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S/C/M/136  
 
26 November  2018 
(18-7439) Page: 1/33 
Council for Trade in Services    
 
REPORT OF THE MEETIN G HELD ON 12 OCTOBER  2018 
NOTE BY THE SECRETAR IAT1 
The Council for Trade in Services held a meeting on 12 October 2018 chaired by Am bassador 
Suescum (Panama). The agenda was contained in document WTO/AIR/CTS/1 6. 
 
The Chairman  indicated that, u nder Other Business, the Secretariat would  report briefly on its 
discussions with the UN Statistical Division concerning the accessibility of the CPC Provisional. The 
representative of the United States  said that his delegation  wished to add an  item of Other Business  
to make an announcement on an upcoming OECD event.  The representative of India also wished to 
add an  item of Other Business, to make a brief statement about the EU's General Data Protection 
Regulation.  
 
The agenda was adopted as modified . 
1  ITEM A:  NOTIFICATIONS PURSUA NT TO ARTICLES III:3 , V:7 AND VII:4 OF THE GATS  
1.1.  With regard to the notifications made p ursuant to GATS Article III:3 (T ransparency), the 
Chairman  drew the Council's attention to the communication s received , respectively,  from 
Kazakhstan (contained in document S/C/N/911), the Central African Republic (in document 
S/C/N/915) and Hong Kong, China (in document S/C/N/917) . He suggested that the Council take 
note of the notifications made . 
1.2.  It was so agreed . 
1.3.  Concern ing the notifications made pursuant to GATS Article V:7 (Economic Integration), the 
Chairman  drew the Council's attention to the communication s received , respectively,  from China and 
Macao, China (in document S/C/N/265/Add.10) and from Turkey and Singapore  (in document 
S/C/N/916). He suggested that the Council take note of the notification s made, and that the 
agreement s notified be referred to the Committee on Regional Trade Agreements for consideration.  
1.4.  It was so agreed .  
1.5.  While on the subject of the Commi ttee on Regional Trade Agreements (CRTA), the Chairman  
drew delegations' attention to the fact that, at its meeting scheduled for 19 and 20 November , the 
CRTA would be considering  three regional trade agreements that cover ed service s. The agreements 
in que stion we re: the 'Treaty on the Eurasian Economic Union'; the 'Treaty on Accession of the 
Republic of Armenia to the Eurasian Economic Union' and the 'Treaty on Accession of the Kyrgyz 
Republic to the Eurasian Economic Union'.   
1.6.  The representative of the Unites States  thanked all delegations that had submitted 
notifications. Notification requirements had become a topic receiving close attention in the WTO and 
it was important to see services notifications being submitted to  the Council ; he wished to 
acknow ledge and appreciate those Members that had contributed in that sense.  
1.7.  He drew Members' attention to the notification by China and Macao, China, which he believed 
represented best practice with respect to paragraph 14 of the RTA Transparency Mechanism; th ese 
                                                
1 This document has been prepared under the Secretariat's own responsibility and is without prejudice 
to the positions of Members or to their rights and obligations under the WTO.  S/C/M/136  
 
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  two Members had consistently put forward excellent notifications as they continued to modify their 
agreement.   
1.8.  He also wished to congratulate Turkey and Singapore for the notification of their FTA, which 
his delegation looked forward to reviewing in th e CRTA in due course. His delegation was very 
pleased to see the customs duties moratori um enshrined in that agreement , and thus continuing the 
practice among st Members , as well as the non -discrimina tory treatment of digital products . He also 
noted that th e website from Enterprise Singapore mentioned in the notification was a fascinating 
tool, which he commended Singapore for. It had prompted the reflection that,  in the future, the 
Council might wish to engage in a conversation of how Members' websites coul d be made user -
friendly in a manner that allowed traders to understand trade agreements. The Singapore tool was 
quite interactive with respect to goods ; while presenting  services trade rules in such a manner was  
more challenging, it might still be useful f or Members to have a conversation, and maybe discuss  
with Singapore, as it would be very helpful to produce something practical and usable for service 
traders and to see how access under the GATS or RTAs might be promoted through websites.  
1.9.  Concerning the notifications made pursuant to GATS Article VII:4 (Recognition), the Chairman  
drew the Council's attention to the communications received  from Kazakhstan (in documents 
S/C/N/912 -14). He suggested that the Council take note of th ose notification s.  
1.10.   It was so agreed .  
2  ITEM B: TEMPLATE FOR NOTIFYI NG CHANGES TO AN EXI STING REGIONAL TRADE  
AGREEMENT  
2.1.  The Chairman  said that, a t its 89th Session on 19 -20 June 2018, the Committee on Regional 
Trade Agreements (CRTA) had adopted a template to be used for notifications  of changes to all 
existing RTAs  (document WT/REG/28, date d 22 June 2018).  At that Session, the CRTA had also 
agreed to recommend to the Council for Trade in Services, as well as to the Council for Trade in 
Goods and the Committee on Trade and Development,  the adoption of the same template. In 
forwarding its recommendation, the CRTA had indicated that the nature of the proposal was 
procedural, and its implementation would not entail any change in Members' legal rights and 
obligations.   
2.2.  The last time the CRT A had modified the template for the notification of RTAs, back in 2006, 
the Council had taken  a formal decision to adopt it. Therefore, for the purpose of adopting the  new 
template for notifying changes to ex isting RTAs, the Secretariat had  prepared a draf t decision, 
contained in document S/C/W/377.  
2.3.  A representative of th e Secretariat  provide d some background to the  draft decision. As 
Members  knew, in 1995 the Council  had adopted a set of guidelines for notifications under the GATS, 
contained in documen t S/L/5. The guidelines list ed all the notification requirements under the 
Agreement, and include d a standard template for Members to follow. When the CRTA  had agreed on  
a new format for the notification of RTAs in 2006, the Council had taken a formal decision to adopt  
it (document S/L/310, dated 19 November 2007 ). As the CRTA had  now adopted a new template 
for notifying changes to existing RTA s, the Secretariat ha d prepared the  draft decision  in document 
S/C/W/377  for the Council to adopt the new templ ate. The draft decision was based on the one 
adopted by the Council in document S/L/310.  
2.4.  The representative of Switzerland  welcomed and appreciated the efforts done to facilitate and 
improve transparency through the implementation of the  notification requirements under the  GATS . 
Her delegation was confident that the new template would attract even more notifications and hoped 
that in the future even further improvements could be done in that area.  
2.5.   The Chairman  suggest ed that the Council adopt  the draf t decision  and take note of the 
statements made .  
2.6.  It was so agreed . S/C/M/136  
 
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  3  ITEM C: OPERATIONALI ZATION OF THE LDC SE RVICES WAIVER  
3.1.  The Chairman  recalled that, at the previous meeting, LDCs had put forward several suggestions 
with regard to  the Nairobi Ministerial Decision on the implementation of the LDC services Waiver. 
Some delegations had asked the LDCs t o provide more specifics on the  different proposals, and to 
do so ideally in writing.  For his part, since the previous meeting  of the C ouncil , he had held a number 
of meetings with the LDC Group, with the aim of assisting to advance the process. The LDC Group 
had since submitted a written communication, in document JOB/SERV/284 , on "Possible E lements 
for a Council Review of the O peration of Notified P references ". 
3.2.  The representative of Chad, speaking on behalf of the LDC Group , said that the Group once 
again wishe d to thank the WTO Membership for the progress made until then in operationalizing the 
LDC s ervices Waiver . Before delv ing furthe r into that  matter, he wished to make some observations 
regarding  services trade in LDCs.  
3.3.  According to the Secretariat N ote in document WT/COMTD/LDC/W/66 on 'Market Access for 
Products and Services of E xport Interest to Least Developed C ountries ', dated 2 October 2018, 
following two years of negative growth, LDCs' trade in commercial services  had begun to grow again 
in 2017. Exports  had increased by 7% to reach US$34.2 billion ; however,  imports had grown  at an 
even higher rate of 8% , reaching US$67.7 billion.  
3.4.  Growth of commercial services exports in LDCs had been  slower than the growth in developed  
countries  (8%) and other developing economies (8%). In 2017, the share of LDCs in global exports 
of commercial services stood at 0.6%, lo wer than in 2016 (0.7%) and only slightly higher than the ir 
share in 2010 (0.5%). Moreover, services trade in LDCs remain ed concentrated within a few 
economies, an unchanged patte rn since 2010. In 2017, the top -ten leading exporters accounted for 
70% of th e group's services receipts , according to Secretariat estimates.  
3.5.  Nonetheless, on a more positive note, over the 2010 to 2016 period, tourist arrivals to LDCs 
had grown  by 10 million. The rise in t ourist arrivals for all LDCs had been  accompanied by an incr ease 
in LDC travel receipts. In 2017, travel revenue had reached a high of US$18.1 billion , compared with 
US$10.4 billion in 2010. Travellers'  expenditures were an important source of services revenue for 
LDCs and support ed a number of sectors indirectly. Indeed, travel exports of LDCs had  generally 
expanded more rapidly than exports of other sectors.  
3.6.  The LDC Group had  always stressed that for LDCs, services trade went beyond pure economic 
significance , due to the major role services play ed for achieving so cial and development objectives 
and as a means of addressing poverty, upgrading welfare, improving universal availability and access 
to basic services, and in ensuring sustainable development, including its social dimension.  
3.7.  Moving to the  very important i ssue of operationalizat ion of the LDC services Waiver, he recalled 
that, at  the Council meeting in March, the LDC G roup had stated that the Waiver Decisions had 
always recognized the need for supply -side and other capacity  building required for LDC supplie rs. 
More needed to be done to assist LDC suppliers benefit from the notifications in a concre te manner, 
rather than just general assistance program mes that might  or might not be geared towards the 
notifications. The LDC Group had also stressed the need to collaborate  in order  to build the necessary 
assistance to enable LDC suppliers to avail themselves of the preference benefits .  
3.8.  At the Council meeting in May, the LDC Group  had recalled its concern , expressed in Nairobi , 
about the very few notifications made with respect to Sections B and C of the Collective Request , 
stressing that preferen tial treatment to remove behind -the-border restraints or obstacles was key 
to any provision of market access. At that meeting, t he LDC  Group had called on Members to share 
information in accordance with the various elements of the Nairobi Ministerial Decision on 
'Implementation of Preferential Treatment in Favour of Services and Service Suppliers of Least 
Developed Countries and Increasi ng LDC Participation in Services Trade ', document WT/L/982.  
3.9.  The LDC Group had taken  note of the statements by Members at that meeting , and had noted 
their commitment to the fulfilment of the Waiver D ecision and to the meaningful implementation of 
notified  preferences , as well as the request to the G roup to shed more light on what was being asked 
of Members going forward.  In that regard, t he Group refer red the Membership  to document 
JOB/SERV/284 regarding possible elements for a review of the operation of n otified preferences.  S/C/M/136  
 
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  3.10.   As Members were aware, the Decision in  document  WT/L/982 did not stop at notifications of 
preferences. Bullet four of paragraph 1.5  stipulated  that "[t]he Council for Trade in Services shall 
initiate a process to review the operation of notified preferences, on the basis of information provided 
by Members. In support of that process, Members may request WTO Sec retariat inputs, as 
appropriate ". It was important to recall that it was now close to three years since the Nairobi Decision 
had been taken . Moreover , Members could not  forget the fact that the clock was running on expiry 
of the W aiver. A review of the operation of notified preferences was due, to enable LDCs to  know 
where they stood . 
3.11.   He explained that, i n order to allow for adequ ate preparation, the Council could agree to hold 
the first review as a dedicated meeting of the CTS at a specific date in the second quarter of 2019. 
It could further be considered to organize , back-to-back with the review , a workshop that could 
bring toge ther LDC government and private sector stakeholders, Members' development agencies  
and releva nt international organizations . 
3.12.   Regarding t he actual review, he said, firstly , that, given that  there were several mandated 
elements in the  Nairobi  Decision which would ultimately provide an input to a "review of the 
operation of notified preferences ", the information -sharing on these elements could be put together 
under bullet 4 of paragraph 1.5 to constitute the review.  
3.13.   Secondly, turning to specific elements, as the Group had said previously , and as provided for 
in paragraph 1.4. of the Nairobi Decision, notifying M embers could report on specific technical 
assistance and capacity -building measures they ha d undertaken to orient LDC service suppliers to  
preference benefits available , so that such suppliers could  utilize the preferences granted. It was a 
fact that , unless domestic public and private stakeholders  were fully informed about the W aiver, 
they would  not know where to turn to identify any new an d specifi c commercial opportunities. That  
was the case also for potential consumers in notifying Members that might not be aware of 
opportunities available in LDCs by virtue of the preferences contained in the notifications.  
3.14.   What was listed by way of examp le in JOB/SERV/284 was by no means an exhaustive or 
definitive list. Such reports could include : information on specific technical assistanc e or 
transparency measures, such as  websites with information about the preferences that were on offer; 
outreach , such as  information on whether Members, as part of their technical assistance packages 
to LDCs , had held workshops in LDCs with  the LDC private sector to orient them to the benefits 
available from the notified preferences and how these could be utilised ; information on initiatives 
that notifying Members  had taken to ensure that their consumers we re aware that preferences were 
available in order to enhance access to services from LDC suppliers. The LDC Group had been  pleased 
to hear some notifying partners all ude to the usefulness of such information -sharing and was  ready 
and willing to discuss further with all Members how to structure such an exchange in  a manner that 
promoted interactivity .  
3.15.   Third, notifying Members that ha d not yet done so could provide an assessment of the use of 
the preferences by LDC services suppliers, e.g. by providing information on supply of services by 
LDC suppliers in notified sectors, or developments in the number of application s for authorization 
received. The Group  thank ed Turkey and India for providing information  in that regard at the 
previous Council meeting . The LDC G roup had indeed listened carefully to some of the concerns 
expressed by other notifying Members regarding measurement of some pr eferences. The Group 
acknowledged  and appreciate d the relative paucity of trade in services data and it was indeed such 
challenges that would  prompt Members to think of creative ways to ensure a Waiver -relevant , 
business -friendly data collection method. Ag ain, those we re ideas that could be discussed as part of 
the review.  
3.16.   Fourth, as stated in bullet 3 of paragraph 1.5 , notifying Members could provide information 
on technical assistance measures undertaken to promote the increasing participation of LDCs in  
world services trade. That was not new, and  notifying Members may wish to refer to the Modalities 
for the Special Treatment for Least -Developed Country Members in the negotiations on trade in 
services , which  mandated Members to take measures, in accordanc e with their individual capacities, 
aimed at increasing the participation of LDCs in trade in services.  
3.17.   The measures referred to there include d: strengthening programmes to promote investment 
in LDCs, with a view to building their domestic services capaci ty and enhancing their efficiency and S/C/M/136  
 
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  export competitiveness; reinforcing export/import promotion programmes; promoting the 
development of LDCs’ infrastructure and services exports through training, technology transfer, 
enterprise level actions and schemes , intergovernmental cooperation programmes, and where 
feasible, financial resources; and improving the access of LDCs’ services and service suppliers to 
distribution channels and information networks, especially in sectors and modes of supply of interest 
to LDCs.  
3.18.   Furthermore , for the review  the Secretariat could present any currently available data on LDC 
services exports in notified sectors. The LDC Group, as mentioned previously, recognized the 
challenges with services trade data, and as such a S ecretaria t presentation could include the gaps 
in data collection and reporting by Members.  
3.19.   Finally, taking into account the information emanating from the review, Members could further 
discuss any issues that might  facilitate benefits provided under the notified preferences. The LDC 
Group also stresse d that the review would be without prejudice to any recommendations the Council 
might  make on steps that could be taken towards enhancing the operationalization of the Waiver.  
3.20.   The LDC Group ha d in the past reported on  some assessments of the notifications in the 
Council; going further,  LDCs, either collectively or individually , could report to the Council about 
utilization of  the preferences, if any , or the difficulties faced in utilizing the notified preferences. This  
would allow for an interactive session.  
3.21.   The LDC Group once again thanked  all notifying Members for their notifications. A great deal 
of progress had indeed been made with regard to the W aiver since Nairobi and it was highly critical 
to maintain the momentum. Su ch significant progress could not  have been made without the 
commitment of notifying partners to fulfil their pledges and the entire Membership. The LDC Group 
welcome d the input of all Members to move the proces s forward and looked  forward to a fruitful 
discussion in the Council and beyond .  
3.22.   The representative of the European Union  said that this delegation attache d great importance 
to the implementation of the LDC s ervices Waiver and was looking forward to continuing  following -
up on the Nairobi Decision. The EU believe d that th at Decision constitute d Members' roadmap fo r 
any future work on LDCs in the  Council and the EU was ready to move ahead on that  basis. Indeed, 
it was in the light of the Nairobi D ecisio n that the EU had  examined the recently circulated 
communication from the LDC Gr oup. 
3.23.   He wished to thank the LDC Group for circulating  their proposal s in writing, as this had proved 
helpful. By and large, the  communication mirror ed some of t he key elements of the Nairobi D ecision, 
which was something his delegation could therefore support. This inc luded  initiating a process of 
review and an exchange of views and the presentation of technical assistance that ha d been provided 
to LDCs and that could  be relevan t for trade in services.  
3.24.   However , he noted that the  LDC communication contain ed some new elements that ha d not 
yet been considered or agreed to by Members. For example , transparency measures or outreach 
activities, or the provision by notifying Members  of an assessment of the use of preferences , were 
not foreseen by the Nairobi Decision. It should therefore not be expected that all Members might 
have information to share in that  respect. If those elements were only suggestions from the LDC 
Group, the EU was  happy to take note and possibly look into the matter. However, it should not be 
expected that notifying Member s be required to provide th at information or organize those activities , 
and that needed to be made clear.  
3.25.   With respect to the process, the EU  believed that the standing item o n the CTS agenda 
provided  the right space for ho lding th ose discussion s. His delegation  would not oppose the idea of 
a dedicated session but did not necessarily see the added value beyond a regular CTS meeting, with 
an agenda point that was standing and would be announced in advance. The agenda of that meeting 
should be open , and Members should be able to address any of the elements as they s aw fit. He did 
not think that further guidance was necessary. The proposal to hold a wo rkshop was premature in 
his delegation's  view and the EU  would rather focus attention on conducting a fruitful review.  
3.26.   Finally, he stress ed that, for the  review to make sense, it need ed to be an exchange of views, 
in a constructive spirit, with contributio ns from  all Members having a stake in the LDC Waiver. It S/C/M/136  
 
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  would  be therefore very important that LDCs also share the information available to them. It might 
be useful for LDCs to share what reforms or actions had been taken or were envisaged to help 
compani es from LDCs engage in cross -border services trade. The success of the review could not 
rely solely on the notifying Members.  
3.27.   Finally, the EU wished to strongly encourage those Members that ha d not yet notified 
preferences, to do so as soon as possible.  
3.28.   The representative of the United States  thank ed the LDCs for their communication; it was  
greatly appreciate d that they ha d taken the time to put their proposal s in writing, as this had  
facilitated his delegation's  ability to evaluate and assess the ir ideas with the numerous domestic 
stakeholders . He also acknowledge d the outreach efforts undertaken by the LDC coordinators, which 
had been extremely hel pful, and hope d to continue that dialogue.  
3.29.   His delegation's review of the  LDC proposal was ongoing an d his views were only preliminary, 
but he wished to take the opportunity to share with Members how his delegation was  approaching 
the proposal. As he had mentioned in his  consultations with the LDC coordinators, he believe d that 
common ground could be foun d for beneficial work in the Council  focused on the better integration 
of LDCs in global services trade.  His delegation recognised the political importance LDCs place d on 
the W aiver, but at the same time the United States had  never been convinced of the ma gnitude of 
its practical importance, and want ed to be careful about focusing on outcomes that the Waiver itself 
could never deliver.  
3.30.   For that reason, his delegation  believe d that  a more interesting and productive approach 
would  be for  the Council to step back and examine on an individual country or regional level what 
the priorities or challenges were in terms of service sector d evelopment in LDCs. Questions Members  
should be asking in the Council were what LDC reform priorities were in terms of regional i ntegration, 
or where services fit in their national development plans.  If Members managed  to get a picture of 
where work was already being undertaken, they might  be able to identify meaningful initiatives 
within the Council to help support tho se efforts.  
3.31.   Members' starting point had to be one that recognized  how development assistance ha d 
evolved ove r recent years to become demand -driven, accompanied by clear political will, and to be 
delivered in a manner consistent with well -articulated national developme nt plans. His delegation 
welcome d greater transparency on technical assistance activities in the Council , but its participation 
would  be guided by how technical assistance  was delivered .  
3.32.   There were a number of ways to proceed; his delegation was open to d iscussions on how to 
craft an LDC work plan that allowed  for a broader approach to issues of importance to LDCs than 
what his delegation saw  possible under the very narrow win dow offered by the W aiver preferences . 
The United States  would see this work suppo rting the use of the Waiver, but not limited to it.  
3.33.   In terms of specific comments on the LDC communication itself,  he noted that the Nairobi 
Decision called for the Council  to establish "a process to review ", and his delegation had  always 
interpreted that  to be a dynamic process that involve d an ongoing exchange of in formation. LDCs 
were proposing a static review and his delegation  viewed that as something very different from what 
had been agreed to in the Nairobi D ecision.  
3.34.   The Decision also refer red to Me mbers at large in many places , and the United States  had 
always understood that it was a shared responsibility among all Members to bring forward 
information they had access to in an effort to exchange and share. The LDC proposal appeared  
imbalanced in its approach in terms of who had  access to what information and whose responsibility 
it was to collect, analys e and share that information.  Also, his delegation  was struggling to reconcile 
how to respond to specific interests if the basis for engagement were aggregate prefe rences available 
to all LDCs.  
3.35.   As the EU had indicated , it was also unclear how many of the LDC goals could not just as 
easily be addressed  under the existing standing item  on the Council's agenda , and his delegation  
was not sure of the need  for a specific , dedicated session.  S/C/M/136  
 
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  3.36.   The representative of India said that her delegation  attache d utmost importance to the  
meaningful implementation of preferences granted under the LDC Waiver by all preference -granting 
Members , with the ulti mate objective  of increasing  LDCs' share in global services export s. India was 
the only WTO M ember that had notified the waiving  of visa fees for all LDC nationals  applying for 
Indian Business and Employment visas d uring the full duration of the W aiver. As part of its 
preferences , India had also notified that  at least 25% of all technical assistance and capacity building 
opportunities offered by the Indian Ministry of External Affairs would be solely earmarked for LDCs.  
3.37.   India had taken  note of the communication from the  LDC Group  and lent  its support to the 
same , on the understanding that it was essential to take note of the LDC preferences. India was  
already working on all elements  indicated in the communication,  including specific te chnical 
assistance and capacity -building measures. Her delegation was in the process of collating inputs 
from various Ministries and Departments regarding the activities they had undertaken in that  regard , 
and was  of the view that other notifying Members should also provide update s on the steps  they had  
taken in th at context. India  also support ed organisation of a workshop that brought together all 
relevant stakeholders.  
3.38.   The representative of Australia  thanked the LDC Group for its communication, which , by 
provid ing further detail on thei r proposal s, had been help ful to inform her delegation's  thinking. As 
emphasised i n previous meetings, Australia wa s committed to supporting the operationalisation of 
the LDC Waiver and to implementing the MC10 Decision;  her delegation recognise d the impor tance 
of increasing LDC participation in trad e in services.   
3.39.   She noted that the LDC proposal suggested  a number of action items that Members could 
undertake.  In order to faithfully carry out what had been agreed under the MC10 D ecision, a useful 
first step  would be  to share  information in the CTS on technical assistance that support ed LDC 
participation in tra de in services which complemented  Waiver preferences. This would be bo th in 
terms of Members that had  notified preferences  and from LDCs about how services trade ha d been 
incorporated in their national development plans and wha t capacity -building efforts had been most 
effective from their perspective. Her delegation could be ready to provide such information in line 
with the timeframe suggested and l ooked forward to fully engaging in th at exercise.  
3.40.   Australia  was also open to consider ing other elements in the LDC communication that were 
in line with the Nairobi D ecision , including to initiate a review.  Her delegation was ready to discuss 
the be st way to undertake information -sharing as she had  outlined and a process for review , but 
agree d with the EU that Members  also need ed to consider how best to use the standing agenda item 
already in the CTS. She looked forward to further engagement on that matter.  Finally, Australia 
wished to encourage Members that had  not notified preferences to do so.  
3.41.   The representative of Norway  recognised the need for all M embers to work hard on measures 
that facilitate d the operationalisation of the LDC Waiver. At the same tim e, a recurring issue for any 
Member who wa s keen to introduce measures that were truly helpful was the lack of concrete 
knowledge from the LDC s themselves as had  also been underlined by several other delegations . A 
critical factor in moving forward on the operationalisation  of the Waiver was establishing what the 
actual needs we re.  
3.42.   Norway therefore call ed on all LDC s to share more of their own analysis along with precise 
specificati ons of what each LDC itself saw  as the ob stacles, in sectors that were  important, that 
prevent ed its  service suppliers from participating in foreign markets, in the same region or world -
wide. It was  important to differentiate between obstacles that relate d to supply -side issues and 
quality requirements , and therefore require d a need for capacity -building for LDC service suppliers, 
those that r elated to the capacity to understand and navigate other M embers ' procedures, and those 
that relate d to other restrictions, including limited commitments by other Members.  
3.43.   The representative of New Zealand  was also grateful to the LDC G roup for its communication.  
New Zealand wa s pleased to have notified preferences under the Waiver, and recognised  the 
importance of supporting greater participation by LDCs in international trade in services.  His 
delegation saw value in an exchange on te chnical assistance and capacity -building in the CTS and 
would be pleased to participate.  However, like the EU and the United States , New Zealand saw  value 
in a more general discussion of technical assistance and c apacity building , rather than being 
constrained to a discussion that only relate d to those sectors covered by the W aiver.  His delegation S/C/M/136  
 
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  would also welcome input s and views from LDCs on the areas  of greatest importance to them. New 
Zealand would support fu rther Secretariat work i n that  area and, as noted by t he representative 
from Chad, saw  value in better statistics.  
3.44.   The representative of China  welcomed and appreciat ed the LDC Group 's written submission. 
China had always been a sta unch supporter of LDCs' efforts to better integrate into the global trading 
system. China had notified its preferences in favour of LDCs back in July 2015 ; these  contained not 
only market access measures , but also technical assistance and capacity building -related measures. 
His delegation  wished to  encourage all Members to continue to contribute to efforts aimed at  helping 
LDCs benefit substantially from greater tr ade. China was ready to engage i n further discussions, 
with a view to enriching the LDC Waiver mechanism in a construc tive manner.  
3.45.   The representative of  the Republic of Korea  also thanked the LDC Group for their submission 
and their outreach efforts. Korea recognised the importance of increasing LDC participation in 
services trade and had notified its preferential treatm ent in favour of LDC service suppliers. Her 
delegation was committed to implementing the Nairobi Decision and appreciated the LDC Group's 
inputs on the information that could be provided as a basis for a future review. Korea was also 
encouraged to hear tha t LDCs were willing to put forward their own inputs, as those inputs would 
be very valuable to implement the Nairobi Decision. With regard to the LDC submission, her 
delegation saw the proposed elements as useful but, as mentioned by the European Union, al so 
wished to stress that it should be up to Members to decide which information would better fit in the 
discussion. In that regard, she noted that Members had expressed a readiness to exchange 
information on technical assistance and she considered that tha t could be a possible area for 
Members to focus on.  
3.46.   The representative of Chad, speaking on behalf of the LDC Group, thanked all delegations for 
their support and observations. He had found the comments constructive and welcomed Members' 
readiness to work with LDCs to make progress on the issue. He underscored that the LDC Group 
remained open to delegations' suggestions and comments.  
3.47.   By way of brief reply to some of the observations made, he said, first, that with regard to the 
suggestion to hold a dedicat ed meeting, the idea was simply to have the review in a dedicated 
meeting of the Council for Trade in Services . LDCs were in no way suggesting eliminating the 
standing item on the Waiver currently on the Council's agenda. Behind the proposal to hold a 
dedicated meeting was the time element; a dedicated meeting would in fact allow Members to gather 
and share as much information as possible without any time constraint s. This wa s important given 
that, as part of the review, Members had underlined the usefulnes s of an interactive exchange with 
LDCs, as a group as well as individually, on the pertinent elements of the Nairobi Decision, on 
technical assistance. That was also why LDCs had proposed that the dedicated meeting be held 
sometime between April and May 20 19, to allow sufficient preparation time.  
3.48.   With regard to the suggestion to hold a workshop, the value -added was to secure the 
contribution of the private sector, aid agencies and other international organi zations. This would 
enable Members to draw from as wide as possible a range of ideas regarding the Waiver preferences. 
The LDC Group was open to discussing the suggestion further  with any Member.  
3.49.   Even if it was possible to envisage that the review would start with only one of the elements 
of the Nairobi Decision and move on from there, the interest of addressing all the elements together 
in a review was to ensure a maximum degree of cross -fertilisation and, even more importantly, to 
ensure that there would not be limitation s on the elements that Members or  the LDC Group were 
more at ease with and would choose to report on at that stage.  
3.50.   LDCs were not asking that Members address immediately all of their suggestions and 
concerns, but those suggestions represented the ir priorities and they wished to ensure th at all 
Members would be in a position to react to them; the Group would adjust its suggestions on the 
basis of Members' reactions. The Group was open, it had already started discussing bilaterally with 
many Members and it would continue along those lines i n order to arrive at a n agreed way forward . 
3.51.   The challenges that LDCs faced were numerous, specifically when it came to services. The 
Group wished to thank particularly India, which had shown great openness on those issues, and 
hoped that other Members coul d proceed along similar lines. The Group was open, ready to listen to S/C/M/136  
 
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  all observations and suggestions and ready to engage with all Members, with the aim of achieving 
progress in the near future on the suggestions that they had put forward.  
3.52.   The Chairman  thanked the LDC Group for the submission, the ideas and the proposals made. 
He also thanked delegations for their constructive reactions and comments, and for their willingness 
to initiate a process to review the operation of notified preferences. For his p art, he would be 
contacting relevant delegations to try to find a way forward to respond to the LDCs' proposals. He 
then suggested that the Council take note of the statements made, and said that the Council would 
revert to the item at its following meetin g. 
3.53.   It was so agreed . 
4  ITEM D: WORK PROGRAMME ON ELECTRONIC COMMERCE  
4.1.  The Chairman  invited any delegation wishing to share information under the sub -item on 
'exchange of information and experiences based on submissions by Members ' to do so at that 
juncture.  
4.2.  The representative of the United States  explained that he had remained silent duri ng the 
exchanges held under that  agenda item during  past meetings because his delegation was assessing 
how best to engage in a discussion that would engender the widest possi ble interest among 
Members. A number of recent submissions on e -commerce and digital trade had been made in 
various WTO Committees, including under the Work Programme. They had highlighted the dramatic 
trade, economic, and development opportunities created  by technological change and innovation 
brought about by the digital age. Many of those submissions had called upon Members to recognize 
and discuss the particular opportunities and challenges faced by developing and LDC Members as 
they sought  to integrate  into the new digital economy and harness its potential for economic growth 
and prosperity. He wished to take an initial step toward responding to those questions in an effort 
to identify some areas of common interest among Members that could be pursued in  greater depth 
in future meetings. His delegation's suggestions beg an from the standpoint of sharing experiences 
based on the ongoing work being carried out by the US  development agency, USAID, and its different 
public and private partners. If delegations could find common ground, based on an exchange of 
experiences – both success stories and ongoing challenges – Members might be able to move 
discussions for ward in an inclusive and bottom -up manner.  
4.3.  As a starting point, the United States wished to share so me of the work being carried out in 
partnership with Members on the ground to identify, tackle and overcome some of the development 
challenges that some delegations had mentioned in the Council, such as the digital divide, digital 
inclusion, financial incl usion, digital readiness, and the importance of building national capacities to 
enable count ries to fully utilize digitally -enable d innovation and technology. Tho se issues had been 
specifically called out in earlier submissions by the Africa n Group, and he  believed that they indeed 
deserved to be looked at in the Council in a specific and tangible way. In future meetings, his 
delegation would bring forward concrete examples of how USAID was implementing its digital 
development strategy through a combination  of integrating technology and innovation into its core 
development work, and through a network of public -private partnerships (PPPs) that enabled to 
leverage a wider range of resources in a coordinated effort to close the digital divide. PPPs were an 
increasing critical component of development assistance , and thus far, USAID had leveraged over 
US$81 million through PPPs to support digital infrastructure and services such as internet 
connectivity and digital payments.  
4.4.  USAID was a leader in supporting digi tal inclusion, investing in program mes that supported 
access to and adoption of the internet through mobile phones, local schools, health clinics and 
community centres. Two reports on this work might be of interest to Members: "Closing the Access 
Gap: Inno vation to Accelerate Universal Internet Adoption " and "Connecting the Next Four Billion: 
Strengthening the Global Response for Universal Internet Access " aimed at helping guide USAID 
Missions and partners in creating innovative last -mile connectivity solut ions. USAID had also 
pioneered innovative PPPs to advance the goals of digital inclusion , such as the Alliance for Affordable 
Internet – USAID's partnership with the UK development agency, the Department for International 
Development (DFID), private sector  and a broad coalition of governments, technology providers, 
civil society groups and academia, which were empowering policy makers with the tools and 
resources to facilitate more open, competitive and innovative markets. In future meetings, his S/C/M/136  
 
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  delegation  would bring forward additional information on the support provided, for example, in 
Liberia to invest in broadband internet infrastructure, in Kenya to support a local wireless start -up 
that had led to internet connectivity for nearly 10,000 people in the  rural area, and in Indonesia,  
where USAID partners were supporting a national plan for broadband access.    
4.5.  In the frequently cited space of  financial inclusion, USAID was also supporting digital finance 
program mes. It had published a Handbook on Digital F inance for Development, which had served 
as a tool to build local capacity and helped assistance providers and partners understand how to 
identify, assess and act upon opportunities to use inclusive digital financial services, like mobile 
money, in USAID p rogram mes. Another initiative that might be of interest to the Council related to 
the work of the "Better than Cash Alliance ", which was co -founded in 2012 by USAID to spark a 
global effort to accelerate the growth of electronic payments and broader digita l financial services 
to empower people and grow emerging economies. For example, the US - India joint project 
"Catalyst: Inclusive Cashless Payment Partnership " had helped India's small business and low –
income consumers utilize digital payments to gain access to broader financial services. Its goal was 
to create scalable and sustainable models to achieve last mile financial inclusion. Th at project also 
hosted a l ibrary of reference materials and case studies, including the recently published guide for 
small businesses going cashless entitled "The dawn of Digital India is here! ".  
4.6.  Another important aspect had to do with data and data  flows. USAID's work had helped to build 
local capacity in developing countries to fully utilize data to enhance those countries' abilities to take 
full advantage of geospatial technologies, as well as advanced data analytics to improve their ability 
to see relationships between people a nd their environments in ways not possible with traditional 
assessments. For example, USAID's GeoCenter had provided satellite imagery for 55 development 
projects in 43 countries, which had supported disaster preparedness, biodiversity conservation, 
forest  monitoring, improved land rights, malaria prevention and many other projects. The GeoCenter 
had also led the Youthmappers network of 5,000 university students in 30 countries to create new 
geospatial data that addressed humanitarian and development challe nges. One example of how data 
and data analytics applied to development projects could be found in the GeoCenter's work in 
Mozambique, where it had supported mapping activities in Zambezia Province, utilizing the global 
network of Youthmappers to remotely analyse and validate mapping data used to manage and target 
malaria prevent ion and treatment measures. That  was an interesting example of the intersection 
between data flows, data analytics and real world measurable outcomes. Similar mapping and data 
analy sis had been carried out in Nigeria to look at the relationship between demographic information, 
location and availability of maternal and neonatal health care. The analysis of accessibility of 
emergency obstetric and neonatal care had helped prioritize th e locations where investments in 
healthcare would be most effective , with the goal of ensuring that women and infants ha d access to 
life-saving care within two hours of travel time. All that had been  done using data analytics and data  
flows.  
4.7.  USAID's Develo pment Informatics team had also led the public advocacy campaign for the 
"Principles for Digital Development ", a set of best practices for applying digital technology and data 
in development, which had been endorsed by over 60 organis ations, including key USAID 
implementing partners, donors, and multilateral organizations. USAID had also fostered a 
development approach that specifically supported ways to identify and accelerate comprehensive 
solutions that empowered women and girls to access and use digital  technology to drive positive 
health, education, and livelihood outcomes. As part of the WomenConnect Challenge, USAID had 
supported a global c all for solutions to achieve tho se goals as part of an exercise to award projects 
that had the potential to inspi re others. It resulted in over 500 applications from 89 countries. Some 
of those selected for recognition included an entrepreneurial and empowerment program to help 
rural women in Senegal, Morocco, Kenya and Namibia run local internet service providers an d work 
as network engineers. Another project, which had been recognized for its work in northern India, 
had found ways to overcome women’s limited access to mobile phones using community radio and 
interactive voice technologies. In Mali, access to healthca re had been improved by using a locally 
developed, voice -based application on a basic cell phone. In the Dominican Republic, innovative 
digital solutions had enabled women to obtain a credit score and access needed financing options.  
4.8.  His delegation wished to introduce the wide range of interesting ways in which di gital innovation 
was shaping the US  approach to development assistance, highlighting the areas where development 
partners themselves had prioritized digital advancement in their national goals. His  delegation was 
pleased to find an overlap between discussions taking place in the Council on digital issues and what 
was happening on the ground to ensure economic growth and prosperity and , hence, wished to S/C/M/136  
 
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  explore some of those areas in greater depth in  future meetings. He would welcome the opportunity 
to work in partnership with other Members to bring some of those experiences  forward with the aim 
of providing useful context for future discussions about the opportunities of digital and technological 
innovation for development.  
4.9.  The representative of China  welcomed the intervention from the United States and USAID's 
efforts in supporting e -commerce development in the developing world. His delegation wished to 
join hands with the United States and other Mem bers in such an important endeavour, and would 
also share its experience in that  regard in the future.  
4.10.   China valued and supported e -commerce discussions under the WTO framework. To keep 
pace with the times in the new era, the multilateral trading system ha d to effectively respond to 
industrial development demands and to reflect on the concept of inclusive trade. China wished to 
share information on its new e -commerce Law to help Members understand China's legislative ideas 
and regulatory concepts in the fie ld of e -commerce. His intervention was in two parts : part one 
addressed general information about the Law, while part two focused on some of its key elements.  
4.11.   Legislative work on China's e -commerce Law had started five years earlier , and had 
undergone  four reviews since it was formally launched in 2013. The Law had been passed by China's 
National People’s Congress on 31 August and would come into force on 1 January 2019. To achieve 
the goal of protecting the legitimate rights and interests of all parties t o e-commerce and regulating 
e-commerce activities, tremendous efforts had been made throughout the legislative  process, with 
full transparency. Extensive consultations had been conducted with various stakeholders and 
multiple workshops had been held to req uest opinions domestically and abroad, including from 
experts from UNCITRAL, the United Sates, the European Union, Japan, Singapore and other 
countries and regions. In addition, consideration had been given to ensuring coordination with 
relevant domestic l aws and international rules. Various international rules had been taken into 
consideration, including the UNCITRL Model Law on Electronic Commerce and the UNCITRAL Model 
Law on Electronic Signatures, among others. Domestically, efforts had been made to avo id overlaps 
with other existing laws, such as the Contract Law and the Electronic Signature Law on data 
message s and the Law on the Protection of Consumer Rights and Interests on Dispute Resolution, 
so as to focus on e -commerce specific issues.  
4.12.   The e -comm erce Law was composed of seven chapters and 89 articles, including on general 
provisions, e -commerce operators, e -commerce activities (including e -contract s, e-payment s, 
logistics and express delivery), data and information, the protection of consumer righ ts and 
interests , dispute settlement, legal liability, etc.  
4.13.   Turning to the Law's key elements, he indicated , first,  that in terms of  scope and definitions, 
the Law  stipulated that e -commerce referred to "business activities in the territory of the People’s  
Republic of China enabled by the internet and other information networks to sell goods or provide 
services ". In this definition, information networks included internet, mobile internet, etc ., while  
'business activities ' referred to those for profit, inclu ding commodity transactions, service 
transactions and related auxiliary business services.  
4.14.   Second, in terms of obligations and responsibilities, the Law clearly stipulated the subjects of 
electronic commerce operation s, distinguishing between the ordinary  operators of electronic 
commerce and the platform operators of electronic commerce ( i.e. third-party platform s). It aimed 
at striking a balance between the legitimate rights and interests of consumers, ordinary operators 
and platform operators. The Law al so strengthened the obligations of platform operators, to better 
protect the interests of consumers.  
4.15.   Third, Articles 23 to 25 set forth detailed requirements relating to personal information  and 
privacy protection. In that  regard, e -commerce operators who collected and used the personal data 
of their users were required to be abide by the laws and administrative regulations regarding the 
protection of personal informa tion. E-commerce operators  were also required to make clear the ways 
and procedures for the  inquiry, correction and deletion of user information, as well as the cancellation 
of user accounts. They were precluded from setting unreasonable conditions for the inquiry, 
correction and deletion of user information, or the cancellation of user accounts . In those cases 
where the relevant competent authorities requested e -commerce operators to provide e -commerce 
data related information pursuant to laws and regulations, e -commerce operators were to  provide S/C/M/136  
 
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  such information as required. Relevant competent authorities were required to take necessary 
measures to protect the security of the data and information provided by e -commerce operators, to 
keep strictly confidential personal information, privacy and trade secrets involved, as well as not to 
disclose,  sell or illegally provide these to others.  
4.16.   Fourth, Articles 53 to 57 set out measures to safeguard e -payments. Parties to e -commerce 
transactions might agree to pay ment through an electronic payment system. Electronic payment 
service providers were required  to provide electronic payment services for e -commerce according to 
the relevant provisions of the State, instructing the users of electronic payment services on related 
matters, including the functions, usage, precautions, related risks and charging stand ards. In 
addition, they were precluded from attaching unreasonable transaction conditions thereto. Electronic 
payment service providers were required to ensure that electronic payment instructions were 
complete, consistent, traceable and monitorable, and c ould not be tampered  with. Meanwhile, e -
payment users had also their responsibilities. For example, users should keep payment security tools 
such as transaction passwords and electronic signature data in appropriate ways. If a user became 
aware that the se curity tool was lost or stolen or had been used in unauthorized payments, the user 
would  have to  immediately notify the electronic payment service provider.  
4.17.   Fifth, Articles 41 to 45 provided measures on intellectual property right (IPR) protection. The 
Law required e -commerce platform operators to formulate IPR protection rules, strengthen 
cooperation with IPR holders, and protect IPRs according to law. If an IPR holder believed that his 
IPR had been infringed, he had the right to request the relevant e -commerce platform operator to 
take necessary measures, such as deleting, blocking, disconnecting or terminati ng transactions and 
services. The representative  stood ready to share f urther information regarding China's  new e -
commerce Law in the future and in ot her venues.  
4.18.   The representative of Australia  welcomed discussions on the very important matter of 
enabling countries to fully utilise developments in the digital economy. Her delegation supported the 
idea of exchanging experiences, including on what had wo rked and ongoing challenges from a broad 
range of Members. Austr alia had been very active in that  space and would share more detai led 
information on its capacity -building efforts at the following  meeting.  
4.19.   By way of example, at a very general level, Austra lia's efforts covered areas such as: 
i) assistance in the development, adoption and use of international standards that promoted digital 
trade and supported inclusive growth; ii) piloting a digital tool in developing countries to map out 
supply chains and analyse transport routes and modes; iii) examining how emerging digital 
technologies could be applied to help developing countries leapfrog existing technologies and give 
people access to new services; iv) building reliable communications infrastructure to  enable the 
presence of fast and affordable internet connections, which was vital for e -commerce and digi tal 
trade to be successful. That  was a small , high-level snapshot of what Australia was doing and she 
looked forward to providing further information a t the following  meeting, as well as hearing from 
other Members.  
4.20.   The representative of India thanked the United States for its various digital initiatives in India 
and worldwide. Her delegation welcomed the MC11 Decision reaffirming the 1998 Work Programme  
on Electronic Commerce , which had a n exploratory and  non-negotiating mandate. While e -commerce 
had created new and exciting trade and investment opportunities, it had also posed several new 
infrastructure and regulatory challenges, which needed to be addre ssed first. These included : 
classification issue s such as whether e -commerce should be treated as trade in goods or services; 
to what extent existing WTO rules applied to the digital economy; fiscal and other implications of e -
commerce , including the Morat orium and the scope of "electronic transmissions "; the impact of e -
commerce on competition and market structures; and , most importantly, the need to bridge the 
digital divide.  
4.21.   Against that  backdrop, India had introduced its proposal "Moratorium on customs duties on 
electronic transmissions: Need for a re -think", contained in document WT/GC/W/747, at the meeting 
of the General Council held in July 2018. The realities prevailing in 1998, when WTO Members had 
agreed for the first time to the temporary moratori um on customs duties on electronic transmissions , 
had changed significantly. Tho se changes required a re -examinat ion of the implications of the 
Moratorium, particularly from a development perspective. Going forward, India proposed to continue 
engaging with  Members and looked forward to discussions under the auspices of the General Council 
to examine the various issues related to the imposition of customs duties on electronic transmissions.   S/C/M/136  
 
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  4.22.   As it was clear from the review of progress by the Chairs of the bo dies mandated to carry 
forward the Work Programme during the July General Council  meeting , a lot of useful work had been 
carried out under the Work Programme in the context of two very useful communications submitted 
by Chinese Taipei. She als o thanked Chi na for sponsoring the  workshop on e -commerce for 
development held in China from 8 to 21 May 2018 as part of the Work Programme. In the current 
exploratory phase, India considered that emphasis should be put on the need to understand the full 
scope and dime nsions of the various issues involved and address the kn owledge gap that existed in 
that area.  
4.23.   Some Members were keen to identify issue s for multilateral rule -making i n e-commerce. In 
her delegation's view, the gains from e -commerce should not be confused  with the likely benefits of 
rulemaking in e -commerce. While  Members had seen the benefits of e -commerce both in goods 
trade on electronic platforms and in the convenient delivery of services, and supported its growth 
and the benefits it brought  to consume rs, negotiation s on rules and disciplines on e -commerce would 
be highly premature at th at stage, especially given the highly asymmetrical nature of the existing 
global e -commerce space.  
4.24.   She wished to reiterate India's serious concerns on having parallel d iscussions on e -commerce 
under the Joint Statement Initiative , with clear rule -making objectives, which run contrary to the 
exploratory mandate of the 1998 multilateral Work Programme that had been reaffirmed by all 
Members at MC11. She concluded by quotin g UNCTAD's recent Report on Trade and Development 
2018, which aptly justified her delegation's position: "Given that large -scale use of digital 
technologies is still unfolding and that related impacts are still not fully understood, international 
cooperati on to fill data gaps and develop comparable metrics needs to accompany policy efforts at 
the national level. The international community is just beginning a dialogue on what rules and 
regulations can harness the productivity and development potential of th e digital economy. 
Agreement needs to be reached on what parts of the issues around the digital economy are in the 
realm of the WTO and what part in that of other international organizations. A premature 
commitment to rules with long -term impacts in this f ast-moving area where influential actors might 
be driven by narrow business interests should be avoided.  Further more, the report stated that "(...) 
it is important to retain freedom and space to design digital policies which help in increasing 
developmenta l gains from trade and foreign investments, like policies around localization, 
restrictions on free flow of data, technology transfers and custom duties on electronic transmissions. " 
UNCTAD's report constituted a very timely warning to developing countries  on how they could lose 
out to digital monopolies, unless they had taken charge of their trade and investment policies in the 
digital era.  
4.25.   The representative of the European Union  welcomed the exchange of experiences on what 
had been done in e-commerce to address the challenges that had been raised at the Council and 
other WTO processes  and his delegation stood ready to continue th at exchange. In this regard, he 
referred to the European Union External Investment Plan (EIP), which had started in September 
2016 to help boost investment in EU's partner countries in Africa and the European neighbourho od, 
particularly with a new EUR 1.5 billion European Fund for Sustainable Development (EFSD) 
guarantee. The Plan aimed at mobilising E UR44 billion in sustainabl e investment for Africa and EU 
neighbourhood countries by 2020. Since January 2017, grants had been approved by the EIP, 
blending operations and guarantees, w hich were expected to leverage around EUR24 billion in public 
and private investment.  
4.26.   In 2017 the Europ ean Union had set out five priority areas for the EIP guarantees, called 
"investment windows ". One of the five areas , called "Digital for Development ", aimed to promote 
investments in innovative digital solutions for local needs, financial inclusion and decent job creation. 
In July, the European Union had approved the first 12 guarantee tools, two of which  were dedicated 
to digitalisation. The first one was the European Health Guarantee Platform for Africa, for which the 
European Investment Bank, which had been the lead financial institution , would incentivise  research 
and innovation in e -health in less -developed and fragile environments, leading to cheap er healthcare 
services for people on low incomes and saving lives. The European  Union would provide up to 
EUR80 million guarantees. The second guarantee called "Digital Transformation Platform and 
Broadband Investment Programme ", for which the European Ban k of Reconstruction and 
Development (EBRD) was the lead financial institution, aimed to increase the use of digital 
technologies and widen rural access to broadband in some EU neighbourhood countries.  S/C/M/136  
 
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  4.27.   Additional EU guarant ees would be approved later that  year, and some would focus on the 
digital sector and e -commerce. He would keep Members informed o f the different projects, and noted  
that some investment would be supported by technical ass istance to make those projects more 
palatable and concrete.  
4.28.   The re presentative of South Africa  thanked the United States and the European Union for 
their interventions, stating that their commendable efforts in the digital innovation and inclusion 
arena were appreciated. She wondered  what was the point of having that dis cussion in the Council  
for Trade in Services . If the objective was to infor m delegations about aid, then that  was best suited 
for the Committee on Trade and Development or the Aid for Trade meetings. She pointed out that 
some Members were opposing any eval uation to the aid they had provided, but were more than 
willing to notify Members of it.  
4.29.   Her delegation was prepared to continue examining e -commerce issues in a comprehensive 
manner under the Work Programme. In South Africa's view, it was premature to neg otiate 
multilateral rules on e -commerce. As to the developmental aspects of the discussion in the Council , 
and especially in terms of how they related to the GATS legal framework, South Africa, and the 
African Group wished to reiterate elements from their past statements and submissions. First, they 
had been requesting a further examination to properly and fully scope the range of challenges that 
developing countries needed to overcome regarding the digital divide , in order to approach a level 
where they co uld be considered as being "e-commerce ready ". Second, Members needed to address 
the measurement challenges of e -commerce that were essential for building up a body of accurate 
data, which was the prerequisite for evidence -based policy -making. Third, it wa s necessary to 
carefully consider what was required to build the capabilities of developing countries and LDCs so 
that they were able to effectively participate in cross -border e -commerce. It was also important to 
consider the impact of e -commerce on Afric a’s longstanding developmental objectives of industrial 
development, structural transformation and employment. All of that  should be done with a view to 
promoting inclusive and equitable growth, trade and development in the digital economy.  
4.30.   Therefore, her delegation requested Members who wanted to share their experiences in the 
Council to focus on helping delegations to understand the specific government measures that they 
had put in place to support the development of e -commerce in their countries and how they had 
achieved remarkable advances in digital tech nologies , including for developing digital infrastructure.  
4.31.   The representative of New Zealand  reiterated the importance his delegation attached to e -
commerce as it offered many opportunities, including fo r small and medium -sized enterprises . His 
government considered that the facilitation of e -commerce fitted squarely with its policy aimed at 
promoting economic growth and development, including at the regional level. In particular, e -
commerce allowed busin esses, including SMEs, direct access to consumers. New Zealand was a 
strong supporter of multilateral rules for all types of trade and, therefore, his delegation saw value 
in all discussions in the WTO on e -commerce and supported moving them forward. Like other 
Members, New Zealand would be happy to share examples of how it ha d been working in partnership 
to strengthen the online presence of the private sector, particularly in the Pacific. His delegation 
considered that ICT could make an important contribut ion to sustainable economic development as 
it could provide access to tools, resources, services and markets, and a pathway for sharing different 
cultures with a global audience. Therefore, its development programmes aimed at supporting the 
online presence  of the private sector, while increasing the availability of ICT tools for SMEs and 
LDCs.  
4.32.   The representative of Chinese Taipei  welcomed the interventions that had been made on e -
commerce. His delegation wished to invite delegations to consider issues rela ting to "accessibility 
asymmetry ", such as the different response time and accessibility of on -line shopping platforms, in 
the discussions. In th at regard, Member's measures on the international transfer of information could 
affect cross -border business op erations. His delegation stood ready to discuss related issues in future 
meetings.  
4.33.   The representative of the United States  wished to offer some clarifications in response to 
comments made on his intervention. His aim was not to present his delegations' technical assistance, 
but to focus on what governments and the private sector had been doing on the ground to showcase 
how they were using digital innovation as a problem -solving tool. His delegation's experience as  a 
development partner offered a window through which it was possible to better understand the 
regulatory challenges and key issues faced by developing countries on the ground, and how digital S/C/M/136  
 
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  tools, such as mobile money, could address them. While his dele gation had not been the one which 
had brought the issue of the digital divide to the Council, the initiative was an attempt to engage on 
those discussions. His delegation considered that such an approach would provide a perspective that 
was relevant to Members' discussions. He clarified that the suggestion was not aimed at promoting 
USAID, but rather at using its partnerships and experience to address tangible questions that had 
been raised by other delegations in the Council, and try to seek commonalities in addressing 
development challenges.  
4.34.   The representative of the International Telecommunication  Union updated delegations on the 
ITU Global Symposium for Regulators (GSR) held at the CICG in Geneva from 9 to 12 July  2018, 
under the topical theme "New Regu latory F rontiers  to Achieve Digital Transformation ". As discussed 
at GSR, regulators had adopted a new set of best practices to guide policy -makers and regulators in 
193 Members States to facilitate digital transformation. Regulators had recognized the nee d to keep 
pace with advances in technology, address such new regulatory frontiers and create the foundations 
upon which digital transformation could achieve its whole potential. The adopted GSR -18 Gu idelines, 
which could be found o n the ITU website, placed  emphasis on emerging technologies, business and 
investment models and continued innovation and progress , with the aim of supporting digital 
transformation.  
4.35.   In terms of emerging technologies, the Guidelines called for implementing an agile framework 
for an innovative digital ecosystem through flexible , light-touch, multi -sectoral, forward -looking, 
neutral and transparent policy and regulatory approaches. They also called for encouraging policy 
and regulatory measures to facilitate the deployment and use of  emerging technologies for 
affordable digital infrastructure and services, and to consider regulatory tools such as infrastructure -
sharing, interconnectivity, quality of service and effective use of spectrum. In terms of business and 
investment models, reg ulators had stated that an investment -friendly policy and regulatory 
framework was needed to support digital  transformation, which permeated  all industries and 
impact ed markets in all sectors. Regulators and policy makers needed to work together across 
sectors and with each other to promote policies that encourage d both innovation and effective 
competition among sector players in the ecosystem, and that also supported the protection of 
consumers.  
4.36.   Regarding innovation and progress, the technology swirl of the last decade in terms of new 
technologies, new players and new business models was rapidly coming of age. Regulators  had 
stated that proactive measures and exchanges with all players in the value chain in the sector were 
key for boosting the emerging di gital ecosystem. ICT policy and regulatory frameworks needed to 
be up -to-date, flexible, incentive -based and market -driven to support digital transformation across 
sectors and across geographical regions. However, innovative out -of-the-box measures had also 
been listed, including regulatory sandboxes for enterprises, start -ups and experiment interfaces and 
5G pilot projects. Next year, the ITU GSR would take place in Port Vila, Vanuatu, from 9 to 12 July 
under the theme "Connecting the Dots for Smart Societ ies". She hoped that Member States would 
attend the GSR next year. Finally, she informed about a new ITU study that quantified and presented 
key numbers on the positive impact of broadband, digitalization and the interplay of ICT regulations 
on national ec onomies. It also presented a blue print, with the formula, framework and models to 
assess such economic impact. It would be followed -up by regional studies, starting in the Americas 
and Africa.  
4.37.   The Chairman  suggested that the Council take note of the statements made and said that the 
Council would revert to that agenda item at its next meeting.  
4.38.   It was so agreed . 
5  ITEM E: MODE 4  
5.1.  The Chairman  indicated that there were two issues to be addressed under that agend a item, 
which he wished to address in turn. First, the CTS had held a thematic seminar entitled "Mode  4 at 
Work" earlier that week; he would give the floor to the Secretariat to provide a factual account of 
the event. The second element was the  proposal to  update the Secretariat Background Note on 
mode 4 , which had been placed on the Council's agenda at the request of the delegation of India.   S/C/M/136  
 
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  5.2.  A representative of the Secretariat  said that the seminar  "Mode 4 at Work"  had been organised 
at the request of the  Council, following an agreement Members had reached at the previous meeting 
of the CTS in May. The event had been  structured in two parts. Part I set the scene. An introductory 
session  had delineated the scope of mode 4 and offered a snapshot of the GATS commitments 
undertaken and Most -Favoured -Nation exemptions listed by WTO Members. The session entitled 
"RTA practices " had examined mode 4 access and pertinent regulatory disciplines negotiated in 
Regional Trade Agreements. After an overview of the RTA lan dscape, Canada and Turkey had shared 
their respective experiences with negotiating mode 4 in RTAs, and a further presentation had 
discussed the evolution of the legal framework for mode 4 , from the GATS to RTAs. The 
measurement of mode  4 trade, estimates o f its importance, and its potential economic impact, 
including in terms of linkages with other modes of supply, had been  considered in the subsequent 
session.  
5.3.  Part II of the seminar had focused on "Mode 4 at work ". It had discussed regulatory measures 
that might have a bearing on scheduled mode 4 commitments and challenges to realising the 
benefits of existing bindings for this mode of supply. Speakers had shared their experiences in 
making use of mode  4 commitments from different regional perspectives, fr om Asia, Africa and 
Central and Latin America. Members  had heard a perspective from the private sector, especially with 
regard to the movement of intra -corporate transferees and business visitors. The challenges involved 
in the recognition of skills and qu alifications, as well as possible ways to address them, had also 
been discussed. Finally, the policy tools that officials have at their disposal to manage temporary 
workers' mobility had been  presented.  
5.4.  Speakers were highly qualified; they had emanated fro m governments, the private sector, 
academia and international organisations. The seminar had provided ample time for questions and 
answers following panel presentations, and the many delegations present had participated actively. 
The speakers' presentation s would be posted on the WTO website, under the "Events " section of the 
services page, to facilitate dissemination of the information presented to capital -based delegates 
and colleagues who had not been able to attend the seminar.   
5.5.  The representative of Turkey  thanked the delegation of India for its initiative to hold a seminar 
on mode 4 and the Secretariat for inviting Turkey to share its experience. The seminar had been 
very informative and her delegation extended its congratulations to the Secretariat for organizing 
the event.  
5.6.  Turkey was a demander of improved mode 4 disciplines, as well as improved market access. 
The seminar's presentations had highlighted some very crucial areas that needed to be addressed. 
First, entry, temporary stay and work permi t application procedures were creating barriers to trade 
in services and preventing Members from fully exploiting scheduled commitments. It was thus 
evident that new disciplines needed to be developed to address those issues.  
5.7.  Second, there were other barr iers to services market access behind the border that foreign 
service supplier s faced. Procedures regarding authorization, certification and licensing were one 
element which was also dealt with under the negotiations on domestic regulation. Recognition was  
a second element which was especially problematic for service suppliers from developing and least -
developed countries. It was therefore apparent that there needed to be more work under the CTS 
to address those issues.  
5.8.  Apart from those barriers, there wer e also problems with mode 4 statistics. Without meaningful 
statistics, mode 4 would  remain the most neglected mode of supply for trade in services , with an 
estimated contribution of only 5%. Turkey strongly believed that if there were reliable data, the 
impact of mode 4 could easily exceed that of mode 2. Therefore, Turkey supported any initiatives to 
improve mode 4 trade statistics.  
5.9.  During the seminar, a lot of emphasis had been placed on intra -corporate transferees and the 
most skilled amongst  mode 4 sup pliers. She underlined again that those categories were the most 
fortunate among mode 4 service suppliers , with access to information and resources. There were 
also other mode 4 service suppliers whose services were indispensable for trade in services, as well 
as for trade in goods, which did get enough attention.  S/C/M/136  
 
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  5.10.   The representative of India expressed sincere thanks to the Council, the current Chairman, 
Ambassador Suescum, the previous Chairman, Ambassador Braithwaite, all Members and the 
Secretariat for t he successful organisation of the mode 4 seminar.   
5.11.   As a share of total trade in services, mode 4 trade accounted for less than 5%, making it the 
least-traded mode of supply. Th at was despite the fact that existing literature on the subject pointed 
to subst antial gains for both origin and destination countries resulting from the liberalisation of the 
temporary movement of natural persons. The Secretariat’s 2009 Background Note on mode 4 , in 
document S/C/W/301 , gave an extensive account of the existing empiri cal literature on the subject. 
A more recent 2015 report by the National Board of Trade of Sweden showed that the liberalisation 
of temporary movement of persons was a win -win reform.  
5.12.   Supply of services through mode 4 was particularly important for develo ping countries and 
LDCs, as they were well endowed with a diverse category of skilled service providers. For those 
countries, the mode 4 route for service supply was crucial for their export competitiveness as well 
as for maintaining their comparative adva ntage in that area.  
5.13.   The mode 4 seminar held on 10 October under the auspices of the CTS had been very useful 
and timely. All presentations had been  extremely insightful, with useful lessons for all Members and 
also for the WTO.  
5.14.   Her delegation wished to hi ghlight some of the key ideas emanating from the seminar. First, 
mode 4 enabled countries to leverage labour market complementarities and exploit comparative 
advantage based on labour and skill availability. Many countries faced a shortage of labour due to  
ageing populations, declining fertility rates and fewer persons entering the workforce, while some 
other countries had surplus labour. This was especially true for skills required in the new digital era. 
Mode 4 was a means to address that shortage. Growin g intersectoral and intermodal linkages in 
trade and production also made mode 4 important. Services were embedded within manufacturing 
production and exports and modes were often bundled together in delivery. Hence, facilitation of 
mode 4 was important fo r services trade and for ensuring competitiveness in other sectors of the 
economy.  
5.15.   Second, 'industry 4.0' might require more mode 4, due to the increased fragmentation of 
tasks and demand for specialized skills and services in the areas of blockchain, artificial intelligence , 
cloud services, robotics, analytics, modelling, etc.  
5.16.   But there were risks and challenges. Misinterpreting mode 4 as a migration issue, recipient 
countries were often not prepared to admit foreign service suppliers and therefore imposed  
cumbersome, non -transparent, and costly border and non -border measures on the entry and 
presence of foreign service suppliers. In source countries, there were capacity, quality and 
institutional constraints. Going forward, supply capacity and quality need ed to be augmented in 
exporting countries while importing countries needed to provide transparent and predictable market 
access for mode 4.  
5.17.   Mode 4 commitments under the GATS were indeed dated; even the limited openings were 
often nullified through non -transparent Economic Needs Tests, denial of visas, differential minimum 
salary norms, unfair levies on foreign professionals, non -portability of social security contributions, 
and so on. Therefore, mode 4 agreements remained only 'intention' agreements. Turkey ’s RTA 
practices in addressing some of the barriers faced by services suppliers had been very insightful.  
5.18.   While recognition of foreign qualifications was a major barrier to mode 4, MRAs had not really 
provided the answer , as they were extremely difficult to negotiate. Therefore, domestic regulation 
disciplines  at the multilateral level, especially commercially meaningful disciplines on qualification 
requirements and procedures, were critical.  
5.19.   While some Members had legislations for mode 4 service provider s, many did not. A 
multilateral framework for a GATS visa would be useful to govern mode 4 , wherein temporary and 
permanent movement of labour were clearly delineated. This would enable regulators and 
policymakers to deal with mode 4 as a trade issue as ag ainst a migration issue.  S/C/M/136  
 
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  5.20.   Given the 'spaghetti bowl' effect of RTAs, the WTO remained crucial as the only venue where 
consistency in relation to mode 4 could be ensured. There also needed to be greater cooperation 
through arrangements concerning labour mobi lity, skill development, and certification.  
5.21.   Finally, India wished to reiterate its longstanding request that the Council agree to the 
Secretariat updating its  2009 Background Note on mode 4, contained in document S/C/W/301.  
5.22.   The representative of China  thanked India for its initiative and the Secretariat for the great 
organization of the mode 4 seminar. Many Members had also contributed to the success of the event, 
and their efforts were highly appreciated. He also wished to extend China's support to India's  
suggestion of updating the Secretariat Background Note on mode 4.  
5.23.   The representative of Australia  thanked the Secretariat for its hard work in organising the 
thematic seminar on "Mode 4 at Work " and India’s initiative in proposing that the Council hold th e 
event. The seminar had provided a good cross -section of views and information on matters related 
to presence and entry commitments in the WTO and across FTAs.  
5.24.   In relation to the proposal to update the Secretariat Note on mode 4, Australia was open to 
considering the suggestion. As her delegation had said at the previous meeting, there might also be 
merit in updating the other modal papers, specifically document S/C/W/304 on Modes 1&2 and 
S/C/W/314 on Mode 3. Her delegation had not put that down as a formal proposal but would be 
happy to do so for the following meeting if there was appetite from Members to consider it.  
5.25.   The representative of the United States  asked if the two sub -items under that agenda item 
were being addressed together or separately.  
5.26.   The Chairman  said that he had intended to address them consecutively, but as delegations 
were commenting on both together, and in order not to break the natural  flow of the meeting, he 
would entertain comments on both sub -items.  
5.27.   The representative of the United States  indicated that for his delegation the two issues were 
separate but he would proceed as indicated. First, he wished to express his delegation's grea t 
appreciation to the Secretariat team for an event that had taken  nearly two years to materialise, 
had come off very well and had been  very well -attended and to acknowledge the hard work that had 
gone into the seminar. He also wished to thank India for th e initiative. His delegation had had capital -
based participation at the event, had learnt a lot and had been particularly struck by the 
interconnection between the digital economy and the high -tech sectors and some of the mode 4 
proponents , and how deeply they were linked. The fact that one could not think about mode 4 
without thinking about digital trade as well had been an important takeaway , and one element that 
should be factored into Members'  discussion. His delegation  had also taken away a clear pictu re of 
how interconnected all the modes were ; a lot of the presenters had highlighted how mode 4 did not 
exist in isolation. The world had moved on and businesses were integrated in such a way that they 
were involved in several  modes at different times.  
5.28.   Moving to the second issue under that agenda item, there had been a suggestion at the 
previous meeting to update the modes 1&2 and mode 3 Secretariat papers. His delegation wished 
to suggest to step away from what it saw as an anachronistic separation of the modes and  suggest 
that, instead of three separate papers to consider the modes in isolation, a more practical 
contribution would be to consider all the modes together in one paper, with an emphasis specifically 
on their interrelationship. This would allow for a fuller examination of the conceptual, statistical and 
enterprise -level issues related to modal classification, while still providing the space for any relevant 
update for any particular mode of supply. Compared to looking at only one mode, the most s ignificant 
research and statistical work of the previous decade had considered the intermodal linkages, and 
the implications of maintaining sectoral limitations in one mode on trade in related modes, 
particularly  at the firm level. Therefore, if there was an update to do on the modes of supply, his 
delegation considered that it would be best to consider them in a more integrated manner, more 
consistent with the way the world operated.  
5.29.   The Chairman  added his words of thanks to the organisers and participants  to the mode  4 
seminar. Their work and presentations had  contributed to a very successful and useful event. With 
regard to the suggestion to update the Secretariat Background Note  on mode 4 , he noted that S/C/M/136  
 
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  several proposals had been put forward and reaction s had generally been positive. He would contact 
the different delegations concerned to see what might be possibly done to satisfy the different wishes  
expressed in terms of Secretariat work. He  then suggested that the Council take note of the 
statements ma de. 
5.30.   It was so agreed . 
6  ITEM F: CYBERSECURITY MEASUR ES OF CHINA – REQUES TED BY JAPAN AND THE  
UNITED STATES  
6.1.  The Chairman  said that the item had been added to the agenda of the Council at the request 
of the delegations of Japan and the United States. As Member s would have seen, the previous week 
the United States had also submitted a communication on the issue, titled "Measures adopted and 
under development by China related to its Cybersecurity Law – Questions to China ", which wa s 
contained in document S/C/W/37 8, dated 5 October 2018.   
6.2.  The representative of Japan  said that, in continuation from the previous meeting, his delegation 
welcomed the opportunity to share  once again  its concerns on China’s recent measures related to 
cybersecurity.  
6.3.  At the previous meetings, while Japan and other WTO Members had expressed their concerns 
regarding China’s existing and proposed cybersecurity measures, China had stated that it had 
already responded sufficiently. In his delegation's view, however, China’s response s had n ot been 
sufficient to provide concrete assurances that it would resolve the concerns expressed by Japan and 
other Members. Therefore, Japan wished to bring the matter before the Council once again, and 
called upon China to respond clearly and address the c oncerns raised before start ing to  implement 
its cybersecurity measures or issuing related cybersecurity measures in the following months.  
6.4.  At the Council meeting held in March, Japan had expressed concerns about three important 
points, as follows: first, th e obligation on foreign operators of critical information infrastructure to 
store specific dat a domestically; second, the obligation to conduct a security assessment on cross -
border data transfers; and, third, the ambiguous definition of legal terms such a s "network 
operators ", "critical data ", "critical information infrastructure ". 
6.5.  On each of those concerns, Japan reiterated its request to China for a clear explanation as to 
the following points.  
6.6.  First, both the obligations just mentioned and stipulated in  Article 37 of the Cybersecurity Law 
could place foreign operators under conditions that rendered them less competitive than local 
operators, and could be related to the national treatment obligation under Article XVII of the GATS.  
6.7.  Second, with regard to t he security assessment requirements, while Article 37 of the 
Cybersecurity Law applied to "critical information infrastructure operators ", the related measure, 
named "Measures on the Security Assessment of Cross -Border Transfer of Personal Information and 
Important Data ", extended the scope to "network operators ". Japan asked China to provide a clear 
explanation of the difference between those descriptions of the targets.  
6.8.  Third, up to  that point China had not provided any explicit explanations of the broad and 
ambiguous definitions of legal terms such as "network operators ", "critical data " and "critical 
information infrastructure ". At the Council meeting held in October  2017, China had explained that 
"impo rtant data " referred  to those  data "of importance fo r the nation, not for the enterprises or 
individuals ". However, Annex A of the Guidelines for Data Cross -Border Transfer Security 
Assessment listed a lot of data that were usually indispensable in doing business, including 
information on production, sales,  research and development by electronics information enterprises 
(A6c), and information on credit research on enterprises (A20). In that regard, Japan requested that 
China explain the reason why such business -related information as that listed under Annex A of the 
Guidelines should be restricted from the perspective of national security and the public interest.  
6.9.  At the previous meeting, China had explained that the protection of personal information and 
critical data was important for the nation and that ea ch Member had the legitimate right to deal with 
that issue appropriately. Japan did not deny a nation’s right to protect personal information. S/C/M/136  
 
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  However, Japan believed that China’s definition of the term "critical data " was ambiguous, and could 
thus harm transparency and predictability for business operations. Thus, Japan requested China to 
operate in a manner that was fully consistent with the GATS.  
6.10.   Japan was deeply concerned that China planned, from December 31, to conduct security 
assessment s on cross border -data transfer s including general business data based on its "Measures 
on the Security Assessment of Cross -Border Transfer of Personal Information and Important Data ". 
In that regard, Japan requested China to clarify the scope of the term "critical data ". 
6.11.   Japan had raised a number of questions, including the important issues mentioned above, on 
the occasion of the 7th Trade Policy Review of China held in July 2018. Japan had appreciated China’s 
punctual responses, but regretted that China’s respon ses had not satisfied his delegation's concerns.  
6.12.   In addition, in July, Japan had submitted detailed comments on the "Cybersecurity Classified 
Protection Regulations " to the Ministry of Public Security of China. In that regard, Japan appreciated 
the opport unity to provide comments from the perspective of transparency. The draft measure, 
however, continued to include ambiguous articles in terms of definitions of terms, concrete 
requirements of inspections and assessments, the scope of the Regulation and so o n. As a result, 
Japan believed that the Regulation could be implemented in a manner that would hinder the 
participation of foreign business operators in the Chinese market and lead to technology leakages. 
Thus, Japan urged China to clarify the definitions and descriptions used in the Draft Measure, and 
to implement the M easure with a high degree of transparency, and in a manner that was fully 
consistent with the GATS. Japan also urged China to respond to the abovementioned requests and 
concerns in a sincere  manner in the process of making regulations.  
6.13.   Japan recognised that on 5 October the United States had submitted a written communication 
to the Council on China’s Cybersecurity L aw. Japan appreciated the proactive initiative of the United 
States in addres sing th e issue. Japan would submit the same kind of written communication and 
would request that China respond to those communications clearly and adequately.  
6.14.   In conclusion, Japan expected China to give full consideration, in its process for drafting the 
relevant regulations, to Japan’s abovementioned concerns and requests, and call ed upon China to 
provide clear and sincere responses to the concerns that Japan ha d mentioned at that meeting  and 
on other occasions.  
6.15.   The representative of the United States  said that his delegation, along with the delegation of 
Japan, had requested the inclusion of that topic on the agenda of the Council for Trade in Services 
in order to continue to express its concerns with China’s Cybersecurity Law and various implementing 
meas ures related to both the Cybersecurity Law and , in some cases, China’s National Security Law. 
He thank ed China for its time and engagement in bilateral meetings on th at issue.  
6.16.   Over the previous two years, WTO Members, the international business community a nd other 
stakeholders had raised serious concerns that China’s proposed measures would have a wide range 
of negative impacts, including restricting cross -border data transfers and requiring the localization 
of data in China.    
6.17.   The United States had submitt ed to the Council two previous communications relating to 
China’s Cybersecurity Law. On 26 September 2017, the United States had submitted a 
communication on "Measures Adopted and Under  Development by China Relating to its Cybersecurity 
Law", in document S /C/W/374, which focused on the issues of cross -border data flows and data 
localization. On 23 February 2018, the United States had submitted a follow -up communication , 
contained  in document S/C/W/376 , that included th at same topic.  
6.18.   The United States contin ued to bring the matter before the Council because the potential 
effects extended across all services sectors and therefore had bearing on the rights of many other 
Members.  
6.19.   The United States' fundamental concern was that the measures as currently drafted c ould 
disrupt, deter, and in many cases, prohibit cross -border transfer of information that were routine in 
the ordinary course of business.   S/C/M/136  
 
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  6.20.   To follow up on those issues, and to help facilitate China’s provision of specific responses, in 
advance of that meeting the United States had provided China a brief list of key outstanding 
questions regarding its proposed regime for cross -border transfers  of information. Those questions 
had been circulated to Members on 5 October, in document S/C/W/378. The United States 
recognized that its submission was close in timing to the meeting, and that the document could not 
be added to the formal agenda for that  meeting, and therefore understood that China and other 
Members might need additional time to review  it.  
6.21.   Nevertheless, his delegation wished to take the opportunity to review the questions it had 
asked previously to China , both in the Council and in its w ritten submissions to Chinese authorities. 
The questions focused on China’s proposed approach to require a burdensome "security assessment " 
for all such cross -border transfers of information, including:  
• prohibitions or restrictions on the undefined catego ry of "important data ", including who would 
define that category according to China’s  previous clarification, data that was "important for 
the nation ", and how any such broad definition could be administered in a manner that was 
not arbitrary;  
• regarding the category of "personal information of individuals ", a requirement for explicit 
consent (in virtually all cases) by the owner of the information before any cross -border transfer 
could take place, and whether China was willing to consider other,  less restrictive and globally 
acknowledged means of protecting such information, including the APEC Cross -Border Privacy 
Rules System (CBPR);  
• the proposed overall scope of any such security assessment, including the definition of 
"network operators ", and whether the security assessment would apply to all network 
operators, or solely to network operators of critical in formation infrastructure (CII);  
• and, if any limitation to network operators of critical information infrastructure  was intended, 
how that in practice would diminish any stakeholder concerns, as China’s Cybersecurity Law 
as well as its draft implementing measures (including new draft measures released in June 
2018) continued to define CII in very broad and vague terms.  
6.22.   His delegation appreciate d the opportunity to review those concerns at that meeting and 
looked forward to further discussion and responses to its written questions in future meetings.  
6.23.   The representative of Canada  said that her delegation supported the statements made by 
Japan and the United States. The Internet economy was driving economic growth and creating jobs 
in societies. In order for the Internet economy to thrive, it was critical that Members create  a climate 
that encouraged the free flow of information and fostered innovat ion. In addressing cybersecurity 
threats, it was essential that such measures did not curtail human rights and the free flow of 
information, innovation and trade.  
6.24.   Canada had indicated its concerns with China’s cybersecurity measures in the past, noting in 
particular measures requiring the local storage of data, restrictions on cross -border data flows, and 
the challenges foreign technology companies face d in competing for procurement contracts.  
6.25.   More broadly, Canada was concerned that the burdensome regulatio ns proposed for 
companies, in today’s fast -paced technology environment, risked hampering the dynamism of the 
ICT sector, and the Internet economy more broadly. Furthermore, foreign service providers might 
not have the capacity to enforce such new responsi bilities.  
6.26.   Canada hoped that China would consider the questions submitted by the United States and 
the questions that Japan would be sending; her delegation would also be interested in China’s 
replies.  
6.27.   The representative of the European Union  expressed his delegation's support for the 
interventions made by Japan, the United States and Canada. The EU had already expressed its 
concerns regarding the cybersecurity measures of China in the previous meetings of the Council. At 
that meeting, once again, the EU wis hed to recall some of the points that had already been raised , 
and to invite China to provide further clarifications.   S/C/M/136  
 
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  6.28.   The EU was especially concerned with the Article 37 of the Cybersecurity Law that requires 
operators of critical information infrastructu re to store personal information and other important 
data in China. According to th e Law, operators would only transfer data overseas if it was "truly 
necessary due to business requirements " and following a security assessment.  
6.29.   First, the EU considered th at the draft regulation on critical information infrastructure had a 
very broad scope. A definition of critical information could cover, and thereby put a data localisation 
obligation on , many commercial activities and whole sectors that had no bearing on national security.  
6.30.   Second, the implementing measures related to the cross -border transfer of personal 
information and important data extended the application of the data localisation and security 
assessment requirements to all "network operators ". The def inition of "network operators " was so 
broad that it could potentially cover any organisation , or even individuals. His delegation looked 
forward to receiving clarifications in that regard.  
6.31.   Third, the draft security assessment guidelines identified data fro m 27 economic sectors as 
"important data ". The scope was so broad that it could include, for example,  data that was necessary 
for normal business operations or non -sensitive, factual industry data which was not linked to 
national security. In addition, the  list was open -ended. Consequently, the data localisation and 
security assessment requirements in the Cybersecurity Law could potentially become applicable to 
any operator using telecommunications networks to transfer data.  
6.32.   The European Union considered t hat, as a result of the above data localisation and security 
assessment requirements, foreign companies operating in China could find themselves in a de facto  
less competitive situation compared to domestic operators in China, including in sectors where Ch ina 
had taken full or partial GATS market access or national treatment commitments. Foreign 
companies, unlike domestic ones, often stored and regularly transferred data overseas, and would 
therefore need to bear an additional burden deriving from the measu res in question.  
6.33.   The European Union had communicated those concerns to the relevant authorities in China. 
The European Union supported Japan and the United States in their request to China to provide 
further information to the concerns raised by different  Members. The EU would also appreciate 
China's update on the process, including the possibility for potential revision of the proposed 
implementing measures and any next steps.  
6.34.   The representative of Australia  expressed her delegation's support for the stat ements made 
by Japan, the United States, Canada and the European Union. While that agenda item related only 
to the Cybersecurity measures of China, Australia wished to make some general comments that 
applied to both that agenda item and the following one, on Viet Nam’s Cybersecurity Measures. Her 
delegation would also make separate comments on the measures of China and Viet Nam.  
6.35.   The ability to store and transmit data across borders was integral to international services 
trade, and restrictions on the free flow of data added considerable costs to doing business. Australia 
shared the view that safeguarding cybersecurity was a legitimate policy objective of governments, 
but, as it had stated previously in the Council, her delegation believed in finding th e least trade -
restrictive manner to achieve that objective. The default position should be that data flows were 
allowed and data was not required to be stored in a particular place unless a clear and legitimate 
public policy reason existed, not the other w ay around.  
6.36.   Global problems like cybersecurity required global solutions. Australia urged Members to 
utilise international standards and frameworks to deal with data security concerns, in order to 
maximise transparency and minimise unnecessary barriers to t rade, such as the ISO 27000 series 
on information security management systems.  
6.37.   Australia welcomed China’s ongoing efforts to consult on its Cybersecurity Law and related 
measures. However, her delegation remain ed concerned about China’s Cybersecurity Law a nd its 
implementing measures. Australia had provided feedback directly to China on several recent 
measures, noting concerns regarding ambiguity in scope and application.  
6.38.   It was unclear which service suppliers and what data the Law and implementing measure s 
applied to, and it was unclear in what circumstances cross -border data flows were permitted. As S/C/M/136  
 
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  raised at the May meeting of the Council, Australia was concerned that that ambiguity might create 
circumstances where service suppliers could not be confiden t that they were in compliance with the 
Law. Her delegation was concerned that this would discourage cross -border data transfers, result in 
the burden of compliance falling disproportionately on foreign service suppliers, increasing 
significantly operation al costs, and create potential barriers to future market entry.  
6.39.   The representative of New Zealand  said that his delegation shared some of the concerns 
raised by the United States, Japan, Canada, the European Union and Australia in relation to the 
cybersecu rity-related measures adopted and under consideration by China. New Zealand 
acknowledged that security and data protection challenges had emerged, and that collective efforts 
were required to ensure a continued , stable, secure and well -functioning Internet  environment. In 
that regard, New Zealand recognised that Members ha d the right to regulate on those important 
public interest grounds. Nonetheless, such measures should be introduced in a manner that was 
consistent with existing international obligations,  and that minimised negative impacts on trade.  
6.40.   New Zealand considered the scope of the Cybersecurity Law and its implementing measures 
to remain unclear. The regulation, as currently drafted, appeared to have a very broad scope. Data 
localisation requirem ents and restrictions on the cross -border transfer of data would affect foreign 
firms, putting them at a competitive disadvantage to local firms. Overly -broad data localisation 
regulations might also discriminate against foreign firms, since they would add  to the cost of these 
businesses operating in China compared with local businesses.  
6.41.   The draft TC260 Standard for cross -border data flows required that regulator -conducted 
security assessments be undertaken for cross -border transfers of certain types of bu siness -related 
data. As currently drafted, the assessment process was burdensome and expansive in its scope, and 
might disproportionally affect foreign firms. New Zealand requested that China clarify how it would 
ensure that data subject to security assess ment was limited to that which posed a legitimate risk to 
China’s national security, law enforcement or other critical national interests. New Zealand also 
sought China’s assurance that the national security testing process would treat foreign and domestic  
companies equally.  
6.42.   Similarly, the Cybersecurity Law and various implementing measures had failed to clearly 
define a number of key terms. These included "network operator " and "critical national security 
network " in the national multi -Level Protection Scheme framework, and "critical information 
infrastructure " in the TC260 Standards. Such unclear definitions created uncertainty as to which 
entities, products and operations were likely to be affected by the Cyberse curity Law and regulations. 
New Zealand encouraged China to adopt a narrower and more focussed scope, including more 
targeted definitions, to address its security and data protection concerns.  
6.43.   Like the Members that had spoken before on that item, New Zeala nd sought further 
clarification on aspects of the draft regulations issued to date. Specifically, New Zealand asked China 
to provide an indication of how it planned to proceed with the implementation and development of 
the Cybersecurity Law, taking into ac count the feedback China had received , both through that and 
other fora in the WTO, and through its other stakeholder engagement processes.   
6.44.   New Zealand urged China to ensure that the measures at issue be implemented consistently 
with the letter and spirit  of the obligations contained in the GATS, and be guided by the principle 
that regulations affecting trade be kept to the minimum necessary level to achieve legitimate public 
policy objectives. His delegation looked forward to further opportunities to enga ge with China on the 
measures in question and obtain further clarity about how they would apply.  
6.45.   The representative of Chinese Taipei  supported Japan and the United States for having raised 
once again that issue in the Council, and also shared the concerns  raised by the European Union, 
Australia and Canada. He also thanked China and Viet Nam in advance for their comprehensive and 
informative responses.  
6.46.   At previous Council meetings, Chinese Taipei had expressed its concerns on the importance 
of reciprocally equal market access on e -commerce. His delegation continued to believe free cross -
border data and information flows over the Internet enabled firms to co -ordinate their participation 
in global value chains and had empowered even tiny firms to enter the tra de arena. That was the S/C/M/136  
 
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  reason why many delegates and experts repeatedly stated that e -commerce and MSMEs were two 
sides of the same coin.  
6.47.   As outlined in Chinese Taipei's non -papers on e -commerce, which had been circulated over 
the previous two years, MSMEs  were enabled to reach potential overseas customers directly, across 
great geographical distances and visible boundaries, instead of relying solely on physical contacts, 
and consequently to gain access to markets.  
6.48.   Chinese Taipei looked forward to more acti ve discussions on future developments and to 
following developments with the measures.  
6.49.   The representative of China  said that he had carefully listened to some Members' concerns 
for 27 minutes. His feeling was one of surprise, for three reasons. First, jus t like Australia had rightly 
pointed out, China's cybersecurity measures were still under development; hence, he was surprised 
to hear that some Members had drawn the conclusion that they were burdensome, restrictive and 
ambiguous. He had had some opportun ity to participate in the drafting of the measures and to have 
internal discussions  there on and, in spite of this, he himself had no idea of what the consequences 
might be.  Second, there was a very famous saying in China, which was "never do to others what  
you would not like them to do to you ". His delegation knew very well that some other Members had 
measures that raised corresponding concerns for China.  Third, his delegation had responded to 
certain Members' questions on the cybersecurity  protection issue  several times , in the Council and 
on other occasions. Therefore, he had been quite surprised to find that the issue was still on the 
agenda of that meeting. Previously, services cluster of meetings lasted a full week but now meeting 
times and agendas were much more precious. Therefore, China suggested that more time and 
opportunities be given to the discussion of other topics and other Members.  
6.50.   The previous week had been the National Day ho liday in China, which  had left his delegation 
with very limited prepara tion time in Beijing, so he was thankful for the United States' understanding 
in that regard.  Nevertheless, he still wanted to take that opportunity to respond to certain  of the  
questio ns posed , because China always believed that sincere communication was the best way to 
enhance mutual understanding. His responses were as follows.  
6.51.   First, regarding the issue of transparency. During the drafting process of the Cybersecurity 
Law and its sup porting regulatory measures, China had solicited public opinions and given 
opportunities for comments to stakeholders , including the United States, Japan and other interested 
Members. There was no doubt that China's  practice was in line with existing WTO r ules. Moreover, 
what his delegation was sharing at that meeting included information about draft measures that had 
not yet been finalized. As far as transparency was concerned, those efforts had, in his delegation's 
view, exceeded the requirements of WTO r ules.  
6.52.   Second, regarding the issue of necessity. He believed that all delegations understood that , in 
today’s world, each Member depended on the reliable functioning of critical information 
infrastructure, while different kinds of cybersecurity threats pla ced Members' national security, 
economy, and public safety at risk. Therefore, ensuring cybersecurity was an urgent need and an 
unquestionable sovereignty issue of every Member. China needed the Cybersecurity Law and its 
draft supporting measures, a s the U S had the Cybersecurity Enhance Act of 2014, National  
Infrastructure Protection Plan, etc. As for cross -border data flows, some Members might think that 
free flow was the best practice, while others might consider the orderly and lawful flow as more 
approp riate. Each Member had its own unique national conditions, there was no one -size-fits-all 
approach. China firmly supported the multilateral trading system and free trade, but liberalization 
did not mean deregulation. The objectives of China to stipulate an d implement the Cybersecurity 
Law and relevant measures, including the cross -border data transfer security assessment, were 
neither to restrict market access of foreign enterprises, technologies or products, nor to prohibit 
cross-border data flows, but rat her to safeguard cyberspace sovereignty and national security, 
maintain social and public welfare, and protect the rights and interests of Chinese citizens, legal 
persons and other organizations.  
6.53.   China had noticed that both Japan and the United States had  participated in the TPP 
negotiations. Article 14.11 of the TPP E -Commerce Chapter stipulated that "nothing in this Article 
shall prevent a Party from adopting or maintaining inconsistent measures to achieve a legitimate 
public policy objective ". Even taking TPP, that high -level agreement negotiated and designed by the S/C/M/136  
 
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  Members in question, as a reference, his delegation believed that China's regulatory requirements 
were in line with the requirements for data flows. Moreover, WTO rules, such as the GATS, cle arly 
stipulated the right of Members to regulate in order to meet national policy objectives. Everyone 
was aware of  the data leakage incidents that had recurred on the Facebook platform recently. Even 
as a world -class Internet company, Facebook had not bee n able to ensure the security of its users' 
information, l et alone other companies. In that  light, it should not be hard to understand the 
necessity of a security assessment on cross -border data flows.  
6.54.   China was fully aware that cross -border data flows had  become a premise for economic 
globalization, and China was willing to enhance exchange and cooperation with other Members on 
that matter, jointly promote lawful and orderly cross -border transfer of data, and adequately protect 
personal information securit y and national cybersecurity.  
6.55.   Third, regarding the definition or scope of specific terms. With regard to the critical 
information infrastructures (CII), according Article 31 of the Cybersecurity Law, the State 
implement ed focused  protection for critical in formation infrastructure in important sectors and areas , 
such as public telecommunications and information services, energy, transportation, water 
conservation, finance, public services, e -government, etc., as well as other critical information 
infrastruct ure that, whenever it was destroyed, lost its ability to function or encountered data leaks, 
might gravely harm national security, the national economy, people’s livelihoods and the public 
interest, on the basis of the tiered cybersecurity protection struc ture. The scope of critical 
information infrastructure and relevant security protection rules had been  formulated by the State 
Council.  
6.56.   He had tried to compare th at with the definition of critical infrastructure in relevant US laws, 
such as section 1016 o f the USA Patriot ACT of 2001, where critical infrastructure mean t systems 
and assets, whether physical or virtual, so vital to the United States that the ir incapacity or 
destruction would have a debilitating impact on security, national economic security,  national public 
health or safety, or any combination of those matters. In that regard, he felt that the definition in 
China's Law seemed to be clearer.  
6.57.   Concerning the concept of important data, China was currently drafting the relevant 
supporting measures  of the Cybersecurity Law, such as the Guidelines for Data Cross -Border 
Transfer Security Assessment, the Measures on the Security Assessment of Personal Information 
and Important Data , and others. The above -mentioned drafts had already been released for p ublic 
comments. The current draft s stipulated the scope of important data and defined the important data 
as the data that was "closely related to national security, economic development, and social public 
interest ".  
6.58.   As for the stipulation  that transfer of  personal information required explicit consent by the 
owner of the information, China did not see anything inappropriate with it. His delegation had noticed 
that, among the United States Federal Trade Commission's fair information practice principles, the  
first principle was 'Notice/Awareness', which required that consumers be given notice of an entity's 
information practices before any personal information was collected from them. The second principle 
was 'Choice/Consent', which meant giving consumers opt ions to control how their data was used, 
and specifically choice related to secondary uses of information beyond the immediate needs of the 
information collector to complete the consumer's transaction. Hence, China had reason to believe 
that "transfer of p ersonal information requires explicit consent by the owner of the information " was 
also a universal principle for the protection of consumer privacy in the United States.  
6.59.   The representative hoped that his delegation's responses would help Members further 
understand the relevant Chinese regulatory requirements. He then wished to take the opportunity 
to express China's concerns on certain Members’ measures that might affect other Members’ 
cybersecurity interests.  
6.60.   The first concern related to the Clarifying La wful Overseas Use of Data Act (CLOUD Act), which 
required that "a provider of electronic communication service or remote computing service shall 
comply with the obligations to preserve, backup, or disclose the contents of a wire or electronic 
communication  and any record or other information pertaining to a customer or subscriber within 
such provider’s possession, custody, or control, regardless of whether such communication, record, 
or other information is located within or outside of the United States ". Faced with that requirement, S/C/M/136  
 
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  service providers located in other WTO Members may encounter a dilemma situation if disclosure of 
electronic data was prohibited by the host country law.  What would happen if communication service 
providers were faced with potential conflicting legal obligations, when a foreign government ordered 
disclosure of electronic data that US law might prohibit providers from disclosing? Moreover, who 
would take the responsibility of protecting consumers' privacy and personal data se curity?    
6.61.   Second, it was well -known that the US President had signed the "Defence Authorization Act 
for Fiscal Year 2019 " in August 2018, and had passed the Foreign Investment Risk Review 
Modernization Act (FIRRMA) and the Export Control Reform Act (ECRA).  Specifically, FIRRMA's 
provisions on critical infrastructure, critical technologies and sensitive personal data expanded the 
power of Committee on Foreign Investment in the United States (CFIUS), and any investment 
involving such new category was subject to CFIUS review; while ECRA enlarged US export control s 
on "emerging and foundational technologies ". Although the specific list of such technologies was still 
unclear, the business community was concerned that artificial intelligence, financial technology,  and 
Internet technology were highly likely to be identified as "emerging and foundational technologies ". 
Therefore, many stakeholders had raised concerns on the vague and broad definitions in FIRRMA 
and ECRA. In that regard, did the export control of "emerging and foundational technologies " imply 
that the U nited States was beginning to favour technology and data localization, thus restricting the 
free flow of data? How would the U nited States reconcile the enlarged data jurisdiction of CFIUS with 
existing data transmission models?  
6.62.   He hoped that his delegation's concerns could be resolved through concrete responses.  
6.63.   The Chairman  suggested that the Council take note of the statements made.  
6.64.   It was so agreed . 
7  ITEM G: CYBERSECURITY MEASUR ES OF VIET NAM  – REQUES TED BY JAPAN AND THE  
UNITED STATES  
7.1.  The Chairman  said that th e item had been added to the agenda of the Council at the request 
of the delegations of Japan and the United States.   
7.2.  The representative of Japan  reiterated his delegation's concerns with regard t o the Vietnamese 
Cybersecurity Law. Japan had expressed a series of concerns over the obligation to locally store data 
and the obligation to conduct a security assessment on cross -border data transfers on the occasion 
of the previous meeting of the Council , as well as in its comments on the draft Cybersecurity Law 
submitted during the public comment procedure. It was regrettable, however, that the Cybersecurity 
Law had been approved at the Vietnamese National Assembly in June 2018, without introducing  the 
essential improvements in spite of Japan’s repeated expression of its concerns.  
7.3.  In particular, with reference to Article 26.3 of the Law, Japan wished to point out that, while 
the obligation to store important data in Viet Nam was imposed both on local and  foreign enterprises, 
it could force foreign enterprises to bear an additional burden compared to local enterprises , in terms 
of the need to meet extra costs related to storing data in Viet Nam. From that perspective, the draft 
Law could place foreign comp anies under conditions that rendered them less competitive than local 
companies, and, consequently, could be related to the national treatment obligation under 
Article  XVII of the GATS. Japan asked Viet Nam to explain how it maintained the consistency of t hat 
measure with its obligations under the GATS.  
7.4.  In addition, Article 26.3 provided that foreign enterprises, as defined in Sub -Article 26.3, shall 
locate their branches or representative offices in Viet Nam. That requirement could substantially 
restrict t he provision of cross -border services (i.e. mode 1). Moreover, the definition of "enterprises " 
stipulated under Article 26.3 was not necessarily clear from that sentence. Japan requested Viet  Nam 
to ensure that the details of Article 24.4 were fully consis tent with the GATS and to make sure that 
it would not harm the predictability of business operations.  
7.5.  At the Council meeting held in May, Viet Nam had stated that, for the benefit of its citizens, 
dealing properly with cybersecurity and cybercrime was important. Japan understood the importance 
of the policy objective.  However , Japan  wished to underscore  once again that the regulations at 
issue could not only become barriers hindering access to the Vietnamese market , but also harm the S/C/M/136  
 
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  business operations of foreign enterprises. Japan had noted that Viet Nam planned to prepare laws 
and regulations related to the operation of the Cybersecurity Law in the near future. In that regard, 
Japan requested that Viet  Nam develop the draft laws and  regulations in such a manner that did not 
unfairly hinder the level -playing field of the business environment in Viet  Nam and were fully 
consistent with the GATS.  
7.6.  The representative of the United States  said that his delegation had requested the inclusion  of 
that topic on the Council's agenda to provide an update on its concerns about Viet Nam’s Law on 
Cybersecurity. When his delegation had raised that topic at the CTS meeting in March, the Law was 
still in draft form. On 12 June 2018, Viet Nam’s National Assembly had approved final passage of 
the Law.   
7.7.  Based on his delegation's assessment of the final version of the Law, the United States was 
extremely concerned about how the Law would impact a wide array of foreign service suppliers. His 
delegation had en umerated those concerns at length at the previous CTS meeting and in detailed 
written comments to Viet Nam’s National Assembly. He noted that those concerns had also been 
shared by other WTO Members and a range of stakeholders. Accordingly, the United Stat es was 
disappointed that that broad range of concerns , and many specific suggestions for addressing them, 
had, for the most part, been ignored.  
7.8.  At that meeting, he would highlight two particularly problematic provisions of the final Law, in 
the hope that V iet Nam would address them in implementing regulations currently under 
development. Article 26.3 of the Law on Cybersecurity imposed sweeping data localization and local 
presence requirements on any "local and foreign enterprises that provide services on 
telecommunications networks and the Internet " and that were "involved in gathering, exploiting, 
analysing or processing data on personal information, service users’ relations, or data created by 
service users in Viet Nam ". Such enterprises  had to store data  in Viet Nam for a period to be specified 
by the Government, and also had to locate branches or representative offices in Viet Nam.  The final 
language in Article 26.3 appeared to have expanded the scope of the draft provision posted for 
comment earlier tha t year, which had limited such localization requirements to suppliers of Internet 
and telecom services.  
7.9.  It was hard to think of a service supplied on a cross -border basis that was not provided, at 
least in part, over the Internet or telecom networks, and w here suppliers did not gather or process 
certain user -generated data. This was certainly the case for suppliers in the 61 specific sectors or 
subsectors for which Viet Nam had undertaken mode 1 commitments under the GATS, including 
most professional servic es, computer and related services, advertisi ng services, management 
consulting  services, scientific and technical consulting services, distribution services, computer 
reservation services, and certain financial services, among others.  
7.10.   Localization requirem ents, both with respect to data and to juridical presence, could be 
extremely disruptive to trade in services and the burden could fall disproportionately on foreign 
service suppliers through requiring redundant computing and office facilities. In sectors for which 
Viet Nam had undertaken mode 1 commitments under the GATS, US and other foreign suppliers 
should be able to supply services such as those just mentioned without establishing a presence in 
Viet Nam. To the extent that data comprised a significant part of the service, such suppliers should 
be able to rely on infrastructure in a location of their choosing and not have to maintain or lease 
computing facilities in Viet Nam.  
7.11.   Service suppliers with commercial presence in Viet Nam (i.e. mode 3 suppliers) also depended 
on computing resources located outside of Viet Nam. Th at was particularly the case for financial 
institutions, which needed to utilize global systems in order to effectively offer core services, 
appropriately manage global risk and fulfil reg ulatory requirements across jurisdictions. Accordingly, 
requiring such suppliers to store data in Viet Nam disproportionately affected foreign suppliers, which 
had, over decades, built up global infrastructure.  
7.12.   Given the significant disruption the Cybersec urity Law could impose on trade in services, the 
United States urged Viet Nam to narrow the scope of the Law's applicability in the implementing 
regulations. At a minimum, Viet Nam should exempt from the scope of the Law all services subject 
to full GATS c ommitments, or services subject to similar commitments in FTAs, and those mode 3 S/C/M/136  
 
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  service suppliers that were dependent on established investment in significant offshore data -
processing facilities.  
7.13.   His delegation understood that Viet Nam planned to release implementing regulations, 
including two decrees and a Prime Ministerial decision, before the Law went into effect on 
1 January  2019. The United States strongly urged Viet Nam to consult with other Members and 
stakeholders in an open and transparent manner prior to promulgating final versions of those 
regulations , and to provide ample time for Members to provide meaningful input. His delegation 
believed that this would take a minimum of 60 days following publication of the draft regulations.  
7.14.   Finally, both as a general matter under Article III:3 of the GATS (Transparency) and a specific 
telecommunications -related measure falling under Article 5(c) of the Telecommunications Annex, 
Viet Nam should formally notify the CTS with respect to both the Law and implemen ting regulations.  
7.15.   The representative of the European Union  shared the concerns expressed by Japan and the 
United States regarding the recently adopted Cybersecurity Law of Viet Nam.  
7.16.   The European Union had submitted detailed comments to the Vietnamese auth orities during 
the consultation process, expressing strong concerns regarding the negative impact the Law could 
have on foreign enterprises. His delegation had also raised its main concerns at the previous CTS 
meeting, and had asked Viet Nam to take into a ccount the views expressed by WTO Members at the 
CTS and by foreign business operating in the country. However, the Cybersecurity Law adopted in 
June was even more restrictive than the draft on which his delegation had commented.  
7.17.   The European Union was par ticularly concerned about the data localisation and local presence 
requirements imposed on local and foreign enterprises that provided services on telecommunications 
networks and the Internet and processed personal information and other important data in V iet Nam. 
That obligation could potentially cover all  economic sectors and affect  all businesses providing 
service from abroad. The scope of those measures should be reassessed.  
7.18.   The European Union was concerned that the adopted measures imposed costs and 
administrative burdens on foreign businesses than did not have to be borne by domestic operators. 
The measures forced foreign enterprises into a less competitive situation when compared to domestic 
ones, including in sectors in which Viet Nam had taken full or partial GATS market access or national 
treatment commitments. His delegation would appreciate if Viet Nam provided an explanation as to 
the consistency of the new Cybersecurity Law with its international commitments.  
7.19.   The European Union invited Viet Nam  to provide further explanations addressing the concerns 
raised in the CTS. The EU also supported the request of Japan and the United States to ensure that 
the relevant cybersecurity measures were in line with Viet Nam’s international commitments. The 
European Union would appreciate if Viet Nam provided information on the state of play of the 
implementing measures.  
7.20.   The representative of Australia  expressed her delegation's support  for the statements made 
by Japan, the United States and the European Union.  Recalling her delegation's  general comments 
under the previous agenda item , Australia also had  concerns about Viet Nam’s Law on Cyber security.  
Along with other Members , Australia had  provided feedback on Viet Nam’s draft Law, noting its 
interest in seeing a  law that  supported  increased participation in global e -commerce, and  enhanced  
the business environment in Viet Nam, including by being transparent, clear and compliant with 
international trade commitments.  
7.21.   She thank ed Viet Nam for i ts willingness to engag e on the matter while the Law was in draft 
form. Now that the Law had  been passed, she encourage d Viet Nam , in implementing the L aw, to 
balance the legitimate need to safeguard cybersecurity  with facilitation of digital trade and 
consistency with international trade obligations.   
7.22.   Australia noted that Viet Nam  planned  to prepare further measures related to the opera tion 
and implementation of its C ybersecurity Law, and would wish to have furth er opportunity to engage 
on that matter as tho se evolve d. S/C/M/136  
 
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  7.23.   The representative of New Zealand  said that, as with Japan, the United States, the 
European  Union and Australia, New Zealand continued to be concerned regarding the potential 
effects of Viet  Nam’s La w on Cybersecurity , which his delegation understood was to come into effect 
on 1 January 2019.  
7.24.   New Zealand also understood that Viet Nam intended to release its draft implementing 
regulations in the near future, and urged this to happen quickly, to enable  stakeholders to effectively 
input into the consultation process before final regulations were promulgated.   
7.25.   He recalled his delegation's previous comments on the importance of the regulations at issue 
remaining consistent with Viet Nam’s GATS commitments,  and to ensure that the requirements 
including regarding the local storage of data and limitations on cross -border transfer of data did not 
unduly act as a barrier to foreign service suppliers, putting such businesses at a potential commercial 
disadvantage .  
7.26.   As other Members  had done , New Zealand called on Viet Nam to promptly notify both the Law 
and proposed regulations, to enable Members and traders to become better acquainted with its 
requirements.  
7.27.   The representative of Canada  supported the intervention s on Viet Nam’s Cybersecurity Law 
made by the United States, Japan, the European Union, Australia and New Zealand. In previous 
meetings, Canada had expressed concerns with elements included in the draft version of the Viet 
Nam’s Cybersecurity Law. The Law adopted by Viet Nam did not address all of her delegation's 
concerns. Canada looked forward to continued engagement by Viet Nam on that issue in the Council 
for Trade in Services.  
7.28.   The representative of Chinese Taipei  also joined other Members’ concerns on  Viet Nam ’s Cyber 
Security measures.  
7.29.   The representative of Viet Nam  took the opportunity to respond to the United States, Japan 
and other Members, while also thanking those Members for sharing their views with regard to 
Viet Nam’s Law on Cybersecurity and taking note of their remarks and observations.  
7.30.   It was the fact that on 12 June 2018 the National Assembly of Viet Nam had adopted the Law 
on Cybersecurity by voting with a majority of 86.86% representatives providing their consent. The 
prior critical debat e concerning th e Law, as well as the voting result itself at the National Assembly , 
reflected a well -informed consideration process, which had taken into account all opinions and 
comments from different stakeholders, including concerns and suggestions by W TO Members. It had 
to be noted that the Law's adoption was based on the broad national policy objective of ensuring 
cybersecurity , while adhering to Viet Nam's WTO commitments.  
7.31.   There were some misinterpretations of certain provisions in the Law in relation to Viet Nam's 
GATS commitments, specifically the alleged inconsistency with market access and national treatment 
obligations due to data localization and local presence require ments. In that connection, his 
delegation wished to clarify that those requirements were important in the case of Viet Nam for a 
number of legitimate public policy objectives, such as security of State information, privacy and 
protection of personal data, law enforcement support and ensuring the quality of the services 
supplied, among others. The requirements neither run counter to Viet Nam's market access 
commitments under the GATS, nor were they inconsistent with the national treatment obligation; as 
the United States had pointed out, Article 26.3 of the Cybersecurity Law imposed the obligations in 
question on both local and foreign enterprises. Assuming that the burden of complying with those 
requirements fell disproportionately on foreign service supplie rs did not hold, as Viet Nam's local 
suppliers did not possess the advantage of data localization or presence in the context of 
interconnected global supply chains.  
7.32.   In order to make the Law effective, the responsible domestic agencies were drafting 
impleme nting regulations. It was expected that draft regulations would be released soon enough for 
public comment. Just like the Cybersecurity Law formulation and adoption, a similar process would 
apply for those regulations, i.e. it w ould be open and transparent . Viet Nam always abided by the 
transparency obligations, including notifications , in line with related provisions of the WTO 
Agreements.  S/C/M/136  
 
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  7.33.   The Chairman  suggested that the Council take note of the statements made.  
7.34.   It was so agreed . 
8  ITEM H: RECENT DEVELOPMEN TS IN TRADE IN SERVI CES STATISTICS  
8.1.  The Chairman  recalled that, in October 2016, Members  had agreed that the Secretariat would 
present to the Council, on a yearly basis, the latest developments in trade in services statistics. 
Hence, the Secretariat had once again been invited to update the Membership on recent 
developments in trade in servic es statistics.   
8.2.  A representative of the Secretariat  said that a pillar of the Secretariat's work was the production 
of statistics. Annual and quarterly trade in services statistics, the so called "Geneva datasets " were 
produced by the WTO in collaboration with UNCTAD and ITC, in order to leverage resources, whereas 
solely the WTO collected and disseminated monthly statistics.  
8.3.  The annual dataset was available for the 2005 -2017 period, with the 2017 estimates having 
recently been released. It covered over 20 0 reporters, provided a detailed sectoral background, with 
bilateral statistics, where available, and world estimates and regional aggregations. The quarterly 
dataset was available from the first quarter of 2005 until the second quarter of 2018, with the t hird 
quarter being released  on the WTO website the following week. That dataset  covered over 150 
reporters, broken down by main service sector, with world estimates and main regional 
aggregations. Finally, the monthly dataset existed for the period from Ja nuary 2006 until August 
2018, covered over 30 reporters and provided data on total commercial services.   
8.4.  After statistics had been  produced, they were disseminated and analysed in different ways: in 
the statistical database, which would become available vi a a new portal in November 2018 and would 
provide, inter alia, BoP and FATS services statistics; in bulk downloads of detailed annual data; in 
short-term statistics; in the World Trade Statistical Review 2018, which had just been published in 
print and had  been available on -line since July; and in the Trade Profiles 2018 publication.  
8.5.  In terms of the specific projects the Secretariat was involved in, the first one was a WTO -OECD 
project on bilateral trade in services. This was aimed at developing a benchmark  dataset for bilateral 
trade in services by main service sector for the 2005 -2017 period.  A historical dataset based on 
BPM5 had been  available up to 2012; the project was now aimed at creating a 2005 -2017 dataset, 
which should be released in the first qua rter of 2019.  
8.6.  The second specific project, which was funded by the European Union, was on trade in services 
by mode of supply. It was aimed at developing and maintaining an analytical dataset  by 59 main 
sectors and by mode  of supply, to cover the 2005 -2017 period and ensure  that the two datasets 
under development could be used together.  
8.7.  The Secretariat was also involved in analysing trade data, for instance in publications or papers 
for WTO Committees. In terms of world exports of commercial services by m ain sector, the 
representative noted that these had recovered  in 2017 , after two difficult years, by growing by 8% 
compared to 2016, as opposed to only a 1% increase in 2016 compared to 2015. She further noted 
that all regions had participated in th at growth. From a sectoral perspective, charges for the use of 
intellectual property (i.e. patents, licensing, franchising and IP included for example in audio -visual 
material) had been the most dynamic sector, surpassing ICT services which had traditionally been  
the most dynamic industry. The United States and the European Union accounted for 73% of 
receipts, but rapid growth had also taken place in various developing countries. Transport services 
had also recovered significantly in 2017, and shipping in particul ar, after experienc ing challenging 
times due to low shipping rates. Travel was also thriving, and had been the fastest -growing sector 
since 2013, increasing by over 25% in Africa, driven largely by the recovery in North Africa.  
8.8.  Trade in commercial service s remained dominated by developed economies, although the share 
of developing countries' exports had increased from 23.8% in 2005 to 30.6% in 2017. By way of 
comparison, developing countries' share in merchandise trade was 13% higher than their share in 
services trade. Developing economies' export participation in 2017 was mostly concentrated in 
travel, followed by transport services and finally by other commercial services, where developing 
economies' exports accounted for less than a quarter of the total.  The commercial service category S/C/M/136  
 
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  included various types of services , such as ICT services, charges for the use of intellectual property, 
financial services, and professional services. Developing economies' participation in exports of other 
commercial servi ces was highly concentrated, with India, China, Singapore and other developing 
Asian economies accounting for 18.4% of the total, three times as much as all other four developing 
regions taken together ; those economies had managed to penetrate upstream ser vices markets.  
8.9.  When it came to LDCs, their participation in global services exports remained below 1% in 
2017. Their exports accounted for 0.6% of the total, up from 0.4% in 2005. The situation mirrored 
the one in merchandise trade, where LDCs' trade amoun ted to less than 1% of the total. Comparing 
the structure of world commercial services imports and LDCs' commercial services exports for 2016 , 
by main type  of services, one could note an asymmetry in the type of services demanded by the 
world, with other c ommercial services accounting for half of the total, and the services supplied by 
LDCs, which were mostly travel , and  included the expenditure of foreign travellers in goods and 
services during their stay in LDCs. It was also noticeable that LDCs' travel e xports were 
predominantly south -south trade. Although there was no information available on bilateral service 
flows for LDCs, as for other developing economies and even developed economies, the European 
Union did publish some disaggregated data. This showe d that EU imports of services from LDCs were 
very concentrated, with the first five LDC partners accounting for around 50% of the total.  
8.10.   Finally, in terms of technical assistance, the representative said that the WTO was the inter -
agency focal point for te chnical assistance in trade statistics, and had experienced growing demand 
for workshops and courses. She indicated that the next technical assistance event was the WTO -
African Union course on "Trade in Services Statistics with emphasis on Africa ", to be h eld in Geneva 
from 3 to 7 December 2018. The course, which would be attended by statisticians, would focus on 
data collection  and the compilation of service  statistics of trade interest, including FATS, modes of 
supply, etc. Attendance to the course requir ed the prior enrolment in the WTO -UNCTAD -UNSD e -
learning course on trade in services statistics. Contributors at the course included national experts 
from Members, UNCTAD, OECD, ITC, UNSD and PARIS21. The latter organization, the Partnership 
for the Develo pment of Statistics in the 21st Century, might be less familiar to delegations. It fostered 
the development of statistics and , inter alia , provided assistance to developing economies by 
facilit ating access to donor funds to develop statistics in various fi elds, including trade. However, 
such trade statistics needed to be included in countries' National Strategies for Statistical 
Development in order for financing to be mobilised. The representative noted that technical 
assistance could not only consist of w orkshops and courses but that the availability of detailed 
statistics on trade in services required the launch of specific enterprise surveys which were costly to 
develop, especially for LDCs.  
8.11.   The representative of New Zealand  thanked the Secretariat for t he presentation and greatly 
appreciated the work done , given the importance of being able to quantify trade flows in services. 
He also wished to underline that the interpretation of the data depended on sectoral classifications 
and, in that context, at the  previous CTS meeting, his delegation had drawn the attention of Members 
to the fact that the UN statistical website appeared to no longer provide excerpts to the CPC 
Provisional . New Zealand viewed this as a significant gap , given the importance of that instrument 
to understand GATS commitments and in terms of public access to information. He understood that 
the Secretariat had continued to engage with UNSD on that issue; his delegation appreciated the 
Secretariat's efforts a nd hoped that the issue could be resolved soon. He looked forward to updates 
in due course.  
8.12.   The Chairman  indicated that, under Other Business, the Secretariat would indeed be providing 
an update with respect to  the issue raised by New Zealand.  
8.13.   The represe ntative of the United States  expressed his appreciation for the Secretariat's 
presentation, which was quite timely given the conversation Members had had earlier in the day. 
The presentation had been particularly instructive in terms of looking at LDC serv ices trade. It did 
confirm his delegation's earlier intervention in trying to steer the Council's work on LDC issues 
towards something broader than just the Waiver. The 1% share of LDC in services trade might seem 
depressing, but it also highlighted that i f Members were supposed to focus their efforts across every 
service sector to every LDC , they might try and attempt to do something about that 1% share , while 
the facts showed that there were LDCs for which, for example, over 10% of the GDP came from 
tourism and for which that sector was critical. In that sense, it was important to explore individual 
development goals and individual context s, as these were important if Members wanted to address 
how LDCs participated in service trade. It was essential to hea r from LDCs individually , and S/C/M/136  
 
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  disaggregate the bigger numbers; it might be that travel, transport or commercial services were 
incredibly important for one LDC regardless of whether they were important to all LDCs.  
8.14.   The contribution of services to an econom y was different from the contribution of services to 
exports and trade, and it was essential to remember that services were an extremely important part 
of the domestic economy. In that sense, Members also needed to focus on helping LDCs support 
service sec tors, whether they traded or not. That was one of the considerations that underpinned 
his delegation's push to have a broader discussion; the Waiver alone was not sufficient to address 
that 1% of global trade.  
8.15.   It was also key to keep in mind the south -south trade aspect. Exporting services from Africa 
to the United States was likely more difficult and expensive than exporting services to neighbouring 
countries; the latter should probably be the starting point. The focus should be kept on the individual 
level, in terms of the sectors, markets and priorities for individual LDCs. The participation of LDCs 
in international services trade needed to be increased, but it was more likely that LDCs would be 
trading with their neighbours and regional partners first, before penetrating larger, more competitive 
markets. It was important not to lose that focus in the Council's work on LDC issues. In that sense, 
the presentation had validated his delegation's approach to the discussion.  
8.16.   The Chairman  suggested  that the Co uncil take note of the statements made . 
8.17.   It was so agreed . 
9  ITEM I: OTHER BUSINESS  
9.1.  The representative of the United States  wished to inform Members that the OECD' s 2018 Global 
Forum on Trade would be held on 22 October,  in Paris, and its theme would be digital trade. Further 
information on the event was available from the OECD's website.  
9.2.  The representative of India said that her delegation had taken note of the intervention made 
by Brazil during the Council meeting held in  May and supported  the view that EU might  notify the 
entry into force of the EU General Data Protection Regulation (GDPR) in accordance with Article III:3 
of the GATS , taking into consideration its relevance to trade in services. India await ed the EU’s 
response on the matter and fe lt that de tailed discussions on the same might  be undertaken after 
the notification. With regard to the impact of GDPR, her delegation had undertaken domestic 
consultations with stakehol ders, wherein several issues had  been raised by Indian  service providers 
with re gard to provisions in GDPR and also the manner in which the R egulation  was being 
implemented.  
9.3.  In trying to reply to India's question, t he representative of the European Union  noted that his 
delegation had not been given any pre -warning of the question as w as usually customary. His 
delegation still needed to revert to Brazil's question on that same issue  raised  at the previous 
meeting of the Council. His authorities were currently looking into the issue and were examining the 
request.  
9.4.   He had taken note of I ndia's intervention, which was interesting and brought back the debate 
to notifications under GATS Article III:3. In that regard, he wished to ask India if its question was 
intended to be part of a new debate on notifications. He noted that all Members wer e sitting in a 
glasshouse with respect to notifications, and he wondered if India's comment was intended as a 
fresh impetus on Members to notify more in the years ahead. His delegation had had a look at 
existing notifications and has noted that very few, i f any, privacy regimes or legislation on data 
protection had been notified to the Council under Article III:3. In that regard, he was puzzled by the 
sudden interest in one specific piece of legislation on the EU side. Having said that, the European 
Union w as looking into the question posed by Brazil at the previous meeting and would revert to 
that delegation as soon as practicable.  
9.5.  A representative of the Secretariat  recalled that, at the May meeting, New Zealand had drawn 
the Council's attention to the fact that the website of the United Nations Statistics Division no longer 
provided access to the Provisional Version of the Central Product Classification, but only contained 
links to the more recent versions of the CPC, 1. 1 from 2004 and 2.1 from 2015. Given the importance 
of the CPC Provisional as a reference document for services commitments under the GATS and many S/C/M/136  
 
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  FTAs, upon New Zealan d's request, the Secretariat had  been in regular and repeated contact with 
UNSD on th at issue.   
9.6.  The Secretariat  had lear nt that the problem appeared  to stem from an  IT migration issue at 
the UN. The UN Statistics Division was aware of the difficulty, and had  received a number of requests, 
as well as com plaints from Members, which had  highlighted the need for action. Although for the 
time being UNSD had  no breakthrough to report, it planned  to bring previously available content, 
including the CPC Provisional and correspondence tables, back up on its website, taking into account 
its new IT r equirements and safety issues. The S ecretariat would continue to engage with UNSD , to 
convey the importance and urgency of the issue, and would  report to the CTS in December, hopefully 
with some positive news.  
9.7.  The Chairman  said that the Council would take note of the statements made.  
9.8.  The meeting was adjourned . 
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