WORLD TRADE  
ORGANIZATION  RESTRICTED 
S/C/M/110 
27 August 2012 
 (12-4630) 
Council for Trade in Services  
  
 
REPORT OF THE MEETING HELD ON 29 JUNE 2012 
 
Note by the Secretariat
1 
  
1. On 29 June 2012, the Council for Trade in Serv ices held a meeting under the Chairmanship of 
Ambassador Reiter (Sweden).  The agenda  was contained in document WTO/AIR/3965. 
2. The representative of Australia said that her delegation wished to add an item of Other 
Business concerning the entry into forc e of the certified EC-25 schedule.  
3. Also under Other Business, the representative of I ndia indicated that his delegation wished to 
add an item on Members' requests tasking the WTO Secretariat with the preparation of background 
Notes. 
4. The representative of the United States said that , under Other Business, his delegation wished 
to make a brief statement, for transparency  purposes, regarding discussions amongst a group of 
Members on how to move services liberalization forward. 
5. The agenda was adopted, as modified. 
A. NOTIFICATIONS PURSUANT TO ARTICLES III:3  AND V:7 OF THE GATS 
6. Starting with the notifications made pursuant to  GATS Article III:3, the Chairman drew the 
Council's attention to the communications receive d from Albania in documents S/C/N/623 to 641. 
7. The Council took note of the notifications made. 
8. Turning to the notifications made pursuant to  Article V:7, the Chairman pointed to the 
communications received from:  China and Hong Kong, China (S/C/N/264/Add.5);  China and 
Macao, China (S/C/N/265/Add.5);  the Republic of Korea and the United States (S/C/N/621);  Chile 
and Guatemala (S/C/N/622);  Peru and Panama  (S/C/N/642 and Rev.1);  Australia, Brunei 
Darussalam, Cambodia, Indonesia, Malaysia, Myan mar, New Zealand, the Philippines, Singapore, 
Thailand and Viet Nam (S/C/N/545/Add.1);  and Colombia and the United States (S/C/N/643). 
9. The representative of India indicated that the United States-Colombia and United States-
Korea agreements were structured in an unfamiliar  way.  As his delegation was still examining the 
text of the agreements, he reserved the right to reve rt with more detailed comments at a later stage.  
However, by way of preliminary qu estions, he sought clarification on two points.  First, certain GATS 
concepts, such as national treatment, MFN and cross- border supply, appeared to have been defined 
differently in the PTAs.  For ex ample, in Chapter 12 of the Un ited States-Korea PTA and Chapter 11 
of the United States-Colombia PTA, national treat ment and MFN seemed to cover only service 
suppliers, rather than also services as in the GATS.   Similarly, the definition of cross-border supply 
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. S/C/M/110 
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  appeared to differ from that in the GATS.  While I ndia was fully aware that there was no obligation to 
follow GATS definitions in PTAs, it would welcome an  explanation of the reasons and implications 
of such changes.  Second, clarification was s ought on how the PTAs proposed to liberalize mode 4 
services trade, with an indication of which were  the relevant provisions in the agreements. 
10. The representative of the United States said that, given that he did not have at hand the text of 
the PTAs, he could only provide partial responses, but stood ready to continue discussions.  Over the 
previous 15 years, the United States had conclude d PTAs that adopted different language from that 
used in the GATS, as, at that particular time, it had found it more appropriate or effective for the 
purpose being pursued.  It might nevertheless be help ful to discuss these definitions further, although 
he believed that the WTO had already given so me consideration to the concept of "like 
circumstances" versus "like services and service suppliers", on the basis of Secretariat papers.  With 
regard to mode 4, the PTAs did include this mode  of supply.  The United States had excluded specific 
immigration measures in its PTAs, but the obligati ons of the agreements applied to mode 4 trade 
across all sectors on a negative list basis.  There was a pretty broad coverage of mode 4 in the PTAs, 
particularly with regard to the national treatment that natural persons received in the United States.  
His delegation would be happy to follow up on these or any other questions Members might have.  
11. The representative of Colombia said that the ques tions raised by India were interesting and 
his delegation would welcome receiv ing them in writing so as to provide more complete answers.  
The representative of the Republic of Korea echoed Colombia's statement. 
12. The representative of India said that his de legation looked forward to receiving detailed 
responses from the Members concerned.  As request ed, India's questions wo uld be circulated in 
writing.  His delegation was ready to continue disc ussing, including on a bilateral basis, and asked 
that the issue remain on the Council's agenda. 
13. The Chairman said that the Council would revert to  India's questions at its next meeting.  He 
also proposed that the Council take note of the notif ications made and refer th e agreements notified to 
the Committee on Regional Trade Agreements for consideration.   
14. It was so agreed. 
B. SECTORAL AND MODAL DISCUSSIONS  
15. The Chairman recalled that recent deliberations had focused on the role of SMEs in services 
trade.  At its previous meeting, the Council ha d discussed a communication on the issue submitted by 
delegation of Switzerland, titled "The services sect or, small and medium-sized enterprises and their 
activities related to electronic commerce: the case of Switzerland" (document S/C/W/345).  Many 
Members had expressed the view that the Swiss communication was also pertinent to discussions 
under the Work Programme on Electronic Commerce.  Thus, he suggested that the Council do not confine its deliberations on the Swiss communicati on to that agenda item.  Rather, delegations 
wishing to focus on issues that were more specifi c to e-commerce could intervene also under the item 
dealing with the E-commerce Work Programme.   
16. It was so agreed. 
17. The representative of Switzerland indicated that, in its communication in document 
S/C/W/345, his delegation had compiled the results of  studies on the obstacles faced, in particular by 
SMEs, when it came to e-commerce.   On the basis of a fairly significant amount of studies, his 
delegation had selected the informa tion most relevant to cross-border trade.  This had pointed to 
typical obstacles, faced regardless of the sector of activity and the enterprise's place in the production 
chain (e.g. whether selling directly or operating at the wholesale distribution level): clearly no two  S/C/M/110 
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  countries were the same, and the bigger the geographical  distance, the more obstacles might be faced.  
The obstacles identified, set out in paragraph 12, could serve as a basis for future work.  E-commerce 
was becoming increasingly important, and SMEs accounted for the greatest share of domestic economies in terms of numbers, employment-cr eation and on account of their dynamism.   
18. With regard to the Chairman's proposal, he c oncurred that Switzerland's submission contained 
cross-cutting considerations relevant to the di scussions on e-commerce and favoured organising the 
Council's work as suggested.  Indeed, he clarif ied that the studies reviewed in the Swiss 
communication covered the Swiss economy as a whole and all SMEs, regardless of their sector of activity.   
19. The Chairman said that the Council would take no te of the statements made and might revert, 
as appropriate, to this item at its next meeting. 
20. It was so agreed. 
C. SERVICES DATABASE - PRESENTATION BY THE WORLD BANK 
21. The Chairman recalled that, as indicated in th e communication faxed to all delegations on 
11 May 2012, the Secretariat had been informed, th rough its counterparts in the World Bank, that the 
latter had completed and made publ icly available its work on a services database.  In various 
discussions in the Council, Members had expressed an in terest in exploring ways  to improve data and 
enhance transparency on trade in services.  Against this background, it had been suggested that the 
World Bank, being a permanent observer to the Counc il for Trade in Services, be invited to make a 
presentation of its database to the Council.  As no objections had been raised, an invitation had been 
extended to the World Bank to present its work.   
22. The representative of the World Bank, Mr Aaditya Mattoo, said that the work he was about to 
present had been co-authored with Mr Ingo Borchert  and Ms Batshur Gootiz.  He stressed that the 
database was a first step, a research project, rather th an an institutional product.   It had been delayed 
in the hope of creating a perfect product, but it had since become evident that  it was preferable to 
release it as "work in progress" and get feedback and reactions.  It was meant as a collectively created 
public good, rather than a definitive pronouncement on policy by one set of individuals or institution.  
It was intended as the beginning of a conversation about a set of policies that mattered profoundly for 
development, but about which very little inform ation had been available up to that point. 
23. He would focus on four elements:  the main features of the database; some emerging policy 
patterns; initial research on policy patterns that matte red for development, and particularly regarding 
trade costs, foreign investment, performance of  manufacturing and, perhaps most importantly, access 
to services; and a somewhat adventurous comparison of the GATS commitments made in the 
Uruguay Round, and the DDA offers, with actual ser vices policy.  The latter comparison, which had 
not been possible until then, was one of the ma in advantages that the database offered.  
24. Services mattered profoundly for economic output, employment and, increasingly, 
international transactions.  Nonetheless, very lim ited information was available on actual services 
policy.  The database was a first step to try to fill th is gap.  It potentially had three uses:  informing 
national policy reform by making possible more rigorous analysis of services policies and their consequences; facilitating and lendi ng a sharper edge to interna tional negotiations on trade in 
services; and, perhaps most ambitiously and least adequately at that stage, becoming a first stop for business, a knowledge-resource about conditions of access to different markets.   In this sense, the 
database's biggest pay-off was to countries that were not equipped to collect this information 
themselves.  Some of the better-endowed, richer  countries already produced their own reports on 
services trade policies in other countries.  The real incremental value of the database was for countries 
without the resources for such elaborate data-collection exercises. S/C/M/110 
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  25. The database currently covered 103 countries, 79 of which were developing countries.  It was 
thus ambitious in scope.  Other efforts were underw ay on collecting similar data at the OECD. They 
were more ambitious in detail, they were more li mited in coverage.  The Bank's database represented 
the first attempt to try and get a global picture of services policy.   
26. In terms of sectors and modes, the data base covered banking (lending and deposit 
acceptance), insurance (automobile insurance, life insurance and re-insurance), telecom (fixed-line 
and mobile), retail distribution, transport and a number of professional services (accounting, auditing 
and legal services).  In every one of those sectors, the focus was on mode 3, but mode 1 was also included where it was most relevant, for example in areas like transport and financial services, and mode 4 was also covered for professional services.   
27. Two areas were regrettably not part of the database.  One was a fuller coverage of the 
mobility of providers of unskilled labour services, for example in areas like construction services.  
This was because data had been collected though la w firms hired in individual countries, and it had 
proven extremely difficult to get a good picture of  immigration policy affecting relatively unskilled 
people.  Nonetheless, it remained a priority going forward, especially because it was an important area 
of export interest to developing countries.  The seco nd were digitally-provided services, i.e. the whole 
outsourcing phenomenon.  This area was not covered for the opposite reason, as, for the most part, 
business process outsourcing services were not affected by explicit restrictions.  Yet again, it remained an area for future consideration, give n the importance of domestic  regulations affecting 
trade in those services.  
28. In terms of policy coverage, the database focu sed primarily on policies which affected the 
ability of foreign services and service providers to enter and be provided in the domestic market.  It 
considered barriers to foreign entry and ownershi p, as well as restrictions on operations and some 
limited aspects of the regulatory environment that str ongly affected trade in services.  With regard to 
licensing requirements, as these affected both entry and operations, a particular effort had been made 
to try and get as much information as possible.  Across almost all service sectors, the conditions of 
entry and operation were profoundly affected by the licensing regime.  At that stage, the focus was on 
discriminatory measures.  But there was also an e ffort, especially in professional services, to collect 
information on measures such as education or qualifi cation requirements which, at face value, were 
non-discriminatory but could have a strong effect on the ability of foreign service providers to contest 
national markets.   
29. Information had been gathered by developing a very detailed questionnaire and working with 
local law firms tasked with filling it in.  A su mmary of the information collected was sent for 
comment to all relevant WTO dele gations.  About half of the Members surveyed sent feedback, which 
was very valuable.  The other half did not.  Indeed , one of the reasons for presenting the database in 
the WTO was that it was not set in stone.  It was al most like a "Wiki" database, to be looked at and 
reassessed constantly, in light of any f eedback on the information it contained. 
30. There were elements that the database did no t cover.  First, while it described policies 
affecting entry and operation, it did not contain data on market structure, such as the number of foreign firms already present and their share of the ma rket.  By way of example, in financial services 
Malaysia had already allowed the establishment of foreign providers with almost full ownership and 
extensive branching rights, which implied a high degree of foreign competition.  However, the 
conditions of entry for new entrants were somewhat more restrictive.  So while market structure was 
not part of the picture at that stage, the contestab ility of the market, in terms of the conditions facing 
entry for new providers, was accounted for. 
31. Second, services outcomes depended not just on explicit barriers, but also on the state of 
regulation, be it prudential regulation in areas like professional services or financial services, or pro- S/C/M/110 
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  competitive regulation in areas like telecommunications  and transport.  However, those regulatory 
measures were only inadequately covered in the datab ase.  It was very difficult to have hard data on 
the quality of such regulation.  Th at had two implications.  First, the database only captured explicit 
discrimination, and the restrictive effects of do mestic regulation were ignored.  Second, and of 
profound importance, it was not possible to see how th e consequences of liberalization, in the sense of 
eliminating discrimination, depended on the state of  complementary regulation.  Taking the example 
of financial services in Zambia, to say that Za mbia was open said nothing about the quality of 
prudential regulation for banks and insurance compani es in Zambia.  That meant that one could not, 
and should not, conclude that if Zambia liber alized, some positive consequences would necessarily 
follow.  The consequences of liberalization depend ed on the state of regulation, on which not enough 
information was available.  It was thus not possi ble to state that having a low score on the Bank's 
index was necessarily good, as a low score coupled with  weak regulation could lead to an undesirable 
outcome.  The scores only presented a partial pict ure, both in a positive sense of the universe of 
policies, and in a nominative or prescriptive sense.  At that stage, the database also had limited 
information on implementation of policies.  Taking the case of licensing, in some cases a licensing 
requirement might be automatic and not imply any additional barriers to entry, but in other cases it 
might become a way of restricting entry and discriminating.  Trying to sift the automatic prudential licensing from the protectionist discriminatory li censing was extremely difficult and an area where 
more work was needed.  
32. Third, no good data was available on outcomes,  such as prices, quality or diversity of 
services.  The best way of measuring the restrictiv e impact of services policies was by seeing how 
they affected such outcomes.  The absence of th at kind of information severely limited the ability of 
measuring credibly and rigorously the r estrictive effect of services policies.   
33. Although the real value of the database was in the richness of the policy texture, it had also 
been used to get some crude measures of how r estrictive policies were.  This enabled rigorous 
statistical and econometrical analysis and helped dr aw some lessons about broader patterns of policy.  
If the data had been left in a textual form and not  quantified, it would not have been amenable to 
analysis.  There were many different ways to do such  a quantification.  In the database, the simplest 
and most transparent had been chosen.  Was the re gime in question completely closed to foreign 
entry, or was it completely open?  For those two extremes, there could be no argument of 
quantification.  Was it virtually closed, meaning that in principle foreign entry was allowed but 
subject to huge restrictions?  Or was it virtually open, meaning that almost no restrictions existed, 
apart from some nominal requirements which were nevertheless barriers?  These were the four 
judgement categories.  Anything that did not fit into these went into a middle, large category, which implied that there were significant restrictions but  they fell in-between, the regime being neither 
virtually open nor virtually closed.  By way of a little experiment, the database had been presented the 
previous day in UNCTAD to a group of 10-12 ser vices experts from very different countries and the 
disagreements that had emerged were marginal. As Paul Krugman had said, it was sometimes better to 
be roughly right than precisely wrong.  More sophisti cated methods existed, of course.  Ideally, one 
would measure restrictiveness by seeing how much it a ffected outcomes that mattered, such as foreign 
investment flows, the price of services, or access to services.  He would later provide an example of such complex methods, and then compare them with  the one chosen, to see how the latter fared.  
34. Turning specifically to the application,  the database could be accessed by typing 
"iresearch.worldbank.org/servicestrade".  The initial pa ge had four menus.  The first one explained the 
main features of the database.  The last one begged for feedback, which Mr Mattoo elicited.  
"Research and analysis" provided links to some in itial papers produced, a very  detailed guide to the 
database, as well as a note providing an overview of  initial results.  The most important part of the 
database could be found under "access the data" menu.  The relevant page enabled a selection of the 
"sector", the "mode of delivery" and the "countri es and regions".  The "key restrictions" tab 
summarized the major restrictions.  The "STRI" disp layed the index, which went from 0 to 100, with S/C/M/110 
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  0 being completely open and 100 completely closed, 50 in-between, 25 virtually open and 75 virtually 
closed.  Those numbers had to be seen as purely indi cative at that stage.  The "all policy measures" 
tab provided a lot more detail, and showed the rich ness of available information.  If one wanted to 
know if market entry was allowed in a given country,  the reply would be much more detailed than a 
binary "yes/no", with the "comments" column provi ding the fuller picture.  This data had taken an 
enormously long time to collect and present, and in  the meantime regimes were changing.  Indeed, 
one of the challenges was updating the information, not just by replacing old with new, but also by tracking the passage of reform, so as to asses s how policy changes affected outcomes. 
35. Turning to patterns of policy, countries had been plotted on the basis of their per-capita 
income on the horizontal axis, and the indicator of restrictiveness plotted on the vertical access.  The 
picture that emerged showed that, on average, acros s sectors, industrial countries were all clustered 
together, while poorer countries were more scattere d.  A country like Ethiopia, for example, was 
relatively restricted today because there were a set of public monopolies in key areas, while other 
countries with similar per capita GDP, like Ghana or  Rwanda, were relatively open.  Interestingly, 
some of the fastest-growing countri es in the world, in South and East Asia, as well as some of the 
richest countries in the world, in the Gulf Co-operation Council, today had relatively restrictive 
policies on average.  This was an uncomfortable findi ng:  were these countries growing fast in spite of 
these restrictions, or were they growing fast becau se of them, because they had been implementing 
reforms more gradually?  Trying to understand  the links between policy restrictiveness and 
performance was a first-order research question.  
36. Looking at the sectoral picture, financial servi ces, telecommunications and retail were sectors 
that had seen huge unilateral liberalization.  Th e public monopolies which used to dominate these 
sectors in all countries had been dismantled, but th ere were new, "second generation" restrictions.  
Even countries which had abolished monopolies con tinued, for example, to limit the number of 
licences that were issued, not just in mobile te lephony where spectrum ava ilability could create an 
objective limit, but in other areas as well.  Licensing continued in many cases also to be opaque.  In 
areas like retail, explicit barriers were examined, but  often aspects of domestic regulation, like zoning 
laws, were restrictive in a way that  was not adequately captured.   
37. Interestingly, the two most protected sectors were professional services, where labour 
mobility was involved, because all countries were grudgi ng in their treatment of even skilled labour 
mobility, and, quite surprisingly, transportation, which again was protected in both industrial and developing countries.  In aviation, for instance, many bilateral air service agreements were very 
restrictive, and though some countries had implem ented open-skies type agreements, most markets 
were duopolies served only by the national and one fo reign carrier.  All the while, air transport was 
excluded from the scope of the GATS and maritime transport was not really being addressed head-on in the negotiations.  It was therefore quite ironic th at in areas where there was protection, there did not 
seem to be hard negotiations.  The same was true for mode 4.  
38. Additional interesting patterns emerged from the database.  For example, landlocked 
countries, which had the greatest stake in being connect ed with the rest of the world, surprisingly had 
among the most restrictive policies in those very sectors, like air transport and telecommunications, which were key to connectivity.  There was curre ntly a huge emphasis on trade facilitation, "aid for 
trade" was the new mantra, more and more resources  were being spent on building ports, airports and 
so on.  But building ports and airports and not allowing service providers to compete for the right to 
use them eroded the benefit of a lot of such inv estment.  The air transport data in the database had 
been drawn from the WTO's work by Pierre Latrille and Antonia Carzaniga, in a great example of 
how institutions could usefully collaborate.  By fr eeloading on that effort, it had been possible to 
show that countries which restricted trade in air transport services had lower quality and more expensive logistic services.    S/C/M/110 
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  39. When it came to investment promotion, again countries competed to give subsidies and tax 
breaks to foreign investors in the hope of attracti ng them.  Thanks to the database it had been possible 
to show that, even controlling for differences acro ss countries in size and income and differences in 
sectors, FDI flows tended to be lower in more restri cted countries than less restricted countries.  So 
even from the point of view of investment promotion, services reform seemed like a powerful 
instrument.  Again, this was only preliminary resear ch, and hopefully more w ould be undertaken to 
get more rigorous results, but it pointed to the valu e of the database in making such research possible. 
40. The database did not have, for the time bei ng, a historical dimension.  It contained 
information on policies at a given point of time, but no data on how and when they had changed.  A 
special effort was nonetheless made in the case of India, which had implemented a significant degree 
of unilateral reform in services.  The analysis just  undertaken convincingly showed that such reform 
had had a huge effect on manufacturing productivity.  Most pre-existing studies of Indian industry had 
focused on trade liberalization in goods and th e end of the so-called "licence Raj", and had 
inadequately appreciated that the upstream services reform had been a very powerful ingredient in 
India's manufacturing revival.  As concerned ac cess to services, a strong link was found between 
reform and access to credit, for example.  Finally,  a comparison of a more sophisticated measure of 
restrictiveness, based on econometric analysis, and th e Bank's crude indicator showed that the latter 
fared reasonably well and that the two were strongly correlated.  
41. The database had enabled a comparison of the Uruguay Round commitment, Doha offers, and 
actual policy.  The broad trend showed that, while  the DDA's best offers did improve on the Uruguay 
Round commitments, they were still hovering well above the state of act ual policy, not even capturing 
liberalization that had already happened.  Why was that the case?  Was it because of weaknesses in 
regulation?  Concerns about market structure?  Mo nopolization?  Concerns about infant industries? 
Those were the kinds of questions th at should be further looked into.  
42. To conclude, the Bank's goal now was, first of all, to improve the data through feedback.  
Then, it aimed to improve the coverage and quality of  data in terms of sectors, modes, measures and, 
ideally, timelines, as well as to refine the quantifica tion methodology.  It also wished to examine more 
rigorously whether services policies mattered.  Fi nally, a very interesting question was what 
determined the policies themselves.  Why were more  restrictive policies encountered in air transport 
and telecommunications in landlocked countries th an other countries, for instance?  When was 
protection, for good reason, a consequence of wea kness in complementary regulation?  When was 
protection simply designed to protect vested interest s?  Those kinds of questions would lead to more 
informed conversations in the World Bank and ot her institutions about the design of support for 
reform programmes, based on improved mutual understanding.  
43. All delegations who spoke congratulated the Bank on its impressive work.  They expressed 
particular appreciation for the transparent descr iption of the methodology and the feedback it was 
seeking from Members to improve its database further. 
44. The representative of Saudi Arabia said that  some policies could not be quantified and 
wondered how the Bank was planning to deal with them and how much subjectivity was involved.  
He also asked how useful the WTO's Trade Policy Reviews were to World Bank's work. 
45. The representative of Hong Kong, China acknow ledged the challenges involved in turning 
qualitative attributes into quantitative measures, as we ll aggregating them.  As far as he could see, 
however, the database also provided plenty of qua litative information and a very good menu for users 
to select measures they were particularly interest ed in.  He had noticed that Hong Kong, China and 
Singapore, for instance, were not covered by the database and wondered about the absence of 
information on such sizable services economies.  He signalled his delegation's interest in contributing 
to the initiative.   S/C/M/110 
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  46. The representative of Japan said that he was very  interested in making use of the database for 
negotiating purposes.  In this regard, he wondere d how the Bank's work compared with the OECD's 
STRI initiative and whether and how services regulation at the federal and local level was covered in 
the database. 
47. By way of preliminary, general reaction, the representative of the Plurinational State of 
Bolivia said that the database should be further de veloped and extended to c over sectors and modes of 
interest to developing countries, such as mode  4, beyond professional services, in sectors such as 
tourism, construction, maintenance, cleaning, etc.   The notion of "explicit discrimination" could be 
useful also in looking at mode 4.  He then sought a clarification on the precision of the information feeding the database.  Did this consist of publishe d laws or had other sources been used, such as for 
instance the WTO Director General's report on trade-related developments?  
48. In a preliminary manner, the representative of Israel wondered why the World Bank's index 
had been limited to a five-point scale, rather th an having been set along a continuum with greater 
variance, given that a degree of subjectivity was ine scapable in any event.  He then asked about the 
relationship with the OECD's STRI and why only so few sectors had been covered, for instance in 
professional services.  With regard to the example of India and the relationship between trade in 
services and the manufacturing sector, he wondered if  such a connection was made in the database 
itself or was an example of the kind of research that it enabled.   
49. The representative of the European Union sai d that his delegation would analyse the 
information in the database and mi ght provide feedback.  With rega rd to the relationship with the 
OECD's STRI exercise, he had taken note of th e explanation that the OECD work was more 
ambitious in detail but less am bitious in scope.  While acknowledging that the two exercises were 
different and based on different foundations, he wond ered whether there was scope for merging them. 
50. The representative of South Africa wondered how  the World Bank was planning to take its 
work forward.  He understood that the exercise was complex, and his delegation stood ready to 
engage, for instance by providing missing informat ion on South Africa's trade regime.  The nexus 
between services and manufacturing was very interesti ng.  It had been 18 years since democracy, and  
South Africa was now sufficiently mature to admit that some policy mistakes had perhaps been made.  
Information like the one in the database could be useful in terms of putting South Africa's economic 
policies into clearer focus.  He wondered whethe r the Bank was intending to present its work to 
Members individually or should be invited to do so. 
51. The representative of the United States said that he had always appreciated Mr Mattoo's work, 
even when it had made him uncomfortable.  He imag ined that, upon closer scrutiny, the information 
in the database would probably make each Member  a little uncomfortable, but appreciated that it was 
only a starting point.  The database was also a usef ul tool to explain to stakeholders what was 
happening in services and the services negotiations .  The focus on discriminatory measures was 
appropriate:  the further one tried to go into intern al regulations, the more one delved into deeper 
policy questions that were not easily grappled w ith in the WTO.  He then wondered whether the 
results showing a high degree of restrictiveness fo r professional services were not influenced by the 
analysis focusing on the regimes for temporary prac tice.  In the US experience, the conditions to 
obtain a permanent licence in certain markets were much more restrictive than those to work on a 
short-term project in association with someone who was permanently licenced.  He also asked whether it might be possible to provide a link to the various measures or the responsible government 
agency's website, to get more detailed information.  From a business perspective, this would be very 
valuable information. 
52. By way of preliminary comments, the representa tive of China said that the compilation of 
measures was very useful, as it could facilitate nego tiations in Geneva.  However, while comparing  S/C/M/110 
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  market openness was a legitimate objective, care had to be exercised when producing quantitative 
indicators and scoring policies.  He had a number of questions on the quantifying methodology used.  
He wondered, for instance, how the specific indi cators were determined and the scores chosen.  
Arriving at an equitable quantification was a challenging task.  Taking the example of registered capital requirements, these were usually applied acr oss the board, regardless of whether the company 
was a start-up or a multinational enterprise, but th ey implied different levels of restrictiveness for 
different market players.  In sectors such as telecommunications, for instance, differences in 
registered capital requirements could also be explai ned by the size of the market to be served.   
53. With regard to the database's coverage, he regretted the lack of information on unskilled 
labour services and digitally-provided services, which were areas of export interest to developing 
countries.  He hoped for additional information in the future.  As concerned the content of the 
database, it was important that information be re gularly updated, to ensure accuracy, and that the 
historical dimension be added.  He had understood that data had been  collected through law firms, and 
hoped that Member governments' feedback would be also be included.  He sought more information 
on the relationship between the World Bank's work and the OECD STRI initiative, and the differences 
between the two methodologies.  He echoed South A frica's question on how the Bank was thinking of 
taking this work forward and what its  next steps were.  Finally, it had been stated that regions with the 
fastest growth rates, such as South and East Asia  or the GCC countries, were amongst the relatively 
more restricted according to the Bank's STRI and th at this pointed to the need to determine whether 
this higher growth had been achieved in spite or because of the restrictions in place.  He looked 
forward to reading more findings about that particular question in the future. 
54. The representative of India observed that the da tabase would lead to increased transparency 
and could be used as a reference guide.  It would be particularly useful for developing countries, 
which lacked the resources to undertake their own research.  Since the database dealt with services 
trade restrictions, some subjectivity was inescap able.   He appreciated the Bank's openness to 
receiving feedback on its data, as well as the clear e xplanation of the shortcomings of the database. 
55. He had noted that national regimes involving th e mobility of natural persons in professional 
services had been found to be amongst the most restri ctive.  He echoed previous speakers' questions 
on methodology and the way forward.  He had also found the US suggestion regarding the addition of 
links to the original sources to be very useful. 
56. India had participated in the preparation of another, similar datab ase by another prominent 
international organization.  In I ndia's experience, a number of factors had limited the usefulness of the 
exercise, particularly for developing countries, and he wished to share those factors with the WTO 
Membership.  Firstly, the pilot database of this organization included only those measures which its 
experts, in their subjective judgment, thought fit to  include.  Many measures, which India considered 
to be restrictive, had not been taken into account, an d the selection of measures appeared to have been 
influenced by the perspective of developed Memb ers' service suppliers.  Second, the database under 
preparation in this organization had focused excessi vely on GATS Article XVI-type measures, rather 
than taking an overall perspective about the ease wi th which a service operator could enter a foreign 
market and operate there.  Article XVI did not cove r all kinds of possible market restrictions which 
existed on the ground.  Domestic re gulations could play an equally important role in limiting actual 
market access.  For example, in the case of banking services, a Member might have limitations on foreign equity participation which would be captu red under Article XVI, but might at the same time 
provide a single licence throughout its territory fo r all kinds of banking activities and require foreign 
providers to approach only one licensing authority.    How did this compare with another Member 
which had no foreign equity limitation, but limited the participation of foreign banks to certain 
activities and require them to obtain separate licen ses from multiple sub-federal entities and approach 
several authorities to obtain such truncated licences?  The database prepared by that organization did 
not appear to capture those kinds of nuances.  The usefulness of such databases depended upon the 
choices made in selecting measures.  S/C/M/110 
Page 10  
 
  57. He said that a trade restrictiveness index w as of limited utility because of the enormous 
amount of subjectivity involved in the selection, categorization, quantification of measures, assigning 
of weights, comparison of different modes, etc.  It  could potentially give misleading results.  Based on 
the same set of data, different experts could draw  totally different conclusions depending upon the 
assumptions they made and perspective they had.  He understood that developing of an index was an 
attempt to reflect the complexity of services re gimes, but the subjectivity involved might end up 
complicating matters.  As Einstein had said, "make everything as simple as possible, but not simpler". 
58. Finally, he wondered whether India had provide d feedback when it had been solicited from 
Members' WTO Missions, and how it could further contribute to the exercise.  He also sought further elaboration on how governments had been involved.  He would refer the matter back to capital and 
wait for further guidance. 
59. The representative of Switzerland hoped that, with  further developments  by the World Bank 
or other public or private institutions, a cleare r picture would gradually emerge of the actual 
restrictions facing service suppliers when accessing foreign markets.  He had three comments at that stage.  First, he had noted the information in the database with regard to restrictions applicable to 
mode 4, but wondered how and when  measures had been disaggregated for the other modes of supply.  
There might be legislation that applied to just one mode or to several or all modes concurrently, and 
he would be interested to know how such situations  had been dealt with in the database.  Second, 
there might be a difference between how a measure appeared on paper and the way it was applied.  
For instance, legislation might provide for a gene ral restriction but also allow for discretionary 
exceptions.  This could happen, for instance, w ith quantitative limits on licences or entry permits, 
where authorities could at times exceed the quota if th ey deemed it desirable.  How was this type of 
situation dealt with?  Was it the letter of the measure  or its implementation that had been taken into 
account?  Third, he echoed the US s uggestion to link measures to the s ource of the relevant legislation 
as well as the competent authorities.  Such info rmation could contribute to promoting greater 
transparency also in the contex t of the WTO notification process. 
60. The representative of Argentina said that the da tabase was especially valuable to developing 
countries, which lacked the resources to collect th is kind of information and conduct such research.  
The work contributed to filling the information de ficit on services trade measures and policy.  He 
noted, for instance, that the WTO Secretariat had ju st published a guide to trade policy analysis but 
that services trade was totally absent.   He sought clarifications on a number of issues.  First, while he 
could not remember receiving a questionnaire from the World Bank, his delegation would still be 
interested in commenting on the measures included in the database for Argentina.  Second, he 
wondered whether there were plans to update the in formation and add a time dimension to the data 
currently in the database.  Third, along the lines suggested by the United States and Switzerland, he 
would welcome adding a link to indicate the source of the measures included in the database.  Finally, 
he suggested that it would be useful if a link to  the World Bank database could be added to the WTO 
website, to facilitate acce ss to the information. 
61. The representative of Canada recalled that, on several occasions, her delegation had stressed 
the importance of increasing transparency on the c onditions of doing business in services sectors.  The 
database was a very valid contribution in that sense,  and she supported particularly the transparency 
aspect of it.  She also highly appreciated the fact that the raw data had been made publicly available, 
for anyone wishing to conduct its own analysis. 
62. She had a few preliminary comments.  First, she ha d been interested to hear that the trigger of 
much liberalization was domestic reform, rather th an just trade opening.  Services measures, both 
regulatory and at the border, were often introdu ced in the context of Members' own economic 
reforms.  The link between services reform and attraction of investment or creation of efficiencies in the manufacturing sector was also noteworthy.   S/C/M/110 
 Page 11 
 
 
  63. Second, along the lines of the US intervention,  she would also be interested to know how 
non-discriminatory barriers had been addressed in th e database.  Such measures always triggered 
deeper methodological questioning because they went be yond just a trade perspective.  Indeed, it was 
important to acknowledge that governments regulated for reasons other than trade.   In that sense, she 
wished to know how the distinction had been draw n between measures that had a protectionist intent 
and non-discriminatory regulation introduced in pursuit of national policy objectives without any 
trade-restrictive aim.  
64. Third, she shared other Members' wish to see the database extended to cover other sectors and 
areas.  Canada was pleased to see that mode 4 had been included, but wonder ed for instance whether 
mode 2 or sectors such as IT, which were importa nt enablers of domestic growth, would also be 
covered in the future.  
65. Finally, she wondered to what extent lack of data had hindered the Bank's analysis, why 
certain qualifications had been introduced and, goin g forward, whether data scarcity could be solved 
by more investment by domestic governments, or whether it was an inherent problem for services. 
66. The representative of Kenya said that his delegati on had a substantial interest in the mobility 
of unskilled labour and wished to know whether th is area might be included in the database in the 
future.  Regarding policy coverage, he said that some  barriers to entry and restrictions of operations 
were merely aimed at limiting access to the markets,  but others were "flexi bilities", taken to address 
Members' development concerns.  He wondered whether the Bank's analysis included such 
flexibilities and whether it was possible to disaggr egate and know which actions had been taken to 
address development concerns, rather than restricting market access.  
67. The representative of Turkey asked how the non-quantifiable elements had been quantified 
and included into the STRI, since the assessment of  restrictiveness depended on the criteria chosen, 
their relative importance and the methodology used .  She also wondered how the database would be 
kept up-to-date and accurate and whether it might be  possible to link it to the OECD STRI initiative. 
68. The representative of Australia concurred that lack of information on services restrictions was 
a real obstacle to trade.  While it was not possible to devise a perfect way of measuring 
restrictiveness, the Bank's work contributed to th e picture that Australia was building up through its 
own efforts in various fora.  Even in its own assess ment of the gap in services negotiations, Australia 
had come to the conclusion that it was necessary to adopt a crude unit of measurement of openness 
and that an approximate picture could be more accu rate than some of the more complex analytical 
tools would lead to believe.  She noted that the comments made, particularly on licensing, supported 
the case that Australia and other Members had been  making for a long time for a focus on domestic 
regulations as significant obstacles in services.  He r delegation would delve into the depth of the 
database to identify further evidence in support of its case. 
69. The representative of Brazil said that the da tabase helped reduce information asymmetries 
across countries for the benefit of developing countries in  particular.  It was al so particularly helpful 
for policy design in services.  He echoed the comments by China, South Africa, India and other 
developing countries on their specific concerns, questi ons and comments, particularly with regard to 
the flaws and shortcomings of the methodology considered in the ambit of the OECD. 
70. He then made a general remark on the direction of the Council's deliberations.  There here had 
been a growing focus in the discussions on the lack of knowledge on policies affecting market 
operating and market entry conditions in services.  Members and relevant national organizations 
should also think about such issues, take a step b ack and consider the basic enabling regulatory policy 
and institutional frameworks and infrastructure fo r services provision.  Developing country Members 
in particular were forced to grapple with r esource constraints in setting up those frameworks and S/C/M/110 
Page 12  
 
  infrastructure, which were a sine qua non  for the development of services activities.  It would then be 
sensible to have Members and relevant internati onal organizations share their experiences and work 
on those kinds of deficiencies and constraints, in addition to addressing difficulties which were mostly 
knowledge-based.  It would also be useful, in that  respect, to share studies and experiences exhibiting 
flaws, deficiencies and asymmetries across countri es, as well as stressing the importance of regulation 
to achieve legitimate objectives such as quality, pri ce, universal access.  The resulting broader picture 
would also be available for services negotiatio ns.  Building those sorts of frameworks and 
infrastructure was essential for developing countries to realize the potential benefits of trade liberalization, which had to be pursued gradually. 
71. The representative of Mexico asked whet her it was possible to access the scoring 
methodology and sought ad ditional information on a possible link with the OECD STRI initiative. 
72. Addressing the main comments and questions raised, the representative of the World Bank 
was heartened that Members had viewed the data base as "collective" work in progress.  The 
contractual arrangement with law firms had been th e only way to ensure information was effectively 
collected, but Members' involved was crucial.  Ma ny questions had been asked about the involvement 
of Geneva delegations.  Because of the rotation of Geneva delegates and delays with the Bank's 
release of the database, feedback could not always be ensured.  In response to the specific question 
raised, he indicated that India had provided no feedback.  Delegations also faced constraints 
domestically, when trying to secure the involvement of national ministries.  Looking ahead, to ensure 
that the database remained up to date, Members'  feedback was essential, not only in correcting 
inaccuracies, but also in keeping track of devel opments that had either happened since current 
information was collected or that would happen in  the future.  Adding a time dimension was of 
paramount importance for policy analysis.  In this  sense, he welcomed Members' feedback on the 
information that was currently in the database.   
73. He indicated that a lot of the wo rk had been made possible thanks to the generosity of the UK 
governments' Department for International Deve lopment (DFID).  He was trying to mobilise 
additional resources and had been talking also to  the WTO Secretariat and the OECD.  It was 
important to avoid a proliferation of databases.  Tr ade statistics, for instance, could be found across 
different institutions and, though the source was u ltimately essentially always the Central Bank of the 
country recording transactions, the information did not always match.  He recommended that, in going 
forward, an attempt be made to build on what the Bank had done, rather than duplicating databases, 
which might also be in the interest of delegati ons as stakeholders and taxpayers' representatives.   
74. In terms of comparison with the OECD's STRI initiative, he had indicated that the OECD's 
work was more ambitious in scope but narrower in terms of country coverage.  The Bank's database 
covered a much larger set of countries, including several African countries (incidentally, Hong Kong, 
China and Singapore had not been covered as law firm s there had proven too expensive).  In terms of 
sectors, the time and effort necessary to cover the re gime in a given sector in 103 countries had made 
it necessary to make a selection and limit the sectors cove red, at least for the time being.  The OECD's 
initiative was very detailed and sophisticated.  Id eally, such dense information for a sub-set of 
countries would sit alongside a broader database for a larger set of countries.  The Bank's database 
was focused on policy measures, including domestic regulatory ones, and was not seeking to categorise them.  The Bank had shared its questio nnaire with the OECD at the beginning of the 
process, to enable potential harmonization, and woul d like to further co-operate with the OECD, as 
well as with the WTO Secretariat.   
75. On quantification, he agreed that the STRI w as imperfect, but it was a simple, transparent 
measure that could be improved as it was not set in stone.  They had tried interesting, alternative 
measures which did resemble each other in terms of outcomes.  As to the source of the legislation, this would increase the complexity of the database signi ficantly, but if Members thought it would be very  S/C/M/110 
 Page 13 
 
 
  valuable, they could look at buildi ng it in the database.  With regard  to sub-federal entities, in the case 
of the EU, for instance, they had created a "EU" en tity, separate from the Member States, so that both 
intra-EU and extra-EU regimes could be captured.  They would be happy to be invited to disseminate 
their work in interested countries to the extent feasible.  Looking ahead, they wished to cover areas 
such as construction services and digitization, for instan ce, and be able to explore the implications of 
barriers that prevented just a part of service from be ing supplied, as was alluded to in the US question 
about licences for temporary practice.  He knew he had not done justice to all the thoughtful 
comments made by delegations but would be happ y to continue the discussion with interested 
Members. 
76. The Chairman thanked the World Bank for the interesting and thought-provoking 
presentation.  He suggested that the Council take not e of the presentation and the statements made.   
77. It was so agreed.  
78. The Chairman noted that Brazil and Canada had mentioned the broader transparency issue.  
He indicated that he was open and looked forward to Members' suggestions on how to follow-up the 
work on transparency. 
D. DEDICATED DISCUSSION ON INTERNATIONAL MOBILE ROAMING  
79. The Chairman recalled that, in March, the de legation of Australia had organised a very 
informative symposium on international mobile ro aming (IMR), which had been widely appreciated 
by delegations.  At the Council meeting that imme diately followed the symposium, delegations had 
shared their reflections on the event, as well as, more generally, their views on the relevance of the 
GATS to international mobile roaming.  Members gene rally felt that, in light of the complexity of the 
issue, more deliberations were needed, and it ha d been decided that international mobile roaming 
would continue to figure on the Council's agenda. 
80. At the meeting held in March, the Council ha d also considered a communication by the 
International Telecommunication Union on the work  this organisation was undertaking on mobile 
roaming services.  A representative of the ITU was again present at those deliberations, and the 
Chairman proposed inviting him to provide the Counc il with an oral update on proposals related to 
international mobile roaming submitted to  the World Conference on International 
Telecommunications, for possible inclusion in the International Telecommunication Regulations.  The 
Council agreed. 
81. A representative of the International Teleco mmunication Union (ITU) explained that the 
International Telecommunication Regul ations was one of the 4 ITU Treaties and would be revised at a 
conference to be held in Dubai at the end of 2012.  Amongst the many proposals for revision, a 
number related to IMR.  They could be grouped into two categories.  The first concerned the 
transparency of roaming prices for the end user .  They called either for transparency of 
telecommunication prices in general, or transparency  in general but specifically included roaming, or 
were especially targeted at roam ing.  The second group of proposals concerned the level of the price 
of the service for mobile users.  These suggested th at prices be cost-based or cost-oriented, either in 
general or specifically with regard to roaming rat es.  Some proposed that the roaming price for the 
user be the one prevalent in the country that was be ing visited, while others called for the price to be 
based on that in the home network, without any roam ing surcharge.  No proposals had been agreed, 
and at that stage they were just being suggested for review and would be further discussed in Dubai.  The price proposals in particular were considered to be rather delicate and sensitive.  The proposals 
currently under review could be accessed from th e ITU website by the ITU Membership, which 
included all WTO Members.  A password was required, and the WTO Secretariat, which also had access to those documents, could make them  available to interested delegations. S/C/M/110 
Page 14  
 
  82. All delegations who spoke tha nked the ITU representative for the information provided, as 
well as the delegation of Australia for the symposium on IMR it had held. 
83. The representative of Australia was very interested in the outcome of the ITU proposals, 
particularly on the pricing of roaming.  She tha nked again Members for their participation in the IMR 
symposium, which had successfully brought toge ther policy makers, regulators, industry and 
consumer bodies and allowed for the presentation of a very diverse range of perspectives.  The 
symposium had raised awareness of the costs asso ciated with IMR and the impact of high roaming 
costs on trade and travel, particularly for the servi ces sector, and provided some insights into policy 
responses by some countries and regions.  Her dele gation would continue re flecting and consulting on 
next steps and would welcome ideas from other Members as to how to take the issue forward. 
84. The representative of South Africa said that South Africa's regulator had participated in the 
symposium and presented the efforts underway domestically and in the SADC region, as well as the 
difficulties and legal challenges involved with IMR.  His delegation was still examining the 
implications of the GATS, and particularly Article  5 of the Annex on Teleco mmunications, on its own 
national legislation and especially the Electroni c Communications Act.  However, South Africa 
remained to be convinced that the GATS, the Te lecom Annex and the Reference Paper applied to 
IMR.  Roaming rates were too high for consum ers, but South Africa was conscious of the 
jurisdictional and mandate questions that would arise if the WTO pursued the issue further, in light of 
the specific mandate of the ITU and national regulat ors.  The Annex and the Reference Paper obliged 
Members to ensure that interconnection rates were reasonable and predictable, that operators could 
interconnect without unduly burdensome requirements,  etc.  As was evident from presentations at the 
symposium, interconnection was a competitive business,  whereas, in South Africa's view, IMR was a 
retail pricing issue and caution was necessary in exam ining it.  South Africa was currently engaging 
with relevant Ministries and regulators and saw merit in further considering the IMR issue. 
85. The representative of the United States supporte d continued examination of the IMR issue, 
and like South Africa urged great care in examining how or whether the GATS provisions applied. 
86. The representative of Turkey reiterated that the determination of IMR charges by industry 
operators was an issue beyond the responsibility of national governments.  She echoed South Africa's 
statement that IMR charges were a retail price issu e, and said that governments had no role to play 
with regard to such prices set by industry actor s.  She re-stated that her delegation was doubtful 
whether the GATS applied to IMR charges, but stressed the importance of ensuring continued 
consumer protection through the provision of clear a nd transparent information on the part of service 
providers.   
87. The representative of China reiterated China' s commitment to lowering IMR charges for 
customers.  With regard to how to proceed, he not ed that a market-oriented approach was fundamental 
and that regulatory interventions could also play an important role in this regard.  He noted that the 
ITU had undertaken relevant work on IMR and that  the way forward could be built on this work.  
China was ready to engage with Members to assess how WTO rules could apply to IMR. 
88. The representative of Brazil stressed his delegati on's interest in further discussions on IMR.  
Brazil was reflecting on how to address the issue fro m a GATS perspective and hoped to be able to 
contribute to the debate at a later stage. 
89. The representative of Japan said that his dele gation was open to further discussing IMR and 
the role of the WTO.  He looked forward to receiving further updates in the future.  
90. The Chairman said that the Council would take note  of the statements made and revert to this 
item at its next meeting.  S/C/M/110 
 Page 15 
 
 
  E. WORK PROGRAMME ON ELECTRONIC COMMERCE  
91. The Chairman recalled that discussions in  the Council under the E-commerce Work 
Programme had focused on a communication from the European Union and the United States dealing 
with trade principles for ICT services, in document S/C/W/338, and a communication from the 
United States on cloud computing and mobile applic ations, in document S/C/W/339.  Additionally, as 
discussed under agenda item A, the Swiss communi cation in document S/C/W/345, dealing with the 
e-commerce activities of small and medium-sized en terprises, was also of relevance to the Work 
Programme.  
92. The representative of the European Union noted that several interesting papers had been 
submitted under this agenda item and encouraged Me mbers to engage in deeper discussions as a way 
of contributing to the overall WTO e-commer ce Work Programme.  His own delegation was 
reflecting on how to take deliber ations forward on the trade principles for ICT services and would 
revert with more c oncrete suggestions. 
93. The representative of the United States echoe d the EU's suggestion to examine the ICT 
principles in a more detailed way.  By way of upda te on the ICT principles themselves, he said that, 
after the United States and the EU had signed tho se principles, the United States had entered into a 
similar set of principles not only with Japan, as had b een previously indicated, but most recently also 
with Mauritius.  That ICT principles statement i ndicated that the United States and Mauritius intended 
to cooperate with each other, and with third coun tries, to enhance national regulatory capacity and 
support the extension of ICT networks and ser vices, which were powerful tools for economic 
development.  The United States was looking forward to working with Mauritius, the EU, Japan, and 
other Members to further delve into those principles.  
94. The United States was similarly looking to have  a more detailed discussion on its mobile 
applications and cloud computing paper.  Those we re important areas, in light of the phenomenal 
growth rates of mobile data traffic around the world.   For example, the Cisco forecast indicated that 
the compounded annual growth rate for the Middl e East and Africa was 104 per cent, Asia-Pacific 
84 per cent, Latin America 79 per cent, with No rth America and Europe coming in behind those 
regions.  It was a phenomenon that affected many different regions across the world.  The US 
submission tried to draw attention to this growing trend and ensure that it could continue in an open 
trade environment. 
95. Cloud computing helped businesses overcome any memory and speed limitations they might 
have.  Cloud applications were going to account for 71 per cent of the total mobile data traffic, and it 
was a growing area.  The ICT principle on cross-bor der information flows would help ensure that 
continued growth.  It stated that governments shoul d not prevent service suppliers of other countries 
or customers of those suppliers located in their territories from electronically transferring information 
internally or across borders, accessing publicly  available information or accessing their own 
information stored in other countries.  That prin ciple was nicely related to the mobile application 
paper.  The United States was looking forward to continued discussions and more detailed 
examination of that principle and all others. 
96. The representative of Japan welcomed further discussions of contributions from Members to 
facilitate a sound e-commerce environment.  Japan had signed an ICT principles statement with the 
United States in January 2012, setting out their vi ews on trade promotion in the ICT service area and 
working together to integrate their shared views into trade principles.  Japan was still open to 
considering new elements in the services Council, such as the ones mentioned by Australia at the 
March meeting of the Council.  Mobile applications  and cloud computing were important issues.  The 
current rapid expansion of the mobile applica tions business was facilitated by a reasonable market 
entry cost.  The e-commerce Work Programme was an important area for co-operation amongst 
Members.  S/C/M/110 
Page 16  
 
  97. The Chairman recalled that the Ministerial Decision on the Work Programme on Electronic 
Commerce of 17 December 2011 instructed the Gene ral Council to periodically review progress with 
the Work Programme.  The next such review was sche duled for July 2012.  Th erefore, in line with 
usual practice, he would produce, under his own r esponsibility, a Chairman's Report to the General 
Council of the discussions the Council for Trade in  Services had had under the Work Programme, in 
time for the General Council meeting scheduled for the end of July.  The report would be purely 
factual, reflecting the essence of Members' discussions on that day and back in March.   
98. The Council so agreed. 
99. The Chairman added that the Council would take note of the statements made and revert to 
this item at its next meeting.   
F. OTHER BUSINESS  
100. The representative of the United States said that, in  the interest of transparency, his delegation 
wished to provide a brief update on discussions it had been having with a number of Members on 
possibilities for future liberalisation of trade in services.  The discussions had been looking across a 
range of services agreements, in bilateral and regi onal arrangements, and cons idering how progress in 
other venues could be pursed in a more systematic manner.  Since the Council meeting in March, the 
group had been joined by Israel and Turkey, and wa s currently composed of twenty Members, with a 
good mix of developed and de veloping country Members.  It had held two meetings, in Geneva, and 
the United States was very encouraged by the c onstructive spirit and substantive nature of the 
discussions, which were going to intensify in autumn .  Deliberations needed to better define the 
contours of what the group wanted to achieve, includi ng with regard to the overall architecture and the 
necessary mechanics.  As for the relationship betw een the group's initiative and the WTO, a lot more 
work was necessary before firm conclusions could be drawn.  However, the group shared the goal that 
its work should support the multilateral trading sy stem, be open to including other Members with 
similar objectives, encourage the participation of mo re developing countries and take into account the 
interests of least developed countries. 
101. Many delegations thanked the United Stat es for the update and the appreciated the 
transparency it brought about. 
102. The representative of South Africa recalled that the Chairman's summary at MC8 had 
highlighted that, while Members would be prepared to explore different negotiating approaches, there 
remained divergence on what the appropriate nature  of those approaches should be.  Ministers had 
reaffirmed their commitment to the DDA, by stati ng that they remained committed to work actively, 
in a transparent and inclusive manner, toward s a successful multilateral conclusion of the DDA in 
accordance with its mandate.   
103. She emphasised the multilateral nature of the e fforts to conclude the Round.  South Africa 
was committed to considering all new approaches, pr ovided they were compatible with the principles 
of inclusivity and formed part of the single unde rtaking.  In addition, any new approach should 
advance the objectives of the DDA in a manner that  benefitted all Members,  and be based on the 
MFN obligation.  A plurilateral agreement in th e legal sense of Article 2:3 of the Marrakesh 
Agreement was the only legally permissible depart ure.  However, South Africa recognised that 
Members were free to pursue market access preferential arrangements outside of the WTO legal framework, as provided for in Article V of the GATS.   She reiterated South Africa's support for all 
possible new approaches, provided that such new a pproaches were within the WTO context, respected 
the principle of inclusivity, formed part of th e single undertaking and were in accordance with the 
development mandate.  She stressed the importanc e of the linkage between NAMA, agriculture and 
services.   S/C/M/110 
 Page 17 
 
 
  104. The representative of China reiterated that, against the backdrop of the stalled DDA 
negotiations, China welcomed all efforts aimed at  moving the negotiations forward, provided that 
those initiatives respected the consensus reached by Mi nisters at MC8, i.e. that they proceed in a 
transparent and inclusive manner, in accordance  with the development mandate, and contribute 
towards a successful multilateral conclusion of th e DDA.  He hoped that the discussions in the 
purilateral initiative would advance the multilateral negotiations, not replace or undermine them.   
105. At the CTS in March, China and many devel oping countries had asked a number of questions 
to the Really Good Friends of services (RGF), regard ing the nature of the plurilateral, its relationship 
with the DDA, how it would serve as a steppi ng stone for the multilateral negotiations, how RGF 
envisaged multilateralising the outcome of the pr ocess, how the principles of transparency and 
inclusiveness would be implemented.  These questi ons were crucial to getting a better understanding 
of the plurilateral process and were still puzzling Chin a at that stage.  He hoped for detailed responses 
on the part of the RGF.  
106. The representative of Israel indicated that his delegation had recently joined the plurilateral 
services discussions and encouraged other Members to participate in that interesting and stimulating 
initiative.  
107. The representative of Cuba echoed the statements by South Africa and China.  He expressed 
his delegation's opposition to any a ttempt or initiative aimed at a plurilateral services agreement that 
advanced the negotiations in one area to the detrimen t of others that were part of the DDA agenda.  
His delegation was concerned that the Council was being used as a platform to update WTO Members 
on such non-inclusive, non-transparent negotiatio ns that were only going to undermine the 
multilateral trading system and further harm the credibility of the WTO.  He encouraged the 
Chairman, and all Members, to keep  such consequences into account.  
108. The representative of India recalled that, along with other developing country Members, his 
delegation had asked some questions to the RGF, primarily about how their proposed initiative would 
strengthen multilateralism and advance the goal of co ncluding the DDA as per the guidance given by 
Ministers at MC8.  India had expressed concerns about the impact of that initiative on multilateralism 
and the goal of concluding Doha R ound, and those concerns persisted. 
109. At the March meeting, the RGF had admitted that they did not have all the answers.  Today, 
they had stated that they were yet to find answ ers.  While their honesty was appreciated, India's 
concerns and questions were outsta nding.  He urged the RGF to seriously consider the effects of their 
initiative on multilateralism, the goal of concluding DDA  and the cardinal principles of inclusiveness 
and transparency. 
110. The representative of Costa Rica indicated that hi s delegation was also part of the plurilateral 
discussions.  The RGF initiative was useful in advancing services trade liberalization and was 
underpinned by the objective of strengthening the multilateral trading system and of multilateralising 
any advances made within the group.  He enc ouraged other Member to join the initiative. 
111. The representative of Barbados, speaking on beha lf of Small Vulnerable Economies (SVEs), 
said that SVEs continued to take note of the RGF's discussions, which were aimed at advancing 
services liberalization.  SVEs were cognizant that  recent reports had tended towards an outcome 
agreement compatible with GATS Article V.  Ar ticle V allowed Members to enter into services 
agreements among themselves, but called for a leve l of trade liberalization over and above their 
GATS commitments.  The benefits of such an agre ement remained with the parties concerned.  
Although many WTO Members had entered into such  agreements, an economic  integration agreement 
of the nature and scope that was being discussed was not, and would not be, an ordinary economic 
integration agreement.  Multilateralism had come to be the basis under which WTO Members rested S/C/M/110 
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  the development of trade-related rules and progressed  trade liberalization and the forum charged to 
integrate developing countries into the global trad ing system.  Although some developing countries 
had joined in the plurilateral initiative, the major ity, including the most vulnerable ones, were not 
engaged in the process, as multilateralism remained paramount in their minds.   
112. Multilateralism was at a fragile stage in its  evolution as negotiations within the DDA 
remained stalled.  Trade in services negotiations had admittedly not been spared from this stalemate.  
Ministers at MC8 had given the mandate to explor e new negotiating approaches against a backdrop of 
multilateralism.  SVEs remained hopeful that great er emphasis could be placed on developing these 
new negotiating approaches within the multilateral tr ading system.  A multilateral approach, based on 
Annex C of the Hong Kong Ministerial Declaration, remained a cornerstone of Members' work in 
services, as it carefully charted the objec tives and approaches to be undertaken.   
113. SVEs were appreciative of the level of op enness and transparency that the RGF had 
displayed.  SVEs noted that the modalities of the agreement were yet to be defined and recalled that 
they were not part of the discussions.  They empha sized that the multilateralisation of an agreement 
which they had had no hand in negotiating was not th e same as a multilaterally negotiated agreement.  
Those were two contrasting arrangements, as there was no way to ensure that their particular interests 
were preserved.  Careful consideration would need to  be given not to regress to a point prior to the 
launch of the DDA.  SVEs reiterated their commitme nt to the multilateral process and the principles 
of transparency and inclusiveness, and stood w illing and ready to engage in that regard.  
114. The representative of New Zealand acknowledge d that the RGF had a significant further 
amount work to do before they could reach firm c onclusions on a number of the issues raised, and 
they remained mindful of those important questions in their work.  They had a common willingness to 
make a contribution to trade in services reform and liberalization.  They shared the stated goal of 
supporting the multilateral trading system, remaini ng open to other Members who shared similar 
goals, encouraging developi ng country participation and taking in to account the interests of LDCs.  
New Zealand supported all on-going efforts to advan ce trade in services liberalization and remained 
open to discussing those issues with any interested delegations. 
115. The representative of Argentina echoed the concerns raised by South Africa, India, Cuba, 
China and Barbados on behalf of the SVEs.  A ny new approach should strengthen the multilateral 
trading system, be transparent and inclusive, and promote the successful conclusion of the DDA 
mandate, including equivalent treatment in  services, industrial goods and agriculture. 
116. The representative of the Plurinational State of Bolivia echoed the statement made by 
Barbados on behalf of the SVEs, as well as the c oncerns expressed by many other Members.  Though 
all Members had the right to take any bilateral and plurilateral initiative they saw fit, trying to 
promote such initiatives within the WTO was against the spirit that all Members tried to promote, 
namely multilateralism in general terms and the DDA more particularly.  Trying to by-pass the DDA 
was not an option that the Plurinational State of  Bolivia and other developing countries could accept. 
117. The representative of Ecuador concurred with th e view expressed by other Members that it 
was doubtful that the RGF initiative could promote th e attainment of the objectives of the DDA.  In 
the current state of the negotiations, it was im portant to avoid pursuing initiatives that could 
undermine the multilateral nature of the WTO, the MFN obligation, and the principles of 
inclusiveness and of a single undertaking that underpinned the current negotiating process.   
118. The representative of Pakistan recalled that his delegation was part of the RGF initiative.  He 
had heard that some delegations were concerned or were uncertain about the plurilateral initiative, but 
wished to reassure Members that there were no surprises to come.  The RGF believed in progress, 
creativity, transparency, inclusiveness, but wished to avoid any impasses.  As to the negotiating  S/C/M/110 
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  approach being pursued, it could be nuanced so as  to avoid deadlocks, as nothing was sacrosanct.  The 
RGF remained open, and he encouraged other Memb ers not to prejudge outcomes, not to view the 
process as circumventing the multilateral trad ing system and to keep an open mind. 
119. The representative of the Bolivarian Republic of  Venezuela disagreed that the plurilateral 
initiative could be as an alternative to advance th e services negotiations.  She was concerned by the 
Council's readiness to discuss such a negotiating format:  this undermined the credibility and 
seriousness of the WTO.  She stressed the impor tance of defending multilatera lism and keeping with 
the principles of the WTO. 
120. The representative of Chile echoed the statements by New Zealand, the United States and 
others in supporting the RGF plur ilateral initiative.  Chile was a developing country Member and 
participated in that initiative as such.  For that same reason, he invited other developing countries, 
which stood to benefit most from further services li beralization, to look favourably at the initiative 
and possibly consider joining in. 
121. The representative of Brazil said that he understo od that the plurilateral initiative had been 
conceived in a context of an overwhelming and complex impasse in the DDA, compounded by the 
difficulty, confronting all countries, of liberalising trade in services in light of the crisis.  He also 
understood the utility of using the Council, in light of  the goal of the proponents to try and fulfil the 
inclusiveness and transparency principles of the MC8 mandate.  Against this backdrop, it was obvious 
that a few Members had decided to push for negotiati ons in areas where they had an interest.  It was 
only to be expected, however, that such cherry-p icking, selective initiatives would be questioned by 
many Members.  There was a growing perception of the intention to harvest, at an early stage, in areas 
where the Members concerned would have to make ve ry few efforts to liberalize, while, in a sense, 
burying the DDA, along with its developing agenda.  What was left for the proponents to do was to 
claim in a very loose fashion that their initiative c ontributed to the multilateral trading system.  But to 
push for liberalization only where the proponents were competitive would weaken, rather than 
strengthen, the WTO.  For one thing, important trad e-offs would be brushed aside, and a serious blow 
would be delivered to the MFN obligation. 
122. The representative of Australia recalled that her delegation was one of the twenty participants, 
representing 47 Members, that were taking forward the guidance provided by Ministers at MC8 to 
explore new pathways to trade reform.  In the difficult negotiating environment in Geneva, the RGF 
initiative was an exciting prospect and Australia wa s focused on using the exercise to strengthen the 
multilateral trading system.  Very specifically, ther e were several ways in which this objective was 
being pursued, namely:  contributing to the process of trade reform by making ambitious liberalising 
commitments;  designing inventive rules;  looking at  ways to encourage participation by the broader 
WTO Membership;  and looking at how to take account  of the interests of LDCs.  All those elements 
supported the multilateral trading system and the obj ectives of the DDA.  As discussions continued, 
the group proposed to continue to brief the Member ship.  They also planned to share developments, 
concepts and relevant issues, as they arose, th rough the appropriate WTO committees.  They were of 
the view that some of the questions tackled would inform their participation in the WTO deliberations 
more broadly.  Australia would be happy to talk to  any Member about this work, and hear their views 
on how this could support the multilateral system even  more than they considered it already did.  
123. The representative of the European Union was grateful for Members' comments and 
questions.  Most of the questions raised, including th ose of China, could not be addressed at that stage 
simply because the process was not sufficiently matu re to provide precise answers, but they were 
interesting questions that would re quire additional discussion.  The EU  was participating in the RGF+ 
exploratory discussions and considered it useful  to investigate new approaches to advance 
negotiations on trade in services in the spirit of the MC8 Declaration.  Through those exploratory discussions, the EU aimed at advancing the multilateral trading agenda.  In that sense, he encouraged S/C/M/110 
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  a broad participation in the exploratory discussi ons, welcomed the new Members that had recently 
joined and invited others to  consider participating. 
124. The Chairman said that the Council woul d take note of the statements made. 
125. Turning to the second item of Other Business, the representative of Australia sought an 
update from the EU regarding its progress on the entry into force of the certified EC-25 schedule.  She 
recalled that it had been several years since Austra lia had first raised its concerns.  She yet again 
urged the European Union and its Member States to  expedite the entry into force of the amended 
schedule of commitments. 
126. The representatives of India said that he fully shared the concerns expressed by Australia and 
others on this issue.  It has been more than si x years, if he recalled correctly, since compensation 
agreements had been negotiated with the EU.  Th e agreements had still not entered in force and, 
worse still, there was no certainty about the date on which they would enter into force.  India had both 
systemic and commercial concerns.  Systemic concer ns arose regarding the efficacy of the provisions 
of Article XXI.  Commercial concerns resulted from the fact that compensation agreements agreed at 
a particular point of time might be rendered irreleva nt by the time the agreements actually entered in 
force.  
127. As indicated by the EU in its latest briefing, progress was painfully slow.  In the past year, 
only one more Member State had ratified the agreemen t.  Other than the slow progress, the matter was 
made even more difficult by the lack of detailed br iefings by the EU on the reasons for the delay, the 
efforts made, the various issues involved, etc.  He ur ged the EU to expedite the process of ratification, 
encouraged it to be more transparent and provid e detailed status reports, in whatever format, to 
facilitate greater understanding by the Membership.  To this end, India was willing to work in a 
constructive manner with the EU. 
128. The representative of Brazil supported the statements by Australia and India.  
129. The representative of the European Union said that eighteen Member States had already 
ratified the consolidation.  As ha d been explained in the past, the ratification was a complex process 
that required time.  His delegati on would continue to engage with  affected Members in informal 
clarificatory meetings to keep them as much as possible up to date with the on-going ratification 
process, and would also be pleased to report to the Council whenever questions arose. 
130. The Chairman said that the Council woul d take note of the statements made. 
131. With regard to the last item of Other Business,  the representative of India said that the issue 
they were raising was important from a systemic a nd efficiency point of view.  It concerned the 
frequent requests made by the Membership that the Secretariat prepare different kinds of background 
Notes and reports.  India's experience was that the Secretariat had been working very hard to meet 
Members' demands and had produced some excellent  documents.  Those documents had been very 
helpful to Members in general, and to develo ping Members in particular, in improving their 
understanding of the different issues involved.  Ho wever, India felt that those documents could be 
made more useful, and more focused in terms of their output, if there could be more discussion on 
their terms of reference or scope before the Secret ariat was tasked with producing them.  India was 
open to working with the Membership to explore ho w to achieve this goal in a constructive manner, 
without unduly delaying the decision-making process.  
132. The representatives of China, Brazil, the Plur inational State of Bolivia, South Africa and 
Argentina echoed India's statement.  S/C/M/110 
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  133. The representative of Australia said that her de legation would be happy to take up this issue 
another time, perhaps in a more substantive way, rather than attempting to provide guidance in a 
rushed manner.  She was surprised by the context, in that if the Membership had failed to provide 
appropriate guidance to the Secretariat with term s of reference on a partic ular paper, she would 
imagine that to be the fault of th e Membership rather than any issue with the Secretariat.  She would 
not wish to see Members trying to negotiate documen ts which were ultimately issued by the WTO 
Secretariat in its own right.  She would not want to unduly constrain the Secretariat.  More thought 
and detailed discussion was perhaps necessary on the way in which Members provided clarity in terms of reference to the Secretariat.  In her expe rience, there had been inst ances in the past of a lot 
discussion on terms of reference.  There were ma ybe particular examples that the Members who had 
concerns had in mind and might wish to discuss in some detail.  
134. The representative of Canada concurred, and sugg ested that India could perhaps circulate its 
proposal in writing, with more specifics. 
135. The representative of India stressed that he ha d not said that there was an issue with the 
Secretariat.  He was also not into finding faults, a nd had not used the word ‘fault’.  India had only said 
that there was room for improvement.  Its proposal was made in a positive spirit, with the aim of 
improving Members' working.  India was ready to  share further details w ith delegations who had 
expressed an interest in further discussing the issue. 
136. The Chairman said that the Council would take note of the statements made.   
137. In terms of future work, he indicated that two clusters were being considered for the autumn, 
during the week of 1 October and during the week of 3 December.  The Council would be scheduled 
on the Friday of those weeks.   
138. He then recalled that paragraph 3 of the Elem ents for Political Guidance of MC8 stated that 
"Ministers underline the importance of the work of regular WTO bodies [...] Ministers call for strengthening and improving their functioning."  He informed Members that he intended to hold 
consultations, starting in September, with a view to trying to respond to that call by Ministers.  He 
would greatly appreciate if delegations could r espond favourably to his requests for meetings, and 
looked forward to their constructiv e engagement as well as their useful suggestions on how to 
translate the call by Ministers into something concrete for the Council. 
139. The meeting was adjourned. 
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