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21 November  2016 
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Committee on Specific Commitments    
 
 REPORT OF THE MEETIN G HELD ON 5 OCTOBER  2016 
NOTE BY THE SECRETARIAT1 
The Committee on Specific Commitments (CSC) held a meeting on 5 October  2016 chaired by 
Mr. Changtian Han from China . The agenda for the meeting, contained in WTO/AIR /CSC/6, was 
adopted . 
 
1  ITEM A - SCHEDULING  ISSUES  
1.1.  The Chair man recalled that a proposal from the delegation of Turkey (contained in document 
JOB/SERV/224, dated 29 February 2016) had previously been  submitted to the Committee under 
this item, which was aimed at reviving the Co mmittee's discussion on economic needs tests 
(ENTs).  Noting problems arising from vague and ambiguous ENT entries in Members' schedules, 
Turkey had proposed further work in the Committee, including: (1) an update of the Secretariat’s 
Note on ENTs by examin ing the schedules of new Members and revised offers; (2)  a review of 
Members’ ENT entries in FTAs with a view to developing an acceptable definition and scheduling 
method of ENTs; (3) an exchange of information by Members on ENT requirements specified in 
their legislation and de facto  application of ENTs, on a voluntary basis; (4) identification of 
common elements in criteria for ENTs by mode and sector . 
1.2.  The Committee had only agreed to task the Secretariat to update its Note on ENTs by 
examining the schedu les of newly acceded Members.  Accordingly, the Secretariat had issued the 
second addendum to its Note on ENTs , which was contain ed in document S/CSS/W /118/Add.2 and 
had been  presented at the Committee's last meeting. In the follow -up discussions, it had be en 
recognized that the new addendum to the Secretariat's Note had strengthened the need for further 
work on ENTs , as i t had shown that not only ha d the total number of scheduled ENTs increased, 
but also that ambiguous and unspecified ENT entries continue d to be a problem . Nevertheless, 
there had been  no agreement on how the Committee should proceed with Turkey's other 
proposals . 
1.3.  The Chairman  noted that d uring his consultations, delegations had reiterated their general 
support for further work on ENTs. He ur ged Members to make concrete progress at this meeting . 
In addition to ENTs, he had  consulted with Mem bers on other scheduling issues as reflected  in the 
Annotated Agenda. He noted  some positive feedbacks, including indications of interest in work on 
some s pecific issues, such as localization requirements.  
1.4.  The representative of Ecuador  referred to the document submitted by the delegation of 
Turkey and the documents provided by the Secretariat with respect to  ENT entrie s in Members' 
schedules in different mod es of supply and sectors. The fact that the ENT application criteria were 
not clearly defined in most cases  led to ambiguity and uncertainty of commitments . ENTs were 
mentioned i n GATS Article XVI as a form of limitation on market access , but the GATS was silent 
about the definition of ENT and its application criteria . The main problem was how to reduce the 
degree of subjectivity of ENTs. From various analyses previously made, it could  be concluded that 
ENTs constituted a major barrier  to services trade , particularly to mode 4 . The application of ENTs 
by Members , without clear definitions, parameters or application procedures , would  affect trade in 
services. Ecuador therefore suggested  that, complementary to the documents previously prepared , 
the S ecretariat  conduct  an analysis of the degree of ENT's restrictive effects  on market access, 
                                                
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/CSC/M/7 7 
 
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  based on the guidelines provided  by the UN M anual on Statistics of International Trade in Services, 
taking into account  implications for each  mode of supply . Built upon the a nalysis of the 
Secretariat, certain guidelines, criteria, definitions or procedures on ENTs might  be established at 
the multilateral level and, if applicable, for each mode of supply. This suggestion was made  for the 
sole purpose of moving forward the work on ENTs .  
1.5.  The representative of China  noted that t he issues and proposals raised by Turkey  were worth 
further consideration. C learer and more commonly accepted criteria for ENTs could increase the 
transparency and legal clarity of Members’ commitments and  help reduce ambiguous scheduling 
practices. There  might be a need to come back to this topic with more in -depth discussion after a 
substantial information -sharing exer cise. 
1.6.  The representative of the European Union  reiterated his delegation's support for f urther work 
on ENTs. Seeking clarification again on Turkey's  proposal for the Secretariat to examine ENTs in 
FTAs, he was open to a Member -driven process proposed for the exchange of information with 
respect to domestic practice on ENTs. Referring to the p roposal by Ecuador, he thought that 
quantifying the level of restrictiveness of existing ENTs went beyond the issue of scheduling and 
was not within the scope of discussion under this item. I n general , his delegation  was interested in 
more discussions  on scheduling issues, which should be the main work of the  Committee in the 
future. His delegation  was reflecting internally on topic s to be prioritize d and some domestic 
consultations  were on -going .   
1.7.  Reiterating her delegation's support for work on ENTs, t he representative of India endors ed 
Turkey's proposal for the Secretariat to analyse ENTs in FTAs and offers . More time was probably 
needed to specify what was expected from the analysis, but this was a  worthwhile exercise. India 
would support any future wor k in this area.  
1.8.  The representative of Ecuador  explained that his delegation's proposal was to request the 
Secretariat to undertake an analysis of levels of restriction on market access represented by ENTs. 
For this purpose, it would be useful to take guid ance from the Manual on Statistics of International 
Trade in Services.  This document had been  edited by the Statistics Division within the Economic 
and Social Affairs Department  in February 2010 and adopted by the UN Statistics Commission at 
its 41st perio dic session . The Manual set out an  internationally agreed framework for the 
compilation and submission of statistics for international trade in services , which would contribute 
to facilitating services trade negotiations. S even organisations and agencies had participated in 
revising  the Manual , including  the WTO, IMF, UNCTAD, OCDE, and Eurostat . Ecuador felt that  this 
document would  be useful  for the  Committee  to continue with its work .  
1.9.  The representative of Canada  reiterated his delegation's interest in t he Turkish proposal. In 
general, Canada was willing to engage in the discussion on scheduling issues which could be a 
useful focus for the Committee. He stressed that the Committee's work should be member -driven. 
Noting general support for the Turkish prop osal, he urged Members to engage in substantive 
discussions. Members could start with  sharing their experience  on ENTs if they felt comfortable 
with this. Reacting to the proposal from Ecuador, he shared the view of the EU that an econ omic 
study on the imp act of ENTs  went beyond the issue of scheduling.   
1.10.   The representative of Australia  stated that her delegation had expressed strong support for 
work on ENTs since th e proposal had initially been tabled. I nterested in all of the ideas raised in 
the Turkish pr oposal , Australia wished to see  them turned into something concrete. For Australia , 
the next step could be an exchange of information between Members on their experience in 
scheduling ENTs .   
1.11.   The representative of Singapore  noted that the list of examples regarding scheduling 
practices arising from the Chairman's  consultations provide d a good direction for Members  to 
continue discussion. Singapore was interested in further work on scheduling issues . For example , it 
would be interesting to hear Members' view s about  references to laws and regulations of general 
application in a schedule.   
1.12.   The representative of Seychelles  stated that her delegation support ed Turkey's proposal and 
further discuss ion on scheduling and exchange of information  with respect to ENTs .  As one of the S/CSC/M/7 7 
 
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  Members  who ha d entered ENTs in their schedule s with clear criteria , Seychelles was interested  to 
know how other Members  scheduled  ENTs.   
1.13.   The representative of the United States  questioned the purpose of discussion in the 
Committee in the  absence of actual market access negotiations. Regarding Turkey's proposal, he 
indicated that no answer was given to the questions his delegation had previously raised, such as 
where the work  was heading,  what specificity could be added to what the Secreta riat was being 
asked to produce, and what was the problem to be addressed. Noting no progress on Turkey's 
proposal, he thought that this might be due to lack of clarity. He therefore sought specificity and 
clarity again from Turkey on its proposal. On Ecua dor's proposal, h e shared the concerns 
expressed by other delegations .  
1.14.   The representative of Turkey  recalled that his delegation had submitted its paper on ENTs 
during the March cluster of 2016, hoping for a lively debate on how Members could ad dress the 
problem. It had  been acknowledged that ENTs had been scheduled in an ambiguo us manner. L ack 
of clarity and precise criteria for application  create d chilling effect s on service suppliers. Ambiguous 
ENTs also breach ed one of the fundamental principles of the GATS , which was transparency.  ENTs 
allowed for discrimination and arbitrariness in the market and made it difficult to assess 
compliance with commitments. While  it was recognized that  ENTs in Members' schedules were 
problematic, the discussion in the Committee as to how to address this problem  had been 
insufficient.  His delegation's  paper on ENTs aim ed to foster discussion in this respect  with a view 
to exploit ing Members' experiences. Turkey  thus had made  four proposals in its paper  as noted by 
the Chai rman in his introductory remarks . The Secretariat fulfilled the first proposal by circulating 
an addendum to its Note which covered  ENT entries in newly acceded Members' schedules. T here 
was no consensus on other pr oposals for the Secretariat to undertake relevant studies . He 
believed that  the proposed studies  would help Members have a better knowledge of  the magnitude  
and nature of the problem  and find possible solutions to  it.  He welcome d Members' willingness to 
share their experience on ENTs. Taking  note of the questions raised, his delegation  would  provide 
more details at the next meeting .  
1.15.   The representative of the Secretariat  shared the concerns expressed about Ecuador's 
proposal which seemed to be an exercise of analysing the cause - effect relations hip between ENTs 
requirements and the degree of their restrictiveness in services market . The Secretariat might not 
be in a position to conduct such analysis due to lack of information. The problem with ENTs was  
that relevant entries  without the applicatio n criteria did not provide any certainty to commitments .  
This was a scheduling issue , while  an economic analysis of the effect  of ENTs was a different  
matter. Even from a methodological point of view , it would be  difficult to analyse  the impact of a 
measu re when  the definition of the measure  was ambigu ous.  
1.16.   The representative of Ecuador  explained that the purpose of his delegation's proposal was to 
move forward  the discussion on ENTs  as there was no analysis on the ir restricti ve impact on 
services market . He expressed thank s for the comments made by other delegations and would 
report them back to the capital. His delegation was open to further discussions.    
1.17.   The Chairman  noted the general willingness to continue the discussion on ENTs  and other 
scheduling i ssues. H e would continue with his  consultations on how to proceed with Turkey's 
proposals  as well as the work on other scheduling issues . He then suggested that the Committee 
take note of the statements made and revert to this item at its next meeting.  
1.18.   It was so agreed .  
2   ITEM B - CLASSIFICATION  ISSUES  
2.1.  The Chairman recalled  that there had been  no substantive discussion on any specific 
classification issues at the last meeting , though some Member s had continued to express general 
interest in further discussi on in this regard . He had held consultations on possible future work 
under this item. Questions subject to consultations included: whether it was desirable for the 
Committee to examine the correspondence between W/120 which was based on the CPC 
Provisional , on the one hand,  and the CPC version 2.1 , on the other hand ; whether it was worth 
giving a closer look at some outstanding issues, in particular the classification of services involved S/CSC/M/7 7 
 
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  in e-commerce , as well as services related to environmental goods, which were not easily 
identified in the current classification system.  
2.2.  The representative of China  noted that the sectoral classification applied in  the schedules of 
specific commitments of WTO Members, i.e. W/120 and the Provisional CPC, was developed more 
than 20 years ago. Subsequent  evolution of services industries and market reality need ed to be 
reflected properly in a classification system  serving future negotiations , if there was to be one . 
Therefore, without prejudice to the legal certainty of existin g commitments, the Committee  should  
continue the technical discussion  on classification issues . An issue of interest  for China was n ew 
services . In China's  view, cloud computing and social networking services f ell into the category of 
new services as they could  not be captured  properly by any service sector in the provisional CPC, 
nor could  they fit neatly in the current WTO classification system. For example, given that  public 
cloud services normally include d IaaS (Infrastructure as a service), PaaS (Platf orm as a Service) 
and SaaS (Software as a Service), different type s of cloud services should  be classified  on a case -
by-case basis, as opposed to the practice of treating the whole set of cloud services as computer -
related services. China  suggested that  Members  exchange information  on their regulation and 
classification  practices  with respect to  the above mentioned services  and that the Secretariat 
compile such information  and assist  Members in relevant analysis . 
2.3.  Referring to the questions raised by the Cha irman in consultations, the representative of 
Australia  stated that her delegation continued to have interest in discussions on scheduling and 
classification issues. However, discussions had proved most productive when they could support or 
fit into active  negotiations.  Noting that there was a growing services agenda where a lot of 
interesting ideas were currently under discussion, Australia believed that, as these ideas were 
further developed in other bodies, they could be of value in complementary discuss ions in the CSC. 
Example s could include discussion  on ICT related classification issues as the shape of the e -
commerce agenda became clearer or discussion on the scheduling of localisation measures as part 
of any discussions on trade facilitation under mode 1. The Committee could also pick up any issues 
related to MFN exemptions resulting from the current MFN exemption review once it was 
concluded.  Open to suggestions from other Members, Australia would continue to consider what 
discussions might be most us eful in the context of a broader services agenda . 
2.4.  Regarding  the suggestion raised by China, more information was needed as to how the 
suggested work  could build  on previous discussions in the CSC.  Recent discussions on new services 
had been  very useful and  thorough , but Australia consider ed that th e topic ha d been exhausted.  
Australia dis agree d with China's presumption that those discussions had drawn any conclusions 
linking cloud computing to new services.  In Austra lia's view, cloud computing fit  very wel l within 
the existing classifica tion under the GATS.  Australia was willing  to have a further discussion or 
exchange of information on the classification of cloud computing and computer related services if it 
was clear that this would  build on previous wor k without repeat ing the previous discussions  in this 
Committee.   
2.5.  The representative of Canada  echoed Australia's intervention. He added that a negative list 
approach to scheduling would obviate a need to debate on new services and improve the quality of 
commitments.  
2.6.  The representative of the European Union  sought clarification from China on the objective of 
the suggested discussion. He recalled previous discussions in the Committee on new services, 
including the presentation by the UN statistical officer  about the exhaustiveness of CPC . He 
disagree d with the interpretation that cloud computing was not covered  by the existing 
classification.  For the European Union,  cloud computing was comput er related services .  
2.7.  The representative of the United States  echoe d the previous interventions,  reiterat ing that 
the discussion on new services had been exhausted  and that the negative list approach would be 
beneficial in this area .  
2.8.  The representative of China  stressed again that  W/120 and the provisional CPC had been 
developed more than 20 years ago and that classification should  respond to the evol ution o f the 
services industry. What his delegation had suggested was  an exchange of information on a 
voluntary basis, which  could be done in an informal mode  if Members pref erred to do so.   S/CSC/M/7 7 
 
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  2.9.  The representative of the Secretariat  recalled that previous discussion s in the Committee had 
covered cloud computing, though they  might not be conclusive and had not resulted in any 
convergence. Previous discussions had been centred on w hether new technologies necessarily 
created new services and whether certain services were genuinely new or simply supplied through 
new means of delivery. These issues had also been addressed in a number of services related 
disputes. If requested, the Secr etariat could provide references to relevant documents.   
2.10.   The Chairman noted that divergence remained on whether the consideration  of new services 
should continue. He also noted interest in having discussions on  some specific classification issues . 
He ther efore urged Members to come up with concrete contribution s in this regard. He then 
suggested  that the Committee  take note of the statement s made and revert to this item at the 
next meeting .  
2.11.   It was so agreed .  
3   ITEM C – FUTURE WORK AND TIMI NG OF THE NEXT M EETING  
3.1.  The Chairman  suggested that he would hold consultations on the timing of the next meeting 
and inform Members of that in due course.  
3.2.  It was so agreed . 
4  ITEM D - OTHER BUSINESS  
4.1.  No delegation made interventions under this item. The Chairman adjourned  the meeting .  
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