RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/S/M/40 
17 March 2011 
 (11-1365) 
Council for Trade in Services 
Special Session  
 
 
 
REPORT OF THE MEETING HELD ON 17 FEBRUARY 2011 
 
Note by the Secretariat1 
 
 
1. The Special Session of the Council for Trade in Services held a formal meeting on 
17 February 2011, chaired by Ambassador Ferna ndo de Mateo of Mexico.  The agenda for the 
meeting, contained in document WTO/AIR/3696, was adopted.  To facilitate discussion, the Council 
agreed to the Chairman's proposal to deal c oncurrently with Agenda items A and B.   
A. IMPLEMENTATION OF THE MODALITIES FOR THE SPECIAL TREATMENT FOR LEAST -
DEVELOPED COUNTRY MEMBERS IN THE TRADE IN SERVICES NEGOTIATIONS  
B. REVIEW OF PROGRESS IN NEGOTIATIONS , INCLUDING PURSUANT TO PARAGRAPH 15 OF THE 
GUIDELINES FOR NEGOTIATIONS ; AND ORGANIZATION OF FUTURE WORK 
2. The Chairman  noted that the meeting was taking place at the close of an intensive cluster of 
meetings and consultations.  In market ac cess, the focus of discussions had been on 
telecommunication, computer-related and audiovisua l services, and modes 3 and 4.   The overall 
ambition, as stated by the TNC in November, was to intensify and refocus the services negotiations, to 
arrive at a successful result by the end of the fi rst quarter.  The purpose of the present meeting was to 
assess the progress made in the services negotiations, including on the LDC waiver, and determine 
how best to proceed to a successful conclusion.  In  doing so, Members needed to identify the precise 
elements required to conclude the negotiations, gi ving careful consideration to any appropriate new 
ideas or techniques that had been discussed.  A further cluster had been agreed for the week of 
14 March.  
3. The delegation of Bangladesh , speaking on behalf of the LDC Group , was encouraged by 
recent progress made on bridging differences on the LDC waiver proposal, and wished to participate 
fully in the small group process. The LDC waiver w as however only one of the elements of the LDC 
modalities.  Paragraph 9 of Annex C of the Hong Ko ng Ministerial Declaration identified other areas 
which were to be expeditiously implemented.  There were LDC-specific flexibilities agreed in the 
modalities text, the General Council Decision (WT/L/579) and the Hong Kong Ministerial 
Declaration.  These flexibilities had to be reflected  in all areas, but especially in GATS rules and 
domestic regulation.  Particular account had to be taken of the serious difficulties of LDCs in 
undertaking negotiated specific commitments, in view  of their special economic situation and their 
development, trade and financial needs.  LDCs also needed targeted and coordinated technical 
assistance and capacity building programmes, in order to strengthen their domestic services 
capacities, build institutional and human capacity , and enable them to undertake appropriate 
regulatory reform.  Technical assistance was also need ed to carry out national assessments of trade in 
services, in overall terms and on a sectoral basis, w ith reference to the objectives of the GATS, and 
Article IV in particular. 
                                                      
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. TN/S/M/40 
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  4. The delegation of Australia
 said that the week had generally gone well for the services 
negotiations, including in domestic regulation.  With respect to the implementation of the LDC 
modalities, it looked forward to proceeding as Banglad esh had outlined, including participation in the 
small group process.  On market access, although ther e had been a real appetite to move forward, 
more work was sorely needed.  Members were behind in terms both of the clarity and precision needed vis-à-vis other areas of the Doha market access package.  Matters were urgent, since getting 
precision by April, and by mid-year in the services market access package, was going to take a lot of 
work.  Australia was discussing with some other Me mbers how best to accomplish this, and had done 
some basic work in collating a few sectors in a way that might help scheduling future work.  The main 
reason was to get appropriate experts in Geneva at  the same time.  This would not however exclude 
discussion of other topics.   
5. On the structure of forthcoming meetings, Aust ralia thought that a Special Session should be 
held in March, as late as possible in the chosen  week in order to give room for bilateral and 
plurilateral work.  It would also be useful to hol d the meetings of the WPDR and WPGR outside of 
that week, perhaps in the following one, to a llow for dedicated discussion amongst delegations on 
these topics. 
6. The delegation of Switzerland
 said that the services activities over the previous week had 
proved useful, and that the number and types of meet ings had increased.  It reiterated its full support 
for the successful conclusion of the negotiations on LD C modalities, noting in this respect that it had 
made a proposal on rules of origin for insertion in th e draft waiver text.  During the week, Switzerland 
had held a number of bilateral meetings, some very successful, others less so.  Members now needed 
to show the flexibility to improve their commitments. 
7. Switzerland had also taken part in two plurilate ral meetings.  The first was on mode 4, where 
the Swiss offer on this mode was discussed.  In Switzerland, 25 per cent of the active population were 
foreigners, which translated into around 25 per cent extra GDP for Switzerland.  Mode 4 thus 
represented a positive economic contribution.  There was a need, of course, to manage migratory 
flows.  The second plurilateral meeting was on audi ovisual services, in which Switzerland explained 
why it did not have any commitments in the sector .  For systemic reasons, it was important to 
participate in sectors which might be difficult for a Member, in accordance with the provisions of the 
Scheduling Guidelines on the non-exclusion of sectors or modes of supply. 
8. Switzerland also attended a very successful m eeting convened by the EU, bringing together 
Members who had taken part in the Signalling Conference in July 2008.  At the current stage of the 
negotiations, it was important to e ngage not only in bilateral meeti ngs, and meetings of the formal 
negotiating bodies, but also in this type of meeti ng. Switzerland hoped that meetings in this format 
would be repeated soon. 
9. On domestic regulation, Switzerland thought that work was progressing in the right direction.  
In market access, it agreed with the Australian propos al on the sectors to be dealt with during the next 
services session.  The grouping of sectors was a good idea.  On the room document submitted by 
Mexico (RD/SERV/44), Switzerland's preliminary view  was that the basic idea was interesting, and 
deserved further consideration by Members.  Ho wever, it was doubtful whether the detail of the 
proposal was consistent with the negotiating guidelines  and the Doha Declaration.  The main problem 
was limiting the sectoral coverage to 119 subsect ors.  The negotiating guidelines provided for the 
non-exclusion of any sector, and the main negotia ting method remained bilateral requests, with 
plurilateral requests simply a complement.  The selection of 119 subsectors did not seem to be based 
on solid reasoning.  As a final point, Switzerland re gretted that it had not yet received the French 
version of the minutes of the last meeting.   TN/S/M/40 
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  10. The delegation of Chinese Taipei  looked forward to future c onsultations on the LDC waiver, 
and hoped that consensus could be reached as soon as possible on a draft text.  If a consensus was 
difficult to achieve by the end of the first quarter, a bracketed text might be envisaged.  On market 
access, Chinese Taipei welcomed the initiative led by  the EU to hold a plurilateral meeting on modes 
1 to 4, with special attention to telecom and co mputer services. The meetings had been useful and 
constructive, and Chinese Taipei looked forward to the same spirit of engagement in the following 
clusters in March and April.  On organiza tional matters, including the grouping of sectors for 
discussion, Chinese Taipei was open.  It thanked Mexico for its recent paper (RD/SERV/44), and 
welcomed in general any initiative to creat e momentum in the stalled negotiations. 
11. On domestic regulation, Chinese Taipei welcom ed the 'sweeping exercise' conducted during 
the previous week. It had been very useful in fi nding ways to narrow differences.  In light of the 
limited time left before the end of the first quarter , delegations needed to make the best use of their 
time to reach a new and acceptable draft, and in th is respect the drafting exercise envisaged by the 
Chair was welcome.  On the issue of a 'necessity test', Chinese Taipei could go along with the Chair's 
plan to hold a dedicated discussion.  On GATS ru les, contributions made by Members to move 
forward the discussions earlier in the week were welcome, and Chinese Taipei remained engaged in 
the technical discussions.    
12. The delegation of Hong Kong, China  noted that the services week had been mainly devoted to 
market access discussions.  During meetings, delega tions had explored various means to invigorate 
the dialogue between them.  Hong Kong China par ticularly appreciated the initiative of some 
Members to kick-start a dialogue on Members'  sensitivities and flexibilities in improving their 
commitments.  It was to be hoped that as the di alogue deepened, the shape of the services market 
access outcome would become clearer.   Hong Kong China agreed with Australia's suggestion that 
dialogues with a specific sectoral focus would help take the negotiations forward.  The priorities of 
Hong Kong China in this respect were logistics ser vices and related transportation sectors, but it was 
flexible in accommodating Members' other priorities.   
13. Hong Kong China, as a co-sponsor, participated  in the plurilateral meeting on audiovisual 
services.  There was plainly no positive movement yet in that sector.  Although Hong Kong China 
understood the sensitivities of some Members, it rema ined deeply concerned that some recipients 
continued to exclude the entire sector from their schedules without any indication of willingness to review the situation, resulting in a huge gap be tween GATS commitments and market reality.  The 
rigidity of Members' positions on MFN exemptions ma intained in this sector was also disappointing. 
14. Mexico's room document (RD/SERV/44) aimed at linking the various market access 
negotiations was welcome.  Hong Kong  China took note of the idea with interest, but stressed that an 
ambitious outcome in services was indispensable for any final deal to be saleable to its stakeholders.  
15. On the rule-making front, Hong Kong China had participated in the informal meetings on 
domestic regulation aimed at narrowing differen ces and identifying potential convergence amongst 
Members.  It had approached the discussion pragmati cally.  While insisting that the results of the 
domestic regulation negotiations live up to the le vel of ambition in the GATS negotiating mandate, 
Hong Kong China had been as flexible as possibl e in taking account of the concerns of other 
Members.  On the proposed LDC waiver, Hong K ong China reiterated the importance of the early 
conclusion of the negotiations.  In this respect, it looked forward to a fruitful discussion in small 
group or other formats. 
16. The delegation of Mexico
 introduced its room document (RD/SERV/44).  The core idea was 
that there were two sides to the equation that coul d take Members to a successful conclusion of the 
services negotiations.  On one hand, there was a binding of current levels of liberalization as 
stipulated in the regulatory regimes of the Member s, and many delegations had spoken in favour of TN/S/M/40 
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  this.  On the other hand, there was also the desi re of some Members to obtain commitments which 
implied liberalizing beyond current regulatory regi mes.  The issue was how to reconcile these two 
sides of the equation, in a way that kept the nego tiations moving forward in a structured way, ensured 
predictability (despite the difficulties of a singl e undertaking), and ensured a balanced outcome. 
17. At the Davos Ministerial meeting in January , the Mexican Minister had made a proposal 
aimed at establishing a horizontal scheme to assist Members in achieving a simultaneous solution on 
market access issues in NAMA, environmental good s, services and agriculture.  The scheme proposed 
was quite straightforward.  It consisted in a framewo rk to provide structure to the negotiations in the 
four main areas of market access, without prejudice to the level of ambition of a final package.  
Focusing on the services side of the scheme, ther e were now collective requests in some 119 sub-
sectors.  On the basis of these requests, it would be expected that developed and developing Members 
who had participated in the 2008 Signalling Conferen ce (plus any other interested Members) would 
commit to bind their current levels of liberalization in all of the sub-sectors on the table, with a certain number of exempted sub-sectors for developing Members, and different number of exempted sub-
sectors for developed Members.  These two figures would be agreed by Members.  Although the 
scheme would not set any particular level of ambiti on, exemptions for developing countries would be 
expected to be greater than those provided for developed countries.   
18. Any Member wishing to obtain commitments at a higher level of ambition (which might 
imply a change in the current regulatory regime of another Member) would then be able to engage in 
negotiations with another Member, but would have to offer payment for this additional concession.  
The scheme would function on the basis of reciproc ity and, since it would cover simultaneously all 
four areas of market access, payment for greater concessions could take place within services alone, or in other areas of market access.  This way of d ealing with the four areas of market access would 
help to ensure predictability with regard to co mmitments to be offered by Members.  All Members 
participating in the scheme would submit their list of sub-sectors that they would be exempting from 
binding a current levels, while concurrently reachin g agreement in the other market access areas of 
the Round.  
19. The scheme did not in any way prejudge the level of ambition of the final package.  The main 
function was to create a framework, and establish a starting point enabling Members to successfully 
navigate the final stretch of the negotiations. It  would ensure predictability, because each Member 
would then have a clear indication of what was on  the table when submitting its final offer.  The 
package could be as ambitious as the Members want ed it to be, because the final "give-and-take" 
would take place across any of the four areas of market access.  
20. The delegation of Singapore
 had found the results of the ser vices week to be a step in the 
right direction, with what seemed to be the begi nnings of a more broad-b ased intensification and 
substantive engagement. Singapore had participated in several bilateral meetings, as well as two 
plurilateral meetings – one general, organised by the EU, and one on audiovisual services, in which it 
had participated as a co-sponsor.  Overall, the mee tings had been useful to gain a better understanding 
of other Members' approaches and constraints, a nd their participation had been constructive.  No 
substantive movement had been achieved, but th ere was a positive momentum.  Singapore hoped for 
an intensified phase in the negotiations, and was keen  to support any move in this direction.  On 
domestic regulation, Singapore was pleased that there had been more focused discussions.  It stood ready to contribute constructively in the negotiations , with the aim of achieving a product that struck a 
balance between developed and de veloping country interests.   
21. The delegation of China
 said that the services cluster had been very constructive and fruitful. 
Members had demonstrated a clear sense of urgency, and had moved towards more focused 
negotiations on both market access and domestic regul ation.   On market access, China appreciated 
the initiative of the EU to organize intensive negotiations on a modal approach.  Members had  TN/S/M/40 
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  undertaken focused and candid exchanges on all modes of supply.  Members appeared not to diverge 
significantly with respect to modes 1 and 2, while on modes 3 and 4 there still remained differences in 
approach between developed and de veloping countries.  A way out of the deadlock might be through 
trade-offs between interests in modes 3 and 4.  
22. China had sent out very strong signals that it wa s fully prepared to engage in the end-game 
exchanges.  It had reaffirmed its commitment to contribute towards the goal of ending the negotiation 
during the current year.  A gradual approach woul d bridge the gap between high levels of ambition 
and individual Members' sensitivities, if sufficiently  long transition periods were permitted.  But the 
momentum in the services negotiations alone was not  sufficient to conclude the Round.  Agriculture 
and NAMA negotiations had to move with the same pace and ambition so that, in the end, a final 
balanced package could be agreed.  
23. On LDC modalities, China said that their implementation was an essential element of the 
current development round.  LDCs needed to be accorded as much flexibility as possible to address 
their developmental needs.  In that  spirit, China was prepared to accep t a broad scope of application of 
the waiver mechanism as set out in  the current draft text.   It was understood by Members that the 
waiver mechanism was only an enab ling instrument to permit Members to grant preferential treatment 
to the LDCs. It did not add or subtract fro m any existing obligations. The Members offering 
preferential treatment to the LDCs  therefore had full autonomy in de termining the parameters of the 
preferential treatment, and defining the scope of a pplication of such treatment.  In the course of 
negotiation of the LDC waiver text, Members had identified a significant number of circumstances where the application of a waiver could go beyond  market access, extending to areas such as national 
treatment and domestic regulation.  It was neither feasible nor practicable for Members to draft an 
exhaustive list of circumstances where the wa iver mechanism applie d beyond market access. 
Therefore, considering the nature of the waiver as only an enabling instrument, it was desirable to 
give the mechanism a broader scope  of application, and let indivi dual Members determine the specific 
parameters on a case-by-case basis. 
24. On domestic regulation, the small group process had been fruitful in sweeping the draft text 
and removing some of the drafting options.  Memb ers were on the right track in moving towards a 
bracketed text reflecting Members' positions.  Ev en though there remained divergences on some key 
issues, there was a gradual bridging of the gap which made agreement on balanced domestic regulation disciplines a feasible objective before the conclusion of the Round.  
25. On the market access negotiations, all Member s had sensitivities. One Member's sensitivity 
was however another's opportunity.  With creativene ss and determination, Memb ers could arrive at a 
satisfactory deal with respect to modes 3 and 4.   China therefore encouraged Members to continue 
focused negotiation on a sectoral basis, to keep up momentum, and work towards the goal of ending 
the negotiation during the current year.  
26. The delegation of New Zealand
 was pleased by the current services cluster.  For the first time 
in many months, there was a sense not just of an  expressed willingness to talk, but also of forward 
momentum across the negotiations.  Some Members had been talking about stepping back from long-
held assumptions about each other's positions, and en gaging afresh.  Some had been frank about their 
particular modal and sectoral sensitivities. 
27. New Zealand had participated as both a demandeur  and a recipient in a number of plurilateral 
discussions, and was encouraged to see new life being breathed into the plurilateral process.  There 
was still a lot of work ahead, and not much time left to do it.  Members needed to get further into the 
detail in order to reach a common understanding on the content of a services package that was 
acceptable to everyone.  Members already had guida nce on the shape of the p ackage in the form of 
Annex C and the 2008 services text, and they now needed to fill out those frameworks.  TN/S/M/40 
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  28. On the issue of future engagement, New Zeala nd continued to see the importance of having a 
clear and common-sense structure for work ahead.  It  was useful to have agreed areas of focus at 
particular points in time so that Members could a rrange for the appropriate expertise to be brought to 
Geneva.  A schedule did not need to be rigid, nor did it need to be time-bound, but Members did need 
to be prepared to compress or accelerate their work  in order to meet deadlines that might be set for 
them.  
29. On the document introduced by Australia, but  which represented inputs from a range of 
Members, New Zealand was happy to agree to a fo cus on transportation, distribution, logistics and 
postal and courier for the next cluster.  There were clear similarities and linkages between these 
sectors, and it was useful to focus on them as a group.  These were not New Zealand's biggest priorities, but they were important in the negotia tions, and had a significant role in supporting goods 
trade.  New Zealand supported also a focus on prof essional services and education, where there were 
clear similarities.  
30. On domestic regulation, which remained a key priority for New Zealand in the negotiations, 
the Chair's objectives for the week of 'sweeping' the text with a new mind-set had been achieved.  
Although areas in the text which we were comple tely stabilized remained few, delegation had 
nonetheless made progress in narrowing down the options in a number of areas.  Members had even 
indicated that they were prepared to at least discuss , at a technical level, topics that for a long time had 
been almost been taboo.  On LDC modalities, Ne w Zealand was supportive of the conclusion of the 
negotiations as part of a balanced services pack age, although it noted that a number of important 
issues remained to be resolved. 
31. The delegation of India
 agreed with others that overall it had been a good week for the 
services negotiations.  With respect to LDC modalit ies, India supported the rapid and expeditious 
resolution of the remaining issues in the draft text for an LDC waiver.  
32. On domestic regulation, India noted that differe nces remained in key areas of the Chair's text, 
although there had been significant convergence, at  least conceptually, in many areas.  On GATS 
rules, India had introduced its paper with other co -sponsors, Chile and Mexico, to develop a roadmap 
for the development of subsidy disciplines. A health y first exchange of views by Members had taken 
place, and India looked forward to working with ot her Members to resolve the differences of opinion 
in order to fulfil the fifteen-year-old mandate. 
33. On market access, mode 4 had been one of the areas of focus. A plurilateral meeting on this 
topic had been held, stressing the importance of this  mode for developing count ries.  The meeting had 
been held in a traditional format with recipien ts and co-sponsors, and had resulted in a positive 
atmosphere.  As well, a productive meeting had been  convened by the EU and some other Members, 
covering all modes.  Certain new approaches were ra ised, especially with respect to modes 1 and 2, 
and these ideas needed further work.  Members had al so engaged in a frank exchange of views on 
modes 3 and 4.  These meetings had been useful, since they had discussed modes of supply and other 
topics in a balanced fashion, horizontally a nd sectorally. However, the format had inherent 
limitations, and needed to be supplemented with inte nsive bilateral and plurila teral meetings to make 
concrete progress.  India had also held market ac cess bilaterals during the week, at both expert and 
senior official level.  
34. At the last Special Session, key recipients ha d made statements about the need for a robust 
outcome in mode 4.  Although India had had positive contacts throughout the week in various 
formats, it had yet to see real efforts to translate thes e statements of intent into concrete action.  India 
understood the familiar concerns on mode 4 liberali zation, and had addressed these issues in detail 
during its various meetings.  Switzerland had expl ained well the prism through which one needed to 
view mode 4 – not as a cause of concern but as an opportunity for growth.  India was prepared to  TN/S/M/40 
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  work constructively to reach a satisfactory outcome on mode 4, as this was one of the main demands 
of developing countries.  India also strongly believe d that any balanced outco me in market access in 
services would need to take into account the substan tial movement made so far by developing country 
Members, and the development dimension of the current Round.  
35. In terms of next steps, India wished to focus during the next cluster on modes 1 and 2.  In 
terms of sectors, it wished to choose sectors that  balanced the interests of both developed and 
developing countries.  It had two comments on th e Australian proposal.  First, the second proposed 
group of sectors appeared to be too crowded compar ed to the third one. Second, professional services 
and business services had been grouped separately, even though professional services were a sub-set 
of business services.  A professional services grouping left out a number of important sub-sectors, 
such as medical, dental, nursing, and physiotherapist services.  India preferred a discussion on the 
entire gamut of professional services, to ensure comprehensive coverage and strike balance. The remaining business services could be contained in another grouping.  Finall y, India thanked Mexico 
for its paper and detailed explanati on, which it would study further.  
36. The delegation of Brazil
 said that the discussions held during the week had been very 
productive, and showed the engagement of many  Members in the successful conclusion of the 
services negotiations.  The continuation of this  process would depend, however, on Members' 
willingness to participate constructively, in light of development interests, in the other pillars of the 
Doha Round.  
37. All Members wanted to achieve an ambitious out come in their areas of interest, which meant 
that the level of ambition was different for each Memb er.  In this respect, a balance had to be found. 
Brazil had stated on several occasions that the ba lance achieved in 2008 was an acceptable one, even 
though it had not been easy to sell domestically.  As regards services, Brazil had done its best to 
improve its initial schedule of commitments, taki ng into consideration various sensitivities and 
multilaterally agreed mandates.  However, Brazil wa s still of the opinion that new improvements in 
market access for services would, in principle, requi re improvements in its areas of offensive interest, 
such as agriculture. 
38. Members needed to keep in sight important principles such as (i) gradual liberalization; 
(ii) appropriate flexibility for developing country Members for opening a fewer sectors, liberalizing 
fewer types of transactions, progressively extending market access in line with their development 
situation;  and (iii) due respect for national polic y objectives.  Brazil had yet to develop fully its 
services sector to be competitive in the internationa l market.  This took time, and these principles 
were essential in achieving this goal.  
39. It was also important to intensify efforts in  the other areas of the services negotiations.  On 
domestic regulation, Brazil had held fruitful di scussions during the previous week that would 
hopefully result in a revised text with a manageable  number of brackets.  Br azil still believed that the 
draft text of March 2009 reflected, in general, an ad equate level of ambition.   In this connection, 
Brazil viewed with concern proposals to significantly modify that level of ambition, especially on the 
issue of the necessity test, taking into account its in terference with the right to regulate, which for 
Brazil was a sacred principle.  
40. On GATS rules, Members needed to redouble their efforts to fulfill the mandates.  There were 
interesting work proposals in all areas, which w ould allow Members to deepen their knowledge on the 
three issues, paving the way for the creation of th e necessary disciplines at the right moment.  On 
LDC modalities, Brazil continued to engage in the discussion of the draft waiver text, aiming at an 
outcome that would allow LDCs to gain a more si gnificant share in world services trade.  Brazil was 
ready to participate in the small group drafting exer cise.   Brazil also welcomed the Mexican proposal TN/S/M/40 
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  for a horizontal framework covering all market acces s areas in the Round.  The framework focused on 
a simultaneous treatment of market access areas, a valuable idea which needed further study.  
41. On the organization of future work, Brazil rec ognized the need for Members to intensify their 
efforts.  Regarding the frequency of meetings, Br azil was facing budgetary cu ts that might make it 
difficult to bring relevant experts to Geneva frequ ently.  Members needed to agree, therefore, on 
reasonable intervals between meetings. With respect to an earlier proposal to exchange revised offers 
during the process of negotiations until July, Brazil sai d that any indication of its final positions would 
depend, to a great extent, on what was on o ffer in the other areas of the Doha Round. 
42. The delegation of Korea
 welcomed progress on LDC modaliti es and domestic regulation.  
Disciplines on domestic regulation were important in complementing market access; a concrete text 
with fewer brackets was needed by Easter.  With  regard to the market access negotiations, the 
delegation had actively participated in bilateral m eetings over the week, and also took part in the 
plurilateral meeting on audiovisual services as a re cipient country.  Overall, Members had proved 
very engaging.  However, the same  arguments for not opening certain sectors were also heard, and 
specificity was lacking.  Even though Members co nfirmed what they had signaled, a lot of work 
remained to translate this into concrete offers .  Members should be prepared to discuss flexibilities 
and sensitivities in a more concrete and clear manner.  While delegations had tried to focus on the ICT 
sectors, not many Members had been able to bring their experts and allow them to offer concrete 
proposals or answers.  Australia's proposal for th e meeting in March was therefore useful.  Korea 
wished to concentrate especially on areas such as transportation and distribution.  Concentrated work 
on modes 1 and 2 would also be useful since hor izontal discussions during the week had permitted 
identification of what should be done to reflect the current level of liberalization in these modes.  The 
delegation was also open to continue discussions on ICT, in particular telecommunications and 
computer-related services.  Regarding the objectives  for the Round, the delegation emphasized, first, 
that there should be no a priori exclusion of any sectors or modes, and the need to reduce MFN exemptions.  Second, all Members had to reflect th e current level of autonomous liberalization as 
much as possible, provided that their sensitivities were  reflected in a more concrete way.  In this 
sense, the delegation welcomed Mexico's proposal.  Among the 155 sub-sectors, Korea had made commitments on 104.  New commitments were offe red for 26 sub-sectors, including education, which 
was very sensitive.  Even though Korea had sens itivities in audiovisual services, commitments had 
been undertaken in the Uruguay Round.  The dele gation hoped that Members would continue to 
engage more actively in the market a ccess negotiations in March and April. 
43. The delegation of Thailand
 was satisfied with the current intensification of the negotiations.  
The delegation looked forward to the finalization of the LDC modalities at the earliest opportunity.  
On market access, negotiations had moved in a positiv e direction, especially the discussions held at 
the EU Mission on 15 February.  Both demandeurs and recipients had had an opportunity to exchange 
views on how far they could go.  Members learne d what the ambitions, limitations, and difficulties 
were, and what flexibilities were needed.  The ne xt step was to find a mutually acceptable 
compromise.   The delegation emphasized that setti ng a realistic level of ambition, based on "give-
and-take", could bring a balanced outcome in lin e with the developmental mandate of the Round. 
44. The delegation of the United States  shared views expressed by others about the constructive 
and positive meetings during the week.  It felt that se rvices negotiators had been held back by events 
beyond their control and that many wanted to get to  work.  The large meeting hosted by the EU had 
proved interesting and helpful.  The discussion of modes 1 and 2 had been the most constructive.  
Members shared views on objectives and sensitivities,  and some offered proposals on how to address 
those sensitivities to achieve a stronger outcome.  The discussion of modes 3 and 4 was somewhat 
less satisfying, with Members generally holding to l ongstanding positions and reluctant to engage in a 
"what-if" kind of discussion.  Members might have b een reluctant to talk freely about their particular 
situation in a large group.  Still, this had been useful overall, and the delegation hoped to see that  TN/S/M/40 
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  configuration continue.  As for next steps, Me mbers needed to keep working with each other 
bilaterally and in various group conf igurations to intensify negotiations .  To help focus discussions, it 
was helpful to work through specific sectors so as to get better clarity on where negotiations stood.  
The United States could generally support Australia 's suggested groupings of sectors for the next 
cluster, and was also happy to address all professi onal services as a group, as per India's suggestion.  
The delegation's goal over the next several weeks wa s to have a clear picture of where Members stood 
relative to those two key indicators in sectors of greatest interest: coverage of commitments and removal of foreign equity limitati ons.  This would help the leadership to make informed decisions 
about how to proceed across all three of the ma rket access areas of the Round.  Regarding the 
coverage of commitments, the delegation was looking  for substantial progress toward binding current 
practice in key sectors.  On foreign equity, ther e was a need to see demonstrable progress toward 
removing real constraints.  This meant new market access.  The United States failed to see how turning away foreign investment could be seen as a victory for development.  Progress along these lines was sought from key players, and also from a critical mass of Members.   
45. The United States understood that others had partic ular priorities that needed to be addressed 
as well, including on mode 4.  It was prepared to work constructively with all Members to build the 
best possible package of services co mmitments.  On Mexico's proposal , further reflection was needed, 
but the delegation thought, as an initial reaction, that a fatal flaw laid in what constituted a sub-sector.  
Would Members all agree on who would get credit for what?  Creative minds could endlessly debate about what might count as a sector or what the a ppropriate level would be, and this could create a 
distraction.  At the end of the day, when lookin g at the coverage of commitments, the Secretariat 
would be able to highlight progress, but the Unit ed States did not want to pre-negotiate what 
thresholds might be.  Regarding the plurilateral meeting on audi ovisual services hosted by Mexico, 
the delegation was disappointed by the signals receiv ed.  Members needed to come to an appropriate 
balance of commitments and comfort.  On LDC m odalities, the United States continued to be engaged 
in working through the issues raised by the draft LD C waiver.  The delegation had questions related to 
the scope of the waiver, and was interested in further discussing the ideas presented by the EU on 
rules of origin. 
46. The delegation of Colombia
 thanked Bangladesh for the inform ation provided with respect to 
discussions on LDC modalities.  Colombia had made a textual proposal, which it was prepared to discuss further.  With regard to market access,  exchanges had been frank and very useful.  
Consequently, the possibility to reach an agreemen t within the window of opportunity existed.  
Members needed to make every effort to ensure that an agreement was reached quickly; a sense of 
urgency had to be maintained.  Members also needed  to have clear objectives and targets, taking into 
account what was really achievable, and to find ways to resolve the concerns th at some Members had.  
The development dimension should guide delegations ' work.  The delegation was concerned by the 
vicious circle caused by a lack of confidence on the part of Members.  If delegations got a clear idea 
of the scope and level of ambition that was sought , then each Member would be in a position to 
indicate more clearly and precisely its intentions.  For that to happen, discussions on market access 
should continue in different formats.  Colombia  supported the idea of carrying out the sessions in 
March and April like those that had taken place this week.  The delegation also thanked Mexico for its 
interesting proposal, which it would be able to di scuss further in due course.  In concluding, the 
delegation stressed that the result of negotiations in  the area of services would be incomplete without 
domestic regulation disciplines to capture and fully re flect all the elements of GATS Article VI:4.   
47. The delegation of Indonesia
 understood the difficulty of responding to the call of political 
leaders to conclude the negotiations this year.  Ch allenges could be overcome with a sense of urgency 
as well as by the hard work of Members.  The week  of negotiations had shown new optimism.  To 
move forward, services negotiations should not be  seen in isolation from other areas of the 
negotiations – namely agriculture and non-agricult ure matters.  The importance of achieving an 
overall balanced package had to be kept in mind.  Further, service ne gotiations should not be detached TN/S/M/40 
Page 10  
 
  from the development aspects highlighted in Articles IV and XIX of the GATS, as well as Annex C of 
the Hong Kong Ministerial Declaration.  With respect to domestic regulation, Indonesia was of the view that the revised text would speed up wo rk in fulfilling the mandate.  In moving these 
negotiations forward, Members had to bear in mind the importance of preserving the right to regulate 
and the special needs of developing countries a nd LDCs.  Concerning the negotiations on GATS 
Rules, the delegation thought that further work was needed, and was pleased that presentations on 
statistics in relation to emergency safeguard measur es would take place in the coming months.  With 
respect to LDC modalities, it believed that these would facilitate the participation of least developing 
countries in services trade, and encouraged Members to intensify work.  On the proposal by Mexico, 
Indonesia saw the need to facilitate negotiations, but needed more time to study the paper.  
48.  The delegation of Barbados
 said that the negotiations aimed at achieving balance and 
ensuring special consideration for developing countri es, and LDCs in particular.  In achieving an 
ambitious result for areas such as domestic regu lation, Members had to try to avoid placing 
developing countries with constrai ned budgets under pressure.  In this  regard, in determining license 
fees, it had to be remembered that this could be an important revenue earning activity for small 
economies and that making the level of revenues co mmensurate with costs might cause difficulties.  
Disciplines should not undermine the autonomy of  governments in managing their revenues and 
expenditures.  Fiscal policy approaches of most  revenue-constrained developing countries made 
determinations on revenue based on the relative impo rtance of the service to the economy and to the 
society.  Governments were often willing to incur losses on services of high social value and compensate for those losses in areas that were of le ss significant social value.  Such flexibilities were 
legitimate and should not be compromised.  Any di scipline that would undermine or obstruct that 
flexibility to apportion costs among various sources of fees and revenues could be difficult for 
developing countries.  While it was important that dom estic regulations be made more transparent and 
predictable, these must not be so constrained by disciplines compromising Members' ability to 
manage and regulate their wider domestic and co mmercial environment.  More important matters 
were currently being negotiated in services, but fo r small economies, matters  which appeared small 
could have significant implications.  In trying to ensure a higher level of ambition, Members should 
avoid modalities that could constrain the developm ent of small countries in terms of their fiscal 
flexibility. 
49. The delegation of the European Union
 perceived a renewed engagement in the market access 
negotiations during the week.  The delegation had organized a meeting on behalf of the United States, 
Canada, Japan, Australia and the EU with a bout 25 Members, generally corresponding to the 
participants at the Signalling Conference of July  2008.  For the sake of transparency, the five 
Members that organized this meeting had made available a non-paper describing the objectives with 
respect to the level of ambition sought, including binding autonomous levels of liberalization, making 
new and improved commitments in mode 4, and removing foreign e quity and other limitations in 
mode 3.  It was time to move the discussions in to the specifics of the fl exibilities that each Member 
needed to reach an ambitious result.  This had to be done with a sense of urgency because progress 
made in the market access negotiations had to be assessed by Easter when texts of Agriculture and 
NAMA modalities would normally be released.  Very lim ited time remained until then.  Members had 
to be flexible and creative in seeking solutions for difficult issues, for instance using transitional 
periods for new commitments in mode 3 or in ot her modes of supply.  Delegations should try to 
negotiate on a "what-if" basis, othe rwise negotiations risked remaini ng paralyzed as had been the case 
in the last two years.  
50. In terms of the agenda, the European Union supported the list of sectors distributed by 
Australia for the clusters in March and April.  Di scussions should cover all modes of supply so as to 
ensure a balanced negotiating result.  With respect  to the proposal by Mexico, it was important to 
reflect on how to unlock the market access negotiati ons, but, on substance, the delegation reserved its 
position pending further analysis.  An initial reaction, however, was that, while the paper's focus on  TN/S/M/40 
 Page 11 
 
 
  binding autonomous levels of liberalization was fine , it seemed to lack sufficient ambition in that it 
did not go beyond the binding of autonomous liberaliza tion other than through reciprocity.  This was a 
problem, in particular for mode 3.  On dome stic regulation, the delegation welcomed recent 
discussions and noted that the necessity test, as we ll as the development chapter, remained the most 
contentious issues.  It hoped Members would engage  in constructive discussions to seek convergence 
beyond abstract concepts and reiteration of past positions.  The delegation was ready to continue 
discussions in the small group, and welcomed a proc ess of transparency through the WPDR.  On LDC 
modalities, it stood ready to participate in order to ir on out the two remaining issues, namely the scope 
of the waiver and the rule of origin.  It was funda mental to have a result on these modalities at the end 
of the Round otherwise common objectives in terms of development would be betrayed.  Finally, on 
the organization of future clusters, it was preferable  to schedule the Special Session at the end of the 
week so as to ensure enough time for discussions in this critical phase. 
51. The delegation of Norway  considered that the week's discussions confirmed the shift of gear 
and the new dynamism in the services negotiations.  The process seemed to be headed toward the end-
game.  This was promising for the assessment of pr ogress in the market access negotiations by Easter.  
The meeting hosted by the EU had been particularly  useful.  This was the first real plurilateral 
exchange in a very long time.  It proved a timely a nd a very frank exercise.  The delegation also found 
it very positive that plurilateral ne gotiations had been reinvigorated.  It was now necessary to agree on 
the follow-up to this good start.  No time was to be  lost if delegations were to assess progress in the 
market access negotiations by Easter.  The proposal by Australia could be a constructive way forward.  
It was necessary to ensure that  formats became meaningful for all Members, recognizing that 
delegations had different interests and priorities in  these negotiations.  The delegation thanked Mexico 
for the paper; more time was needed to consider its substance.  On domestic regulation, it was now 
important to intensify the drafting process in order to have a text with few brackets in April.   
52. The delegation of Turkey  said that the meeting organized at the EU mission had showed that 
progress on modes 3 and 4 was interlinked.  Progr ess on these issues should be balanced and pursued 
together.  Members who ask for more on a specific mode of supply should develop creative ideas in 
order to offer more to their counterparts in other m odes.  Such "give-and-take" might pave the way to 
a more substantial outcome.  The delegation suggest ed that future dedicated discussions not exclude 
any mode of supply and it looked forward to continue  intensified dialogue in meetings similar to the 
one organized by the EU.  Regarding domestic regu lation, recent work had allowed Members to see 
where divergences remained, and intensive work was necessary to complete th e disciplines within the 
timelines.  If a differentiation could be made be tween developed and deve loping Members throughout 
the text with regard to the level of obligati ons undertaken, the delega tion would consider doing 
without soft law language in several paragraphs.  On the necessity test and similar mechanisms, 
Turkey had major concerns.  With respect to LDC modalities, it was in  favor of preferential treatment 
that was broad in coverage both w ith respect to Members and the type  of treatment.  The development 
aspect of the Round could not be allowed to fade away.  On the Mexican paper, further internal 
consultations were needed.  Finally, on the Aust ralian proposal, the delegati on had no objections with 
the groupings suggested.    
53. The delegation of Malaysia  thought that the week had been productive.  The meeting 
organized by the EU was useful in that it allo wed Members to exchange views on the difficulties and 
flexibilities needed in sectors and modes of supply.  That said, bilateral sessions should continue.  
Malaysia supported Australia's proposal on the sector  grouping for the March and April meetings.  
Concerning Mexico's proposal, the delegation consid ered it provided an interesting and constructive 
approach on how to move negotiations horizontally .  More time was needed to provide specific 
comments.  On rules, Malaysia stressed that this was an important part of the negotiations, which had 
to be balanced with the market access negotia tions.  Concerning domestic regulation, the sessions 
over the previous week proved an important exercise : delegations had been able to identify all the 
difficult areas and to narrow the differences. TN/S/M/40 
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  54. The delegation of Japan
 perceived a more positive atmo sphere overall in the services 
negotiations.  The end-game had already started and negotiations had to accelerate further.  The 
meeting hosted by the EU had been very useful as it had permitted to exchange information on each 
Member's sensitivities and discuss how to address th em with frankness and constructiveness.  Japan 
had also held some bilateral negotiations, but it w as regrettable that some of the other delegations 
involved lacked sufficient representation from experts from the capital.  Wider and stronger 
involvement of such experts was fundamental.  Japan also held a meeting of the friends of maritime 
transport, which had yielded a go od discussion about how to move forward.  Progress had also taken 
place in domestic regulation, and Japan would activ ely engage in the drafting process.  On LDC 
modalities, the delegation considered that the sma ll group drafting sessions were useful to address the 
remaining issues, and looked to further such discussions. 
55. While the market access negotiations had show ed some positive signs, the overall progress 
was not yet sufficient.  Delegations had to continue  tackling the substance first in order to strengthen 
positive signs and turn them into solid momentum.  Members had to increase the involvement of the 
relevant authorities and intensify their direct contacts to deepen mutual understanding on each 
Member's domestic regulatory system.  On sectoral discussions, Japan supported the groupings 
suggested by Australia.  It wished to continue  focusing on binding existing levels of openness in 
modes 1, 2 and 3, the elimination of foreign equi ty limitations, and mode 4.   Depending on progress 
in areas of interest, the delegation was ready to cons ider positively what more it could do in relation to 
mode 4.  Sensitive issues should be addressed through mutual understanding and creative ideas.  
Japan also had some sensitive area s.  On process, it believed that delegations should soon take stock 
of progress in writing with a view to knowing where th ings stood and what more had to be done.   
56. The delegation of Mexico  indicated that, as coordinator of the plurilateral request on 
audiovisual services and on behalf of the co-s ponsors (Hong Kong China, Chinese Taipei, Japan, 
Singapore and the United States), it had convened a mee ting to evaluate progress in this area.  It was 
important to hear new indications regarding this sector  in view of the lack of positive indications in 
the Signalling Conference in 2008, where recipien t Members had provided no positive indication of 
commitments in any audiovisual sub-sector.  Curre nt commitments on audiovisual services did not 
reflect autonomous liberalization and this was also the sector with the highest number of MFN exemptions.  During the plurilateral meeting, 2 out of 29 recipients expressed some positive 
indications regarding potential commitments to be introduced in their offers and one recipient 
indicated its compliance with almost the totality of the request.  The other recipients of the request 
expressed their cultural and political sensitivities in th is sector.  These Members said they were not in 
a position to schedule new commitments or to elimin ate MFN exemptions even though some of them 
recognized the openness of their markets.  Recipi ents that already had certain commitments on 
audiovisual expressed their cautiousness to incl ude additional commitments on the sub-sectors 
identified in the plurilateral request.  Co-sponsors expressed their interest in better understanding gaps 
between the legal regimes and the current practice in Members' markets.  They thought that in 
considering the possibility of further commitments, each recipient should identify differences in the 
level of sensitivities within this sector.  Co-sponsor s wished to continue discussing with recipient 
Members the flexibilities required for compliance with  the plurilateral request.  Regarding a question 
raised by the United States on the Mexican paper,  the delegation said that the definition of a sub-
sector would depend on the negotiations.  It would al so be related to the classification used in the 
negotiations, whether the CPC or another.  The de legation also emphasized that the proposal talked 
about the binding of all the sub-sectors; Members would define only sensitivities, namely the sub-
sectors where they would be requesting exceptions.   
57. The delegation of Canada
 was pleased to see real and constructive discussions on market 
access in all areas.  It would therefore continue to  support the format that was introduced this week 
through the meeting held at the EU mission.  It  was good to see that Members had started to focus on 
flexibilities and sensitivities and on what the real probl ems were.  However, a lot of work still had to  TN/S/M/40 
 Page 13 
 
 
  be done, which was why such a format should cont inue.  Canada was now seeking clarity on the 
market access package in services so as to be able to evaluate what was on the table at the same time 
as in other areas, including agriculture and NAMA.  The delegation agreed with India's view that 
delegations should also move forward on all modes; and that this should complement the bilateral and 
plurilateral process.  It was pleased with the pl urilateral meeting held on mode 4 during the week; 
Canada was willing to engage and be  constructive in this area.  On the Australian proposal, the list of 
issues for the March cluster looked daunting, but time was of the essence and Canada would bring 
sectoral experts.   
58. On the Mexican proposal, the delegation did not think that a formula-like approach 
represented what was needed in services.  Annex C already called for new and improved 
commitments, including on mode 4.  Canada want ed new market access, not solely binding existing 
levels.  On domestic regulation,  Canada would work to focus on areas of convergence and narrow 
down the areas of divergence.  The delegation al so supported moving fo rward on LDC modalities 
with a view to resolving outstanding issues.  Ov erall, progress was made during the week, but further 
movement and clarity were needed.  It was necessary to focus on th e sensitivities and flexibilities that 
Members had, including with respect to binding exis ting access, the removal of restrictions in mode 3 
− in particular restrictions on fore ign equity and type of legal entity − and making real improvements 
in mode 4.   
59.  The delegation of Pakistan  believed that the criteria for success in market access was, first, 
expanding coverage across all or substantially all sectors and sub-sectors, second, the removal of all 
limitations or close to binding the autonomous libera lization on mode 4, and, third, to rely on an 
approach where each Member looked at how much pain  it could take, rather than to care for others' 
comfort.  There would be no gain without pain.  On process, the week had proved very satisfying and 
constructive.  The delegation wished that meetings  such as that convened by the EU could continue, 
and it also supported the ideas provided by Australia.  On the Mexican paper, Pakistan felt that fresh 
ideas were needed to help assess market access gains – or lack thereof.  This was a positive 
contribution in order to assess where delegations stood. 
60. The Chairperson  noted, first, that, as suggested by the EU, he would try to schedule the 
meeting of the Special Session as late as possible in the week.  Second, more precision and clarity were needed in the market access negotiations. Dele gations had had a healthy discussion at the current 
meeting.  Third, the Australian proposal for next meetings' sectoral focus had been supported by a 
number of delegations.  Members n eeded to continue consultations on this because it was important 
that experts from capitals come to Geneva so  progress could continue.  Fourth, on domestic 
regulation, he congratulated the Chair of the WPDR because real progress was occurring.  He hoped 
that remaining difficulties could be resolved shortl y.   Finally, there was a strong commitment to 
conclude work on the LDC waiv er, and delegations should con tinue with their plurilateral 
consultations.   
61. The Council
 took note of the statements made, and decide d to revert to this item at the next 
meeting. 
C. OTHER BUSINESS  
62. Since there was no other business, the Chairman  adjourned the meeting. 
 
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