WORLD TRADE  
ORGANIZATION  RESTRICTED  
S/C/M/81 
21 February 2006 
 (06-0725)  
  
Council for Trade in Services  
  
 
REPORT OF THE MEETING HELD ON 9 FEBRUARY 2006 
 
Note by the Secretariat
1 
  
1. On 9 February 2006, the Council for Trade in Services held a meeting chaired by 
Ambassador Claudia Uribe (Colombia).  The age nda was contained in document WTO/AIR/2751.   
2. The Chairperson
 indicated her intention to make a br ief statement, under "Other Business", 
regarding consultations on the appointment of ne w chairpersons to the su bsidiary bodies to the 
Council for Trade in Services for 2006.  The representative of Japan  said that his delegation and other 
delegations wished to raise issues concerning Article XXI negotiations with the European 
Communities under "Other Business".   
3. The Chairperson suggested that the agenda be adopted as circulated, with the addition of the 
items raised under "Other Business". 
4. The Council so agreed . 
A. NOTIFICATIONS PURSUANT TO ARTICLES III:3  AND V:7 OF THE GATS 
5. The Chairperson  drew the Council's attention to ten notifications (S/C/N/349-358) from 
Albania pursuant to Article III (Transparency).   
6. The Council took note  of these notifications. 
7. The Chairperson  then drew Members' attention to four joint notifications pursuant to 
Article V:7 (Economic Integration), i.e.:  doc uments S/C/N/359, from Mexico and Nicaragua;  
S/C/N/360, from the EC and Chile;  S/C/N/361, fro m Thailand and New Zealand;  and S/C/N/362, 
from Morocco and the United States.  She proposed th at the Council take note of the notifications, and 
that the agreements notified be referred to  the Committee on Regional Trade Agreements for 
examination.   
8. The Council so agreed.  
B. REVIEW OF AIR TRANSPORT UNDER THE ANNEX ON AIR TRANSPORT – ORGANIZATIONAL 
MATTERS  
9. The Chairperson  recalled that, in accordance with para graph 5 of the Annex, the Council for 
Trade in Services should review periodically, and at least every five years, developments in the air 
transport sector and the operation of the Annex wi th a view to considering the possible further 
application of the Agreement in this sector.  At the conclusion of the first Review on 
                                                      
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/C/M/81 
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  24 October 2003, the Council had decided that the formal commencement of the second Review 
should take place at the last regular meeting of the Council in 2005.  Therefore, the second Review 
had formally started in September 2005.  At th at meeting, the Council had held discussions on 
organizational matters, including preparatory work which should be undertaken by the Secretariat.  
On that occasion, the Council had agreed that th e second Review would be conducted in dedicated 
meetings with the participation of capital-based expert s, following the practice of the first Review.  It 
had also been agreed that the Secretariat would update the background documents circulated for the 
purpose of the first Review.  However, there were three outstanding questions.  And, as indicated at 
the last meeting, she had held various informal cons ultations since last September to try and reach an 
agreement allowing the Council to start its substantive discussion.   
10. She recalled that, concerning the List of I ssues contained in Job 2451 (which had been 
prepared by the Secretariat in 2 000 to structure discussion for the first Review), some delegations had 
expressed concern regarding certain elements containe d in the List, i.e. section II:B ["Operation of the 
Annex for services not directly related to traffic right s"] and part of section II:C ["Identification of the 
possible need for clarified and/or additional di sciplines under the Agreement for services covered 
under A and B above"].  In that regard, it was importa nt to clarify that, as had been the case for the 
first Review, the Secretariat documentation would not deal at all with sections II:B and II:C;  so, it would be essentially for Members to discuss these issues, if they so wished.  On this basis, and after 
consulting with the delegations concerned, she unde rstood that it would be possible to proceed with 
the List of Issues.  Second, delegations had di fferent views on when to start the substantive 
discussion.  The main issue was whether the subs tantive discussion should start only once the full 
Secretariat documentation was available or whet her, as had been the case for the first Review, 
Members could start addressing the first items in Job 2451 and proceed with the remaining items once 
the documentation would become available.  Third,  some Members were of the view that a "work 
plan" should be agreed for this Review, which would entail in particular that Members set an end-date 
and/or determine in advance the number of dedica ted meetings.  Other Members considered this 
would be inappropriate because it would prejudge the outcome of the Review, and were in favour of 
an open-ended process.  After various informal consultations with interested delegations, she 
considered that a possible consensus solution coul d be the following:  (i) the Secretariat would 
produce the documentation by the end of June; (ii)  the first substantive meeting would take place in 
September/October;  and (iii) the Secretariat w ould propose an agenda for Members' discussion when 
the documentation was ready. 
11. The representative of the United States
 thanked the Chairperson for helping delegations to 
find a solution.  Her delegation wanted to add anothe r element to the Chair's proposal, i.e. that before 
holding the first substantive meeting of the second Review, Members should have an opportunity to 
discuss the preparation of a definitive agenda for th e Review, in order to take on board any useful 
contribution coming out of the Secretariat material.  With this understanding clearly reflected by the Chair, the United States could support the Chair's proposal. 
12. The representative of New Zealand
 thanked the Chairperson for holding informal 
consultations.  The solution proposed by the Chai r met her delegation's requirements.  The first 
dedicated session would take place in September/October, after the Secretariat had updated the 
documentation.  The Secretariat would also propose a work plan.  Her delegation had not understood 
that an element of the Chair's proposal entailed that  a definitive agenda would need to be agreed upon 
before the first substantive meeting.  She sought clarification from the United States on this point. 
13. The representative of Australia  thanked the Chairperson for her role in finding a helpful 
compromise. His delegation was of the view that the Review should comprehensively address the 
issues.  His delegation noted the postponement of th e first substantive meeting and reiterated that the 
Review should comprehensively address the mandate to examine the operation of the Annex with a 
view to considering the further application of the GATS in the air transport sector.  He acknowledged,  S/C/M/81 
 Page 3 
 
 
  however, the fact that the Secretariat documenta tion was not going to address this issue.  He 
supported New Zealand's request for clarification con cerning the comment made by the United States.  
Australia understood that the Secretariat, having updated the documentation, would also draft a 
proposed agenda, which could then be discussed among Members prior to the first substantive 
meeting.  However, the agenda needed not be definitive because, as the discussion evolved, new 
issues might need to be added.  It would be a guiding tool to ensure that discussion would be 
productive and focussed. 
14. The representative of the United States  agreed with Australia's interpretation concerning the 
agenda to be proposed by the Secretariat.  Her de legation wanted to see a detailed agenda after having 
received the Secretariat's material. 
15. The representative of the European Communities  thanked the Chairperson for her efforts.  
Her delegation was satisfied with the compromise pr oposed by the Chairperson.  She understood that 
the Secretariat would prepare an agenda, which w ould be discussed by delegations on the basis of 
updated material presented by the Secretariat.  Howe ver, the first substantive meeting should not be 
dedicated to a discussion of the agenda. 
16. The representative of Canada  thanked the Chairperson for her hard work, which led to a 
satisfactory compromise.  He welcomed the clarifica tion regarding the role of the Secretariat in the 
preparation of the documentation.  With respect to the use of Job 2451, Canada's concern was that the 
structure of that document might give rise to so me confusion.  However, as his delegation had 
indicated during the informal consultations, Canada  could support discussion on parts II:B and II:C of 
Job 2451, based on the understanding that these di scussions were placed in the context of the 
consideration of the further application of the An nex on air transport services to other sectors of air 
transport, as stated in paragraph 5 of the Annex.   
17. The representative of the United States  agreed that a discussion on the agenda should not hold 
up the substantive discussion.  However, the Unite d States was interested in having a constructive 
discussion on the agenda before the September/Oct ober cluster, based on the material that the 
Secretariat would provide by the end of June.  Th e United States also hoped that, unlike for the first 
Review, the second Review would be productive and would avoid procedural debates.  She supported 
the statement made by Canada. 
18. The Chairperson  reiterated her proposal and indicated that, in her view, it protected the 
interests of all delegations.  Members would have the opportunity to discuss the agenda proposed by 
the Secretariat before the first substantive mee ting.  She suggested that the Council adopt this 
proposal. 
19. The Council so agreed . 
C. OTHER BUSINESS  
20. The Chairperson  said that, in accordance with the Guid elines for the Appointment of Officers 
to WTO Bodies (WT/L/510), the outgoing chairperson of the Council would normally conduct consultations on the appointment of the new chairper sons of its subsidiary bodies, with a view to 
proposing a list of names for these bodies.  At the meeting of the General Council of 8 February, she 
had announced that she would conduct such consultati ons in the following weeks.  Delegations having 
interest in this matter were invited to approach  her.  Moreover, in accordance with the rules of 
procedure (S/L/15), the election of the new chairper sons of the subsidiary bodies to the Services 
Council should normally take place at the first meeting of the year and should take effect at the end of 
that meeting.  Since these subsidiary bodies had alre ady held their first meeting this year, before she S/C/M/81 
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  could undertake consultations, the election of the new ch airpersons would, therefore, take place at the 
beginning of the next meeting of these bodies. 
21. The Council so agreed . 
22. The Chairperson  opened the floor on the issue raised by  the delegation of Japan under "Other 
Business". 
23. The representative of Japan  said that, in April 2005, the European Communities (EC) had 
notified their intention to withdraw or modify  a number of commitments in document S/SECRET/92.  
In accordance with GATS Article XXI and document S/L/803, fourteen Members had claimed that 
they were affected by the EC proposed modification or withdrawal.  Affected Members and the EC 
started negotiations on this matter, but, unfortunately, were not able to find an agreement within the 
established deadline of 27 August 2005.  The Members concerned then agreed to extend the negotiating deadline until 27 February 2006.  For th at purpose, the EC sent a letter proposing this 
extension to affected Members, which signed it and sent it back to the EC.  Unfortunately, the EC did 
not sign the agreement, did not take any action and let the arbitration period lapse.  Thus, his 
delegation was concerned that the EC did not hold the negotiations in good faith.  Moreover, the EC 
letter containing the proposed extension included th e condition that all affected Members were to 
agree to a single extension for the EC to agree to the extension.  In Japan's view, such a condition, 
which was not stipulated in any document, was unacceptable. 
24. The representative of the European Communities
 said that, all along the procedure, her 
delegation had strictly followed the provisions in cluded in document S/L/80 and had acted in good 
faith.  When the EC proposed to extend the deadline,  they made it clear that it was under the express 
condition that all affected Members should accept the extension and sign the corresponding 
agreement.  Before the expiry of the deadline, one  delegation informed the EC that it was not willing 
to co-sign the extension.  As a result, the EC di d not sign the other agreemen ts and did not send them 
to the WTO Secretariat.  Affected Members knew fro m their past experience that every time all of 
them had signed similar agreements proposed by th e EC, the EC had immediately co-signed them and 
sent them to the WTO Secretariat, which had circ ulated them in the form of a communication from 
each affected Member and the EC.  For example, with  regard to the last extension of the negotiating 
deadline for SECRET/8, which expired on 26 April 2005, communications had been issued on 3 May 
2005.  In this context, affected Members should have been alerted by the fact that the WTO 
Secretariat did not issue any communication and sh ould have realised they had 45 days (i.e., until 
11 October 2005) to request arbitration. However,  none of them did so.  The legal situation was 
therefore clear:  the deadlines for negotiating and for requesting arbitration with respect to the changes 
contained in SECRET/9 had legally elapsed and could not be retroactively re-opened.  However, the 
proposed modifications in S/SECRET/9 were not yet in force since the EC had not yet initiated the 
certification procedure provided for in  paragraphs 20 to 22 of document S/L/80.  Despite the fact that 
the legal procedure had now been exhausted, a nd in order to show once again its good faith, her 
delegation wished to express its readiness to neve rtheless carefully examine any substantive comment 
that any of the previously affected Members woul d still wish to make, in addition to the comments 
already made during the procedure, and respond to  it.  Any such engagement between previously 
affected Members and the EC would be done on an informal basis, exclusively as an exchange of 
information, and would produce no legal effect whatsoever. 
                                                      
2 Supplementary Notification From the European Communities and Its Members States Pursuant to 
Article V of the GATS , 6 April 2005. 
3 Procedures for the Implementation of Article XXI of the General Agreement on Trade in Services 
(GATS) – Modification of Schedules , adopted by the Council for Trade in Services on 19 July 1999.  S/C/M/81 
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  25. The representative of Colombia  said that, in July 2004, his delegation had identified itself as 
an affected Member and had notified its claim of in terest pursuant to GATS Article XXI, with respect 
to the EC notification contained in SECRET/8.  In 2005, Colombia had also identified itself as an affected Member with respect to a new notification filed by the EC in S/SECRET/9.  Colombia then 
withdrew this claim of interest, as expressed in a letter to the EC.  This withdrawal did not prejudice 
Colombia's claim under S/SECRET/8.  Colombia hoped that the EC would facilitate the ongoing 
negotiations and would agree on a way to compensate  Colombia for the modification and withdrawal 
of commitments in terms of goods and services.  His delegation hoped that these negotiations would 
be fair and would take place independe ntly of the Article XIX negotiations.  
26. The representative of Hong Kong, China
 thanked the delegation of Japan for starting out the 
factual situation of the case, and indicated that hi s delegation shared some of the concerns expressed 
by Japan about the procedural aspects of the negot iations under Article XXI in connection with the 
communication S/SECRET/9 from the EC.  His delegation had received from the EC a proposal for 
extending the period of negotiations  to 27 February 2006 and had expressed its agreement to the 
proposed extension.  When accepting the proposed extension, Hong Kong, China had not accepted the 
condition set by the EC.  So, his delegation consider ed it had multilaterally agreed with the EC to the 
extension of the negotiation period .  Even if Hong Kong, China were to accept the condition for the 
agreement, it also did not see the case that the conditions for agre ement should fall through, because 
no affected Member had made known its intention to  go to arbitration.  Therefore, no affected 
Member wanted to cut short the period for negotiations .  In that sense, his delegation was of the view 
that the period for negotiations had been extended by mutual agreement until 27 February 2006.  His 
delegation took note of the statement just made by  the EC with respect to the procedural gap 
concerning the notification of the agreement.  In this regard, there seemed to be a lapse in the 
procedure and his delegation intended to seek furthe r clarification on a bilateral basis with the EC.  
Hong Kong, China recognised that, with S/SECRET/ 9 and S/SECRET/8, it was the first time that 
Article XXI and associated procedures in S/L/80 we re invoked.  So, it was inevitable that Members 
wished to proceed cautiously and that there woul d be questions and differences about the process.  
The on-going negotiations set a precedent for future cases.   So, it was necessary to take a practical and 
pragmatic approach in handling the procedures in or der to set a proper precedent.  Hence, there was a 
significant systemic interest in ensuring that th is first case proceeded in a proper way, not only to 
demonstrate that Article XXI would be practically useable, but also to ensure that Article XXI would not become an easy way-out for ro ll-back of specific commitments.  Hong Kong, China had a number 
of concerns over the whole negotiations and proceed ings under Article XXI, but wished to highlight 
two which had particularly significant systemic implications.   
27. The first concern related to the insistence by the EC on quantifying th e trade effects resulting 
from the proposed withdrawals/modifications of commi tments before affected Members were able to 
enter into discussion concerning compensatory adju stments.  This ignored the fact that GATS 
Article  XXI was constructed differently from GATT Article XXVIII.  This also ignored the 
distinction between the situation on the goods side , dealing mainly with tariffs – which were 
quantifiable measures whose effect on trade could be estimated with available and long-established 
historical data.  In services, by contrast, specific commitments covered a wide range of measures 
aimed at ensuring the legal certainty of the trad ing environment, and most of these measures were 
unquantifiable, either in themselves or in respect of  their correlation with actual trade;  moreover, 
statistics and information on trade were much less available in services.  Hong Kong, China continued 
to hold the view that the sole purpose of negotia tions under Article XXI was to reach agreement on 
any necessary compensatory adjustme nts, in order to maintain a general level of mutually 
advantageous commitments not less favourable to trade than before , in accordance with 
Article XXI:2(a). The key factor was therefore to  maintain the balance of rights and obligations 
among Members. Where withdrawal/modifications of specific commitments took away the legal 
certainty of the trading environment and affected  the terms and conditions of trade, it would be 
incumbent upon the modifying Member to restore the balance of rights and obligations by making S/C/M/81 
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  compensatory adjustments to those affected Member s who would be subject to less favourable terms 
and conditions in their trade under the withdrawn/modified commitments. 
28. Hong Kong, China' second concern related to th e mixing up of Article XXI and Article XIX 
negotiations. In particular, his delegation was concer ned that the offers submitted by the EC in the 
services negotiations under Article XIX containe d changes arising from both improvements of 
commitments offered in the course of negotiations under Article XIX and withdrawal/modification of 
specific commitments that were s till subject to negotiations under Article XXI.  In principle, and in 
practice, the processes of negotiations under Articl es XIX and XXI were entirely separate.  The 
starting point for the negotiations under Article XIX was the existing commitments, which did not 
include the proposed withdrawal/modifications of specific commitments.  The proposed 
withdrawal/modifications of commitments were s ubject to on-going negotiations under Article XXI 
including any necessary compensatory adjustments.  To ensure the separation between the two 
processes, his delegation had requested that a clear indication be made in any draft schedule to 
delineate the changes made pursuant to Article XI X negotiations on the one hand, and changes made 
pursuant to Article XXI negotiations on the other.  So far, this had not been done.  Thus, his 
delegation was concerned with the continued mi xing up of the two processes, and this was 
particularly the case because all Members not involve d in Article XXI negotiations would be dealing, 
in the context of Article XIX negotiations, with an EC offer including roll-back of commitments 
subject to on-going Article XXI negotiations.  He noted that the procedures for implementation of 
Article XXI in document S/L/80 (paragraph 24) provid ed that any Member might request the Council 
for Trade in Services to review the procedures.  His delegation was of the view that the Council might 
have to consider such a course of action in the light of the experience gained in the ongoing 
negotiations and proceedings under Article XXI. 
29. The representative of the United States  shared the concerns raised by Hong Kong, China and 
Japan with regard to the EC's notification contai ned in S/SECRET/9 (+ Corr.1).  While reserving its 
rights under GATS Article XXI and document S/L/80, the United States had file d a claim of interest 
on 12 April 2005 and, subsequently, accepted and sign ed a mutual agreement to extend the period for 
negotiations until 27 February  2006.  The United States believed th at the mutually agreed extension 
should have taken effect regardless of whether all t hose WTO Members with claims of interest agreed 
to such extension.  His delegation had always pro ceeded on that basis.  Nevertheless, the European 
Communities took the position, not found in the rules, that all claimants had to agree to an extension 
of the negotiation period before such extension could take effect.  The EC claimed that Colombia was 
the only WTO Member having initially filed a claim of interest that did not agree to extend the 
deadline of SECRET/9.  The United States understood  that Colombia believed that it had withdrawn 
their claim of interest at the time the mutual exte nsion had been agreed to by the others and had now 
provided written confirmation to that effect due  to confusion about th e EC's representations. 
Moreover, Colombia never proceeded with arbitrati on.  The EC had initiated a written offer to extend 
the period and should have equally informed Memb ers in writing that the offer was no longer on the 
table if they believed that Colombia did not meet the EC's condition.  In addition, paragraph 5 of 
S/L/80 indicated that the modifying Member, in th at case the EC, must send the Secretariat a joint 
letter signed by concerned Members, together with a report, on the results of completed negotiations.  
Paragraph 6 dealt with situations where agreements  were reached.  It appeared that paragraph 5 
"results" would include a report from the EC that it  had not agreed to extend the negotiations on 
SECRET/9.  In light of these factors and Colombia's  confirmation that it had withdrawn its claim of 
interest and that, therefore, all remain ing claimants had accepted the February 27th extension, the 
United States believed, following the EC's position,  that the extension should now be confirmed as 
mutually agreed.  Finally, the Un ited States also agreed with Hong Kong, China and reaffirmed its 
view that Members were not required to provid e the information the European Communities had 
requested in paragraph 6 of S/SECRET/9 as a ground for substantiating a claim under GATS 
Article XXI and S/L/80.  S/C/M/81 
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  30. The representative of Australia  wished to associate himself w ith the interventions of Japan, 
United States, Hong Kong, China and Colombia.  His delegation absolutely rejected the EC 
suggestion that the lack of circulation of the fo rmal agreement by the Secretariat should have made 
Members aware of the failure of the EC to sign such document.  Indeed, Australia's response letter 
indicating its acceptance of the EC's proposed extens ion, and dated 28 July 2005, specifically stated 
that Australia's agreement to extend the negotiatio ns would take effect from the time of the EC 
receiving Australia's mutual agreement, and not upon notification by the EC of that agreement to the 
Secretariat.  Good faith negotiations by the EC require d that their desire to renege on their offer of an 
extension should have been communicated directly  to the individual affect ed Members.  In the 
absence of this, his delegation considered the mutu al agreement to be in place and the deadline for 
negotiations to be extended to 27 February 2006.  Australia looked forward to on-going negotiations 
under Article XXI with the EC on both S/SECRET/9 and S/SECRET/8.  
31. The representative of Korea  shared the views of previous speakers on this issue.  His 
delegation was seriously concerned that no substantial results had b een achieved with the EC with 
respect to the proposed modifications of schedule notified in S/SECRET/8 and S/SECRET/9.  Korea 
wished to register that there should be a clear distinction between market access negotiations under 
Article XIX and negotiations for compensation with  affected Members pursuant to Article XXI.  
Furthermore, his delegation was of the view that the level of compensation should be measured both 
in terms of actual and potential losses affected by the withdrawal.  
32. The representative of Colombia  associated itself with the concerns raised by other Members.  
It was important that in the services area, as in th e area of goods, a balance be maintained between 
obligations and commitments made by Members, and between the rights which Members had after 
negotiations.  Colombia wished to reaffirm wh at his delegation had stated earlier and hoped the 
negotiation process under Article XXI would follow the GATS and the rules of procedures in 
document S/L/80.  
33. The representative of Chinese Taipei  said that, as one of the Members having claimed interest 
in this matter, specifically on th e document S/SECRET/8, his delegation considered that there were 
systemic interests and concerns in the handlin g of the proceedings concerning S/SECRET/8 and 
S/SECRET/9.  As pointed out by the delegation of Hong Kong, China, Members should keep in mind 
the distinction between Article XIX and Article XXI. 
34. The representative of New Zealand  shared the concerns raised by other Members regarding 
the process.  New Zealand had accepted the offer ma de by the EC, there was nothing in S/L/80 that 
distracted from that acceptance and, accordingly, the extension should be granted as mutually agreed.   
35. The representative of Ecuador  thanked the delegation of Japan for having raised this issue and 
wished to share the concerns of the delegations who had already spoken.  In July 2005, the EC had 
made a communication with regard to the extens ion, until 27 February 2006, of the negotiations 
concerning S/SECRET/9.  Ecuador had accepted that  proposal on 26 August 2005.  Therefore, her 
delegation understood that the EC had accepted this  bilateral agreement.  She said that, on two 
occasions, she had spoken over the telephone with EC representatives with regard to the notification 
to the Secretariat and at no point in time did they indicate that they had not accepted this extension.  
So, it was Ecuador's understanding that the extensio n had been accepted, taking into account the letter 
of July 2005.  Moreover, paragraph 4 of the proce dures in S/L/80 stated that the modifying Member 
must begin negotiations in the three months follow ing the claim of interest.  Although Ecuador had 
indicated its availability to begin negotiations, the EC had not met with Ecuador in order to try and 
negotiate an agreement on this issue.  Neverthele ss, Ecuador had accepted in good faith an extension 
of the negotiating deadline, despite the fact that  there had been no negotiation whatsoever.  Her 
delegation could not accept a unilateral interpre tation by the EC.  It was her delegation's 
understanding that this extension had been accepted.   The Legal Division had confirmed that, if a S/C/M/81 
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  Member had not accepted the extension, which w as the case of Colombia, that Member was entitled 
to begin arbitration, but not those Members who had accepted the extension.  So, Ecuador continued 
to wait for the procedures in document S/L/80 to be complied with and the spirit of Article XXI to be 
maintained.  Ecuador would remain available to cons ider this issue and was certain that the EC would 
behave as they should in this process.  This was the first case involving the withdrawing of 
commitments of thirteen Members, as listed in  S/SECRET/8, and a series of commitments under 
mode 4 in the case of S/SECRET/9.   
36. The representative of Argentina  shared the concerns raised by other delegations and hoped 
that the EC would continue the procedure under Article XXI and follow the procedures in S/L/80.  
Argentina had also replied in good faith to the le tter which had been sent out by the EC, accepting the 
extension of the period of negotia tions.  His delegation shared the concerns raised by Hong Kong, 
China with regard to the confusion between the procedure under Article XXI, begun by the EC, and 
the negotiations under Article XIX.  
37. The representative of Canada  shared the systemic concerns th at had been raised by previous 
delegations.  Canada had interest in ensuring that  the Article XXI process was carried out properly.  
38. The representative of Cuba  echoed the concerns expressed by  other delegations.  Cuba had 
sent a letter accepting the extension of the negotiation period and was of the view that this period had 
been extended.  Cuba hoped that the negotiati ons under S/SECRET/9 would be carried out on the 
basis of Article XXI.  
39. The representative of China  said that his delegation was in th e same situation procedurally as 
those Members who had already spoken.  China wa nted to share the concerns expressed by those 
affected Members.   
40. The representative of the European Communities  recognized that all affected Members, but 
one, had accepted the extension of the negotiations  proposed by her delegation.  She insisted, 
however, that her delegation had made it very clear  in the letter that the EC offer was under the 
express condition that all affected Members should accept the extension of the deadline and sign the 
corresponding agreement.  This condition was clear although some of the affected Members did not 
like it.  As this condition had not been met, the EC had not signed the agreement to extend the 
negotiations, and, consequently, there had never been a mutual agreement between the EC and 
affected Members to extend the negotiations.  It was inappropriate to discu ss whether the EC was in 
good faith or not, or who had been personally inform ed or not.  She indicated that she had warned 
personally a number of persons of the situation last July and was ready to reply outside the meeting to 
claims of bad faith.  Her delegation disagreed with  Hong Kong China's interpretation that there was 
absolutely no need to even try to quantify the e ffects on trade resulting from the proposed withdrawal.  
However, the EC was ready to continue this debate  bilaterally with Hong Kong, China.  As for the 
second concern, relating to the EC offer, her dele gation recognized the situation, but had found it 
extremely difficult, if not impossible, to table a cons olidated offer at twenty-five in the market access 
negotiations that would not include changes sugg ested under Article XXI.  It should be noted, 
nevertheless, that the EC proposed withdrawals unde r Article XXI were clear because they had been 
circulated and, therefore, everybody was aware of them.  Hence, her delegation could not accept the argument that the EC was trying to mix both negotiations.  The intention to withdraw or modify 
commitments under Article XXI had been notified and was visible in one single document.  In 
practical terms, it had been impossible to present an offer that would not take on board changes 
suggested as part of the consolidation process.   
41. The representative of the United States
 wished to make a point of order.  Being under "Other 
Business", the Council was not supposed to engage in  a lengthy debate.  The United States wished to 
reserve its right to ask for this issue to be put on the agenda of the next meeting.    S/C/M/81 
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  42. The Council took note  of the statements made. 
D. APPOINTMENT OF THE NEW CHAIRPERSON  
43. The Chairperson  said that, based on the consensus reach ed in the General Council, she was 
pleased to pass on the chairmanship of the Council to  Ambassador François ROUX, of Belgium.  She 
was confident that with his experience and wisdom , Ambassador Roux would guide the future work 
of the Council skilfully and efficiently.  She said th at, as the outgoing chairperson of the Council, she 
had enjoyed working with all Members and had appr eciated their cooperative and constructive spirit 
in fulfilling the mandate of the Council.  She also thanked the Chairpersons of the subsidiary bodies 
and the Secretariat for their co-operation and effort s in supporting her work. She proposed that the 
Council elect Ambassador Roux by acclamation as the new Chairperson of the Council for Trade in 
Services. 
44. The Council elected  Ambassador Roux by acclamations. 
45. The Chairperson  thanked the Ambassador of Colombia for her kind words and congratulated 
her on her election as the Chairperson of the Trade Policy Review Body.  He also wished to thank 
delegations for their trust and suppor t.  He intended to chair the Counc il in the fairest and most neutral 
manner, and counted on delegations ' support and collaboration to m ove work forward smoothly and 
fruitfully. 
46. The representatives of Ecuador , Mexico , United States , European Communities , New 
Zealand , Pakistan  and Dominican Republic  thanked Ambassador Uribe for her work as Chairperson 
of the CTS and congratulated Ambassador Roux on his appointment. 
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