WORLD TRADE  
ORGANIZATION  TN/S/W/51 
23 September 2005 
 (05-4227) 
Council for Trade in Services  
Special Session Original: English 
 
 
 
COMMUNICATION FROM SWITZERLAND 
 
Methodology to assess Schedules of commitments under the GATS  
 
 
 The following communication, dated 21 Septem ber 2005, from the delega tion of Switzerland, 
is being circulated to the Members of the Council for Trade in Services.  
_______________ 
 
SUMMARY 
This paper presents a methodology developed by  Switzerland to assess Members' schedules of 
specific commitments in the framewo rk of the GATS.  This methodology is a quantitative tool that 
makes it possible to translate commitments – either at  sectoral level or for all sectors – into one single 
index between 0 and 100.  The methodology doe s not only measure whether commitments are 
undertaken or not, but it measures the actual density of  restrictions inscribed in the schedule.  It does 
that in great detail, sub-sector by sub-sector and, within each sub-sector, for all modes of delivery.  The index is therefore an indicator of the overall level of commitment in a schedule or in a sector. 
 In practice, the methodology allows to track in detail the improvements made by Members in initial 
and/or revised offers.  The methodology's key adde d value consists in establishing transparency and 
comparability.  Comparative analysis is facilitate d because it is easier to compare two (or more) 
simple figures rather than whole schedules and because those figures are computed on exactly the same basis.  Comparisons can be made over time, i.e. between initial and revised offers, or across 
Members, or across sectors.  
To ensure a neutral approach, the index is computed  with an arithmetic formula.  It is a simple, 
straightforward formula based on the number of limi tations in each mode of supply.  The formula is 
expressed by a coefficient raised to the number of  limitations: the more limitations in a given 
commitment, the smaller the "score" associated with that commitment.  This "score" is then weighted 
with the actual sectoral coverage of the commitme nt to reach an even greater level of accuracy. 
 
The average of the "scores" of sub-sectors form an  aggregated index for every services sectors.  A 
graphic presentation displays the level and the impr ovement of commitments on an aggregated basis 
and for the twelve services sectors.   
Weaknesses of the methodology are highlighted in th e paper.  However, the simplicity of the formula 
and the arithmetically significant and unbiased resu lts obtained make it a convenient, reliable and 
accurate analytical tool.  The transparency obtaine d from this analysis will contribute to promote 
effective liberalisation of international trade in services.  TN/S/W/51 
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 I. INTRODUCTION 
1. This paper aims at presenting the methodology de veloped by the Swiss delegation to translate 
Members' specific commitments into quantif ied indexes in the framework of the GATS.
1 With the 
objective to increase transparency and comparab ility, the methodology allows to assess and compare 
whole schedules of commitments of Members.  The main feature of the methodology is that it is 
formula-based; the formula is a si mple continuous function, which is normalized between 0 and 1.  
The formula takes into consideration each single lim itation inscribed in a sche dule in accordance with 
Art. XX of the GATS.  Then the "score" obtained is  weighted by the coverage of the commitment.  
The outcome is a single index number (between 0 a nd 100) on an aggregated level, either for all 
sectors or on a sector by sector basis.  A graphic presentation displays the level and the improvement 
of commitments.  Since the methodology is formul a-based, it can easily be extended beyond the basic 
formula shown below.  This paper presents such possible extensions and fine-tunes. 
2. It should be underlined that the present methodol ogy is built on the sectoral part of schedules 
only.  Switzerland has worked on an instrument  quantifying horizontal commitments, but research 
thereon still needs to be completed.  For instance, a horizontal index can be devised.  The two indexes 
could then be either multiplied or used in paralle l to get a full analysis of Members' schedules.  
 
II. METHODOLOGY 
 
(a) Terminology used in the methodology 
3. The terminology used in the methodology draws on the structure of document 
MTN.GNS/W/120. 
 
Sector 1. BUSINESS SERVICES 
Sub-sector  A. Professional services 
Group c. Accounting, auditing and bookkeeping 
services  
Category  
(CPC 4 digit code) - Accounting and auditing services 
(CPC 8621) 
Service  
(CPC 5 digit code) - Financial auditing services 
(CPC 86211) 
 
 
(b) Structure 
4. The methodology encompasses 146 non-overlappi ng services sub-sectors and groups.  The 
classification is identical to the Services Sector al Classification List (document MTN.GNS/W/120, 
hereafter "W/120") and is based on the Provisional Central Product Classification List (CPC), except 
for financial, maritime and air transport services.  In those sectors, the Annex on Financial Services, 
                                                      
1 Nothing in the methodology or in the examples shown shall be understood or construed as prejudicing 
Switzerland's or Members' interpre tation of any classification issues, scheduling issues or commitments.  TN/S/W/51 
 Page 3 
 
 
 the Schedule on Maritime Transport Services and a combination of the "W/120" and the Annex on 
Air Transport Services are used.2 
5. For each sector, there are 4 modes of supply an d 2 categories of limitation: market access 
(MA) and national treatment (NT).  Therefore, a commitment in one of the 146 specific group or sub-sector consists of 8 entries.  As a result, a total of 1168 entries exist for each Member.  To each entry 
corresponds a numerical "score" according to the formula detailed below (point c). 
6. In addition to MA and NT restrictions, the methodology discounts limitations of the sectoral 
coverage.  Coverage indicators ar e constructed for each group or sub-sector (point e) and combined 
with their 8 numerical "scores" to fo rm aggregated indexes (point f).  
7. The analysis is performed for existing GATS commitments, the initial and revised offers, 
allowing to track improvements in the offered commitments. 
 
(c) Formula 
8. Each Member's specific commitments are en tered into an excel sheet according to an 
arithmetic formula (continuous function) defined as follows: 
 
   where: 
n = number of scheduled restrictions in one en try (i.e. additional to horizontal commitments and 
restrictions); 
C = any coefficient between 0 and 1.  For practi cal purposes, the coefficient is set at 0.5.  
However, it could be any number between 0 and 1 without altering the arithmetic properties of 
the methodology or the comparability of the results .  The value of the coefficient is not of 
substantial relevance since the same value is used for all schedules of all Members. 
 
9. The formula tries to encapsulate two facts.  First, each limitation to market access and/or 
national treatment is an additional burden for the se rvice supplier.  This can be modelized by taking 
each limitation inscribed in a sche dule into account in the formula. 
10. Second, it is fair to assume that the marginal  burden that falls on the service supplier due to 
each additional limitation is decreasing.  Indeed, im posing one or two limitations compared with "free 
access" does have a great impact for a service supp lier who considers entering a market.  However, 
the additional marginal burden caused by the n
th limitation is not that important given the impediment 
caused by the (n-1) limitations.  This is modelized by the non-linear shape of the formula chosen.  
Unlike the formula, a basic counting system would not reflect this reality.  
11. The simplicity of the formula allows to cal culate indexes for all services sub-sectors and 
groups following a single approach.  Eight numerical "scores" (corresponding to 8 entries) are 
assigned to each Member's commitment according to the formula (see table below).  
 
                                                      
2 The sub-sectors and groups "Other" listed in the "W/120" without  any CPC reference are disregarded, 
since in practice no Member has unde rtaken any commitment. This expl ains why the methodology does not 
encompass the 155 sub-sectors and groups to be found in the "W/120". f(n) = Cn   ∈ ]0,1] TN/S/W/51 
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 Number of limitations Formula-based score 
n = 0 
("none" or "unbound except as specified 
in the horizontal part"3) f(0) = 0.50 = 1 
n = 1 f(1) = 0.51 = 0.5 
n = 2 f(2) = 0.52 = 0.25 
n = 3 f(3) = 0.53 = 0.125 
... ... 
 
12. Where Members chose not to grant market acce ss or national treatment with respect to a 
given mode of supply ("Unbound"), a "score" of 0 is assigned.  In the cases where Members indicate 
"Unbound due to lack of technical feasibility", a "nil " is assigned to the corresponding entry, which is 
not taken into account when calculating the indexes.  
13. If no commitment is undertaken for a given group or sub-sector, all 8 entries are assigned a 
"score" of 0. 
Example (fictive): 
 
 
Sector or Subsector Limitations on Market  Access Limitations on National Treatment 
3. CONSTRUCTION 
AND RELATED ENGINEERING 
SERVICES 
A. General 
construction work 
for buildings 
   
- For one- and two-
dwelling buildings  
(CPC 51210) 1) Unbound due to lack of technical 
feasibility [nil] 
2) None [0.50=1] 
3) None except that: 
- Branches are not permitted. 
- Limits on amount per contract 
are applied. [0.52=0.25] 
4) Unbound except as indicated in 
Part I [=1] 
 1) Unbound due to lack of technical 
feasibility [nil] 
2) Unbound [=0] 
3) None [0.50=1] 
4) Unbound except as indicated in 
Part I [=1] 
 
 
 
                                                      
3 Mode 4 commitments are listed in a positive way in the horizontal part. However, if they were to be 
translated in a negative listing (like horizontal commitments on modes 1, 2 and 3), the inscription "Unbound 
except as specified in the horizontal  part" would become "none". The formula captures the limitations scheduled 
in the sectoral part, which apply in addition to horizontally scheduled commitments and limitations, for all modes of supply. The approach used in the methodology concerning mode 4 is therefore similar to modes 1 to 3: 
the formula is applied for each limitation listed in addition to the horizontal part.  TN/S/W/51 
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 (d) Formula extensions 
14. Because it is formula-based, the methodology can easily be extended in order to fine-tune it 
even more.  Among such possible extensions, the following are of particular relevance: 
(i) For commitments or limitations concerning a limited number of local or sub-federal entities, 
the formula can easily be extended in the following way: 
[(# of entities with n limitations x 0.5n) + (# of entities w/out limitation x 0.50)] 
(total # of entities) 
 (ii) There are cases where a limitation relates only to part of the category or service covered in an 
entry.  This can be taken into account by slightly  extending the formula, along the same lines as for 
locally applicable measures.  In this  case the limitation is discounted on a pro rata  basis based on the 
CPC coverage. 
(iii) If desirable, the formula can also be expanded in  order to take account of different degrees of 
severity of various measures.  It suffices to use a higher C-value (e.g. 0.75) for benign measures (e.g. 
an exam requirement) and a lower C-value (e.g . 0.25) for stringent measures (e.g. a nationality 
requirement). 
 
(e) Coverage 
15. The coverage is defined between 0 and 100,  where 0 means that no commitment is 
undertaken and 100 means that the commitment is a pplied on the full sub-sectoral coverage according 
to the "W/120" list.  Where applicable, the referenc es to the CPC are counted at 5-digit level, which 
ensures a great level of precision.  For example, the sub-sector 10.D.  "Sporti ng and other recreational 
services" (CPC 964) gets a coverage of 100 if the commitment includes the 7 CPC references 96411 
to 96419 (4) and 96491 to 96499 (3) and a value of (4/7)*100 = 57.14 if the commitment only covers the sporting services classified under CPC 9641.  In case s where sectoral limitations are expressed in 
a way that cannot be translated into CPC refere nces, a value of 50 is assigned (i.e. "best guess"). 
 
(f) Indexes and averages 
16. Indexes are computed in the following way: 
• Sub-sectoral and group indexes are constructed using the average of the formula's result for 
the 8 entries, weighed with their coverage indicator; 
• Sectoral indexes are the average of the sub-sectoral indexes; 
• A single global index for the entire schedule of commitments is obtained by taking the 
average of the 12 sectoral indexes. 
 17. The formula being a simple continuous function,  normalized between 0 and 1, it allows to 
compute any type of aggregate average while ensu ring arithmetically significant and unbiased results. TN/S/W/51 
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III. STRENGTHS AND WEAKNESSES OF THE METHODOLOGY 
 
18. The formula is simple and straightforward.  It is flexible since it can easily be extended to 
capture more details.  The arithmetical properties of the formula make it possible to average out, 
aggregate, combine and compare results. 
19. Translated into graphic form, the methodology provides a clear and concise view of (i) the 
sectors which are most committed and (ii) the sectors in which commitments have most improved (see Annex III).  The transparency obtained from this an alysis will contribute to promote effective 
liberalisation of international trade in services. 
20. The comparability of commitments is the most important value added brought about by the 
methodology. 
21. Although there is inevitably an arbitrary component  in this exercise, re sults are statistically 
robust given the large number of entries (law of larg e numbers).  The aggregated indexes are therefore 
reliable. 
22. The methodology does not give more weight to  restrictions of bi gger economic importance 
and does not differentiate between categories of ser vices based on their relative importance in trade.  
However, this is not a severe limitation in itsel f, since the intended use of the methodology is to 
increase transparency of the schedules, not to pro ceed to an economic assessment of the impact of 
trade liberalisation. 
23. The quality of the results rely critically on the quality of the scheduling.  The methodology 
can not – and does not have the purpose to – make poor scheduling more clear and precise. 
IV. RESULTS 
 
24. Results for Switzerland (chapter 1 of the sectoral part of the revised offer) are shown in 
Annex I.  Aggregated indexes for Switzerland's commi tments in force, initial and revised offers can 
be found in Annex II.  A graphical presentati on of these indexes is displayed in Annex III. 
 
V. PROPOSAL  
25. Switzerland proposes to Members to take note of this methodology, to discuss its value and to 
consider its merits.  Members may consider how th ey can best use this ne w tool to enhance their 
overview of commitments undertaken.  Members are encouraged to sh are views on possible 
improvements to this methodology or further extensions (e.g. horizontal commitments). 
 
 
 
  TN/S/W/51 
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 Annex I: Results for Switzerland, chapter 1 (revised offer) 
    
TN/S/W/51 
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 Annex II: Aggregated indexes for Switzerland 
 TN/S/W/51 
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 Annex III: Graphs for Switzerland