RESTRICTED  
  
S/C/W /370 /Rev.1  
 
17 February  2017 
(17-0979) Page: 1/5 
Council for Trade in Services  Original: English  
 
COMMUNICATION FROM HONG KONG, CHINA; JA PAN; REPUBLIC OF KOREA AND  
THE SEPARATE CUSTOMS  TERRITORY OF TAIWAN,  PENGHU, KINMEN AND M ATSU  
REVIEW O F ARTICLE II (MFN) EXEMPTIONS  
Questions from Hong Kong, China; Japan;  Republic of Korea and  
the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
Revision1  
The following communication, dated 17 February 2017, from the delegation s of Hong Kong, China; 
Japan; the Republic of Korea and the Separate Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu  is being circulated to the Members of the Council for Trade in Services.  
 
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Recalling t he MFN principle is the cornerstone of the WTO system , any MFN exemptions under 
Article II: 2 of the GATS, as the name implies, must be the exceptions, and s uch exemptions 
should not be maintained  for an indefinite period.  
 
In light of that, t he Annex on Article II Exemptions of the GATS mandates the Council for Trade in 
Services to review all exemptions granted for a period of more than five years and the rev iew 
shall, among others, examine whether the conditions which created the need for such exemptions 
still prevail.  
 
For the purpose of the review of the MFN exemptions by the Council for Trade in Services  in 
accordance with the Annex on Article II Exemption s of the GATS , we would request the Members 
concerned to provide answers to the  following questions in respect of their MFN exemptions.  
 
1  GENERAL QUESTIONS  
1.1.  For each of the MFN exemptions listed in the Secretariat ’s sectoral compilation 
(JOB/SERV/29 /Rev.1 ), we would appreciate  if all Members maintaining any MFN exemptions  would 
respond to the following general questions by the delegation of Hong Kong, China : 
Q1 Please indicate whether the exemption has been used for any actual measure since the 
previous revie w in 20 10/11, and if so provide information on the use.  
 
Q2  The intended duration for the following MFN exemptions has already expired or should  have 
expired.  Please advise if there is any plan to remove them from the MFN exemption list.  If not, 
please explain why these exemptions have to be maintained.  
 
                                                
1 This revision is only to add Japan, Republic of Korea and the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu as co-sponsors to the submission.  S/C/W/370/Rev.1  
 
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  Member  MFN Exemption  
(page number in JOB/SERV/29 /Rev.1 ) 
Cyprus  All sectors  (page 6) 
Thailand  Treaty of Amity and Economic Relations (page 34)  
Malaysia  Advertising services (page 51)  
Bangladesh  Telecommunication services – international services (page 
53, two entries)  
European Union  Financial services (page 113)  
Mauritius  Financial services (page 115)  
Cameroon  Maritime transport: coastal shipping (cabotage) trade  (page 
132) 
Congo  Maritime transpor t: coastal shipping (cabotage) trade  (page 
135) 
Côte d'Ivoire  Maritime transport: coastal shipping (cabotage) trade  (page 
137) 
Gabon  Maritime transport: coastal shipping (cabotage) trade (page 
138) 
Mali Maritime transport: coastal shipping (cabotage) tr ade (page 
140) 
Niger  Maritime transport: coastal shipping (cabotage) trade (page 
142) 
Senegal  Maritime transport: coastal shipping (cabotage) trade (page 
145) 
Thailand  International maritime transport of cargoes (page 149, three 
entries)  
Viet Nam  Maritime transport (page 154)  
Ukraine  Internal waterways transport - passenger  and freight 
transportation (page 158)  
Moldova, Republic of  Selling and marketing of air transport services (page 163)  
 
Q3  The following exemptions appear not MFN inconsistent, e. g. covered by GATS Article V 
exception, covered by general exceptions in GATS, outside the scope of GATS, etc.  Please explain 
the rationale for maintaining such an exemption.  
 
Member  MFN Exemption  
(page number in 
JOB/SERV/29 /Rev.1 ) Questions  
El Salvador  All sectors (page 9)  Is the concern already covered by  
GATS Article V exception?  
European Union  All sectors, 1st and 3rd entries 
(page  11) Work permit requirement alone 
should not constitute an MFN 
breach if it is simply an 
immigration measure.  Is ther e 
any other reason for the 
exemptio n? 
Guatemala  All sectors (page 13) and all sectors, 
entries No. 4 and No. 5 (page 14)  Is the concern already covered by 
GATS Article V ex ception?  
Honduras  All sectors (page 15)  Is the concern already covered by 
GATS Art icle V ex ception?  
Jamaica  All sectors (page 16)  Work permit requirement alone 
should not constitute an MFN 
breach if it is simply an 
immigration measure.  Is there 
any other reason for the 
exemption?  
Liechtenstein  All sectors (page 19)  Granting permit of  temporary stay 
and permanent residency alone 
should not constitute an MFN 
breach if it is simply an 
immigration measure.   Is there 
any other reason for the 
exemption?  S/C/W/370/Rev.1  
 
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  Member  MFN Exemption  
(page number in 
JOB/SERV/29 /Rev.1 ) Questions  
Switzerland  All sectors (page 31)  Granting permit of temporary stay 
and permanent resi dency alone 
should not constitute an MFN 
breach if it is simply an 
immigration measure.  Is there 
any other reason for the 
exemption?  
Georgia  Fishing related services (page 51)  Why fish catch is considered as 
services?   
Indonesia  Construction services ( government 
funded projects) (page 106)  Does the measure fall under 
government procurement?  
Cyprus  Human health services (page 125)  Is the concern already covered by 
general exceptions ? 
Canada  Air Transport - aircraft repair and 
maintenance services provi ded by 
service suppliers located outside of 
Canada (page 160)  Is the concern already covered by 
GATS general exceptions?  
 
 
2  SPECIFIC QUESTIONS ON HORIZONTAL EXEMPTIONS  
2.1.  Hong Kong, China would like to request the Members concerned respond to the following 
specific questions  (see JOB/SERV/29 /Rev.1 for the relevant page number reference ): 
Q4 Brunei Darussalam (page 3 , 1st entry ), Malaysia (page 22) :  Foreign  equity cap, which  
is usually applied on a non -discriminatory basis, is one of the very common trade barr iers.  In this 
regard, we would like to know the reason for applying discriminatory treatment.  Please illustrate, 
with examples of existing measures, how those discriminatory measures could achieve the policy 
goal of match ing specific development requirem ents with the abilities and facilities provided by 
foreign enterprises and their home countries  and maximis ing economic benefits of foreign 
participation in your economy .  In particular, w e note that in the last review Malaysia stated that it 
had not taken  any discriminatory measures against any Member under this exemption.  On this 
basis, we would like to know whether this exemption is necessary and if Malaysia would consider 
removing this exemption.  
 
3  SPECIFIC QUESTIONS ON SECTOR AL EXEMPTIONS  
3.1.   Furthermore,  we would appreciate the Members concerned  could respond to the following 
specific questions  (see JOB/SERV/29 /Rev.1 for the relevant page number reference ): 
Business Services  
Q5 Costa Rica  (page 45):  How this reciprocal arrangement  could ensure the minim um 
standards of quality for professional services?  Did Costa Rica conduct any review on the 
effectiveness of this reciprocal arrangement?  
 
Q6 New Zealand  (page 51):  Other than Japan, which countries are currently covered under 
such arrangement?  What con ditions will New Zealand take into account when giving more 
favourable entry to nationals of any countries?  
 
Telecommunication Services  
Q7 Argentina (page 53):  Having regard to the development of the telecommunications 
market in the past decade, please ad vise whether the condition for this exemption (i.e. 
development of domestic satellite systems) is still valid.  If so, did Argentina conduct any review 
on the effectiveness of the reciprocity arrangement in the development of domestic  satellite 
systems?  A re there any other factors that would be more effective in promoting the development 
of domestic  satellite systems?  S/C/W/370/Rev.1  
 
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Q8 Colombia (page 54):  In the past twenty years, progressive liberalisation has taken place 
in the telecommunications sector all over the world.  Such liberalisation has delivered tremendous 
benefits to businesses and consumers.  In this regard, did Colombia conduct any review to 
evaluate whether such preferential treatment limited to Andean Group countries was beneficial  to 
Colombia ’s econo my?  Would Colombia consider extending the treatment to all WTO Members?  
 
Financial  Services  
Q9 Austria (page 108) : Please provide a list of countries to which this exemption is applied.  
Is this list subject to periodic review?  If so, what kind of assess ment has been taken to determine 
the countries on the list are not offering competitive opportunities and effective market access to 
Austrian service suppliers?  
 
Q10 Hungary (page 113) : Please provide a list of countries that are currently not eligible  for or 
denied MFN treatment as a result of the measure under this exemption.  What kind of assessment 
has been taken to determine which countries are not offering equal market access possibilities to 
Hungarian service providers?  
 
Q11 Israel (page 114) : Please  provide a list of countries that are currently not eligible  for or 
denied MFN treatment as a result of the measure under this exemption.  What kind of assessment 
has been taken to determine which countries are not offering equal market access possibilitie s to 
Israeli banks?  
 
Q12 Peru (page 117) : Please elaborate, with existing measure and example, the meaning of 
national or public interest covered by this exemption.  
 
Q13 Philippines (page 117, all the three entries) : Please provide a list of countries tha t are 
currently not eligible  for or denied MFN treatment as a result of the measures under the three 
exemptions.  Regarding the condition for the creation of the exemptions, does “full market access 
and national treatment ” refer to other Members ’ GATS comm itments or their de facto regimes?  
 
Q14 Slovak Republic (page 120) : Please provide a list of countries that are currently not 
eligible  for or denied MFN treatment as a result of the measures under this exemption.  What kind 
of assessment has been taken to determine which countries are not offering equal market access 
possibilities to Slovak service providers?  
 
Maritime Transport Services  
Q15 Brazil (page 131): Please provide an update on the list of countries that Brazil  has cargo 
sharing agreements with.   
 
Q16 Bulgaria (page 131): What kind of preferential treatment is awarded to countries which 
are parties to the UN Convention on a Code of Conduct on Liner Conference?  Is such preferential 
treatment stipulated  in the Convention, or in the laws of Bulgari a?  Regarding the cargo sharing 
agreements, could Bulgaria provide an update on the list of countries that it has cargo sharing 
agreements with?   
 
Q17 India (page 140, 2nd entry): We note that in its revised conditional offer India has 
offered to terminat e this MFN exemption  and India has indicated in the last review that the 
removal of this exemption was subject to the result of the DDA negotiations .  Does India still 
maintain any cargo reservation with any country under this exemption?  
 
Q18 Philippines ( page 143, 2nd entry): Please provide information on the existing bilateral 
agreements covered by this exemption, the countries to which  these bilateral agreements appl y, 
and the expiry date of each of these agreements.  Please also elaborate on the meaning  of "limited 
access " in the second column.  
 S/C/W/370/Rev.1  
 
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  Q19 Singapore (page 147): It is noted that Singapore will periodically review this exemption in 
the light of international developments.  Would Singapore please provide information about the 
latest review , inclu ding the timing of the review, the criteria used,  and the results?   We would also 
like to know if there are other bilateral shipping agreements signed since the last review.  Please 
provide details if there is any.  
 
Q20 Thailand (page 148) : In the last rev iew, Thailand indicated that the measure relating to 
VAT collection on the selling and marketing of maritime transport services had been modified and 
it was no longer inconsistent with the MFN obligation in GATS.  In this regard, we would like to 
know if T hailand has any plan to remove this exemption.  
 
Road Transport Services  
Q21 US (page 196): Do the conditions  for the need of this exemption  still valid?  If so, please 
illustrate the rationale behind.    
 
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