RESTRICTEDWORLD TRADE
ORGANIZATIONS/CSS/W/3
22 May 2000
(00-2084)
Council for Trade in Services
Special SessionOriginal:  English
COMMUNICATION FROM THE EUROPEAN COMMUNITIES
AND THEIR MEMBER STATES
The Cluster Approach
The attached communication has been received from the delegation of the European
Communities and their Member States with the request that it be circulated to Members of the
Council for Trade in Services.
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A. INTRODUCTION
1. Trade liberalisation coupled with the appropriate domestic regulatory environment are
essential instruments to improve the efficiency of WTO Members’ economies. The GATS preamble
states the wishes of Members in this respect. The Agreement itself offers a wide range of instruments
to pursue these shared objectives, providing Members with sufficient flexibility to adapt liberalisation
and domestic regulatory reform to their needs. Negotiations have traditionally been based on the
request-offer approach, supplemented as necessary by other negotiating modalities.
2. As a consequence of the flexibility offered by the GATS in relation to undertaking
commitments, Members have usually considered services sectors in an isolated fashion for schedulingpurposes: when negotiating market access and national treatment commitments in the past, ensuring
coherence between the commitments undertaken in the various sectors has rarely been a factor taken
into account. And this despite the fact that a consiste nt approach to the various services sectors would
seem to be a logical requirement of any liberalising effort.
B. T
HE CLUSTER APPROACH
3. In order to create the conditions for improving the degree of coherence of those liberalising
efforts by Members, and taking advantage of the possibilities for flexible approaches offered by the
GATS, the European Communities and their Member States consider that it would be useful for
Members to begin early discussions on the so called "clusters" of inter-related services sectors. These
have already been the subject of discussions in various GATS bodies. The use of clusters could incertain sectors potentially help Members as a tool in the traditional sectoral request-offer negotiation,
which is likely to remain the main basis for the current round. The use of clusters would allow
economic linkages to be more clearly recognised by Members by providing them with a "checklist"
outlining the economic interrelations between subsectors and thus, contribute to increasing the
efficiency and coherence of services negotiations.S/CSS/W/3
Page 2
4. It would make sense for Members to try to ensure some coherence, where appropriate,
between their commitments under different sectors in GATS negotiations, for at least the following
reasons :
− where the lack of coherence reflects and/or is at the origin of divergent paces of
liberalisation within a single country, one should not exclude economic imbalances in
the domestic economic structure as a result. This would be particularly damagingwhen the sequencing of liberalisation prevents the proper development of certain
"infrastructural" services sectors.
− services sectors may be inter-related. A variety of economic « interlinkages » between
individual service sectors and subsectors can be identified. For example, where
certain services constitute key inputs for the provision of other services, restrictions
on the supply of those "input-services" would affect the supply of  the other services.
Another reason for linking certain services sectors together can be a common end-use . This approach could therefore take into account end-use for the definition of the
cluster while not requiring amendment of the existing classification. Specific
commitments would in any case be  scheduled in the existing relevant GATS sectors.
It would make good economic sense to take account of these inter-service linkages in
GATS  negotiations.
− commercial linkages are important for companies, which are increasingly organising
themselves in a variety of ways in order to provide more comprehensive packages of
services.  GATS negotiations need to take account of this commercial reality.
5. At the same time, we recognise that there are input-relationships among most service sectors.
For instance, core sectors like financial and telecoms services are economically inter-related with
almost all other service sectors. And virtually all services can also be provided for a specific end-use.
The question would then be, given that ultimately all services are interrelated, to define clusters that
are as focused as possible, covering only closely linked sectors and subsectors. Only in these cases
would a significant need for coherence clearly arise.  At the same time, the need for coherence should
not result in the singularities of the different sectors and subsectors being disregarded.
6. Having too many, or too big, clusters would make such an exercise void of any sense; we
would simply end up covering all services sectors but regrouped according to clusters, which in
addition would inevitably overlap. Hence the need to establish priorities among clusters, and only
work on a limited number where progress could be useful for the preparation of negotiations.
Conclusion :  the European Communities and their Member States propose that Members begin early
discussion of clusters, as a way to explore useful approaches to GATS negotiation;  the outcome of
this work should be "checklists" of such inter-related sectors and / or subsectors. This would allow
Members to more easily take account of the existing links in the negotiations. Members could try to
agree on a limited number of "clusters" of inter-related services sectors. As a starting point we
propose  tourism services and environmental services, to take advantage of work already begun onthese sectors.
As a contribution to this work, the European Communities and their Member States consider the
paper presented by the Dominican Republic  (S/C/W/127 dated 14 October1999) as a very useful
basis for a  "checklist" on tourism. On environmental services, we propose that the relevant section ofthe EC and their Member States Communication to the CSC on Classification of Environmental
Services (attached) should be used.S/CSS/W/3
Page 3ENVIRONMENTAL SERVICES CONSOLIDATED LIST Sept. 30, 1998
CLASSES AND SERVICES EXAMPLES/DESCRIPTIONSPROVISIONAL
CPCCPC
VERSION 1.0
6A) PROTECTION OF AMBIENT AIR AND CLIMATE
Services to reduce exhaust gases andother emissions and improve air quality- operation and maintenance of equipment and
facilities at power stations or industrial complexes
to remove air pollutants
- monitoring of mobile emissions and
implementation of control systems or reductionprogrammes994040 94900
6B) WATER FOR HUMAN USE & WASTEWATER MANAGEMENT
Water, except steam & hot water, distribution
services through mains- potable water treatment, purification and
distribution including monitoring18000, 713 69210
Waste Water Services - removal , treatment and disposal of household,
commercial and industrial sewage and other waste
waters including tank emptying & cleaning,
monitoring, removal and treatment of solidwastes, transport of waste water9401, 94010 9411, 94110, 94120
6C) SOLID/HAZARDOUS WASTE MANAGEMENT
Refuse disposal services - hazardous & non-hazardous waste collection,
treatment and disposal (incineration, composting,
landfill)94020 94211, 94212, 94221,
94222
Metal waste & scrap recycling services, on a fee or contract basis- recycling of aluminium and steel 88493 86931S/CSS/W/3
Page 4
ENVIRONMENTAL SERVICES CONS OLIDATED LIST Sept. 30, 1998
CLASSES AND SERVICES EXAMPLES/DESCRIPTIONSPROVISIONAL
CPCCPC
VERSION 1.0
Wholesale & retail trade services of waste,
scrap, and other material for recycling- sale of paper for recycling
- sale of aluminium cans for recycling62278, 62113; 63299 61195, 61295, 62495,
62595
Sanitation & similar services - sweeping & snow removal
- other sanitation services94030 94310, 94390
Storage - hazardous & non- hazardous waste storage
- operation of disposal site7422 6722
6D) REMEDIATION AND CLEANUP OF SOIL & WATER
Treatment, remediation of
contaminated/polluted soil and water- cleaning-up systems in situ or
mobile, emergency response, clean-up and longer
term abatement from spillsand natural disasters
- rehabilitation programmes (e.g. recovery of
mining sites) including monitoring94060 94900
6E) NOISE & VIBRATION ABATEMENT
Noise abatement services - monitoring programmes, installation of noise
reduction systems and screens94050 94900
6F) PROTECTION OF BIODIVERSITY AND LANDSCAPE
Nature & landscape protection services - ecology and habitat protection
- protection of forests and promoting sustainableforestry
- public awareness programmes94060 94900S/CSS/W/3
Page 5ENVIRONMENTAL SERVICES CONSOLIDATED LIST Sept. 30, 1998
CLASSES AND SERVICES EXAMPLES/DESCRIPTIONSPROVISIONAL
CPCCPC
VERSION 1.0
6G) OTHER ENVIRONMENTAL & ANCILLARY SERVICES
Other environmental protection services - includes services not classified elsewhere 94090 94900
Operation, maintenance & repair services of
machinery & equipment- operation maintenance & repair of various
environmental equipment & facilities, e.g. water
treatment plants, wastewater treatment plants,
sanitary land fills940, 88620 87159S/CSS/W/3
Page 6
CLUSTER
ENVIRONMENTAL RELATED SUB-SECTORS WHICH COULD BE SUBJECT TO A “CLUSTER” NEGOTIATION,
TOGETHER WITH THE SERVICES IN THE ENVIRONMENT CLASSIFICATION
ENVIRONMENTAL SERVICES CONSOLIDATED LIST Sept. 30, 1998
CLASSES AND SERVICES EXAMPLES/DESCRIPTIONSPROVISIONAL
CPCCPC
VERSION 1.0
ENVIRONMENTAL R&D
Environmental R&D services 85101, 85103,
85109, 85202,
85300, 853081110, 81130, 81190,
81220, 81300, 8130
ENVIRONMENTAL CONSULTING, CONTRACTING & ENGINEERING
Design & Engineering 867 83131, 832, 833
Education, Training and Technical
Assistance- training courses on environmental protection or
operation & maintenance of environmental
facilities
- training sessions for employees and/or
contractors for performing proper sampling924, 929 929
Environmental consulting services and
environmental legal services- environment consulting services
- related consulting services for tourism, transport,fishing, sustainable land use
- design and legal services, e.g. feasibility studies
& design of sewage treatment facilities867, 86729 83131
Integrated engineering services 86732 83312
Project management services e.g. supervision of construction of sewage
treatment facilitiesNo apparent
categories83322, 83323, 83329S/CSS/W/3
Page 7ENVIRONMENTAL SERVICES CONSOLIDATED LIST Sept. 30, 1998
CLASSES AND SERVICES EXAMPLES/DESCRIPTIONSPROVISIONAL
CPCCPC
VERSION 1.0
ANALYTICAL SERVICES, DATA COLLECTION, ANALYSIS AND ASSESSMENT
Composition & purity testing & analysisservices- includes accredited environmental testing
services
- includes both field and laboratory testing86761 83561
Modelling- computer simulations of movement of pollutants
through air, water, or soil
- software development for engineering programs7544, 8672 83139, 8339
Monitoring & testing - monitoring of air and water quality 8672, 8676, 9409 8313, 8339, 8351
Subsurface & surface surveying services - mapping
- use of global positioning systems (GPS)86752, 86753 83520, 83530
CONSTRUCTION
Septic system installation services - installing septic tanks and disposal fields 51620*, 9401, 9409 54342
Construction services- laying of sewers
- laying of water pipelines
- construction of treatment plants
- construction of landfills51340*, 51350*,
511, 512, 513, 514,
515, 516, 517, 51854241, 54251, 541,
542, 543, 544, 545,
546, 547, 548
Installation services of other goods - installation of equipment used in sewage
treatment facilities88590* 86590
Insulation services 51650, 5165 54650, 5465S/CSS/W/3
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ENVIRONMENTAL SERVICES CONS OLIDATED LIST Sept. 30, 1998
CLASSES AND SERVICES EXAMPLES/DESCRIPTIONSPROVISIONAL
CPCCPC
VERSION 1.0
TRANSPORT
Land transportation under various modes - movement of waste material by rail or road 7112, 7123, 7139 6412, 6423, 6439
Water transportation under various modes - movement of waste material by barge or ship 721, 722 651, 652
OTHERS
Urban planning services 86741 83221
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