedules were
records of legal commitments, nothing should appear in them which was not legally binding.
Presumably anything contained in a schedule, in whatever form, was part of the treaty and thus had
legal effect.  Any entry would need to be interpreted in accordance with the ordinary and commonmeaning of the words used, and applied within the context of the treaty.  While Canada agreed that
Members should not inscribe matters that were not intended to have legal effect, it had concerns
regarding the suggestion that elements of some entries might not have any legal effect.  Canada
expressed similar points of view on paragraphs 10, 11 and 12.  Japan agreed with the statement by the
Secretariat according to which references in a schedule to a measure inconsistent with one of the
general obligations and disciplines in Part II of the Agreement would be inconsistent with the GATS.
Schedules could not be used to subtract Members from their obligations under the Agreement.
However, there were cases where explanatory notes to specific commitments contributed to the clarity
and transparency of the commitments.
6. On paragraph 10, Japan agreed that footnotes should be in principle avoided.  However, one
should conduct a careful examination in order to see if the deletion of each footnote would make the
commitment concerned unclear or not or if the footnote could be incorporated in the relevant
columns.
7. On paragraph 11, Japan enquired if there were concrete examples of problems caused by
headnotes and covernotes in existing schedules.
8. On paragraph 13, Canada felt that the fact that schedules did not indicate the date of entry into
force of the commitments was a problem related to the GATS itself and not to the scheduling
guidelines.  Any improvement with regard to this issue would have to occur only during negotiations.
9. On paragraph 14, Canada agreed with the new  wording suggested by the Secretariat.
10. On paragraph 15, Canada felt that the use of the terms “pre-entry” and “post-entry” was
confusing since they were not defined terms in the GATS Articles.  It was not apparent that further
clarification of the bolded paragraph 4 was needed.  Japan, indicating that these elements were
evident, was not convinced of the need for additional precision.
11. On paragraph 16, Canada considered that the revision would imply a reinterpretation of
Article XVI.  In addition, terms such as “national” and “foreigner” should not be used.  These should
be replaced by the terms used in the GATS.  Japan indicated that these elements were self-explanatory
and doubted the need for additional precision.
12. On paragraph 17, Canada agreed with the new drafting suggested by the Secretariat.
13. On paragraph 18, Canada felt that the level of detail of the suggested drafting regarding
licensing requirements was unnecessary and would  not solve the problem of distinguishing between
Articles XVII and VI.  The manner in which these two articles was distinguished was subject to eachS/CSC/M/9
Page 3
Member’s understanding.  Canada therefore supported continued reliance on the bolded paragraph 29
of document MTN.GNS/W/164/Add.1.
14. On paragraph 19, Canada believed that, if a problem existed, it related to the GATS Articles
and therefore was a problem of interpretation.  Clarifying this problem via the scheduling guidelines
should not be undertaken by the CSC.  Japan was inclined to agree that the mention of minimum
requirements as a restriction might be needed.  However, several Members had not mentioned these
minimum requirements in their schedules.  In the event that they would be considered as a restriction,
those Members might need to introduce new restrictions in their schedules, and one should find ways
to address that problem as it might deteriorate the level of commitments.  Korea considered that
minimum requirements could operate as market access restrictions, but doubted that these types of
restrictions could be incorporated in Article VI of the GATS.  In cases of nullification or impairment
of commitments.  Article XXIII of the GATS would apply.
15. On paragraph 20, Japan thought that more discussion on the scheduling of residency
requirements was needed as even in cases where they applied to a person not directly supplying the
services, they could be well considered a market access restriction .
16. On paragraph 21, concerning the significance of the word "total" in Article XVI.2b, Canada
felt that the Secretariat was highlighting a problem with the GATS Articles.  Clarifying this problem
via the scheduling guidelines should not be undertaken by the CSC.
17. On paragraph 22, Canada considered it unnecessary to suggest a possible example of both
individual and aggregate foreign shareholdings.
18. On paragraph 23, Canada agreed with the suggested addition of the content of the relevant
paragraph of document MTN.GNS/W/164/Add.1.
19. On the illustrative list of national treatment examples suggested in paragraph 24, Canada
indicated that the focus of the revisions should not be on simply listing broad categories of measures
relating to national treatment, but on identifying the discriminatory elements that might arise from
each of the measures listed.
20. Korea indicated that such a list would be useful, but only if it was illustrative and not
exhaustive.  The subsidy-related example should be excluded from the list as there were no agreed
definitions or disciplines for subsidies.
21. On the suggestion by the Secretariat regarding subsidies contained in paragraph 26, Korea
considered this paragraph inappropriate as there was no agreed definition or disciplines for subsidies.
22. Canada did not support the proposal either.  Further clarification of this issue was not
required;  bolded paragraph 10 was sufficient.
23. With regard to paragraph 27 relating to the scheduling of measures inconsistent both with
market access and national treatment, Canada believed that clarifying this point via the scheduling
guidelines should not be undertaken by the CSC.  The Chairman suggested to Members to reflect on a
compromise proposal to be included in the scheduling guidelines: continue scheduling measurescontrary to both articles in the market access column, in order to respect Article XX:2, while
indicating by a typographical convention that the measures were contrary to both market access and
national treatment.S/CSC/M/9
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24. On paragraph 28, which raises the possibility of scheduling additional commitments for just
one mode of delivery, Canada indicated that this was evident from the bolded paragraph 12 and
therefore no addition was needed.
25. With regard to the suggestion on prudential measures contained in paragraph 29, Japan
underlined that prudential measures only existed in the financial services sector and did not yet have a
precise definition.  Hence it was doubtful whether a Member would want to take additionalcommitments in this area which, in turn, suggested that the proposed addition was not necessary.
Canada indicated it had no evidence that there was a problem, and expressed interest in other
Members' views.  Would an additional commitment ha ve the effect of waiving an exception?  Canada
would be concerned about anything that would have the effect of reducing the ability to implement
prudential carve-out.
26. On paragraph 1, page 13 - so numbered as a consequence of a technical error -, Canada
supported this statement and the Secretariat’s proposed drafting.  However, the reference in therevised text should have been to "version 1.0" and not "revision 1" in line with the United Nations
Document ST/EDA/SER:M/77 ver 1.0 which was cited in footnote 5 of the Secretariat document.
27. On paragraph 31, Canada supported the Secretariat’s statement that detailed definitions were
essential for the purpose of transparency and disciplines when a Member scheduled commitments
without using the CPC code as reference.  In any case, the scheduling guidelines indicated in bolded
paragraph 16 that "Where it is necessary to refine further a sectoral classification, this should be done
on the basis of the CPC or other internationally recognized classification".  The United States
considered that work on the classification part of the scheduling guidelines was premature as itanticipated the work of the Committee on classification.  The United States therefore suggested
setting aside those paragraphs for the time being.  In  addition, the guidelines should in future require
Members to indicate precisely to which version of the CPC they were referring to.  Norway supported
this position.
28. On paragraph 32, Canada considered that the distinction between modes of delivery was a
significant issue and beyond the scope of the revision of the scheduling guidelines.  It should therefore
be considered elsewhere.  Referring to discussions on financial services and electronic commerce,Norway emphasized the need to provide as much cl arity as possible on the distinction between modes
in the scheduling guidelines.  This should not be left to future negotiations.  The United States
suggested waiting until other bodies such as the Financial Services Committee had come to a
conclusion on that issue, which was more than a pure technical question.
29. On paragraph 33 and the suggested addition of the paragraph of document
MTN.GNS/W/164/Add.1 relating to the scheduling of residency requirements, Canada considered
that clarifying this issue via the scheduling guidelines should not be undertaken by the CSC.
30. On paragraph 34 relating to the combination of horizontal and sectoral entries, the
United States was not convinced of the need for the first indent of the suggested drafting as it did not
capture the issue of Article XX:2.
31. On paragraph 35, suggesting the inclusion of the paragraph of document
MTN.GNS/W/164/Add.1 dealing with references in schedules to general legislation, Canada indicated
that an additional clarification or an example would be helpful in this paragraph.  The Secretariat
indicated that this, being part of document MTN.GNS/W/164/Add.1, had already been agreed by
Members and that it was referring to entries of the type "all other laws and regulations apply".  The
United States indicated that there remained some grey areas in this context.S/CSC/M/9
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32. On paragraph 36 relating to the scheduling of the lack of technical feasibility, Japan and
Korea supported the suggestion by the Secretariat to delete the relevant paragraphs in
MTN.GNS/W/164 and MTN.GNS/W/164/Add1.  Canada supported in principle that there should
only be limited use of the term unbound.
33. On paragraph 38 dealing with the relationship between entries in the market access and
national treatment columns, Canada indicated that the CSC should not attempt to clarify the legalrelationship of commitments under Articles XVI and XVII via the scheduling guidelines.
34. On paragraph 42, relating to the scheduling of measures subject to GATT disciplines, Canada
considered that the comment by the Secretariat questioned the scope of the GATS and, therefore,
could not be addressed via the scheduling guidelines.  The United States indicated it considered this
clarification unnecessary.
35. On paragraph 45 on foreign exchange controls, the United States reserved its position.
Canada indicated that it needed to understand the range of measures covered by the term "restriction
on international transfers and payments" in order to  determine if there was an overlap with measures
deemed restrictions on market access or national treatment.
36. After a short debate on how to proceed, the Chairman suggested that the Secretariat  produce
an informal document on the basis of S/CSC/W19 which would summarize after each  paragraph the
comments made by delegations during the two discussions of the paper. The Committee so agreed.
II. CLASSIFICATION
37. The Chairman recalled that this part of the meeting was to be conducted in informal mode.
As agreed at the last meeting, discussions on classification would be recorded in a regularly updated
informal document.  Details of the discussion on this agenda item can be found in document Job
No. 205/Rev.2.
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