. /.RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/81
9 December 1998
(98-4987)
Council for Trade in Services Original:  English
COMMUNICATION FROM THE UNITED STATES
Computer and Related Services
The following communication received from the delegation of the United States was
circulated informally on 22 July 1998 to the Members of the Council for Trade in Services to assist in
the discussion on Computer-related Services in the context of the Information Exchange Programme.
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I. GROWTH OUTLOOK AND BENEFITS OF LIBERALIZATION
1. Liberalization of trade in the computer and related services sub-sectors will increase the
number of companies competing in the marketplace, improve the variety of computer services
available, and will help reduce the costs of these services to businesses and the public.  Furtheropening in this sector should support the growth of WTO Members’ computer and
telecommunications sectors. More generally, given the important role of  computer services such as
software development, database creation and database processing in supporting and stimulating
business activity, further liberalization of the computer and related services sectors also should help
countries expand existing and find new export markets for other types of goods and services.  This
trend is likely to continue as technological adva nces in the telecommunications sector, including the
growth of the internet and electronic commerce, help promote additional cross-border trade incomputer and related services.
2. This growth is not confined to European and North American countries.  The WTO
Secretariat has noted that the client base and emerging opportunities for the information technology
industry are global.  The Secretariat highlights that by 1995, countries such as the Republic of Korea,
Brazil, and China had markets that were comparable to or larger than some European markets and onaverage, the market growth in non- OECD countries is nearly double that in OECD countries.    The
Secretariat paper also notes that the information technology sector is a substantial generator of new
employment and of skilled, well-paying jobs, including in  emerging markets.
3. According to official U.S. trade data, cross-border sales of computer and data processing
services grew from $1 billion in 1990 to $3.1 billion in 1996.  During the same period, U.S.cross-border imports of computer services grew from $44 million to $334 million.  Thus, during that
time period, exports of computer and data processing services to foreign purchasers grew by 210
percent, and imports by 660 percent.  According to U.S. International Trade Commission data, in
1995, U.S. sales of computer and data processing services through foreign based affiliates totaled $
22.7 billion.  U.S. purchases of services from U.S.-based affiliates of foreign firms increased by 11percent, to $ 3.5 billion.S/C/W/81
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II. POSSIBLE AREAS FOR FUTURE DISCUSSION AND WORK
4. Although many WTO Members have taken on significant market access commitments in this
sector, further work is needed.
(a) The coverage of W/120 with respect to computer and related services should be
further examined and discussed to see whether and what changes are necessary  toreflect the current nature of business activity in the sector, while not diminishing the
value of any commitments already made by WTO members.
(b) Those WTO Members that have not made commitments for computer and related
services should consider doing so; what concerns have prevented them from making
such commitments?
(c) All WTO Members should strive for maximum transparency in this sector.  WTO
members have for the most part felt it unnecessary to impose regulations in thissector; this approach should be continued to the greatest extent possible given other
policy requirements.
(d) The Secretariat notes that the most common market access limitations in computer
and related services are limitations on commercial presence, specifically on the  type
of legal entity allowed for commercial presence of service suppliers and on the levelof participation of foreign equity.  Why do countries believe that these restrictions are
necessary?
(e) Given the increasing importance of cross-border trade for delivery of computer and
related services, WTO Members should endeavor to maintain liberal regimes for
cross-border supply.
III. U.S. REGIME
5. The U.S., recognizing the benefits for economic  growth in open markets for computer and
related services, made substantial commitments in this sub-sector during the Uruguay Round.  The
U.S. commitments cover all computer and related services with the exception of airline computer
reservation systems.  The U.S. committed to fully open markets (“none”) for both market access andnational treatment, except for mode 4 of market access, where the commitment is “unbound, except as
indicated in the horizontal section.”
6. The activities of computer services companies are largely free from Federal and State
Government regulation.   The deregulation of the U.S. telecommunications sector also has supported
the growth of computer and related services provided through electronic means.
IV. REMARKS ON WTO SECRETARIAT PAPER/QUESTIONS FOR DISCUSSION
7. We have reviewed the Secretariat’s remarks in paras. 7-9 on the classification of computer
and related services, including the Secretariat’s finding that computer software would appear not to be
covered under the scope  of CPC 842 -- software implementation services.  While we agree that the
wording (and punctuation) of CPC 842 may be confusing, in our view there is no question that it
includes the creation and supply of computer software, and that the commitments undertaken by WTO
members in this sector reflect this understanding.
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