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S/C/M/146  
 
22 July 2021  
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Council for Trade in Services    
 
 
REPORT OF THE MEETING HELD ON 1 JULY  2021 
NOTE BY THE SECRETARIAT1 
The Council for Trade in Services held a meeting on 1 July 2021, chaired by Ambassador Villalobos 
(Mexico) . The agenda was contained in document WTO/AIR/CTS/ 27. 
The agenda was a dopted . 
The Chairman  recalled that delegations  were meeting both in virtual and in -person mode.  He trusted 
that delegations attending were  familiar with the main technical aspects of participation  for both 
modes . He urged delegates to speak at a reasonable, moderate pace and, if possible, to provide the 
interpreters with an advance copy of any written statements they intend ed to deliver , to help ensure 
that interventions were properly conveyed and understood when translated  in the other two official 
languages.   
 
1  ITEM A: NOTIFICATIONS PURSUANT TO ARTICLE S III:3 , V:7 AND VII:4  OF THE GATS  
1.1.  With regard to the notifications made pursuant to GATS Article III:3 (Transparency), the 
Chairman  drew the Council 's attention to the commun ications received from  the Russian Federation 
(in documents S/C/N/1048 and S/C/N/ 1049); Egypt (S/C/N/1050); Guyana (S/C/N/1051); 
Macao,  China (S/C/N/1057); and Thailand (S/C/N/1058 and S/C/N/ 1059).  
1.2.  He suggested that the Council take note of the notificatio ns. 
1.3.  It was s o agreed . 
1.4.  Concerning the notification s made pursuant to Article V:7 (Economic Integration), the 
Chairman  drew the Council 's attention to the communication s received from the European Union (in 
document S/C/N/6/Add.1); Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and 
the European Union (S/C/N/680/ADD.1); Australia, New Zealand, Samoa, Solomon Islands, Tonga 
(S/C/N/1052); India and Mauritius (S/C/N/1053);  Costa Rica, El Salvador, Honduras, Nicaragua, 
Panama, and the Republic of Korea (S/C/N/1054); the United Kingdom and Albania (S/C/N/1055); 
Antigua and Barbuda, Barbados, Belize, Dominica, Dominican Republic, Grenada, Guyana, Jamaica, 
Saint Kitts and Nevis , Saint Lucia, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago 
and the United Kingdom (S/C/N/1025/Add.1); and the United Kingdom (S/C/N/1056).  
1.5.   The representative of India said that India and Mauritius had  signed the Comprehensive 
Economic Cooperation and Partnership Agreement (CECPA) in February 2021. The CECPA was the 
first trade agreement signed by India with a country in Africa. The agreement , which had entered 
into force on 1 April 2021 , covered, inter alia , trade in services,  the movem ent of natural persons, 
telecom munication and financial services.  
1.6.  As concerned trade in services, Indian service providers would have access to around 115 
subsectors from the 11 broad service sectors , such as professional services, computer  and related 
services, research & development, other business services, telecommunication, construction, 
distribution, education, environmental, financial, tourism and travel -related  services , recreational, 
yoga, aud io-visual services, and transport services. India ha d offered around 95 sub -sectors from 
 
1 This document has been prepared under the Secretariat's own responsibility and is without prejudice 
to the positions of Members or to their rights and obligations under the WTO.  S/C/M/146  
 
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  the 11 broad services sectors, including professional services, research & development services , 
other business services, telecommunication, financial, distribution, h igher education, environmental, 
health, tourism and travel -related services, recreational services and transport services.  
1.7.  The Chairman  suggested that the Council take note of the notification s and the statement made 
and that the agreements notified be ref erred to the Committee on Regional Trade Agreements for 
consideration.   
1.8.  It was so agreed . 
1.9.  With regard to the notifications made under Article VII:4 (Recognition), he drew the Council 's 
attention to the communication received from the Russian Federation (S/C/N/10 47).  He suggested 
that the Council take note of the notification.  
1.10.  It was so agreed . 
2  ITEM B: OPERATIONALIZATION OF THE LDC SERVICES WAIVER  
2.1.  The Chairman  recalled that , on 2 and 3 June , the Council  had organised a webinar on "Least 
Developed Country services export performance and facilitating implementation of preferences 
notified under the LDC Services Waiver".  
2.2.  The WTO Director -General, Dr Ngozi Okonjo -Iweala, the Minister of Chad, His Excellency Mr  Ali 
Djadda  Kampard, and Commissioner Mr Emmanuel Mutahunga, representing the Ministry of Trade, 
Industry and Cooperatives of Uganda, had given  welcome remarks.  
2.3.  The first session of the webinar  had provided an overview of LDC services trade. The WTO 
Secreta riat had presented the most recent and disaggregated information available, which had also 
illustrated the ruinous impact of COVID -19 on LDC services trade. Members had also heard the 
perspectives of national statistical compilers, from Bangladesh, the Uni ted Kingdom and Turkey. 
Overall, it was apparent that there were considerable data gaps with regard to LDCs services trade 
data. Although some work was under way to try to improve the situation, it require d both time and 
resources.  
2.4.  In Session 2, Members h ad heard from exporters and importers of LDC services, in sectors as 
diverse as audio -visual services, IT services, business and professional services. One clear thread 
that had run through speakers' interventions was the enabling role of digital technolog y, which ha d 
significantly impacted how businesses were run and foreign markets accessed. At the same time, 
the point had been  made that adequate digital infrastructure was an essential element to successfully 
participate in services trade.  
2.5.  In Session 3, representatives of LDCs had presented initiatives they ha d undertaken to 
strengthen the domestic services sector and support service suppliers in their attempts to penetrate 
foreign markets, including by making use of notified preferences. Representatives of notifying 
Members and other relevant cooperation partners  had also reported on their strategies, highlighting 
certain of the technical assistance and capacity -building programmes in place to help integrate LDCs 
into global services trade.   
2.6.  The final Se ssion had heard some views about lessons that had emerged from the webinar, 
and a number of suggestions about possible steps that could be taken to increase LDC s' participation 
in world services trade.   
2.7.  The Chairman believe d that the webinar had offered p lenty of food for thought, and he would 
welcome hearing delegations' further reflections and reactions.  
2.8.  The representative of India thank ed the Membership for coming to the consensus that Least 
Developed Country Members shall not be required to apply the p rovisions of the TRIPS Agreement 
for another 13 years. Her delegation  was happy to note that the special needs of LDCs ha d been 
recognised by all  Members .  S/C/M/146  
 
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  2.9.   The representative reiterate d that India attache d utmost importance to the meaningful 
implementation of preferences granted under the LDC Services Waiver by all preference -granting 
Members , with the ultimate objective of increasing the LDCs ' share in global export of services.  
2.10.  During  the webinar, India had provided specific information regarding  the utilization of 
preferences  it granted , in the three areas of visa -related preferences, technical assistance and 
capacity building , and market access. Her delegation had  also provided some suggestions on bette r 
utilisation in future of th ose preferences by LDCs. India looked forward to further meaningful 
engagement with all Members on th at important issue in the run up  to MC12.  
2.11.  The representative of the United Kingdom  thanked the LDCs and the Secretariat for or ganising 
the webinar. Her delegation believed that t hat kind of  information -sharing exercise  had been 
extremely useful in evidencing both  the challenges and the opportunities with increasing LDC 
participation in global services trade. The  United Kingdom re cognised that the need to support the 
resilience and recovery of LDC services suppliers had become more acute in light of the impact of 
the COVID -19 pandemic . 
2.12.  The United Kingdom had been pleased to be able to actively support the webinar, through  
contributions from its Office for National Statistics , which had set out the efforts that they were 
making to improve data collection of UK services trade with LDCs,  and also from  KPMG UK , which 
had shared the company's experiences and reflections on impo rting services from LDCs . 
2.13.  The United Kingdom believed that a greater collective effort was needed to support LDCs in 
that area, including through more effective operationalisation of the Waiver . Her delegation was 
continuing to consider the LDC response to the UK notification under the Waiver  at the previous 
meeting of the CTS in March . The United Kingdom was also keen to  work with other Members to  
consider what more could be done to  support LDCs , and would continue to engage in initiatives to 
deepen its understanding . 
2.14.  The representative of South Afri ca thank ed the Secretariat for organising  the June webinar. 
The event had highlighted that LDC services exports continue d to be low and unbalanced , with 
mode 3 amounting to only 7.2% of LDC trade whilst  the corresponding share  for developed 
economies was 62.5%. In addition, LDC services exports were dominated by only a few players, 
with the top 5 capturing 52.2% of LDC services exports. Moreover, one of those top  5 exporters was 
not a WTO Member and, therefore, did not enjoy MFN market access  and was not a beneficiary of 
the LDC Services W aiver.  
2.15.  The d ata on the collapse of LDC services exports in 2020 highlighted  the risks of an 
undiversified economy and the cost of dependency on tourism exports. The data presented indicated 
that the Waiver preferences were not having the desired impact in terms of economic transformation 
and diversification of LDCs.  
2.16.  The session o f the webinar that had focused on experience -sharing by exporters and importers 
of LDC services had been,  in her delegation’s view , the most criti cal input for constructive 
discussions , firstly, to review and promote the operationalisation of the LDC Services Waiver  and, 
secondly , to better tailor government initiatives to support LDC service suppliers. To that effect, 
Members needed more insightful  information sharing for all services sectors , from both exporters 
and importers. It was also necessary to institutionalize continuous assessments , in an effort to 
understand what related restrictions were discouraging preference utilization so that govern ments 
could  work with relevant stakeholders and introduce targeted solutions.  
2.17.  In that regard, she reiterate d South Africa's previous statements and highlight ed the need to 
continuously monitor and evaluate the impact of the implementation of the preferenc es granted 
under the Waiver, with a view to introducing measures that could  advance positive changes to LDCs' 
share in global services trade.  
2.18.  Her delegation had  made a practical suggestion in December 2020, namely the introduction 
of an on -line WTO -hosted  portal for LDC service suppliers and importers of such services, so that 
they could record bottlenecks or challenges in activating the preferences granted. The portal could 
facilitate the real -time collection of sector and mode -specific data and could als o give preference -
granting Members the opportunity to look into ways to address issues recorded therein.  S/C/M/146  
 
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  2.19.  The representative of Chad, speaking on behalf of the LDC Group , again thanked the 
Secretariat, Members and its partners  for the preparation and conduc t of the workshop on the 
implementation of the LDC Services Waiver held in June.  
2.20.  The workshop followed the one Members had held in 2019. The LDC Group had worked to 
provide inputs that had been shared by exporters as well as importers of LDC services in v arious 
markets. The Group had been able to gather very important information by interacting with them. 
LDCs expressed appreciat ion to the Members who had contributed to the imports in their markets 
and thank ed the LDC colleagues and partner organizations f or their contributions.   
2.21.  Indeed, the Group had  requested updates on the status of LDC services  trade data . All 
Members were aware of the difficulties in collecting data on services  trade in general. For LDCs, the 
situation was especially  difficult. The Group appreciated the work done by Barbara d'A ndrea of the 
Secretariat and the suggestions  made, on which the Group planned to follow up.  
2.22.  LDCs also  thought that South Africa's idea of the WTO setting up a service portal for LDCs 
was useful . The portal could  facilitate real -time collection of sectoral and specific data and could also 
give preference -granting Members the opportunity to consider different ways of dealing with 
reported issues and information on government and private sector pro grammes. 
2.23.  An important conclusion of the 2019 CTS seminar and of the webinar just held was that there 
was a serious lack of detailed data on LDC services trade, particularly in heavily traded sectors such 
as business services, as well as the absence of bila teral statistics. Particular issues reported include d 
the lack of coverage of entire sectors. Existing data collection systems were not designed to capture 
details, and there was a significant time lag between surveys.  
2.24.  From th at perspective, the LDC Group  wished to recommend  the following:  
a. Surveys could  be designed to also provide information on LDCs' services exports through 
digital intermediation platforms, in line with the OECD -WTO-IMF Manual on the 
Measurement of Digital Trade issued in 2020 ; 
b. The Enhan ced Integrated Framework (EIF) could be used to  explore funding for the 
development of harmonized services surveys in LDCs. Th at should be accompanied by 
sustained technical assistance and a program me of statistical capacity building in LDCs, 
including the  use of statistical software and new data sources. In th at regard, the Group  
believe d that the Secretariat's guidance remain ed important.  
c. Notifying Members should report annually on initiatives taken in relation to LDCs. Th at 
would provide guidance to LDC exporters on how to use preferences and provide 
information about consumers in their markets who use d LDC services.  
d. The WTO should set up a service portal for LDCs that would  record obstacles or difficulties 
in using the preferences granted. The portal sh ould facilitate real -time collection of sector -
specific data , would give preference -granting Members the opportunity to consider 
different ways to address reported issues , and would provide i nformation on government 
and private sector program mes. 
e. The Group  intend ed to bring recommendations to MC12 that Members take stock  of by 
MC13 .  These would  include : 
i. Consider ation of  any improvements in LDC services exports;  
ii. Further analysis to improve the preferences  granted,  to ensure that increases in LDC 
participation in services trade correspond to requests for LDC -provided services from 
consumers in preference -granting Members ; 
iii. Assessment of options beyond the preferences themselves,  so to facilitate their 
utilisation ;  
iv. Assessment of changes in information on services in  LDCs since the pandemic; and  S/C/M/146  
 
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  v. The possibility of making the W aiver permanent , in light of the difficulties of tracking 
data, the information challenges faced , and the fluctuating capacities in LDCs.  
2.25.  Those were some of the recommendations that the Group  hoped would be addressed.  
2.26.  The representative of Canada  thanked the LDC Group and the Secretariat for the successful 
webinar. Canada had been  pleased to participate as a panellist and hope d that its  concret e examples, 
including of its free online matchmaking service with Canadian buyers , had been useful . As indicated 
by the Executive Director of Trade Facilitation Office Canada, Canada  hoped that  LDC services 
exporters would  take advantage of th at tool and r egister. Her delegation  continue d to welcome 
further constructive exchanges on how to support a better integration of LDCs in the multilateral 
trading system.  
2.27.  The representative of the European Union  said that her delegation attached great  importance  
to assisting LDCs to strengthen their economies, including services trade , and the LDC Waiver  was 
a very significant instrument in that respect, in addition to the  development and  capacity -building 
programmes . 
2.28.  The EU had found the webinar very constructiv e, with a number of interesting and useful 
interventions  from panellists and Members. T he European Union had been pleased to contribute to 
the event, to share information about relevant development support instruments and programmes . 
Many Members had stres sed the impact of the COVID -19 pandemic , especially  on the two key 
services sectors for LDCs trade, namely  travel and tourism, as well as the importance of digital trade 
for the future of services trade, including for LDCs .  
2.29.  The representative underscored the importance  of comprehensive government and 
international cooperation approach es to strengthen LDCs' services economies and trade, includ ing 
the need for LDCs to have the relevant domestic regulat ory frameworks in place . As previously 
stated, the Europe an Union stood ready  to continue discussi ons on  the operationalisation of the LDC 
Services Waiver . Finally, w ith regard to the proposal for a dedicated WTO website, she asked the 
LDC Group to provide further details  in order to enable her delegation to ade quately assess and 
react to the proposal.  
2.30.  The representative of the United States  thanked the LDCs and the Secretariat for the very 
informative  webinar. The event had been  quite useful in highlighting some of the key challenges 
facing LDC in developing services exports . Lack of country data on LDC services trade was a problem, 
and his delegation could look to support work to continue to improve  statistics and  the gathering of 
data.  
2.31.  The webinar had shown that COVID -19 had hit key LDC expor t markets , particularly in tourism 
and transport services, and it was in the interest of all Members to see those markets rebound.  
Through those workshops and webinars, his delegation continued to learn from LDC service suppliers 
about the challenges they faced in expanding their offerings, and supported continued identification 
of capacity constraints and opportunities for technical assistance.  
2.32.  He indicated that  at that point  the United States was not ready to support  some of the  ideas 
on next steps. H is delegation  had a number of questions o n the suggest ed web portal, and  like other 
Members  would welcome the circulation of the proposal in writing. He had questions on  who would 
maintain  the portal , verify and monitor the information in the portal . The lack  of data collection 
proved that it was a challenging exercise and he asked if the WTO would be the data collector in 
that regard. He also asked  if the portal would also identify  restrictions  that were  in LDC domestic 
markets  that hindered the development o f services markets and the LDC ability to export . He noted 
that some of the improvements in the areas of services exports were not necessarily related solely 
to the Waiver preferences.   
2.33.  The United States supported continued engagement on that issue, ident ifying technical  
assistance  needs  and capacity -building opportunities . 
2.34.  The representative of Japan  stated that Japan was one of the Members that had notified 
preferences for LDC services and service suppliers under the Waiver. Japan placed significant 
importance on promoting the integration of LDCs into global trade. The webinar had been  a very S/C/M/146  
 
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  informat ive and useful occasion to hear from the Secretariat, Government officials and services 
exporters and importers on relevant data  and efforts to promote LDC trade in the midst of the 
pandemic. In particular, it had been  very valuable to know that even under  the pandemic, there was 
a growing opportunity to expand LDC services trade through  the use of new technologies. Japan was 
ready to continue to engage in the discussion on th at important matter.  
2.35.  The representative of China thank ed the Secretariat for the s uccessful organization of the 
webinar and all the Members who had contribut ed to the event. The webinar  had shed more light on 
the development of the services industry in LDC s and the challenges facing LDC services suppliers, 
especially in the context of t he COVID -19 pandemic. It had highlighted the urgency of more capacity -
building and technical assistance efforts.  
2.36.  During the webinar, China had  shared its experience in providing technical assistance to  LDCs 
government s and service suppliers, and it was ready to continue to active ly contribut e to the 
effective implementation of the LDC Services Waiver.  China  also encourage d Members to exchange 
best practices in th at regard, with a view to providing more effective support for LDCs to further 
participate in , and benefit from , global services trade.  
2.37.  The representative of Australia  thanked the LDC Group and the Secretariat for the 
organization of the webinar. Her delegation had been  very pleased to participate in the event by 
outlining  some of Australia's  targeted  Aid for Trade initiatives aimed at supporting  LDC service 
suppliers increase and improve the value of their services exports . The webinar  had very usefully 
provided a broad range of views  from experts, from notifying Mem bers to, most importantly, LDC 
services suppliers, on those issues. It had also been particularly valuable to hear about the specifics 
of, and the challenges faced by LDC service suppliers because of the COVID -19 pandemic.   
2.38.  Australia was encouraged by the many Members that had notified comprehensive preferences 
under the Waiver, including, most recently, by the United Kingdom. As highlighted by a number of 
speakers at the webinar, and building on the comprehensive Waiver preferences notified, she said 
that Members' efforts should be focused on what could be done to help LDC s utilise market access 
opportunities and fully benefit from preferences notified under the Waiver , including by addressing 
domestic capacity and supply -side constraints  that had been iden tified by LDCs themselves . Those 
included how Members could complement market access  opportunities with Aid for Trade  and 
targeted development assistance programmes. She would not outline Australia's activities that had 
been presented at the webinar but no ted that Australia  regularly evaluated  its activities  to ensure 
that they were responsive to the requests that it received from LDCs .   
2.39.  With regard to the specific portal suggestion, she echoed previous delegations' call for the 
proposal to be set out  in writing, to facilitate consideration.   
2.40.  Speaking on behalf of the LDC Group , the representative of Chad thanked Members for their 
support towards  enhancing LDC participation in world services trade. With regard to the comments 
by some delegations concerning the portal suggestion, he indicated that the LDC Group would submit 
its proposal  in writing  in a reasonable timeframe . He added that the portal  proposal had not been 
made with the intention of creating difficulties for any Member, but only represented an attempt to 
find solutions to the challenges faced by LDC service suppliers. It was intended as a means to 
facilitate the real -time collection of  data and improve the access  to information.  
2.41.  The Chairman  thanked all delegations who had intervened . He added that Members had had 
an interesting discussion  on a challenging issue . He suggest ed that the Council take note of the 
statements  and said that i t would revert to that item at its next meeting.  
2.42.  It was so agreed .  
3  ITEM C: WORK PROGRAMME ON ELECTRONIC COMMERCE  
3.1.  The Chairman  recalled that,  at the previous  meeting, a couple of delegations  had shared further 
contributions related to the joint communicati on from a group of Members, titled "Exploratory 
discussions on supporting digital capability of business and consumers" and circulated as document 
JOB/SERV/296/Rev.4. In addition, Members  had heard about the role of e -commerce in promoting S/C/M/146  
 
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  high-quality bus iness development.  Members had also exchanged views on the Work Programme 
more broadly.  
3.2.  He then opened the floor for any delegation wishing to intervene either under the sub -item on 
"exchange of information and experiences" or to speak to the Work Programme generally.   
3.3.  The representative of Chad, speaking on behalf of the LDC Group , drew Members' attention to 
the LDC submission to the General Council regarding the Work Programme on Electronic Commerce, 
dated November 2019 and contained in document WT/GC/W/787.   
3.4.  The LDC Group wished to reiterate the important elements in possible di scussions between 
then and MC12. With respect to the services elements of the submission, the Group had noted the 
following issues raised by LDCs: difficulties in accessing credit cards , which were t he main means of 
online payments;  a high proportion of un banked consumers or those with limited access to online 
payments; inadequate online payment methods; and limited skills among businesses that wished  to 
use e -commerce and strategic ICT for B2B, B2C or B2G buying and selling of goods and services.  
3.5.  Those were some of the LDC  concerns , and the Group called on M embers to support LDCs in 
addressing th ose important challenges for the efficient use of e -commerce , which offer ed important 
opportunities for development.  
3.6.  The representative of the Republic of Korea  recalled that, at previous meetings, his delegation 
had explained Korea’s online shopping trend s following the COVID -19 outbreak and  had presented 
related statistics. Prior to the pandemic, the proportion of online shopping among total retail sales 
was aroun d 22%. According to the statistics authority in Korea, the ratio  had skyrocketed to around 
26.7% annually in 2020, reflecting an ongoing upward trend. In the fourth  quarter of 2020, the ratio 
was around 28.7%.  
3.7.  The report issued by UNCTAD in June 2021  also highlight ed the dramatic increase in the share 
of online retail sales among total retail sales. According to UNCTAD's  report, online retail sales had 
grown  noticeably in several countries , including China, the United Kingdom , the United States  and 
Singapo re. The Republic of Korea had reported the highest share , at 25.9% in 2020, up from 20.8% 
the year before. The UNCTAD figure was a little lower than Korea’s official statistics, presumably due 
to methodology issue s.  
3.8.  The sharp increase in e -commerce transa ctions in Korea reflect ed the fundamental shift in 
consumer behavioural  trends , as well as tightened health measures in the course of combatting 
COVID -19. His delegation firmly believe d that the Korean e -commerce industry ha d helped to tackle 
the COVID -19 pandemic and at the same time  had led to economic resilience and recovery. 
Considering the growing importance of online trading activities, it was necessary for all Members to 
respond to th at trend in a constructive manner as they rebuil t their ec onomies during th e pandemic 
and move d forward toward the new normal in the era of post -COVID -19.  
3.9.  At the December 2020 meeting, his delegation had  presented  a specific government 
program me, which was the MSMEs Remote Work Facilitation Program me. Under th at Program me, 
MSMEs ha d been able to receive voucher -based services related to virtual communication, working 
from home, cybersecurity, and even childcare services so that they could  carry out their regular 
tasks in the period of tightened social distancing.  He wished to provide an update with regard to that 
Programme . 
3.10.  In the course of its implementation, some measures ha d been deployed for reasons such as 
efficiency, effectiveness,  and customer satisfaction. Currently, online application was recommended , 
and simplified information of listed services was easily accessible. Within the annual ceiling amount 
of USD40,000 per beneficiary company,  USD20,000 was the maximum amount that one beneficiary 
company could  be provided by a specific service supplier. As a re sult, a beneficiary could  be provided 
with various voucher services from at least two suppliers.  
3.11.  After receiving applications from potential beneficiaries in February, voucher -based services 
had started to be provided in April. The program operator  was cu rrently  surveying customer 
satisfaction, which was expected to be reflected in the future operation of th e Program me. S/C/M/146  
 
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  3.12.  The representative of China  thanked Korea for the information shared, and Chad for the 
statement made on behalf of the LDC Group, as  indeed the digital divide was great and was becoming 
even more pronounced during the COVID -19 pandemic. Th at was  an important reason why Members  
should continu e and revitalize the discussions under the e-commerce Work Program me. At that 
meeting, he wished to share some information o n the recent development of e-commerce in China.  
3.13.  Since the outbreak of the COVID -19, e -commerce ha d played a prominent role in ensur ing 
supplies, resuming work and production, and enabling consumption, acting as a stabilizer for 
economic and social development. Tak ing China as an example, in 2020, China' s national online 
retail sales had hit CNY11.76 trillion , or around USD1.8 trillion , an increase of 10.9% year -on-year, 
while the online retail sales of physical goods  had reached CNY9.76 trillion, a jump of 14.8% year -
on-year and accounting for nearly a quarter of the total retail sales of consumer goods. Import and 
export volume of Chi na’s cross -border e -commerce in 2020 was CNY1.69 trillion, corresponding to 
an annual growth of 31.1%.  
3.14.  The crisis had also s een the expansion of new e -commerce business models, such as contact -
free delivery, intelligent logistics and e -sales live streaming . In 2020 , major e -commerce platforms 
in China had hosted over 24 million live broadcasts in total. Online education sales had increased by 
more than 140% year -on-year, while online medical consultations had increased by 73.4%. 
E-commerce ha d also provided  a strong impetus to rural revitalization and poverty alleviation, which 
his delegation  had introduced at the CTS before.  
3.15.  China support ed a continued exercise to share information and experiences on e -commerce 
issues within the WTO framework. China hope d that, through more in -depth discussions, Members 
would  deepen their understanding on e -commerce -related services and find out what could  be done 
to keep the WTO relevant and ensure a smoother post -pandemic economic recovery.  
3.16.  The representative of India noted that the digital revolution was still unfolding. While digital 
infrastructure ha s played its role during the ongoing pandemic, it h ad also brought out clearly the 
existing, and widening digital divide among Members, a divide exposed further during th e COVID -19 
crisis. Moreover, many Members we re yet to fully comprehend  the implications of e -commerce on 
competition and market structures; issues related to transfer of technology; data storage; 
automation and its impact on traditional jobs; and the gaps in e-commerce policy and regulat ory 
frameworks in developing countries. That was why India ha d been a proponent of strengthening the 
multilateral work under the non -negotiating and exploratory 1998 Work Programme on Electronic 
Commerce.  
3.17.  Under th e multilate ral Work Programme and with the intention of better understanding the 
implications of the Moratorium on customs duties on electronic transmissions, India,  along with 
South Africa,  had introduced submissions, which explain ed its  understanding of the scope a nd the 
impact of the Moratorium. India and South Africa, in their latest submission dated 4  December  2020, 
titled 'Reinvigorating the work under the 1998 Work Programme on Electronic Commerce ' and 
contained in document WT/GC/W/812 , had emphasised the need for structured discussions in the 
relevant WTO bodies, including the CTS, in accordance with General Council 's mandate as contained 
in document WT/L/274.  
3.18.  India was of the firm belief that multilateral avenues based on consensus were the most 
effective mean s to achieve inclusive development -oriented outcomes. In th at context, India, along 
with South Africa, ha d recently made a submission in the General Council titled "Legal status of JSIs 
and their negotiated outcomes " (document WT/GC/W/819), wherein, inter alia, India' s concerns on 
the plurilateral negotiations on e -commerce taking place under the Joint Statement Initiative (JSI) 
were articulated.  Given that the Work Programme on E lectronic C ommerce clearly ha d a 
non-negotiating and exploratory mandate, whic h had been reaffirmed in successive Ministerial 
Decisions, her delegation  believe d that rule -making on trade -related aspects of e lectronic commerce 
by a group of Members would be tantamount to negating the decisions of past Ministerial 
Conferences and would be severely detrimental to the rules -based multilateral trading system under 
the WTO.  
3.19.  In December 2019, India had joined the consensus for a six month extension of the 
Moratorium, with an understanding that the Work Programme on Elect ronic Commerce would  be 
reinvigorated with an objective of achieving clarity on various issues, including the scope of the S/C/M/146  
 
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  Moratorium and its impact on Members ' policy space and revenue. Since then, due to repeated 
postponement of the 12th Ministerial Conf erence, the Moratorium ha d been extended by about two 
years, which was  much beyond the six months agreed to in December 2019. During th ose few 
months up  to MC12, Members needed  to constructively engage on various issues under the Work 
Programme. Delegation s also need ed to have a clear understanding about the scope of the 
Moratorium, to enable Members  to make an informed decision on its extension or otherwise at the 
upcoming Ministerial Conference.  
3.20.  Under the 1998 Work Programme  (document WT/L/274), the Counc il for Trade in Services 
was tasked to examine the treatment of electronic commerce in the GATS legal framework. The 
General Council had identified specific issues to be examined  by the CTS. Th ose include d scope ; 
MFN; transparency ; increasing participation  of developing countries ; domestic regulation, standards  
and recognition ; competition ; protection of privacy and public morals and the prevention of fraud ; 
market -access commitments on electronic supply of service s; national treatment ; access to and use 
of public telecommunications transport networks and services ; customs duties ; and classification 
issues.  
3.21.  India was working on a submission which sought  to elaborate on some of th ose issues.  
3.22.  The representative of South Africa  expressed her delegation's suppor t for the interventions 
by Chad and India.  
3.23.  Supporting digital capability of business and consumers was key for solving some of Members'  
major development challenges. With respect to South Africa's  national circumstances, the digital 
economy had to  be as inclusive as possible , focusing on job creation, transformation and growth. 
With South Africa's unemployment rate at 32.6%, if digital platforms could  target th ose three  areas, 
in her delegation's  view they w ould be able not only to scale effectively but provide services and 
products that were relevant across disparate income brackets.  
3.24.  Platforms  had not only to employ low -skilled workers but to assist with rural economic 
development, to upskill Sout h Africans and to provide support to M SMEs. Locally developed  platforms 
focused on solving domestic problems that predominately occur red in rural areas or townships where 
service delivery was limited and had big relevance for other developing and LDC marke ts. For 
example, Lumkani was a South African  tech-based solution , developed as an early warning system 
for shack fires. This was coupled with low -cost insurance products to provide both safety and 
financial security to clients.  
3.25.  But the full digital capabi lity of business and consumers was constrained by lack of 
infrastructure, device and data availability , as well as digital literacy among consumers , especially 
in rural areas , who were largely excluded from the platform economy. Therefore,  while there was a 
lot of promise held within the digital economy, a significant portion of it cater ed largely to the middle - 
and upper -income consumers. Th at mean t that large portions of low -income consumers in Africa 
and elsewhere were excluded from the digital economy b ecause the goods and services available 
were either not relevant to their needs or were unaffordable. Low -income households  also need ed 
support to unlock digital business capability ; as her delegation  had observed , that wa s where some 
of the best problem -solving for development emerge d.  
3.26.  South Africa was committed to advancing the 1998 Work Program me in examining th ose 
issues , working with Members of the CTS and through consensus develop recommendations for 
action , CTS recommendations that were mea ningful and impactful for universal digital inclusion. The 
e-commerce JSI would  not have th at meaningful impact as it left behind low -income households and 
the global poor.  
3.27.  The representative of Canada  said that her delegation  had not planned to intervene but wished 
to react to some of the statements made and to reiterate Canada's longstanding position.  
3.28.  As Members  were consider ing way to address the pandemic and support a more inclusive 
economic recovery , her delegation remained convinced that ensuring a p ermanent, tariff -free space  
for cross-border  electronic transmissions, including content was a meaningful way to provide long 
term predictability , certainty and openness for businesses and consumers . Canada had committed 
with many trading partners, through  bilateral and regional  Free Trade Agreements , to a permanent S/C/M/146  
 
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  customs duties prohibition on electronic transmissions. That approach had made Canada a more 
attractive destination for foreign invest ment, contributed to the creation of new employment 
opportun ities and placed the country in a competitive position for engaging in  digital trade.  
3.29.  While Canada strongly supported  having the multilateral Moratorium  become  a permanent 
prohibition, it was pleased to see Members extend  the practice of not imposing customs duties on 
electronic transmissions  until MC1 2. 
3.30.  Canada was aware of the concerns  raised by a few Members in recent years  about the possible 
impact of the Mora torium . Her delegation had welcomed and actively participated in informal 
open-ended meetings and structured discussions which had been brought forward by Members. The 
dedicated and structured format had  provided a conducive environment for Members' delibe rations. 
She noted that the document referred to by India and South Africa asked to continue the structured 
discussions ; that mechanism was already available to interested Members and Canada did not see 
the need to ask the General Council , or the CTS that day, to make any decision s in that sense . 
Having said that, her delegation would be interested to know  more from the proponents if they were 
suggesting something different , especially in view of the upcoming structured discussions that the 
General Council would hold on 5 July, which  in Canada's view  provided the best forum for Members  
to engage on th at issue.  
3.31.  In light of the desire to reinvigorate the Work Programme, Canada had been pleased to 
co-sponsor , with around 13 other Members, the proposal to engag e in exploratory discussions on 
supporting digital capabilities of businesses and consumers. Those discussions had provided  useful 
information on how government s were seeking to help address domestic challenges but also to 
support developing Members. Canad a had participated in that exercise by providing its domestic 
experiences and had learnt from other Members' contributions.  
3.32.  Finally, Canada  did not agree with statements suggesting  that the e -commerce JSI 
negotiations negatively affected the WTO or specific groups of Members. The establishment of rules 
on e-commerce was more than overdue. An ambitious and comprehensive outcome would contribute 
to facilitating trade, provid ing certainty and creating inclusiv e economic growth. The JSI negotiations 
were open, inclusive and transparent . Any interested Member could join the Initiative,  and she noted 
the increasing number of developing Members participating . 
3.33.  The representative of the Kingdom of Saudi Arabia  reaffirmed her delegation 's commitment  
to support the multilateral trading system  and remain engaged to work with Members constructively 
to strengthen the work of the WTO . Since  1998, Members had agreed not to impose customs duties 
on electronic transmissions an d to extend the Moratorium at the biannual Ministerial Conference . 
Members had continued addressing e -commerce related issues in  the Council for Trade in Services, 
the Council for Trade in Goods, Council for TRIP S and Committee on Trade and Development , as 
with part of the e -commerce Work Programme. Having said that, and consistent with the Ministerial 
Decision of 13 December 2017 in document WT/MIN(17)/65 , her delegation had agreed to extend 
the current practice of not imposing customs duties on electronic  transmissions until the following 
Ministerial Conference. Saudi Arabia believed that the Moratorium  did not stop Members from 
imposing internal tax or VAT  on electronic transmissions . 
3.34.  The Chairman  suggested that the Council take note of the statements made and said that the 
Council would revert to this item at its next meeting.  
3.35.  It was s o agreed . 
4  ITEM D: UPDATE OF THE SECRETARIAT BACKGROUND NOTE ON MODE 4 – REQUESTED 
BY INDIA  
4.1.  The Chairman  indicated that that item had been added to the agenda of the Council at the 
request of the delegation of India.   
4.2.  The representative of India said that, as had been emphasized by her delegation on several 
previous occasions, India reiterate d its request for the updat e of Secretariat Background Notes on 
all four modes of s upply, and also support ed the Secretariat work on inter -modal linkages, as 
requested by one delegation.  S/C/M/146  
 
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  4.3.  As her delegation had clarified before , while India  welcome d the US proposal on the issue of 
inter-modal linkages, that should not substitute the request to update the separate modal 
background notes by the Secretariat.  The representative urged the United States  to reconsider its 
position , as having  an inter-model Secretar iat Note ma de no sense without first updating the 
separate modal Notes. 
4.4.  While Members ha d asked for higher level s of transparency on COVID -related measures and 
timely reporting of such measures, the y should no t object  to producing an  update of the  mode 4 
Secretariat Note. For transparency, the rationale for collecting information on trade in goods should 
also hold good for trade in services.  
4.5.  India once again request ed all Members to positively consider its proposal that was inclusive 
and comprehensive. Her delegation believe d that  it would be a very useful exercise for th e Council 
to undertake . 
4.6.  The representative of South Africa  expressed her delegation 's support  for the intervention 
made by India. South Africa reiterate d its previous statements on th at matter and echoed  India's 
proposal for the updating of the 2009 Secretariat Background  Note on mode 4. Her delegation also 
support ed the updating of the other modal Notes, and the US proposal that modal interlinkages be 
included as part of the package of work covering the updated modal Notes.  
4.7.  The representative said that Members who d id not see value  added for their delegations should 
not stand in the way of analytical work by the Secretariat that other  Members found  useful. Her 
delegation caut ioned that the suppression of technical support activities pertaining to collation and 
dissemination of information not only undermine d capacity building but the role of the Secretariat 
as well.  
4.8.  As stated at previous CTS meetings  over a number of years , the representative of the United 
States  said that his delegation did  not support an updated Secretariat Background Note on mode 4  
and saw no value  added in updating that Note.  
4.9.  The United States  had suggested support for consideration of a new Secretariat Note examining 
interlinkages  between modes of supply , which could be an interesting Note and stimulate discussions 
in the Council  on trade in services . But his delegation could not support using the Secretariat 's 
resources to simply update the Background Note on mode  4. The US position on that issue had not 
changed.  
4.10.  The Chairman  suggested that the Council take note of the statements made.  
4.11.  It was s o agreed . 
5  ITEM E: CYBERSECURITY MEASURES OF CHINA A ND VIET NAM – REQUESTED BY JAPAN 
AND THE UNITED STATES  
5.1.   The Chairman  indicated that the item ha d been added to the agenda of the Council at the 
request of the delegations of Japan and the United States.  
5.2.  The representative of Japan  said that in May and June , the Japanese Government submitted 
detailed opinions to the Chinese Government on the draft Data Security Law, the draft Personal 
Information Protection Law, and the draft Regulations on Automobile Data Security Management, 
for which China invited public comments.  
5.3.  He said that, first, the Data Security Law was enacted in June without fully taking into account 
the comments submitted by his delegation, and Japan understood that the Law was scheduled to be 
enforced on September 1. However, as his delegation p ointed out in its comments, Japan had 
particular concerns about the security review of data activities (Article 24) and data export control 
(Article 25).  
5.4.  With regard to Article 24, if screening or implementation was carried out arbitrarily, it could be 
a violation of China's national treatment obligation under Article XVII of the GATS. Japan requested S/C/M/146  
 
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  China to develop fair and clear screening criteria and to ensure transparency of the new Law's 
implementation, in order to make sure that foreign entities wou ld not be treated unfairly.  
5.5.  Regarding Article 25, if that provision meant a data localisation requirement, foreign service 
providers could be forced to bear additional costs associated with storing data in China. Foreign 
service providers would be placed a t a competitive disadvantage compared to Chinese service 
providers that aggregated and managed data in China, which could constitute a violation of China's 
national treatment obligation under Article XVII of the GATS. Japan requested China to ensure that 
foreign service providers would not be treated, either formally or de facto, in a discriminatory 
manner.  
5.6.  In addition, Japan also requested China to ensure consistency with the WTO Agreements of the 
provisions in Article 21, Article 26, Article 34, Article 35 and Article 44 of the Law.  
5.7.  Second, with regard to the Personal Information Protection Law of the People's Republic of 
China, Japan had concerns about provisions of Article 38, Article 40, Articles 42 and 43, Article 52 
and Article 53. Japan had concerns  that, depending on the interpretation and manner of 
implementation, those provisions could excessively restrict data distribution, force foreign 
enterprises to refrain from their activities, and effectively place foreign enterprises at a competitive 
disadvantage compared to domestic enterprises in China. That could be a violation of China's 
national treatment obligation under Article XVII of the GATS. Therefore, Japan requested China to 
establish fair and clear screening criteria, to ensure transparency of  its implementation, and to avoid 
introducing excessively trade -restrictive measures.  
5.8.  Third, with regard to the draft Regulations on Automobile Data Security Management, Japan 
had a strong concern on the obligation in Article 12 to store data in China, whi ch could cause 
additional costs to foreign service providers and effectively put them at a competitive disadvantage 
compared to Chinese service providers who aggregated and managed data in China. In addition, the 
Article required a "Data Extradition Safety  Assessment" by the State Internet Information 
Department for the data to be transferred overseas. Yet, the standards for the Assessment were 
unclear and depending on how it was applied, there was a risk of unfair treatment to foreign service 
providers. Th ose provisions could violate China's national treatment obligation under Article XVII of 
the GATS, and Japan requested China to remove the mandatory domestic storage obligation and to 
ensure transparency in its implementation.  
5.9.  Japan also requested China t o ensure consistency with the WTO Agreements of the provisions 
in Article 3, Article 13 and Article 15.  
5.10.  Japan appreciated China's efforts to seek public comments from domestic and foreign 
stakeholders in view of transparency. However, the Government of Jap an was concerned that the 
development of related laws and regulations was proceeding without addressing the expressed 
concerns, such as in the case of the above -mentioned Data Security Law.  
5.11.  Japan hoped that the requests and concerns expressed by the Japan ese Government in the 
public comments would be considered and addressed in the future enactment process. Japan 
reiterated its request to ensure that the measures did not discriminate against foreign businesses, 
including Japanese, in terms of form and subs tance, and that consistency with the GATS was 
ensured.  
5.12.  With regard to Viet Nam, the Japanese Government submitted its detailed opinions to the 
Vietnamese Government in April on the draft Decree on the Protection of Personal Information for 
which the Vietna mese Government invited public comments. In the draft Decree, as pointed out in 
the public comments, Japan had a particular concern on the regulation of cross -border transfer of 
data and the obligation to store data under Article 21.  
5.13.  Article 21 stipulated that, in principle, personal information could not be transferred out of 
the country unless it met all of the following requirements: consent of the individual, storage of the 
original data in the country, issuance of a certificate of sufficiency, and writ ten consent of the 
Vietnamese Personal Data Protection Commission (PDPC). However, such cross -border transfer 
requirements were overly restrictive and might lead to unfair treatment of foreign businesses S/C/M/146  
 
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  depending on implementation. Japan requested Viet Na m to ensure that the requirements would be 
applied in a reasonable, objective and fair manner.  
5.14.  In particular, the obligation to store the original data domestically could place additional 
burdens on foreign businesses and effectively place them at a compet itive disadvantage compared 
to Vietnamese businesses that aggregated and managed the data domestically. If foreign businesses 
were effectively treated less favourably than Vietnamese domestic businesses, Japan could not deny 
the possibility of a violation by Viet Nam of its national treatment obligation under Article XVII of 
the GATS, and Japan therefore, requested the removal of such obligation.  
5.15.  Furthermore, while the Article listed specific cases where cross -border transfers were 
prohibited, there was a r isk that data transfers could be prohibited by arbitrary decisions of the 
authorities, and depending on implementation, foreign businesses could be treated less favourably 
than Vietnamese businesses. That could conflict with Viet Nam's national treatment o bligation under 
Article XVII of the GATS. Japan requested Viet Nam to ensure that the requirements were applied 
in a reasonable, objective and fair manner.  
5.16.  Japan appreciated Viet Nam's efforts to seek public comments from domestic and foreign 
stakeholders in view of transparency. On the other hand, measures to restrict data flows should be 
limited to the minimum necessary to achieve legitimate objectives and in a manner that was not 
overly trade -restrictive. Japan reiterated its request to Viet Nam to ensur e transparency by clarifying 
the scope and content of such measures and consistency with the GATS.  
5.17.  The representative of the United States  said that for several years, his delegation had raised 
concerns in the Council that various Chinese draft and final m easures, including in connection with 
China's Cybersecurity Law and its National Security Law, might unduly restrict cross -border data 
flows and required localisation of data. The United States and several other WTO Members raised 
similar concerns in 2020 and at the CTS meeting in March over China's draft Personal Information 
Protection Law, of which a second draft was released on April 29. The United States submitted 
comments in that proceeding. In sum, the second draft of the Law did not address the US co ncerns 
with the first draft of the Law.  
5.18.  Regarding the second draft of the Law's potential impacts on cross -border data flows, the 
United States was particularly concerned with provisions that imposed a data localisation 
requirement on operators of a potent ially very broad category of critical information infrastructure, 
and on personal information processors that processed personal information whose volume had 
reached a certain threshold. Those entities would be subject to a "security assessment" before bei ng 
able to transfer any personal information out of China. Imposing unduly restrictive requirements on 
data transfers simply because they were cross -border unfairly disadvantaged foreign suppliers and 
did not enhance protections for personal information. T he United States, once again, requested 
China to remove those provisions from the Law.  
5.19.  In addition, the United States had raised concerns with provisions of the second draft of the 
Law that would require that data processors outside of China established an  office or appointed a 
representative in China, a requirement that would appear unworkable for the thousands of foreign 
companies, many SMEs, that routinely processed China -related data outside of China.  
5.20.  At the March Council meeting, China noted that, as i t was formulating its laws and regulations 
relating to cybersecurity (including in connection with the draft Personal Information Protection Law), 
it was comprehensively referring to the experiences of other WTO Members. The United States 
disagreed. The ap proach that China proposed in the second draft of the Law was in some respects 
very far from the experiences of other WTO Members.  
5.21.  The United States recognised that governments had a legitimate interest in ensuring the 
protection of personal information. However, China's proposal to impose additional requirements on 
transfers simply because they were cross -border unfairly disadvantaged foreign suppliers and did 
not enhance protection for personal information. The possibility to use certificati ons by professional 
organisations as a basis for the cross -border transfer of personal information, included in the current 
draft, was positive. Those provisions could benefit from expansion, including allowing for the use of 
cross-border data transfer mec hanisms such as the APEC Cross -Border Privacy Rules (CBPRs).  S/C/M/146  
 
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  5.22.  In previous CTS meetings, the United States and other WTO Members also raised concerns 
that another measure that China was considering – its Data Security Law – could have a severe 
effect on serv ices suppliers and cross -border data flows. On June 10, 2021, China promulgated a 
final version of the Data Security Law, which would enter into force on September 1, 2021.  
5.23.  The Law focused on protecting an unclear category of "important data" that China ap peared 
intent on defining expansively and subjecting to onerous restrictions . The Law also required security 
assessments of any proposed cross -border transfer of information by an operator of critical 
information infrastructure (CII), according to the term s of the Cybersecurity Law. Other (non -CII) 
operators also would be subject to security assessments under procedures to be developed by China. 
The United States had serious concerns that China's focus on "important data" and its imposition of 
security asse ssments for cross -border transfers of data would result in new restrictions and burdens 
on companies, including in regard to the commercial data that they sought to use in the ordinary 
course of business.  
5.24.  With respect to Viet Nam, the United States had rai sed concerns about Viet Nam's data 
localisation and local presence requirements in its Cybersecurity Law and its draft implementing 
Decree for several years now. At the last Council meeting, the United States noted with great concern 
the draft Decree on Pe rsonal Data Protection that appeared to expand the scope and restrictiveness 
of data localisation requirements.  
5.25.  The United States submitted written comments in April on that draft Decree, and explained 
at the last CTS meeting that implementing such sweeping requirements that companies stored data 
locally, or that they sought government approval prior to transferring  any personal data across 
borders, could impede the supply of cross -border services in many sectors, including ones for which 
Viet Nam had GATS commitments. The United States requested an update from Viet Nam on the 
status of that draft Decree and any othe rs for which the United States had submitted comments.  
5.26.  The representative of the European Union , as in previous meetings, shared the concerns 
expressed by other Members about the implementation of the Cybersecurity Law of China. Her 
delegation considered t hat the scope was too broad, some requirements remained unclear and key 
terms in the Law were not specified in sufficient detail. The European Union also noted that the lack 
of clear and consistent implementing regulations, as many were still in draft form , created significant 
uncertainty for economic operators. The European Union would therefore welcome an update from 
China on when implementing measures would be adopted.  
5.27.  The growing number and expanding scope of the administrative review processes put fore ign 
companies at risk of exposing sensitive information. China's cybersecurity regime established strict 
restrictions on the cross -border transfer of a wide range of data. That effectively prevented network 
operators from transferring personal information or important data collected or generated during 
the operations in China to anyone outside China without completing an official security assessment. 
The Chinese regulatory framework for data related  to national security went beyond the depth of 
the Cybersec urity Law.  
5.28.  The Data Security Law, which would come into force on September 1 , was also of concern to 
the European Union. Instead of clarifying certain concepts, the Law introduced yet another category 
of data, that of core data. Moreover, the Law had an ex cessively broad scope of application, covering 
data activities within China but also beyond the territory of mainland China that might harm China's 
national security or public interest. Her delegation would appreciate replies from China on  the 
concerns tha t the European Union and other Members had raised .  
5.29.  Regarding the Vietnamese Cybersecurity Law, the European Union shared other Members' 
concerns and reiterated its remark about the Law's potential economic impact and its combability 
with Viet Nam's commit ments under the WTO. The European Union was particularly concerned about 
the data localisation and local presence requirement and the liability of foreign companies. The 
framework for the implementation of data localisation and local office requirements ne eded to be 
clearer on the specific conditions based on which foreign companies would be requested to open 
local branches or localise the data that the processor hosted. The European Union expected that 
those conditions were subject to clear and defined limits stipulated by an independent oversight 
mechanism and judicial review and that they were in line with Viet Nam's commitments at the WTO. S/C/M/146  
 
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  Finally, the European Union would welcome further information on the overall implementation of the 
Cybersecurity Law  in Viet Nam and the adoption of the implementing Decree.  
5.30.  The representative of Australia  appreciate d China 's efforts to consult with interested parties 
on its measures relating to cybersecurity. Australia had been pleased to make submissions to the 
Chines e Government as part of public consultations on its cybersecurity framework , including most 
recently, China 's second draft Personal Information Protection Law and second draft Data Security 
Law.  
5.31.  As Australia set out in its most recent submissions, it welcomed a number of revisions to both 
those draft laws. Nonetheless, Australia remained concerned that China was considering introducing 
provisions that had the potential to create inconsistencies with WTO rules. Australia noted that any 
measure or countermea sure taken under those laws should only be applied consistently with China's 
WTO obligations. Australia also recommended that both laws provided greater detail when it came 
to definitions, jurisdiction and a number of other fundamental elements that would enable businesses 
operating in China to fully understand and implement their new obligations.  Australia continued to 
urge China to take into account the concerns of business es and Members in the implementation of 
those measures and development of future me asures. Australia looked forward to continuing to work 
closely with China on those issues.  
5.32.  With respect to Viet  Nam, Australia was  encouraged by Viet  Nam's interest in developing 
regulation s to protect personal information and support the development of the digital economy 
more broadly. However, Australia had concerns about elements of the draft Decree on Personal Data 
Protection. It was important to ensure that any new rules were business -friendly and consistent with 
the shared commitment to digital trade. Cross -border transfers of data were a critical driver of 
innovation and growth in the digital economy. Australia  looked forward to continuing to work with 
Viet Nam on that law and related m easures.  
5.33.  The representative of Canada  supported further discussions on that item and was supportive 
of the remarks made by Japan, the United States, the European Union and Australia. Canada 
preferred to see Members take risk -based approaches to cybersecuri ty, as those were often better 
suited in addressing security challenges online and were more likely to adapt to changes in 
technology. Conversely, prescriptive cybersecurity requirements created unnecessary burdens for 
businesses and restricted trade onlin e, and were particularly detrimental to MSMEs and individual 
entrepreneurs, which comprised so much of the global digital economy. Members should be 
considering how best to adopt measures which, while addressing 21st -century digital trade 
challenges and se curity concerns, struck a balance in helping to facilitate digital trade as well.  
5.34.  The representative of China  thanked Members who had taken the floor for their continued 
attention to China's regulatory measures on cybersecurity. At previous meetings, China  had already 
provided very detailed responses to Members' remarks and questions. As emphasised before, in the 
legislative drafting process, China had referred comprehensively to the internationally accepted 
practices and legislative experiences of other Me mbers. Also, China had strictly followed the 
transparency requirements, extensively solicited public opinions, and attached great importance to 
all the comments, as always, with the purpose of better coping with regulatory challenges, protecting 
the intere sts of all stakeholders, and promoting the sound development of the Internet and the 
digital economy.  
5.35.  China took the opportunity to briefly introduce the Data Security Law and shared with 
Members the latest progress of the legislation. Since the announceme nt of the legislative plan of the 
Data Security Law in 2018, China had taken a series of steps to advance the relevant legislative 
work, including conducting in -depth research and widely soliciting opinions from various 
stakeholders including many WTO Memb ers' enterprises in China. It took nearly one year from the 
public consultation in July 2020 to the approval of the legislation by the Standing Committee of the 
National People's Congress on June 10, 2021. That Law would officially enter into force on 
September  1, 2021.  
5.36.  In recent years, the digital economy with data as a key element had been thriving. China's 
Data Security Law placed equal emphasis on security and development. While regulating data -
related activities, the Law had introduced rules regarding promoting data security and development, 
open use of government data, etcetera. By facilitating the legitimate, reasonable and effective use S/C/M/146  
 
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  of data, the Law would ensure that data would play an important role as basic resources and engines 
for innovation,  so as to accelerate the growth of a digital economy driven and supported by 
innovation, and better advance economic and social development.  
5.37.  At present, the Data Security Law had been published. China was willing to further exchange 
views with Members on its implementation in the future. His delegation reiterated that China had 
always followed international rules and earnestly fulfilled its WTO commitments. Relevant laws and 
regulations were not intended to prohibit the cross -border transfer of data or dis rupt international 
trade. China would continue to develop and improve the supporting measures of relevant laws and 
regulations and wished to work closely with Members to achieve a balance between security and 
development of the digital economy.  
5.38.  The represe ntative of Viet Nam  thanked the United States, the European Union and other 
Members for their continued interest in its Cybersecurity Law and legislative drafting process for the 
Decree to implement that Law. As explained in previous sessions of the Counci l for Trade in Services, 
Viet Nam's process for the Decree had been transparent. All stakeholders' comments had been 
reviewed for continuing internal consideration. Further explanation of certain provisions in the draft 
Decree had been provided to all inte rested Members through the Questions and Answers of 
Viet Nam's recent Second Trade Policy Review.  
5.39.  Concerning the draft Decree on Personal Data Protection mentioned by Japan, Viet Nam 
shared the same objective of properly protecting personal data in the cu rrent context of digital 
transformation, like many other Members. As Members already noticed, Viet Nam's legislative 
process was transparent. In particular, the draft Decree had been posted on the Portal of the 
Government and the Ministry of Public Securit y of Viet Nam to seek broad comments from agencies, 
organizations, businesses, and people until April 9, 2021. At the moment, the Drafting Committee, 
the Ministry of Public Security, was carefully reviewing all comments from both domestic and foreign 
parties in order to advise the Government on formulating the Decree to suit the circumstances of 
Viet Nam, as well as to ensure compliance with Viet Nam's international commitments.  
5.40.  The Chairman  suggested that the Council take note of the statements made.  
5.41.  It was so agreed . 
6  ITEM F: 5G -RELATED MEASURES OF AUSTRALIA – REQUESTED BY CHINA  
6.1.  The Chairman  indicated that the item had been added to the agenda of the Council at the 
request of the delegation of China.  
6.2.  The representative of China  said that, since 2018, his de legation had raised continuous 
concerns on Australia's 5G -related restrictive measures in previous CTS meetings , but related issues 
had yet to be effectively addressed. At that meeting, his delegation would  not repeat the specific 
questions and hope d that Australia would  rectify the discriminatory practices as soon as possible, 
faithfully implement its GATS commitments, and provide further clarification on the relevant 
restrictive measures which were inconsi stent with various articles of the GATS.  
6.3.  The representative of Australia  noted China's statement. She said that China first raised that 
issue elsewhere in the WTO in late 2018. Since that time Australia had engaged constructively with 
China to explain in d etail the rationale for its position. Australia reiterated that its position on 5G 
networks was country -agnostic, transparent, risk -based, non -discriminatory, and fully WTO -
consistent.  
6.4.  The Chairman  suggested that the Council take note of the statements mad e. 
6.5.  It was so  agreed . S/C/M/146  
 
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  7  ITEM G: RUSSIAN FEDERATION SOFTWARE PRE -INSTALLATION MANDATE (FEDERAL 
LAW DATED 2 DECEMBER 2019 NO. 425 -FZ "ON AMENDING ARTICLE 4 OF THE LAW OF 
THE RUSSIAN FEDERATION 'ON PROTECTION OF CONSUMER RIGHTS'") – REQUESTED BY 
THE UNITED STATES  
7.1.  The Chairman  indicated that the item had been added to the agenda of the Council at the 
request of the delegation of the United States.  
7.2.  The representative of the United States  recalled that his delegation had raised concerns in a 
number of CTS meeti ngs about the Russian Law that mandated the pre -installation of Russian 
software. However, questions remained about the regulations implementing that Law and how those 
regulations would ensure that there was a level playing field for software providers and  in turn, the 
services provided through that software, namely Internet browsing and search, e -mail, and other 
computer or telecommunication services. The United States understood that the Russian Federation 
had proposed amendments to the regulations govern ing the pre -installation mandate. The 
representative asked whether the Russian Federation could provide an update on the status of those 
regulations.  
7.3.  At the March CTS meeting, the Russian Federation confirmed that if the software was not 
compatible with t he operating system, the Law did not require installation. However, it was not clear 
who had the burden of demonstrating that the Russian software was or was not compatible with the 
operating system. The representative said that that uncertainty raised a n umber of questions: Who 
had the responsibility to remedy any problems that arose with compatibility issues? Was it the 
software developer who bore that responsibility? What was the process for any appeal of decisions 
related to the software's compatibility ? Would the Ministry of Digital Development, Communications 
and Mass Media mandate a company to pre -install software that the company believed was 
incompatible with its operating system or device, or penalize a company for not installing the 
software?  
7.4.  The United States remained concerned about those pre -installation mandates that favoured 
Russian suppliers of software and thereby favouring the use of Russian services suppliers that offered 
an array of services for which the Russian Federation had WTO commit ments. The United States 
was concerned specifically about how mandating the use of Russian software complied with 
obligations not to impose national treatment limitations on e -mail, online information and database 
retrieval, online information and/or data processing, and computer and related services more 
generally. To date, his delegation had only heard broad assurances that it complied with WTO 
commitments, but it would be helpful to know specifically how a mandate to use Russian software 
in the provision  of those services comported with its obligations.  
7.5.  That measure was part of a growing trend of measures adopted by the Russian Federation that 
impeded the growth of a vibrant and open digital economy. For example, after the CTS agenda 
closed for that meeti ng, the Russian Federation adopted a measure that now required technology 
companies with an audience of greater than half a million Russians to open up offices in the Russian 
Federation by 2022. In addition, as his delegation had raised in the past, certai n tax measures 
appeared to favour Russian or Eurasian Economic Union (EAEU) countries companies over foreign 
companies. In short, through those, and other measures, the Russian Federation appeared to be 
implementing a digital protectionist policy through l ocal content requirements that extended to 
services, not just goods. The United States would continue to raise its concerns with such measures 
in order to ensure they were consistent with the commitments made by the Russian Federation.  
7.6.  The representative o f Canada  said that on its website, last updated on March 12, 2021, the 
Ministry of Digital Development, Communications and Mass Media of the Russian Federation 
described the pre -installation of programs for certain types of technically complex goods as one  of 
the measures that allowed the import substitution of programs for consumer electronics by means 
of software products, the countries of origin of which were the Russian Federation and other member 
states of the Eurasian Economic Union. The selection cri teria of the software to be pre -installed were 
accordingly designed to achieve that import -substitution objective.  
7.7.  The classes of computer programs that were targeted represent software whose use required, 
in almost all cases, the continued provision of a  service from the program supplier, notably by 
mode   1. Therefore, by seeking to advantage software products of Russian and EAEU origin, the S/C/M/146  
 
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  measure would, in all likelihood, accord foreign services and services suppliers a treatment less 
favourable than t he measure accorded to Russian and EAEU -like services and services suppliers. The 
Russian Federation took no limitation on national treatment in mode 1 in computer services nor 
other potentially relevant sectors.  
7.8.  Canada noted that that measure could theref ore constitute a violation of the Russian 
Federation's national treatment obligations under the GATS. If the Russian Federation considered 
that that was not the case, Canada would appreciate further clarification from the Russian Federation 
as to exactly w hich limitations on national treatment as part of their services schedule would provide 
sufficient flexibility.  
7.9.  On the same website, it was stated that the measure would create more balanced conditions 
for competition between developments from the EAEU and  foreign software. In Canada's view, the 
optimal means to restore online competition in the face of anti -competitive conduct such as self -
preferencing via app pre -installation was competition enforcement against any such anti -competitive 
conduct, not more app pre -installation. Where governments chose regulation and policies, 
policymakers should carefully consider the resulting effects on market competition and innovation. 
They should also take appropriate steps to ensure policy responses were pro -competitiv e, led to 
greater consumer choice, empowered consumers and stimulated productivity, economic growth, and 
innovation. Any measures that could restrict competition should be necessary, narrowly cast, and 
proportionate.  
7.10.  The representative of Japan  said that, as pointed out at the previous CTS meetings, his 
delegation had  a concern that the Russian measures could, depending on the details of the 
regulations and implementation, impede the entry of foreign enterprises to the Russian market and 
violate the princip le of non -discrimination. Japan  request ed the  Russia n Federation  to ensure that 
its measures complied  with GATS rules and obligations.  
7.11.  The representative of the European Union  shared the concerns expressed by the United States 
and other Members on the Russian Federation's software pre -installation mandate. As requested in 
previous CTS meetings, the European Union would welcome clarifications on how the obligation to 
pre-install  certain Russian software would comply with the national treatment commitments that the 
Russian Federation had made in computer and related services as well as in telecommunications 
services.  
7.12.  The European Union would further welcome updates on the implemen ting measures 
envisaged. Finally, the European Union also observed other developments in or impacting the digital 
sector  which it would continue monitoring closely.  
7.13.  The representative of the Russian Federation  thanked Members who had intervened for their 
interest in the Russian Federation's consumer protection -related measures. Her delegation took note 
of all comments and would provide them to Capital for further consideration. At the same time, the 
representative was surprised to hear from the United State s such a long list full of concerns and 
limitations with regard to Russian legislation which was not the subject of today's discussion and 
went far beyond that agenda item.  
7.14.  Secondly, the representative reiterated that the Russian Federation disagreed with the 
allegation that the measure requiring the pre -installation of software was inconsistent with the 
Russian Federation's obligations under the WTO agreements, in particular, under the GATS. The Law 
did not impose restrictions on foreign suppliers or their  software. The Law did not prohibit the pre -
installation of foreign software or required deinstalling of such software. The Law equally applied to 
all producers of technically complex goods on the Russian market, including Russian producers of 
such goods. The measure with regard to smartphones was in force since April 1, 2021.  The 
mechanism operated properly, all requests from foreign and Russian companies were being 
considered carefully.  
7.15.  The Chairman  suggested that the Council take note of the statements m ade. 
7.16.  It was s o agreed . S/C/M/146  
 
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  8  ITEM H: MEASURES OF THE UNITED STATES RESTRICTING TRADE IN SERVICES – 
REQUESTED BY CHINA  
8.1.  The Chairman  indicated that the item had been added to the agenda of the Council at the 
request of the delegation of China.  
8.2.  The representative o f China  said that, since the last CTS meeting, where his delegation  
reiterated its concerns regarding measures taken by the United States  restricting trade in services, 
China ha d noted the revoking of relevant executive orders by the previous US administra tion on 
TikTok, WeChat and other Chinese applications, which was a positive step toward the right direction.  
8.3.  China u rged the United States  to treat Chinese enterprises in a fair and just manner, comply 
with the WTO rules and fulfil its GATS commitments, a nd avoid politici sing economic and trade 
issues. China ha d always required Chinese enterprises operating overseas to obey the laws and 
regulations of host Members and was willing to work with all WTO Members to maintain an open and 
transparent business env ironment and a trad ing system based on international rules.  
8.4.  The representative of the United States  thanked China for its intervention. He said that the 
United States stated in previous responses in the Council that the actions in that regard had been 
taken by the United States to protect its national security.  
8.5.  The Chairman  suggested that the Council take note of the statements made.  
8.6.  It was so agreed . 
9  ITEM I: MEASURES OF INDIA RESTRICTING TRADE IN SERVICES – REQUESTED BY 
CHINA  
9.1.  The Chairman  indicated that the item had been added to the agenda of the Council at the 
request of the delegation of China.  
9.2.  The representative of China  recalled that at previous meetings, China raised concerns about 
India's tightened investment approval policy, ban on  applications  and a series of other measures 
restricting trade in services. It was regretful that India ha d not rectified its restrictive measures  so 
far. China ha d always required Chinese enterprises operating overseas to comply with the 
international rul es as well as laws and regulations of host Members. China hope d that India would  
take concrete measures to address the above concerns and create an open, transparent and non -
discriminatory business environment for services suppliers from all WTO Members, i ncluding the 
Chinese ones.  
9.3.  The representative of India said that, as  underscored at the previous meetings of the CTS, 
India was committed to upholding its obligations at the WTO. India value d, and was committed to 
protecting, the democratic rights of its c itizens, including access to goods and services while 
reserving the right to take measures to ensure the protection of privacy, data security and national 
security. India firmly believe d that the measures raised under that agenda item were fully consistent  
with India 's GATS commitments.  
9.4.  The Chairman  suggested that the Council take note of the statements made.  
9.5.  It was so agreed . 
10  ITEM J: KINGDOM OF SAUDI ARABIA MINISTER OF HUMAN RESOURCES AND SOCIAL 
DEVELOPMENT DECISION 112203 REGARDING LOCALIZATION OF CUSTOMER SERVICES – 
REQUESTED BY THE UNITED STATES  
10.1.  The Chairman  indicated that the item had been added to the agenda of the Council at the  
request of the delegation of the United States . 
10.2.  The representative of the United States  expressed his delegation's concern on a recent 
decision by the Ministry of Human Resources and Social Development of the Kingdom of Saudi Arabia 
that required the loca lisation of all customer service activities of companies selling or distributing S/C/M/146  
 
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  products to customers within the Kingdom of Saudi Arabia. That decision would pose significant 
difficulties and costs for many companies with major investments in the Kingdom of Saudi Arabia 
and imperil the ability of those companies to continue serving their customers in the Kingdom of 
Saudi Arabia with the same level of customer -service care that was critical to their reputation and 
an integral part of the service they offere d. 
10.3.  The United States understood that various industry representatives had raised their concerns 
with the Government of the Kingdom of Saudi Arabia but had yet to receive assurances that that 
decision would be implemented in a way that did not undermine the ir business operations. The 
United States noted that in a number of sectors that could be significantly affected by that measure, 
including wholesale and retail distribution services, travel and tourism services, and computing 
services, the Kingdom of Saud i Arabia had no limitations on their cross -border commitments for the 
supply of those services.  
10.4.  The implementation date of that decision was July 31, 2021. It was important that the 
Kingdom of Saudi Arabia examined closely the trade implications of its dec ision, and at a minimum, 
delayed implementation of that measure so as to not disrupt the operations of businesses that had 
made significant investments in serving the Kingdom of Saudi Arabia's market.  
10.5.  The representative of the European Union  share d the con cerns expressed by the United States 
regarding decision 112203 by the Ministry of Human Resources and Social Development of the 
Kingdom of Saudi Arabia regarding the localisation of customer services. Her delegation was 
concerned about the implication that  it might  have on foreign service s suppliers that had made 
significant investments in the Kingdom of Saudi Arabia. The European Union would also appreciate 
more information on the decision concerned and on how it would  be implemented.  
10.6.  The representative o f the Kingdom of Saudi Arabia  thanked the United States for its 
statement. The Kingdom of Saudi Arabia emphasised that the Ministry of Human Resources and 
Social Development decision 112203 was in full conformity with the Kingdom of Saudi Arabia's GATS 
commitments and that the decision's objectives and implementation did not intend to change or 
modify market access regulations and requirements for either mode 1 or mode 3 on customer 
services. Neither required or limited companies, either located in the King dom of Saudi Arabia or 
abroad, to engage in contracts only with customer service providers located in the Kingdom of Saudi 
Arabia.  
10.7.  For further clarifications, international firms were not required to relocate or open new 
customer service branches in the K ingdom of Saudi Arabia. The Kingdom of Saudi Arabia had 
approved and specified only two types of work contracts for all sectors. The first type was the normal 
work contract, work from premises, which was applied on both nationals and foreign expatriates 
located in the Kingdom of Saudi Arabia. The second type was the telework contract, homeworking 
or work remotely, which was applied and valid only for Saudi nationals. The reference decision aimed 
at regulating the second type of contract for telework for cus tomer services, professional services 
across all sectors, and was not limited to call centres, which fell within the Kingdom of Saudi Arabia's 
right to protect legitimate public interests.  
10.8.  Moreover, the Kingdom of Saudi Arabia confirmed that the objective  was to regulate and 
prevent: first, circumventions of that type in contract registration requirement, procedure and 
process; second, violations and breaches of hiring illegal workers holding expired work permits or 
illegal work permits and; third, ensurin g full conformity of the licensed entity with the relevant laws, 
regulations and decisions.  
10.9.  The Kingdom of Saudi Arabia expressed its hope that its reply gave a clear response to the 
concern of the United States and remained open and ready to continue the  ongoing bilateral 
discussions with the United States.  
10.10.   The Chairman  suggested that the Council take note of the statements made.  
10.11.   It was so agreed . S/C/M/146  
 
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  11  ITEM K: OTHER BUSINESS  
11.1.  No issue was raised under that agenda item.  
11.2.  The meeting  was adjourned . 
__________