WORLD TRADE  
ORGANIZATION  TN/S/18 
9 December 2004 
 (04-5400) 
Council for Trade in Services 
Special Session  
 
 
 
SPECIAL SESSION OF THE COUNCIL FOR TRADE IN SERVICES 
 
Report by the Chairman to the Trade Negotiations Committee  
 
 
 The Council for Trade in Services in Special Session met on 29 November and 
3 December 2004.  
 I. STATUS OF WORK 
1. With respect to the Assessment for Trade in Services, the Council welcomed representatives 
of the OECD and UNCTAD to present two reports, respectively, "Services Barriers and Their Economic Impact:  Examples of Banking and Tele communication Services in Selected Transition 
Economies" and the "World Investme nt Report (2004):  The Shift Towards Services".  The OECD 
study seeks to elaborate a methodology for measurin g the level and effect of barriers in trade in 
services, while UNCTAD's WIR reports, in part, on the levels and effects of FDI in services and 
discusses the drivers and possible dividends associ ated with trade in services generally.  Members 
demonstrated a high level of interest in the pr esentations, and particularly that from UNCTAD.  
Among others, Members drew attention to the benefits the report indicates can accrue from 
appropriately planned off-shoring as  well as to the central importan ce of a stable and predictable 
investment environment in order to promote long-term export success and productivity through mode 3 trade.  The Council invited WTO Secretariat to present the "World Trad e Report (2004)" at its 
next meeting. 
2. Under the item Proposals Relating to the Nego tiations under Article XIX, the Council heard 
two presentations related to the mo vement of natural persons:  one on Australia's Mode 4 Temporary 
Entry Arrangements and the other on Chile's Experience with the Temporary Movement of Business 
Persons.  A good level of interest was demonstrat ed with some 14 delegations intervening with 
questions and statements.  Discussions on mode 4 at the last two meetings have been characterised by 
information sharing on concrete experiences.  A number of Members reverted to an earlier proposal 
On the Importance of Mode 3 Commitments with some judging that a significant gap exists in mode 3 
in the negotiations.  A group of six Members introduced an informal communication on trade in 
certain supporting services to air transport.  Memb ers' views on the interpretation of the relevant 
provisions of the Annex on Air Transport Services and the fora in which to discuss these issues 
remain divergent. 
3. Under the item Consideration of Proposals on S& D Treatment Provisions, with respect to the 
Category II proposals which were originally referr ed to the Special Session by the Chairman of the 
General Council in May 2003 and to which the Genera l Council Decision of 1 August 2004 refers, I 
recalled for Members the considerat ion undertaken to date on these proposals as well as the July 2005 
reporting deadline contained in the Decision.  A st atement was made by the African Group on the 
importance of these proposals and it was agreed that I will hold consu ltations on this matter.  Under a 
separate agenda item, the Council decided to orga nize a two-day Symposium on Cross-Border Supply TN/S/18 
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of Services on 17-18 February 2005.  This event will be financed by the WTO with funds allocated in 
the Technical Assistance and Training Budget (2005). 
4. With respect to the Council's Review of Progress in Negotiations, Including Pursuant to 
Paragraph 15 of the Guidelines for Negotiations, I can report that a new offer was tabled from El 
Salvador, and offers were announced as forthcomin g by Malaysia and Egypt.  The total number of 
initial offers presented comes to  47 representing 71 Members.1  Some 45 offers remain outstanding 
not including least-developed coun try Members.  Please see my further remarks under the next sub-
heading.    
II. OUTSTANDING ISSUES 
5. The Council engaged in a frank discussion in reviewing progress in the negotiations.  Some 
29 delegations representing a cross-section of the Members made highly useful interventions.  
Generally speaking, delegations sought to sound a procedural warning bell to their trading partners 
and to the TNC.  The absence of a significant number of outstanding initial offers, referred to in the 
recommendations adopted by the General Council in Annex C of its 1 August 2004 Decision, is deeply preoccupying to a large group of Members.  Delegations urged those Members that have not 
done so to submit their initial offers as quickly as possible in order to allow the negotiations to 
proceed to the next benchmark for revised offers in May 2005.  Indeed, numerous delegations drew 
attention to the short timeline remaining until th e Sixth Ministerial meeting and the substantial 
amount of work to be completed, in all areas of the negotiations, in the interim.  In this connection, it 
was reiterated that the nature of the services negotiations, in comparison to other market access negotiations, differ in that they proceed through a ra ther laborious process of requests and offers.  The 
preparation of and responses to requests and offers  requires longer periods of time which must be 
factored into the schedule of work with a view to  fulfilling Members' collective responsibility in their 
preparations for the Hong Kong Ministerial.   
6. Members also emphasized that th e Council should bear in mind the very short period of time 
next year for fulfilling its duties and that failure to do so would have negative results.  Members need 
to signal the level of ambition they seek in the se rvices negotiations in advance of the May benchmark 
for revised offers.  The nature of the request-offer  process is such that delays in indicating their 
intentions will prevent these constructive signals fro m being fully considered in the negotiations.  The 
regrettable outcome could be negotiating results that fall short of what could have been achieved, and 
that jeopardize work in other areas.   
7. Numerous Members also referred to the othe r areas of work which must benefit from 
intensive efforts in 2005 in order to ensure a complete contribution by the Council to preparations for 
the next Ministerial Meeting.  Some delegations expr essed their view that technical work in subsidiary 
bodies and in some friends groups is maturing and ma y be ready for harvest in the near future in the 
Council.  However, a number of delegations also expressed serious concern that some work in the 
subsidiary bodies which is complementary to the market access negotiations, has also fallen behind.  
In this regard, a number of Members drew particular  attention to all aspects of rules negotiations, as 
well as work on classification and scheduling issues in the Committee on Specific Commitments. 
Some Members expressed the view that the subsid iary bodies could meet between clusters of 
meetings in order to effectively address th e substantial amounts of work before them. 
8. From my vantage-point, the views expresse d by Members, although rather grave, are 
constructive:  they point to areas of serious conc ern on which the Council must remain focused in 
order to ensure it can make a satisfa ctory report to the TNC in its preparations for the next meeting of 
                                                 
1  The European Communities' offer is counted as representing 25 Member States.  TN/S/18 
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Ministers.  I will naturally engage in intensive c onsultations in the coming weeks in order to discuss 
the important issues raised by Members.   
III. FUTURE WORK 
9. The Council will pursue its work  during an exceptionally extended three-week cluster of 
meetings from 7-25 February 2005.     
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