RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/M/65
21 March 2003
(03-1661 )
Council for Trade in Services
REPORT OF THE MEETING HELD ON 28 FEBRUARY 2003
Note by the Secretariat1
1. The Council for Trade in Services held a meeting on 28 February 2003 chaired by
Ambassador Mary Whelan (Ireland).  The agenda for this meeting is contained in documentWTO/AIR/2038.
2. The Chair informed the Council that she intended to make a brief report regarding the
Chairs of the subsidiary bodies under "Other Business".  She suggested that the agenda as
cirulated be adopted with the addition under Other Business to which she had just referred.
3. It was so agreed.
A. NOTIFICATIONS TO THE COUNCIL PURSUANT TO GATS ARTICLES III:3 AND
V:7
4. The Chair drew the Council's attention to recent notifications made pursuant to Article III
(Transparency) of the GATS.  She stated that eighteen notifications had been made by the
People's Republic of China, contained in docume nts S/C/N/208 to S/C/N/225 inclusive, as well as
one notification from each Poland and the Kyrgyz Republic, contained in documents S/C/N/227and S/C/N/228 respectively.  She proposed that the Council take note of these notifications.
5. It was so agreed.
6. The Chair further drew the Council's attention to two notifications pursuant to Article V
(Economic Integration) of the GATS.  The first was a notification by EFTA Members (Iceland,
Liechtenstein, Norway and Switzerland) and Sing apore, contained in document S/C/N/226.  The
second was by some of the Members of the Caribbean Community (CARICOM), namely,
Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, St. Kitts and
Nevis, St. Lucia, St. Vincent and the Grenadines , Suriname, and Trinidad and Tobago, contained
in document S/C/N/229.  She proposed that the Council take note of the notifications and that the
agreements be referred to the Committee on Regional Trade Agreements for examination in termsof their consistency with the provisions of Article V of the GATS.
7. It was so agreed.
                                                          
1 This document has been prepared under the Secretariat's own responsibility and without
prejudice to the positions of Members and to their rights and obligations under the WTO.S/C/M/65
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B. PROPOSALS FOR A TECHNICAL  REVIEW OF THE GATS PROVISIONS –
ARTICLE XX:2
8. The Chair recalled that an informal meeting had been held on 14 January on the issue of
Article XX:2 and the related question of the ov erlap between Articles XVI and XVII in cases
where Members have entered 'unbound' under either the market access or national treatmentcolumn of their Schedule while maintaining a commitment in the respective other column.  She
believed that the discussion at the informal meeting had been helpful in clarifying the various
possible ways of understanding the problem.  It had also been useful to delineate the various
avenues that could be taken in addressing the issue.  She recalled that the delegation of Brazil had
presented in greater detail its informal paper, contained in Job (02)/215, which had been initially
submitted to the regular session in December.  The paper noted that Article XX:2 could be taken
to suggest that, for scheduling purposes, the domain of Article XVI be extended to all measuresof a quantitative nature, regardless of whether these measures were discriminatory or not.  By
inscribing 'unbound' in the market access column, a Member would reserve the right to introduce
any of the market access restrictions falling within that domain, including both non-
discriminatory and discriminatory ones.  For the reverse case, where a commitment under market
access existed, but national treatment was left unbound, a Member could only introduce thosediscriminatory measures that would not also fall under Article XVI, such as discriminatory tax
measures.  In essence, this reading would draw a line between Articles XVI and XVII in a way
that all discriminatory measures falling under the overlap would be addressed under Article XVI
only.
9. The Chair noted that a different approach had been suggested by other delegations.
According to this view, Article XX:2 should be understood as stating that any discriminatory
measures falling also under Article XVI need to be inscribed under Article XVI, regardless of
whether a commitment was taken under that Article or not.  Under this reading, an 'unbound'
under market access coupled with a 'none' under national treatment would imply that the Member
in question could not introduce any discriminatory measures falling also under Article XVI.Conversely, where no limitation was scheduled under market access, an 'unbound' under national
treatment would not entitle the Member to apply measures that also fell under market access,
since such measures would have to be specified in the market access column.  She said that,
unlike the reading suggested by Brazil, the view she had outlined would not result in a division of
the scope of the two Articles for scheduling purposes, but rather would limit the scope of an
'unbound' to the area of either market access or national treatment in which no overlap existed.
To the extent of a commitment in the other column, that commitment would also cover the
overlapping area.  In other words, a 'none' – or a commitment in general – would override an
unbound.
10. The Chair recalled that during the informal meeting, attention was drawn to paragraph 18
of the scheduling guidelines, which suggested that in cases where measures inconsistent with both
Articles XVI and XVII were inscribed in the column relating to Article XVI, Members could
clarify that these also limited national treatment by making a statement to that effect in the market
access column.  She believed that it had been clarified that this sentence did not relate to cases
where market access was left unbound, because in such a case no measures at all were inscribed
under market access.  For the case where national treatment was left unbound, no specific
statement that any market access limitation would also limit national treatment would benecessary, since no commitment under national treatment existed.  Paragraph 18, therefore,
referred to cases where commitments were made under both market access and national treatment
and supported the call for clarity in scheduling which has its foundation in paragraph 1 of ArticleS/C/M/65
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XX, and was reiterated throughout the scheduling guidelines.  The Chair stated that it appeared to
her that each of the arguments presented had merits, and was conclusive in its own right, but
would lead to incompatible results.  She felt that this might be an area where Members, through
agreement on an understanding of the complex relationship of the Articles in question, could
inject some clarity into the process.  She encouraged Members to address both the substance ofthe issue, and the question of whether an agreed solution would be desirable, and if so, what next
steps would be needed to advance on such a pat h.  The Chair then drew the Council's attention to
a communication from Hong Kong, China on this item, contained in Job(03)/34.
11. Introducing his delegation's submission, the representative of Hong Kong, China thanked
Brazil for its presentation at the last formal meeting as it was a basis for his delegation's informal
paper.  He stated that the purpose of his paper was to collect the views and arguments that had
been identified thus far and to present them in  a structured manner.  He stressed that the
submission did not necessarily represent his delegation's interpretation of relevant GATS
provisions, but was presented as a means to allow Members to have a fuller discussion.  He stated
that he viewed this as an issue relevant to the services negotiations, as it might help to clarify
Members' intentions when an 'unbound' in the market access column and a 'none' in the national
treatment column or vice versa  appeared in new commitments.  The question persisted as to how
entries should be written so as to reflect Members' intentions and whether other Members would
read them in the manner intended.  He stressed that it was important to have a common language
in the negotiations when examining of initial offe rs.  This technical issue was the starting-point of
his reflection and seemed highly pertinent.  He noted that his paper, like Brazil's, also separated
the possible measures covered by Articles XVI and XVII into the same three types, although henoted that he had used different terminology.  He had also tried to illustrate and clarify the
various different scenarios through a series of diagrams.  He stressed that a situation where either
the market access or national treatment column was unbound involved systemic issues.  He had
taken note of situations where both columns were bound, and the fact that these cases could also
give rise to ambiguities, however, it appeared to him that the ambiguities arose from unclearscheduling language rather than from a systemic issue. This explained why Hong Kong, China
had confined its consideration to the situation where one column had an 'unbound' entry.
12. The representative of Hong Kong, China said that he had attempted to summarise the
different readings by delegations of the various scenarios in Part II his paper.  Elaborating on the
case outlined in paragraph 7(f), he stated that it could be argued that Articles XVI and XVII
represented obligations to which Members could subscribe by way of entries in their Schedule of
Specific Commitments.  It could be argued that the fact that a Member inscribed 'unbound' meantthat the Member did not intend to assume an obligation under the relevant Article.  He argued,
however, that this inscription did not obviate any other obligations that a Member may have
assumed by scheduling entries under another Article.  For example, a Member which had entered
an 'unbound' under market access had no intention of undertaking any obligation under Article
XVI.  However, where it had also entered 'none' under Article XVII, it would assume a fullcommitment under the national treatment column.  The fact that it had not assumed any
obligation under Article XVI would not absolve the Member from having to fulfil its obligations
assumed under Article XVII.   This would mean that an 'unbound' entry would be taken to mean
only those measures which fall exclusively under the relevant Articles, but not under the
overlapping area.  He stressed that this interpretation was not necessarily the only interpretationpossible and that there were questions which remained regarding how an 'unbound' and 'none'
with one entry in one column and the other in the second should be read.  He felt that there were
no unambiguous answers to these questions.  If these questions persisted, this would lead the
impression that there were ambiguities in the Sc hedules of Specific Commitments with respect toS/C/M/65
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what a Member had intended by inscribing an 'unbound' and a 'none' together.  He felt that it was
important for Members to come to a common understanding of how to schedule and/or interpret
new commitments so that the scheduling language would reflect the true intention of Members in
these scenarios.
13. The representative of Hong Kong, China had tried in his submission to identify possible
solutions, some of which had been borrowed from other papers and summarised.  In the first
solution outlined, an 'unbound' under market access would cover market access measures only,
and would fall exclusively under Article XVI, unless otherwise indicated.  Similarly, an 'unbound'
entry under national treatment would cover those measures which fall exclusively under the
national treatment column, but not the overlapping measures.  The second possible solution, he
stated, would correspond to the suggestion from Brazil, in which overlapping measures of the two
Articles would be governed by a Member's commitment or the absence thereof, in the marketaccess column.  He noted that his paper suggested examples of how entries in this scenario would
appear.  In the third solution, the assumption was that Article XX:2 did not apply to the present
situation and it would thus be up to Members to indicate where the overlapping measures fell.
For example, if a Member intended to take a commitment in the overlapping area, it would
indicated this in its Schedule.  Likewise, if it did not intend to make a commitment in anoverlapping area it would also indicate this in its Schedule.  He stressed that in his view, there
was no substantive difference between these solutions, in so far as new commitments were
concerned.  He recalled that the main objective of the exercise was to identify the ambiguities, to
ascertain if any ambiguities arose from Article XX:2 and to avoid possible ambiguities.  Hong
Kong, China felt that any of the three solutions would allow Members to alleviate the ambiguitiesthrough scheduling language, and that it would remain a Member's choice to determine under
which scenario it would make its commitments.  His concern, however, was that the same
solution be applied throughout a Member's Schedule of commitments for the sake of consistency,
and that there be a common language among Members to ensure that the exact scope of their
commitments could be inferred from their entries.  With respect to paragraph 18 of the schedulingguidelines, he suggested that it might not be a sufficient solution to these problems since it might
not apply to the scenario where an 'unbound' entry appeared.  Moreover, he noted that the
Guidelines were not binding, which meant that there was no guarantee that Members would
indicate whether overlapping measures appeared in market access column of the Schedule.
14. Finally, the representative of Hong Kong, China sought to touch upon the possible
implications for existing commitments, especia lly in the light of the decision to consolidate
Members' Schedules.  He reiterated that in his view the aim was to avoid ambiguities in thescheduling of new commitments and that the identification of ambiguities, at the present stage,
would be without prejudice to Members' positi on on any outcome.  He agreed that it was an
important to consider the possible implications  for existing commitments and the possible impact
on existing rights and obligations which Members had already entered in their existing Schedules
of Specific Commitments.  While remaining open-minded, he felt that it was essential to identifyany ambiguities with respect to new commitments and explore any solutions before considering
any problem which might be associated with existing commitments.  He welcome comments
from others Members regarding possible solutions and on how to take the issue forward.
15. The representative of Switzerland indicated that he would revert to the communication
from Hong Kong, China, and comment on the submissions from Brazil and the Secretariat.  He
thanked the Secretariat for recalling at the last meeting that Article XVI contained an exhaustive
list of measures, whereas Article XVII has a much larger scope that covers all discriminatory
measures.  He noted that Article XX:2 stated that "Measures inconsistent with both Articles XVIS/C/M/65
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and XVII shall be inscribed in the column relating to Article XVI.  In this case, the inscription
will be considered to provide a condition or qualification to Article XVII as well."  As recalled by
the Secretariat, this Article should be considered as a scheduling convention.  Its aim was to avoid
the repetition of measures, which applied to both market access and national treatment, in both
columns.  Although the recent papers by the Secretariat and Brazil examined situations in which'unbound' appeared in one column and 'none' in the other, in Switzerland's view, Article XX:2 did
not apply to these situations.  He explained that the reason was that Article XX:2 related to
situations where "measures" inconsistent with both Articles XVI and XVII were "inscribed".  He
felt that an 'unbound' inscription in the market access column could not be considered as
equivalent to a set of "inscribed measures" and, therefore, could not imply an application of
Article XX:2.  In the same way, 'none' in the market access column could not be considered as an
inscribed measure "inconsistent with both Articles XVI and XVII", and hence Article XX:2 couldnot apply.  This Article applied only in cases where there were measures inconsistent with both
Articles XVI and XVII which were inscribed in th e column relating to Article XVI.  He recalled
that this was also emphasised by the Secretariat in its paper Job(02)/89, paragraph 9.
16. Turning to the Secretariat note, contained in Job(02)/153, the representative of
Switzerland outlined his delegation's opinion regarding the first scenario – 'unbound' undermarket access and 'none' under national treatment.  He stated that the inscription 'unbound' under
market access and the 'none' under national treatment meant that Members could take any market
access restriction, except a discriminatory one.  He felt that had the Member wished to have kept
open the opportunity to take measures inconsistent  with Article XVII, it would not have inscribed
'none' under national treatment.  The 'none' inscription under national treatment would preventany market access restriction inconsistent with national treatment.  Switzerland did not share the
position outlined by Brazil in paragraph 7 of Job(02)/215, which introduced a certain hierarchy
between Articles XVI and XVII, and which considered that an 'unbound' under market access
would be equivalent to a set of inscribed meas ures which, through Articl e XX:2, would also apply
to Article XVII despite the 'none' inscribed in this column.  He considered that a 'none' undernational treatment meant that the Member could not introduce any measure which would be
inconsistent with Article XVII, otherwise it would have inscribed 'unbound' under Article XVII as
well.  He pointed out that the case of a "double unbound" could often be found in Schedules and
very few cases of an 'unbound/none' combination.  He said that foreign capital requirements of
the type envisaged in paragraph (f) of Article XVI:2 were discriminatory in the sense of Article
XVII, and that these would be inconsistent with an existing commitment under national treatment.
He further noted that most of the cases in Schedules in which the combination 'unbound/none'appeared, were under modes 1 and/or 2, for which measures such as those in Article XVI:2(f), did
not have the same relevance as for mode 3.
17. Turning to the second scenario outlined in the Secretariat note – 'none' under market
access and 'unbound' under national treatment – the representative of Switzerland stated that this
scenario seemed quite clear.  The Member could not introduce any of the measures listed inArticle XVI, but could take any discriminatory m easure of another type.  It seemed obvious that
Article XX:2 did not apply in this scenario, because there was not a "measure inscribed" in the
market access column.  He stated that the GATS appeared quite clear on the issue of Article XX:2
and that an authoritative interpretation was not necessary.  He suggested that to improve the
clarity of commitments, Members should be encouraged to base new commitments in their initialoffer, on paragraph 18 of the scheduling guidelines, and, in the cases where they have listed
measures inconsistent with both Articles XVI and XVII under the market access column, indicate
that the measure also applies to national treatment.S/C/M/65
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18. The representative of the United States requested that a copy of the Chair's statement be
made available to delegations.  She felt that the papers by the Secretariat, Brazil and Hong Kong,
China, all confirmed her view that the Council s hould begin a technical review.  A number of the
issues highlighted by Hong Kong, China had taken the Council a further step in this direction, and
she felt that a fuller consideration of these points would require a technical review.  She felt thatthe Council had examined what the substance of a review on Article XX:2 would be.  She noted
that the representative of Hong Kong, China had drawn the distinction between paragraph 18 of
the scheduling guidelines and paragraph 13 of his delegation's communication, in particular by
noting that paragraph 18 did not deal with the am biguity and was not necessarily binding.  She
agreed with Hong Kong, China that a technical review would neither prejudge any Member's
position nor the outcome of the review, or even whether it would be immediately binding.  The
United States felt that Article XX:2 could result in confusion and she did not wish to see asituation arise in which a 'none' in the national treatment column could conceal a discriminatory
measure.  In her view the introductory comm ent by the Chair and the discussion demonstrated
that the Council had reached a level of substance which justified moving ahead with a technical
review.
19. The representative of Brazil requested that the Chair's introductory comments be made
available, and stated that the submission from Hong Kong, China along with the earlier
Secretariat paper was helpful in understanding what Article XX:2 meant and what it did not
mean.  He stressed that the discussion was not a technical review, but that it served to identify
what might and might not be addressed through a technical review, without prejudging any
Member's position in this regard.  Turning to his comments on the submission from Hong Kong,China, he felt that Part I presented the theoretical problem and assessed what was at stake.
Regarding Part II of the paper, he was not sure that he could agree with the conclusions or
possible interpretations presented in sub-item (f) of case A and sub-items (i) and (j) in case B.  He
felt that the interpretations presented could only be maintained if one assumed the absence of
Article XX:2.   However, given the existence of Article XX:2, he was not sure that the scenariooutlined in sub-item (f) could be interpreted as presented by Hong Kong, China.  He inquired as
to whether in the last sentence of sub-item (f) the word "national" was missing before the words
"like services and suppliers".  It appeared to him that without this word, it would appear that the
case might refer to an MFN violation.  Regarding Part III he believed that the answer question (a)
was that for the scenario where market access was unbound and national treatment bound, Article
XX:2 did apply and in the opposite scenario it did not.  Speaking on Part IV, the delegate stated
that the problem was not related exclusively to new commitments, and that an interpretationwould need to address both existing and new commitments.
20. With respect to possible solutions, the representative of Brazil stated that the paper
seemed to outline two types of solutions:  (1) a scheduling convention, which had the advantage
of not requiring consensus in the Council, and it would allow each Member to interpret its
existing commitments and to be transparent in  its new commitments.  At the same time, this
solution seemed to raise two problems.  Firstly, a scheduling convention was not binding and it
would leave it to each to be transparent as it saw appropriate.  Secondly, it raised questions with
respect to existing commitments and their possible interpretation.  He recalled what an earlier
statement by Uruguay that because Members would be working with new Schedules, the
problems raised could be limited since they might be solved through new commitments.  (2) Anauthoritative interpretation was also a possible solution, which would be a binding interpretation
of the GATS and a common interpretation for all.  Here, the problem would be the need to
achieve consensus, which might not prove possible.  He said that this solution could avoid theS/C/M/65
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problem of differentiating between existing and new commitments since the interpretation could
apply to both.
21. Regarding the comment made by Switzerland, the representative of Brazil stated for
clarity that the Brazilian submission did not seek to present a hierarchy between Articles XVI and
XVII.  Following up on Switzerland's comments he asked whether, given a case where an'unbound' appeared under market access and a 'none' under national treatment was interpreted to
mean that no discriminatory quantitative measure was permitted, it would appear that at least one
of the quantitative measures listed in Article XVI would be prohibited, namely, sub-item (f).
Reasoning along these same lines, he said that an 'unbound' under market access theoretically
would allow any of the six quantitative restrictions.  If there were no possibility to discriminate
under this scenario, then the right to inscribe one of the six measures under market access would
in fact be reduced to five measures.  He argued that because of sub-item (f), there was a need tointerpret Article XVI as enabling a Member to inscribe a quantitative discriminatory measure
even if a 'none' appeared under national treatment.  He requested that Switzerland clarify its view.
Regarding the comments by the United States, he fe lt that the it was useful to distinguish between
a technical review, characterised by an interpretation of the GATS or a change to the Agreement,
and a scheduling convention which, if similar to the scheduling guidelines, would not constitute atechnical review.  It was important before decidi ng to embark on a technical review to consider
possible alternatives, as perhaps a convention would be sufficient.
22. The representative of Poland, outlining his delegation's general comments on a proposal
for a technical review, stated that it was his understanding that technical clarifications should in
no way affect the rights and obligations arrived at by Members.  The technical review of GATSprovisions should improve legal consistency and remove ambiguities.  He felt that possible
ambiguities could arise with respect to Article XX:2 when 'unbound' appeared in one column and
'none' in the other.  In this case Article XX:2 did not provide clear guidance regarding which
entry governs the measures falling in the overlap between Articles XVI and XVII.  He echoed
Hong Kong, China's view that the key problem was to arrive at a common understanding on howto schedule and interpret new commitments, so as to better reflect the true intention of Members.
He acknowledged that there was no guarantee that a panel decision would coincide with the
interpretation of the Member concerned.  He felt that there was a need to clarify two issues:  (1)
whether a panel interpretation would coincide with an interpretation stemming from a common
understanding, and (2) would a common understanding prevent Members from bringing a
dispute?  In this regard, he felt that the legal status of any understanding should be considered.
23. Making a few preliminary comments, the representative of Canada noted that the
methodology and categories for analysis outlined in Brazil's and Hong Kong, China's
presentations were useful, namely quantitative limitations, discriminatory limitations, and those
which were both quantitative and discriminatory.  He felt that it was an interesting exercise for
Members to try to determine when their quantitative limitations might also be discriminatory.
Finally, he said that it was important to consid er the potential implications and problems that
might arise in resolving this question with respect  to existing commitments and any possible roll-
back on those commitments.  In attempting to determine whether quantitative measures were also
discriminatory, the exercise might lead to potentia l roll back of commitments.  He noted that this
was relevant given the market access process in which Members were engaged.  Any solution that
would arise would therefore need to address new commitments in addition to those negotiated inthe Uruguay Round, as well as any subsequent sectoral negotiations.S/C/M/65
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24. The representative of Thailand noted that she might revert to the statement by Hong
Kong, China, and requested that the Chair's and Switzerland's statements be made available.  She
indicated that her delegation had begun to examine the issue and agreed, on a preliminary basis,
that there could be confusion.  Although paragraph 18 of the scheduling guidelines were not
legally binding, she encouraged other Members to use them.  She further invited Members toclearly indicate their intentions with respect to new commitments in their Schedules of Specific
Commitments.  She registered her reservation with regard to existing commitments and wondered
whether a situation could arise in which, if Members explained their Uruguay Round
commitments to their trading partners, disagreements might arise which could lead to a dispute.
She felt such an outcome would be unfortunate.  In this regard, she saw problems with the
interpretation of existing commitments.  She said that she did not have a definite view regarding
an authoritative interpretation or a scheduling convention as a possible solution, but might revertto this point.  She stated that because the interpretation of existing commitments could touch upon
substance, a procedural question was raised about whether the review remained technical or
would be substantive.  Thailand did not see the ex ercise as purely technical, but one which could
be linked to the negotiations, and therefore, reserved its position on how to proceed.  She
reiterated that Thailand had not agreed to enter into a review.
25. The Chair thought it could be helpful for Thailand to elaborate on what it felt might be
subject to negotiation.
26. The representative of Argentina, speaking on the case where an 'unbound' appeared in the
market access column and a 'none' under national treatment, agreed with Brazil and Switzerland
that this case poses an ambiguity.  His reading of such a case suggested that the 'unbound' entrywould allow him to maintain any restriction lis ted in Article XVI:2, including those with a
discriminatory element.  However, he agreed that if he were told that there were no limitations in
terms of national treatment, then he would be led to wonder what this meant, for instance,
whether he would be prevented from maintaining any national treatment restriction, including the
one contained in Article XVI:2(f).  He therefore felt that the problem was clear, however, thesolution was not.  The question which lay ahead, as mentioned by Hong Kong, China, would be
whether to have a scheduling convention for these types of cases.  He noted, however, that the
problem touched upon existing commitments, since a qualification of a 'none' entry could be a
deterioration in the level of treatment provided.  He was thus not entirely sure that the problem
could be solved technically because it would have implications on existing commitments.  He felt
that a solution might improve or erode current levels of commitments, which would be more than
simply technical.
27. The representative of the European Communities noted that her delegation was still
consulting with legal experts in Brussels, and that her comments were preliminary.   She agreed
that, since Article XX:2 talked about measures which were inscribed in the market access
column, these measures needed to be specific, and that an 'unbound' would not be sufficient to
override a 'none' entry under national treatment.  This suggested that where an 'unbound' appearedunder market access and a 'none' under national treatment, this would not give the possibility in
the future to inscribe discriminatory entries in the market access column.  She felt that this
referred to Article XVI:2(f) as well.  With respect to the issue of existing and new commitments,
she said that commitments in a sector would be  the basis for any further commitments, and she
agreed that there was a clear link between them and that a solution would be the same for both.With regard to the issue of whether the Council should move to a technical review, she agreed
with Thailand that this issue needed to be discussed by the Council in order to be clear about the
issues involved and what the possible solutions might be, whether an interpretation or aS/C/M/65
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scheduling convention, which might subsequently guide a panel.  She said that the legal
application of the existing GATS remained, whether or not an agreement was reached.  She
concurred that whatever the solution it could have potential implications on existing
commitments, and in this regard she inquired as to whether Thailand, in referring to negotiations,
had the provisions of Article XXI in mind.
28. Given the complex technical nature of the issues being discussed, the representative of
India felt that more discussion was required before deciding on the next stage.  He agreed with
Thailand that technical discussions on the various submissions and issues they raised shouldprecede discussion on the next stage.  On Hong Kong, China's paper he sought to reserve India's
position and the right to revert to it.  Regarding Brazil's statement, as he recalled, Article XVI
dealt with quantitative and discriminatory measures, whereas Article XVII dealt exclusively with
discriminatory measures.  Brazil's paper stated that if an 'unbound' appeared under market accessand a 'none' under national treatment, the Member would maintain the right to take quantitative
and discriminatory limitations, and the 'none' in the national treatment column would stand
qualified.  In the reverse case – 'none' under market access and 'unbound' under national treatment
– he said that the Member could maintain any limitations which were exclusively discriminatory.
The conclusion put forth in paragraph 5 of th e Brazilian paper was that only exclusively
discriminatory measures were to be inscribed in the national treatment column.  In India's view,
national treatment measures were governed by Article XVII, and it could be argued that any
discriminatory measure, qualitative or quantitative, could theoretically be inscribed in the national
treatment column.  He felt that there could be quantitative discriminatory limitations which were
not covered by Article XVI and could be scheduled under Article XVII.  He requested moreinformation from Brazil regarding paragraph 5 of its submission, which argued that only
exclusively discriminatory measures could be inscribed under Article XVII when a 'none'
appeared in the market access column.   It was also not clear whether all measures included under
market access were quantitative in nature.  For example, whereas Article XVI:2 (a)-(d) were
quantitative, he noted that sub-item (e) did not appear to be quantitative, but instead referred to atype of legal entity or joint venture.  He re cognised that for analytical purposes, Brazil had
delineated three categories and took note that Hong Kong, China had used a different
categorisation.  He requested that Brazil elaborate on the points he had raised.  He further
recognised the possible overlap between market access and national treatment in the context of
Article XX:2, was analysing Articles XVI and XVII in this regard, and noted that his delegation
felt further technical discussions would be useful.
29. The representative of Switzerland stated that his delegation might present a paper on this
issue in the near future.  Responding to a question from Brazil, he stated that Article XX:2
applied to cases where measures were inscribed in the market access column.  He felt that it
would be too far-reaching to consider an 'unbound' as an inscribed measure, because it was
neither a measure nor was it inscribed.  Secondly, he said that he had sought to understand how
the drafters of Article XX:2 had drafted their own Schedules, as this might prove enlightening.His research indicated that in the Schedules examined – where and 'unbound' appeared under
market access and a 'none' under national treatment – one also found instances in these same
Schedules of 'unbound' inscribed under both columns.  This suggested that the drafters assumed
that, when the drafters meant a double unbound they inscribed this situation.  He felt that this
shed light on the thinking at that time.  Regarding the situation described in the Brazilian paper –where an 'unbound' appeared under market access and a 'none' under national treatment – the
'none' in the national treatment column did qualify market access measures in the sense that these
could not be discriminatory.  He noted that Article XVI:2 (a) – (e) listed measures which could be
partly discriminatory.  He argued that if one accepted the idea that the 'none' inscription underS/C/M/65
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market access could qualify a quantitative measure that was partly discriminatory, he did not see
how one could defend the idea that it would not qualify a same type of measure that was entirely
discriminatory.  In this regard, he noted the need to be consistent in one's reasoning, that  the
'none' qualified all measures of Article XVI:2 (a) to (f).  Therefore, if one accepted the idea of
qualifying sub-items (a) – (e) (which could be partly discriminatory), one had to extend thisreasoning to apply to sub-item (f).
30. The representative of Switzerland said that the question which followed was how Article
XX:2 could help in this situation.  He felt that the relevance of Article XX:2 was to be found in
cases where there were measures inscribed in the market access column which did not appear in
national treatment column, for example, where there appeared a 'none' or measures of another
type (taxes, subsidies, etc.) in national treatment column.  In such a case, if the market access
column had an Article XVI:2(f) restriction which was not repeated in the national treatmentcolumn, there would be a strong case to assume that it was meant to cover the measure in a
discriminatory manner.  However, in reading a Schedule, questions remained in cases where there
were measures of type XVI:2(a) – (e), which could be partly discriminatory and were not
repeated in the national treatment column.  He sa id that in this case, because Article XX:2 only
applied in one direction, there was the need to discern the intention of the drafter of the Schedule.In this regard he felt that paragraph 18 of the scheduling guidelines were helpful and he
encouraged Members to implement it.
31. Responding to the comments made by Brazil, the representative of the United States
stressed that in her view a technical review would not prejudge any possible solutions or the
direction in which the review might lead.  She noted that the representative from India hadalluded to the Council's discussion as a technical discussion.  She felt that in the course of a
review, should an issue arise which would requi re a solution implying a substantive element of
negotiation or interpretation, then that would require a decision by the Council.  Her delegation's
view was that a decision to move to a technical review would not prejudge the course or outcome
of that review.  With respect to the points raised by Thailand and Argentina, she stated that thesecould be addressed in a technical review.  She noted along with Brazil the possibility that the
conclusion could favour a scheduling convention.  Posing a question to Brazil, she had
understood the representative as first suggesting that this discussion should include existing
commitments, and later saying that Brazil would find it awkward to go through existing
commitments.  She sought clarification from Brazil on whether the scope should include a
detailed analysis of the existing commitments.  The United States believed that scope should not
be prejudged.  While acknowledging that the Coun cil had not decided to start a review, she noted
that the discussion had the substantive characteristics of a review.
32. Responding to the question posed by the representative of the European Communities,
the representative of Thailand clarified that she had not been alluding to the provisions of Article
XXI when she had referred, for lack of a better term, to "negotiations".  Indeed, these wereprecisely the type of issues that Thailand did not want to see raised.  Her intention was to say thatthe discussion might not be only technical, but could raise other issues.  For example, she hoped
that the situation whereby a Member would have to explain to other Members how it interpreted
its Schedule of Specific Commitments could be avoided, since the trading partner might not have
had the same interpretation in mind.  She stated that Thailand had followed, perhaps naïvely, the
provision contained in Article XX:2, namely that the inscription in the market access columnwould provide qualification for Article XVII, as was reflected in its Schedule.  Referring to the
statement made by Switzerland, she requested that the representative further elaborate on his
comment that Article XX:2 allows for interpreta tion in "one direction".  In summary, Thailand'sS/C/M/65
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preliminary view was that an inscription under Article XVI provided a qualification in terms of
Article XVII.  She noted that a solution could ha ve effect and hoped to avoid the confusion that
explaining Schedules to trading partners might entail.
33. The representative of Brazil reiterated his understanding that the Council was engaged in
a technical discussion and that it had not commenced a review.  Responding to the United States'
question as to whether a solution would affect existing and new commitments, he stated that, if
the solution entailed a transparency exercise in which Members clarified the meaning of
commitments with respect to paragraph 18 of the scheduling guidelines and the unbound/none
scenario under discussion, there would be a need to examine existing commitments.  He
acknowledged that this might not prove necessary in the context of the presentation of a new offer
in a consolidated schedule. However, he felt that if it proved possible to reach a common
understanding on how to resolve the issue, then th ere would not be a need to examine cases of an
unbound/none entry or vice versa  in existing commitments.  Responding to India's query, he
explained that Brazil had tried to distinguish three categories of restrictions that could be taken
under Articles XVI and XVII.  He said that he could agree with the assessment outlined by
Switzerland and Argentina, if Article XX:2 did not exist.  In its absence the coherence of
interpretation would run in both directions, that is, that it would be difficult to assess whether amarket access inscription would override national treatment or if national treatment would
override market access.  He agreed that, in absence of Article XX:2, there was no way to interpret
if an 'unbound' in one column would override a 'none' in the other.  He further noted that Article
XX:2 might not resolve the ambiguity because it was designed to apply when a binding was made
in both columns.  However, given the existence of Article XX:2, he inquired as to whether itcontained anything that could help decide which column inscription overrode the other.  He felt
that Article XX:2 could suggest an answer with respect to quantitative discriminatory measures.
One could read the first sentence of Article XX:2 as rendering equal, for scheduling purposes,
both quantitative and quantitative discriminatory measures.  At the same time, theoretical
consistency of the solution would be ensured by the second sentence of Article XX:2.  Hetherefore felt that the Article might provide some guidance on how to interpret quantitative
discriminatory measures, and help indicate whether a 'none' in one column could override an
'unbound' inscription in the other.
34. The representative of Hungary agreed with Argentina that the case where an 'unbound'
appeared under market access and a 'none' under national treatment, seemed to be the one on
which Members' interpretation of existing commitments differed.  He said that Hungary's position
was similar to that of the European Communities' and of Switzerland's, namely, that aninterpretation or solution which would alter existing commitments would not be within reach.
The situation raised the question as to whether such  an interpretation would fall within the context
of a technical review.  He felt that the objective of the technical exercise could be to clarify how
to schedule and interpret new commitments that might be undertaken in current negotiating
round.  He agreed that paragraph 18 of the scheduling guidelines could be a good point ofreference in this respect.
35. Responding to the question from Thailand regarding his statement that Article XX:2
works in "one direction", the representative of Switzerland explained that the first direction
applied to those preparing a Schedule.  In this case, Article XX:2 worked well, since a measurewhich was both quantitative and discriminatory would be entered in the market access columnand would apply to the national treatment column as well.  However, in the opposite direction,
which applied to those who have before them another Member's Schedule and were attempting to
understand it, Article XX:2 did not provide full enlightenment.  A measure would appear in theS/C/M/65
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first column, but not in the second, and it would not be clear whether the inscription in the first
was meant to provide cover in the second column.  In the case where there was a 'none' in the
second column it was difficult to know if this was a hard 'none'.  Therefore, Article XX:2 was
clear only in the first direction outlined.
36. The representative of Djibouti noted the different views which had been expressed.  He
suggested that in future meetings each Member outline its understanding of the operation of
Article XX:2 before proceeding furt her on this issue.   He felt that the Council had been losing
time as the discussion appeared to be without direction.  He noted that no common definition had
been arrived at.  He felt that too much time had been spent on the discussion and that more
attention should be focussed on the objectives of  the Doha Agenda and preparations for Cancun.
37. Seeking to respond to some of the comments  made, the representative of Hong Kong,
China, addressing the issue of existing and new commitments, recalled that Members were
concerned about how the discussion could affect existing commitments and the rights and
obligations associated with them.  He shared thes e concerns.  He said that the starting-point for
his reflection was the distinction between new and existing commitments.  He stressed that for
new commitments, it remained up to Members to decided whether to commit or remain unbound
with respect to the area of overlap.  He agreed with  Brazil that, in principle, the issues involved in
the interpretation of 'unbound' in combination with 'none' entries were theoretically the same for
both types of commitments, however, in practical terms, they were different.  Existing
commitments were inscribed on the basis of the rights and obligations Members' had assumed.
He felt that, for new commitments, the matter wa s purely technical in nature, and that any
decision would not prejudge any particular level of commitments.  He reiterated the importanceof bearing in mind this fact.  He felt that the most important issue was to have a common view as
to whether Members believed there was a problem with respect to new commitments.  His
understanding of the discussion was that there was a problem which needed to be addressed.
38. Turning to the issue of existing commitments, the representative of Hong Kong, China
said that different views had been expressed as to  whether there would be implications and, if so,
how these implications might be dealt with.  For example, mention had been made of negotiations
and technical modifications.  He suggested that the problem with existing commitments depended
on where one stood with respect to the interpretation of the issues raised by Members.  For
existing commitments, in the case of an 'unbound' under market access and an 'none' under
national treatment, he said the nature of the problem depended whether, in the current round, a
Member felt changes could be made to its Schedule and whether these changes would be the
subject of negotiation under Article XIX or under Article XXI or a technical modification.  If adelegation assumed that a 'none' did not bind it with respect to the overlapping area, and if that
Member offered to replace the 'unbound' with a specific limitation that were discriminatory and
quantitative, then the question as to whether this would be considered an improvement or roll-
back would be a function of Members' interpretation of this issue.  He repeated in this regard that
Hong Kong, China had no position on this interpretation issue.  Rather, the question appeared tobe whether Members wanted to see this type of scenario occur.  Turning to the question by Brazil
which referred to the difference between an interpretation and a scheduling convention, he
believed that a scheduling convention could have some effect on how Schedules were interpreted
if Members agreed so, and if it were applied consistently.  In this sense he did not see a large
difference between a scheduling convention and an interpretation, so long as they could resolve,including for a panel, the problem of how to schedule and read new commitments.S/C/M/65
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39. The representative of Hong Kong, China sought also to respond to comments made
regarding paragraph 18 of the scheduling guidelines.  He said that, because paragraph 18 did not
require a Member to schedule an entry in a certain manner, if that Member did not use
paragraph18 as a convention he could not be sure whether logically or legally the Member had
intended for the Schedule to be read in a manner opposite to that outlined in paragraph 18, that is,that the entry did not qualify Article XVII.  He suggested that this was why paragraph 18 might
not be a sufficient solution.  Regarding Brazil's question pertaining the last sentence of paragraph
7(f) of Hong Kong, China's communication, he confirmed that this referred to the obligation
under Article XVII.  With respect to references made to paragraphs 7(i) and (j) and 8(a) he
clarified that his intention was to not argue in favour of one particular interpretation.  He had
presented in his paper in light of the different vi ews that had been expressed as to whether Article
XX:2 was applicable to the cases outlined.  Hong Kong, China had simply sought to outline theissues and recapitulate the different views in paragraphs 7(a) to (c).  He felt, however, that if the
Council had no agreed understanding of whether Article XX:2 would apply, a problem of
interpretation might arise.
40. Echoing the comments made by Djibouti, the representative of the United States felt that
the views expressed argued in favour of moving ahead with a technical review.  She had taken
note of the references made to substantive concerns and also shared the desire to clarify how a
technical review might be characterised in this regard.  She also pointed out that the reference to
this item on the agenda was misleading, as it gave the impression to some delegations that
substance would not be discussed.  In response to the Chair's request for input as to where the
process should move from this point, she recalled that there were proposals before the Counciland she felt that the Council should embark on a technical review in order to discuss them.
41. Summarising the discussion, the Chair stated that there had been a good discussion and
that the level and depth of participation indicated that this was an issue of concern to a
considerable number of delegations, as reinforced by the number of papers presented and
allusions to forthcoming communications.  She noted the concern that had been mentioned withrespect to ensuring clarity in the interpretation of existing and future commitments.  She drew
Members' attention to the last paragraph of Job(02)/89, which indicated that "a preliminary count
shows that cases where the precise scope of a market access or national treatment commitment
cannot be clearly inferred, appear in the schedules of specific commitments of some fifty-five
Members" and said that this fact illustrated that the discussion was not theoretical but practical.
She assumed that every Member was looking at their Schedules to see if this situation applied to
them and were deciding how to proceed in this re gard.  She agreed that it was time to ask how the
Council should proceed from this point.  She had retained Brazil's example of a scheduling
convention which might not be covered by a technical review.  This was a sign that the Council
might wish to consider solutions, rather than asking what to call these solutions, to the problems
which had been identified.
42. The representative of Djibouti sought to reiterate the point that on this issue the Council
was moving ahead too slowly and not leading in a clear direction, and that more attention should
be focussed on the Doha Agenda.
43. The representative of Thailand reiterated that her delegation had not agreed to embark on
a technical review, and that there was no consensus in this regard.  The current exercise, she
stated, was a discussion of a technical nature on Article XX:2.  She said that some delegationsmight feel that substantive issues had been touched upon, however, legally this did not imply that
there was agreement for a technical review.  She agreed that there existed inconsistencies inS/C/M/65
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Schedules which would seem to pose an ambiguity, however, she pointed to systemic
implications of greater concern.  She felt that a solution to the technical issue could have
substantive bearings for many delegations and could have an impact on the balance of rights and
obligations with respect to existing commitment s.  She mentioned that offering new commitments
implied the identification of a starting-point in ex isting commitments.  She inquired as to whether
any outcome might lead to a dispute settlement.  Finally, she recalled that Thailand had agreed to
embark on a discussion to clarify a number of issues, that the Council was engaged in a technical
discussion on Article XX:2, and that it remained be up to Members to decide how to proceed.
44. The representative of Uruguay, recalling the title of this agenda item, stated that the
Council was in a technical discussion, and that it was clear that it was not in a technical review.
He noted that if a decision were taken in this di rection, Uruguay would want to be sure that the
scope and coverage of what was decided be clea rly defined.  For example, if Members decided by
consensus that work would be required on Article XX:2, that work would be limited to this item
and with a defined purpose.  He urged caution in this regard since a technical review had no
parallel in the Agriculture or Anti-dumping Agreements.  Finally, he urged Members to examine
carefully the content of the specific problem of Article XX:2.  He suggested that the Council
focus on the proposals concerning Article XX:2 and that Members decide which avenues itshould explore and what possible decisions the Council might take.
45. The representative of the United States confirmed her understanding that the Council was
not in a technical review.  She underlined that the Council had been pursuing this item for some
time and said that it should decide whether or not to proceed.  The question seemed to be when to
decide, if at all, to move forward, given the fact that, although the Council had not embarked on atechnical review, the content of its discussion s amounted to one in her interpretation.  With
respect to the suggestion to inscribe the item differently on the agenda, she felt that, given that the
Council was neither agreed on the direction of the discussion nor what a technical review would
be comprised of, she would need to take this suggestion back to capital.
46. The Chair noted the substantive nature of the discussion and the level of interest shown.
She also noted the preliminary nature of many statements, which might suggest the need for
further reflection and the wish to return to this is sue.  In this regard, she suggested that Members
reflect on how they wish to proceed with this issue.  Should Members, as suggested by Uruguay,
focus on the proposals on Article XX:2 and explore which decisions the Council might take?
Should the issue appear differently on the agenda as suggested by the United States?  She felt that
if the Council could agree on substance, an appropriate procedure could then be found;  however,
if the discussion focussed on procedure, a meeting of the minds might prove arduous.
47. The representative of Brazil noted that the suggestion by Uruguay to focus in on
proposals for a technical discussion instead of a technical review might prove helpful in deciding
the substance of the discussions and moving the process forward.  He felt it was important to
agree on what issues deserved consideration, and that once the substance had been identified, the
name of the agenda item would flow from this.
48. The Chair suggested that the Council take note of the statements made and that the in-
coming Chair may wish to hold consultations on this item.S/C/M/65
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C. OTHER BUSINESS
49. As she had indicated at the beginning of the meeting, the Chair informed the Council
about the appointment of the Chairs of the subsidiary bodies of the Council.  She said that,
subsequent to her update on this matter to the Members of the Council a week earlier, she had not
received any communications from heads of delegations.  She said that the recommendations shehad made had, therefore, seemed acceptable.  These recommendations were that the Chair of the
Working Party on GATS Rules would be held by Nicaragua, the Chair of the Working Party on
Domestic Regulation by the Philippines, the Chair of the Committee on Trade in Financial
Services by Canada, and the Chair of the Committee on Specific Commitments by Belgium.
D. APPOINTMENT OF NEW CHAIRPERSON OF THE COUNCIL
50. The Chair wished to express her gratitude to the Secretariat for their support and to the
Membership for the good cooperation and discussion they had provided throughout the preceding
year.  She recalled that the rules of procedure for the Council for Trade in Services stipulate that
the Council elect its Chair for each year at the end of its first regular meeting of that year.  In
accordance with the outcome of the consultations conducted by the Chair of the General Council
in this regard, she proposed that the Council for Trade in Services appoint Ambassador OusmaneCamara (Senegal) to be its Chairman.
51. It was so agreed.
52. After having been invited to take the chair, the new Chair of the Council for Trade in
Services, wished to thank Mr. Sergio Marchi, Chair of the General Council, for his consultations
which resulted in his appointment.  He soug ht to congratulate Ambassador Whelan for the
excellent work she had accomplished during her tenure, which had been marked by important
events in the Council's history, including the accession of China and Chinese Taipei.  He noted
several encouraging developments that lay ahead.  He thanked the out-going Chair for her role in
ensuring the smooth functioning of the Council.  He thanked the assembled colleagues for the
confidence they had placed in him, in his country and indeed in the least-developed countries.  Hecommitted his full efforts in response to this confidence.  He pledged that during his tenure he
would be guided by the concern to accomplish the Council's work in a spirit of teamwork,
transparency, equity, objectivity, neutrality and consensus.  He said that the GATS constituted an
opportunity for developing countries, especially the least-developed among them.  In this respect,
he felt that the Council should pursue its work with a view to ensuring positive results and
helping to contribute to development.  He thanked the Secretariat and the interpreters.  With
respect to the interpreters, he suggested that co nsideration be given to the work they accomplish,
and in particular the usefulness of providing th em with lengthy written statements in advance in
order to ensure proper translation.  Noting that most of the statements were made in English, he
said that he wished to ensure that delegations' interventions were translated faithfully.
53. The Chair proposed that the Council take note of the statements made and that the
Council adjourn.
54. It was so agreed.
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