RESTRICTED  
  
S/C/M/147  
 
19 November 2021  
(21-8772) Page: 1/22 
Council for Trade in Services    
 
 
REPORT OF THE MEETING HELD ON 22 OCTOBER  2021 
NOTE BY THE SECRETARIAT1 
The Council for Trade in Services held a meeting on 22 October 2021, chaired by Ambassador 
Villalobos (Mexico) . The agenda was contained in document WTO/AIR/CTS/ 28. 
The delegation of Mongolia  asked for the addition of an item of O ther Business , on the impact of 
container shortages on trade costs.  
The agenda was a dopted  as modified . 
The Chairman  recalled that delegations  were meeting both in virtual and in -person mode.  He trusted 
that delegations were  familiar with the main technical aspects of participation  for both modes . He 
urged them to speak at a reasonable, moderate pace and, if possible, to provide the interpreters 
with an advance co py of any written statements they intend ed to deliver , to help ensure that 
interventions were properly conveyed and understood when translated in the other two official 
languages.   
 
1  ITEM A: ANNUAL REPORTS OF THE SUBSIDIARY BODIES TO THE COUNCIL FOR TRADE 
IN SERVICES  
1.1.  The Chairman  recalled that, i n accordance with WTO reporting procedures, the Council was to 
consider the Annual Reports of its subsidiary bodies. He drew Members ' attention to the Reports that 
had been adopted by the respective bodies , namely  the Annual Report of the Committee on Trade 
in Financial Services (S/FIN/97);  the Annual Report of the Committee on Specific Commitments 
(S/CSC/27); and  the Annual Report of the Working Party on GATS Rules (S/ WPGR/72).  
1.2.  As concern ed the Annual Report of the Working Party on Domestic Regulation, the Secretariat 
had circulated that morning a communication  with a further revised draft Annual Report ( contained 
in document S/WPDR/W/64/Rev.2), incorporating comments r eceived on the previous version. The  
communication set a  deadline of 25 October  for any comments.  
1.3.  Given  that the Working Party on Domestic Regulation ha d not yet adopted its Annual Report, 
he suggest ed that: first, the Council take note of the three report s that had been  adopted, on the 
understanding that they would  be annexed to its own Annual Report; and , second, that as soon as 
the draft Annual Report of the WPDR was adopted, it also be deemed taken note of, and annexed to 
the Council 's own Annual Report . 
1.4.  It was so agreed . 
2  ITEM B:  ANNUAL REPORT OF THE COUNCIL FOR TRADE IN SERVICES TO THE GENERAL 
COUNCIL  
2.1.  In accordance with WTO reporting procedures, the Council for Trade in Services was to  report 
each year to the General Council on its activities , as well as those in its subsidiary bodies. In that 
regard, t he Chairman  drew delegations ' attention to the draft Annual Report of the Council for Trade 
in Services on its activities in 2021, contained in document S/C/W/385. The Report was factual and 
 
1 This document has been prepared under the Secretariat's own responsibility and is without prejudice 
to the positions of Members or to their rights and obligations under the WTO.  S/C/M/147  
 
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  self-explanatory, covering the period from the 2020 Report up until the Council 's last meeting , in 
July.   
2.2.  No comments  were made on the draft Annual Report.  
2.3.  The Chairman  explained that, in light of the fact that the Annual Report of the Working Party 
on Domestic Regulation ha d not been adopted  yet, the Council  could  not formally adopt its own 
Annua l Report at that meeting. He therefore suggest ed that Members agre e to the text of the draft 
2021 Annual Report of the CTS contained in document S/C/W/385 , and, as soon as the draft Annual 
Report of the WPDR was adopted, the Council 's own Annual Report als o be deemed adopted, and be 
transmitted to the General Council.  
2.4.  It was so agreed . 
3  ITEM C: NOTIFICATIONS PURSUANT TO ARTICLE S III:3  AND V:7 OF THE GATS  
3.1.  With regard to the notifications made pursuant to GATS Article III:3 (Transparency), the 
Chairman  drew the Council 's attention to the communications received from  the Russian Federation 
(S/C/N/1062 and 1063); Hong Kong, China (S/C/N/1064); and Lesotho (S/C /N/1065 to 1071).  
3.2.  The representative of  India wished to raise  the issue of the operationalisation of transparency 
obligations. She drew the Council 's attention to the submission made  in December 2020 by her 
delegation , the African Group and Cuba titled "Strengthening the WTO to promote development and 
inclusivity " (WT/GC/W/778/Rev.3 ). 
3.3.  When it came to s ervices, GATS Art icle III:3 require d Members to "promptly and at least 
annually inform the Council for Trade in Services of the introduction of any new, or an y changes to 
existing laws, regulations or administrative guidelines which significantly affect trade in services 
covered by its specific commitments under this Agreement ". Therefore, regular  notification of entry -
related measures affecting existing mode 4  commitments of Members were required , in order to 
understand the full implications of the commitments made by Members. S he said that s ome 
developed Members ha d not been implementing th at obligation . 
3.4.   At the WTO, some Members ha d proposed higher obligations on transparency for trade in 
goods. When it came to  transparency, the rationale for collecting information on trade in goods h eld 
equally  for trade in services.  
3.5.  She requested that developed Members lead by example in submittin g comprehensive, timely 
and accurate notifications.  
3.6.  The Chairman  suggested that the Council take note of the notifications  and the statement 
made . 
3.7.  It was s o agreed . 
3.8.  Concerning the notification s made pursuant to Article V:7 (Economic Integration), the 
Chair man drew the Council 's attention to the communication s received from: the United Kingdom 
and Mexico (S/C/N/1060); and the United Kingdom and Canada (S/C/N/1061).  
3.9.  He suggested that the Council take note of the notification s and that the agreements notified 
be referred to the Committee on Regional Trade Agreements (CRTA) for consideration.   
3.10.   It was so agreed . 
3.11.   While on the subject of the CRTA , the Chairman  drew delegations ' attention to the fact that, 
at its meeting scheduled for 1 and 2 November, the CRTA would  be considering three regional trade 
agreements that cover ed services trade. The agreements in question were: (a) the Free Trade 
Agreement between the European Union a nd Viet Nam; (b) the Agreement between the United 
States, Mexico and Canada and (c) the Comprehensive Economic Partnership Agreement between 
Indonesia and Australia. He trusted that th at information w ould be of interest to delegations.  S/C/M/147  
 
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  3.12.   He suggest ed that the Council take note of the statement  he had  made.  
3.13.   It is so agreed . 
4  ITEM D: OPERATIONALIZATION OF THE LDC SERVICES WAIVER  
4.1.  The Chairman  recall ed that, at the July meeting, Members  had shared their reflections on, and 
reactions to , the webinar the Council had held in June , on "Least Developed Country services export 
performance and facilitating implementation of preferences notified under the LDC Services Waiver ". 
4.2.  All delegations who  had intervened had expressed appreciation for the event, which, in th eir 
view, had highlighted the significant gaps in LDC services trade data and helpfully illustrated the 
opportunities and challenges faced by LDC suppliers in participating in global services trade.  
4.3.  The LDC Group had put forward a number of suggestions fo r next steps, and had been  
encouraged by other Members to submit its suggestions in writing.  
4.4.  After apologising for his late arrival, due to the need to attend another meeting and the lack of 
resources that LDCs have to contend with, t he representative of Chad, speaking on behalf of the 
LDC Group , inform ed Members that LDC Trade Ministers had met earlier that week within the 
framework of preparing for MC12  and had adopted  a joint Declaration  which contained the main 
priorities for LDCs.  Those were the areas where  LDCs were hoping to see significant results  at MC12  
that respond ed to their expectations.  The LDC Ministerial Declaration was intended to guide LDCs in 
the negotiations in the WTO also  beyond  MC12. The LDC Group  wanted to see an  intensification of 
efforts towards achieving  results that would support LDCs in getting back on the path towards 
development and strengthen their commercial  capacity .  
4.5.  In that sense, LDCs had announced that they would be submitting a proposal for MC12 that 
reflected their assessment of next steps  following  the Council webinar held in June with regard to 
operationalization of the LDC Services Waiver and of notified  preferences . The LDC Ministerial 
Declaration was  still being formatted and would be distributed to Members by the following Monday . 
It contain ed a number of areas of special  interest for LDCs and of joint work with other Members for 
MC12.  
4.6.  With regard to services, t he LDC Ministerial Declaration invite d Members to do what was 
necessary to impro ve implementation of the Waiver  Decisions, as well as notifications of preferences 
in favour of LDC  services and service suppliers .  
4.7.  Specifically, Ministers asked that: the WTO Secretariat explore  improvement s that could  be 
made in terms of services export s from LDCs ; the Secretariat  also monitor service suppliers  from 
LDCs and consumers of LDC services  in preferen ce-granting Members' markets ; options beyond the 
preferences themselves be evaluated, to facilitate the use of preferences  themselves ; an evaluation 
be undertaken if any changes in information on LDC services  had improve d or new opportunities  had 
emerge d since the COVID -19 pandemic; notifying Members introduce programmes to orient LDC 
service suppliers and consumers of LDC services in prefer ence-granting Members  to the Waiver 
notifications they ha d made; and  that the Waiver be made permanent , given the challenges  to track 
the data and information difficulties faced, as well as fluctuating capacities in LDCs.  
4.8.  The LDC Group would provide  delega tions with the Declaration  adopted on 19 October , and 
wished to thank Members  for their commitment  to LDCs and the Secretariat for its technical  support.    
4.9.  The representative of Uganda  echoed  the statement delivered by Chad and reiterated her 
delegation's commitment to the work that was being done in the Council on that very urgent matter. 
She wished to express her gratitude to the Ambassador of Chad and recognize the hard work that 
had gone  into the LDC Ministerial Declaration and the LDC Services Waiver, and also thank ed 
Members, the Chairman and the Secretariat for their support.  Uganda  continue d to support the 
efforts of its fellow LDC countries and would continue to work with Chad on th at important issue.  
4.10.   The representative of India reiterate d that her delegation  attache d utmost importance to the 
meaningful implementation of preferences granted under the LDC Services Waiver by all preference -S/C/M/147  
 
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  granting Members with the ultimate objective of increasing the LDCs ' share in global services 
export s. 
4.11.   During the webinar  on the Waiver held on 2 -3 June, India had provided specific information 
regarding  the utilization of preferences it had granted in the three areas of visa -related preferences, 
techni cal assistance and capacity building , and market access. Her delegation  had also shared  some 
suggestions on better  future  utilisation by the LDCs of those preferences.  
4.12.   India looked  forward to further meaningful engagement with all Members on th at important 
issue in the run -up to MC12.  
4.13.   The representative of China  stressed that his delegation attache d great importance to the 
LDC Services Waiver. China  support ed the increasing particip ation of LDC Members in the 
multilateral trading system and world services trade. In 2015, his delegation had  submitted  China 's 
notification of preferential treatment  in favour  of LDC services and services suppliers. China had  
subsequently  actively impleme nted th ose preferential measures, and assisted LDC Members in 
capacity building, in particular in medical services, education services and other areas.  
4.14.   His delegation had also  taken note of  the valuable events organised, such as the webinar on 
the W aiver held in June, which had provided ample information on how to better utilize the 
mechanism. He added that t he Tenth China Round Table organized by the WTO Secretariat would  
take place the following  month. China highly appreciate d Members ' contributions to LD C 
development under the WTO framework  and believe d that  further discussions in th at regard would  
make capacity  building and technical assistance more targeted. Bearing th at in mind, his delegation 
would continue to actively engage in relevant discussions and encourage d more information -sharing 
on the LDC Services W aiver.  
4.15.   The representative of Chad, speaking on behalf of the LDC Group , thanked all Members, and 
particularly China and India, for their support with  regard to the LDC Services Waiver. The Waiver 
was an  absolute priority for LDCs; he was certain that Members were cognizant that the pandemic 
had had a great impact and grave  consequences in LDC economies , especially as far as services 
were concerned. As a result of the pandemic, LDCs were facing up to a number of challenges and 
the Waiver was a  vital issue as they move d forward and deal t with the impact of COVID -19 on their 
services exports . That was a real priority for the Group , and Members needed to do their utmost to 
help LDCs reach their goals and move forward on the Waiver along the lines highlighted  in the LDC 
Ministerial Declaration . The Group was looking forward to continu ing to collaborate with Members in 
a constructive and open way with the necessary flexibility , so as to  ensure that LDC  concerns and 
priorities were taken into account by all Members.  
4.16.   The Chairman  suggested that the Council take note of the statements  made,  and said that it 
would revert to that item at its next meeting.  
4.17.   It was so agreed . 
5  ITEM E: WORK PROGRAMME ON ELECTRONIC COMMERCE  
5.1.  The Chairman  recalled that,  at the previous  meeting, a couple of delegations  had presented 
their experiences and latest developments related to e -commerce. Members had also exchanged 
views on the Work Programme more broadly.   
5.2.  The representative of India recalled that her delegation had consistently been a proponent for 
strengthening th e multilateral work under the non -negotiating and exploratory 1998 Work 
Programme on e -commerce. Th at was all the more important in the context of the pandemic, which 
had exposed the existing and widening digital divide.  
5.3.  India and South Africa, in their submission dated 4 December 2021  and titled "Re-invigorating 
the Work under the 1998 Work Programme on Electronic Commerce ", had emphasised the need for 
structured discussions in the relevant WTO bodies, including the CTS, in accordance with  the General 
Council's mandate as contained in WT/L/274.  S/C/M/147  
 
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  5.4.   Her delegation  remain ed open and eager to work on the rejuvenation of the Work Programme 
and work with all like -minded Members to drive a constructive outcome in a space which would  
fundamentally influence how the w orld would operate in the times to come. India urged all Members 
to support th e Work Programme and come together for joint global good.  
5.5.  The representative of China  thanked  Members  for their  interventions and sharing their 
experience s. In the past few years , China ha d actively participated in discussions on e -commerce 
issues at the WTO and had shared its experience on e -commerce development, South-South 
cooperation on e -commerce, logistics  and e-payment s, amongst others . The COVID -19 pandemic 
had spurred mor e online shopping , and in that context e -commerce ha d played an increasingly 
prominent role in economic and social activities. China  encourage d more in -depth discussions and 
experience -sharing on e -commerce at the CTS.  
5.6.  With MC12 approaching, China was willing to work with all Members towards a multilateral 
Ministerial Decision to reinvigorate the Work Program me and extend the Moratorium. China  believe d 
that such an  outcome at MC12 would  contribute to the rapid growth of global e -commerce , help the 
WTO respond to the needs of the times and keep itself relevant.  
5.7.  The representative of the Republic of  Korea  said that, s ince co -sponsor ing the proposal on 
exploratory discussion s on supporting the digital capability of businesse s and consumers, his 
delegation ha d actively participated in the discussion o f that issue, in two regards .  
5.8.  First, his delegation  had provided update s on Korea 's online shopping trend s following the 
COVID -19 outbreak and related statistics. Prior to the pa ndemic, the proportion of online shopping 
among total retail sales was around 22%. Th at share had  skyrocketed to around 27% annually in 
2020. Th at figure  reflect ed an ongoing upward trend and consumer behaviour  in favour  of e-
commerce in the process  of ove rcoming the pandemic. Changes in online shopping trends were 
going to continue to be observed in the future, especially in the period transitioning to normal 
business and consumption activities.  
5.9.  Second, Korea had  presented to the CTS in-depth information about domestic program mes, 
such as the MSMEs remote work facilitation program me and the online business support program me. 
Through th ose domestic program mes, the Korean government was trying to help MSMEs  be 
equipped with digital capability and  be able to  carry out their regular tasks  even in a period of 
tightened social distancing.  
5.10.   In the future, in addition to the two aspects mentioned, Korea would  introduce its digital ODA 
program me, which it hoped would contribute to closing the global digi tal gap. His delegation was 
looking forward to other Members ' active participation regarding th at issue.  
5.11.   Wishing to respond on the issue of the Moratorium  on customs duties on electronic 
transmission s, the representative of India noted that the Moratorium had had a substantive impact, 
both in terms of revenue and policy space and the ability to support industrialization. It was 
incumbent upon the proponents of the Moratorium 's extension to establish a clear and direct link, 
providing evidence that the Morat orium had had a substantive positive impact on the development 
of e-commerce around the world, including  during pandemic. India advocated an evidence -based 
decision. That would also help Members understand how the growth of the sector depended on the 
exten sion of the Moratorium, and how it would be affected if the Moratorium was not renewed. There 
was a need for  a clear understanding on the scope of the Moratorium. Her delegation requested 
Members to come up with evidence and proposals for extending the Mor atorium.  
5.12.   The Chairman  suggested that the Council take note of the statements made and said that the 
Council would revert to this item at its next meeting.  
5.13.   It was s o agreed . 
6  ITEM F: UPDATE OF THE SECRETARIAT BACKGROUND NOTE ON MODE 4 – REQUESTED 
BY INDIA  
6.1.  The Chairman  indicated that that item had been added to the agenda of the Council at the 
request of the delegation of India.   S/C/M/147  
 
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  6.2.  As had been emphasized by her delegation on several previous occasions, t he representative 
of India reiterate d its request f or the update of the Secretariat Background Notes on all four modes 
of supply  and also support ed Secretariat work on inter -modal linkages.  
6.3.  As previously clarified , while India welcome d the proposal by the United States  on the issue of 
inter-modal linkages , that should not substitute its request to update the separate modal Background 
Notes by the Secretariat. India was of the view that having  an inter-model linkage Note made no 
sense without first updating the modal Notes. 
6.4.  India had , in the past, identified some of the possible areas  in the 2009 Background Note on 
mode 4 that could be updated. These included: i mproved methodology for statistics on mode 4, 
including th e work in the Trade in Services data by Mode of Supply (TiSMOS) ; how mode 4 and 
related issues, such as MRAs, provisions for facilitating trade in professional services and others,  
had been addressed in some recent RTAs , covering not only commitments but a lso regulatory 
disciplines on mode 4 ; updating information on  the number of MRAs in professional services 
concluded amongst WTO Members since 2009 ; mode 4 commitments and MFN exemptions of 
recently acceded Members ; sectoral specificities , given that t he 2009 Background  Note provide d an 
analysis of mode 4 commitments on a more horizontal basis ; obstacles to mode 4 based on new 
literature and empirical information.  
6.5.   Additionally, the update could include specific information on  the priorities of LDC s ervice 
suppliers. Further, all Members had experienced the dampening effects of the pandemic on trade i n 
services through mode 4. In th at context, it would also be useful for the 2009 Note to be updated 
to incorporate an examination  of the measures taken during the COVID -19 pandemic related to 
mode 4 and the impact that th ose measures might  have ha d on the exports of Members, especially 
developing countries for whom th at was an area of key interest.  
6.6.  As Members ha d asked for higher level s of transparency on COVID -related measures and timely 
reporting of such measures, there should be no objection to updating the  mode 4 Secretariat Note 
as an exercise that promote d transparency through dissemination of updated information. India 
urged those delegations who did not see value  added in the updating of the mode 4 Note not to 
stand in the way of analytical work that other delegations found useful for promoting knowledge  
building. Th at exercise should be seen as a technical support initiative. Further, her delegation  also 
believe d that the updated Note could  serve as useful background information to facilitate 
comprehensive and structured discussions , especially in the con text of  the interest s of developing 
countries in the CTS -SS. 
6.7.  The topics mentioned by her delegation were only suggestions. India would be happy to engage 
with other interested Members on their views and suggestions on its proposal to update the mode 4 
Note. Her delegation once again urge d Members to positively consider its proposal. Updating all the 
Secretariat modal  Background Notes , as well as the proposed additional Note on inter -modal 
linkages, would be a very useful exercise in trade in services.  
6.8.   The representative of the United States  said that his delegation was still not persuaded that 
updating the 2009 Secretariat Note  on mode 4  would add any value  to the discussion . His delegation 
had suggested , and appreciated India's support for the US suggestion , that the Secretariat produce 
instead a Note examining  inter-modal linkages  as a way to advance Members' conversations, since 
Secretariat resources should be used to add value to Members' discussions. His delegation would 
continue to consult wit h India on that issue but its position  had been well stated in the past and at 
that stage there was no need to repeat the US concerns with the Indian suggestion to update the 
2009 Note on mode 4.   
6.9.   The Chairman  suggested that the Council take note of the statements made.  
6.10.   It was so agreed . 
7  ITEM G: CYBERSECURITY MEASURES OF CHINA AND VIET NAM – REQUESTED BY JAPAN 
AND THE UNITED STATES  
7.1.   The Chairman  indicated that the item ha d been added to the agenda of the Council at the 
request of the delegations of Japan and the United States.  S/C/M/147  
 
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  7.2.  Regarding China' s cybersecurity laws and regulations, the representative of Japan  noted that 
China had explained at the previous  CTS meeting that it "has comprehensively referred to 
internationally -accepted practices and legislative experiences of other Members " and "strictly 
followed transparency requirements, extensively solicited public opinions, and attached great 
importance to all comments " with th e purpose of "protecting interests of all stakeholders. "  
7.3.  Japan appreciate d China 's efforts to seek public comments from various domestic and foreign 
stakeholders in view of transparency. However, his delegation  recognize d that China 's legislati ve 
process had continued without addressing the concerns raised by Japan and other Members. Japan  
again request ed China to provide  responses and improve its laws and regulations.  
7.4.  At the last CTS, Japan  had expressed its concerns on the "Data Security Law " and the "Personal 
Information Protection Law " of China.  However, the "Data Security Law " had come  into effect on 
1 September without reflecting Japan's  concerns. The "Personal Information Protection Law " had 
also been enacted in August without fully taking into accou nt the public comments submitted by 
Japan, and was scheduled to come into effect on  1 November. Japan  further underst ood that the 
"Regulations for Automobile Data Security Management, " on which it had  raised concerns at the last 
CTS meeting , had come  into effect on 1 October.  
7.5.  In those laws and regulations, Japan was  particularly concerned by the obligation to store data 
domestically and  by the implementation of a safety assessment by the State Internet Information 
Department for the data to be transferred overseas. His delegation had  a concern on the obligation 
to store data in China,  as th at could imply  additional costs for foreign service  providers and 
effectively put them at a competitive disadvantage compared to Chinese service providers who 
aggregate d and managed  data in China. On the safety assessment, the standards for the assessment 
were unclear, and , depending on how it was applied,  there was a risk of unfair treatment of foreign 
service providers. Th ose provisions could violate China 's obligation of National Treatment  under 
Article XVII of the GATS, and Japan  request ed China to remove the mandatory domestic storage 
obligation and to  ensure transparency in implementation.  
7.6.  The Japanese government  had submitted its public comments on the draft amendment to the 
"Measures for Cybersecurity Review " in July. The draft amendment add ed "data processing activities 
by data processors " in Articl e 2 and "data processing activities and overseas listing " in Articles 10 
and 16  to the scope of cybersecurity reviews . Those measures require d cybersecurity reviews when 
the targeted activities "affect or are likely to affect national security ". However, t hat definition was 
unclear. Japan was concerned that adding "data processing activities by data processors " to the 
scope of cybersecurity reviews could lead to overly broad implementation of the measures. 
Depending on how the measures were applied, they could result in unfavourable  treatment of foreign 
entities and therefore be inconsistent with China 's National Treatment obligation under Article XVII 
of the GATS. Japan  request ed China to ensure that the measures would  be implemented in a manner 
consistent with the WTO Agreements.  
7.7.  Finally, his delegation was  aware that the Chinese government was currently seeking public 
comments on the "Measures for the Safe Management of Data in the Field of Industrial 
Informatization ". Japan  planned to submit its comments, including its concerns on the obligation to 
store important data domestically and the restrictions on cross -border transfers.  
7.8.  Turning to Viet Nam's measures, a s his delegation had  noted  in previous CTS meeting s, Japan 
was aware that the "Draft Decree to Implement the Cybersecurity Law " and the "Draft Decree on 
the Protection of Personal Information " were under consideration by the Vietnamese government.  
7.9.  In particular, Japan had  a concern on Article 21 of the "Draft Decree on the Protection of 
Personal Information ", as it had  pointed out at the previous CTS  meetings . That Article stipulate d 
the obligation to store data domestically and the prohibition of cross -border data transfe rs. 
Depending on the application of th ose provisions, there was a risk that foreign businesses would  be 
treated less favourably  than Vietnamese businesses, and therefore there was a possibility that this 
could be inconsistent with Viet Nam 's obligation of National Treatment under Article XVII of the 
GATS.  
7.10.   Japan appreciate d Viet Nam 's efforts to seek public comments from various domestic and 
foreign stakeholders in view of transparency. On the other hand, Japan  request ed Viet Nam to ensure S/C/M/147  
 
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  that its measures were in compliance with the GATS by limiting measures that restrict data 
distribution to the minimum amount necessary to achieve legitimate objectives, and by clarifying 
the scope and content of the measures to ensure transparency.  
7.11.   The representative of th e United States  recalled that his delegation  had raised concerns in 
the Council that various Chinese measures, initially including in connection with China 's 
Cybersecurity Law but more recently, also in connection with China 's Data Security Law and Personal 
Information Protection Law, might  restrict cross -border data flows and require localization of data.  
7.12.   China 's Personal Information Protection Law had been  finalized on 30 August and w ould enter 
into force on 1 November. The final Law did not address US concerns or  the concerns raised by many 
other WTO Members.  
7.13.   Regarding the Law 's potential impacts on cross -border data  flows, the United States  noted a 
particular concern that the Law impose d a data localization requirement on operators of critical 
information infrastructure, and on personal information processors that process ed personal 
information whose volume reached a certain threshold. Th ose entities would  be subject to a "security 
assessment " before being able to transfer any personal information out of China. WTO Members ha d 
repeatedly raised concerns about Chinese measures and policies that propose d those types of 
security assessments on data transfers.   
7.14.   Cross -border transfers of personal information should not and need not undermine the privacy 
and security standards China decide d to adopt. To th at end, comparable protection of personal 
information laws implemented in other jurisdictions generally include d various mechanisms for 
transferring data across borders. The Unit ed States recognize d that governments had a legitimate 
interest in ensuring the protection of personal information, regardless of the destination of the 
information transfer, whether domestic or cross -border. However, China 's proposal to impose 
additional requirements on transfers simply because they were cross-border unfairly disadvantage d 
foreign suppliers and did not enhance protections for personal information.   
7.15.   Other provisions in the Law addressing cross -border transfers, if appropriately clarified and 
elaborated, might  provide a step forward, including , as found in Article 38 (2) , the possibility to use 
certifications by professional organizations as a basis fo r the cross -border transfer of personal 
information. Th ose provisions could benefit from expansion, including to allow for the use of cross -
border data transfer mechanisms such as the APEC Cross -Border Privacy Rules (CBPRs).    
7.16.   The United States  urged China to develop implementing measures for the Law that provide d 
necessary mechanisms for enabling the transfer of data across borders.   
7.17.   China 's Data Security Law had entered into force on 1 September. The United States and 
other WTO Members ha d raised concer ns that the Data Security Law could have a draconian effect 
on service suppliers and on cross -border data  flows.   
7.18.   The Law focuse d on protecting "important data " and made  clear that China was planning to 
develop a very broad definition of that type of data . The Law also require d security assessments of 
any proposed cross -border transfer of information by an operator of Critical Information 
Infrastructure  (CII), according to the terms of the Cybersecurity Law. Other (non -CII) operators also 
would  be subject to security assessments under procedures to be developed by China. The United 
States ha d serious concerns that China 's focus on "important data " and its imposition of security 
assessments for cross -border transfers of data would  result in new restrictions and burdens on 
companies, including in regard to the commercial data that they sought  to use in the ordinary course 
of business.  
7.19.   In connection with implementation of the Law, China 's Ministry of Industry and Information 
Technology  had recently released dr aft (trial) "Industry and Information Technology Data Security 
Management Measures " for public comment. Th ose draft measures raise d further concerns by 
requiring data processors to categorize and classify the types of data they were handling. The 
measures would prohibit transfer abroad of "core data ". "Important data " also would need to be 
stored in China unless very restrictive requirements  could  be met. Although the draft trial measures 
also acknowledge d a classification of "ordinary data " that would not be subject to the same S/C/M/147  
 
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  restrictions, it was not clear how data processors could be certain that they could  avail themselves 
of that category.  
7.20.   Turning to Viet Nam's measures, f or the previous three years the United States ha d raised 
concerns in the Council about Viet  Nam's data localization and local presence requirements in its 
Cybersecurity Law and its draft implementing Decree.  
7.21.   As his delegation had  explained, th ose requirements would undermine the provision of 
services fou ndational to the digital economy, ranging from e -mail to electronic payment s to cloud 
computing services, which were frequently provided on a cross -border basis. His delegation  would 
welcome any update Viet  Nam could provide regarding the status of that draft decree.  
7.22.   As it had noted in  the previous CTS meeting, the United States was also very concerned to 
see that on 9 February Viet  Nam had released a draft Decree on Personal Data Protection (PDP), 
which appear ed to replicate and indeed expand the scope an d restrictiveness of data localization 
requirements.   
7.23.   The United States had  submitted written comments in April on th at draft Decree. As  his 
delegation had noted at the previous CTS, implementing sweeping requirements that companies 
store data locally, or  that they seek government approval prior to transferring any personal data 
across borders , could impede the supply of cross -border services in many sectors, including ones 
for which Viet  Nam ha d undertaken  GATS commitments. Moreover, such requirements did not 
contribute to, and could  in fact be counterproductive to, the objective of protecting data privacy.   
7.24.   He urged Viet Nam  to seriously consider comments of the United States and other WTO 
Members on th ose measures, and to consider options for taking a l ess trade -restrictive approach to 
protecting personal data. His delegation  would welcome any update Viet Nam  could provide 
regarding the status of the draft PDP decree.  
7.25.   With regard to China's cybersecurity measures, the representative of Canada  said that her 
delegation appreciate d the opportunity China had provided, in July 2021, to submit comments to 
the Cyberspace Administration of China (CAC) on the draft Revised Measures on Cybersecurity 
Review.  
7.26.   Canada note d the extensive expansion of the sc ope of the measures , to include not just 
operators of Critical Information Infrastructure, but also any operator of data processing equipment. 
Her delegation believe d that  the measures would now encompass firms in a wide variety of 
technology industries (e .g. cloud computing, social media, entertainment platforms, gaming firms).  
In addition, the considerations operators had to  use when conducting a cybersecurity review of the 
products they purchase d had also been greatly expanded. She sought China 's explana tion of what 
the new cybersecurity risks were and why the new requirements were needed.  
7.27.   Her delegation  would also appreciate clarification from China with respect to its Personal 
Information Protection Law. Canada  underst ood that th at Law would impose rest rictions on the 
cross-border flow of information, where , under certain circumstances, companies processing 
personal information might  be subject to the vague requirement of a security assessment before 
being able to transfer such personal information out o f China.  
7.28.   Her delegation  would appreciate an explanation from China as to how it consider ed its new 
Personal Information Protection Law to be consistent with its GATS commitments on 'Computer  and 
Related Services  - Data Processing Services ', specifically w ith respect to mode 1. Placing restrictions 
like those found in the Law, such as those on the transfer of data, and requirements to obtain 
certification, raise d concerns from Canada 's perspective, and ha d the potential to negatively impact 
trade.  
7.29.   The representative of Australia  said that her delegation appreciate d China 's efforts to consult 
with interested parties on its measures relating to cybersecurity.  Australia had been pleased to make 
submissions to the Chinese Government as part of public consultations on its cybersecurity 
framework , including the Personal Information Protection Law and Data Security Law, passed on 20 
August and 10 June respectively.  S/C/M/147  
 
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  7.30.   As set out in its submissions, Australia  welcomed  a number of revisions to both th ose draft 
Laws. Nonetheless, Australia still ha d concerns with the final legislation , particularly around extra -
territoriality, trade retaliation measures, compliance costs for firms and the overall scope.  
7.31.   Her delegation continue d to urge China to take into account the concerns of business and 
Members in the implementation of th ose measures and development of future measures.  Australia 
remain ed concerned that provisions in th ose Laws had the potential to create inconsistenci es with 
WTO rules.  She noted that any measure or countermeasure  taken under th ose Laws should only be 
applied consistently with China 's WTO obligations.  
7.32.   Australia  also continue d to remain concerned about the lack of clarity when it came  to 
definitions, ju risdiction and a number of other fundamental elements, to enable businesses operating 
in China to fully understand and implement their new obligations. Her delegation looked forward to 
continuing to work closely with China on th ose issues.  
7.33.   In relation to Viet Nam , Australia was encouraged by Viet Nam 's interest in developing 
regulation to protect personal information, and to support development of the digital economy more 
broadly.  However, she reemphasise d the concerns that her delegation had previously raised in t he 
Council about elements of the draft Decree on Personal Data Protection.  She looked forward to 
continuing to work with Viet Nam  on that Law and related measures.  
7.34.   The representative of the European Union  said that, a s in previous meetings, the EU share d 
the concerns expressed by other Members about the implementation of the cybersecurity policy in 
China. The scope was too broad, some requirements remain ed unclear and key terms were not yet 
specified in sufficient detail.  
7.35.   China 's cybersecurity regime establishe d strict restrictions on the cross -border transfer of a 
wide range of data. Th at, effectively, prevent ed companies from transferring much of the data 
collected or generated during their operations in China to anyone o utside China without completing 
an official security assessment. In practice, it seem ed to act as a strong deterrent to data transfers, 
as shown by a string of decisions by foreign investors to over -comply and localise all data in China.  
7.36.   The restrictions did not only apply to personal data but also to data that China consider ed 
"important " or data  that wa s generated by "critical information infrastructure operators ". The Data 
Security Law authorise d regional government departments and industries to establi sh their own 
catalogues of "important data ", which could result in an even broader scope, regulatory overlap and 
legal uncertainty.  
7.37.   Her delegation was also concerned that the Law cover ed activities beyond the territory of 
mainland China that might  harm Ch ina's national security or public interests. The rules on critical 
information infrastructure seem ed to include large parts of the economy , including 
telecommunications and information services, banking, finance, energy and transport, as well "any 
other im portant facility or system ". The growing number and expanding scope of administrative 
review processes put foreign companies at risk of exposing sensitive information. Intrusive 
inspection regimes and an increasing number of filing, screening and approval requirements would  
affect foreign -invested enterprises more if they continue d to rely on cross -border data transfers. 
The EU would appreciate replies from China on the concerns raised.  
7.38.   Turning to Viet Nam's C ybersecurity Law, the EU wished  to reiterate it s concerns about the 
Law's economic impact and its compatibility with Viet Nam 's commitments under the WTO. 
Cybersecurity measures should not restrict trade by introducing data localization and local presence 
requirements. Her delegation would invite Viet Nam  again to share the latest drafts of the Decree 
and inform Members  of the da te of its adoption.   
7.39.   The representative of Viet Nam  thanked  Members  who had intervened for their  continued 
interest in Viet Nam's Cybersecurity Law and  the legislative  drafting  process for the  Decree to 
implement that Law.  As his delegation had previously  indicated in the CTS,  Viet Nam's process  for 
the Decree had been  transparent,  and all stakeholders' comment s had been reviewed by the Drafting 
Committee and submitted to the Government for consideration. D etailed explanations of certain 
provisions in the draft Decree had been provided to all interested Members, including the United S/C/M/147  
 
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  States and the European Union through the questions and answers of Viet Nam's second Trade Policy 
Review held in April that year.  
7.40.   He said that t he draft Decree on Personal Data  Protection  shared  the same  objective that 
many other Member s also pursued  of protecting personal data in the current context of digital 
transformation. As Members would have noticed, Viet Nam's legislative process was open and 
transparent. At that time, t he Drafting Committee and Ministry  of Public Security were carefully 
reviewing all comments from both domestic and foreign stakeholders and would update the draft as 
deemed appropriate.  
7.41.   The representative of China  said thank ed Japan, the U nited States, Canada, Australia and  the 
European Union for their continued attention to China 's cybersecurity -related legislations. China ha d 
already responded to Members ' remarks and questions at several previous meetings. In addition, 
some Members had also rais ed similar questions during China 's eighth Trade Policy Review, to which 
his delegation had  submitted written responses.  
7.42.   At that meeting , China would not repeat th ose responses . As had been previously  emphasized, 
the legislative process of the legislations  in question had been open and transparent. China 
welcome d and attache d great importance to the constructive suggestions from all stakeholders. 
China ha d always abided by international rules and earnestly fulfilled its WTO commitments. 
Relevant laws and re gulations were implemented in accordance with WTO principles , including 
National Treatment, MFN treatment and transparency. The legislations were not intended to hinder 
cross-border data flow s, nor to restrict international trade.  
7.43.   China ha d learned a lot a nd would  continue to learn from the experiences of many other 
Members in its cybersecurity -related legislation, with the purpose of guaranteeing cybersecurity, 
data security and protection of personal information, as well as addressing the development need s 
of the digital economy. In terms of  the next step s, China would  continue to formulate and improve 
supporting measures of relevant laws and regulations . In that regard, his delegation welcome d 
Members ' comments and suggestions and was willing to work closely with other Members in th at 
process in order to achieve a balance between cybersecurity, data security, protection of personal 
information and business development in the global digital economy.  
7.44.   The Chairman  suggested that the Council take note of the statements made.  
7.45.   It was so agreed . 
8  ITEM H: 5G-RELATED MEASURES OF AUSTRALIA – REQUESTED BY CHINA  
8.1.  The Chairman  indicated that the item had been added to the agenda of the Council at the 
request of the del egation of China.  
8.2.  The representative of China  recalled  that his delegation had raised strong concerns at previous 
CTS meetings several times, but the related issues ha d yet to be effectively addressed.  
8.3.  At that meeting, his delegation would not repeat its specific questions and concerns . China 
hoped that Australia would  rectify the discriminatory practices as soon as possible and provide 
further clarification on the relevant restrictive measures , which were inconsistent with the provisions 
of Articles II, VI, XVI and XVII of the GATS, as well as the provisions of paragra ph 5 of the GATS 
Annex on Telecommunications Services, and paragraphs 2 and 5 of the Reference Paper on  Basic 
Telecommunications. China  hoped that Australia would  live up to its WTO obligations and create a 
fair, just and predictable business environment f or all businesses , including Chinese ones.  
8.4.  The representative of Australia  noted China 's statement.  China had  first raised that issue 
elsewhere in the WTO in late 2018. Since that time , Australia ha d engaged constructively and in 
good faith with China to e xplain the rationale for its position.  Australia reiterate d that its position on 
5G networks was country -agnostic, transparent, risk -based, non -discriminatory and fully WTO 
consistent.  
8.5.  The Chairman  suggested that the Council take note of the statements mad e. S/C/M/147  
 
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  8.6.  It was so  agreed . 
9  ITEM I: RUSSIAN FEDERATION SOFTWARE PRE -INSTALLATION MANDATE (FEDERAL 
LAW DATED 2 DECEMBER 2019 NO. 425 -FZ "ON AMENDING ARTICLE 4 OF THE LAW OF 
THE RUSSIAN FEDERATION 'ON PROTECTION OF CONSUMER RIGHTS '") – REQUESTED BY 
THE UNITED STATE S 
9.1.  The Chairman  indicated that the item had been added to the agenda of the Council at the 
request of the delegation of the United States.  
9.2.  The representative of the United States  recalled that his delegation and other Members ha d 
raised concerns about the Russian Law th at mandate d pre-installation of Russian software at a 
number of Council meetings. The US questions remain ed about the regulations implementing t hat 
Law and how those regulations would  ensure that there was a level playing field for software 
providers and in  turn the  services provided through that software , namely internet browsing and 
search, email and other computer or telecommunication services.  
9.3.  In response to questions raised by the United States  at the July meeting of the Council, the 
representative of the Russian Federation had  undert aken to share the US questions with her C apital. 
The United States  wished t o know if the representative of the Russian Federation had answers from 
Capital at that meeting . Specifically , the United States  remain ed interested  in the consequences of 
incompatibility between software  that must be installed and the underlying  operating system. 
Specifically , who ha d the responsibility to remedy any problem s that arose  with compatibility issues ? 
Was it the software developer who bore that responsibility ? What was the process for any appeal of  
decisions related to the software 's compatibility ? Would  the Ministry of Digital Developmen t, 
Communications and Mass Media mandate a company to pre -install so ftware that the  compan y 
believed was  incompatible with its operating system or device, or penalise that company for not 
installing that software?  
9.4.  In addition to th ose procedural issues, the United States was yet to  hear a concrete response 
from the Russia n Federation as to how mandating the use of Russian software complie d with Russia's  
WTO obligations not to impose National Treatment limitation s on email, on -line information  and data 
base retrieval, on -line information  and/or data processing , and computer  and related services more 
generally. Up to that point, Russia ha d deflected  the US  concerns with vague assurances of WTO 
compliance.  The United States  remain ed interested to know how specifically a mandate to use 
Russian software in the provision of th ose services was consistent with Russia's  obligations. Th at 
measure was part of a growing trend of measures adopted by the Russian Federation that impede d 
the growth of a vibrant and open digital economy. The United States had seen  numerous new 
measures  being passed by the Russian Federation that  appear ed to tilt the  playing field towards its 
national service providers at the expense of foreign service providers. Th e measure that his 
delegation was raising at that meeting  was emblematic of that trend in  the Russian Federation.  
Therefore , the United States  continue d to raise its concerns with such measures in order to ensure  
that they were consistent with the commitments made by the Russian Federation.  
9.5.  The representative of the  European Union shared the conc erns expressed by other Members 
on the Russian Federation 's software pre -installation mandate. The EU  had serious reservations as 
to how the obligation to pre -install certain software on the basis of being considered to be Russian 
could comply with the National Treatment commitments the Russian Federation,  had made in 
'Computer and Related Services ' (CPC 84) and in 'Telecommunications Services ' (in particular, 
CPC 7523). Her delegation would invite the Russian Federation to review th at question.   
9.6.  The EU would also welcome clarifications on Government Decree 1031 of 28 June 2021 and 
how it tallie d with the Russian Federation's  GATS commitments not to discriminate with respect to 
subsidies granted to foreign subsidiaries established in the Russian Fe deration,  both from the 
perspective of the SME and of the entity developing the software. The Decree seem ed to be 
introducing a scheme to subsidise the purchase of domestic software by SMEs ; notably, the 
government would  subsidise 50% of licence fees when SMEs purchase d "Russian software ". The EU 
would  continue following th at issue closely as well as other initiatives of the Russian Federation in 
the digital sector, which the EU was  concerned could be discriminatory against foreign service 
providers.  S/C/M/147  
 
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  9.7.  As his delegation had  pointed out at previous CTS meetings , the representative of Japan  said 
that his delegation  was concern ed that the Russian measures could, depending on the details of the 
regulations and implementation, violate the principle of non -discrimin ation and impede the entry of 
foreign enterprises into the Russian market. Japan  request ed the Russia n Federation  to ensure that 
its measures were in compliance with the rules and obligations  of the GATS . 
9.8.  The representative of Canada  said that her delegation would appreciate clarification from the 
Russia n Federation  on how compatibility of the software was determined and whether this 
necessitate d disclosure of source code from the company to a government authority. Canada look ed 
forwa rd to hearing the Russia n Federation 's responses to questions previously posed, and an 
elaboration with rationale as to how th at requirement did not violate Russian  National Treatment 
obligations under the GATS.  
9.9.  The representative of the Russian Federation  said that it was encouraging to see that the 
United  States, the European Union, Canada and Japan continue d to study  the Russian experience in 
software regulation.  
9.10.   The Federal Law No. 425 -FZ "On amending article 4 of the Law of the Russian Federation 'On 
protection of consumer rights '" did not impose restrictions on foreign goods, service suppliers or 
their services. The Law did not prohibit pre -installation of foreign software or require de -installation 
of such software. The Law applie d equally to all prod ucers of technically complex goods on the 
Russian market, including Russian producers of such goods. The Federal Law did not impose National 
Treatment limitations on email, online information and database retrieval, on -line information and/or 
data processi ng. Therefore, exist ing requirements compl ied with the Russia n Federation 's WTO 
commitments.  
9.11.   The software installation mandate was stipulated in the Law "On consumer protection ". The 
Ministry of Digital Development, Communications and Mass Media was responsible for selecting 
applications regarding proposed software for pre -installation. The Government approve d that list of 
software. Such procedure of selecting could  be appealed i n accordance with Russian legislation.  The 
existing regulation stipulate d that , if the producer found  that software was incompatible with the 
underlying operating system, the producer was released from the obligation to pre -install it.  
9.12.   The representative a dded that t hat was the first time that her delegation had heard the 
questions from EU on its other Decree. She had taken note and w ould consider them.  
9.13.   The Chairman  suggested that the Council take note of the statements made.  
9.14.   It was s o agreed . 
10  ITEM J: MEASU RES OF THE UNITED STATES RESTRICTING TRADE IN SERVICES – 
REQUESTED BY CHINA  
10.1.   The Chairman  indicated that the item had been added to the agenda of the Council at the 
request of the delegation of China.  
10.2.   The representative of China  said that  his delegation had noted the revoking of relevant 
Executive Orders of the previous US administration on TikTok, WeChat and other Chinese 
applications, which was a positive step in the right direction. But China had  also not ed that the US 
Government require d a security risk review on Chinese apps and services and that the Committee 
on Foreign Investment in the United States ( CIFIUS ) investigation on TikTok was still ongoing. Th ose 
measures were vague, trade -restrictive, violate d the basic principles of the WTO, and undermine d 
the legitimate rights of relevant Chinese companies.  
10.3.   His delegation urged the U nited States to treat Chinese enterprises in a fair and just manner, 
comply with WTO rules, fulfil its GATS commitments, and avoid politicizing economic and trade 
issues. Chin a reserve d the right to take further actions in the future.  
10.4.   The representative of the United States  thanked China for its intervention. He recalled  that 
the United States had stated in previous responses  on that issue  in the Council that the actions  cited 
by China's intervention  had been taken by the United States to protect the US  national security.  S/C/M/147  
 
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  10.5.   The Chairman  suggested that the Council take note of the statements made.  
10.6.   It was so agreed . 
11  ITEM K: MEASURES OF INDIA RESTRICTING TRADE IN SERVICES – REQUESTED BY 
CHINA  
11.1.   The Chairman  indicated that the item had been added to the agenda of the Council at the 
request of the delegation of China.  
11.2.   The representative of China  said that, i n the name of national security, India ha d banned 
many applications with Chinese background, and  had discriminated against FDI from countries 
sharing land borders with India. The above -mentioned measures seriously violate d the basic 
principles of the WTO and India 's GATS commitments. China strongly oppose d India's repeated 
abuse of national security measures and the adoption of restrictive measures affecting Chinese 
services and services suppliers. China reserve d the right to take further actions in the future.  
11.3.   China ha d always required Chinese enterprises over seas to operate in compliance with 
international rules as well as local laws and regulations. His delegation  hoped that India would  rectify 
those restrictive measures as soon as possible, and create a sound, transparent and fair business 
environment for al l foreign investors.  
11.4.   The representative of India said that, as underscored at previous CTS meetings, India was 
committed to upholding its obligations at the WTO. India value d, and was committed to protecting, 
the democratic rights of its citizens, includin g access to goods and services , while reserving the right 
to take measures to ensure the protection of privacy, data security and national security. India firmly 
believe d that the measures raised under th at agenda item were fully consistent with its GATS 
commitments.  
11.5.   The Chairman  suggested that the Council take note of the statements made.  
11.6.   It was so agreed . 
12  ITEM L: KINGDOM OF SAUDI ARABIA MINISTER OF HUMAN RESOURCES AND SOCIAL 
DEVELOPMENT DECISION 112203 REGARDING LOCALIZA TION OF CUSTOMER SERVICES – 
REQUESTED BY THE UNITED STATES  
12.1.   The Chairman  indicated that the item had been added to the agenda of the Council at the 
request of the delegation of the United States.  
12.2.   The representative of the United States  said that his delega tion had hoped that the item would 
have been resolved, and he appreciated the delegation of the Kingdom of Saudi Arabia playing a 
constructive role in seeking to resolve that issue, which his delegation had raised in the previous 
Council meeting. However, he noted that the issue remained unresolved.  
12.3.   The United States had repeatedly sought clarifications from the Saudi Arabian Government 
on the scope of that measure and its impact on US companies that had presence in the Kingdom of 
Saudi Arabia, not just on  companies located outside of the Kingdom. The United States had asked 
to clarify its scope in a publicly available manner. Unfortunately, it had not received a response and 
an uncomfortable level of uncertainty remained. The representative expressed his h ope to resolve 
that issue quickly with the help of his Saudi Arabian colleagues.  
12.4.   The representative of the European Union  shared the concerns expressed by the United States 
about Decision 112203 of the Kingdom of Saudi Arabia regarding the localisation of customer 
services. As the scope remained unclear, her delegation was concerned about the implication that it 
might have on foreign services suppliers that had made significant investments in the Kingdom. The 
European Union would appreciate more information  on the Decision concerned and on how it would 
be implemented and looked forward to assisting in a resolution to that issue.  
12.5.   The representative of the Kingdom of Saudi Arabia  thanked the United States for its statement 
and appreciated the efforts of the US  mission in Geneva. The Kingdom of Saudi Arabia reiterated S/C/M/147  
 
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  and emphasised that the decision specifically regulated the contractual relationship between 
employers and employees within the Kingdom of Saudi Arabia for "teleworking" in customer services, 
which  was only permissible for Saudi nationals, rather than regulating firms or "customer services" 
provided by firms.  
12.6.   It was worth mentioning that the United States' concern stated in the previous Council 
meeting regarding the mentioned Decision was that "the decision requires the localisation of all 
customers' services activities of companies selling or distributing products to customers within the 
Kingdom of Saudi Arabia". In that regard, the Kingdom of Saudi Arabia had conducted various 
meetings with the US delegation and Capital -based officials and emphasised that the concern was 
raised as a result of misinterpretation of the Decision. The Kingdom of Saudi Arabia had tackled that 
confusion immediately to resolve any concern for companies investing in the Kin gdom, if any, 
through publishing an updated version of the Decision's procedural manual, which formed an integral 
part of the concerned Decision.  
12.7.   The procedural manual had fully responded to the concern raised on pages 5, 6, 9 and 10: 
"the Decision applie s to entities that are subject to the Labour Law of the Kingdom of Saudi Arabia 
and specifically regulates the contractual relationship between employers and employees within the 
Kingdom of Saudi Arabia, pursuant to the Saudi Labour Law".  
12.8.   For further clar ification and to avoid misinterpretation of the word "Tawtin"; she explained 
that  "Tawtin" in Arabic was defined as a synonym to "Saudization of workforce" and had nothing to 
do with localisation.  
12.9.   The decision did not target entities outside Saudi Arabia that served customers inside the 
Kingdom, such companies were not subject to Saudi Labour Law.  
12.10.   The Decision aimed at limiting the "teleworking in customer services" employment and its 
provision to the entity's customers, within the Kingdom only, and did n ot apply to non -Saudi 
employees who were physically working from the entity's premises – rather than through teleworking 
contracts.  
12.11.   "Teleworking" was defined as "an employee performing his duties in a location other than 
the usual place of work using any of the communications and information technology means".  
12.12.   She concluded that nothing in the Decision, which had entered into force on 31 July 2021, 
warranted the concern raised by the United States, as none of the international firms, either located 
in the  Kingdom of Saudi Arabia or abroad, were required, either de jure or de facto, to relocate their 
operations into the Kingdom in order to provide customer services within the Saudi Arabian market. 
Her delegation hoped that that clarification answered the co ncern of the United States.  
12.13.   The Chairman  suggested that the Council take note of the statements made.  
12.14.   It was so agreed . 
13  ITEM M: RECENT DEVELOPMENTS IN TRADE IN SERVICES STATISTICS  
13.1.   The Chairman  recalled  that, in 2016,  the Council  had agreed  that the Secretariat  would  
present  to the Council,  on a yearly  basis,  the latest  developments  in trade  in services  statistics.  
Hence,  the Secretariat  had once again  been invited  to update  the Membership  on recent 
developments  in trade  in services  statistics.  
13.2.   A representative of the Secretariat  noted that 2020 had witnessed the worst -ever decline in 
trade in services, not only since the global financial crisis when services trade had decreased by 17% 
in the sec ond quarter of 2009 but also since estimates for world trade in services started being 
produced in 1980. Global services trade, measured as the average of exports and imports, had fallen 
by 21% in 2020. However, some countries had seen even sharper decline s, such as the LDCs, whose 
exports had decreased by 35% in 2020.  
13.3.   Estimates for the third quarter of 2020 confirmed earlier expectations that trade in services 
would be hit harder by the COVID -19 pandemic than trade in goods as consumer demand for services S/C/M/147  
 
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  such as leisure, international travel and recreational services had shifted to goods. Goods trade had 
recovered quickly, reaching pre -pandemic levels in November 2020. In the first quarter of 2021, 
trade in services was still 9% below the value of 2020, wh ile trade in goods had risen by 12%.  
13.4.   Travel and transport services, which had accounted for 43% of total trade in services prior to 
the pandemic, had experienced the sharpest drop. Travel services had decreased by 81% in the 
second quarter of 2020 and had plateaued at -68% in the third and fourth quarters of 2020. In the 
first quarter of 2021, they were still 62% below the value of 2020.  
13.5.   Transport services had seen a decline of 29% in the second quarter of 2020, and 14% in the 
fourth quarter. However, the sector had witnessed a quick rebound, reaching pre -pandemic levels 
in the first quarter of 2020. Freight transport, which was the largest component of international 
transport, had helped that sector to partly offset the decline recorded in passenger transp ort. 
13.6.   Annual export estimates showed a 20% decline in commercial services in 2020, more than 
twice as much as trade in goods ( -9%) on a Balance -of-Payments basis. Most services sectors had 
declined, and particularly those that required physical proximity. T ravel exports had fallen by 63%, 
passenger transport through all modes of transport by 44%, construction by 18%, and personal, 
cultural, and recreational services by 14%.  
13.7.   While almost all sectors had suffered losses, two major sectors had fared well durin g the 
pandemic. Firstly, exports of insurance and pension services and financial services had risen by 3% 
and 4% respectively. Secondly, exports of computer services, being the most dynamic and fastest -
growing services sector in the last decade, had increa sed by 8% in 2020, boosted by the shift 
towards remote working and digitalization.  
13.8.   The representative noted that the official estimates for the second quarter of 2021, jointly 
compiled with ITC and UNCTAD, were still being finalized and would be released b y the end of 
October. However, initial visualizations of the sectors most affected by the pandemic could already 
be shown.  
13.9.   Turning to travel exports, many countries had seen substantive year -on-year growth in the 
second quarter of 2021. However, she noted  that such a recovery was normal as the base in 2020 
was very low. A more accurate analysis was a comparison with pre -pandemic levels, which showed 
that travel exports in the second quarter of 2021 were still 70% below the value of the second 
quarter of 20 19. There had been sharp declines around the world, with all countries still having to 
catch up, and particularly LDCs that heavily relied on international tourism. The representative 
expressed her hope that as travel restrictions were progressively being lifted the recovery of travel 
services would further accelerate.  
13.10.   For some countries, such as the United States, monthly data were available that allowed to 
identify more recent developments. While travel exports had not caught up as strongly, travel 
import s, i.e. the travel -related expenditure of US residents in other countries, had increased, 
showing an acceleration in the last months. In other countries, too, such as in Europe, a small 
catching -up process had been observed in the summer months.  
13.11.   In contras t, the results for transport services were completely different: exports in the 
second quarter of 2021 had been 4% above the value of the second quarter of 2019, despite the 
heavy losses in air passenger transport. The recovery of the transport sector had been boosted by 
the high demand for goods. That had resulted in surging freight rates due to port congestions, testing 
and quarantine, shipping delays and a global shortage of empty containers. For instance, Chinese 
transport exports in the second quarter of 2021 had been 136% higher than in the second quarter 
of 2019, but also other economies in the region had recorded large increases.  
13.12.   Monthly statistics for China showed that transport exports had further increased in July and 
August 2021. That sharp incr ease in exports had coincided with the recovery of trade in goods 
starting in November 2020.  
13.13.   The Freightos Baltic Index (FBX) Global Container Index represented the spot market rates 
of 40-foot container shipping in US dollars. The latest data from October  15 showed that the global 
price of shipping a container at sea averaged US$ 10,396. That was an increase of 4% compared to S/C/M/147  
 
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  8 October and a year -on-year increase of 365%. According to a comparable index for air freight 
from the same company, the increase i n price was only 21% since the beginning of 2021, from US$ 
5.6 per kilo to US$ 6.8 per kilo.  
13.14.   Certain routes had recorded particularly sharp rises in costs, while others had seen a more 
modest increase. For example, shipping costs from China and other East Asian ports to the west 
coast of North America had increased to US$ 17,377 on October 15, from US$ 3,847 last year, an 
increase of 350%. While prices had plateaued in January, they have been rising since August.  
13.15.   The same applied when looking at shipping co sts to the east coast of North America, where 
a large increase had also been recorded. However, also for shipping the other way around, from 
North America to Asia, prices had risen, but they were significantly lower. For example, shipping a 
container today  cost a little more than US$ 1,000 compared to US$ 400 a year ago. Other routes 
had also seen increases, such as East Asia to North Europe, where the price per container was US$ 
14,500, up from US$ 2,150 in 2020. It had become apparent that there was a lot  of pressure on 
certain goods within Asia and some developed destinations.  
13.16.   The RWI/ISL Global Container Shipping Index, which was based on container throughput, 
i.e. handling on containers in ports worldwide, was very high through August. The representativ e 
noted that the description of the current situation as a shortage of containers was inaccurate since 
the world was more likely to be confronted with a misallocation of containers. Traffic in various ports 
remained at an all -time high, and that was due to  the high activity particularly in Chinese ports in 
the previous months.  
13.17.   The problem was not a global shortage of containers, but rather the high demand for goods 
that exceeded existing capacities, starting with the strong rebound of merchandise trade at t he end 
of 2020. The Secretariat expected that demand would cool off in the coming months and ease some 
pressure on prices. According to the latest statistics from the Port of Los Angeles, empty containers 
accounted for 83% of all outbound container traffic . That should ease to resolve the misallocation of 
containers, but it would take some time to clear the backlog. In the Port of Los Angeles, 39 ships at 
anchor were currently waiting to unload goods, with an expected delay of 14 days. Prices would 
remain h igh, and they would also be reflected in the official statistics, as long as the backlog 
persisted.  
13.18.   The IHS Global Manufacturing Purchasing Manager's Indices (PMIs) showed that new export 
orders had increased to 54.9 in May but had been declining since the n. On the other hand, stocks 
of finished goods had risen to 48.6 in September, meaning that inventories were being replenished. 
The high demand would thus be alleviated as firms were rebuilding their inventories and demand 
for goods was cooling. The Secret ariat believed that the situation would take some time to adjust 
but would eventually return to normal. The decline in new export orders compared to the peak in 
May might have also caused the stability observed in delivery times and prices of inputs and ou tputs 
in September. In addition, while consumer demand had shifted from services to durable goods during 
the pandemic, a re -shifting towards services would also alleviate the pressure on goods and, at the 
same time, help the recovery of trade in services.  
13.19.   The representative of China  thanked the Secretariat for the very informative presentation, 
which gave a clear picture of the trend in world trade in services over the previous two years, and 
especially after the COVID -19 pandemic. The pandemic had indeed h ad an impact on global trade 
in services and he hoped that the situation could continue to improve as vaccination was going on, 
with more people being vaccinated, and more international travel and transport being restored.  
13.20.   He noted that several statistics  shown were related to China. It was true that China had seen 
a huge increase in exports of transport services. However, there was also a hidden picture, namely 
the huge increase of Chinese imports of transport services from the world. The transport sector  had 
always been one of the largest sectors having deficits in China's services industry and that continued 
to be the case. Even with the large increase of Chinese exports in transport services, there were still 
big deficits in that sector. The increasing cargo container rates had negative effects on almost 
everyone, including China.  
13.21.   A representative of the Secretariat  confirmed that the increase in container rates, as 
mentioned during the presentation, also applied the other way around. Large increases wer e seen S/C/M/147  
 
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  for shipping from Asia to North America, and, albeit slightly less, also for shipping from North 
America to China and other East Asian harbours, with costs of US$ 1,064 today compared to US$400 
in 2020. Rising shipping prices were an issue for every one, both firms and consumers, as those 
higher costs would result in inflation. The Secretariat hoped that there would be a stabilization of 
the situation, but that would take some time.  
13.22.   The representative of the United Kingdom  echoed China in thanking the  Secretariat for that 
very informative presentation which was a very useful data point for working on a number of files 
at the WTO. Regarding the observation that trade in telecommunications services had gone down, 
but trade in computer services had gone u p, he asked whether that was a question of classification 
or human behaviour or a combination of the two.  
13.23.   A representative of the Secretariat  responded that statistics published by some countries 
contained an aggregation on ICT services, which included various sectors behaving completely 
differently such as telecommunications, computer and information services, which also included 
database serv ices. The observed declines in telecommunications were due to lower prices. Although 
there had been an increase in transmissions, and especially during the pandemic when internet 
transmissions had peaked, the actual cost of those transmissions was lower as  many more 
companies worldwide engaged in that service. The telecommunications sector had seen a decline in 
price over the previous 20 years when the sector had been liberalised.  
13.24.   The Chairman  asked, in view of the misallocation of containers, where those c ontainers were 
located that they did not attend the market between China and North America, and why that 
correction would take so long.  
13.25.   A representative of the Secretariat  responded that one had to go back to the peak of the 
pandemic where production had b een halted. Nobody had expected such a quick recovery in trade 
in goods in a matter of months, as pre -pandemic levels had already been reached by November 
2020. Those containers had been left where the original shipment had taken place, for example, in 
the Port of Los Angeles and other ports that provided statistics on container handling. The containers 
had not been returned because they had to be returned empty as demand was one -way.  
13.26.   Although not having access to those statistics, each container had a GEO  number with which 
they could be localised. One could see that they were in the wrong places and had to be shipped 
back where they were needed and where production was taking place, which was mostly in East 
Asia. In Los Angeles, 83% of outbound traffic cur rently was empty containers going back to East 
Asia. 
13.27.   In addition, there was the issue of delays as harbours in China and elsewhere had to shut 
down because of COVID -19. The pandemic had had a big impact on the misallocation of containers 
and delays because  there had been quarantine requirements also for seafarers. That had created a 
backlog and a big container bottleneck at the world level. Keeping the pandemic under control with 
vaccinations increasing worldwide would help resolve the issue of container mi sallocation. There was 
movement, but the backlog was so tremendous that it would take several months.  
13.28.   On another note, the representative indicated that she would try to include the latest 
numbers and some other trends on monthly data in her presentation t o be distributed to Members. 
If Members believed it would be useful and would provide clarifications on the situation, she would 
also distribute her notes.  
13.29.   The Chairman  extended his thanks once again to the Secretariat for the interesting and rich 
presenta tion and suggested that the Council take note of the statements made.  
13.30.   It was so agreed . 
14  ITEM N: OTHER BUSINESS  
14.1.   The Chairman  offered the floor to the delegation of Mongolia, which, at the beginning of the 
meeting, had asked to add an item under "Other busin ess" on the impact of container shortages on 
trade costs.  S/C/M/147  
 
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  14.2.   The representative of Mongolia  drew Members' attention to the issue of the unexpected 
increase in trade costs caused by a shortage of shipping containers. Mongolia believed that Members 
would benefi t from engaging in an exchange of views about the current situation, which had 
important trade implications. His delegation was aware that the Secretariat was monitoring the issue 
closely and would hold an information session for delegations on that critic al issue.  
14.3.   For years, container shipping had kept supply chains and globalisation running. At the start 
of the COVID -19 pandemic, expectations were that seaborne trade, including containerized trade, 
would experience a strong downturn. World merchandise tra de had fallen by 5.3% in 2020 and 
global supply chains had faced significant challenges.  
14.4.   Contrary to expectations, changes in consumption during the COVID -19 pandemic had led to 
increased import demand for manufactured consumer goods, a large part of whic h was moved in 
shipping containers. The increase in demand was stronger than expected and not met with a 
sufficient supply of shipping capacity, which had resulted in the delay of shipments and transport 
operations and a significant increase in container f reight rates.  
14.5.   Since November 2020, the cost of shipping of 40 -foot containers from Asia to Europe had 
risen more than threefold from around US$ 2,200 to US$ 7,900. The price of shipping goods from 
North America to Asia had doubled. The Drewry's composite World Container Index was 309% higher 
than it had been a year earlier.  
14.6.   According to the Freigthos data, the total increase over the past twelve months was 526%. 
In some regions, the price of container shipments had increased ten times. Consignments were 
delayed leading to a demand -supply imbalance both in the domestic and international markets, 
thereby disrupting global supply chains. That issue had led not only to a shortage of essential food 
and medical goods but also to a halt of supplies of necessary ma terials for certain industrial sectors 
and even their shutdown.  
14.7.   During the WTO Public Forum 2021, a working session under the theme "Facilitating transit 
and transport operation in crisis situation: lessons learned from COVID -19" was held and panellists 
underlined the need for putting in place certain policies and procedures to help countries to respond 
to unforeseen events like the COVID -19 pandemic in a better way, without disrupting global value 
chains.  
14.8.   In the current situation, when freight rates would remain high and disruptions of global 
delivery chains would remain in 2022, it was important to raise awareness among WTO Members 
and to find a solution to strengthen the existing rules and, if necessary, to create new ones in order 
to avoid similar situat ions in the future.  
14.9.   The representative noted that his delegation had circulated the communication 
JOB/SERV/CTS/5 on the container shortage issue and looked forward to WTO Members taking an 
active part in future discussions on that issue.  
14.10.   The representativ e of India thanked the delegation of Mongolia for highlighting that very 
pertinent issue of a shortage of containers and the resultant steep increase in container freight rates, 
which was being faced by several countries today. She also thanked the Secreta riat for their insights 
on the issue of container shortage in their report under the previous agenda item.  
14.11.   The pandemic had had a huge impact on transport operations, thereby disrupting global 
supply chains and contributing to an increase in trade costs. J ust like the case in many other 
countries, India too was grappling with a huge shortage of timely availability of containers, along 
with a manifold increase in container freight rates. India supported further discussions on that 
important subject.  
14.12.   The rep resentative of the United States  echoed India in thanking the delegation of Mongolia 
for its communication. Since that had only come after the agenda of the CTS had closed, his 
delegation was still looking closely into the communication. Typically, substan tive issues are not 
raised under "Other Business". He noted that the previous presentation had highlighted a number 
of key issues and his delegation believed that the issue was being looked at and was studying the 
communication from the trade in services a ngle. S/C/M/147  
 
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  14.13.   The representative of Panama  thanked Mongolia for circulating the document on seaborne 
transport. She echoed the United States in noting that the topic would require substantive 
discussion. It was perhaps not the right space for such a discussion, wh ich would require a different 
meeting of the Council as the document had only been provided some days earlier and it contained 
elements that required consideration by Capital.  
14.14.   The representative of Uruguay  appreciated the communication from Mongolia and it s 
statement. It was publicly known that the logistics sector was currently in the middle of a global 
crisis, heightened by the pandemic, due to the shortage and localisation of containers and the 
consequent increase in the costs of maritime transport, to w hich Uruguay was not alien.  
14.15.   He noted that it would be productive to maintain exchanges of information and experiences 
with Members in the instances that were deemed most relevant and timely. That could also include 
the eventual participation of experts and  the private sector. The Secretariat had provided very 
interesting comments and his delegation hoped to have access to the results or studies. In particular, 
it would be interesting to know the actions that were being carried out at the national, regional and 
global levels, as well as possible actions that might be taken within the framework of the WTO.  
14.16.   The representative of Turkey  thanked Mongolia for the communication on the container 
shortage issue. The container shortage that countries had started exper iencing after the first effects 
of the pandemic on global trade had increased costs in terms of both trade in goods and services. It 
was also of importance to transport services in terms of managing risks related to the smooth flow 
of global supply chains.  
14.17.   He noted that the lack of prompt coordination among countries had exacerbated the scale 
of the difficulties experienced. Turkey believed that international cooperation would be critical to 
finding a common solution. In that context, his delegation was of t he view that the communication 
by Mongolia was very timely and relevant.  
14.18.   As Members might remember, upon interventions by some delegations during the last TNC 
meeting, the Director -General had reacted to that issue and stated that the Secretariat would ge t in 
touch with relevant stakeholders. A webinar on digitalization and logistic resilience during the 
pandemic had been organised the previous week and sector representatives of Turkey also had 
taken part. His delegation believed that more needed to be don e at WTO to address the container 
shortage issue properly.  
14.19.   On the other hand, as a consequence of the container crisis, Turkey had seen an increase in 
demand for and pressure on other modes of transport, namely road and rail transport. The current 
disrupt ion, and risks of future disruptions, were naturally increasing the importance of road and rail 
transport for global and regional supply chains. The maritime transport sector was covered by 
relatively comprehensive and liberal commitments under the GATS co mpared with other modes of 
transport.  
14.20.   With that in mind, Turkey was of the view that considering and further discussing the level 
of commitments for all modes of transport as well as auxiliary logistics services, such as cargo -
handling, storage and warehou se services, was becoming even more critical. Therefore, in addition 
to Mongolia's proposal, a study that compared the level of commitments in different modes of 
transport and logistics services could be useful. Turkey would like to present that idea for 
consideration to Members.  
14.21.   Lastly, the Reference Paper of the Joint Statement Initiative on Services Domestic Regulation 
was expected to be accepted during MC -12. If the disciplines included in the Reference Paper were 
implemented effectively, Turkey believe d that that would contribute to the resolution of the container 
shortage issue in terms of reducing trade costs by providing transparency and predictability in that 
sectors. With those explanations, Turkey expressed its support for the proposal of Mongolia  and 
would be ready to engage constructively on possible work in the Council.  
14.22.   The representative of China  thanked Mongolia for the communication. The increased import 
demand during the COVID -19 pandemic had led to a serious shortage of shipping containers and a 
significant increase in trade costs. As a result, the healthy development of global trade had been 
seriously affected. Shipping containers, as an integral link of the global logistics system, played an S/C/M/147  
 
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  important role in the post -pandemic economic rec overy. China was now assessing that 
communication internally and was willing to exchange information with Members in that regard.  
14.23.   In addition, he referred to a communication that China had circulated on logistics services 
(JOB/SERV/301) under the CTS -SS in  July 2020. China encouraged further discussions on logistics 
services based on both Mongolia's and China's communications. Such discussions would contribute 
to more comprehensive research on how to improve the efficiency of logistics services and thus 
ensure a smoother global supply chain.  
14.24.   The representative of Honduras  expressed his delegation's support for what was mentioned 
by the delegation of Mongolia. As indicated in the last TNC meeting, Honduras was currently facing 
an unprecedented increase in the  logistics costs of imports and exports, specifically in the cost of 
freight worldwide, which was directly affecting the logistics, production and marketing chains of 
goods, affecting the price and supply of products, causing a reduction in the purchasing power of 
consumers and companies, in particular of small and medium -sized companies that had been 
especially affected given their vulnerable financial situation.  
14.25.   Given that the situation represented a serious threat to global macroeconomic stability and 
eroded competitiveness, affecting all countries that depended on international trade, Honduras 
hoped that all Members and relevant stakeholders could share information and exchange opinions 
about the limitations on import and export of goods due to those int erruptions and discuss measures 
to mitigate the impact of those interruptions.  
14.26.   The representative of Switzerland  thanked Mongolia for bringing that topical issue to the 
attention of the Council. He also expressed his thanks to the Secretariat for the excel lent and 
insightful presentation on the container shortage issue and its consequences on international trade. 
As highlighted in that presentation, the logistics sector, and in particular multimodal container trade, 
was currently facing important issues. Ac cording to the latest World Bank Trade Watch, global 
carrying capacity had recovered to pre -pandemic levels but could not seem to increase to match 
demand. Meanwhile, trade in goods had been 13% higher in July 2021 than two years earlier.  
14.27.   Switzerland agree d that the current container issue and the logistics sector deserved 
discussion in the WTO. Some of that conversation should take place in the CTS, some of it in more 
dedicated fora such as the Committee on Trade Facilitation where also regulators and indu stry 
associations could be associated to the discussion. There had already been good discussions the 
previous year within the CTS -SS on the need for GATS commitments related to the logistics sector. 
Switzerland was interested in pursuing that discussion an d in learning from the crisis.  
14.28.   The representative of the European Union  thanked Mongolia for its communication. She also 
expressed her appreciation to the Secretariat for the update on the developments on trade in 
services statistics and for having already  provided some data on the issues raised in Mongolia's 
communication.  
14.29.   The European Union was closely monitoring the development in the container shipping 
industry as well, and was aware that there had been large price increases in the container shipping 
sector over the course of the year on the routes to and from the European Union as well as in other 
parts of the world. In particular with respect to the large price increases and the related challenges 
in that sector, it had been noted that the causes of th e price hikes and issues at stake were diverse. 
In terms of the CTS role in that debate, the European Union would need more time to consult and 
study Mongolia's suggestion, including on the angle of trade in services in that issue.  
14.30.   The representative of Canada thanked Mongolia for its proposal. As other delegations had 
mentioned before, the proposal had been received after the circulation of the agenda, and therefore 
Canada was still in the process of analysing the proposal. It was also interesting to see t hat the 
presentation of the Secretariat was linked to certain issues in the paper and allowed a first update 
of the situation. Therefore, it would perhaps be of interest to further discuss the proposal mainly on 
the proposed scope, especially with a view t o considering to what extent it applied to the Council for 
Trade in Services.  
14.31.   The representative of Singapore  thanked Mongolia for its proposal. As other Members had 
mentioned earlier, Singapore was also taking time to review the proposal. As a trans -shipm ent hub S/C/M/147  
 
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  in Asia, Singapore was experiencing the effects of the container shortage most keenly. The waiting 
time for the ships visiting Singapore was currently five to seven days, up from two days previously, 
and the number of ships that stayed in Singapore  for more than two days had been 46 in January, 
which was 59% more than the same month a year earlier. Singapore was taking measures to 
mitigate the container shortage problem and would be happy to share more information in further 
discussions in the CTS.  
14.32.   The representative of Korea  thanked Mongolia for its proposal and statement. He also 
thanked the Secretariat for the update on the recent statistics on services trade. Korea was going 
to review the proposal on how the WTO could contribute to the solution t o that problem. Fortunately, 
according to the Secretariat, the PMI had eased recently, which would lead to an improvement of 
the situation of container shortages and price increases. An improvement of that issue would be 
expected.  
14.33.   The representative of South Africa  appreciated the communication from Mongolia and her 
delegation supported the proposal outlined in paragraphs 2.1.a and b of the submission. South Africa 
was particularly interested in undertaking work in relation to evaluating the impact of the s hortage 
on developing country freight and related services, especially on MSME's. Some of South Africa's 
key exports had been affected with exporters reporting that shipments that used to cost them around 
US$ 4,000 previously had suddenly increased to arou nd US$ 7,000 per unit.  
14.34.   South Africa understood from reports that most agents were prioritising exports over 
empties since it made more financial sense than carting away empty containers. At some African 
ports, the issue was one of space and a reduced numbe r of ships docking. Based on those preliminary 
reports suggesting different situational happenings, her delegation would not be in a position to 
support the suggestions in paragraphs 2.1.c and d of the submission at that time.  
14.35.   South Africa, however, was i nterested in working with other Members in developing 
recommendations for preventing and resolving similar situations in the future and exchanging ideas 
on how Members could cooperate or what cooperative action might be necessary to facilitate better 
circulation of containers. The representative also thanked the Secretariat for its complementary 
presentation preceding that item and looked forward to receiving further detailed research on that 
issue.  
14.36.   The Chairman  suggested that the Council take note of the s tatements made.  
14.37.   It was so agreed . 
14.38.   The meeting  was adjourned . 
__________