WORLD TRADE  
ORGANIZATION  WT/REG238/M/1 
27 October 2008 
 
 (08-5187) 
Committee on Regional Trade Agreements 
Fiftieth Session  
 
 
 
 
CONSIDERATION OF THE PROTOCOL OF MONTEVIDEO  
ON TRADE IN SERVICES  IN THE MERCOSUR 
 
Note on the Meeting of 18-19 September 2008  
 
Chairman:  Mr. D. Brauns (Germany) 
  
1. The meeting was convened in document WTO/ AIR/3202 and Corrigendum 2, dated 5 June 
and 9 July 2008, respectively. 
2. Under Agenda Item B.VI of its 50
th Session, the Committee on Regional Trade Agreements 
(CRTA or the Committee) took up consideration of th e Protocol of Montevideo on Trade in Services 
in the MERCOSUR (hereinafter referred to as 'the Agreement'). 
3. The Chairman  said that the Agreement had entered into force on 7 December 2005 and had 
been notified by the Parties to the WTO on  5 December 2006 under GATS Article V:7(a) as an 
Agreement providing for the liberalization of trade in services within the meaning of Article V of the 
GATS (document S/C/N/388 and S/C/N/388/Corr.1).  The text of the Agreement was available, 
together with its Annexes, on the Parties' official websites.  The Factual Presentation on the services 
aspects (document WT/REG238/1, dated 9 May 2008) had been prepared by the Secretariat on its 
own responsibility in full consultation with the Part ies, in accordance with paragraph 7(b) of the 
Transparency Mechanism for Re gional Trade Agreements (document WT/L/671).  In addition, 
written questions and replies on the Agreement had been recently distributed in document 
WT/REG238/2, dated 19 August 2008.  He proposed to  organize the consideration of the Agreement 
by asking first the Parties and then other Member s to give any general comments.  The Committee 
would then turn to the specifics of the Agreem ent using the Factual Presentation, document 
WT/REG238/1, to guide the debate.  He proposed  to go through the Factual Presentation by section, 
and then through the questions and replies document. 
4. The representative of Brazil  expressed great pleasure to present, on behalf of the States 
Parties of MERCOSUR – Argentina, Paraguay, Uru guay and Brazil - the Protocol of Montevideo on 
Trade in Services to the CRTA.  His delegation had participated actively in the negotiations that had 
led to the adoption, on a provisional basis, of the decision on the Transparency Mechanism for 
Regional Trade Agreements – decision WT/L/671 of  14 December 2006 – and in this context looked 
forward to the exchange of views on the Protocol within the Committee.  On a personal note, it was 
interesting to be on the receiving e nd of what one had negotiated.  He  had noted with interest the way 
in which this had been interpreted, and acted upon by some delegations.  He recalled that perhaps a 
handful of delegations at most ha d ever substantively engaged in th e negotiations of the substantive 
elements of the Doha Mandate including the issue of the definition of "substantially all the trade".  It 
was interesting to see that despite the reluctance of  the majority of Members to discuss the issue, 
Members felt free to judge whether other Agreements  met "substantially all the trade" test.  Having 
said that, he thanked the Secretariat for the comp rehensive factual report contained in document WT/REG238/M/1 
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  WT/REG238/1, as well as those delegations that had submitted questions in advance of the current 
meeting for raising some interesting points with rega rd to the Protocol and which had already allowed 
for initial clarifications.  There were two tran slation problems in the document containing the 
questions and replies – WT/REG238/2 in the English version.  On page 5, paragraph 2, line 3 in 
question 13 addressed to Brazil, said " ... the Stat es Parties had already conducted seven rounds of 
negotiation ... ", whereas it was "six rounds" as written in Spanish.  In the final line of the same 
paragraph, the phrase read "the spirit of thoroughgoi ng integration ... ".  His delegation's response in 
Spanish had been " .. integración profunda", whic h meant deep integration which he believed, was 
much simpler and clearer. 
5. He said the role of the free circulation of services in the MERCOSUR had been recognized as 
a fundamental element of the creation of the Common Market since its inception by the Asunción Treaty in 1991.  In this respect, the treaty ou tlined the components of the Common Market, which 
included “the free circulation of goods, services and factors of production”.  The Protocol of 
Montevideo embodied that goal, which was to be ach ieved within ten years from its entry into force, 
which had taken place on 7 December 2005, the date of the third ratification of the Protocol.  The 
Protocol borrowed heavily from the general struct ure, principles and provisions of the General 
Agreement on Trade in Services (GATS) of the WT O, a fact that was not surprising when one 
considered that the negotiations of the Protocol of Montevideo had taken place immediately following 
the conclusion of the Uruguay Round, which had been the first experience of MERCOSUR members 
with services negotiations.  In this respect, he hi ghlighted the positive-list approach and the gradual 
approach to liberalization of trade in services among MERCOSUR members. 
6. However, he believed that the Protocol of Montevideo went beyond the GATS.  In this 
respect, what was defined in the GATS as the objective of "progressive liberalization" was "free circulation of services" in MERCOSUR.  Furt hermore, this objective was given even greater 
ambition in that it was associated in the Asunció n Treaty with the concepts of common policies, 
policy coordination and harmonization.  Since the conclusion of the Protocol, MERCOSUR members 
had launched seven rounds of nego tiations, based on a request-offer procedure.  The seventh round, 
which was still underway, was scheduled  to be concluded at the end of 2008.  Its aims were to make 
progress in the incorporation of sub-sectors in wh ich no commitments had yet been made and to 
continue eliminating market access and national treatment  restrictions.  In spite of the fact that the 
liberalization of trade in services among MERCO SUR members was still an ongoing process, the 
results of all the previous rounds were already being incorporated into the Protocol, as the results were 
under congressional review.  Commitments that had already been included in these rounds would 
allow MERCOSUR members to benefit from concessi ons in most sectors, including financial, 
telecommunications, sports, tourism, and cargo trans portation among others.  Even though the current 
meeting focused only on the concessions origin ally negotiated among MERCOSUR members, as 
these were the only concessions that had been approved by the Congress in MERCOSUR members, a review of the results achieved in this process show ed that the level of commitments made by each 
MERCOSUR member in the original schedules had b een consistently and considerably improved.  
MERCOSUR members remained committed to conti nuing such a process until the liberalization 
programme was completed.  Beyond the Protocol  itself, MERCOSUR’s commitment to achieving its 
goal of trade liberalization in services had been co mplemented by the following agreements:  an 
Agreement on the MERCOSUR Visa (Decision CMC 16/03), which facilitated the movement of 
natural persons among the four members;  the M echanism for the "Temporary Professional Exercise" 
(Decision CMC 25/03), which also established streamlined procedures for temporary movement of professionals;  and the Agreement on the Fac ilitation of Business Activities in MERCOSUR 
(Decision CMC 32/04), which facilitated the establishm ent of commercial presence for the supply of 
both goods and services.  The commitment to liberalizing trade in services in MERCOSUR was to be achieved in ten years ending in 2015.  This commitm ent was also illustrated by the coverage of the 
Protocol, which comprised all sectors and the four  modes of supply established by the GATS, without 
any a priori exclusion.  The most-favoured- na tion principle was applied without any exceptions  WT/REG238/M/1 
 Page 3 
 
 
  among MERCOSUR members – a simple provision, but which demonstrated a significant GATS-plus 
approach.  Furthermore, it was worth noting th at the initial commitments  had undergone constant 
improvement, even before the entry into force of the Protocol.  Given that liberalization in the 
services sector was still under way, the current liberalization commitments of the Montevideo 
Protocol should be viewed only as a first step towards the formation of the common market.  Finally, 
he stressed that MERCOSUR members firmly believed th at their efforts to liber alize trade in services 
in the customs union were an important contributio n towards greater liberaliz ation globally and were 
consistent with their commitment to the comple mentarity between multilateral and regional trade 
liberalization in accordance with the appropriate provisions of the WTO. 
7. The representative of the United States  thanked the Parties and the Secretariat for the 
information provided on the Agreement.  The Agre ement was of significant interest to the United 
States, and she appreciated learning more about it th rough the consideration.  Her delegation had two 
follow-up questions which she would come back to later. 
8. On the questions and replies document, th e representative of the European Communities  (EC)  
sought further clarification on the current state of play of Paraguay's ratification process in Congress 
and asked for a concrete date for the adoption of th e Agreement, if any.  On the current level of 
commitments in question 4, her delegation had asked about the public availability of the results of the 
most recently concluded round of negotiations an d expressed its interest in being updated on the 
objectives and outcome of the seventh round of ne gotiations which had been launched in 2007. 
9. In response to the first question raised  by the EC, the representative of Brazil  said that the 
Protocol of Montevideo on Trade in Services was currently undergoing the process of parliamentary 
approval.  It had been approved by a number of Commissions in the Chamber of Senators, but the 
report of one Commission was still outstanding.  Once approved by the Chamber of Senators, the project would be submitted for consideration by the Chamber of Deputies.  It was not possible to 
estimate the date of its final approval, taking into  account the fact that Congress had begun a new term 
in 2008 and, naturally, it established its own progr amme of work, independently from the Executive 
Branch.  As regards the second question raised by the EC, the results of the first six rounds of 
negotiations concluded under the Pr otocol of Montevideo on Trade in  Services could be accessed on 
the MERCOSUR website (www.mercosur.org.uy).  U nder the icon “Decisions”, the year 2006 should 
be selected and the results were available by downloading decision 01/06.  With respect to the 
objectives of the seventh round, there were no sp ecific guidelines for members.  The negotiating 
rounds were based entirely on the request-offer pro cedure, with each member submitting to the others 
specific requests of their priority interests in their markets.  Res ponses were tabled by each member 
and a process of negotiation sought to achieve a mu tually acceptable balance of rights and obligations, 
as had been the case in the previous six rounds. 
10. The representative of Japan
 had a follow-up question regarding question 11 to which the 
Parties had replied that government procurement w as out of the scope of the consideration.  Her 
delegation did not agree with the observation as th ey believed government procurement included both 
goods and services areas, and was therefore relevant to  the current consideration.  She again requested 
a response to question 11. 
11. In response, the representative of Brazil  said MERCOSUR Parties acknowledged that 
government procurement included the acquisition by  governments of both goods and services.   
However, the Protocol of Montevideo on Tr ade in Services explicitly excluded government 
procurement of services for governmental purposes and without a view to commercial resale from the 
scope of its coverage, as specified in Article XV  of the Protocol.  This was, as pointed out in 
paragraph 81 of the Factual Presentation, the same  approach as in the GATS for the treatment of 
government procurement of services.  In this regard, MERCOSUR Parties believed that this 
Committee was not the appropriate forum for a discussion of MERCOSUR's government procurement WT/REG238/M/1 
Page 4 
 
 
  policies and negotiations.  Should any Member be in terested in obtaining fu rther information on the 
Protocol on Government Procurement in MERCO SUR, it was available on the same website 
mentioned in response to the previous question ( www.mercosur.org.uy ), and could be found under 
decisions in 2006 as number 23/06.  As noted in pa ragraph 82 of the Factual Presentation, however, 
this Protocol had not yet entered into force. 
12. The representative of the United States  supported the questions raised by the EC, and added 
that her delegation would appreciate knowing when Members might be able to review the improved 
schedules of commitments.  She was also interested in the answer to question 9 in the questions and 
replies document, which referred to MERCOSUR’s pr eferential trade agreements that had not yet 
been notified to the WTO.  In her delegation's vi ew, the question originally  posed by the EC was a 
fair one, and she hoped that the Parties woul d reconsider more fully answering it.  
13. In response, the representative of Brazil  restated that the results of the first six rounds of 
negotiations concluded under the Pr otocol of Montevideo on Trade in  Services could be accessed on 
the MERCOSUR website (www.mercosur.org.uy).  As these results had not yet been approved by the 
Congress in their respective countries, they had not yet come into force.  Once they were in force, 
they would be notified to the WTO under the terms of paragraph 14 of the decision on the 
Transparency Mechanism for Regiona l Trade Agreements (WT/L/671) and thus subject to review in 
the Committee.  On the second question, he reitera ted the Parties' understanding that the status of 
other agreements negotiated by them, individually or collectively, fell outside the scope of the current 
consideration exercise.  Paragraph 12 of decision WT/L/617 explicitly stated that “Members’ written 
questions or comments on the RTA under considerati on shall be transmitted to the Parties…”.  
Paragraph 13 went on to state that “All written ma terial submitted, as well as the minutes of the 
meeting devoted to the consideration of a notified agreement…”.  Nonetheless, he took note of the 
interest expressed in these other agreements and wo uld forward them to the appropriate authorities in 
the respective Governments for appropriate action. 
14. The Chairman  noted that the consider ation of the services aspects of the Protocol of 
Montevideo on Trade in Services in the MERCOSUR had allowed the Committee to clarify a number 
of questions and oral discussion of the Agreement could be concluded in accordance with paragraph 
11 of the Transparency Mechanism.  If any delegati ons wished to ask follow-up questions they were 
invited to forward submissions in writing to the Secretariat by 25 September 2008 and Parties were 
asked to submit replies in writing by no later than 9 October 2008 .  In accordance with paragraph 13 
of the Transparency Mechanism all written submis sions, as well as minutes of this meeting would be 
circulated promptly, in all WTO official la nguages, and would be made available on the 
WTO website. 
15. The Committee took note  of the comments made. 
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