RESTRICTED  
  
S/C/M/133  
 
6 November  2017 
(17-6033) Page: 1/26 
Council for Trade for Services    
 
 
REPORT OF THE MEETIN G HELD ON 6 OCTOBER 2017  
NOTE BY THE SECRETAR IAT 
The Council for Trade in Services held a meeting on 6 October 2017, chaired by Ambassador Julian 
Braithwaite (United Kingdom). The agenda was contained in document WTO/AIR/CTS/1 3. 
 
The Chairman  took the opportunity to welcome the new Director of the  Secretariat's  Trade in 
Services and Investment Division  (TSD) , Ms Xiaolin Chai , who had taken up her duties just that 
week.   
 
The new Director of TSD, Ms Xiaolin Chai, thanked Ambassador Brai thwaite for his kind words of 
introduction.  She was delighted to join the WTO S ecretariat and to be at Members'  service.  Her 
predecessor , Mr. Hamid Mamdouh , had dedicated 27 years  at the service  of the Organiz ation and 
his immense contribution deserved del egations'  deep appreciation.  On a p ersonal note, she wished 
to pay tribute to him for the guidance he had offered to her  on every aspect of the Division's work. 
She was humbled to say that Hamid had left a big hole that she would  not be able to fill withou t 
working closely with her colleagues, with the Council and its subsidiary bodies a nd most 
importantly with all Members . She would try her very best to deliver.  That was her fifth day on the 
new job, and for the previous four days she had  been meeting people and attending  the meeting  
of the WPDR.  
 
As that  stage , when  Members were preparing for MC11, what was needed most were confidence 
and collaboration. In that  regard, she was reminded of a story that she had learnt when she had 
served a s the senior official for the DDA negotiations 10 years earlier. It was a short story and, 
with Members' permission, she wished to recount it . The story went as follows. There are a snake 
and a rabbit; they are friends but both are blind. One day, the snak e suggests that they feel each 
other to find out what the oth er looks like. The snake starts first and says: "You are tender, you 
are warm and you have long ears ". Then the rabbit feels the snake and says: "You are cold, you 
are slippery and you have no ea rs: you must a trade negotiator ". While she was not a cold -hearted 
negotiator , she certainly needed to sharpen her listening skills , especially at a time when Members 
needed to build convergence over  divergence.  
 
She had  met Amb assador Braithwaite two day s earlier and she had been immediately impressed 
by his rich experience  and wide -ranging  knowledge on t rade in services . She therefore knew that 
delegations were in good hands. She would have the Council's Secretary, Ms. Antonia  Carzaniga,  
play the key role of support ing Ambassador Braithwaite and she would  go to the floor and practice  
her listening skills. She thanked delegations once again and looked forward to working closely with 
them in the years ahead.  
 
All delegations who spoke  at the meeting welcomed Ms Chai to her new position and wished her all 
the best in the new job.  
 
The Chairman  said that he was impressed that ancient Chinese prover bs were a lso about  trade 
negotiators, which showed what a rich history of trade China had. From h is side, he very much 
looked forward to working with Ms Chai . He wished to  add his tribute to Ms Chai's team for the 
support they had provided to him and to the Membership at large and wished her all the best in 
her new position. He then suggested that the  agenda be adopted as circulated.   
 
It was  so agreed . 
 S/C/M/133  
 
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  1  ITEM A:  NOTIFICATIONS PURSUA NT TO ARTICLES III:3  AND V:7 OF THE GATS  
With regard to the notifications made pursuant to GATS Article III:3 (transparency), the 1.1.  
Chairman  drew the Council's attention to th e communications recei ved from the Republic of Korea, 
containe d in documents S/C/N/892 to 894 . He suggested that the Council take note of the 
notifications made.  
It was so agreed . 1.2.  
Concerning the notifications made pursuant to GATS Article V:7  (Economic Integration) , the 1.3.  
Chairman  drew the Council's attention to the communications received  from China and Hong Kong, 
China, in document S/C/N/264/Add.10 ; Georgia, Iceland and Norway, in document S/C/N/891; 
Chile and Thailand, in doc ument S/C/N/895; and Canada, of  the one part, and the European Union 
and its Member States, of the other, in document S/C/N/896 . 
The Representative of the United States  thanked th ose Members who had submitted the 1.4.  
notifications on the  Council's  agenda and said  that his dele gation looked forward to reviewing th e 
agreements  notified in the Committee on Regional Trade Agreements  in due course . He wished to 
commend  the exemplary behaviour of the delegations of  China and Hong Kong, China with respect 
to how they were notifying the changes to their agreement, and the clear and concise way in 
which they had continued to table notification addenda that had tied back to the original 
notification ; this had provided a very clear picture of how the ir agreement had evolved over time.   
The Chairman  suggested that the Council take note of the notifications and the statement 1.5.  
made, and that the agreements notified be referred to the Committee on Regional Trade 
Agreements for consideration.  
It was so agreed .  1.6.  
While on the subject of the Commit tee on Regional Trade Agreements  (CRTA) , the Chairman  1.7.  
wished to share some factual information that he felt c ould be of interest  to Members . He drew 
delegations' attention to the fact that, at its meeting scheduled for 9 -10 November, the CRTA 
would be considering two regional trade agreements that cover ed trade in services.  The 
agreements in question were the 'Free Trade Agreement between C hina and the Republic of Korea'  
and the 'Free Trade Agreement between Mexico and Panama'.   
2  ITEM B: OPERATIONALIZATION O F THE LDC SERVICES W AIVER  
The Chairman  recall ed that, at the June meeting, the delegation of Panama had  introduced 2.1.  
its notification of preferential treatment for LDC service s and service suppliers, contained in 
document S/C/N/890. Panam a had explained in some detail how the preferences it was granting 
compared with i ts commitments under the GATS. Panama's notification ha d brought the tally of 
notifications pursuant to the LDC Waiver to 24, accounting for 51 Members.  
The LDC Group had proceeded to provide its own assessment of Panama's notification, and 2.2.  
had also addressed the preferential t reatment notified by Thailand. LDCs had posed a number of 
questions, to which some answers were provided at the meeting.   
Recalling the Nairobi Waiver D ecision, LDCs  had also called on preference -granting Members 2.3.  
to undertake specific te chnical assistance and capacity -building measures to help their service 
suppliers benefi t from the W aiver preferences. They had also urged delegations to share with the 
Council information on the concrete action s they had taken to that end.  
The representative of Uganda , speaking on behalf of the LDC  Group, said that the Group 2.4.  
intended  to provide comments from its review of the final set of notifications submitted to the 
Council pursuant to the Waiver. After welcoming Ms Chai to her new position, they also express ed 
their appreciation to Mr. Mamdouh, the outgoing Director  of TSD, for the excellent ye ars of service 
dedicated to the Organization, and wished him well in his future endeavours .  
The LDC Group's approach wa s to note where notification s had  provided preferences in 2.5.  
market acces s, but also beyond Article XVI  measures , to include national treatment  measures and S/C/M/133  
 
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  measures t hat remove d regulatory hindra nces as preferential treatment for LDCs in response to 
Sections B and C of the LDC Collective Request. The Group might seek clarifications  to better 
under stand the preferences notified. It might also ask notifying Members to explain how their 
preferences would be implemented and how they would operate if those  preferences appear ed to 
be the same on paper  as in the ir schedule s of specific commitments and in light of notifying  
Members ' applied regime s. Finally, LDCs would ask Members to explain how they we re building 
awareness of the preferences with their consumers and assisting LDC suppliers in LDCs "to orient 
themselves to preference benefits available so that such suppliers can utilize the preferenc es 
granted. " In short, how paragraph 1.4 of the Nairobi De claration would  be implemented. For that 
day's meeting , LDCs hoped to conclude the ir review of  all the notifications , by considering the 
preferences notified by  Liechtenstein and Uruguay.   
Starting with Liechtenstein's preferences, the Group welcome d the notification submitted by 2.6.  
the Principality of Liechtenstein in November 2015. Six sectors we re covered in the notification, 
four of which had been requested by LDCs. Those we re: translation/interpretation services (a 
sector listed in the LDC Collectiv e Request); hotels and restaurants;  insurance services;  and 
banking services . With regard to the latter, LDCs asked  Liechtenstein to clarify if ' check cashing 
and money transfer services ' were allowed, and , if so, if equity limitations we re imposed.  LDCs 
also noted that Liechtenstein had  notified preferences in both m arket access and national 
treatment only for telecommunication  services, library services and translation/interpretation 
services.  For other sectors, preferences only concerned market a ccess me asures. No preferences 
were provided from Sections B or C of the LDC Collective Request.  
The Group wished for Lichtenstein to explain the manner in which the preferences notified 2.7.  
would be implemented and how the preferential treatment  would work. Addition ally, it asked if 
Liechtenstein could explain the difference  between the preferences notified and the existing access 
to its market , as per  its applied regime , compared to its current GATS  commitments. LDCs also 
enquired if Liechtenstein would  undertake aw areness building of its preferences  domestically, so 
that its consumers became  aware of the potential services that LDCs could supply to  its market 
under a preferential scheme, consistent ly with paragraph 1.4 of the Nairobi Ministerial Decision. 
The Group further asked how Liechtenstein's  preferences  would operate for LDC suppliers in 
keeping with paragraph 1 of the LDC S ervices Waiver Decision of 2011, particularly in ensuring  
that LDC services and service suppliers were provided preferential access compar ed to like 
services  and service suppliers of other Members.  
Turning to Uruguay's preferences, t he LDC Group thank ed and appreciate d the notification 2.8.  
from Uruguay. The Group  had observed that the notification only covered m arket access. LDCs 
appreciate d the inclusion of contractual service  suppliers  (CSS) in the preferences notified; this  
appeared  to be an improvement on Uruguay's DDA offer . They also welcomed the fact that the 
requirement , which was found in the way contractual service suppliers  were someti mes defined , 
that CSS be in the previous employ of their home -based employer for at least one year, was not 
found in Uruguay’s notification. I f the removal of this requirement was only for LDC service 
suppliers, this added value to the preferences granted to LDCs. 
Uruguay had  also provided  preferences  for independent professionals in areas requested by 2.9.  
LDCs. These include d: scientists, researchers, teaching staff, professionals, academics, technical 
personnel, journalists, sportsmen and sports women, and art ists. The up to four -year duration of 
stay for t hose independent professionals was also  welcome d by LDCs.  
The Group asked Uruguay to clarify the note u nder 'Professional services ', which stated  2.10.   
"Legal domicile does not imply residence in Uruguay ". While LDCs thank ed Uruguay for not 
imposing a residency requirement, they needed  to understand what the aforementioned note 
mean t.   
Six sectors were inscribed in the notification;  accounting  services , architect ural services , 2.11.   
engineer ing services , building clean ing services, convention services and  general construction work 
for civil engineering.  All modes we re included, with four exceptions in mode  1, for architect ural 
services , accounting  services , engineering  services  and construction work for civil engineerin g. 
LDCs appreciate d that preferences in those four sectors went beyond Uruguay's DDA offer, but 
wondered why mode  1 had been excluded;  with current technological advancements,  they asked if 
Uruguay consider ed that it was not te chnically feasible to supply those services under mode  1.  S/C/M/133  
 
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  The Group also enquired how  Uruguay's preferences  would  operate for LDC suppliers in 2.12.   
keeping with paragraph 1 of the LDC S ervices Waiver Decision of 2011, particularly in ensuring 
that LDC services and service suppliers were p rovided preferential access compared to like 
services and service suppliers of other Members.  
The Group  wished to express its appreciation to Liechtenstein and Uruguay for t heir 2.13.   
respective notifications of  preferential treatment under the Waiver , and use t he opportunity to 
express its appreciation to all preference -granting Members for their notif ications. LDC s applauded  
the notifications , and considered them  to be  a success for all Members  and for LDCs. However, 
now Members  had to collaborate to build the necessary assistance to enable LDC suppliers to avail 
themselves of the benefits  therein. Towards that end , therefore, they wished to make an appeal in 
line with paragraph  3.2 of their Collective Request. LDCs had  increasingly come to the conclusion 
that it was more helpful to their service suppliers if donor Member s, development partners and 
other agencies  design ed and  provide d technical assistance to projects and program mes that were 
based in LDC countries or regions , with a view to building LDC supply capacity on the groun d. 
These programmes should help , inter alia , to build awareness amongst LDCs' citizens  of the 
benefi ts accruing as a result of the W aiver. This would help build an inclusive space of shared 
prosperity that tr uly ensure d the integration of LDCs in the multilateral trading system.  
Further , in line with  paragraph  1.6 of the relevant Nairobi Ministerial Decision, Members  2.14.   
needed to explore what recommendations to make on further steps that could be taken to enhance 
the operationalization of the Waiver . Additionally, as previously indicated , the Group  wished to 
request that M embers  undertake some waiver -related domestic awareness building  among their 
respective constituencies , so as to afford them sufficient understanding of the preferential 
treatment LDCs  had been granted .  
Since that was the last Council meeting the representative was attending, he wished to 2.15.   
state that it had bee n an honour and a privilege to speak for the L east Developed Countries on 
that and many other services -related  issues. On his  own behalf , and on behalf of all his colleagues, 
he expressed sincere appreciat ion to all services  colleagues  with whom LDCs had worked  on the 
elements for the Collective Request , the numerous bilaterals leading up to, and following , the 
successful H igh-Level Meeting,  the notifications subsequently submitted and the Nairobi Decision 
on the implementation of the Waiver.  
Many delegati ons intervened to wish the representative  of Uganda  all the best in his future 2.16.   
endeavours.  
The representative of Panama  wished to reply to some of the questions LDCs had posed on 2.17.   
her delegation's notification. With regard to the fact that her delegation's  notification covered only 
market access measures, she explained that Panama's Waiver preferences indeed did not include  
either national treatment measures or measures referred to in Sections B and C of the LDC 
Collective Request. This was a reflection of the fact that the latter  measures implied elements 
related to national security and the  application of existing domestic legislation relating to the 
specific conditions under which foreigners could enter the national territory to carry out a 
professional a ctivity. Likewise, it was not possible to exempt LDC suppliers from the payment of 
taxes, given that fiscal measures were established by the Panamanian  government  and required a 
higher mandate than that involved in granting preferences to trading partners  such as LDCs. With 
regard to S ection C, she indicated that the measures in question  applied to professional services , 
they had been inscribed  in Panama's GATS horizontal commitments and remained in force; they 
were of a sensitive nature , as they had to be observed both by Panamanian nationals and  by 
foreigners.  
As for  the "none" inscribe d for modes 1 to 3 in terms of the application of GATS  Article XVI 2.18.   
measures, she confirmed that this was indeed the case, with two exceptions. First, in the case of 
sub-sector "(r) Printing and publishing services (CPC  88442) ", where there was a limitation under 
mode 3 relating to printing of  national written media . Second , under sector "H. Services auxiliary 
to all modes of transport (only including supporting servic es for railway transport) ', for sub-sectors 
'(a) Cargo -handling services  (CPC 741)", "(b) Storage and warehouse  services  (part of CPC 742)", 
and "(c) Freight transport agency  services (part of CPC 748)", where mode 3 was unbound in the 
case of  road transport services . S/C/M/133  
 
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  With regard to how Panama's preferences would  be implemented, she explained that the 2.19.   
preferences would  be implemented once the formal notification had  been submitted to the WTO , 
as this would  be the reference for LDC suppliers to benefit from the preferences . As those 
preferences were already being granted to Panama's FTA trading partners, there should be no 
obstacle to extending them to LDCs. Regardless, Panama would be revising its domestic legislation 
with the aim of better enab ling LDCs to take advantage of those preferences.  
Turning to the differences between t he preferences notified,  the Panamanian applied regime 2.20.   
and Panama' s existing  GATS  commitments , and the specific question about the notification for 
legal consultancy services being  practically the same a s in Panama's  existing schedule  of 
commitment s, she replied that, as previously indicated, with regard to legal services the 
notification only reaffirmed GATS commitments. With the aim of avoiding any confusion, her 
delegation had considered removing this sector from its notificat ion of preferences . For greater 
certainty, she confirmed that the GATS commitment with regard to legal services remained in 
force and was open  to LDC suppliers to take advantag e of.  
Moving to the question about the actual degree of market openness for 'Computer and 2.21.   
Related Services' at the two -digit CPC  84 level , she answered that the whole sector falling under  
CPC 84 was open for LDC suppliers  to access on the basis of their c apacity . Indeed , the services in 
question were already being supplied to  companies in  Panama in accordance with relevant FTA 
commitments and domestic legislation . As concerned 'Travel Agencies and Tour operator services ' 
falling under  CPC 7471, the same preference had been granted by Panama to it s FTA partners and 
would  be of an identical nature when applied to LDCs.  
With regard to sectors such as 'm aintenance and repair of rail transport equipment ', 2.22.   
'building -cleaning services ', 'photographic services ' and others that were not found in Panama's 
GATS schedule nor  in its DDA offer, she confirmed that indeed those sectors had been included in 
the preferences notified as they had resulted from Panama's bilateral negotiations with its FTA 
partners. Panama was unilaterally extending those preferences to LDCs to honour the agreement 
reached in the Bali Ministerial Decision . 
The representative confirmed that Panama would, to the extent possible, honour its 2.23.   
commitment to build awareness , with national and foreign consumers resident in its territory , of 
the preferences it ha d granted to LDC suppliers  when these  suppliers  offered services of proven 
quality that were accessible to domestic consumers .  
She concluded that Panama had included 18 sectors , without counting  legal services,  out of 2.24.   
the 31 elements contained in the LDC Collective Request. Her delegation was ready, if LDCs so 
wished, to remove from the preferences it had notified  those sectors that were not found in the 
LDC Collective Request , to avoid any confu sion.  
The representative of Uruguay  said that she would forward LDCs' questions to capital and 2.25.   
would transmit any replies to the Group.  
The representative of Uganda  thanked Panama and Uruguay for the answers the y had  2.26.   
provided  and would further provide. LDCs looked forward to further engagement with all Members, 
including bilaterally with Panama on some of the areas they had mentioned  in their responses . 
The Chairman  suggested that the Council take note of the statements made a nd said that 2.27.   
the Council would revert to the  item at its next meeting.  
It was so agreed . 2.28.   
3  ITEM C:  CERTAIN WTO -INCONSISTENT MEASURE S APPLIED BY UKRAINE  − 
STATEMENT BY THE RUS SIAN FEDERATION  
The Chairman  indicated that the item had been added to the agenda of  the Council at the 3.1.  
request of the delegation of the Russian Federation.  
The representative of the Russian Federation  reiterated her delegation's continued concern 3.2.  
regard ing the measures related to the reform of the unified gas transportation system of Ukr aine.  S/C/M/133  
 
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  Over the previous three years , Ukraine had failed to provide a WTO consistent explanation of  3.3.  
the measures it was implementing through the Law of Ukraine No. 1645 -VII "On amendments to 
some legislative acts of Ukraine on reforming the management syst em of the Unified Gas 
Transportation System of Ukraine " and the Law of Ukraine No. 329 -VIII "On the Natural Gas 
Market " of 9 April 2015 which had invalidated the Law of Ukraine No. 1645 -VII of 14 August 2014.  
Her delegation again wished to draw the attention of the Membership to th e fact that the 3.4.  
Law, which was in  clear violation of the fundamental principles of the General Agreement on Trade 
in Services, MFN and national treatment, as well as of the specific commitments undertaken by 
Ukraine under t he GATS, remained applicable.  
The lack of progress on the clarification  of the reasons for the adoption of the restrictive 3.5.  
measures at issue and why those measures were still in place was particularly troubling. The 
Russian Federation again requested Ukrai ne to bring its legislation in the energy sector in to full 
compliance with its obligations under the WTO Agreements.  
The representative of Ukraine  thanked the Russian Federation for the ever -growing interest 3.6.  
regarding Ukrainian legislation in the natural g as transit administration system. His delegation had 
taken  note of the concerns expressed and also wished  to underline that Ukraine ha d no evidence 
of any infringement of the rights of transit companies in  the transit  of gas  from the Russian 
Federation to EU member  States  through the territory of Ukraine.  
As concerned  the issue of the non-discriminatory  access to the transit services of Ukraine 's 3.7.  
gas transportation system, he wished to draw M embers' attention to the continuous increase in the  
gas transit v olumes from the Russian Federation to the European Union via the territory of 
Ukraine. In particular, according to the data of the Ukrain ian gas transportation company 
Ukrtran sgaz, which were  available online, over the previous six years the transit volume  had been 
increasing  constantly . In 2016, the volume increase had amounted to 21% , or 37. 7 billion cubic 
meters,  compared with the previous year, and tho se values had continue d to grow in the current 
year; in particular,  the gas transit  volume since the beginning of 2017 stood at  45.7 billion cubic 
meters.  
Ukraine t ook into full consideration the concerns continually expressed by the Russian 3.8.  
Federation in the Council related to the consistency of the Law of Ukraine "On the Natural Gas 
Market " of 9 April 2 015 with the fundamental principles and obligations of the GATS.  
The Law of Ukrai ne "On the Natural Gas Market " was based on the principles of non- 3.9.  
discrimination  and equal treatment of actors in the natural gas market. Moreover, it did not 
constitute a me asure that prohibit ed or restrict ed another WTO Member's service supplier s from 
providing  a service in Ukraine, since it applied  to State infrastructure only, and  it did not require or 
prohibit any specific type of legal entity for  the supply  of pipeline t ransmission services. The Law of 
Ukraine  "On the Natural Gas Market " did not make a  distinction based on origin , which mean t that 
there wa s no discrimination.  
His delegation recognis ed the desire of the Russian Federation for further clarification on 3.10.   
Ukraine's legislation related to the natural gas market. With this in mind, if n ecessary, it was ready 
to continue the "question -and-answer " process that had already started by providing 
comprehensive clarifications, including with regard to  Ukraine's  investme nt regime.  
He assured the Membership that that Ukraine would address in a prompt manner any 3.11.   
concern s raised by interested WTO Members on the issue.  
The Chairman  suggested that the Council take note of the statements made . 3.12.   
It was so agreed . 3.13.   
4  ITEM D: WORK PROGRAMME ON ELECTRO NIC COMMERCE  
The Chairman  indicated that there were several elements to be addressed under this agenda 4.1.  
item. He invited any delegation wishing to share information under the "exchange of inform ation 
and experiences" sub -item to do so at  that juncture.  S/C/M/133  
 
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  The representative of China  stated that his delegation had tabled  a joint e -commerce 4.2.  
proposal with Pakistan in the General Council, the Council for Trade in Goods, the C ouncil for Trade 
in Services  and the Committee on Trade and Developmen t. China had proposed that discussions at 
that stage focus on  the promotion and facilitation of cross -border trade in goods enabled by the 
Internet, together with services directly supporting such trade in goods, such as payment and 
logistics services. Log istics s ervices were the essential link  of the e -commerce eco -system, and 
provided basic support for cross -border transaction s enabled by the Internet. On the one hand, the 
development of logistics services had contributed to speed ing up transactions, prov iding greater 
convenience to customers and promoting the growth of e -commerce. On the other hand, the 
booming of e -commerce had created an enabling environment for the development of logistics 
services. Logistics ser vices and e -commerce were inter dependent  and mutually supportive. The 
scope of logistics services was wide, including , inter alia , courier services, cargo transportation 
services and other relevant services. At that juncture, he would focus his intervention on courier 
services and share China’s experience in the development and regulation of th at sector.  
The booming of e -commerce in China had brought vitality to courier services by increasing 4.3.  
market demand. Recent years had witnessed the rising prosperity of China' s e-commerce -related 
logistics service sector, especially courie r services. The courier service  sector had become an 
important link between different industries, regions, as well as urban and rural areas. Th e sector  
had played an important role in maintaining stable growth, contributing  to social and economic 
development, facilitating structural adjustment and improving people’s well -being. The 
development of courier services had supported  the further growth of e -commerce. The capa city of 
China's courier service  sector kept improving and  its coverage kept expanding, which helped online 
retailers penetrate into inland areas and middle and small cities, greatly enhancing the 
inclusiveness of e -commerce. By the end of 2016, the number of courier networks in China had 
reached 183 '000, coverin g more than 95% of counties and 80% of towns, basically meeting the 
demand for courier services of t he 590 million rural population s. In turn, the growth of China' s 
courier services had helped stimulate the e -commerce market  potential . For example, in 2016 , 
online sales in China’s rural area  had reached RMB 894.5 billion (about USD 135 billion ), 
increasing by 154% year -on-year. 
The Chinese government  kept improving its regulatory framework to guarantee the healthy 4.4.  
development of logistics services related to e -commerce. In order to promote e -commerce 
logistics, China had undertaken concrete measures to provide systemic guidance for the 
development of the courier service  sector, helping it take full advantage of opportunities brought 
about by the Internet. First, China had encouraged competition in the courier services sector. 
China had modified its Postal Law in 2009, clarifying the legal status of cou rier services and courier 
enterprises, and establishing a licensing system for courier service providers, that had helped 
foster a more predictable legal environment for small and medium -sized c ourier service  providers. 
China had also terminated government  pricing for certain postal services , with a view to 
encouraging more competition i n the sector. As a result of tho se efforts, the number of corporate 
enterprises providing courier services had reached 20 '000, employing more than 2 million staff. 
Second, t he government had helped courier service providers improve the quality of their services. 
A licen sing system for courier service  providers was established in 2009 to set qualification 
benchmarks. The government had invited third -party investigators to cond uct satisfaction  tests on 
major courier service  providers and had published relevant results. The government had designed 
and published typical formats for courier service s contracts to protect consumers and enhance 
their confidence. The government also ke pt improving on relevant service standards to promote 
standardization in the sector. Third, China had adopted measures to facilitat e technological  
innovation in the sector. It had encouraged and facilitated the application of relevant technologies 
such as the cold -chain, Internet of things (IoT), radio frequency identification devices (RFID) and 
high-speed sorting. The government had also established a "green channel " for e-commerce 
courier service  providers and kept improving the urban logistics distributi on system. Th ose efforts 
had greatly enhanced the efficiency of the sector. Last year, on average, one employee in the 
courier services sector had delivered more than 15 '000 courier parcels, among which 60% were 
for online sales.  
Besides courier enterprise s, postal enterprises were also important providers of logistics 4.5.  
services for e -commerce and, therefore, their role in the development of e -commerce needed 
more attention. Hence, China suggested inviting the Universal Postal Union (UPU) to the Council in 
the future , to present  its study on the relationship between postal services and e -commerce , as a 
way of deepening Members' understanding o n the matter. His delegation welcomed further S/C/M/133  
 
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  discussions on e -commerce logistics services, as well as the sharing  of regulatory experiences to 
strengthen Members' understanding of the relationship between e -commerce and development 
from different perspectives and to help find ways for e -commerce to be more inclusive at the 
global level.  
In relation  to China's suggestion  to invite the UPU , the Chairman  informed the Council that 4.6.  
the UPU had been accorded observer status in the Council on  an ad hoc  basis.  
The representative of the United States  had found China's information helpful and asked if 4.7.  
the intervention could be cir culated in writing. He then sought further clarification on the idea to 
invite the UPU to the Council , as it was not clear whether a formal suggestion had been made in 
that sense. He was not in a position to endorse any  such invitation at that juncture.  
The Chairman  said that, since China had proposed  that the UPU be invited to attend a 4.8.  
meeting of the Council as an observer, he  had informed Members  that the UPU had the status of 
observer in the Council on an ad hoc basis.  The Chairman asked China, if it so wished, to circulate 
its intervention in writing ; the Council would  then be able to take forward China's  suggestion to 
invite the UPU  as appropriate, in due course.  
All delegations who took the floor thanked China  for the information shared. 4.9.  
The representative of Australia  said that her delegation also saw a vital link between  freight 4.10.   
and logistics services,  e-commerce and growth  in trade  of both goods and services.  Australia was 
interested in hearing further about how regulatory reforms in Ch ina had impacted the growth of 
logistics and e -commerce -related  services, including in relation to opening the market to foreign 
participation. For example, it would be interes ting to know how many of the 20' 000 courier 
providers in China were foreign serv ice suppl iers. Australia was also interested in hearing from 
other Member s about their experience in that  area, and would be happy to work with Members to 
consider  how they could take forward that  discussion.  
The representative of Ukraine  acknowledged the importance and the need to intensify work 4.11.   
in the field of e -commerce as a means to facilitate trade. The analysis of Members' written 
contributions to the Work Programme as set out in documents JOB/GC/130, JOB/GC/131 and 
JOB/GC/132 indicated that, in Membe rs' view, the difficulties in the decision -making process in the 
field of e -commerce were to be found in the nature of the discussions, as well as in the lack of 
synergy in the manner of addressing issues related to this matter. Members had also noted that  in 
numerous economies there were many obstacles, such as inadequate infrastructure, insufficient 
human capacity, lack of payment solutions, national strategies and appropriate regulatory 
frameworks, which impeded the development of e -commerce. Ukraine sup ported the view  of the 
co-sponsors of  document JOB/GC/132 with regard to the need for further discussions based on 
Members' contributions, identifying the priority directions of e -commerce development and setting 
out clear and updated targets for an outcom e at MC11.  
The representative of Switzerland  made a general comment concerning  the WTO  e- 4.12.   
commerce discussions. The fact that Members' contributions were being discussed in different WTO 
bodies, including the CTS, made it difficult to develop a holistic  view on e -commerce  and to 
identify synergies among the different topics. That  view seemed to be shared  by a considerable 
number of Members, including the proponents of document JOB/GC/132, of which Switzerland was 
a co-sponsor. Switzerland supported any initi ative that would allow the better  structur ing of  e-
commerce discussions, including modifying the terms of reference of the Dedicated Discussion  or 
creating a formal Working Group that would address, inter alia , horizontal issues, as proposed by a 
number of Members.   
The Chairman  recalled that at the formal meeting held on 6 June, the Council had addressed 4.13.   
a number of other communications under the Work Programme, some of which had been on its 
agenda before, as  well as a proposal for a t hematic seminar on e -commerce. At the end of th at 
discussion, it was agreed that he would or ganize informal consultations. Accordingly, at the 
informal meeting he had convened on 20 July, delegations had debated  how they might be st 
structure discussions under the Work Programme agenda item  as well as  the organization of the 
thematic seminar on electronic commerce.  S/C/M/133  
 
- 9 - 
 
  Regarding the first issue, there was a general appreciation of the value of continuing with 4.14.   
the exchange of informatio n and experiences relating to electronic commerce in the Council. Also, 
a number of Members had reiterated their position that the remit of the Council under the Work 
Programme did not call for any negotiation. Some delegations had suggested that any such 
negotiations should take place in the Special Session of the Council for Trade in Services. 
Regarding the discussion of the submissions tabled by Members, several delegations had stressed 
that the work of the Council should focus on the services -related as pects contained in the 
communications and that discussions on cross -cutting issues should take place in the General 
Council. As for the second issue, i.e. the organisation of a thematic seminar, it was clear that there 
was no convergence of views among Mem bers to proceed at that point. Given the focus on 
preparations for MC11, it was considered that the matter would be best taken up again in 2018.  
The Chairman then indicated that two new communications had been  submitted under that 4.15.   
agenda item by Chinese T aipei. They were  contained in documents JOB/SERV/264 and 265, and 
addressed, respectively, the paradigm shift of digital trade and the information insufficiency in e -
commerce.   
The representative of Chinese Taipei  indicated that the papers submitted were not related to 4.16.   
any MC11 proposal and were just meant to try to clarify ideas. N o matter what decision was taken 
at MC11, the purpose of the papers was to facilitate discussions and move them forward after 
MC11.  
The first paper dealt with the paradigm shif t of digital trade. Members had seen many  4.17.   
papers on e-commerce or digital trade over the previous  20 years. A common feature of those 
papers was that they followed an "inductive approach". The ir starting point was business surveys , 
which  usually  focused on  large businesses. Based on those surveys, around 3 0 or 40 issues might 
be identified as being of relevance to business and those were  then condensed  into a number of 
negotiable topics. However, s ince the sectors and the questions were diversified, they gave the 
impression that there was a lot of substantive input, whereas  there was no consistenc y among the 
issues identified. Therefore, his delegation proposed to follow what he called a "deductive 
approach", according to which any qualitative  or fundament al difference between digital trade and 
traditi onal trade needed  to have a digital -related technological background. Under such  an 
approach, his delegation had started exploring that background, to try to identify  some 
fundamental differences between digit al trade and traditional trade and, on that basis, it  had tried 
to identif y issues to be discussed or negotiated in the  WTO.  
For that purpose, h e had consulted one of the classic books on the matter , called "Being 4.18.   
Digital"  and written by Nicholas Negropon te, a MIT professor and media lab funder. Negroponte 
predicted, already in 1995, that two major transformations were behind digital trade. The first one 
was the "atoms -bits transformation". Under traditional trade, a magazine printed in London would 
be shi pped to New York. Instead, nowadays, the PDF file would be transmitted from London to 
New York and printed out locally. The original form of transporting papers or atoms had changed 
to transmitting PDFs or bits. The same might happen with 3 -D printing as, in the future, there 
might no t be a  need to transport tables , but only to transmit the blue print of tables, which would 
then be printed out locally. The key issue was that atoms had borders, but bits did not. The GATT 
was mostly about borders and the GATS might  also not  have foreseen all the changes behind the 
atoms -bits transformation.  
The second transformation Negroponte suggested was the "static/mobile transformation". In 4.19.   
1995, most of the devices were static (e.g. TV), but most transmissions were throu gh air. In 2017, 
most devices were mobile (e.g. mobile phones) and more transmissions were made through static 
fibre. Fibre transmissions were much faster than air transmissions. Since devices were versatile, 
the result was also versatile input and output of all kinds of information. Given that the 
transmission was fast, for devices to be mobile, they needed to be small. Most of the devices  that 
were small  were "dumb" devices. Still, they could  do "smart" things , as they could  upload and 
download information very efficiently.  
Two key messages could be extracted for the WTO. First, for the digital trade world, it was 4.20.   
importan t to remove trade barriers for bits, not atoms. Second, it was important to better 
understand new trade features under  the digital revolution. In the  digital trade s cenario, MSMEs 
would be the businesses benefiting most , as this provided their only opportuni ty to reach 
international market s. Instead, big businesses did not have to rely on the internet, but could , S/C/M/133  
 
- 10 - 
 
  instead , set up a branch  to reach out international ly. Therefore, digital trade was very important  
for MSMEs . It was  also essential  to und erstand th e difference between " data" and "information ". 
Most WTO proposals emphasized data flows and concerned essentially "transaction data", which 
was relevant after the buyer and supplier had been  matched. But information was whatever 
communication was needed to  facilitate the match between potential  supplier s and potential 
buyer s, such as  communication s or check ing prices. While data was very much emphasized in the 
WTO, information was not emphasized enough. In summary, MSMEs could be the main beneficiary  
of dig ital trade as the digital world could give them the opport unity to enter new markets , and 
thus provide more trade and domestic employment opportunities as well as access to innovation.  
The second paper addressed "information insufficiency in e -commerce". He would  classify 4.21.   
tradition al trade into several stages: (1) a cknowledging ( i.e. needing to know someone was 
selling); (2) comparing products; (3) placing an order; (4) shipping; (5) clearing customs borders; 
(6) local marketing ; and  (7) consum ing. Traditional trade barriers often happened in stages four to 
six. But cyberspace trade barriers (CTBs) often happened in the early stages of trade (stages one 
to three). The targets were different in the digital world  as compared to  the traditional world .  
The difficulties of accessing markets could be divided  into three parts: accessibility; 4.22.   
connectivity; and  transparency. " Accessibility " referred to each party having an e qual opportunity 
to appear on every  online platfor m and thus have access to potential foreign customers . If this did 
not happen , accessibility was not fair and any trade  that might possibly happen  was also not fair, 
as only one party could have acc ess to the other party's market while the reverse was not true. 
Therefore, accessibility was very important . Even when "connectivity"  to infrastructure was 
present, this did not necessarily imply "access ibility ", for instance in situations where  the network 
was blocked or  extremely slow . On to the WTO 's website, the WTO was sometimes described as a 
"free trade institution", but that was not entirely accurate. It was m ore accurate to describe  the 
WTO as a system of rules dedicated to open, fair, and undistorted competition. Fairness, or "fair 
accessibilit y" was really important, and the fundamental idea behind it was having reciprocal ly 
equal  access. The WTO tried to facilitate fair trade, not unfair trade. The question , therefore,  was 
why the WTO did not address any CTBs. The answer was that this was unde rstandable , given that 
the GATT had been  written 70 years earlier  and the GATS more than twenty years earlier , when it  
was not obvious how digital trade could influence today's trade.  
"Connectivity" was related to infrastructure  (e.g. electricity, fib re), and was  an issue which 4.23.   
had been  repeatedly  emphasized by many developing countries. It was important for all Members 
to be able to connect to as many international potential buyers , or sellers , as possible. In the 
developing world, the main challenges  were lack of electricity, infrastructure, electronic devi ces, 
technical assistance, skills and legal framework s, which , if addressed,  could improve "connectivity" 
and e -commerce readiness. The gap between big  and small  was defined by the  connectivity to t he 
Internet  of big businesses compared to  that of SMEs . In most of North America and Western 
Europe, th is gap was almost zero, while in other places this gap  was lar ge. Another important 
feature was  regulatory barriers, which seemed to explain the rational e behind the  EU proposal  on 
transparency.  
To sum up, he hoped to have emphasized the im portance of reciprocally equal  access and 4.24.   
removing accessibility blocks, which could contribute to fairness. Similarly, increasing access to 
ICT infrastructure and serv ices was important to address the digital divide, while making 
regulations transparent was important for business es to prepare  to enter  into possible  future 
markets. He looked forward to Members ' questions and stood ready to engage  bilaterally with all 
interested Members.  
All delegations who took the floor  thanked Chinese Taipei for its communications and 4.25.   
presentation.  
The representative of the European Union  said that Chinese Taipei 's communications  were a 4.26.   
useful contribution  to define the priorities of WTO work in the area of  e-commerce. The criteria 
proposed in the paper on the paradigm shift of digital trade were one of the ways of assessing 
trade -relevant issues in a broad e -commerce world. Indeed, many would agree that the specific 
topics brought up in the EU negotiating proposal for facilitating online transactions  were the topics 
that ticked the criteria boxes discussed in the communication on the table. On the second 
communication , related to CBTs and the negative impact on consumers who were not a ble to learn 
about the products or businesses  on offer , her delegation shared the underl ying concerns referred S/C/M/133  
 
- 11 - 
 
  to in the communication. Those  restrictions impacted goods and services  equally . Another  
important  element that should be considered was the impa ct of CBTs on businesses when  they 
were carrying out their operations. Overall, her delegation wished  to see the work on e -commerce 
advancing in the WTO and considered the two communications an important element in the 
debate , as they could help Members mo ve to concrete negotiations  to address the challenges and 
opportunities that existed in the modern trade world.  
The representative of Japan  said that , overall,  his delegation supported the  analysis in the 4.27.   
two communications by Chinese Taipei . Japan recogni zed that the world was facing a qualitative 
change with digital trade. CBTs were a serious and on -going challenge in digital trade, which  
should be addressed in the WTO;  Members should be extremely cautious of t he serious risk and 
impact that might be caus ed by  such measures applied  to digital trade.  Government  intervention 
in the cross-border transfer of information by electronic means could significantly reduce the 
potential for international trade via the Internet, especially for SMEs. Therefore, Japan supported 
the suggestions made in the communications  on the table.  
The representative of the Republic of Korea  said that the communications  were a source of 4.28.   
inspiration for his delegation . They offered  fresh inputs into Members' discussions on e -commerce. 
In particular, he thanked Chinese Ta ipei for introducing Negroponte' s concept of "atoms -bits 
transformation". This concept helped to better understand the nature of e -commerce and identify  
the trade -related elements of e -commerce more clearly. The paper s also raised interesting 
questions with regard to current WTO rules and e -commerce proposals. The current WTO 
Agreement was written largely based on trade in physical products . With the atoms -bits 
transfor mation, a qualitative change of trade pattern s was taking place. Therefore, the first 
question was whether it was necessary to re -write the trade rulebook to reflect that change, or 
whether it could be accommodate d by the current rules. The second question  related to the e -
commerce proposals on the table. Since the previous  summer, many proposals had been 
submitted by Members. Some were related to specific issues , such as e -payments  or e-signature s, 
while others  dealt with experience -sharing. He wished to h ear Members' views on the proposals in 
the light of the new approach suggested by Chinese Taipei.  
The representative of New Zealand  welcomed the systemic and thoughtful approach to e - 4.29.   
commerce issues used in the two communications . Chinese Taipei's approac h to the qualitative 
differences presented by e -commerce was interesting. In her delegation's  experience, it was 
certainly true that many of the trade issues faced in e-commerce were really just permutations  of 
conventional trade issues. In other instances , e-commerce applications were legitimately 
transformative and presented essentially novel  regulatory challenges. Her delegation saw value in 
discussing and considerin g e-commerce as a separate  form of trade in both cases , for a number of 
reasons. T he effe cts of trade barriers on e -commerce business models could be different or more 
pernicious as compared to conventional  trade. E -commerce supply chains could e ncompass goods 
and services that  cut across the traditional trade policy categories that governments and the WTO 
tended to operate in . The possible interaction effect between trade barriers through the  e-
commerce supply chains presented challenges that were qualitatively different to tho se faced by 
conventional  supply chains. Those on -going challenges o f e-commerce required further discussion 
and, i n her delegation's view, updated rules to reflect ed modern trading realit ies.   
The representative of India said that the first paper  by Chine se Taipei , on the paradigm shift 4.30.   
of digital trade, was interesting and thought -provoking . It urged Members to adopt a theoretical 
construct and analytical framework  to understand the transforming potential of techno logy and 
opening e -commerce. Clarificatio ns on the use of the new concept s, such as a deductive approach 
and the Negroponte  transformation, were indeed helpful. India would be happy to engage further 
on th ose concepts and approaches. Her delegation  agreed that digital technology, including 
techno logy for 3D printing, had the potential for a paradigm shift of trade. Th ose changing trade 
patterns posed new challenges , both for domestic and for cross -border trade. In her delegation's 
view, there wa s, therefore, a need for sufficient policy space for appropriate domestic and trade 
policies. Members  needed to focus on exchanging information on policies and best practices. This 
was important not just with regard to  cross-border data and information flows, but for all aspects 
of e-commerce and digital tra de, and especially for promoting the transfer  of technology and 
supporting the  development of digital infrastructure in developing countries to reduce the digital 
divide.   S/C/M/133  
 
- 12 - 
 
  The representative of the United States  said that the papers by Chinese Taipei  were 4.31.   
thoughtful and stimulating. They  underscored the importance of further  examining how trade rules 
could better support the opportun ities provided by digital trade and identifying  how specific  
barriers could disproportionally affect its growth and possible benefits. His delegation agreed 
particularly with how damaging  blunt instruments, such as national blocking of services, were to 
that promising and dynamic area of global trade. He saw elements in the papers on the table that 
could serve f or further work in the Council and looked forward to engaging  on tho se issues in the 
future.  
The representative of China  said that the paper s looked at e -commerce mainly from a 4.32.   
technological and economic perspective, and touched upon certain complicated is sues like cross -
border data flows. He recalled that t he 1998 Work Programme mandated Members to discuss 
trade -related aspects of e -commerce, and not digital trade per se  as used in the communications.  
Members should endeavour to base their discussions on t erms defined by the Work Programme , so 
as to avoid unnecessary confusions. In addition, it was important to bear in mind that Members 
were at different stages of development and, therefore, at that stage it was better to manage 
ambition and focus on issues  of common interest. This would be a practical way of bringing 
everyone on board and making discussions sustainable and effective.  
Commenting  more generally on the e-commerce proposals, he noted that s everal proposals 4.33.   
had been submitted to the General Council and the relevant bodies before and after the summer 
break, and Members had proposed different ways of tackling e -commerce under the Work 
Programme. China appreciated the continued efforts of the pr oponents and was willing to continue 
to engage in relevant discussions. He urged Members, through that process, to build mutual trust , 
seek common ground and find proper  landing zones for MC11.  
The representative of Mexico  indicated that both  of Chinese T aipei's  proposals help ed to 4.34.   
considerably  enhance Members' understanding of the digital world, and pa rticularly of e -
commerce. They w ould significantly contribute to future discussions on e -commerce, particularly  
on the role of the WTO in relation to the ch allenges faced with e-commerce. Her delegation stood 
ready to continue discussing the papers on the table and their contribution to e -commerce 
deliberations . 
The representative of Norway  said that the WTO Membership should seize the opportunity 4.35.   
and move head in the area of e -commerce. While the issues set out in the Work Programme were 
still pertinent, delegations  needed to discus s e-commerce in another manner.  Discussions had 
been taking place in several  WTO bodies on the vast  landscape of e -commerce iss ues. A number of 
Members had put forward submissions listing key issues and p rocess -oriented questions. To deal 
with all of th ose issues in a structured way, there was a need for a locus , or a dedicated horizontal 
forum , where all of th ose discussions coul d take place , to facilitate a more comprehensive and 
uninterrupted process. Members could then work more systematically and holistically  on a whole 
range of e -commerce -related issues, including the development dimension, which was clearly 
cross-cutting. Capacity building, technical assistance, exchange of good practices, and cooperation 
with ot her international organizations  would be necessary to bridge the digital divide. Members 
needed to demonstrate the relevance of the WTO by changing gears in the discu ssions on e -
commerce. Her delegation saw MC11 as an opportunity to respond to modern day challenges and 
move the agenda forward with greater clarity on work post -MC11.    
The representative of Canada  said that digital technology was indeed transforming tra de. 4.36.   
Canada looked forward to continue d exchanges with Members  in the Council o n the implications 
for services -related trade policy . 
The representative of Australia  said that the communications and the presentation by 4.37.   
Chinese Taipei were very interesting . Her delegation encouraged in -depth thinking on e -commerce 
and looked forward to engaging in further discussions on the points raised.  
The representative of Singapore  welcomed  the contributions  by Chinese Taipei, which would 4.38.   
contribute to advancing  discussions in the Council , and looked forward to further exchanges.  
The representative of South Africa  was grateful for China's contribution and Chinese Taipei's 4.39.   
communications and presentation, noting that her delegation was very interested in experience -S/C/M/133  
 
- 13 - 
 
  sharing exercises and discussions , in accordance with the exploratory nature of the Work 
Programme, as it studied  its own policy options in response to the profound  changes in the digital 
world. She reiterated the statement that had been made by the African Group at the CTS meeting 
on 16 June  and asked that it be inserted in the  record of that meeting .  
At the June meeting, the African Group had  said that it welcomed the fact that Members' e - 4.40.   
commerce submissions had been tabled in the CTS, which was in acc ordance with paragraph 1.1 of 
the Work Programme, and had been most recently reaffirmed in paragraph  1 of the Nairobi 
Ministerial Decision.  The African Group had approached the exploratory discussions under the 
Work Programme from a perspective that gave p aramount importance to "the development 
implications of e -commerce, taking into account the economic, financial, and development needs 
of developing countries...". The African Group was interested in an exchange of views and 
experiences on the basis of the  current Work Programme. The Group believed that of immediate 
priority should be a fuller assessment of the wide -ranging disruptions that would result from the 
fourth industrial revolution, the growth of digital trade and e -commerce. As Members embarked on  
those discussions under the Work Programme, the African Group wished to see the CTS take up 
issues that placed the needs of developing and least developed countries at the centre, especially 
the "challenges to and ways of enhancing the participation of de veloping countries in electronic 
commerce, in particular as exporters of electronically delivered products, the role of improved 
access to infrastructure and transfer of technology, and of movement of natural persons".  
In previous  meetings, the African Gro up had set out the issues that it thought should be 4.41.   
taken up by the CTS. In addition to those, the African Group had deliberated on a number of 
issues emanating from the submissions on the table and had identified some critical areas of 
interest to the Gro up for further consideration by the Membership. These included: the reality of 
increasing digital inequality; the importance of digital rights, now that data was the raw material of 
the digital economy, and that there was value embedded in its control, man agement and flow; the 
extremely high market concentration levels existing in the current global e -commerce space, which 
was evident both in terms of how e -commerce trade was distributed across the global economy, 
and in terms of the number of firms that do minated the space in terms of their capitalisation; the 
range of attempts at a national level to shape digital flows in order to influence trade and affect 
national digital catch -up. 
Members could frame the discussion around measures that fostered inclusio n and equitable 4.42.   
development for all developing and least developed countries. The Group reiterated its 
encouragement to Members to share their experiences on the specific policy, regulation, and 
measures they had used to derive benefit at the national leve l from greater participation in the 
evolution of global e -commerce. The Group would greatly benefit from a discussion of those issues 
as it explored policy options in response to the profound changes brought on by the so -called 
'Fourth Industrial Revolutio n' vis -à-vis Africa's longstanding developmental objectives of industrial 
development, structural transformation and employment.  
Recalling what it had stated at the 16 March meeting of the Council, t he Group said that, 4.43.   
after listening carefully to the intr oduction of the submissions in the CTS, there were a number of 
issues that would be better suited for a discussion in the other relevant bodies, such as the CTD, 
CTG and TRIPS Council. Some of the issues raised in some of the submissions fell outside the 
scope of the Work Programme or were being taken up extensively in other multilateral 
organisations. The Group therefore strongly urged the proponents to refine their proposals specific 
to the body where they wanted discussions to take place, as per the Work  Programme.  
At that  October  meeting, the representative concluded by saying that South Africa looked 4.44.   
forward to further discussions,  as it sought to address , as a priority , Africa’s longstanding 
developmental objectives of industrial development, structural transformation and employment.  
The representative of Uganda  requested that the statement he had delivered at the June 4.45.   
meeting of the  CTS be put on the record of that  meeting. 
At the June meeting, t he representative of Uganda, on behalf of the LDC Group, had 4.46.   
recalled the statement delivered at the March Council meeting, when he had welcomed the 
communication submitted by the European Union and co -sponsors, which had taken  into account 
the process  suggested  by the Group  during the Dedicated Discussion on e-commerce. In that  S/C/M/133  
 
- 14 - 
 
  regard, the LDC Group had suggested , inter alia , that submissions should be taken to the relevant 
bodies as set out in paragraphs 2 to 5 of the Decision o n the E -commerce Work Programme . Only 
once the discuss ions in the relevant bodies had  matured, they should be reported to the General 
Council.  The Nairobi Ministerial Declaration, in p aragraph 1, instructe d Members t o continue the 
work under the Work Progr amme  based on the existing mandate and guidelines and on the basis 
of proposals submitted by Members in the relevant WTO bod ies as set out in paragraphs 2 to  5 of 
the Work Programme. In addition, the General Council shall take up consideration of any trade  
related issue of a cross -cutting nature . It was  also important to acknowledge the non-negotiating 
mandate es tablished in the Work Programme, which was  exploratory in nature.  
He had  had only preliminary comments on the proposal at that juncture. In the near two 4.47.   
decades after the adoption of the Work Programme,  the digital divide for LDCs had  widened. The 
e-commerce  phenomenon, in theory, provided  a critical gateway for consumers and businesses in 
weaker countries , allowing them to surmount obstacles face d when competing domestically, and 
with enterprises in stronger markets  in the world trading system. However, in reality, most LDCs 
faced a number of constraints , due to insufficient basic infrastruc ture, inadequate access to 
electricity and the Internet , and high cost s of broadband c onnectivity, amongst others, as well as  
bottlenecks that hinder ed LDCs from taking advantage of opportunities theoretically available 
through e -commerce platforms.  
Three things were critical for LDCs to be able to benefit from e-commerce: access, 4.48.   
affordability and availability . In a ddressing these issues, it was  important to contextualize the LDC 
Group's situation. According to the  ITU "Facts and Figures" for 2016,  75% of th e entire population 
in Africa was  offline. Only 20  million households in LDCs had  Internet access , out of 1 billion 
households in the world. While more t han 50% of the LDC population was covered by a mobile 
broad band signal, only 15% use d the I nternet. Fix ed-broadband penetration remained  below 1% 
in Africa an d among the LDCs; and only fi ve LDCs had achieved the target on affordability set by 
the Broad band Commission  on Sustainable Development. The rest could not  afford  it. 
Infrastructure and connectivity were another major issue. By early 2016, total internati onal 
Internet bandwidth had reached 185 '000 Gbit/s, up from 30'000 in 2008. Africa, which was home 
to two -thirds of LDCs, had  the lowest international conne ctivity of all regions: there was  twice as 
much bandwidth per inhabitant available in Asia and the P acific, four times as much in the 
Commonwealth of Independent States region, eight times as much in the Americas and more than 
twenty times as much in Europe. Lack of international connectivity was  a major bottleneck in the 
Internet infrastructure of LDCs.  With this low penetration rate in I nternet use, LDCs would not be 
in a position to adequately take advantage of the benefits of e -commerce. Indeed , without 
meeting the basic requirements, many LDC e ntrepreneurs and consumers would  not be able to 
effective ly participate in e -commerce and take advan tage of its benefits . The discussions under the 
Work Programme should therefore focus on over coming challenges that were  impeding L DCs from 
being e -commerce -ready, including, access to electricity,  access to digit al infrastructure, 
inadequate IT s kills, access to cheap and fast broa dband and technology transfer.  
As a way forward, the LDC Group agreed with the African Group that most of t he 4.49.   
submissions on the table were outside the scope and m andate of the Work Prog ramme. Therefore, 
Members should  narrow their  submissions to  the issues specific to  each particular body; and in the 
event that this was not possible,  they should focus on the development -related aspects of the 
Work P rogram me, such as improved access to infrastructure, transfer of technology,  movement of 
natural persons and use of information technology in the integration of  developing countries. 
These were  issues at the heart of the digital divide that needed to be resolved with the view to 
building LDCs' e-commerce readiness.  
As Members might recall, the African Ministers of Trade , in their  Decla ration issued in 4.50.   
November 2016, had directed that any work undertake n within the WTO should be consistent with 
the African Union's Agenda 2063 , with a view to st ructural transformation and i ndustrialization in 
building "The Africa we want ". Therefore , work in WTO had to complement , and not undermine, 
that Agenda. It was important to examine the implications of e -commerce on the structural 
transformation and indust rialisation of Africa, including the transforma tions to traditional 
production  and supply chains most devel oping countries were involved in, as well as  the impact on 
LDCs' domestic markets, manufacturers and service suppliers.  
On the promise of technical assistance or aid for trade, it was important that M embers, 4.51.   
especially the proponents , adopt an approach of consistency in message and practice. As LDCs had S/C/M/133  
 
- 15 - 
 
  stated in July, there was no reconciliation at all in that  endeavour.  All indications were that aid  for 
trade was on a down ward trajectory and most of it went  to non -LDCs. In a seminar organised by 
the Friends of E -Commerce for Development in December 2016 , Members  had heard a harrowing 
tale from the Secretary General of the I nternational Telecommunicat ions Union (ITU). The ITU had  
a plan to connect 1.5  billion  people to the Internet  by 2020. This strategy required  USD 450  billion  
to be operationalize d. While the ITU had been trying to mobilise  the requisite resources, the 
Secretary General  had been told that there was no money. In  the ITU Secretary General's view, 
and LDCs agreed with him, unless people were connected, e -commerce would not benefit  them; it 
would be like playing music to  the deaf.  
At the June  meeting of the Council, after a ssociating with the statement by South Africa on 4.52.   
behalf of the African Group, he had highlighted that the starting point for discussions was the 1998 
Work Programme , which  allowed Members sufficient space to have an extensive and exhaustive 
discussion on e -commerce. The Work Programme had no negotiating mandate and was only 
exploratory in nature.  
The e -commerce phenomenon, in theory, provided a critical gateway for consumers and 4.53.   
businesses in weaker countries, allowing them to surmount obstacles faced when competing 
domestically, and with enterprises in stronger players, in the trading system. However, in reality, 
most LDCs faced a number of constraints due to insufficient basic infrastructure and access to 
electricity, Internet, high cost of broadband conne ctivity, amongst others, and bottlenecks that 
hindered LDCs from taking advantage of opportunities theoretically available through the e -
commerce platforms.  
During the previous few weeks, the Group had benefitted from discussions in seminars 4.54.   
organised by different agencies. It had also become apparent that there were Members, including 
developing countries, that had generated a lot of revenue from the enterprise. What had not been 
clearly spel led out, however, was the kind of domestic regulatory policy fra meworks that had been 
adopted by those countries, especially developing countries, which  had afforded their domestic 
industries the requisite policy space, and protection, to grow and thrive until such a time that they 
had become strong, emerging and domin ant players. It was therefore necessary for LDCs to 
request that major players share their experience on the kind of digital industrial policies that they 
had put in place that, inter alia, had helped guarantee their digital rights and ensured their curren t 
prosperity.  
As a way forward, as previously stated , most of the submissions on the table fell outside the 4.55.   
scope and mandate of the Work Programme. LDCs therefore requested, and suggested, subject to 
further consultation with the LDCs Group, that Members  narrow their submissions to issues specific 
to each particular body. In the event that this was not possible, the proponents should focus on 
the development -related aspects of the Work Programme, with a view to examining improved 
access to infrastructure,  transfer of technology, the movement of natural persons and the use of 
information technology in the integration of developing countries. These were the issues at the 
heart of the digital divide that had to be resolved in order to build LDCs ' e-commerce r eadiness. In 
the meantime, the Group would also support informal consultations by the Chairman on how to 
continue the CTS work on the basis of the 1998 Work Programme.  
At that October meeting, the representative recalled that, concerning the issue o f future 4.56.   
work under the Work Programme, a process had started under the auspices of the General Council 
and he urged all Members to engage in that process to seek common ground on the less 
contentious issues.  
The representative of Argentina  welcomed the experien ce shared by China on courier 4.57.   
services and the papers submitted by Chinese Taipei.  
The representative of Colombia  said that the papers by Chinese Taipei would contribute to 4.58.   
the discussions on e -commerce from a  more technical perspective. He also thanked C hinese Taipei 
for its presentation, which complemented the papers by providing more detailed information on 
the development issues.  
The representative of Afghanistan  looked forward to continu ing discussions on the papers on 4.59.   
the table and especially on the integration of developing countries, and particularly LDCs, in global S/C/M/133  
 
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  trade in services, as a means of ensuring that the benefits of e-commerce were shared among all 
Members.  
The representative of Hong Kong, China  said that the papers  by Chinese Taipei  were very 4.60.   
different from other papers and offered a fresh perspective in looking at  elements of  e-commerce. 
The various examples put forward in the papers were very interesting and could serve to s timulate 
further deliberations  on e -commerce. H is delegation  stood ready to support and advance 
discussions on the issue . 
The representative of Chinese Taipei  wished to take the opportunity to reply to some of the 4.61.   
questions raised on the papers submitted b y his delegation. He thanked China for bringing up the 
difference between digital trade and e -commerce. He acknowledged that different terms were 
sometimes used in different  papers, but his delegation was neutral in using those terms and 
welcomed any corrections or suggestions on that issue. As for the questions  on "technological 
neutrality" and whether existing rules should be re -written or already applied to the new digital 
world, his delegation agreed with the concept of technological neutrality. However , the problem 
was that sometimes  new technology created animal s that nobody recognized and, in those cases, 
it might be necessary to discuss and see whether new rules we re needed. The WTO was a 
Member -driven organization and, therefore, it was up to Member s to make that determination . 
The Chairman  thanked Chinese Taipei for the rich presentation, all delegations that had 4.62.   
intervened. It had been an interesting and instructive debate . He suggested that the Council take 
note of the statements made and revert to this item at its next meeting.  
It was so agreed . 4.63.   
5  ITEM E: MODE 4 – ASSESSMENT OF BARRIE RS TO ENTRY – STATEMENT BY INDIA  
The Chairman  recalled that that  item had been placed on the agenda of the Council at the 5.1.  
request of the delegation of India. A t the Ju ne meeting,  under that item , the Council had 
addressed the organization of a thematic seminar on mode 4, and had decided to take up the is sue 
at informal consultations. Accordingly, on 20 July he had convene d an informal Council meeting . At 
that meeting i t became apparent that , as in the case of the thematic seminar on e -commerce, 
there was no convergence of views among Members to proceed with the organization of a seminar  
at that point . Given the focus on preparations for MC11, it was considered that the m atter would 
be best taken up again in 2018.  
The representative of India recalled that her delegation's initial proposal  for a mode 4 5.2.  
seminar had been circulated to Members in document RD/SERV/135. In order to t ake Members' 
concerns  into account, the propo sal had subsequently been significantly revised , and circulated as 
document RD/SERV/135/Rev.1 , dated 27 February 2017 . The revised proposed  programme for the 
seminar contained two parts : the first sought to provide an overview of the scope of GATS 
commitme nts and MFN exemptions related to mode 4, the practice under Regional Trade 
Agreements and the economic impact of mode 4, while the second part proposed to  address  mode 
4 in action . Her delegation viewed t he seminar in an experience -sharing mode . All interested 
Members could  propose speakers for the event, with a view to having a good exchange  of 
experiences on the various aspects outlined . She reiterated her delegation's readiness to engage 
with Member s in case  there were any concerns on the revised d raft programme. She looked 
forward to working with Members and the Secretariat on  the organization of the seminar  after 
MC11 .  
The Chairman  suggest ed that the Council take note of the statement made.  5.3.  
It was so agreed . 5.4.  
6  ITEM F: CYBERSECURIT Y MEASURES OF CHI NA AND VIET NAM – REQUESTED BY 
JAPAN AND THE UNITED  STATES  
The Chairman  indicated that the item ha d been added to the agenda of the Council at the 6.1.  
request of the delegations of Japan and the United States. The United States ha d also submitted a S/C/M/133  
 
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  communicati on under that  item, titled "Measures adopted and under development by China related 
to its Cybersecurity Law ", contained in document S/C/W/374 .   
The representative of Japan  said that his delegation appreciate d the opportunity to share its 6.2.  
concerns on Chin a and Viet  Nam’s recent measures related to cyber security and Internet security. 
Starting with China’s measures , he recalled that, a t the previous CTS meeting , Japan had raised 
its concerns on China’s Cybersecurity Law, which had taken  effect on  1 June, and some M embers 
had also express ed similar concerns as well as  interest  in having more discussion on th e issue. 
That had not been  the first time that Japan had raised its concerns ; Japan had taken the 
opportunity to submit concrete comments in re sponse to the call for public comments on China’s 
Cybersecurity Law  and regulations. However, it was  regrettable that China had  continued to 
formulate other related Cyb ersecurity measures without  sufficiently addressing Japan’s concerns.  
At that meeting , hoping to call the attention of  the Members hip to the situation, Japan wished 6.3.  
to reiterate its concerns over China’s series of related measures connect ed with its Cybersecurity 
Law. He would also explain the reasons why his delegation  believe d that  the mea sures at issue 
could be related to China’s  WTO obligations . In that  regard , Japan appreciate d the U nited States  
communication, which  facilitate d Members'  understanding of th e issue.  
Japan had c oncrete concerns with the measures at issue in relation to the national t reatment 6.4.  
obligation under Article XVII  of the GATS . China's Cybersecurity Law stipulate d concrete measures 
for the safety of network operation s and netw ork information. While Japan had  never opposed the 
necessity of cybersecurity, Japan wished  to emphasize that a balance needed to be maintained in 
order to avoid placing foreign operators in a less competitive situation under the GATS.  
From th at perspective , Japan fe lt obliged to point out the ambiguity of the terms described in 6.5.  
the Law as an e xample of its concer ns. Article 31 of the Law referred  to the term "critical 
information infrastruc ture", regarding which it stated  that such infrastructure needed to  be under 
special protection by the Chinese  government . This was described as  "critical in frastructure in such 
areas as public telecommunication and information services, energy, transportation, water 
conservancy, finance, public services, e -government, and other critical information infrastructure 
which could seriously jeopardize national secu rity, the national economy, people’s livelihood and 
public interests in the case of its destruction, loss of its functions or data leaks ". The scope wa s 
extremely broad and vague. Japan wished  to remin d Members that China had  undertaken 
liberalisation comm itments under the GATS in various sectors, including computer and related  
services and financial services, and  therefore  service suppliers operating in such sectors could 
potentially be affected because of the lack of clarity in the scope of the term "critical information 
infrastructure ".  
According to Article 37 of the Law, an operator of "critical information infrastructure " was 6.6.  
required to store personal information and important data within China and to conduct a security 
assessment  when transferring su ch information and data abroad. Generally speaking, it was 
assumed that foreign operators compile d and administer ed data centrally outside China. Therefore, 
under the  Law at issue , foreign operators could be compelled to bear the additional burden of 
estab lishing a separate server inside China for the purpose of storing personal informat ion and 
important data. In that way, the  Law could place foreign network operators in a less competitive 
situation than the local operators, which  could be related to China’ s obligations under Article XVII 
of the GATS.  
Japan also had  concerns over related regulations connected with the Cybersecurity Law and 6.7.  
their possible relation  with China's obligations under the GATS. A series of draft cybersecurity 
measures bas ed on the Cybersecurity Law were  currently under formulation  in China . 
First, there was the regulation named "Measures on the Network Product and Services 6.8.  
Security Review ". This regulation  obliged  network operators to conduct  a security assessment on 
critical networ k products and services utilizing information systems related to national security and 
public interests. The inspection criteria and operational manuals for the security assessment 
needed to  apply to both foreign and domestic operators equally , and the ser vices provided by both 
foreign and domestic operators could not be treated differently , in order to be consistent with  the 
national treatment obligation under Article XVII of the GATS.  S/C/M/133  
 
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  Second, there were  the regulations named "Measures on the Security Asse ssment of Cross - 6.9.  
Border Transfer of Personal Information and Important Data " and "Guidelines for Data Cross -
border Transfer Security Assessment ". The se oblige d network operators to conduct  a security 
assessment when transferring personal information and imp ortant data collected within China 
overseas. As a result, it was possible that foreign companies could be forced to bear an additional 
burden compared to domestic comp anies in China, which usually did  not need to transfer 
"important da ta" overseas. Consequ ently, that  requirement could place foreign operators in a less 
competitive situation compared to domestic network operators in China, and such possible  
treatment could be related to the national treatment oblig ation under Article XVII  of the GATS.  
Third,  there was  the regulation named "Critical Information Infrastru cture Protection 6.10.   
Regulations ". This regulation oblige d operators of critical information infrastructure to protect the 
security of such infrastructure. The definition of "critical information i nfrastructure " was again  very 
broad and vague, in line with the Cybersecurity Law. A dditionally,  Article 29 o f the "Draft 
Regulation " obliged  operators to store personal information and important data inside China while 
the same provision also require d operators to conduct a mandatory security assessment  when 
transferring such information and data overseas. Japan was concerned that foreign operators 
would be compelled  to bear the additional burden of establish ing a sepa rate server inside China 
and condu cting security assessments. Consequently, th ose requirements could place foreign 
operators in a less competitive situation compar ed to domestic operators, and  could be related, 
again, to the national treatment obligation under Article XVII of the GATS.  
Japan also  wished to stress that  measures restricting  the free flow of data and information 6.11.   
should be kept to a minimum.  
To conclude , Japan call ed upon China to provide a clear response to the concerns that his 6.12.   
delegation had  raised at that  meeting and on other occasions.  
Turning to Viet Nam's measures , Japan wished to raise similar concerns wi th regard to the 6.13.   
Vietnamese draft Cybersecurity Law. The  government  of Viet  Nam wa s formulating a 
"Cybersecurity Law " and had submitted its first draft to public opinio n in June 2017. Japan 
understoo d that the draft Law contain ed various provisions which could hinder participation of 
foreign firms in the Vietnamese market. His delegation  found it regrettable that Viet  Nam was 
scheduled to submit the draft L aw to the National Assembly that  month despite not responding 
clearly to the comments Japan had submitted to Viet  Nam to express its concerns on the draft 
Law.  
The draft Cybersecurity Law prescribed  that, when foreign firms provide d 6.14.   
telecommunication or internet se rvices, such firms were required to establish a representative 
office and a data server within Viet Nam,  and manage user information internally within Viet  Nam. 
The d raft Law also required  that copies of personal information and important data be stored 
domestically and that a security assessment be carried out when transferring those data abroad.  
Viet Nam had committed to full and partial liberalization under the GATS in various sectors, 6.15.   
including computer and related servi ces, telecommunication services  and financial services. If the 
obligations under the Cybersecurity Law result ed in foreign operators in Viet Nam being treated 
less favo urably than domestic operators in th ose sectors, that could be related to  the national 
treatment obligation under Articl e XVII  of the GATS.  
Japan  wished to underscore again  that measures restricting the  free flow of data and 6.16.   
information needed to be kept to a minimum.  
Finally, Japan cal led upon Viet Nam to provide a clear response to the  concerns  expressed 6.17.   
by his delegati on at that  meeting and  on other occasions.  
The representative of the United States  said that his delegation ha d requested the inclusion 6.18.   
of that  topic on the Council's agenda in order to express its concerns with China’s Cybersecurity 
Law and various implementing measures related both to the Cybersecurity Law and China’s 
National Security Law.  The United States believed that the measures at issue would have a 
significant advers e effect on trade in services if they enter ed into force in their current form. The S/C/M/133  
 
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  US submission focuse d only on some aspects of the measures , and his delegation reserve d its 
right to address other concerns at a later date.   
The United States was  bringing the mat ter before the Council because the potential effects 6.19.   
extend ed across all se rvice sectors and therefore had  bearing on the rights of many other 
Members. The US fundamental concern wa s that the measures , as currently drafted , could disrupt, 
deter, a nd, in many cases, prohibit cross -border  transfers of information that we re routine in the 
ordinary course of business.   
As described in his delegation's  written statement, the measures at issue would apply to a 6.20.   
group of service suppliers i dentified as "network operators ", a term  which was so broadly defined 
that it could encompass any f oreign service supplier that had  a website or use d the Internet.   
For such network operators, which again could mean any foreign service supplier, the 6.21.   
measures would restr ict cross -border information transfers of so -called "important data " and 
"personal information " unless a broad set of  burdensome conditions was met. Those conditions 
include d the successful completion of a "security assessment "; demonstrating that the purp ose of 
the transfer met standards of legitimacy, necessity, and justification; and controlling for risks, 
including to national security , social and public interests. It wa s difficult to imagine how a service 
supplier could comply with such requirements.   
Meanwhile, transfers of "personal information " were subject to an additional hurdle, in that 6.22.   
network operators would need to obtain prior consent from each individual before any cross -border 
transfer could  take place.  Unlike other Members'  regimes, China' s regime did not allow for less 
burdensome options, such as contractual agreements, third -party accreditation, or other 
mechanisms. The security assessment wa s problematic as well, in that the circumstances that 
could lead to a negative determination were so broadly defined that a nearly unlimited range of 
cross-border transactions could be prohibited. Finally, operators in so -called "critical information 
infrastructure sectors " - another broad and vague category – would be required to store their data 
locally. 
In summary, the measures at issue would impose special scrutiny, particular procedures, or 6.23.   
bans on the cross -border transfer of expansive and loos ely-defined categories of data.  The impact 
of the measures would fall disproportionately on foreign servi ce suppliers, which obviously had  a 
greater need to communicate internationally than domestic firms because they either need ed to 
transfer data to and from headquarters and other affiliates or, in the case of cross -border supply, 
to interact with customers  located in China.   
Given the broad scope, loose definitions, burdensome nature, and disproportio nate effect, 6.24.   
the United States wa s deeply concerned  that the implementation of th e measures at issue would 
disrupt trade and impair the rights of Members. The United States therefore request ed that China 
refrain from issuing or implementing fina l measures until such concerns we re addressed.   
The United States had  similar co ncerns with measures Viet Nam had recently proposed  with 6.25.   
respect to cybersecurity in its draft 2 017 Cybersecurity Law, which had  yet to be finalized. His 
delegation's  comments at that meeting were based on its  review of Draft 4  of the Law , dated 
6 July 2017.  
As with China, Viet  Nam’s proposed legislation was quite broad and vague, such that it was 6.26.   
unclear what kinds of service suppliers would be affected or what steps they would need to take in 
order to comply.  
While the United States had  not had the opportunity to study Vie t Nam’s measures in detail, 6.27.   
a quick review of the proposed measures r aised several concerns. These include d: Article 25, 
which called  for the development of national cyb ersecurity standards and appeared  to ignore 
existing international standards; Article 30,  which required  that cybersecurity service suppliers 
establish in Viet Nam as a condition for offering services; Article 35, which would require service 
suppliers to take measures to prevent the dissemination of proscribed content even if they 
themselves had not create d it, such as in the case of user -generated content; and Art icle 51, 
which would require  telecommunications and Internet service  suppliers to store all consumer data 
locally.  S/C/M/133  
 
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  If implemented, tho se proposals would adversely affect trade in a broad range of services, 6.28.   
and might  well make cross -border s upply inf easible in some areas.  Given the potential effects on 
the sup ply of services covered by Viet N am’s commitments unde r the GATS, the United States  
urged Viet Nam to consult with other Members and work to resolve any concerns before moving to 
implement the  proposed measures.  
The representative of Viet Nam  was thankful  for, and had taken note of, the concerns raised 6.29.   
by Japan and the United States with respect to Viet Nam's draft Law on Cybersecurity. Pursuant to 
Viet Nam's domestic procedures , as part of the le gislative drafting process the  government  had 
submitted the draft Law , with the consolidated comments received , to the National Assembly, in 
this case  its Defence  and Security Commission, for consideration and review before bringing it out 
to the National Assembly's Plenary Session for debate. Two consecutive sessions were normally 
required to pass a law.  The whole drafting process was transparent and the public c ould follow  it 
all the way through.  
With regard to the comments raised by Japan and  by the  United States, if these were  6.30.   
submitted within the public comment period via the appropriate channels, they would be 
consolidated as well in the dossier submitted to the National Assembly.  
Finally , he did not wish to prejudge the outcome of the debates at t he National Assembly as 6.31.   
those were yet to happen. However, it wa s expected that all genuine stakeholders' interests, 
whether o n the part o f investors, trading partners or the general public, as well as the inherent 
right of the  government  to regulate in or der to achieve legitima te public policy objectives, would  
be taken into account during the legislative drafting process.  
The representative of the European Union  said that her delegation shared the concerns 6.32.   
already expressed a bout the measures that China h ad recently adopted, and about other rela ted 
implementing measures that we re currently under development, which could significantly impair 
cross-border data flows and services trade.  
The measures in question stem med from China's Cybersecurity Law , adopted in November 6.33.   
2016 and taking effect  in June 2017. The Law laid  out dispositions for the safety of network 
operations and network inf ormation, which the EU considered  to be valid objectives. However, 
such objectives needed to  be pursued using a balanced set of measures that did  not place foreign 
network operators substantially at a disadvantage compared to national operators. In that regard, 
her delegation shared the view that the Law an d its implementing measures had  the potential to 
lead to significant adve rse impacts on foreign companies that operate d in sectors where  China had  
undertaken liberalization commitments.  
The EU also wished to express particular concern about some of the implementing measures 6.34.   
stemming from the Cybersecurit y Law, whose draft versi ons had  been recently published, namely 
the "Measures on the Security Assessment of Cross -Border Transfer of Personal Information and 
Important Data " and the "Draft National Standard – Guidelines for Data Cross -border Transfer 
Security Assessment ", which t ogether could result in si gnificant restrictions on cross -border data 
flows of personal data and of "important data ".  
In the European Union,  the protection of personal data wa s a fundamental right that was 6.35.   
enshrined in Article 8 of the EU Charter of Funda mental Rights. As such, her delegation  consider ed 
that any Member was entitled to devise measures to protect  the personal data of individuals. 
However, the Chinese measures and guidelines at issue did  not apply only to personal data. In 
fact, in her delegation's  view, they depart ed significantly from the objective of personal data 
protection when they extend ed the cross -border data flows restrictions to vague notions su ch as 
"important data ", defined as data "that are closely related to national secur ity, economic 
development and public interests ". 
The EU wa s particularly concerned that , in Annex A of the Guidelines, China identified  data 6.36.   
from 27 sectors as "important data " in an overly broad manner. This include d, for instance , data 
that were necessar y for normal business operations such as information on production, sales and 
R&D of electronic information enterprises (A.6.c), information on enterprises’ credit inquiry (A.20), 
or registration information on a platform for e -commerce transactions (A.27. b). It included  also 
proprietary information that constitute d enterprises' intellectual property, such as the model, S/C/M/133  
 
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  important parameters or the source code of basic hardware in electron ic information products 
(A.6.d). B ut perhaps more importantly, the lis t was open-ended, often including "all other 
technical data " or "other relevant information ", starting each section with "the important data 
include but are not limited to ", and including a secti on (A.27) that explicitly stated  that, "in view of 
the broad scope of important data ", the classification could  be further extended.  
The draft Guidelines stipulate d that network operators (and the Cyberspace Administration 6.37.   
of China or other competent authorities in specific situations) would need to conduct a securi ty 
assessment when transferring personal data or any of the identified types of "important data " 
overseas. In this case, the EU wa s concerned that the broad defin ition of network operators 
seem ed to cover any operator using telecommunications networks to t ransfer data, which 
nowadays virtually equated  to the whole economy.  
Furthermore, th e EU considered that , due to those  requirements, foreign companies 6.38.   
operating in the ser vice sectors in which China had  taken full or partial GATS market access or 
national treatment commitments would likely find themselves in a de facto  less competitive 
situation when compared to domestic operators in China. Such foreign companies would be 
required to conduct security ass essments when transferring "important data " abroad, and as such 
would need to bear an additional burden that domestic companies in China would  not, since they 
would typically not need to transfer "important data " overseas.  
The EU had  communicated th ose con cerns to the relevant au thorities in China, and 6.39.   
supported  the United States and Japan in the request for China to provide a clear response to the 
concern s raised . The EU also invite d China to take the necessary time to adequately consult , and 
take on board  the opinion of , foreign business operating in China before issuing any new 
implementing measure.  
The representative of New Zealand  said that her delegation share d some of the concerns 6.40.   
raised by the United States, Japan and the E uropean Union in relation to cybersecurity -related 
measures adopted and  under consideration by China.  Government s had to work together to ensure 
that critical information  infrastructure wa s stable, secure and well -functioning.  In that regard, New 
Zealand recognized  that Members had  the right to regulate on those important public interest 
grounds. Nonetheless, such measures had to be introduced in a manner that wa s consistent with 
the existing international obligations and minimize d their negative impact s on trade.  
Data localization requirement s and restrictions on the cross -border transfer of data risk ed 6.41.   
impacting the conditions of com petition for foreign firms in a manner that put them at a 
disadvantage. The realit ies of modern business mean t that even firms engaged in  formerly 
tradit ional goods or services supply we re incr easingly handling large quantities  of data . Where 
those firms' operations were transnational , the centrality of th at data to their  operations typically 
necessitated  frequent and on -going transfers of large qu antity of data across borders. Overly -
broad data localization regulations therefore risk ed discriminating against foreign firms by making 
legitimate data transfers more costly  relative to local businesses.  
New Zealand share d the  concerns raised by  other  Members  regarding the ambiguity of 6.42.   
terms. Broad definition of terms such as "critical information infrastructure ", "network operator " or 
"important data" had the potential to impact on large numbers  of foreign service suppliers. The 
complexity of so me of the measures in question could pose a significant burden on smaller service 
suppliers , or those from developing economies . Such entities we re less likely than large exporters 
to have access to the internal resources  or external expertise  necessary to effectively navigate 
proposed requirements of th at type.  
New Zealand urged China to ensure that the measures at issue we re implemented 6.43.   
consistent ly with the l etter and spirit of the obligations contained in the GATS.  Where data were  
required to be stored locally in the country of origin , the type of data that fell  under those 
conditions had to  be kept to the minimum necessary to achieve legitimate public policy objective s. 
Her delegation looked forward to further opportunit ies to eng age with China on tho se measures 
and obtain further  clarity about how they would  apply.   
Turning to Viet Nam's draft cybersecurity law , which her delegation understood was 6.44.   
currently under consideration, New Zealand also shared  similar concerns to those de scribed in S/C/M/133  
 
- 22 - 
 
  relation to China's measures . Requirements to store data locally, and limitations on cross -border 
transfer s, risk ed treatment of foreig n service suppliers that rendered  them at a competitive 
disadvantage. New Zealand urged Viet Nam to progress t he law in man ner that wa s consistent  
with its GATS commitments and the  wider objective of minimizing the barriers to trade of 
measures in pursuit of legitimate public policy objectives . She thank ed Viet Nam for the 
explanations  they had  provided at that meeting on the ir domestic regulato ry process and the 
opportunities  to feed into that .  
The representative of India said that her delegation was in the process of analysing t he 6.45.   
relevant documents in consultation with its stakeholders and might  revert to the issue with more 
detailed comments at a later stage. However , she wished to inform the Membership that Indian 
service suppliers fa ced barriers similar to the ones outlined in the US communication in some other 
Members  as well.  
Indian suppliers  had underscored that the issue  was a very important one, on which further  6.46.   
deliberations were required.  Nevertheless, at that  stage India wished to reiterate its support for 
cross-border transfer of data by electronic means , including personal data , for the pu rpose  of the 
cross-border supply of services, especially in service sector s in which commitments had been 
under taken.  At the same time, India recognized  that privacy and protection of personal data were 
indeed important public policy objective s; nonetheless , there should not be a "one size fits all " 
approach when it came  to regulating on privacy  and data protection , and Members should not use 
differences in regulatory approaches to undermine the commitments they had made in mode 1. 
The challenge b efore all Members was how to balance the interest s of service suppliers , especially 
those with a global delivery model fo r which  cross-border data flow was indispensable, with the 
pursuit of the public policy objectives of privacy and data protection. Indi a urge d Members to 
exchange information and share  best-practice experiences on that  critical issue.   
The representative of Australia  thank ed the U nited States and Japan for formally placing the  6.47.   
item on the agenda of the Council . Australia  welcome d Members raising issues in the CTS that 
were relevant to trade in services , whether th e measures  concerned  had a liberalising or a 
restrictive effect,  as discussion of such measures was an importan t transparency function of the 
Council . 
Data localisation r equirements were an increasing concern for service suppliers . Business 6.48.   
had made it clear t hat the location  where data w ere stored did  not make data more secure from 
disclosure, and  data localisation measures could  add considerable costs to doing business i n 
foreign markets.  In the XXI century, the ability to store an d transmit data across borders wa s 
integral to international trade as much as the capacity to transmit payment for services.   
Australia consider ed that  there were tech nological means to ensure t hat data w ere stored 6.49.   
safely and protected from disclosure as an alternative to broad localisation measures.  International 
standards, particularly the ISO 27000 series on information security management systems, 
provide d guidance as to how to store, transmi t and manage data securely . Adopting an 
international standard would allow foreign service suppliers a means of demonstrating co mpliance 
with a standard that wa s well -known in the global IT industry.  
As her delegation had noted at the previous CTS meeting , Australia ha d an interest in 6.50.   
discussing China’s Cybersecurity Law in the CTS,  given its effect on trade in services.  Her 
delegation support ed the communication from the United States and share d many of the concerns 
expressed therein . Australia was concern ed that China's Cybersecurity Law and its implementing 
measures affect ed service suppliers broadly across sectors , not only the direct suppliers of 
computing services but  suppliers in  all service sectors that relied  on data usage to sell their 
services.  
She had noted  the United States'  comment that many terms in the Cybersecurity Law  and 6.51.   
its implementing measures we re unclear.  Her delegation concurred. Australia consider ed that the 
ambiguity  around the terminology used could  create circumstances where ser vice suppliers were 
not confident  that their daily activities were in compliance with the L aw; this, in turn , could 
discourage service suppliers from utili sing cross -border data services. Moreover, the burden of 
compliance with the  Law would disproportiona tely fall on foreign service suppliers.  S/C/M/133  
 
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  Australia had also noted Viet  Nam’s recent draft Law on Cybers ecurity. As per her earlier 6.52.   
remarks, Australia  consider ed that  there were alternative  measur es to localisation requirements  
that could provide confidence in information security.  Australia, along  with several other Members, 
had provided feedback on Viet  Nam’s draft L aw, noting its intere st in seeing a l aw that supported  
increased participa tion in global e -commerce and wa s compliant with international trade 
commitments.  Her delegation looked forward to future drafts of the L aw and welcome d 
engagement from Viet Nam with other Members on the  matter.  
The representative of Brazil  wished to add a placeholder for future  discussion. He said  that, 6.53.   
on the basis of the US submission, the issue  for deliberation  in his opinion  was not specifically the 
concerns expressed about the cybersecurity laws of China and Viet Nam, but rather the way in 
which those concerns should be addressed . He observed that,  in its e -commerce submission in 
JOB/GC/94, the United States had suggested that  the issue of restrictions on cross-border data 
flows required rule -making in the  WTO. However, in its communication under that agenda item, 
the United States was suggesting th at restrictions on those same  cross-border  data flows were an 
issue for which GATS commitments came into play. Against that background, he suggested that 
Members give the issue more thought and keep a placeholder for further deliberations. It was very 
important to discuss  whether  issues su ch as cybersecurity, data flows or  privacy  could be 
addressed under existing WTO rules or whether new rules were needed.  
The representative of Chinese Taipei  thank ed the United States and Japan f or bringing the 6.54.   
issue to Members’ attention. He also thank ed the responses provided by Viet Nam and look ed 
forward to clarification s from China.  
His delegation  share d similar systemic con cerns as those expressed by other Members . 6.55.   
China ha d undertaken market access and nat ional treatment commitments  under the GATS in 
many service  sectors  that might be affected by the measures  at issue . Chinese Taipei  realize d that  
the impact of th ose measures would fal l disproportionately on foreign  service and good suppliers, 
especially MS MEs. By way of example, the application of China's measures would imply that  it 
would take longer to access a website, as passing the cybersecurity check might require an extra 
40 or 50 seconds . It was hard to imagine any potential consumers wait ing longer  than one minute 
when sho pping online. As other delegat ions had indicated, Chinese Taipei was also of the view that 
the measures at issue might significantly affect trade in services and create an additional burden 
for foreign suppliers and domestic consumers.  
Pursuant to Article III:3 of the GATS, each Member  had an obligation to "promptly and at 6.56.   
least annually inform the Council for Trade in Services of the introduction of any new, or any 
changes to existing, laws, regulations or administrative guid elines which significantly affect trade 
in services covered by its specific commitments under this Agreement ". As Ch ina's Cybersecurity 
Law had taken effect on  1 June 201 7, his delegation  encourage d China to notify the measures in 
place to the Council for Trade in Services and looked forwar d to further discussion of the  issue.  
Registering  his delegation's interest in the issue, t he representative of Uganda  asked if the 6.57.   
statements delivered by Japan and the United States could be shared with the Membership . The 
Chairman  conveyed th e request to the two delegations concerned.  
The representative of China  thank ed the U nited States, Japan and other M embers for 6.58.   
sharing their views on the issue, and said that  it had taken note of their  remarks and observations.  
There was  a global consensus that Members needed to safeguard  personal information and 6.59.   
cyber security when regulating cyberspace. On the basis of that consensus, and taking into account 
the need for cross -border data flow s driven by economic globalization, as well as the need to strike 
a balance between safeguarding societal security and facilitating  the flow and use of data, China 
had adopted , or was  legislating , relevant laws and regulations, with a v iew to upholding national 
cyber security and safe guarding  people’s interests. Those efforts we re not intended to impede 
cross-border transfers of in formation, let alone restrict  international trade.  
In response to the previous interventions,  and before going into any detail, the 6.60.   
representative  wished to emphasiz e a general principle, namely that it was within the right of any 
WTO Member to define the scope of the terms used in its laws and regulations.  S/C/M/133  
 
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  The US communication and the Japanese statement , as well as some other M embers’ 6.61.   
interventions , reflected quite a  lot of misunderstandings of the  relevant  Chinese L aws and 
regulati ons. Taking that opportunity, his delegation  wished to make the following clarifications. 
First, l ocal data storage requirements we re imposed on critical information infrastructure, instead  
of all network operators. Second , the objects of the security assessment we re limited to personal 
information and important data collected in the Chinese territ ory, rather than all the data that  
flowed abroad. "Important data " referred  to those  data of im portance for the nation, not for the 
enterprises or individuals. Third , according to the related laws and institutional  arrangements, the 
data which were  really necessary to  be transferred across borders were allowed to flow abroad  
once the results of the security assessment indicate d no harm to national security and s ocial public 
interests. Fourth , personal information could flow across borders upon consent b y the related 
individuals. It was  noteworthy that making international phone calls, sending interna tional emails, 
making cros s-border purchases through the I nternet and other initiative s or actions taken by 
individuals were regarded as consent ed by them, as the holders of personal information.  
With regard to the concerns that the relevant measures coul d have a negative impact on 6.62.   
foreign companies or f oreign service  suppliers, it was  necessary to point out that , with the aim of 
facilitating the orderly cross -border flow of internet information within the  applicable  legal 
framework, and as a manifestation  of the guiding principle  of opening up,  and safeguarding 
national cyber security against the backdrop of globalization, the relevant Ch inese laws and 
regulations applied  to both Chinese service providers and foreign ones, and were without prejudice 
to the  implementati on of China's related WTO commitments.  
It was also necessary to highlight that China ha d always abided  by its transparency 6.63.   
obligation s, and  had been  dedicated to guaranteeing the right of the public to comment in its 
legislative  process. In particular, with regard to  the laws and regulations referred to in the US 
communication and the Japanese statement , the competent authorities had solicited , or we re 
soliciting , opinions from Chinese and foreign stakeholders. For example,  the "Measures on the 
Security Assessment of Cross -border Transfer of Personal Information and Important Data " had 
been made available for public  comments from April to May that  year. Based on this, the 
competent authority ha d held a thematic workshop for opinio n seeking, which  had attracted 
diplomats from the embassies of the United States, Japan, the United Kingdom , Germany, 
Australia and the EU delegation, as well as over 200 representatives from more than 150 
multinational companies and associations. The comp etent authority  had taken note of the opinion s 
of the various parties and was  still revising th e Measures  in question . 
Nowadays , Members we re facing the common c hallenges of safeguarding cybersecurity, 6.64.   
combating cyber crime and bridging the digital divide. Promoting the sound development of 
cyberspace was in line with M embers' common interest s. China was  proactively working to that 
aim, and wishe d to exchange ideas and cooperate with Members in th at area, so as to jointly 
facilitate the orderly cross -border flow of information within the applicable legal framework , and 
realize inclusive trade growth , on the precondition that personal information security and national 
cyber security we re fully guaranteed.  
The Chairman  suggested that the Council take note of the statements made.   6.65.   
It was so agreed .  6.66.   
7  ITEM G: FUTURE WORK OF THE COUNCIL  
The Chairman  recalled that, at the formal meeting in June, he had evoked paragraph  11 of 7.1.  
the Na irobi Ministerial Declaration. That  paragraph contain ed a reaffirmation, on the part of 
Ministers, of "the importance of work in regular bodies in furthering the objectives of the WTO 
Agreements and in facilitating meaningful exchange of information and sharing of experiences 
regarding the effective implementation and operation of their provisions ". On that occasion, he had  
also indicated that he intended to organize informal consultations to discuss how to respond to th e 
pronouncement Ministers  had made  in Nairobi. Accordingly, at the infor mal meeting he had 
convened on 20  July, he had shared some of his own ideas, while calling on Members to also put 
forward any suggestions they might have in that  regard. At the  informal  meeting , it was agreed 
that, with a view to facilitat ing Members' consideration of his  suggestions for a further exchange of S/C/M/133  
 
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  views, his introductory remarks would be cir culated to Members in writing. They are contained in 
document JOB/SERV/266, dated 21  July 2017.  
As no delegation asked for the floor, the Chairman  sugge sted that the Council revert to the 7.2.  
item at its next meeting. With regard to reversion, t he representative of the United States  noted 
that the Chairman's report of his consultations  indicated that  Members had not identified any new 
or particularly substant ive work to be pursued in the Council. His delegation was not supportive of 
a forward agenda that aimed to make work out of topics that had already been discussed at 
length. Future work of the Council had  to be driven by concrete proposals by Members; any of the 
issues the Chairman had put forward could be picked up as proposals , but this  work had to be 
driven by Members . With respect to trade policy reviews, the Trade Policy Review Body was the 
appropriate forum  for any questions Members wished to raise re lated to those reviews ; in general, 
his delegation wished to see a continuation of ordinary business , in an expeditious manner, 
without endeavours to create additional work that might not be Member -driven.  
Noting the Member -driven nature of the WTO's work , the Chairman  proposed  that the Council 7.3.  
take note of the statement made and only revert to this item if and when Members requested that 
it be placed on the Council's agenda . 
It was so agreed . 7.4.  
8  ITEM H: RECENT DEVEL OPMENTS IN TRADE IN SERVICES STATISTICS  
The Chairman  recalled that, in October 2016, the Secretariat  had made a presentation to the 8.1.  
Council on the latest developments in  trade in services statistics. At the end of the presentation, in 
light of the importance of the information shared, Members had agreed that such an update would 
become a yearly feature on th e Council's agenda. Against that  background, the Secretariat ha d 
once again been invited to update the Membership on recent developments in trade in services 
statistics.   
A representative of the Secretariat  said that he would present the four main areas of the 8.2.  
Secretariat 's work with regard to trade in services statistics. These were: statistics production and 
dissemination, specific projects, new areas and technical assistance  activities . Starting with the 
first element, he explained that the WTO Secretariat jointly collected and disseminated, in a 
coordinated fashion, annual and quarterly trade in services statistics with UNCTAD and the ITC. 
Annual data sets were produced for over 200 reporte rs, with a detailed sectoral breakdown, 
bilateral trade statistics (where available) and world estimates and regional aggregations. Monthly 
trade data were, instead, available for over 150 reporters, broken down by main sectors and also 
with world estimate s and regional aggregations. In addition, the WTO produced, on its own 
responsibility, monthly trade statistics for total commercial services for over 30 reporters. On the 
basis of this information, the Secretariat had produced a statistical database, the bulk download of 
detailed annual data, short term statistics, the World Trade Statistical Review for 2017 and the 
Trade Profiles for 2017.  
Turning to recent trends, the representative noted how, in 2016, the growth of world exports 8.3.  
of commercial services h ad remained stagnant. At a more disaggregated level, while construction, 
transport and financial services had exhibited less negative growth rates than in 2015, 
telecom munications , computer and information services had proven to be the most dynamic 
sectors . If one considered the year -on-year percentage change of world exports of commercial 
services, the first quarter of 2017 had recorded a positive trend for all main sectors, and it was 
hoped that this would continue into the second quarter of 2017.  
In term s of specific projects the Secretariat was involved in, the representative mentioned, 8.4.  
first, the WTO -OECD Trade in Services Matrix. This was a benchmark dataset for bilateral trade in 
services  and by main service sectors, for the period 1995 to 2012. It wa s an experimental dataset 
which relied on the 5th revision of the BO P Manual . While the dataset was scheduled to be released 
in October 2017, he stressed that it was only experimental, relying on derived, estimated and 
reported data. The second specific pr oject he mentioned addressed trade in services by mode of 
supply and was funded by the European Union. Th at dataset was scheduled for release at the end 
of 2018; it was again an experimental dataset , which  aimed to set an analytical international 
benchmark  that would be improved over time through integrating hard data.  S/C/M/133  
 
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  In terms of outputs, as far as the first project was concerned, data on balanced trade in 8.5.  
commercial services by region for 2012 showed that intra -regional trade was more important than 
inter-regional trade, with intra -European exports accounting for the largest share of total exports, 
followed by intra -Asian exports. The dataset also contained estimates at the country level.  
As for trade by modes of supply, data obtained using the simplified  approach of the Manual 8.6.  
on Statistics of International Trade in Services showed that , in 2014,  mode  3 accounted for 55% of 
all services trade, mode  1 for 25%, mode  2 for 15% and mode  4 for the remaining 5%. The 
representative stressed that those were first  results, which would be refined over time, particularly 
at the individual Member level. The plan later on was to combine data by value, partner and mode 
of supply , and link this to information on individual market conditions for analytical purposes.  
As concern ed new areas of work, the representative highlighted two. The first was with 8.7.  
regard to ICT -services and ICT -enabled services. UNCTAD  had implemented pilot surveys in three 
developing economies in 2017, namely Thailand, India and Costa Rica, with the c ooperation of the 
relevant national statistical institutes. A meeting on lessons learnt was scheduled for late 
November that year. The second new area of work was on cross -border e -commerce and digital 
trade, with the aim of measuring cross -border e -commer ce transactions; an Expert Group meeting 
was scheduled for the following week.  
Finally, with regard to technical assistance in services trade statistics, the representative 8.8.  
explained that the WTO was the focal point in that area. Assistance was initially c oncentrated on 
"rule-making" in the Manual on Statistics of International Trade in Services and related 
Compilation Guide, with a focus on data collection and compilation, in particular for disaggregated 
transactions, data by partner, data quality improvem ent through reconciliation, FATS statistics and 
trade in services by mode of supply. For this, an e -learning course had been  developed and was 
being run ahead of face -to-face courses.  
However, technical assistance was now shifting to the operational side,  and the 8.9.  
representative mentioned two activities in that area. First, a "WTO Course on Trade in Services 
Statistics with emphasis on Africa", to be held from 6 to 20 November. The course, which would 
focus on sectors of trade interest to the relevant Membe rs, would see the participation of national 
compilers as well as experts from UNCTAD, OECD, ITC and Paris21. Second, a "WTO -AMF Follow -
up Course on Trade in Services Statistics for Arab countries" , which was funded by the WTO and 
AMF and would be organised in collaboration with UN ESCWA and UNSD from 20 to 23 November. 
The seminar was a follow -up to a 2013 course to improve statistical collection. Participants were 
required to have taken the e -learning course in order to attend the event, which was focused on 
service sectors of trade interest to Arab countries and the concrete implementation of data 
collection and compilation.  
The Chairman  suggest ed that the Council take note of the statement made.  8.10.   
It was so agreed . 8.11.   
9  ITEM I: OTHER BUSINE SS 
No item s were raised under Other Business .  9.1.  
The meeting was adjourned . 9.2.  
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