RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/S/W/55 
27 October 2005 
 (05-4977) 
Council for Trade in Services  
Special Session Original:   English 
 
 
 
COMMUNICATION FROM THE EUROPEAN COMMUNITIES 
AND ITS MEMBER STATES 
 
Elements for "Complementary Approaches" in Services  
 
 
 The following communication dated 27 October 2005, from the delegation of the European Communities and its Member States, is being circulated to the Members of the Council for Trade in Services. 
 
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   1. Services negotiations should bring about ne w commercial opportunities / effective market 
access, in line with other areas of the DDA. 
2. The Services Core Group, which met at Minister ial level on 12 October, prepared an issues 
paper, which addresses guiding principles and obj ectives for the negotiations as well as qualitative 
parameters, numerical targets and sectoral nego tiations to ensure a meaningful outcome. 
3. Now is the time to start translating the genera l principles in the issues paper into concrete 
proposals. From the outset it should be clear that th e following targets will not be applicable to LDCs 
and to other small and vulnerable devel oping countries in a similar situation. 
I. TARGET FORMULA 
4. The issues paper refers to quantitative targets re lated to improvements in a certain number of 
sectors/sub-sectors either through new commitmen ts or improvements from existing commitments.  
5. The issues paper refers to lower differential targets  for developing countries compared to 
developed countries.  The basis for targets will be the 163 services sub-sectors as listed in the GATS 
Annex for Financial Services and in the W/120 for all other services.  
A. P
ROPOSED QUANTITATIVE TARGETS :  
(a) Offers of developed Members shall include new or improved commitments in at least 
139 sub-sectors (85 per cent of the 163 services sub-sectors). 
(b) Offers of developing Members shall incl ude new or improved commitments in at 
least 93 sub-sectors ( ⅔  x 139 sub-sectors). TN/S/W/55 
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 B. P
ROPOSED QUALITATIVE PARAMETERS :  
6. The issues paper suggests developing modal qualitative parameters in order to provide 
guidance for the scheduling of new and improved commi tments referred to in Part I.A.  These modal 
qualitative parameters could be as follows: 
(a) Mode 1:  make commitments, without limitations when possible, in commercially 
meaningful sectors and remove commercial presence requirements. 
(b) Mode 2:  make commitments, without limitations when possible, in commercially 
meaningful sectors. 
(c) Mode 3:  make commitments, without limitations when possible, in commercially 
meaningful sectors, and remove or redu ce one or more of the following key 
limitations:  discriminatory economic needs t ests, discriminatory limitations on types 
of legal entity, foreign ownership limitati ons (authorising at least 51 per cent foreign 
ownership). 
(d) Mode 4:  make one or more of the follo wing improved commitments: enhanced 
coverage, removal of economic needs tests,  prescribing length of stay, including in 
those categories de-linked from commercial presence (i.e. CSS and IP). 
II. CAPPING 
7. Only sub-sectors where market access comm itments comply with the following minimum 
qualitative thresholds are considered as de facto  bound: 
Minimum qualitative thresholds:  
(a) Mode 1 : Where technically feasible, no commercial presence requirement that applies 
to the entirety of the commitment of the sub-sector concerned.   
(b) Mode 2 : Where technically feasible, no “Unbound” that applies to the entirety of the 
commitment of the sub-sector concerned. 
(c) Mode 3 : no discriminatory economic needs tests that applies to the entirety of the 
commitment of the sub-sector concerned. 
(d) Mode 4 : no nationality requirement that applies to the entirety of the commitment of 
the sub-sector concerned. 
8. In all their commitments, Members shall gr ant market access conditions that are more 
favourable than the above minimum threshold.  
9. Nevertheless, developing countri es will have the right to declare 18 per cent of the 163 sub-
sectors as sensitive sectors which will be authorised  to escape the minimum threshold.  Developed 
countries will have the right to do so for 10 per cent of the 163 sub-sectors. 
III. SECTORAL TARGETS  
10. The issues paper refers to sectoral approaches allowing for higher levels of ambition in 
specific sectors of interest to Members. In tho se sectors, critical masses of WTO Members would 
make commitments according to Model Schedules, Ch ecklists etc.  In this regard, some Members 
have referred to the Note of the WTO Secretariat on Sectoral and Modal Objectives as contained in  TN/S/W/55 
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 the Chairman’s report to the TNC (JOB(05)/237), as identifying some objectives for a number of 
sectors. 
(a) There shall be negotiations on sectors of interest to Members. 
(b) Developed Members shall participate in sectoral negotiations in at least ¾ of those 
sectors. 
(c) Developing Members shall participate in sectoral negotiations in at least half of those 
sectors. 
(d) A process and procedures should be developed so as to allow all Members to know in 
which of the sectoral negotiations each Member will participate. 
 
 
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