WORLD TRADE  
ORGANIZATION  TN/S/W/20 
25 June 2004 
 (04-2758) 
Council for Trade in Services 
Special Session Original:   English 
 
 
 
COMMUNICATION FROM AUSTRALIA; HONG KONG, CHINA; LIECHTENSTEIN; 
MAURITIUS; NEW ZEALAND; NICARAGUA; SWITZERLAND AND THE SEPARATE 
CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU 
 
Logistics Services  
 
  The following communication, dated 25 June 2004, from the delegations of Australia; Hong 
Kong, China; Liechtenstein; Mauritius; New Zeal and; Nicaragua; Switzerland and the Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Ma tsu is being circulated to the Members of the 
Council for Trade in Services. 
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I. INTRODUCTION 
1. In March 2001, Hong Kong, China presented its in itial ideas for liberalization in logistics and 
related services in S/CSS/W/68.  In May 2001, Sw itzerland made proposals on multimodal transport 
in S/CSS/W/78.  This joint paper further devel ops these ideas and presents a concrete proposal and 
checklist for the making of substantial and meani ngful specific commitments in sectors which would 
contribute to the liberalization of logistics servic es.  This proposal and the checklist are presented 
without prejudice to the position of its co-sponsors in the on-going services negotiations in respect of 
individual sectors. 
II. IMPORTANCE OF LOGISTICS SERVICES FOR TRADE 
2. The co-sponsors of this paper consider improve ments in freight logistics services to be a 
crucial underpinning of expansion of trade genera lly and improvements in global economic welfare. 
3. To recap, international trade is facilitated by lo gistics services providing efficient integrated 
management of point-to-point supply and distributio n chains.  Logistics deal with the supply chain 
process that plans, implements, and controls the effi cient and effective point-to-point flow and storage 
of goods, services and related information, th roughout the production, distribution and delivery 
stages, from the initial suppliers of inputs to final cu stomers of products.  Such services form a crucial 
and integral part of the infrastructure and a majo r determining factor of the competitiveness of an 
economy in global trade and investment. 
4. Efficient logistics services are beneficial to world trade in goods and services and crucial to 
the economic development of different economies.  Total logistics costs (including packaging, 
storage, transport, inventories, administration a nd management) are estimated to reach up to 20 per 
cent of total production costs in developed countries, while freight costs alone can be up to 40 per cent 
of export values for certain landloc ked developing countries.  This w ould equally be the case for other 
developing countries, small econo mies and island economies.  The availability of competitive 
logistics services would enhance overall economic effi ciency and competitiveness. Cost reductions or 
quality improvements in the supply chain benef it the exporter through increased competitiveness as TN/S/W/20 
Page 2  
 
well as the importer/consumer through lower total pri ces to be paid.  Differentials in logistics costs 
could be even higher than tariffs and could eas ily undermine comparative advantage in production 
costs.  This is particularly the case for developi ng countries which have significant interests in export 
of goods ranging from agricultural products to i ndustrial goods, and which c ould benefit from timely, 
reliable and efficient supply chain, distributio n and inventory management for their exports. 
5. At the same time, the trend of increasing focus on integrated management of the supply chain 
and outsourced support for inventory management  provides significant potential for third-party 
suppliers of logistics services to flourish.  Su ch third-party logistics services would enable 
manufacturers and suppliers of goods and services to be relieved of the burden of logistics 
management and to focus better on their core co mpetencies to enhance their competitiveness.  
Competitive logistics services could also benefit tr ansport services suppliers through more efficient 
use of their capacity.   
III. CHECKLIST OF FREIGHT LOGISTICS SERVICES 
6. Logistics services comprise a wide range of services and are constantly evolving.  The 
concept has evolved from the narrow definition of physical network for transportation and distribution 
of goods to integrated management of supply and distribution chains.  No doubt the significance of 
logistic services will continue to evolve in view  of technological advances as well as changes in 
business models, particularly those brought about by electronic commerce (both business-to-business 
and business-to-consumers). 
7. For the purpose of developing business in logistics services, the making of commercially 
meaningful liberalization through binding commitmen ts would be important.  Such liberalization may 
include not only the possibility of market acces s and national treatment commitments allowing for 
commercial establishment with minimal limitations, but also additional commitments that enable 
efficiency and give greater substance to market access rights. 
8. To capture the wide range of logistics serv ices for the purpose of making liberalization 
commitments, a checklist is compiled at the Annex .  The purpose of the checklist is to indicate the 
scope of service activities which are involved one way or another in the logistics chain and the 
commercially meaningful liberalization of which could contribute to reaping the benefits of 
competitive logistics services.  In doing so, the check list attempts to cover logistics services in as 
wide a manner as possible and allows for scope fo r future development.  The checklist describes the 
sectors and sub-sectors of such services and where a ppropriate identifies the reference to the services 
sectoral classification list MTN.GNS/W/120 (includi ng those in category 11.H) and the Provisional 
Central Product Classification (CPC). 
9. In compiling the checklist, certain services are r ecognised as the core components of logistics 
services, in that they represent a significant part of the total logistics costs or they would be essential 
for commercially viable logistics operations, and hen ce substantive liberalization in market access and 
national treatment including right to establishment woul d be crucial.  At the same time, a number of 
services are recognised as supporting services, in that  they are related to logistics management or 
operations, and their liberalization should furthe r contribute to enhancing the efficiency and 
competitiveness of logistics services.  Furthermore, a number of sectors that are intrinsically connected with logistics services are already th e subject of specific initiatives or negotiation 
processes. As further liberalization of such services is important for smooth and efficient development of the logistics chain, progress in these areas is en couraged, although emphasis in the present initiative 
will be placed on core freight logistics services. 
10. The additional commitments (Article XVIII) components of the checklist increase the 
potential for efficiency of supply chains through the unambiguous right to integrate supply chains and  TN/S/W/20 
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to avoid the time delays associated with pr ocessing paper documents, and through assurances that 
procedures and formalities will not to be unnecessarily burdensome. 
IV. PROPOSAL FOR LIBERALIZATION OF LOGISTICS SERVICES 
11. The checklist of logistics services is intended as a tool to assist the negotiations of specific 
commitments aimed at bringing liberalization to lo gistics services across-the-board in order to reap 
the benefits to more efficient and reliable global/r egional logistics and supply chains.  In pursuing 
liberalization commitments on the basis of the check list, the following should be taken into account: 
(a) To reap the greatest benefits from compe titive logistics services and to allow ample 
opportunities for the development of such services, it is important that Members 
undertake substantial and meaningful mark et access (MA) and national treatment 
(NT) commitments, as well as other additio nal commitments as may be needed to 
ensure the effectiveness of liberalization commitments, in as many services sectors in 
the checklist as possible. 
(b) However, it is recognised that the sectoral  coverage and level of commitments may 
need to take into account the progress of re gulatory reform and level of development 
of individual Members.  The checklist is th erefore not intended to be a mandatory list 
of sectors for commitments.  Specifically, while substantial liberalization of sectors 
across-the-board within the checklist should be the ultimate goal, progressive liberalization should be allowed. 
(c) Following the above, there should be a range of possible options for undertaking 
liberalization commitments in sectors within the checklist, having regard to the nature 
of the sectors concerned and commercial reality, as well as the domestic regulatory 
reform and development needs of the Members concerned. 
(d) In respect of core services essential to logi stics operations, MA and NT commitments 
with right of establishment should be pr ovided so as to enable commercially 
meaningful liberalization.  Where limitati ons and restrictions are to be scheduled, 
they may be timed-limited to be phased out in the light of progress of regulatory 
reform.  Where MA and NT commitments are not possible, other forms of ensuring effective liberalization of logistics servi ces should be considered (see sub-paragraph 
(e) below). 
(e) Effective liberalization of logistics servi ces requires, apart from the possibility of 
establishing commercial presence and undertaking actual operations, the ability of 
logistics operators to access such service on competitive terms for the sake of their 
integrated operations.  In this regard, a dditional commitments could be considered for 
the purpose of allowing access to such services on reasonable and non-discriminatory terms, or of ensuring competitiveness or reasonableness of the pricing of such services. 
(f) In addition, additional commitments should be  considered to ensu re effective market 
access and address sector-specific issues, fo r instance, regulatory issues such as 
licensing requirements/procedures, technical standards, and anti-competitive practices.  Such additional commitments ma y also be considered for ensuring that 
various procedures and formalities such as documentary requirements, customs 
clearance, customs inspection, and electronic processing, would not become 
unnecessarily burdensome. TN/S/W/20 
Page 4  
 
(g) A specific additional commitment proposed in  the checklist is the right to supply 
checklist services in combination. This ma kes it clear that a Member making this 
commitment cannot break the supply chain up by, for instance, issuing individual licenses for each checklist service. 
(h) Another specific additional commitment pr oposed in the checklist is the acceptance 
of electronic trade administration documents. This is a critical enabler of unhindered 
transit, and creates greatly improved capacity for suppliers of logistics services to move freight from point to point in s hort and predictable time periods without 
compromising quality, particularly of perishables. It would also make more likely the introduction of ‘track and trace technology’, or use of electronic systems by the 
private sector. A Member agreeing to accept electronic versions of trade 
administration documents may choose to do so immediately or over a phase-in period.  
(i) The final additional commitment specifica lly proposed in the checklist is the 
requirement that procedures and formalities such as documentary requirements, 
customs clearance, customs inspecti on, and electronic processing, are not 
unnecessarily burdensome. While in no way reducing the right to regulate or lowering standards for legitimate policy objectives,  an obligation would be created for 
measures related to freight logistics to be chosen so as to avoid unnecessarily impeding trade. 
12. The substantial liberalization of logistics servi ces would bring benefits to all Members, both 
suppliers and users of such services as is likely to be the case for export in goods by developing 
countries.  In this regard, whilst the value of lib eralization commitments in a bilateral evaluation 
process would have to be made having regard to the commercial interests of the trading partner in the 
liberalizing Member in respect of the sectors concer ned, one should not lose sight of the value of 
liberalization in such services in terms of enhanci ng the efficiency and competitiveness of logistics as 
a whole, and the resultant collective benefits that coul d be realised to all Members.  We therefore urge 
all Members to undertake further commitments in logistics services on the basis of the checklist.    TN/S/W/20
 Page 5ANNEX 
 
FREIGHT LOGISTICS CHECKLIST  
 
 
I. CORE FREIGHT LOGISTICS SERVICES 
Services under this core category are essential to logistics opera tion and substantial liberalizat ion would be required for via ble logistics services. 
 Description and W/120 category where applicable CPC codes and inclusions where applicable 
 
11. H. Services auxiliary to all modes of transport  
a. Cargo handling services:  
Container handling services CPC 7411 Other cargo handling CPC 7419 
 
b. Storage and warehousing services CPC 742 (including* distribu tion centre services and materials handling and equipment 
services such as container station and depot services) 
 
c. Transport agency services CPC 748 (including* customs agency services and load scheduling) 
 
d. Other auxiliary services CPC 749 (including* through-chain logistics services, reverse logistics, container leasing 
and rental services)  
 
II. RELATED FREIGHT LOGISTICS SERVICES 
Broadly liberal arrangements for this list of services are crucia l to the efficient supply of integrated logistics services as well as providing an enabling 
environment for third-party logistics services to flourish.  So me of these items are already being addressed in ongoing negotia tions. The effective 
liberalization of logistics services would require broad and mean ingful liberalization of these related freight logistics servi ces. Members are strongly 
encouraged to make offers in this area.   TN/S/W/20 
Page 6 
(1) Freight transport services 
 
11. A. Maritime Transport Services  Services identified under maritime transport negotiations  
 
11. B. Internal Waterways Transport Services  Services identified under maritime transport negotiations  
 11. C. Air Transport Services
 
b. Air freight transport CPC 732 (Currently excluded from GATS, subject  to Annex on Air Transport Services) 
c. Rental of aircraft with crew CPC 734 (Currently excluded from GATS, subject to Annex on Air Transport Services)  
 
11. E. Rail Transport Services  
b. Freight transport CPC 7112  11. F. Road Transport Services
 
b. Freight transport CPC 7123 
c. Rental of commercial vehicles with operator CPC 7124  - without operator  CPC 83102  
(2) Other related logistics services 
 
1. F. e. Technical testing and analysis services
 CPC 8676 
 2. B. Courier Services
 CPC 7512 
 4. A. Commission Agents’ Services
 CPC 621 
4. B. Wholesale Trade Services  CPC 622  
4. C. Retailing Services  CPC 631, 632, 6111, 6113, 6121 (includi ng* inventory management of goods, 
assembling, sorting and grading of goods, br eaking bulk, re-distribution and delivery 
services) 
 
-  Other supporting services not covered by 11. H:  CPC 743, 7113, 744 (exc luding 7441) and 746 . 
                                                      
*These services are not explicitly listed in the official CPC e xplanatory note, and should be explicitly listed in schedules for  clarity.   TN/S/W/20
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III. NON-CORE FREIGHT LOGISTICS SERVICES 
Availability and efficiency of the following services are important  for freight logistics supply chains to operate effectively.  Liberalisation in these areas 
would be desirable for a comprehensive offer on logistics: com puter and related services; packag ing; and management consulting and related services. 
 
Accompanying additional (Article XVIII) commitments  
 
1. [The Member] will accept electronic versi ons of trade administration documents. 
 
2. Service suppliers are entitled to supply listed freight logisti cs services (from services auxiliary to all modes of transport, freight transport, courier 
services and distribution services) in combination, subject to  measures necessary to preven t anti-competitive behaviour. 
 
3. [The Member] will ensure that various procedures and formalities such as documentary requirements , customs clearance, customs i nspection, and 
electronic processing, would not be unnecessarily burdensome. 
 
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