RESTRICTED  WORLD TRADE  
ORGANIZATION  S/CSC/M/54 
7 September 2010 
 (10-4598) 
Committee on Specific Commitments   
  
 
REPORT OF THE MEETING HELD ON 2 JULY 2010 
 
Note by the Secretariat
1 
 
 
1. The Committee on Specific Commitments (CSC) held a meeting on 2 July 2010, chaired by 
Ms. Natalie Burke from Barbados.  The agenda fo r the meeting, contained in WTO/AIR/3577, was 
adopted.  
A. RELATIONSHIP BETWEEN OLD AND NEW COMMITMENT  
2. The Chair  recalled that the discussion under this ag enda item had been going on for quite 
some time.  Members had made some progress and had achieved common understanding on certain 
issues, such as:  the replacement method;  no ro llbacks in the new schedules;  and the need for a 
thorough and comprehensive verification exercise.  They disagreed, however, on whether something 
more was needed, in addition to the verification exerci se, in order to prevent ro llbacks.  To enable the 
Committee to build on what had been achieved so fa r and to move forward, she had held extensive 
consultations since the last formal meeting.  From  these consultations, she had noted that delegations 
were generally in favour of starting discussions on the timing, scope and design of the verification 
exercise.  However, delegations c ontinued to have divergent views on the need for particular language 
in the protocol as a means to prevent rollbacks.  It was necessary to think seriously about how to 
bridge the gap. The room document from Canada was a contribution in this direction.    
3. The representative of Canada  stated that in the spirit of moving discussions forward, his 
delegation had circulated to all Members a ro om document reiterating its  views regarding the 
relationship between old and new commitments alo ng with draft protocol language.  Canada hoped 
that its paper would address some of the issues rai sed over the past few meetings regarding protecting 
Members from potential rollbacks and retaining lega l certainty.  Canada continued to support a 
replacement method at the end of the DDA, wh ich would allow new schedules to replace old 
schedules, but believed that this should be without  prejudice to Members' legal rights under previous 
commitments.  As expressed previously, Canada's pe rspective was that under Article 32 of the Vienna 
Convention, the existing (old) schedules could be referred to as supplementary means of 
interpretation;  in other words, they were part  of the negotiating history, but could only shed 
additional interpretive light on the meaning of the co mmitments in the new consolidated schedules.  If 
Doha commitments replaced commitments from the Uruguay Round or accessions with no 
preservation of old commitments, the Vienna Conv ention might limit Members' recourse to the old 
commitments only to cases where the "ordinary mean ing" could not otherwise be determined.  In 
other words, the Convention would likely allow Memb ers to refer to old commitments in cases where 
the ordinary meaning was not clear (Article 32), bu t would not likely to allow Members to do so in 
interpreting the ordinary meaning of commitments in their context as a general rule of interpretation, 
since the old commitments would no longer be part of the WTO agreements (Article 31).  Although it 
was clear that a Member should initiate an Article  XXI procedure when it intended to roll back an 
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. S/CSC/M/54 
Page 2  
 
  existing commitment, the typical outcome was th e negotiation of a compensation package with 
affected Members in other areas of the Member's schedule.  Canada's proposal would go one step further and provide affected Members with the ab ility to formally seek legal recourse for a reduced 
level of commitment, which could, if upheld by a Pa nel, result in the reinstatement of the previous 
commitment (or alternatively, would allow Member s to impose a retaliatory measure of equivalent 
commercial effect).  In this regard, Canada's pape r was proposing a specific approach to be taken in 
the Protocol to ensure that commitments under th e Doha Round were not reduced in relation to pre-
existing commitments.  Thus, should a rollback be  identified, inadvertent or not, Members would 
retain their legal rights concerning the old commitment.  
 
4. The representative of Switzerland  stated that his delegation supported the replacement method 
for practical reasons.  It was not a legal concept and was therefore devoid of any legal effects.  
Members' rights and obligations were ultimately determined by their schedules of commitments.  The 
verification of new schedules and the introduction of particular language into the Protocol were two 
separate issues, each with its own role and func tion.  The verification exercise did not reduce the 
usefulness of protocol language and vice versa .  One objective of the verification exercise was to 
ensure the accuracy and clarity of commitments in  line with the Scheduling Guidelines contained in 
document S/L/92.  Another objective was to reduce th e possibility of deterioration of commitments.  
Protocol language, however, clarified the relations hip between new and old commitments on the basis 
of Article XIX.  Switzerland welcomed the prop osal from Canada and fully supported it.  The 
language proposed by Canada would leave no doubt about the interpretation of Article XIX and could 
ensure that existing rights and obligations would no t be affected by the new schedules.  The proposal 
concretized this objective in a precise and judi cious manner as had also been advocated by 
Switzerland in its submission S/CSC/W/56. 
5. The representative of Australia  stated that the role of verifica tion would be central in avoiding 
rollbacks.  There were three main  issues:  the timing, the actual process of verification, and the 
associated protocol that might be necessary to deal w ith rollbacks.  On timing, the proposal made by 
Pakistan previously for a 3-6 month period woul d be the minimum necessary to complete the 
technically complex task. On process, Australia ha d made suggestions along the following lines:  the 
Secretariat would circulate the draft final schedules  to kick off the verification process;  Members 
would independently review these drafts and then  meet bilaterally to ensure that concessions 
negotiated were correctly reflected;  Concurrently, sect oral plurilateral negotiations could be held to 
exchange information focusing on rectification i ssues and individual Members' schedules;  groups 
such as the CSC could look at any other outstandi ng issues towards the end of the process.  With 
respect to protocol language, Australia welcomed the Canadian proposal and was carefully examining 
it, particularly the issue of the relationship betw een old and new schedules in the context of possible 
rollbacks.    
6. The representative of Pakistan  first addressed the issue of verification.  Members would need 
sufficient time to conduct the ve rification exercise in services.  This was particularly true for 
developing country Members.  In this sense, Au stralia's proposal had some merits.  One positive 
element was to establish a small group to work in  conjunction with the Secretariat to examine and 
resolve outstanding technical corrections.  This coul d be done in the CSC or the CTSS.  The language 
proposed by Canada was comprehensive; Pakistan full y supported it.  It would help avoid rollbacks.  
He suggested, however, that the term "may be" in  the proposed text ("no benefit accruing to services 
or services suppliers of any Member from existing commitments may be adversely affected by the 
entry into force of the new Schedules of Speci fic Commitments (Schedules) annexed to this 
Protocol") be changed into "sha ll be".  Regarding the proposed discussion on rollbacks, his delegation 
was not aiming at an exact definition of rollback, whic h would be very difficult.  Rather, it intended to 
define some parameters or even illustrative lists to demonstrate what types of instances could be 
regarded as rollbacks.  Regard ing the Chairperson's suggestion in the Annotated Agenda, his 
delegation was not yet in a position to come up with  written proposals.  If the Committee could have  S/CSC/M/54 
 Page 3 
 
 
  discussions along the lines just mentioned, his delegation might put forward a written proposal at a 
later stage.   
7. The representative of the United States  considered that the idea of protocol language might be 
premature since a robust verification might suffice to  prevent rollbacks.  Therefore, his delegation 
welcomed in-depth discussions on the verification process.  The Canadian proposal seemed to allow 
for the possibility of having two sets of documents alive in certain aspects at the end of the Round 
and, thus, might create legal uncertainty.  There were some creative ways to provide Members sufficient time to review schedules.  For example, the previous proposal from Japan raised the idea of 
different time periods, including one period afte r the conclusion of the verification process.  
According to this proposal, if certain problems we re identified during that period, they might be 
properly addressed.   
8. The representative of Turkey
 noted that the common objective of Members was to achieve a 
higher level of liberalization and prevent potentia l rollbacks in the new schedules.  Her delegation 
supported the replacement method.  However, th e new schedules should not reduce the level of 
commitments that had been undertaken.  If both old and new schedules were in  effect and had legal 
value, that would create confusion in interpreting th e legal validity of schedules.  Therefore, once the 
new schedules had been agreed upon and adopted, the old ones should be completely replaced.  
Finally, Members should refrain from defining rollback.   
9. The representative of the European Union  reiterated her delegation's support for the 
replacement method whereby the old schedules w ould lose all legal value once the new ones had 
entered into force.  The new schedules should not contain rollbacks.  However, not all rollbacks might 
be identified in the verification exercise.  Therefore,  it was necessary to include particular language in 
the protocol as an "insurance policy" against ro llbacks.  Her delegation welcomed the Canadian 
proposal in this regard.  While supporting the unde rlying idea, the European Union wondered how to 
interpret the following elements in the proposal:  " no benefit accruing to services or services suppliers 
of any Member from existing commitments may be adve rsely affected by the entry into force of the 
new Schedules of Specific Commitments (Schedules) a nnexed to this Protocol" as well as " ... the new 
Schedule not reducing the level of any commitment included in the previous Schedule".  Therefore, 
the meaning of rollback needed to be discussed in  the Committee to provide legal certainty in the 
interpretation of new schedules.  For instance, woul d it constitute a rollback if the benefits of some 
service suppliers were affected?  Or was any reductio n of any level of commitments considered to be 
rollback?  On verification, the European Union agr eed that 3-6 months would be the reasonable time 
period to identify any rollbacks and supported the Australian proposal to establish a small group to 
work in conjunction with the Secretariat to examine and resolve outstanding technical corrections.  Cases of rollback should be notified to the Secretar iat and made known to Members.  The Secretariat 
could keep record of all rollbacks and the Me mbers concerned should modify their schedules 
accordingly.  Plurilateral negotiations  could be held in case of disagreement and the Secretariat could 
provide technical assistance in resolving outstanding issues.   
10. The representative of China
 stated that the verification pro cess was a vital tool in preventing 
rollbacks.  Considering their capacity constraints,  developing Members had su bstantial concerns over 
their ability to deal with the enormous amounts of in formation in this process.  China, therefore, 
encouraged delegations to address these concerns in  the course of discussions.  On the timing, scope 
and design of the verification exercise, China welcom ed some Members' suggestions.  It seemed to be 
a rational and practical idea to have specific langua ge in the protocol to prevent rollbacks as long as 
Members could be certain about the legal implicat ions concerning the status of both old and new 
schedules.  Regarding the Canadian proposal, China supported the idea that the use of a replacement 
method should be without prejudice to Members' legal rights under previous commitments in the 
event of an identified rollback.  However, with r espect to the specific text proposed by Canada, the 
use of "reduced level of commitments" to refer to rollbacks would require clarification.  Also, China S/CSC/M/54 
Page 4  
 
  supported Pakistan's and other de legations' suggestion of discussing common elements of what might 
constitute rollback.   
11. The representative of India
 supported a thorough verification exercise and the insertion of  
specific language in the protocol to prevent rollb acks.  The relevant time frame would depend to a 
large extent upon the final contours of the verification exercise.  However, it had to be longer than in 
the Uruguay Round because of the increased complexity .  Also, the limited resources available with 
developing countries would need to be kept in mind.  The exercise would not only help to check technical accuracy but also detect rollbacks.  Regarding the Australian suggestion of establishing a small group, India would be willing to engage in constructive discussi ons in any format in order to 
design the contours of the verification process.   
12. With respect to the relationship between ol d and new commitments, India welcomed the 
Communication from Canada.  It was in the process of examining the legal implications of each of the 
proposals on the table before taking a final view.  While agreeing that the objective should be to prevent rollbacks, India recognized that it would be u seful first to have some technical discussions on 
what constituted rollback as pointed out by Pakistan and some other delegations.  It was not clear how 
to prevent something without having some basic idea  of what that was.  The mandate of Article XIX 
was to achieve a progressively higher level of libera lization, which could be interpreted in various 
ways.  Similarly, if talking about "reduction in the level of commitment" as mentioned in the Canadian Communication, the issue was how to defi ne this term.  India understood that it might not 
be possible to arrive at a strict definition of rollb ack; substantial elements of it would have to be 
determined on a case-by-case basis.  Since rollback had not been an issue in the previous verification 
exercises, there was no guidance available.  However,  it would still be beneficial to have a discussion 
amongst Members, without finger pointing, and to outline some common broad parameters or shared 
understanding of what rollback would mean.  For example, would the focus be on overall 
improvements in a particular sector or sub-sector or on line-by-line comparisons of new and old commitments?  How could "improvement" be defined and how could the cases be treated Secretariat 
had cited in the earlier meetings i.e, what if an  economic needs test (ENT ) without specific criteria 
was replaced by a numerical ceiling?  Would it be rollback or not?  This discussion would help 
Members avoid inadvertent instances of rollback in their schedules and, thus, reduce scope for future 
litigation.  Regarding the suggestion in the Annot ated Agenda about written proposal concerning the 
definition of rollback, India echoed the statement of Pakistan that the starting point should be extended discussions among Members to identify the contours of the concept.
   
13. The representative of Chile  noted the consensus to intensify th e work related to verification.  
It was desirable for the Committee to lay down a roadmap of the verification process in the near 
future.  Australia's proposal in this regard was very useful.  With respect to the possibility of 
introducing particular language into the protocol  to prevent rollbacks, Ch ile remained concerned 
about the interpretative implications.  These conc erns were confirmed by the Canadian proposal 
which implied that two sets of schedules might be valid at the same time.  This could generate 
interpretation problems, in particular with resp ect to the new schedules which were supposed to 
replace the old schedules.  In addition, the usefulness  of paragraph 2 of the text proposed by Canada 
was not clear, as Article 1.1 of the DSU alrea dy allowed for the recourse to the WTO dispute 
settlement mechanism.  To define rollback or ev en to determine main parameters was a complex 
exercise with uncertain outcome.  The Committee s hould rather focus on the verification exercise on 
which there was consensus among Members.  
14. The representative of New Zealand  concurred that three to six months might be required for 
verification.  Noting the huge amount of work involved, she suggested that small interest groups be created either plurilaterally, in the CSC or the Sp ecial Session of the Council.  New Zealand also 
supported specific protocol language to prevent rollb acks, since relevant cases might not be noticed 
during the verification process.  New Zealand th anked Canada for its pr oposal and had provided  S/CSC/M/54 
 Page 5 
 
 
  detailed comments.  She reiterated some concerns regarding the Swiss proposal, which could give rise 
to uncertainty in relation to the new schedules.  New Zealand looked forward to further discussion as 
the proposals were heading in the right direction, i.e. of having anti-rollback language in the incorporating protocol.   
15. The representative of Argentina
 agreed that the work of the Committee should focus on 
designing the verification process.  On the time fram e, he echoed the India's suggestion of taking into 
consideration the need of developing country Member s.  As a matter of principle, Argentina agreed 
that there should not be any rollbacks in the new schedules, but it was still examining the need for 
protocol language along the lines of  Canada's proposal.  Noting that  Members were still waiting for 
progress in the negotiations on Agriculture and NA MA, Argentina wondered why there was need to 
agree on a legal guarantee of "no less favourable treat ment or no rollbacks" in the area of services, 
when it was not provided in other areas, particular ly in Agriculture. If such guarantee was to be 
introduced in services, it should also be provided in  other areas.  More specifically with respect to 
Canada's proposal, he suggested that the first paragr aph of the preamble regarding the objective of the 
negotiations be amended in the light of Article XIX of the GAT S, paragraph 25 of the Hong Kong 
Declaration and paragraph 15 of the Doha Decl aration.  These provisions established that, inter alia,  
the purpose of the negotiations in services was to pr omote the economic growth of all trading partners 
and the development of developing and least-developed country Members. 
16. The representative of Mexico  noted that Canada's proposal had addressed a number of 
concerns previously expressed by Members, partic ularly those concerning possible rollbacks.  She 
saw the merit of referring to the dispute settlement mechanism in the proposed text.  The discussion 
on verification should continue, including the issue of  timing which remained to be decided.  While 
supporting the idea of setting up a small group for the ex ercise, Mexico wanted to further look into the 
details.  Regarding the definition of rollback, she agreed that it was complex and needed to be 
addressed on a case-by-case basis.    
17. The representative of Japan  first addressed the issue of verification.  The time period for the 
exercise should be sufficiently long, at least longer than in the Uruguay Round.  However, it could be 
decided only in relation to the overall negotiating pr ocess.  Japan supported Australia's idea of setting 
up a small group to address issues arising from the verification exercise.  With respect to protocol language, he noted that many Members had expressed their interest in having specific language in the 
protocol to prevent rollbacks.  There were four  points in common between Japan's proposal and the 
one from Canada:  inclusion of specific language in  the protocol;  no acceptance of rollback;  the 
application of the replacement method;  and confirmation that, if a new commitment provided 
treatment less favourable than the existing commit ment, the latter should apply.  However, he had 
three questions on Canada's proposal.  First, shari ng China's concern on the wording "reduced level of 
commitments", he asked whether it would be bette r to use a more general expression such as "less 
favourable than existing commitments".  Second,  he sought Canada's vi ew on how to measure 
rollback, in general or line-by-line.  He favoured th e latter option.  Third, he enquired why there was 
no reference to Article XXI in the proposed text.  Noting that a number of de legations mentioned their 
concerns on legal uncertainty that might be created by specific protocol language, he pointed out the 
two types of concerns.  One derived from the lack of definitional clarity of what constituted rollback.  
He reiterated that it was no use having discussion on th e definition of rollback as suggested in Japan's 
proposal.  Holding consultations by concerned Members on a case-by-case basis was the appropriate 
solution.  The second type of concerns arose from th e possibility of having two valid schedules at the 
same time.  Japan believed that after the entry in to force of the new schedules, the old schedules 
would no longer be valid.  Since there would be no co-existence of old and new commitments, there 
was no reason for such concerns.   
18. The representative of Thailand
 sought clarification from the S ecretariat on the follow issue:  
in the absence of additional language in the prot ocol, could the dispute settlement mechanism be S/CSC/M/54 
Page 6  
 
  employed to deal with rollbacks in schedules,  particularly based on Articles XIX and XXI?  
Regarding the verification exercise, he noted the ob jective to improve technical accuracy of schedules 
and to identify potential rollbacks.  It was the r esponsibility of the Members concerned to carry out 
rectifications and then submit final schedules.  He suggested that the Secretariat circulate a draft outline of verification procedures so as to help Members have a more focused discussion.  Such a 
draft could be based on past practice in the Urugua y Round with appropriate adjustments, taking into 
account views expressed in previous discussions.  Th e draft could include brackets when necessary.  
A graphical flow chart clearly depicting procedural stages would be very helpful for Members to have 
a better understanding of the issue.  
19. The representative of El Salvador
 made the statement on behalf of Guatemala, Dominican 
Republic and her delegation.  Th ese delegations took note of Australia's proposal on verification as 
reflected in paragraph 6.a of the Annotated Agenda.  They believed that the exercise could enable the 
resolution of technical questions on scheduling an d should take into account developing countries' 
capacity of participation.  While  thanking Canada for its  proposal, these delegations did not think it 
necessary to include particular language in the prot ocol.  The discussion on this issue was premature.  
It would be more appropriate to focus on how to organize the verification exercise to ensure its 
efficiency in addressing any possible problems, such  as rollbacks.  Article XIX was sufficiently clear 
to guide Members in dealing with such cases.  
20. The representative of Colombia  noted that past discussions under this agenda item had 
focused on whether or not there should be particul ar language in the protocol and if so, how the 
language should be drafted.  Consensus had emer ged on the replacement method.  Recent discussions 
had moved on to a new phase focusing on verification.  Colombia supported work in both areas to 
achieve certainty and predictability of commitments .  For developing countries, this also meant 
greater confidence in the outcome of negotiations.  Regarding verification, it was important to start 
substantive discussions right now so as to enable Members to organize the exercise.  Colombia was 
willing to participate in any group to be set up fo r the purpose of verification, on the assumption that 
it would discuss rollbacks as well as the relationship between verification in services and in other 
areas.  However, Colombia still wanted to  know how discussions in a group would be 
multilateralized.  Canada's proposal would help the Committee have a more focused discussion.  The 
context, the scope, and the legal consequences of rollbacks, as suggested by Canada in its proposed 
language, needed to be part of the ongoing work  in the Committee.  Colombia, however, was 
concerned about the consistency of  Canada's proposal with the WTO dispute settlement system.   
21. The representative of Nigeria  stated that, if delegations started from the premise that the 
objective was to prevent rollbacks, it would be l ogical to develop a common understanding of what 
constituted rollback.  In this context, legal ce rtainty was needed and discussion on the issue of 
rollback would be very helpful.  Regarding the ve rification exercise, which was also linked to the 
issue of rollback, capacity constraints of developing countries should be taken into consideration and 
more discussion was needed in this regard to ensure  that the desired result would be achieved.  With 
respect to the relationship between old and new commitments, while the legal implications were 
important, the basic assumption was that new commi tments took precedence over old commitments.  
This was the objective of the replacement method.  Commenting on Canada's proposal, he agreed on 
the points made in paragraphs 6 (there should be  no rollbacks in new schedules) and 7 (the common 
understanding of the desirability of, and the need for,  an effective verification process).  With respect 
to the proposed text, he shared the views of some other delegations that the wording "reduced level of 
commitments" required clarification.  He also sought  clarification on the last sentence of paragraph 9 
of Canada's proposal.   
22. The representative of Brazil  stated that his delegation was still examining the need for 
specific language in the protocol, as it had concerns  over legal uncertainty that might be created by 
such language.  His delegation was willing to have further discussions on this issue.  Regarding  S/CSC/M/54 
 Page 7 
 
 
  verification, the exercise should be as thorough as po ssible, taking into consideration the constraints 
of developing countries.  Australia's proposal for se tting up a small group required further deliberation 
on the role and composition in order to avoid having  a biased group which only reflected the interest 
of certain Members to the detriment of that of the whole membership.   
23. The representative of Singapore  stated that her delegation supported a thorough verification 
exercise.  A period of six months for this purpo se was reasonable.  The exercise would necessarily 
entail discussions on the definition of rollback.  Th e term "rollback" did not exist in the GATS, but 
the term "progressively higher level of liberalization"  was used in Article XIX.  Regardless of which 
terminology was used, it was a broad agreement that there should be no reduction of existing 
commitments.  Specific language in the protocol to this effect was a back-up measure to ensure this 
objective.  Whether or not such language was need ed might depend on how the verification procedure 
would be organized.  Her delegation noted the concerns that the inclus ion of particular  language in the 
protocol could add an element of uncertainty on th e exact scope of new commitments.  Singapore was 
still considering this issue and would address it at a later stage.   
24. The representative of Pakistan  reiterated that it was impossible to have an exact definition of 
rollback, but there should be some criteria or cer tain broad parameters to be agreed upon among 
Members.  This meant that discussions were need ed to achieve shared understanding in written form 
at the end of the current round.  This was necessar y because with the current negotiations in services 
would produce new schedules which would not have exactly the same language or terminology as the 
old schedules.  In Agriculture and NAMA the outco me of negotiations would not change anything 
except bound tariffs;  the HS codes and the descripti ons in schedules would remain the same.  In the 
new services schedules, however, even if the CPC co des remained the same, there would be changes 
in descriptions of market access and national treatme nt limitations.  Additional commitments might be 
changed as well.  This meant that there might be s ituations requiring clarification, even if rollbacks 
were not intentional.  Therefore, there was a need to have agreement on the parameters of rollbacks.  
With appropriate parameters, it would be much easi er to determine the meaning of, for example, the 
term used in Canada's proposal "reduced level of commitments", or language such as "benefits 
accruing to services and service suppliers".  He not ed that in other areas, such as anti-dumping and 
safeguard, "injury" was always examined on a case-by-case basis, but there was a certain understanding of the parameters that constituted "injury".  A similar understanding or even an 
illustrative list of rollbacks in services would be very  helpful for potential dispute settlement, as they 
would provide guidelines for determining rollbacks on a case-by-case basis.  Such parameters and 
protocol language would compleme nt and clarify each other.  Recalling the Hong Kong Declaration, 
which stated that the services schedules were to be  submitted three months after the agreement on the 
modalities in Agriculture and NAMA, he sought clarif ication on its implications at this stage.  
25. The representative of Turkey
 reserved her delegation's right to make comments on the 
Australian proposal. 
26. In responding to the statement by Pakistan, the representative of Chile  opined that even to 
determine only the parameters of rollback was a complex exercise, because services commitments 
were of a diverse nature.  Parame ters would ultimately be used to deal with concrete cases where 
specific features of regulations needed to be examined  in order to determine whether or not there were 
real rollbacks.  The process of establishing parameters might lead to setting up certain undesirable 
standards or rules.   
27. The representative of Malaysia  supported the replacement method and favoured a longer time 
period for the verification process.  With regard to the Canadian proposal, her delegation had some 
reservations on the language concerning rollback.  Referring to the statement by Pakistan, she saw the 
possibility of having an illustrative list of rollbacks.  Finally, she questioned the need for paragraph 2 
in the protocol text proposed by Canada re garding recourse to WTO dispute settlement.   S/CSC/M/54 
Page 8  
 
  28. Referring to the statement by Pakistan, the representative of India
 said that if Members did 
not develop some broad understanding of rollbacks,  they might run the risk of giving too much 
discretion to panels in the future .   
29. The representative of Indonesia  supported the statements made by Pakistan and India.  It was 
important to have a common understanding of what constituted a rollback.  Based on this, verification 
would be a more predictable process.  The preventio n of rollbacks would also be easier.  He suggested 
that more time be given to developing countries  to conduct the verification exercise, given its 
burdensome nature.   
30. The representative of the European Union  stated that it was important to have a definition or 
parameters of rollback.  Otherwise, it would be for di spute settlement panels to decide.  In the area of 
subsidies, what constituted "injury" was even described  in the agreement.  With respect rollback, quite 
a number of elements needed to be clarified.  For example, concerning the proposed language in 
Canada's proposal - "no benefit accruing to servi ces or services suppliers ... may be adversely 
affected..." - one might ask whether each individual service supplier would be protected and to what degree.  In addition, resort to dispute settlement needed a sound legal basis. 
31. The representative of the Secretariat
 made three points in respondi ng to delegations' enquiries.  
First, the DSU could be invoked when a complaint was made concerning a Member's violation of its 
obligation(s) under one of the "cove red agreements", including the GATS.  Article XX:3 of the GATS 
provided that schedules of specific commitments form ed an integral part of the Agreement.  The 
protocol was a legal instrument giving legal effect to the results of the Round.  Once it entered into 
force, it becomes an integral part of the GATS toge ther with the schedules annexed to it.  If a Member 
considered that another Member did not comply with  its obligations under the protocol or its annexed 
schedule, that Member was in a position to have recourse to WTO dispute settlement by invoking the 
DSU.  Like in any dispute, the complaining party would have to demonstrate that a measure taken by 
the defending party was inconsistent with the la tter's obligation(s) under the GATS.  Regardless of 
whether there was any specific reference to disput e settlement in the protocol, the possibility of 
resorting to dispute settlement existed as long as th e protocol had entered into force.  Second, 
concerning specific language in the protocol, the term  " benefits accruing to ... " was a legal concept 
established in WTO/GATT jurisprudence and was refe rred to in Article XXIII of the GATS.  Third, 
concerning the timing of the verification process, the timeline set out in the Hong Kong Declaration might not provide sufficient guidance.  The procedural framework should be decided upon in accordance with the substan ce it needed to serve at the end of the Round.  Members should consider 
how much time was required to get work done w ith overall coordination provided at the TNC level 
where the whole DDA package would probably be cont ained in one final instrument.  Another issue 
that needed to be considered w as whether the verification exercise should be carried out before or 
after the conclusion of the negotiations.  In the past, it had always taken place after the formal 
conclusion of the negotiations.  The function of the exercise then had been mainly to verify the 
technical accuracy of schedules and their consistency with the scheduling guide lines.  In the current 
Round, Members would wish to ensure that what had been negotiated was accurately reflected in 
schedules and that none of the technical rectifica tions to old commitments entailed any substantive 
alterations of commitments.  
32. In responding to comments receiv ed, the representative of Canada
 stated that his delegation 
would reflect further on specific drafting suggestions .  In essence, the proposal was meant to maintain 
legal certainty of existing rights on the entry into for ce of the new schedules.  It was to ensure that old 
commitments could be referred to for legal purposes,  such as dispute settleme nt, even in cases where 
there was no ambiguity in the wording of new commitm ents.  With respect to the definitional concept 
of rollback in the proposal - "reduced level of co mmitments" - he noted the term used in the GATS:  
"level of liberalization".  Commitments represented certain levels of liberalization and it made sense 
to refer to "maintain or reduce level of commi tments".  Every specific commitment should be  S/CSC/M/54 
 Page 9 
 
 
  respected.  Regarding the paragraph referring to dispute settlement in the proposed text, it was 
intended to provide legal certainty about implicatio ns should a rollback be identified.  It was made 
clear that when the level of a commitment was redu ced, the new schedule had to be amended, i.e. to 
be deemed to include the same level of that par ticular commitment, as Members' existing rights under 
that commitment had to be preserved.  If there was disagreement on this point, certain way was 
needed to adjudicate the matter, which was the dispute settlement mechanism.  If Panels or the 
Appellate Body confirmed the existence of rollback, the protocol would then apply, which indicated 
that the level of that commitment was deemed to be  included in the new schedule.  This was not to 
distract from Members' right to invoke Article XXI to amend their schedules in the future.  The 
proposal did not refer to Article XXI because there was no need.  
33. With respect to the verification exercise, Canada preferred a thorough process to be 
conducted prior to the conclusion of the Round.  While Members were responsible for their own 
schedules, the Secretariat would have an important role in the process.  Canada was open as to how to conduct the process, including the possibility, as pr oposed by Australia, of setting up a small group 
for this purpose. 
34. The Chair
 noted that Canada's proposal had stimulat ed the debate on protocol language.  The 
Committee needed to continue discussions, includi ng in informal consultations, as a number of 
delegations had expressed concerns on the proposed la nguage.  With respect to verification, there was 
a certain level of agreement on the design, scope and timing of the exercise.  Some  favorable 
considerations were expressed on Australia's propo sal for setting up a small group for this purpose.  
She also noted repeated requests that developing coun tries' constraints in participating in the exercise 
be taken into account.  On the issue of rollback, si nce there were divergent views on whether and how 
it should be addressed in the Committee, further cons ultations were needed.  In order to facilitate 
future discussion, she suggested th at the Secretariat prepare a road map identifying the possible steps 
to be followed in the verification exercise, taking into account past practice and recent discussions.   
35. The representative of South Africa  stated that his delegation remained concerned about the 
idea of setting up a small group for the purpose of verification, their formation, status and how it 
would work.  Further discussion was needed on th is idea before any decision could be taken. 
36. The representative of Brazil  echoed the above statement made by South Africa.  
37. The representative of Nigeria  stated that in case a small group was to be set up, it should be 
open-ended; any Member could participate so as to  ensure transparency.  In addition, the report 
produced by the group should not be legally binding.   
38. The Chair  reiterated the suggestion that the Secr etariat prepare a roadmap identifying the 
possible steps to be followed in the verification exer cise.  She also suggested that the Committee take 
note of the statements made and revert to this agenda item at its next meeting.   
39. It was so agreed . 
B. CLASSIFICATION ISSUES  
40. The Chair  stated that she had held consultations on how to revive work given that there had 
been no discussion under this agenda item for nearly  three years.  Her consultations had focused on 
the idea of holding informal discussions, on a se ctoral basis, of possible gaps between W/120 and 
market realities.  The Annotated Agenda suggested some perspectives from which this issue might be 
addressed.  The objective was to help Members recognize the possible implications of sector 
definitions they might inscribe in their schedules and motivate them to increase the accuracy and 
clarity of their commitments.   S/CSC/M/54 
Page 10  
 
  41. She recalled that a proposal had been made rece ntly that the Committee explore classification 
issues raised in the sectoral Background Notes prepar ed by the Secretariat, with a focus on those 
services that were not clearly reflected in W/120.  The Annotated Agenda referred to some examples 
in this regard as identified in various sectoral pa pers.  Delegations had r esponded positively to this 
proposal in consultations.  She inv ited delegations to consider how to  proceed with this exercise in 
terms of sectors subject to discussion, order of pr iority, record of discussions, and other elements 
relevant to this exercise. 
42. The representative of China Taipei
 stated that, while Members were encouraged to use W/120 
and the CPC provisional to schedule their commitm ents, there had been significant developments 
related to CPC version 2.  W/120 had been prepar ed at the beginning of the 1990s to facilitate the 
services negotiations in the Uruguay Round.  Whil e not taking position on whether any parts of 
W/120 were outdated, he suspected that CPC versi on 2 contained significant changes compared with 
CPC provisional.  Otherwise, there would have been no need to develop it.  He suggested that experts 
be invited to give a presentation on changes invol ved to enable delegates to identify classification 
issues for further discussion, in particular those with  implications for the current negotiations.     
43. The representative of Japan  noted that quite a number of Members had made commitments on 
services which were not specified in W/120 or CP C, for example Japan's commitments on freight 
forwarding services.  The model schedule of mariti me transport services provided the definition of 
freight forwarding services, which had  then been us ed in Japan's schedule.  Similar practices could 
also be used in other sectors, reflecting the fl exibility of the GATS.  Due to developments in 
information and communication technologies, there we re gaps between market reality and W/120 or 
CPC.  In addition, there was a need to clarif y the category of "other" services in W/120.  Some 
Members had argued that lack of clarity on "other" computer-related services had become an obstacle to making commitments.  However, it was not pract ical to reach agreement on a new definition of 
such services or some other sectors.  Members should think of other ways of capturing the new reality.   
44. The representative of Chile
 stated that some detailed analysis of classification issues could 
based on the sectoral background notes prepared by the Secretariat.  This would add value to the 
Committee's work. 
45. The representative of New Zealand  supported more work under this agenda item.  She 
thought that the sectoral papers reviewed in the C TS were a good source of information in this regard.  
This was an opportunity to improve delegates' understanding of what was included in particular 
sectors.  With the positive list approach, there rema ined the possibility for Me mbers to self-define the 
coverage of sectors in their schedules.  This shoul d not be compromised.  Given advances in industry, 
new services were available and some elaborati on in this regard could be very useful.   
46. The representative of Switzerland  opined that the benefits of a better classification would 
need to be weighed against the consequences of ha ving different classifications in schedules.  W/120 
and CPC did not prevent Members from making commitm ents as they see fit.  He supported Japan's 
idea of exploring ways of scheduling elements not contained in the current classification.   
47. The representative of the European Union  noted the relevance of classification issues for 
making commitments and agreed that the Background No tes would be a good start for work in this 
regard.   
48. The representative of India  reiterated his delegation's suppor t for the proposal of holding 
discussions on a sectoral basis.  He recalled that India had earlier suggested including "other business 
services" as a sector for discussion.  Interestingly,  the plurilateral request on cross-border supply had 
used CPC Version 1.1 for some of the serv ices under the heading "other business services".  S/CSC/M/54 
 Page 11 
 
 
  49. The representative of Australia  also supported the work on classification issues based on 
sectoral Background Notes.   
50. The representative of Indonesia  supported a more intensified discussion on classification 
issues.  A more detailed and clearer definition of sectors would promote Members to open services for liberalization.   
51. The representative of the Secretariat
 confirmed that it was possible to invite experts to explain 
the differences between CPC vers ion 2 and CPC provisional and the underlying reasons.  It was up to 
Members to draw conclusions, if any, for the services negotiations.  In case Members agreed to 
discuss classification issues based on sectoral papers , the Secretariat could compile the relevant parts 
into a single working document for this purpose.   
52. Noting that there was consensus on di scussing classification issues, the Chair  invited 
delegations to submit areas of specific interest and identify their priorities.  The substantive discussion 
could take place in November, but the compilation suggested by the Secretariat would be done earlier 
so as to allow delegations to highlight specific sector s or interests for  discussion.  She also suggested 
that the presentation requested by Chinese Taipei take place at the meeting of November.  Finally, she 
suggested that the Committee take note of the statem ents made and revert to this item at the next 
meeting. 
53. It was so agreed . 
C. SCHEDULING ISSUES  
54. The Chair  noted that levels of engagement under th is item had declined significantly in the 
past few years.  She therefore had held consultatio ns on how to re-energize relevant work.  In her 
consultations, delegations had c onfirmed the existence of important issues that needed to be 
discussed.  Reference had been made to ENTs and entries in schedules which did not fall under 
Articles XVI and XVII, such as licensing requireme nts.  She encouraged delegations to make 
contributions, preferably in writing, to stimulate discussions.  
55. The representative of Canada  suggested that the Committee hold more detailed discussions on 
the scheduling of ENTs with a focus on mode 4.  He noted that not all Members had specifically 
scheduled ENTs on covered categories while  these were applied in practice.   
56. The Chair  suggested that the Committee take note of the statements made and revert to this 
item at the next meeting. 
57. It was so agreed . 
D. OTHER BUSINESS  
58. There was no intervention under this item.   
 
__________