RESTRICTED  WORLD TRADE  
ORGANIZATION  S/C/M/74 
10 November 2004 
 
 (04-4772) 
Council for Trade in Services  
 
 
 
 
REPORT OF THE MEETING HELD ON 23 SEPTEMBER 2004 
 
Note by the Secretariat1 
  
1. The Council for Trade in Services held a meeting on 23 Septem ber 2004 chaired by 
Ambassador Peter Brño (Slovak Republic).  The ag enda for this meeting is  contained in document 
WTO/AIR/2378. 
2. The Chairman
 said that under Other Business, he intended to make statements regarding the 
transitional review under paragraph 18 of the Protoc ol of Accession of the People's Republic of China 
and the date of the next formal meeting of the C ouncil.  Under Other Business as well, the Secretariat 
would  provide information on a workshop on telecommunications.   
3. The representative of Hong Kong, China  requested that the Secret ariat update consultations 
between the UNESCO and the WTO regarding the draft Convention on Cultural Diversity. 
4. The Chairman  suggested that the agenda be adopted as circulated with the addition of the 
items raised under Other Business. 
5. The Council so agreed . 
A. IMPLEMENTATION  OF ARTICLE  VII OF THE  GATS 
6. The Chairman  recalled that the Council had held discu ssions on the implementation of Article 
VII of the GATS at its previous meetings since July 2003.  These discussions were based on an 
informal note from the delegation of India, contai ned in document JOB (03)/120.  Several issues had 
been raised and discussed under this item, such as:  notification improvement, delegated authority, 
transparency, and information sharing.  Given the interest delegations had expressed in these issues, 
the Council had agreed to revert to this item.  
7. The Chairman further recalled that at the Counc il's previous meeting, he had been asked to 
hold consultations on how to better structure discussions under this item.  He noted that at its informal 
meeting held on 14 September 2004, the Council had conducted extensive discussions in this regard.  
A number of delegations had expressed their desire  to further discuss the following issues:  the 
possibility and modality of improving notifications unde r Article VII; delegated authority or the legal 
status of professional associations in MRAs; and more  transparency in negotiations of MRAs.  A few 
delegations had indicated that it would be desirable to discuss issues relating to paragraphs 1 and 5 of 
Article VII, and to take into account the Gu idelines for Mutual Recognition Agreements or 
Arrangements in the Accountancy Sector in future discussions under this item.  Some delegations had 
proposed that a questionnaire be addressed to Member s so as to facilitate discussions. The Chairman 
said his understanding through the consultations was that Members wished to  continue discussions 
                                                      
1 This document has been prepared under the Secr etariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. S/C/M/74 
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 under this item and that such discussions were to be conducted mainly around three issues: (1) 
improving notifications under Article VII; (2) dele gated authority; (3) transparency.  He invited 
delegations to make comments. 
8. The representative of India  confirmed that future discussions under this item were to be 
concentrated on the issues proposed  by the Chairman.  With resp ect to the issue relating to 
notification requirements, he said that the suggestion of formulating a questionnaire would be helpful.  
He believed that the questionnaire could clarify wh ich elements Members might want to include in 
notifications, what the perceived gaps were, a nd how these gaps could be  improved through the 
notification format.  On the issue of delegate d authority, referring to a specific suggestion on 
questionnaire by the EC, he stated that a questionnaire might help Members achieve a better understanding through sharing experiences in the exis ting notifications to see how delegated authority 
had been dealt with.  On the issue of providi ng opportunities to other interested Members in 
participating in negotiations of MRAs , he underlined that this was a matter of obligation.  He stated 
that such issues as when notificati ons were to be made, which modality of notification was to be used, 
and what content was to be notified, were worth fu rther discussions.  Referring to the informal note 
submitted by his delegation, he noted that informat ion exchange under Article  VII:5 was related to 
specific information on the use of multilaterally ag reed criteria for recognition purposes.  In this 
regard, he agreed to the suggestion that the Guidelines for Mutual Recognition Agreements or 
Arrangements in the Accountancy Sector be taken into account.  He thought that the Guidelines, 
despite their voluntary nature, would be very he lpful for discussions in the Council in terms of 
information sharing. 
9. While noting that very few MRAs had been notif ied to the Council and that no notifications 
had taken place at the time when negotiations we re launched, the representative of the European 
Communities  said his delegation was not convinced at the current stage that this fact had revealed a 
major problem of GATS obligations compliance, Article  VII in particular.  In his delegation's view, 
one of the main reasons for this fact could be lack of MRAs, which was probably linked to 
insufficiency of market access commitments in re levant areas.  In addition, some notified MRAs 
might not qualify for MRAs between two Members that were subject to notification requirements 
under Article VII.  His delegation wished to pr opose some ideas on a questionnaire, believing that 
these ideas would be helpful to clarify the nature of  MRAs that had been notified.  The questionnaire 
might include questions like: did the bodies that had concluded these agreements exercise delegated 
authority?  If not, did the notification imply that by notification the notifying Member became bound by those agreements under international law?  His delegation believed that once the questionnaire 
process was completed, Members would have mu ch better understanding of where major problems 
were and how those problems might be addressed.   
10. The representative of Mexico
 stated that his delegation was interested in further and more 
detailed discussions under this item.  Also noting th e fact that few MRAs had been notified, which 
covered very limited areas, he suggested that Members might have to ask why there were few notifications of MRAs, what the coverage of the existing MRAs was, and under what context these 
MRAs had been negotiated.  Noting that there were MRAs between govern ments as well as MRAs 
between bodies with or without delegated authorit y, he thought that MRAs between bodies without 
delegated authority might have limited effects at the international level.  He pointed out that 
developing countries, through mutual recognition, might  have access to the markets of other countries 
in certain areas of professional services, and therefor e could more effectively compete in international 
trade.  He wondered to what extent Article VII could cover the MRAs deriving from FTAs, which, he 
noted, Article VII did not address.  He informed  the Council that in the framework of NAFTA, 
Mexico had negotiated two MRAs: one was about e ngineering services, the other accounting services.  
He said these two agreements were not in forc e yet and that his government was developing 
instruments in order to implement them.  He, how ever, wished to discuss to  what extent these two 
agreements would be covered under Article VII. S/C/M/74 
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 11. The representative of Hong Kong, China  stated that his delegation was interested in 
discussing issues touched upon by India and the EC unde r this item.  His delegation would be open to 
any ideas as to how the existing notifications woul d be examined and how notification requirements 
could be improved.  His delegation was also inter ested in examining the ex isting notifications to see 
how the issue of delegated authority had been dealt with.  He thought that the suggestion by the EC in 
this regard would be useful.  Echoing the questions  raised by the EC, he said some other questions 
might also be addressed to Members, such as: how opportunities had been provided to interested 
Members to participate in MRAs negotiations; how multilateral guidelines un der Article VII:5 had 
been used.  Noting that the only existing multila teral guidelines under Article VII:5 were the 
Guidelines for Mutual Recognition Agreements or  Arrangements in the Accountancy Sector, he 
encouraged Members to share experien ce if they had used these guidelines.  
12. Referring to document Job (04)/85 in which Au stralia had provided answers to questions 
relating to its notification (S/C/N/297) under Artic le VII, the representative of Hong Kong, China  
commended Australia for having set up a good example of transparency and a good starting point for 
examining implementation issues of Article VII.  He , however, wished to seek further clarifications 
from Australia on document Job (04)/85, explaining  that his delegation could not do so at the 
Council's previous meeting because of time constraints.  
13. Referring to paragraph 8 of doc ument Job (04)/85, the representative of Hong Kong, China  
noted that an engineer did not ha ve to be registered on the National Professional Engineers Register 
(NPER) in order to practise engineering in Australia.  He also noted that in  accordance with paragraph 
2 of document Job (04)/85, engineers needed to be registered in order to practise in the State of 
Queensland and there were registration and/or li censing regimes in the building and construction 
industry which effectively regulated the work of en gineers in most Australian States and territories.  
He asked Australia to explain what the regulated  activities subject to registration and/or licensing 
were and which body was the registration/licensing authority for such activities, and whether such 
body had delegated authority for such registration and/or licensing. 
14. The representative of Hong Kong, China  noted that in the response to Question 1 in document 
Job (04)/85, a number of Australian bodies had been  mentioned, including the Engineers Australia, 
National Engineering Registration Board and the Australian Monitoring Committee for the APEC 
Engineer Register.  Referring to paragraphs 2 and 6 of document Job (04)/85, he further noted that the 
Engineers Australia administered the NPER under the supervision of the National Engineering 
Registration Board, and that the Engineers Aust ralia, with the authorization by the Australia 
Monitoring Committee, was operating the APEC Engin eer Register in Australia.  He inquired whether 
all these bodies were not operating un der delegated authority from the government in respect of the 
registration activities both for the NPER and the APEC Engineer Register. 
15. The representative of Hong Kong, China  noted that in accordance with paragraph 10 of 
document Job (04)/85, the Engineers Australia would register Japanese APEC Engineers on NPER after the presentation of evidence that they had ha d one year experience working in Australia.  He, 
however, noted that in paragraph 12 of document Jo b (04)/85, an APEC registered Japanese engineer 
wanting to practise in Australia would not be re quired to undertake a 12 months period of work 
experience with an Australia engi neer registered on NPER.  He thus sought clarifications from 
Australia on whether the one year experience requi rement was still applicab le to Japanese APEC 
engineers while a Japanese APEC engineer was no t required to work under an NPER registered 
engineer.  
16. Referring to paragraph 17 of document Job (04)/85, the representative of Hong Kong, China
 
noted that the registration process for engineers in Australia on NPER was not as demanding as the 
requirements needed for registration as an APEC Engineer.  He also noted that the bilateral 
framework between Australia and Japan provided for registration of Japanese APEC Engineers on 
NPER subject to certain conditions.  He inquire d in what aspects a Japan ese engineer, under the S/C/M/74 
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 bilateral framework, would be treated differently from a non-Japanese engineer for the purpose of 
practising in Australia.  In order words, he wish ed to know to what extent Japanese engineers were 
enjoying more favourable access to Aust ralia than other APEC Engineers.  
17. In addition, the representa tive of Hong Kong, China  sought clarifications from Australia on 
another two questions:  whether the registration re quirements for an engineer on the NPER included 
the membership of Engineers Australia or other professional bodies of engineers in Australia, and whether the use of the title of engineer was subject  to any restriction in Australia.  While admitting 
that the questions raised by his delegation might not be directly related to the implementation of 
Article VII, he held that some of them, particular ly those concerning delegated authority, could shed 
some light on further discussions under this item.  
18. The representative of the United States
 stated that discussions under this item were not a 
process of review or examination of Article VII per se.  She sought clarifications from the Secretariat 
on whether this item was a regular agenda item or was placed on the agenda at the request of certain delegation.  She indicated that her delegation was concerned about the request that the Secretariat 
prepare a questionnaire.  While appreciating India's interest in encouraging negotiations of MRAs and 
the fulfilment of requirements of Article VII, he r delegation questioned whether to increase efforts 
regarding notifications would actually produce that result.  Noting India's focal point was the actual implementation of Article VII, she thought it would be desirable to have a further look at the overall 
goal of this article.  She stated that difficulties with  MRAs might not be lack of awareness of whether 
negotiations were planned or  in existence, but rather the fact th at MRAs posed a practical challenge to 
reconciling wide variations in qualification re quirements and required a shared commitment to 
reconcile such differences.  She further stated that  this fact was inherent in the whole process of 
mutual recognition.  Nevertheless, her delega tion wished to encourage Members to provide 
information of their experiences.  Referring to  the communication concerning MRAs by her 
delegation, contained in document S/WPDR/W/23, dated 10 March 2003, she pointed out that the US 
government had endeavoured to be forthcoming in  this respect.  She indicated that in this 
communication, her delegation had sought to expl ain how MRAs were negotiated by representatives 
of the professions in cooperation with representatives of the competent authorities, while the ultimate 
authority for implementation rested with the State bodies that did not directly participate in negotiations.  She further indicated that this co mmunication had identified some of the relevant 
organizations that had been engaged in MRAs ne gotiations to date.  On the issue of delegation 
authority, her delegation was of the view that th e focus was to see whether a private body was acting 
under delegated authority and that this issue re quired a case-by-case examination.  She said it was 
important to recognize that each Member might implement delegation in a different manner.  She pointed out that some worthwhile agreements did not involve a direct governmental role.  For 
example, the Washington Accord on engineerin g education was an agreement among private 
accreditation bodies of 8 Members that recognized the substantial equivalency of accreditation 
systems in engineering education programmes.  Th is accord basically established that graduates of 
programmes accredited by the signatory organizations were prepared to practise engineering at the 
entry level.  She stated that this accord was not  notified under Article VII, as it was an agreement 
between private bodies.  However, it was still beneficial.  As a practical matter, the certificate from 
the private accreditation bodies was one of the primar y criteria used by regulatory authorities in 
granting a licence.  Engineers from Members wh ose accreditation bodies were signatories to the 
agreement automatically met the education requi rements imposed by the regulatory authorities 
thereby removing a major element necessary to receive  a licence.  She noted that there were a number 
of different paths that interested parties might take in their work towa rds mutual recognition of 
professional qualifications. While noting that the go vernment-to-government approach might be the 
most familiar to trade policy officials, she thoug ht there was no assurance that this was the most 
productive approach for all cases. 
19. Responding to the question raised by the US, a representative of the Secretariat
 said that this 
item had been inscribed on the ag enda since July 2003 and had been  carried over from one meeting to S/C/M/74 
Page 5 
 
 another based on the conclusion of each discussion indivi dually.  He confirmed that there had been no 
decision to inscribe this item as a standing item on the agenda.   
20. Thanking India for its submission Job ( 03)/120, the representative of South Africa  stated that 
facilitating information sharing on MRAs was impor tant to make meaningful the commitments 
Members had made in professional services.  Such in formation sharing was to be done in advance so 
that other delegations could have opportunity to actively participate in the process of negotiations. She 
thought that India's paper was a good starting point in this respect and that Members should continue in this direction.  
21. The representative of Australia
 stated that his delegation was ready to contribute to 
discussions on issues relating to Article VII, su ch as transparency, notification procedures, and 
delegated authority, and to share information on national experiences.  Citing Australia's own 
experiences in mutual recognition arrangements, he thought that Members might need to be cognisant 
of the fact that mutual recognition was a highl y complex and time-consuming process.  Based on a 
study on this issue, he pointed out that recogniti on required or assumed that a country had in place a 
system for regulating the profession.  The developm ent of a domestic regulatory framework for any 
given profession was a difficult task requiring compet ent and well developed institutions that could 
develop a system which would balance various publ ic policy objectives including ensuring the quality 
of the profession and the adequate  supply output.  The resources a nd expertise and the time required 
meant that in some countries, these regulatory fra meworks were not well developed.  He further 
indicated that the process of recognition required an equally complex task of trying to compare 
frameworks established to meet different sets of cu ltural, social and economic circumstances.  Given 
the importance of public policy objectives to be  safeguarded, establishing the equivalence of 
standards could be extremely difficult and required c onsiderable time and expertise.  As a result, the 
process of recognition could be beyond taking and varied with degrees of differences between the 
parties involved.  
22. Thanking Hong Kong, China for raising questions to his delegation, the representative of 
Australia  said he would refer these questions to his capita l.  He, however, tried to comment on two of 
them at the meeting.  On the first question posed by Hong Kong, China, while admitting that engineering was a self-regulated profession in Aust ralia, he stated that Queensland was the only 
Australian State that had a comprehensive registra tion system for professional engineers.  Engineers 
in Queensland were required to be registered w ith the State Board before being able to offer 
professional engineering services for a fee or award.   All the other Australian States had registration and/or licensing regimes for engineering practitioners  in the building and construction industry with 
education and experience requirements.  There was no one single regulatory regime for the engineering profession in Australia.  In the State of  Victoria, the 1993 Building Act required building 
practitioners to be registered with a statutory aut hority "the Building Practitioners Board" which used 
the NPER as the benchmark for the criteria for qualif ications and experience required for professional 
engineers working in the building sector in Victoria.  Similarly, in the State of South Australia, the 
1993 Development Act required certain types of buildi ng practitioners to be registered with the State 
Board which used the NPER as the benchmark fo r the criteria for qualifications and experience 
required for professional engineers.  In the State of Queensland, the Professional Engineers Act 
provided that only registered professional engineer s and professional engineering companies offering 
services for a fee or award could undertake professional engineering work in Queensland and registration was undertaken by a State authority.  The representative of Australia said his delegation 
would provide more details on these issues to Hong Kong, China if so required. 
23. With respect to the question regarding Austra lian bodies involved in engineering registration, 
the representative of Australia
 stated that the Australian government placed emphasis on self-
regulation of professional associations.  He explaine d that the Engineers Australia had offered a self-
regulation scheme since 1919.  The membership of the Engineers Australia denoted experience and recognition in the field, by which people could dete rmine the experience level of the practitioner.  In S/C/M/74 
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 response to concern expressed in several sectors over the self-regulatory process in Australia, the 
Engineers Australia, in conjunction with the Associ ation of Consulting Engineers Australia and the 
Association of Professional Engineers, Scientists  and Managers Australia, had established the 
National Professional Engineers Register (NPER).  Th e idea behind the Register was to provide an 
objective national registration system and to define standards of practice that had strong degree of 
credibility.  To this end, the N PER was separate and distinct from the membership of the Engineers 
Australia.  The registration system was not owned by the Engineers Australi a, but rather by the 
profession, and offered different benefices to member ship.  Registration was an area of practice that 
was based solely on demonstrated professional compet ence of the applicant.  At the multilateral level, 
the initiative for the APEC Engineer Register had b een developed in 1997-1998.  The intent of the 
APEC Engineer Register was to recognize equiva lencies in the qualifications and experience of 
practising professional engineers in the participatin g economies and to facilitate trade in engineering 
services between those participa ting economies. As required by the APEC engineering framework, 
the Council of the Engineers Australia had convened an APEC Engineer Monitoring Committee.  This 
Committee monitored mechanisms for determining th e eligibility of professional engineers practising 
in Australia to be placed on the APEC Engineer  Register for Australia.  Regarding delegated 
authority, the representative of Australia indicated th at the responsible organizations in Australia were 
reviewing this issue in the engineering profession and that his delegation would get back to it at a later 
stage.  With respect to other questions raised  by Hong Kong, China, he said his delegation would 
discuss with Hong Kong, China bilaterally or in any other forum.  
24. Thanking India for its suggestions on Artic le VII, the representative of New Zealand  
reiterated her delegation's support for further discussions under this  item.  Her delegation thought it 
sensible and useful to concentrate discussions on the issues of transparency, notification and 
delegation authority.  Echoing the statements made by the US and Australia regarding the complexity 
of mutual recognition arrangements, citing New Zealand's experience of professional mutual 
recognition with Australia, she pointed out that ev en between two close neighbours sharing a common 
legal system and similar cultural heritage, it took  many years to reach a high level of profession 
recognition.  On the issue of notification, her delegation supported the suggestion of examining the format of the existing notifications to see whethe r their content could be improved to be more 
informative.  Supporting the EC's suggestion on the examination of the s ubstance of the existing 
notifications, she stated that a questionnaire would be  a sensible way to know more clearly the extent 
to which authority was delegated to the bodies con cerned in a notification.  She stated that her 
delegation was also interested in discussing, among others, the issue of aut onomous recognition under 
Article VII. Pointing out the ambiguity in the application of Article VII:4:(b) to autonomous 
recognition, she said that her delegation wished  to discuss with Members whether autonomous 
recognition was "an agreement or arrangement of the type" envisaged in paragraph 1 of Article VII or 
a recognition measure or something else entirely.   
25. The representative of Switzerland
 stated that his delegation supported the idea of improving 
the implementation of Article VII and was interested in focusing on issues brought forward by India. Admitting that mutual recognition was a difficult process which took much time, his delegation was open to further discussions on how the implementation of Article VII could be  improved.  In this 
regard, his delegation wished to continue to discuss the EC's suggestion on questionnaire as a step 
forward. 
26. The representative of Peru
 stated that his delegation supported initiatives aiming at improving 
the implementation of Article VII, specifically t hose initiatives to strengthen transparency relating to 
Article VII.  Citing Peru's experience in MRAs negotiations, he admitted that the recognition process 
was very complex, and that, as stated by New Zeal and, even countries with common cultural, social 
and historical background might have many difficulti es in reaching mutual recognition.  He, however, 
believed that it was still possible for Members to negotia te this type of agreements.  He stated that 
Members were to be given information in advance so  that they could participate in negotiations of S/C/M/74 
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 MRAs and get to know how MRAs were working.  He  further stated that e xperiences resulting from 
participation in MRAs negotiations wo uld be very helpful to Members. 
27. Noting the complexity of mutual r ecognition, the representative of Japan  stated that his 
delegation wished to continue discussions based on th e issues raised by India.   Echoing the statement 
made by the EC, he further stated that the reas on why few notifications had been made under Article 
VII might be lack of MRAs, rather than lack of awareness.  On delegated authority, he said it was the 
threshold to determine whether or not an MRA was to be notified under Article VII.  While thinking 
the suggestion of questionnaire would be useful in  terms of information sharing, he believed that 
further discussions on the format and content of the questionnaire were needed.  Referring to the 
question raised by Mexico regarding the re lationship between MRAs and FTAs, he sought 
clarifications from the Secretariat on the histori cal background of GATS negotiations concerning the 
relationship between Article VII and Article V. 
28. The representative of the Secretariat  stated that Article V and Article VII had been discussed 
as two completely separate issues in the negotiating history of the GATS.  Article V concerned an 
agreement that established a higher level of libera lization among a group of countries.  The elements 
of Article V constructed the c onditions relating to sectoral cove rage, modes of supply, and the 
elimination of discriminatory measures.  While Arti cle V was more concerned with conditions under 
which service suppliers were allowed to supply ser vices, Article VII was constructed with the view 
that recognition measures were to be allowed.  R ecognition measures were not confined to MRAs as 
recognition could be granted through unilateral action.  Recognition measures under Article VII 
aimed at providing a fast-track procedure for t hose who benefited from them , while paragraph 3 of 
Article VII required substantive st andards were to be applied on a non-discriminatory basis.  The 
other conditions referred to in Article VII include d transparency, notification, affording adequate 
opportunity for interested Members to negotiate their accession to MRAs, and co-operation with 
relevant international organizations in establis hing common standards.  The relationship between 
these two articles had not been subject to any sp ecific discussion during the GATS-drafting process.  
29. The representative of Chinese Taipei  stated that paragraphs 2 and 4 of Article VII required 
Members to promptly notify the Council as far in advance as possible of the opening of negotiations on an MRA, and thus went beyond the standard of the GATS provision on transparency.  Noting that recognition was a complex issue, she tended to support India’s suggestion of focusing discussions on 
notification improvement.  She welcomed the EC’s suggestion of examining the existing notifications 
in terms of delegated authority.  Referring to th e Guidelines for Mutual Recognition Agreements or 
Arrangements in the Accountancy Sector, she wish ed to know the drafting background of this 
document.  
30. The representative of Canada
 stated that his delegation was interested in discussing the issue 
of MRAs in the Council.  Concerned that main th emes might be missed in too detailed discussions, he 
thought it desirable to consider how to better stru cture discussions under this item.  He believed that 
transparency and information sharing were importa nt issues for discussion.  Referring to the EC’s 
proposal for a questionnaire, he wondered who would be responding to the questionnaire.  Presuming it would be up to Members to respond to the questi onnaire, he said his delega tion was concerned that 
it would be onerous to get information to respond to such questionnaire, as in Canada most of the 
MRAs were negotiated by professional associations.   He suggested that an alternative to developing a 
questionnaire would be to identify a list of them es that Members could address when they made 
presentations on their own experiences of MRAs.  Re ferring to the Guidelines for Mutual Recognition 
Agreements or Arrangements in the Accountancy S ector, he stated that it would be desirable to 
consider in discussions what problems th is document was trying to deal with.  
31. The representative of Indonesia
 stated that his delegation supported the suggestion presented 
in India's paper that the implementation of obliga tions under Article VII be improved.  His delegation 
was of the view that, in addition to meeting th e notification obligation under Article VII:4:(c), S/C/M/74 
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 Members were to improve the content of such notifications by stating, inter alia , the sectors or sub-
sectors or activities covered, the availability of the te xt of the relevant agreements, so as to make this 
obligation work effectively. 
32. Seeking clarifications from the US regarding its  previous statement on the review of Article 
VII, the representative of India  reiterated that discussions under this item were to focus on the 
implementation of Article VII, which, he admitted, was one of the issues relating to recognition.  He 
said that other issues of recognition were subject to  discussions in other appropriate forums.  On the 
issue of delegated authority, his delegation could not agree with the presumption that the reason why 
few MRAs had been notified was because many MRAs had been signed by professional bodies 
without delegated authority.  He pointed out that th ere might be different combinations in terms of 
parties to an MRA.  For example, it would be possible that one party to an MRA was a body with delegated authority, while the nature  of the other was not clear.  He stated that even  in cases where the 
bodies involved had no explicit dele gated authority, there still might be a bearing on the actual 
recognition, as regulatory authorities did make use of  mutual recognition arrangements that had been 
made.  Referring to the statement made by the Secretariat, he wondered whether paragraph 3 of 
Article VII regarding non-discrimination would need  to be addressed as well.  Noting that some 
notified MRAs were related to accountancy, he we lcomed initiatives from those concerned Members 
with reference to the extent to which the Guide lines on MRAs in the Accountancy Sector had been 
used. 
33. In response to India's inquiry, the representative of the United States
 stated that her delegation 
was concerned that certain interventions were headi ng in the direction of examining the whole text of 
Article VII.  Echoing the statement by Canada, she hoped that discussions under this item were not 
losing the focus.  Referring to the clarification ma de by the Secretariat, she reminded Members that 
this item was not a standing agenda item and that  Members were engaged in discussions under this 
item only based on the conclusion of each meeting.  
34. Responding to the concerns about his dele gation's proposal for a questionnaire, the 
representative of the European Communities  stated that the questionnaire would be factual and 
addressed to those Members who had made notificati ons.  He further stated that it would also be 
useful for other Members to consider some generi c questions, for example, the question of whether 
they had professional bodies with delegated authority.   He added that the proposed questions were 
open to discussions and that the proposal for a questionnaire aimed at helping Members structure 
discussions. 
35. In response to the Chairman 's inquiry whether the Secretariat would be required to prepare a 
questionnaire by compiling Members' contributions, the representative of the United States  stated that 
her delegation disagreed with this idea.  Her delegation understood that the EC' suggestion on 
questionnaire was to aid in discussions. 
36. The Chairman  proposed that the Council take note of th e statements made and revert to this 
item at its next meeting. 
37. The Council so agreed . 
B. REVIEW  OF ARTICLE  II (MFN)  EXEMPTIONS 
38. The Chairman  recalled that at the Council's previous meeting, delegations had held extensive 
discussions on how to conduct the second review of MFN exemptions and that the Secretariat had 
been asked to prepare background materials for the second review.  The background materials, which 
included two updated compilations of MFN exemptions  and statistical information on the number of 
MFN exemptions, had been circulated to Members.  The two updated compilations were contained in 
documents Job (04)/114 and Job (04)/115, and statistical information on the number of MFN S/C/M/74 
Page 9 
 
 exemptions was contained in docum ent Job (04)/132.  The Chairman further recalled that at the 
Council's previous meeting, dele gations had expressed different views on how the second review of 
MFN exemptions was to be organized in the Council.   He had been asked to hold consultations on 
whether the second review was to be conducted in the Council's regular meetings or in dedicated 
sessions.  During the consultations held on 14 Se ptember 2004, a number of delegations had shown 
great flexibility on this issue, and the emerging consensus was that the second review of MFN 
exemptions was to be conducted in dedicated sessions of the Council.  In addition, some delegations 
had requested that the meetings devoted to the MFN exemptions review be arranged within the 
services cluster so that their capital-based experts co uld participate in the review.  Other delegations 
had expressed the view that it would be desirable to inform Members well in advance of which sectors were to be reviewed.  Regarding the modality of the review, Members tended to follow the previous 
practice whereby the review would be conducted sector-by-sector through a question-and-answer 
process, with questions being submitted in writing at least 3 weeks before the meeting.  Noting that 
Members might need time to get prepared for the review and that it would be difficult to undertake 
substantive discussions on MFN exemptions in the current services cluster, the Chairman proposed 
that the Council's first dedicated session for the sec ond MFN exemptions review take place in the next 
services cluster.  He invited Members to consider  which sectors the second review was to start with.  
He recalled that the Council had scheduled two dedica ted sessions for the previous review and that the 
division of sectors between the two sessions had been based on the order of the Secretariat's sectoral 
compilation, i.e., the order of W/120.  The first session had been devoted to exemptions relating to all 
sectors, business services, communication services, construction services and distribution services.  The second session had been devoted to exemptions relating to the other sectors including financial 
services, health-related and social services, tourism and travel-related services, recreational services and transport services.  At the end of the second session, the Council had decided to hold an additional session to address outstanding issues and to determine the date of any future review.  He 
invited Members to consider whether the Council w as to follow the practice of the previous review. 
39. The representative of the United States
 stated that her delegation agreed that the second 
review of MFN exemptions would be conducted in accordance with th e previous practice and that the 
dedicated session would commence within the next services cluster.  Referring to paragraph 4 of the 
Annex on Article II Exemptions, she reiterated that the scope of the review was to "examine whether 
the conditions which had created the need for the exemptions still prevail".  In this light, her 
delegation did not believe that the review was to attempt to assess the effectiveness of the exemptions 
or their economic rationale.  Her delegation was flexible on the sectoral order of the review.  
40. The representative of Hong Kong, China  stated that his delegation agreed to proceed with the 
review by way of dedicated sessions.  His delegation also agreed to the allocation of sectors between 
the sessions as the Chairman had pr esented.  He thought that substantive discussions were to be 
structured with certain flexibility and that furthe r discussions might be needed either in regular 
meetings or in dedicated sessions in order to unde rtake a full and substantive review.  Regarding the 
issue of mandate, he reiterated that the mandate wa s for the Council to review all MFN exemptions in 
accordance with paragraphs 3 and 4 of the Annex on Article II Exemptions.  
41. The representative of Canada  stated that his delegation agreed with the proposal that the 
review be conducted in dedicated sessions based on th e procedures used in the previous review.  He 
thought the order of W/120 could be a good basis for organizing the review in terms of sector.  In addition, he underlined that questions were to be submitted well in advance of the meetings to allow 
Members to prepare.  Recalling that Members had had options to reply in writing or orally in the previous review, he suggested that the sec ond review could follow this practice.  
42. The representative of Japan
 stated that the review of MFN exemptions was an important 
exercise in the Council as the MFN was one of the fundamental obligations of the GATS.  He further stated that deviations from this obligation were to be limited and that the review confirmed the 
importance of this obligation.  He indicated that his delegation was ready to participate in the second S/C/M/74 
Page 10 
 
 review seriously and would go along with the con sensus emerging from the informal consultations 
regarding the modality of the review.  Echoin g the statement made by Hong Kong, China and 
recalling the practice of the previous review, he sa id that the review process was to be handled 
effectively and that certain flexibility might be needed  to allow follow-up questions to be dealt with at 
meetings after the dedicated sessions.  
43. The representative of the European Communities  stated that his delegation agreed that the 
second review would be conducted in dedicated sessions  and would proceed with the sectoral order of 
the previous review on the understanding that the re view would take place within the parameter of 
paragraph 4 of the Annex on  Article II Exemptions.   
44. The representative of Mexico  stated that his delegation was flexible as to whether the second 
review was to be conducted in dedicated sessions or not.  His delegation was also flexible regarding 
the procedures the Chairman had proposed for th e second review.  Echoing the statement made by 
Hong Kong, China, he suggested that certain flex ibility might be needed to allow Members to put 
forward and reply to questions.  He underlined that paragraph 4 of the Annex on Article II 
Exemptions provided for the mandate of the review.  Referring to the minutes of the previous meeting 
of the Council, he suggested that the communicati on presented by his delegation on MFN, (contained 
in document S/C/W/196), be re-circulated. 
45. The representative of China  said that her delegation would go along with the approach 
proposed by the Chairman regarding the second review , hoping that the Council would have sufficient 
time to conduct a substantive review in accordan ce with the mandate contained in the Annex on 
Article II Exemptions.  
46. The representative of Brazil  said that his delegation was flexible as to whether the second 
review was to be conducted in dedicated sessions, as well as to the issue of the sectoral order of the review.  Echoing the statement made by Canada, he emphasized that questions were to be provided 
well in advance so that Members could have en ough time to prepare for the review, taking into 
account that this review was undertaken during th e current negotiations.  Referring to the minutes of 
the previous meeting of the Council, he pointed out that the position of his delegation was that 
Members could raise any issues in the review.  
47. The representative of Switzerland
 underlined that the MFN was an important pillar of the 
world trading system and that the review would brin g some insight into the issue of MFN exemptions. 
His delegation was flexible as to how the review  would be conducted and would go along with the 
approach proposed.  
48. Stating that her delegation was flexible as to how the review would be conducted, the 
representative of Korea  was concerned that it would be premature to discuss how many meetings 
would be allocated to the review at the current stag e.  Her delegation was also flexible regarding the 
proposal that the review be conducted by sector in the order of W/120. 
49. The representative of Chinese Taipei  stated that her delegation would go along with the 
proposal that the review be conducted in dedicated  sessions and in the order of W/120. Referring to 
paragraph 4 of the Annex on Article II Exemptions, she underlined that the mandate of the review was 
to "examine whether the conditions which created the need for the exemption still prevail".  Her 
delegation was concerned about how the review could be conducted eff ectively and wished to be able 
to get prepared in advance.  
50. The representative of Australia  stated that his delegation was flexible regarding the modality 
of the review as long as there was sufficien t time to conduct an effective review.  S/C/M/74 
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 51. The representative of Thailand  stated that the second review was to be conducted within the 
sense of paragraph 4 of the Annex on Article II Exem ptions and to follow the previous practice. Her 
delegation was flexible as to the sectoral order of the review. 
52. The representative of Norway  said that his delegation supported the Chairman's proposal that 
substantive discussions of the second review start in the next services cluster.  In order to provide 
sufficient time for capital-based expert to prepare for the review, his delegation also endorsed the 
suggestion that the second review be conducted on a sector-by-sector basis as the previous review.  
53. The representative of the United States  expressed concern about how the dedicated sessions 
would be arranged to ensure that capital-based expe rts could attend the review.  To this end, she 
required the Chairman to hold consultations with de legations. In addition, she sought clarifications 
from Japan as to how the issue of follow-up had been handled in the previous review. 
54. In response to the inquiry by th e US, the representative of Japan  stated that it was difficult to 
discuss how to conclude the review at the current st age.  He recalled that in the previous review, 
several follow-up activities had been held in the Council's regular meetings after the dedicated 
sessions. While agreeing that the review would be c onducted in dedicated sessions, he suggested that 
Members might wish to consider how to proceed afterwards.  
55. The Chairman  confirmed Canada's recollection that  Members had had options to answer 
questions in writing or orally in the previous review.  Regarding th e date of the dedicated session for 
the MFN exemptions review, he explained that the original intention was to hold the meeting during 
the second week of the services cluste r so that capital-based experts of  Members could participate in 
the review.  
56. The representative of the United States  reiterated the request of her delegation that the 
Chairman hold consultations on whether the subseq uent dedicated session was to take place in the 
second week of the following services cluster.  Sh e was afraid that relevant capital-based experts 
could not attend the review in the second week of the services cluster, taking into account the 
meetings of the Council's special session.  She thus sought clarifications from the Secretariat on the 
organization of meetings.  
57. The representative of the Secretariat  explained that the special session of the Council 
normally would convene at the beginning of the second week of the services cluster for a whole day and would resume on Friday of that week for half day to deal with outstanding issues on the agenda.  
The dedicated session for the MFN exemptions review  was scheduled for one day of the second week.  
The exact dates for the two meetings would be unde r consultations between the Chairmen of the two 
meetings.  
58. While expressing her support for the Chairman's proposal on the approach to the second 
review, the representative of Israel
 sought clarifications from the Chairman on which sectors the first 
dedicated session would address.  
59. In responding to Israel's question, the Chairman  reiterated his proposal that the first dedicated 
session for the second review, following the previous practice, address the exemptions relating to all 
sectors, business services, communication services, construction services and distribution services.  He further proposed that the Council take note of th e statements made and that the second review of 
MFN exemptions proceed in a dedicated session within the next services cluster.  
60. The Council so agreed.
 S/C/M/74 
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 C. DERESTRICTION  OF DOCUMENTS 
61. The Chairman  stated that this item was placed on the agenda at the request of the delegation 
of the European Communities.  He informed th e Council that in an exchange between the EC 
delegation and the Secretariat, the EC had taken the view that portions of the minutes of the Council's 
previous meeting, contained in document S/C/M/73, w as to remain restricted since they related to the 
ongoing negotiations under Article XXI of the GATS re garding the modification of the EC schedule 
pursuant to document S/SECRET/8.  This view was based on paragraph 2(d) of the decision by the 
General Council regarding Procedures for the Ci rculation and Derestriction of WTO Documents 
(WT/L/452).  The Secretariat  had noted that from a technical standpoint, there had been no precedent 
for the continued restriction of portions of a document under aforementioned procedures.  Also, 
considering that paragraph 2(c) of the Genera l Council decision (WT/L/452) specifically addressed 
minutes of WTO meetings, the Secretariat considered that there was an interpretation question to be 
resolved.   Recognizing that the authority to interpret the rules lay exclusively with the Membership of 
the WTO, and in order to preserve the rights of Me mbers without foreclosing any particular course of 
action, the Secretariat had temporarily mainta ined document S/C/M/73 restricted until Members 
agreed on a course of action to be taken. 
62. The representative of the European Communities  requested that discussions under this item 
be conducted in informal mode.  The Chairman  so proposed and the Council so agreed.  
63. The Chairman  concluded informal discussions by saying that he would hold informal 
consultations on this issue.  He proposed that the Council revert to this item at its next meeting and 
that document S/C/M/73 remain restricted until then. 
64. The Council so agreed . 
D. OTHER  BUSINESS 
65. Referring to his remarks at the beginning of the meeting, the Chairman  recalled that Section 
18 of the Protocol of Accession of the People's Rep ublic of China provided for an annual review of 
the implementation by China of the WTO Agreem ent and of the related provisions of China's 
Accession Protocol.  As indicated in Section 18,  the Committee on Trade in Financial Services was 
one of the bodies in which this review would be conducted.  The CTFS would report to the Council 
for Trade in Services which would conduct its own review and report to the General Council.  The 
General Council would also conduct its own review.  He announced that the next transitional review 
of China's specific commitments would be conducted by  the Council for Trade in Services at its next 
meeting.  In terms of how to conduct the revi ew, he proposed that the Council follow the same 
procedure as the one that had been used in the previous reviews. 
66. The representative of the United States  inquired whether the exact dates could be set for the 
next meetings of the CTFS and the Council.  She explained that it would be very helpful for her 
delegation to prepare for the transitional review. 
67. The representative of the Secretariat  informed the Council that th e next services cluster was 
scheduled from 22 November to 3 December 2004.  For the purpose of the transitional review, the 
meeting of the CTFS would be he ld on Monday 22 November 2004 an d the meeting of the Council 
would take place on Friday 26 November 2004 so th at the Council would take note of the report by 
the CTFS and then adopt its own report to the General Council.   
68. The representative of the Secretariat  also informed the Council that the Secretariat was 
collaborating with the ITU Secretariat to hold, fo r the first time, a joint Workshop on Telecom and 
ICT Regulation on 1-7 December 2004.   The works hop was a pilot effort designed as a "specialized 
training course" for capacity building of developi ng countries.  It would address telecom and ICT S/C/M/74 
Page 13 
 
 regulations in relation to obligations and commit ments of the WTO.  It had intentionally been 
scheduled to take place in the days immediatel y preceding the ITU Global Symposium for Regulators 
(GSR), which would be held on 8 December 2004, so  as to facilitate the participation of national 
regulatory authorities.  The purpose of the training was to enable national regulatory authorities from 
developing countries to better understand the impli cations for their work of the GATS framework, 
GATS commitments, the Reference Paper and certain ot her relevant WTO agreements.  It would rely 
extensively on interactive exercises as a means of enhancing the skills and techniques needed for the 
effective implementation of WTO in this sector.  Give n the high level of interactivity, the number of 
participants to this activity w ould be limited and participation w ould be on a first-come-first-served 
basis.  He said that delegations would be receiving more information on this activity as well as a letter 
of invitation in due course.  
69. The representative of Japan  stated that financial experts from his country would have 
difficulty in attending the next CTFS meeting if  it was scheduled for 22 November 2004 as the 
Secretariat had proposed.   
70. Referring to Japan's concern, the representative of the United States  suggested that one option 
would be to have the next C TFS meeting on 23 November 2004.  
71. In response to the concern about the dates of meetings, the representative of the Secretariat  
explained that normally, what was first decided was the two-week period for the services cluster, and that the exact dates for meetings were subsequently  set in consultations with the Chairmen of the 
services bodies as well as with the Conference Office of the Secretariat.    
72. In response to the inquiry by Hong Kong, China at the beginning of the meeting with respect 
to any update on consultations regarding the draft Convention on Cultural Diversity, the 
representative of the Secretariat
 informed the Council that the Director General of the WTO had 
received in a communication from the Director General of the UNESCO the preliminary drafts of the Convention and his report to the General Conference of the UNESCO.  The Director General of the 
WTO was currently considering the appropriate  procedure through which Members of the WTO 
would be informed of those documents.  Referring to the statement he had made at the Council's 
previous meeting, the representative of the Secretar iat underlined that the Convention raised a broad 
range of policy issues that rela ted to various areas of WTO agenda, including services, goods, 
intellectual property as well as development. 
73. Regarding the workshop on telecommunications and ICT regulations, the representative of 
Canada
 suggested that background documents be di stributed to delegations informally. The 
representative of the Secretariat  confirmed that the Secretariat would do so. 
74. Thanking the Secretariat for providing update on consultations regarding the draft Convention 
on Cultural Diversity, the representative of Hong Kong, China  informed the Council that a seminar on 
trade and culture would be held on 30 Septembe r 2004, which was organized by his delegation and 
the delegations of Chile, Chinese Taipei, Japan, Mexi co, as well as the United States.  He stated that 
the seminar was to facilitate th e exchange of views among WTO Me mbers on the role of trade in 
enhancing cultural diversity and to explore the relationship between WTO instruments, UNESCO 
instruments and cultural diversity.   
75. Turning to the issue of the MFN exemptions review, the representative of Hong Kong, China  
drew the attention of Members to the communicat ion submitted by Chile, China, Hong Kong China, 
Chinese Taipei, Japan, Korea, and Mexico, contained in document Job (04)/131.  He invited Members 
to provide answers to the questions put forward in  this communication in the dedicated session for the 
MFN exemptions review during the next services cluster.  He finally stated that his delegation would also raise some specific questions on MFN exempt ions in advance of the next services cluster. S/C/M/74 
Page 14 
 
 76. The representative of the United States  reiterated that the scope of the MFN exemptions 
review was limited to the examination of whether the conditions which had created the need for the 
exemptions still prevailed.  In this light, her delega tion did not believe that the review was to attempt 
to assess the effectiveness of the exemptions or their economic rationale.  Her delegation therefore 
questioned the relevance of the information requested in communication Job (04)/131, specifically in its paragraphs 4 (b) and (c). 
77. The Chairman
 suggested that the Council take note of  the statements made and adjourn the 
meeting. 
78. The Council so agreed . 
__________