RESTRICTED  WORLD TRADE  
ORGANIZATION  S/CSC/M/38 
22 November 2005 
 (05-5505) 
Committee on Specific Commitments  
  
 
REPORT OF THE MEETING HELD ON 22 SEPTEMBER 2005 
 
Note by the Secretariat
1 
  
1. The Committee on Specific Commit ments (CSC) held a meeting on 22 September 2005.  The 
agenda for the meeting is contained in WTO/AI R/2653.  As no points were raised under Other 
Business, the agenda was adopted
 as proposed in the airgram. 
A. A DOPTION OF THE ANNUAL REPORT  
2. The Chairman  introduced the draft annual report, contained in document S/CSC/W/48.  
Following the format that the Co mmittee had used for previous a nnual reports, it was factual and 
summarized the main areas of activity during the reporting period. 
3. The representative of the European Communities  suggested to add under paragraph 5 of the 
draft report the various sectors that had been discussed  in informal mode.  He further objected to the 
language in paragraph 9 of the draf t annual report, which stipulated that the Committee had "agreed to 
proceed on the basis of the suggestions made by the Chairman."  Legally speaking, the Committee 
had not adopted any editorial conventions.  His de legation at least had neve r agreed even though it 
followed the editorial conventions as set out in the cover note of its revised offer.  He suggested 
changing the language to state that the Committe e "took note of the suggestions made by the 
Chairman." 
4. The representative of Hong Kong, China  supported the proposal concerning paragraph 5 of 
the draft annual report.  As to the proposed change  to paragraph 9, he noted that the language was 
consistent with that used in the report of the m eeting of 11 February 2005, at which the editorial 
conventions for the revised offers had been discussed (S/CSC/M/36).   
5. In response to the point rai sed by Hong Kong, China, the re presentative of the European 
Communities  stated that his delegation did not agree with th e relevant text as contained in that report.  
6. The representative of Hong Kong, China  stated that his delegation followed the convention 
and considered it an agreed basis fo r the preparation of revised offers. 
7. The Chairman  recalled that paragraph 6 of the S/CSC/M/36 clearly indicated that no formal, 
legally binding agreement had ever been sought and that Members had merely been asked to agree to 
proceed on the basis of the proposed editorial conventions. 
8. The representative of Indonesia  requested insertion of the sentence "At the meeting of 
21 June 2005, the delega tion of Indonesia provide d written replies to these comments and questions" 
at the end of paragraph 2 of the draft annual report. 
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. S/CSC/M/38 
Page 2  
 
9. The Committee took note of the statements made and adopted
 the annual report with the 
proposed modifications to paragraphs 2, 5, and 9.2 
B. SCHEDULING ISSUES  
10. The Chairman  suggested that the Committee address Me mber-specific questions first.  It 
could then switch to informal mode to discuss gene ral questions, as illustrated in a room document by 
Hong Kong China, as well as the scheduling of r esidency requirements brought up by the delegation 
of the European Communities at the last meeting.  As for the specific questions, his consultations had 
not produced any workable solution to date.  In hi s annotated agenda, he had suggested that Members 
reflect on the possibility of devising a mechanism - at  least for future questions - that would yield 
greater results on substance.  To be workable in pr actice, such a mechanism wo uld need to respect the 
sensitivities of the questions' addres sees.  At the same time, it should accommodate the constraints of 
small and developing country de legations who had expressed a strong interest in listening to 
explanations from other delegations. 
11. The representative of Brazil  considered classification and schedu ling to be core issues, also in 
the context of discussing complementary approaches.  His delegation aimed to rationalize the request-
and-offer process by collectively addressing issues of general interest.  Its approach was fully 
consistent with the architecture of the agreement a nd the negotiating guidelines.  He reiterated that his 
delegation was flexible as to the mode and form at in which questions could be taken up.  
12. The representative of the United States  was generally supportive of the approach suggested by 
Brazil, provided that the deliberati ons would take place in informal m ode without record and that all 
delegations agreed with it.  She would not want to see individual Memb ers singled out, and stated that 
her delegation was ready to reply to technical questions.   
13. The representative of Hong Kong, China  opined that the Membership needed to undergo a 
reality check.  Many existing entries in schedules an d offers were unclear and uncertain, or at least 
appeared to give rise to ambiguities.  Examples in cluded (i) the scheduling questions that Brazil and 
his delegation had raised, which were all based on speci fic entries in schedules/offers;  (ii) unspecified 
economic needs tests (ENTs) in Me mbers' schedules as listed in the S ecretariat's background note  
S/CSS/W/118, many of which persisted in offers;  and (iii) the safeguard-type provisions in schedules that 
Brazil had referred to in the discussions in the Working Party on GATS Rules (WPGR).  And there were many more scheduling problems.   
14. The whole Membership was concerned, and the situation needed to be redressed 
multilaterally, in the CSC or elsewhere.  The argument was often made that the existing commitments 
represented a balance achieved in previous negotiation s, and that it was up to  individual Members to 
interpret their own schedules, and up to other Member s to negotiate away any dubious entries in the 
current round of negotiations.  This argument was sy nonymous to saying "tough luck" to Members that 
had not used any particular tricks in their own sched ules, and thus could not capitalize on ambiguities in 
the current negotiations.  Would these Members be ex pected to pay if others removed ambiguities? 
15. He felt that Members, in declining to address scheduling issues openly and upfront, missed an 
opportunity of promoting good practices, and encourag ed others to perpetuate the muddled scheduling 
of commitments.  He wondered whether Members, especially developing Members who intended to 
take new commitments, should follow these schedu ling examples.  They might want to follow 
existing examples to safeguard their own interests in the negotiations. 
                                                     
 
2 The Annual Report to the Co uncil for Trade in Services was issued as document S/CSC/11 on 
23 September 2005.  S/CSC/M/38 
 Page 3 
 
 
16. Another popular argument was that scheduling issu es should be dealt with in bilaterals.  There 
was no basis for such claims, however, as scheduli ng issues concerned every Member in the same 
manner.  In principle, there should be a common understanding on how to prepare and read a schedule.  Members should be able to inform others  about the meaning of any entry in their offers, 
and the information should be the same to ev eryone.  A multilateral discussion would not only 
promote the understanding of schedules, but allow Memb ers to discover potential pitfalls and consider 
alternatives.  A positive solution was needed to promote clean and clear scheduling techniques, 
instead of a downward spiral that spread the u se of tricks and ambiguities from one schedule to 
another.  Many schedules of acceding countries pe rpetuated problems found in current schedules. 
17. Many Members had recently proposed multilateral targets in the context of the market access 
negotiations.  While his delegation was not a propone nt, it appeared that all proposals were based on 
the premise that market access issu es could be dealt with multilaterally.  He thus failed to see why the 
same Members expressed reservations  to do the same with scheduling issues.  Some proposals talked 
about assessment, evaluation or scoring of individual Members' offers.  However, in doing so, what 
would be the difficulty in sorting out scheduling issues as well?  If one expected Members to agree on 
a methodology to measure the quality of their offers, there should be no objection to looking at the 
clarity of the entries or even of the classification used, which were equally im portant to determine the 
quality of the commitments.   
18. Clarity, certainty, comparability and coherence were of fundamental importance in ensuring 
the quality of the commitments offered and, eventua lly, scheduled.  These elements were crucial since 
the value of a commitment could be easily undermined by scheduling ambiguities.  
19. He proposed that the CSC, within its terms of  reference, take up scheduling or classification 
issues arising from Members' offers, with a view to  enhancing the "4 Cs". There were a range of 
options that delegations could consider, such as (i) to  examine, with the help of the Secretariat, all 
offers with a view to identifying potential sche duling or classification ambiguities and other possible 
scheduling errors; (ii) to address any classification or  scheduling issues that may be raised, in general 
or with respect to individual offers, with a view  to enhancing Members' understanding and removing 
uncertainties; (iii) to examine, at the request of an y Member, specific entries in individual offers with 
a view to enhancing technical accuracy and coheren ce.  His delegation was open to proceed with these 
three tasks in either generic or specifi c manner, in formal or informal mode. 
20. The "4 Cs" should govern Members' offers.  Adherence to the scheduling guidelines and 
commonly adopted classifications should be a starting point.  The CSC should play a greater role in 
operationalizing benchmarks or targets.  Apart fro m the above-mentioned tasks, which were already 
within its terms of reference, he envisaged that the CSC could (i) appraise all offers, evaluate how 
well the benchmark/target was achieved and identi fy specific entries that  posed scheduling or 
classification ambiguities; (ii) assess the operation of the scheduling guidelines, especially with regard 
to their adherence in offers, with a view to e nhancing the usefulness and comprehensiveness of the 
guidelines; and (iii) report to the CTS Special Sessi on regularly on its activities and on any progress in 
achieving the benchmark/target.  Recomme ndations could be made as appropriate. 
21. The representative of Canada
 supported the discussion of general scheduling issues in 
informal mode in the CSC. 
22. The representative of Chinese Taipei  shared Hong Kong, Chin a's concern that certain 
Members insisted on pursuing scheduling issues only in  bilateral mode.  The technical accuracy and 
coherence of schedules was of paramount importance,  and had informed her delegation's substantive 
contributions to the debate so far.  
23. The representative of the European Communities  felt there was broad agreement that 
scheduling issues could be discussed multilaterally.  However, there was disagreement on the kind of S/CSC/M/38 
Page 4  
 
issues that could be discussed in the CSC and ot hers that could be addressed only outside the 
Committee.  His delegation had organized an open- ended meeting to discuss scheduling issues, and 
other delegations were free to do likewise.  He suggested to concentrate on generic questions, and 
suggested that Brazil transformed its questions accordingly.   
24. The representative of Japan
 remained unconvinced of the u sefulness of addressing specific 
questions multilaterally.  On Hong Kong, China's proposal, she felt that examining each offer for 
scheduling issues could consume an inordinate amount of time.  Moreover, it was difficult to 
distinguish between technical and non-technical questi ons, with the latter being very sensitive.  As she 
recognized the difficulties of small delegations in following all offers, her delegation was ready to 
discuss scheduling issues in a general manner without naming individual Members.  She noted that 
meetings outside the CSC should be on a voluntary basis. 
25. The representative of Norway  declared his delegation's readin ess to engage in informal mode 
on more generic issues, be it on the basis of Hong Ko ng, China's paper, or a compilation of issues by 
the Chairman.  He suggested taking up the least contr oversial issues first.  Member-specific questions 
were best addressed bilaterally. 
26. The representative of Switzerland  stated that his delegation would consider the proposal by 
Hong Kong, China with an open mind.  He sought  clarification as to how the Committee should 
proceed concretely with this proposal in light  of the time constraints mentioned by Japan. 
27. The representative of Pakistan  noted that the "4 Cs" of scheduling were of paramount 
importance also for the business community, a nd for Members’ internal discussions with 
stakeholders. 
28. The representative of Chile  agreed with Hong Kong, China that the quality of offers 
comprised the "4 Cs".  She further concurred that  a benchmark on scheduling could be devised.  The 
representative of Cuba  considered that a multilateral approach  to scheduling was beneficial.  The 
representative of New Zealand  agreed that addressing scheduling issues would result in more robust 
and clear commitments.   
29. The representative of the Philippines  broadly supported the points made by Brazil and Hong 
Kong, China.  He hoped that the proposals would be  considered with an open mind by Members, and 
underscored the points made with regard to the constraints on small delegations. 
30. The representative of China  stated that the clarity of entries was very important to permit an 
analysis of other Members schedules.  The CSC could help in making all schedules clearer and more comprehensible.  Despite China's experience in r eading other Members' schedules, it was frequently 
difficult to determine the level of commitments.  Most  of the time in bilaterals was spent on clarifying 
entries.  He called upon Members and the Secretariat to improve the efficiency of the negotiations.   
31. The representative of Republic of Korea
 shared the main points raised by Hong Kong, China, 
and in particular the idea of making the "4 Cs" a benchmark in the negotiatio ns.  He enquired about 
possible timing for the examination of all offers, a nd whether the results were intended to be binding. 
32. The representative of Brazil  expressed his intention to work with  others in a format that could 
accommodate sensitivities and, at the same time, produce a useful outcome.  Hong Kong, China's 
proposal contained a number of interesting ideas.  He encouraged Hong Kong, China to introduce the 
proposal also in the Special Session discussion on complementary approaches. 
33. The representative of the United States  noted that, since Hong Kong, China's proposal had 
been made only at this meeting, she would comm ent at a later date.  The representative of Mexico , in  S/CSC/M/38 
 Page 5 
 
 
preliminarily comments, supported Hong Kong, China's proposal.  The representative of Chile  
suggested that the Chair consult on this proposal.  
34. The representative of Trinidad and Tobago  enquired what would follow if an examination had 
concluded that certain entries were substantivel y ambiguous.  In particul ar, he wondered whether 
ambiguities would be resolved according to the more liberal or less liberal interpretation. 
35. The representative of Hong Kong, China  stated that his delegation was looking for results, not 
procedures.  The objective was to have cleaner and clearer schedules.  In that regard, the CSC had a 
role to play.  He did not detect opposition to the notion of greater clarity, certainty, comparability, and coherence; rather, delegations appeared to hold di fferent views about the most appropriate way to 
arrive at these "4 Cs".  As for the concerns about possible time constraints in examining offers in the 
CSC, he stated that the offers would be examined in any case, if not in the Committee then bilaterally.  
The bilateral way was clearly less time efficient, as  it required repetitive replies to questions.  He felt 
that the "4 Cs" could be achieved even without binding results.  Of course, any useful discussion 
would address real cases, but would not need to have legal implications.  
36. The representatives of Canada
, El Salvador , and the United States  indicated that they wished 
to be included in any consultations. 
37. The Chairman  suggested to consult informally on Hong Kong, China's proposal, and 
proposed that the Committee take note of the statem ents made and revert to the item at the next 
meeting.  He further suggested that the Committee  switch to informal mode to discuss generic 
scheduling questions, set out in JOB (04)/81 and JO B (04)/133, and further illustrated in Hong Kong, 
China's room document for this meeting.  He su ggested preparing a Chai rman's summary of the 
informal discussion without attribution of  statements to individual delegations.  
38. It was so agreed . 
39. Turning to the issue of econom ic needs tests, the Chairman  recalled that the delegation of 
Canada had presented a paper on EN Ts and Mode 4 (S/CSC/W/47) at the last meeting.  The 
delegation of Korea had submitted a room documen t which provided additional information on the 
criteria it had added to several ENTs in its revised  offer.  The Canadian proposal called not only for 
adherence to the existing rules a nd scheduling guidelines on ENTs and labour market tests, but also 
encouraged Members to attempt to define or agr ee on common elements of Mode 4 ENTs.  The paper 
encouraged an information exchange  and provided a template in its Appendix C to facilitate such an 
exchange.   
40. The representative of Canada  recalled that several Members had requested clarification on the 
notion of economic needs tests with respect to m ode 4 and labour market tests, and the linkage 
between them.  Mode 4 ENTs were essentially various  types of labour market tests that led to the 
issuance of work permits, authorizations or visas.  Canada's domestic legislation used the term "labour 
market opinion," while other Members' temporar y entry regimes used various other terms.  
41. One problem arose from the fact that the GATS did not define the term "economic needs 
test".  With regard to Mode 4, these tests were sometimes also called "labour certification" or" job 
offer assessment".  Labour market tests differed be tween WTO Members with regard to their rigour.  
The main objective of Canada's labour market opi nion, and the tests in other Members, was to 
determine the labour market or economic impact of  the foreign worker.  In some regimes, labour 
market tests were applied differently or more stric tly to certain visa or work permit categories than to 
others: for example, in the United States' system, th e test was implemented in the form of either a 
labour certification, a labour attestation, or someti mes a less stringent test, depending on the category 
or skill level.  Immigration and labour regulators in various countries applied labour market tests to 
allow for regulatory flexibility and liberalization.  This was an acceptable and beneficial public policy S/CSC/M/38 
Page 6  
 
approach.  Many immigration authorities administered  a very limited labour market test in which the 
potential domestic employer had to s how that no domestic workers were available for a specific job or 
would be displaced, if a foreigner were allowed to  take the position.  It was important that labour 
market tests were applied in a transparent manner so that trade officials could assess the value of the 
offers or the commitments being made, and pros pective foreign workers and their prospective 
employers knew what requirements had to be met. 
42. Turning to the request for clarification regarding Annex B and the inclusion of salary and 
skills therein, she stated that the Annex was illustra tive or descriptive, but not prescriptive.  It was 
simply a list of common types of considerations fou nd in various labour market tests.  Salary and skill 
levels were considerations that a ppeared in many tests, either explicitly or implicitly.  For example, 
some tests had salary thresholds as qualifying requ irements, while others looked at the prevailing 
wage in a specific job category.  As set out in paragraph 4 of the proposal, an analysis of labour market tests of various Members showed that, a lthough differences existed in specific terminology 
and factors, the tests comprised several common elements.  Annex B was not a suggestion as to how labour market tests should look like or what they should cover.   
43. In response to questions on the relationship between a labour market opinion and a work 
permit, she noted that a labour market test would ty pically contain questions related to a specific job 
offer and its impact on the labour market.  Canada's  paper detailed the various questions asked in 
Canada's labour market opinion.  A labour market test was usually a prior assessment that might lead 
to the issuance of a work permit or work visa.  The work permit or visa was the document that 
authorized the foreign worker to work or be empl oyed temporarily under certain conditions, e.g. for a 
specific employer, or for a specific period of time.  Labour market tests were usually applied for by 
the employer in the host country, while the potential foreign worker would apply for the work permit.  
The requirements for a work permit were usually quite different from the requirements for a labour 
market test.  However, in some temporary entry regimes, the requirements for both were combined 
and it was consequently difficult to understand the differences between the two, unless there was full 
transparency. 
44. She recalled that at the last meeting, India had stated that it was of critical importance for 
mode 4 ENTs that the scheduling guidelines were follo wed, and that an information exchange was not 
sufficient.  Her delegation agreed that Members should follow the scheduling guidelines with respect 
to Mode 4 ENTs.  Article XVI:2(d) and the scheduli ng guidelines set out the relevant obligations.  
The tests should either not be applied to the cate gories of natural persons covered by a Member's 
Mode 4 commitments or, if applied, be included in  the Member's schedule of specific commitments.  
Furthermore, the scheduling guidelines indicated th at if a Member scheduled an ENT or a labour 
market test, the criteria were to be inscribed in the market access column.  In the paper, Canada had 
proposed that as a first step, Members should adhere  to the agreed rules and scheduling guidelines on 
ENTs and labour market tests.  An informati on exchange was proposed to further increase the 
transparency and understanding of mode 4 ENTs. 
45. In response to a question on whether Annex B refe rred to specific minimum salary levels, she 
noted that salary and skill levels were considerations that appeared in many of ENTs, either explicitly 
or implicitly.  For example, some labour market tests contained salary thresholds as qualifying requirements, while others looked at the prevailin g wage in a specific job category.  The most 
important point was that the considerations underlyi ng the tests were transparent and not arbitrary. 
46. In closing, she reiterated that the main objec tive of Canada's ENT paper was to get Members 
to focus more on Mode 4 ENTs and to encour age adherence to the existing scheduling and 
transparency rules.  This would be a major achievement in the negotiations.   
47. The representative of Republic of Korea
 stated that his delegation's room document at the last 
meeting was intended to expedite  discussion on the definition of, and criteria for, ENTs and to  S/CSC/M/38 
 Page 7 
 
 
encourage the sharing of experience and informati on on their application.  Korea had inserted the 
criteria of its existing ENTs in its revised offe r as specified in the existing domestic laws and 
regulations.  Lack of elaboration on the definition of "economic needs test" and the absence of clear 
specifications in schedules and offers often resulted in trade distortion.  His delegation believed that 
the criteria of ENTs should be administered in a reasonable, objective and impartial manner.  To 
increase transparency and predictability, decisions on individual applications should be taken within a 
reasonable period of time.  In response to questions ra ised at the last meeting, he noted that licensing 
requirements applied to individual service suppliers , whereas the criteria set out under an ENT were 
based more on macroeconomic policy considerations.  Whether criteria such as traffic, environment 
and public interest were suitable for ENTs could be  answered in this contex t.  As for the possible 
overlap between ENTs and a prospective emerge ncy safeguard mechanism (ESM), his delegation 
found that this issue proved the usefulness of discuss ing ENTs in the CSC.  Efforts should be made to 
specify more neutral economic criteria, which enable d a clear distinction to be made between ENTs 
and other measures.  Lastly, any ENTs should appl y equally to both foreign and domestic suppliers, 
unless specific conditions were inscribed. 
48. The representative of the United States  shared the view that ENTs could be sound public 
policy tools and that transparency was the crucial issu e.  On the references made by Canada, he stated 
that the US labour certification process had nothing to do with temporary entry and was only required 
for permanent immigration.  The labour attestatio n applied in the context of the GATS and was a 
streamlined process.  It had been discussed in de tail during a presentation his delegation had given 
when presenting its revised offer.  All informa tion on the US regime was also available on the 
internet.  
49. The representative of Thailand  observed that the criteria for ENTs could entail a high degree 
of discretion, and that tests could serve a vast range of social, environm ental, and economic policy 
considerations.  They could be part and parcel of  licensing and authorization regimes for natural or 
juridical persons.  One of the purposes that EN Ts may serve was to manage competition, as was 
evidenced by the examples set out in Korea's room doc ument.  With reference to the Secretariat Note 
on ENTs (S/CSS/W/118), she noticed that some tests were designed in a way that could lead to a temporary suspension of market access commitments after a certain trigger point was reached.  Other 
ENTs contained performance requirements, such as th e effect of new entrants on public convenience, 
including the continuity and quality of services.   
50. The representative of Norway
 agreed that Members must ensure that ENTs were properly 
specified in accordance with th e scheduling guidelines.  Lack of precision in the schedules was 
sometimes due to lack of precise criteria in national legislation.   He supported in  general terms 
Canada's proposal to discuss in the CSC the po ssibility of common elements or of a common 
definition also in the area of Mode 4.  This could he lp to clarify entries in schedules.  Norway was not 
applying any ENTs. 
51. The representative of Hong Kong, China  acknowledged that there were numerous tests that 
served various policy purposes.  The discussion shoul d focus only on those tests that fell within the 
ambit of Article XVI.   For these, one fundamental  question related to particular specification that 
would be needed for an ENT to qualify as a limitation in the sense of Article XVI.  The onus for providing the necessary information rested on the sch eduling Member.  A perhaps even more basic 
question related to the types of tests, if not all, that would qualify as ENTs.  Alternatively, could it be 
considered that any type of criteria be valid fo r the purposes of an ENT?  A case in point was the 
notion of a minimum salary level as a criterion of an economic needs test, which might undermine the 
concept of comparative advantage.   
52. The Chairman
 suggested that the Committee take note of the statements made and revert to 
the item at the next meeting. S/CSC/M/38 
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53. It was so agreed
. 
C. CLASSIFICATION ISSUES  
54. The Chairman  recalled that the airgram contained the following documents: Indonesia's 
proposal on the classification of energy services (S /CSC/W/42/Rev.1 and Rev.1/Corr.1); the European 
Communities' (S/CSC/W/44) and the United St ates' proposals on Telecommunication Services 
(S/CSC/W/45 and Corr.1.) and a joint statemen t by a group of Members on Legal Services 
(S/CSC/W/46).   
55. The representative of Indonesia  stated that his delegation was us ing its proposal in its bilateral 
negotiations.   
56. The Chairman  noted that no other delegation wished to  comment on any of these papers at the 
present meeting and suggested that the Committee revert  to classification issues at the next meeting. 
57. It was so agreed.  
D. OTHER BUSINESS  
58. The Chairman  suggested that, in accordance with the practice of grouping meetings of 
subsidiary bodies close to meetings of the Council,  the next formal meeting be held in conjunction 
with the next services cluster.   
59. It was so agreed . 
__________