RESTRICTED
WORLD TRADE S/C/M/20
25August 1997
ORGANIZATION(97-3514)
Council forTrade inServices
REPORT OFTHE MEETING HELD ON25JULY 1997
Note bytheSecretariat
1. TheCouncil forTrade inServices heldameeting on25July1997. Theagenda forthemeeting
iscontained inWTO/AIR/646.
A. REQUEST FOR OBSERVER STATUS -STATEMENT BYTHE CHAIRMAN
2. TheChairman drew attention toletters fromICAO (International Aviation Organization) and
SELA (Latin American Economic System), requesting observer status intheCouncil forTrade in
Services, which hadbeencirculated toMembers. Hesuggested thattheCouncil takenoteoftherequests
fromICAO andSELA andthattheyshould beconsidered together withrequests fromotherinternational
intergovernmental organizations listed indocument S/C/W/19 atafuture meeting. Hewould hold
informal consultations prior tosuchameeting.
3. Therepresentative ofJapan expressed strong support fortherequest from ICAO. The
representative ofUruguay indicated thathisdelegation supported therequest fromSELA, which had
observer status intheGATT before itbecame theWTO. Herecalled thatSELA 'sobserver status
intheGATT wasextremely useful incoordinating thepositions ofLatin American Members andin
dealing withissues oftechnical assistance andargued thatonthisbasis SELA mettherequirements
defined bythegeneral Council forobserver status inWTO bodies.
B. THEIMPLEMENTATION OFTHEWORK PROGRAMME APPROVED BYMINISTERS
ATTHE SINGAPORE MINISTERIAL CONFERENCE
4. TheChairman recalled thatatthelastCouncil meeting adiscussion onthisitemtookplace.
Heinvited participants tofollow uponthatdiscussion inrelation tothethreesub-items intheagenda:
theexchange ofinformation exercise; theArticle VI:4 work programme; andtheguidelines for
negotiations.
5. Ontheexchange ofinformation exercise, theChairman recalled thatatSingapore, Ministers
endorsed therecommendation thattheCouncil forTrade inServices should develop aninformation
exchange programme, aspartoftherequisite work tofacilitate thenegotiation ofprogressive
liberalization oftrade inservices asmandated inArticle XIXoftheGATS. Henoted thatthetask
oftheCouncil during 1997 wastoagree tothemodalities andthetiming ofsuchaprogramme. He
drewattention toaNoteprepared bytheSecretariat, contained indocument S/C/W/24, oninformation
available within theWTO andwithother international organizations, which could beusedforthe
information exchange programme. TheNote attempted toraise some ofthekeyquestions which
Members might wishtoaddress indeciding onthestructure, modalities andtiming forthisprogramme.S/C/M/20
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6. TheChairman suggested thattheexchange ofinformation might takeplace atthree different
levels. Thefirstlevelwould involve anexchange ofthesources ofinformation onservices regulations
thatarecurrently available atthenational level, which might include thedesignation ofagencies,
regulatory authorities orother sources capable ofproviding thistypeofinformation. Atthesecond
level, Members might wishtoexchange information bilaterally, possibly intheformofquestions and
answers which could thenbecirculated bytheSecretariat ifsoagreed. Finally, thethirdlevelwould
involve amore comprehensive exchange ofinformation atthemultilateral level. Headded thatif
Members agreed toengage inamultilateral process, further questions might needtobeaddressed as
tothescope anddepth oftheinformation tobeexchanged. Forexample, Members might notwant
toexchange textsoflawsandregulations, butrather briefdescriptions ofrelevant elements. Also,
Members might wishtoconsider whether itwould beappropriate toexchange suchinformation on
thebasisofaquestionnaire -asproposed byChile (S/C/W/16) -andifso,whether theexercise should
aimforcomprehensiveness orestablish priorities among sectors. These three levels ofinformation
exchange -focusing onthesources ofinformation, based onadecentralized process ofquestions and
replies, orrelying onamore formal, multilateral process -would notnecessarily bemutually exclusive.
Various combinations were conceivable.
7. Therepresentative ofChile saidthatshebelieved thattheNotefromtheSecretariat contained
interesting ideas onhowbesttoorganize efficiently theexchange ofinformation andthathercapital
would takeaposition onthebasis ofthebackground information contained intheNote from the
Secretariat.
8. Therepresentative ofSwitzerland saidthathisdelegation believed thatitwaspremature at
thisstage togivepriority tosome sectors andfavoured some more generic work identifying general
trends inservices trade. Hesuggested thattheSecretariat could startpreparing thefirstpaper proposed
bytheAustralian delegation intheirDiscussion Paper ontheExchange ofInformation (S/C/W/21)
on"Trends inServices Trade Flows". Regarding thetypeofinformation required, hesaidthatitwould
beuseful ifasafirststepdelegations could indicate existing available information regarding their
domestic regimes. Regarding theideaofdeveloping aquestionnaire hesaidthatforthetimebeing
itwasnotappropriate asitwould putaconsiderable burden ondelegations andwould require focusing
onspecific sectors, which hadnotyetbeenidentified. Ontheissueofstatistics hesaidthatthisshould
remain apriority, although itwasalongtermprocess.
9. Therepresentative oftheUnited States saidthatitwasacommon concern toavoid creating
aworkprogram which wasunmanageable andthataquestionnaire, depending onhowitwasstructured,
waspotentially unmanageable. TheNote from theSecretariat washelpful inidentifying sources of
information, including some sources which havebecome recently available because oftechnological
progress. Heproposed selecting anumber ofservices sectors (between fifteen andtwenty), where
delegations would agree thatmore information wasneeded; inorder toavoid duplication ofwork,
thisexercise could takeintoaccount thefactthatlesswork might beneeded insome sectors, where
detailed information wasgathered inearlier negotiations. Amore manageable exercise ofthistype
would allow delegations toprovide onrequest moredetailed information about theregulatory framework
affecting aparticular sector. Itwould alsobepossible toidentify some non-regulated sectors which
would notbecandidates forthistypeofexercise. Theprocess should startassoonaspossible, given
therelatively short timeleftbefore thecommencement ofthenextround ofservices negotiations.
10. Therepresentative ofCanada saidthathisdelegation waswilling toprovide allinformation
inthose sectors inwhich ithadtaken commitments under theGATS, butexpressed doubts about the
feasibility ofwork incertain areas given theinadequacy ofthestatistics available ontrade inservices.S/C/M/20
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Hesupported theideaofanexercise based onquestions andanswers, which could beregistered with
theSecretariat anddistributed. Suchanexercise could befacilitated bythestructure ofenquiry points
which hadalready beenestablished byMembers andbyaccess tointernet sitescontaining relevant
information.
11. Therepresentative ofAustralia saidthatamore formal approach should precede bilateral
exchanges, suchasastandardized setofgeneral questions which could beagreed byMembers and
thencirculated bytheSecretariat. Regarding theissue ofpriorities among sectors shesuggested that
itmight bedesirable tofocus onthose sectors where available information waslimited, suchassectors
which since theUruguay Round hadnotbeenthesubject offurther negotiations, orsectors which had
beenchosen forgreater liberalization invarious regional agreements. Thefollowing sectors could
beexamined inthefirstinstance: infrastructure services, including engineering, construction, electricity
andwater supply services andconsultancies; airtransport services; health services; andenvironmental
services. Regarding information available intheWTO shesaidthatinformation immediately available
(Members 'schedules, notifications andresponses toquestionnaires andTrade Policy Reviews Reports)
would beauseful starting point andthataquestionnaire could build onthisexisting information to
formacomplete picture ofthenature ofservices regimes bothattheborder andinthedomestic context.
Asfarasinformation dissemination viatheinternet wasconcerned shenoted thatthiswasaveryeffective
means, butthatitwould beimportant toensure thatallMembers, including developing countries had
access tothisinformation. Australia would notbeconcerned iftheinformation exchange exceeded
theexisting GATS disciplines, going beyond thetransparency requirements ofArticle III;anyadditional
information which Members could provide would bebeneficial.
12. Therepresentative ofMexico saidthattheanalysis ofregulatory regimes should notbelimited
toaninventory ofexisting measures butshould lookatunderlying policies applied totradeinservices,
theendpurpose ofthisanalysis being theidentification ofelements onwhich tobasepolicies forthe
removal ofobstacles totrade. Itwasalsoimportant tolookattrade flows. Itwould bedesirable to
startwithageneral analysis andthenmake aselection ofsectors, although suchanidentification of
sectors should bediscussed informally.
13. Therepresentative ofIndia saidthatfordelegations withlimited resources itmight bedifficult
toengage intheexchange program andthattoaconsiderable extent theywould depend upontheinitiative
oftheSecretariat ingathering andproviding theinformation available inandoutside theWTO. As
farassectoral priorities were concerned hisdelegation didnothaveadefined position forthetime
being, butoncethefirsttwopapers proposed byAustralia ("Trends inServices Trade Flows" and
"The Benefits ofDeregulation andLiberalization ofServices Markets") hadbeenprepared bythe
Secretariat, thatwould enable delegations todecide which sectors tofocus oninitially. India would
notatthispoint intimesupport theideaofdeveloping alarge questionnaire, although theywould be
ready tohelptheSecretariat withspecific information thatmight beneeded. Ontheideaofdeveloping
abilateral question andanswer exercise, hesuggested thatforthetimebeing itwasdesirable towait
forthefirsttwopapers from theSecretariat, before defining thestructure oftheexchange.
14. TherepresentativeoftheEuropeanCommunitiesagreedwithotherdelegationsthattheexchange
should notbeamere inventory ofexisting measures butsomething more meaningful anduseful. She
saidthattheexercise should notplace anexcessive burden ondelegations andontheSecretariat and
that,given theamount ofwork necessary, itmight beuseful toreflect onhowmuch work should be
donecollectively bytheCouncil andhowmuch work should bedonebyindividual delegations. On
thepoint ofthequestionnaire shenoted thatinthepastalimited number ofdelegations hadresponded
tovoluntary questionnaires.S/C/M/20
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15. Therepresentative ofNewZealand saidthatitwould beuseful ifthefirsttwopapers proposed
byAustralia could beprepared atanearlystagetoassist theCouncil initsfurther work. Shesupported
aformal structure fortheexchange program, although shewasflexible withrespect tothewayitwould
beorganized. Asfarassectoral priorities were concerned shesaidthatcomprehensiveness should
betheoverall aimoftheexercise: however, inpractical terms, asitwould notbepossible tostart
work onallfronts together, sheshared theproposal putforward byAustralia andbytheUnited States
ofmaking aninitial selection ofsome sectors where more work wasneeded. Onthispoint sheagreed
withMexico thatinformal consultation would bedesirable.
16. Therepresentative ofJapan agreed thattheprogram should bemanageable, efficient anduseful.
Regarding aninitial selection ofsectors hisdelegation didnothaveafinalposition; itneeded toreflect
onwhether making aselection ofsectors where further liberalization would beundertaken wasan
appropriate approach intheWTO.
17. Regarding thepaper proposed byAustralia On"Trends inServices Trade Flows", some
delegations noted thatastatistical analysis wasnotpossible asstatistics werestilllargely inadequate
andsuggested thattheSecretariat could undertake amore general analysis ofservices trade flows on
thebasisofthedifferent modes ofsupply, ifatallpossible. Asfarasthesecond paper wasconcerned,
"TheBenefitsofliberalizationandDeregulationofServicesMarkets",therepresentativeofIndiarecalled
thatattheprevious meeting oftheCouncil hisdelegation hadrequested thatsuchpaper should deal
withthedifficulties aswellasthebenefits ofliberalization.
18. TheChairman asked theSecretariat toprepare papers on"Trends inServices Trade Flows"
and"The Benefits ofDeregulation andLiberalization ofServices Markets" andsaidthatonthebasis
ofthese twopapers hewould convene informal consultations atanappropriate time.
19. Regarding theArticle VI:4workprogramme, theChairman recalled thattheCouncil wascalled
upon toexamine, asappropriate, under paragraph 4ofArticle VIoftheGATS, measures relating
toqualification requirements andprocedures, technical standards andlicensing requirements. The
objective wastoadvance thework inthisareaasfaraspossible before thecommencement ofthenext
RoundofServicesnegotiationsmandatedunderArticleXIXoftheGATS.Severaldelegationsexpressed
theviewthatalthough itwasimportant toundertake work inthisarea, itwould bedesirable towait
forsome results fromtheWorking Party onProfessional Services, which wasintheprocess ofdefining
multilateral disciplines under Article VI:4withrespect totheaccountancy sector. TheChairman
proposed thattheCouncil revert tothisissue ininformal consultations.
20. Ontheguidelines fornegotiations, theChairman recalled thattheCouncil wascalled upon
tobegin,atanappropriatetime,theconsiderationofguidelinesandproceduresforthefuturenegotiations
mandated under Article XIXoftheGATS. Therepresentatives ofIndia, Australia, Canada andJapan
saidthatitwaspremature tostartwork ontheguidelines fornegotiations andthatsuchwork might
follow thework ontheexchange ofinformation.
C. STATUSOFACCEPTANCEOFTHEFOURTHPROTOCOLTOTHEGATS-STATEMENT
BYTHE CHAIRMAN
21. TheChairmanrecalledthattheFourthProtocoltotheGATSrelatingtobasictelecommunications
wasopen foracceptance until30November 1997. Heinformed delegations thatsofaroutof69
Members (counting theEuropean Communities as15)whohadannexed their Schedules onbasic
telecommunications totheProtocol only7(Colombia, ElSalvador, Hong Kong, Indonesia, Japan,
PeruandNewZealand) hadaccepted itand1(Brazil) hadsigned itsubject toratification. HeurgedS/C/M/20
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participants tomake every effort toexpedite theirprocedures sothatallMembers concerned would
haveaccepted theProtocol by30November 1997andthattheProtocol would enterintoforceasforeseen
on1January 1998.
22. Therepresentative ofJapan, whose government hadaccepted theFourth Protocol, urged other
Members whohadnotyetaccepted ittoexpedite andcomplete domestic procedures intimeforthe
deadline of30November 1997. Therepresentative ofPakistan informed participants thatitsgovernment
hadcompleted theinternal parliamentary procedures andwould beabletoaccept theProtocol inthe
verynearfuture.
D. ESTABLISHMENT OFACOMMITTEE ONTELECOMMUNICATIONS -PROPOSAL
BYTHE UNITED STATES
23. TheChairman recalled thatattheCouncil meeting of5March 1997thedelegation oftheUnited
States proposed thatacommittee ontelecommunications beestablished toprovide aforum forthe
discussionofspecifictechnicalissues,includingthoseregardingthepro-competitiveregulatoryprinciples
oftheReference Paper. Atthattimedelegations expressed theneedtofurther reflect andconsult with
theircapitals onthematter.
24. Therepresentative oftheUnited States introduced aninformal paper dated 24July1997
containing draftterms ofreference foraproposed technical committee ontelecommunications. He
saidthatsuchacommittee would provide therightforum todealwiththeregulatory principles agreed
intheReference Paper, where further discussion andclarification wasneeded. TheCommittee would
bring together experts from thetelecommunication sector andwould bepresided overbysomeone
versed intelecommunications. Itmight meettwice ayear,perhaps inconjunction withanITUmeeting,
inorder tofavour participation byexperts. Hesaidthathisdelegation didnotbelieve thatsuchanew
committee would poseaheavy burden ondelegations northatitwould setadangerous precedent for
theproliferation ofsubsidiary bodies, butthatitwasnecessary, given thecomplexity ofthesector
andtheamount ofregulation.
25. Therepresentative ofAustralia supported theproposal bytheUnited States, especially ifthe
committee weretofocus onexchange ofinformation andtechnical assistance toother Members and
itwould notbepolicing theimplementation ofthecommitments. Therepresentative ofHong Kong
saidhecould seethelogic behind theUSproposal, butwanted toreflect further onhowtodealwith
theissue.
26. Therepresentative ofIndiasaidthathewasnotconvinced thattherewasaneedforacommittee
ofthetypeproposed bytheUnited States. Hewasnotagainst discussion ontheimplementation of
telecommunications commitments, andthatdelegations could askforatelecommunications issue to
beincluded intheagenda oftheServices Council. There wasalsoaCommittee onSpecific
Commitments, whose taskwastooversee theimplementation ofspecific commitments inallmodes
ofsupply inallsectors other thanthose forwhich specific subsidiary bodies hadbeenestablished. The
involvement ofexperts didnotcreate aneedforaseparate body, asexperts could beinvited totake
partinmeetings oftheServices Council oroftheCommittee onSpecific Commitments, especially
ifthose meetings were scheduled inconjunction withmeetings oftheITU. Asfartheregulatory
principles were concerned, hesaidthatwithfewexceptions, allschedules adopted substantially the
same language, which hadbeenthoroughly negotiated foroversixmonths sothatthere wasalready
agreement ontheunderstanding oftheprinciples themselves. Anyproblems would eventually concern
implementation.S/C/M/20
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27. Therepresentative ofBrazil expressed scepticism onthedesirability ofacommittee on
telecommunications; some ofthesubjects proposed foritsexamination suchasinterconnection and
technical assistance would fitbetter under theagenda ofanITUcommittee, which would provide the
appropriate technical environment forthediscussion. Another committee would place anextraburden
ondelegations andtheWTO already offered appropriate fora todiscuss issues affecting
telecommunicationsservices,namelytheServicesCouncilandtheCommitteeonSpecificCommitments.
Atthistimehisdelegation wasnotready toaccept anewcommittee.
28. TherepresentativeofThailandspeakingonbehalfofASEANMemberssaidthathisconstituency
sawnocompelling reason tosetupanewcommittee, andthattheirinitial reaction tothedraftterms
ofreference submitted bytheUnited States wasthattheroleoftheproposed committee could be
performed bytheCommittee onSpecific Commitments orbytheServices Council. Headded that
hesupported theproposal putforward byIndia ofscheduling meetings oftheCommittee onSpecific
Commitments oroftheServices Council inconjunction withITUmeetings.
29. Therepresentative ofCanada saidthathisdelegation didnotseeaneed forcreating a
telecommunications committee atthistimeastechnical assistance andcooperation werealready taking
place inmany other international foraincluding theITUandtheWorld Bank. They could notjustify
spending additional resources tocarry outthesame work intheWTO. Regarding surveillance and
implementation issues, those could beaddressed though existing bodies suchastheServices Council
andtheCommittee onSpecific Commitments. However, hisdelegation would bewilling torevisit
thisissueafterthecoming intoforceoftheFourth Protocol, when itwould bepossible toasseswhether
thevolume ofwork andthetechnical complexity oftheissues warrant thecreation ofaseparate
telecommunications committee. Therepresentative ofMexico saidthatthecreation ofacommittee
ofthiskindwasnotjustified, atleastforthetimebeing, asthere were other forawhich could deal
with telecommunications issues, such astheServices Council andtheCommittee onSpecific
Commitments. Sheagreed withCanada thatitmight bebetter towaitfortheentry intoforce ofthe
Fourth Protocol inorder toconsider thisproposal. Therepresentative ofPerusaidthatalthough there
wassome merit intheproposal bytheUnited States, itwaspremature. Itcould beconsidered ata
laterstage.
30. Therepresentatives ofEgypt, Pakistan andVenezuela saidtheydidnotsupport thecreation
ofanother committee, duetotheheavy workload itwould place onsmaller delegations andtothefact
thattheappropriate foratodiscuss telecommunications issues already existed.
31. TherepresentativeoftheEuropeanUnionsaidthatatthisstageherdelegationhadaninstitutional
objection tothecreation ofacommittee ontelecommunications, asitwasconcerned about the
proliferation ofcommittees intheWTO andabout theemergence ofasectoral approach totrade in
services. However, sherecognized thesectoral specificity oftelecommunications andsaidthatthis
could beaddressed byorganizing meetings oftheServices Council andoftheCommittee onSpecific
Commitments inconjunction withmeetings oftheITU, inorder toallow experts toparticipate
32. Therepresentative ofJapan saidthathewould welcome discussing implementation of
commitments intelecommunications, butthattheparticipation oftelecommunications experts could
takeplace intheServices Council andintheCommittee onSpecific Commitments. Therepresentative
ofKorea saidthatbased onapreliminary examination itwasnotclearthattheamount ofwork tobe
doneontheregulatory principles wasenough towarrant theestablishment ofanewcommittee and
thatwork could notbedonebyexisting bodies suchastheServices Council andtheCommittee on
Specific Commitments. Hesaidthatforthetimebeing itwasdesirable todealwithtelecommunications
issues intheexiting bodies andthathesupported theCanadian proposal toreconsider theissue oftheS/C/M/20
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establishment ofaseparate telecommunications committee aftertheentry intoforce oftheFourth
Protocol.
33. Therepresentative oftheUnited States saidthatonthepointoftiming, asthecommittee would
notstartworking before theentry intoforce oftheFourth Protocol, there wasnoreason toputoff
thedecision whether tohave suchacommittee. Heargued thatiftheFourth Protocol wasnot
implemented intimeitwould stillbepossible todelay thestarting dateofthecommittee astocoincide
withtheentry intoforce oftheProtocol. Regarding theproposal bysome delegations todealwith
telecommunications issues intheServices Council orintheCommittee onSpecific Commitments, he
saidthathisdelegation wasnotquestioning thatthiswould bepossible, butwaslooking atthemost
efficient wayofdealing withtechnical issues affecting telecommunications andthatthiswould be
represented byacommittee ontelecommunications. AsfarastheReference Paper wasconcerned
hesaidthatalthough thelanguage oftheregulatory principles annexed totheschedules wasnearly
identical, there werestillsome important technical questions leftunanswered which required further
discussion.
34. TheChairman suggested thattheCouncil takenoteofthestatements made bydelegations.
35. TheCouncil tooknote.