RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/S/M/37 
24 September 2010 
 
 (10-4880) 
Council for Trade in Services 
Special Session  
 
 
 
REPORT OF THE MEETING HELD ON 2 JULY 2010 
 
Note by the Secretariat1 
 
 
1. The Special Session of the Council for Trade in Services held a formal meeting on 2 July 
2010, chaired by Ambassador Fernando de Mateo of Mexico.  The agenda for the meeting, contained 
in document WTO/AIR/3578, was adopted. 
A. IMPLEMENTATION OF THE MODALITIES FOR THE SPECIAL TREATMENT FOR LEAST -
DEVELOPED COUNTRY MEMBERS IN THE TRADE IN SERVICES NEGOTIATIONS  
2. The Chairman  noted that, following the informal me eting held on 25 June, the LDC group 
had produced a fresh draft text of a waiver, circul ated on 29 June (JOB/SERV/ 18).  All welcomed this 
development, as the implementation of LDC modalities was an important part of the services 
negotiations.  Before opening the floor to comments on the text, he wished to give the opportunity to 
Ambassador Mwape of Zambia to introduce the revised draft proposal. 
3.  The Ambassador of Zambia , on behalf of the LDC Group , said that at the 25 June meeting he 
had signalled areas in the draft waiver of 16 November 2009 where the Group had responded to 
concerns raised by other Members.  The Group ha d subsequently circulated a revised proposal to 
clarify some of these concerns (JOB/SERV/18 of 30 June 2010).  In the revision, the Group had attempted to clarify the language of the draf t, and accommodate issues raised by delegations. 
4. The revised proposal took into account the suggestio ns that had been made by the two Members 
that have submitted written observations.  On the issu e of the scope of the waiver, it was important to 
keep in mind some key textual elements of the serv ices negotiations.  In paragraph 9 of the Annex to 
the Report by the Chairman outlining the elements  required to complete negotiations on services 
(TN/S/34 of 28 July 2008), it was recorded that "Memb ers are of the view that a waiver available to 
all Members from the obligations of Article II pa ragraph 1 of the GATS in respect of preferential 
treatment benefiting all LDC Members offers the most  satisfactory outcome of this negotiation."  This 
wording showed that Members did not contemplate limiting the application of the waiver only to 
market access.   
5. The LDC Group believed that paragraph 9 also pr ovided guidance for Members on sequencing.  
This paragraph stated that "Members shall strive to complete negotiations on the specific principles 
and characteristics of such a waiver before the re vised offers are submitted in accordance with the 
sequence of the timelines set out in paragraph 11(e) of Annex C of the Hong Kong Ministerial 
Declaration".  This meant that Members needed to complete the LDC modalities before embarking on 
revised offers.  Further, the Hong Kong Ministeria l declaration required that the request made by 
LDCs, or in favour of LDCs, was to be consid ered positively, and a decision taken within the 
specified delay. 
                                                     
 
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. TN/S/M/37 
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  6. The delegation of the United States
 appreciated the importance of the waiver as a mechanism to 
enhance the development of LDC services markets, and supported the effort to develop an effective 
mechanism to grant preferential treatment for ma rket access to service suppliers from LDCs.  The 
United States had repeatedly made  the case that a strong services ma rket was an essential component 
for economic development. 
7. With respect to the new draft text, the United Stat es still thought that work needed to be done to 
carefully craft a predictable and legally sustainable m echanism.  Members needed in particular to give 
careful consideration to the scope of the waiver.  Secondly, and very much related to the first point, 
Members needed to consider the effects of any waiver on the existing rights of other Members. 
8. When Members started to examine what a waiv er mechanism would look like for services, it 
became apparent that these were uncharted waters;  there were many things to consider and weigh 
when creating such a mechanism.  Thus, as a firs t attempt at creating an instrument to grant 
preferential market access for services and servi ce suppliers from LDCs, Members needed to 
understand the scope of what the waiver might appl y to, as well as the ramifications of what was 
being created.  Waivers in the goods area applied only to tariff measures, which was the traditional 
market access element, and did not apply to a wider array of measures that could affect the treatment 
of goods.  But in services, there was no analogue for ta riff measures.  Services disciplines applied to a 
vast range of policy measures, including regulatory and tax measures.   Thus, an important first step in 
developing a waiver for services was to consider the kinds of measures to which the waiver would apply.   
9. As to the relevant market access provision, Article XVI provided a logical place to start because 
it described the kinds of measures Members had dete rmined were capable of constraining market 
access for services.  To go beyond Article XVI t ype measures would invite many unknowns and 
create uncertainty as to how the waiver might be a pplied and, importantly, whether the waiver could 
undermine other Members’ existing ri ghts under the Agreement.  Indeed, if the obligations that could 
be waived were to encompass the entire GATS, there was a wider possibility of creating undesirable 
and unforeseen distorting effects. 
10. Therefore, as a practical matter, the United Stat es believed it was of the utmost importance that 
a waiver provide a reasonable degree of clarity concerning the kinds of covered measures that 
Members had envisioned.  The United States remain ed committed to working through these issues 
with LDCs and others. 
11. The delegation of the European Union
 said that it was very committed to finding a globally 
satisfactory outcome on this issue, that would fac ilitate the LDCs' integration into global trade in 
services.  In the area of goods, the EU had been  the first major economy to provide unqualified duty-
free and tariff-free treatment to LDC exports, and it hoped that the same type of facility could be 
provided in the area of services.   
12. The EU wanted to make progress on the proposed text for a waiver, which would be a very 
important part of an overall outcome in the ser vices negotiations.  However, it had wondered for a 
long time whether a waiver was the best solution to  implement LDC modalities, given that waivers, in 
the past at least, were always conceived to a ddress temporary and exceptional situations and not 
structural problems.  Despite that systemic hes itation, the EU was ready to work on the current 
proposal. 
13. The EU had three specific sets of  remarks to make on the proposal as it stood.  The first was 
very much along the lines set out in the United Stat es' intervention, and concerned the scope of the 
waiver.  The EU remained unconvinced that it was feasible or desirable to contemplate a waiver that 
went beyond preferential market access.  There was no justification for any waiving of the basic rules  TN/S/M/37 
 Page 3 
 
 
  for the benefit of LDCs, even if that were tec hnically possible.  If the proponents of the proposal 
continued to seek a scope for the waiver that we nt beyond preferential market access treatment, they 
risked sinking the idea completely. 
14. The second comment was on the definitions and rules of origin.  The EU continued to think that 
the current definition as set out in the text was not fully satisfactory.  The definition of LDC benefits 
was very loose, and would still allow for circ umvention by non-LDCs.  The definitions in 
Article XXVIII of GATS were not a sufficient basis for giving preferential treatment.  The EU would 
attempt to come up with ideas for a much tighter definition, and discuss them  with LDC colleagues. 
15. A third, perhaps minor, comment was that the dr afting should make it clear that only LDCs who 
were Members of WTO would benefit from any waiv er and not LDCs who were not WTO Members.  
This was perhaps obvious, but sometimes su ch things needed to be spelled out. 
16. The EU looked forward to developing the text further without delay so that Members could 
agree on document and a proposal that met everybody's needs, and which would contribute to the momentum in the Round which all were urgently seeking. 
17. The delegation of Chinese Taipei
 said that it was still in the process of reviewing the 
technicalities of the new draft, but wanted to share with Members its initial thoughts on two 
conceptual matters.  The first concerned the scope  of the preferential treatment.  There were two 
options in the draft decision.  Option 1 of the previ ous draft limited the scope of preferential measures 
to those within the scope of the Article XVI.  Op tion 2 did not have such a limitation.  On the one 
hand, Chinese Taipei appreciated the fact that that Option 1 set a clear limit to the scope of 
preferential treatment.  On the other hand, Option 2 might allow for more effective measures tailored 
to the specific needs of LDC Members.  In fact , the difficulties facing LDC Members in entering 
foreign markets were often related not only to the ma rket access issues but also to relevant incumbent 
regulations.  Having said that, Chinese Taipei would ta ke into account the concerns or statements just 
made by the European Union and the United States in the future discussions. 
18. The second matter concerned MFN treatment for a ll LDC Members.  While the proposal to 
extend to all LDC Members the preferential treat ment granted by one Member was undoubtedly well 
intentioned, the real effectiveness of  such a concept might need furthe r full and proper consideration.  
The total number of LDC Members under the Unite d Nations definition was about 49; among these, 
32 were WTO Members and 10 were engaged in the process of accession.  It might be easier and more sensible to grant a particular form of prefer ential treatment to one or just a few specific LDC 
Members rather than extend the measures to all the others.  Though the total volume of trade of LDC 
Members might not account for much at present, such  a broad-sweeping extension to all might create 
a greater administrative burden for the granting Members, at least at the start of implementation.  Consequently, Members might be less willing to provid e any preferential treatment at all to the LDCs.  
Chinese Taipei looked forward to engaging in future discussions on this important issue;  it wanted to ensure the creation of a more effective policy tool  that Members depend on to better integrate the 
LDC Members into global trade in services. 
19. The delegation of Norway
 wished to make preliminary and general comments only, as it had 
not completed its examination of the revised draf t.  First, the LDC Group was to be commended for 
presenting an interesting document, demonstrating th at the LDCs had listened carefully to Members' 
comments and concerns.  A number of these had been dealt with constructively in the revised draft.  For example, the reference to the annual review in  terms of Article IX of the Marrakesh Agreement 
was now included in the text.  Texts dealing with "r ules of origin" were also now included.  Both of 
these changes would hopefully respond to concerns voiced by other Members.  Other changes might 
be more controversial, but in Norway's view the revised draft brought everyone quite a step forward 
in the attempt to flesh out the preferred option indi cated in the roadmap, namely, "a waiver available TN/S/M/37 
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  to all Members from the obligations of Article II pa ragraph 1 of the GATS in respect of preferential 
treatment benefiting all LDC Members".  Norway  looked forward to continuing work towards a 
satisfactory solution in the autumn. 
20. The delegation of Hong Kong, China
 said that the LDC modalities were a key component of the 
Doha round, and the revised draft waiver produced by  the LDC Group was particularly welcome.  The 
revised draft had taken up many comments made by Members raised in the previous consultation 
sessions.  The work on LDC modalities was on the right track and progressing well, although earlier speakers had made reservations. 
21. More specifically, on paragraph 1 (which was perhaps the most important provision) the LDC 
Group now proposed that the scope of the waiver extend beyond market access measures.  Hong 
Kong, China was open to considering this option, noting that it was for the Members affording 
preferential treatment to LDCs to define the exact sco pe of such treatment.  The waiver itself was only 
the enabling instrument.  As a drafting matter, th e suggested formulation that the obligations be 
waived “to the extent necessary to permit Members to provide preferential treatment” was acceptable. 
22. On paragraph 2, positive changes had been made to  clarify that the notification requirement was 
ex ante , as had been proposed by Hong Kong, China and a number of other delegations.  The new 
paragraph would enhance predictability and transparency. 
23. On paragraph 5, it was a useful addition to address the concern of some Members over the risk 
of circumvention by better defining what services and services suppliers would enjoy preferential 
treatment.  On drafting, the words “the supply of” at the beginning of sub-paragraph 5(ii) seemed redundant.  One point for clarification was whether the use of the notion “juridical person” in this sub-
paragraph carried the same meaning as that of the definition of “juridical person of another Member” 
provided under GATS Article XXVIII(m).  An alterna tive that Members, including the proponents, 
might wish to consider was the formulation of GA TS Article V:6, where the condition of “substantive 
business operations” of an enterprise in the LDCs would be given due consideration. 
24. On paragraph 6, the suggestion that the waiver terminate fifteen years from the date of granting 
was not a problem.  The requirement that the waiv er be subject to an annual review under the WTO 
Agreement was a positive change to the draft.  Overa ll, the revised draft waiver was a substantive step 
forward in the negotiations, and Hong Kong, China l ooked forward to continuous  engagement in this 
important subject. 
25. The delegation of Japan
 said that, because of the very recent circulation of the revised draft, it 
would at this point only offer preliminary view s.  On paragraph 1 the second option, limiting the 
preferential measures to those within the scope of Artic le XVI, had been deleted.  Further clarification 
by the LDC Group was needed on what precise kinds of preferential treatment outside the scope of Article XVI were being contemplated.  On paragr aph 5, a newly-introduced provision on denial of 
benefits, appeared to borrow from the sub-paragraphs  (a) and (c) of the Article XXVII.  This concept 
needed further exploration, particularly in rela tion to the definition of the LDC services supplied 
under mode 1.  
26. The delegation of Canada
 reaffirmed its commitment to advance the implementation of the 
LDC modalities.  It appreciated the effort of the LDC Group to address certain issues that had been raised in the past, and would  be reviewing their proposed solutions with interest.  Canada supported 
continued discussion on the scope of a potential waiver  in the specific interests of LDC Members in 
this regard.  Given that the proposal circulated ear lier in the week contained new elements from the 
previous draft text, Canada wished to reserve sp ecific comments until it had reviewed the document in 
more detail.  TN/S/M/37 
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  27. The delegation of China  regarded the LDC modalities as an i ndispensable part of the outcome 
of the DDA.  It fully supported the negotiations on this topic, and wished to offer some preliminary 
remarks on the current proposal.  It recognized the value of the current proposal presented by the LDC 
Group.  With respect to the scope of the waiver, this  was for the granter of the waiver to decide.  The 
only requirement for the granter was to notify the C ouncil for Trade in Services.  As to the rules of 
origin, the added provision was worthwhile but in this case also it was for the granter to decide 
whether the supplier of the service came or not from an LDC.  This was one solution to the problem.  
It was to be hoped that Members would have furt her discussions on these issues, and that satisfactory 
solutions could be arrived at as soon as possible.  
28. The delegation of India  said that it had been involved in the waiver proposal from the 
beginning.  It thus continued to take a paternal in terest in the proposal.  India appreciated the revised 
proposal, which captured many of the suggestions it  had made.  However, there were issues that 
needed further discussion, including the scope of th e waiver, the impact on other countries, and rules 
of origin.  It was discouraging that Members had be en working on the proposal for more than a year;  
perhaps they needed to engage in more intensive consultations under the Chair. 
29. The delegation of Turkey  welcomed the proposal of the LDC Group, which was under 
examination by officials in capital.  The inclusi on of LDCs in global trade was very important, and 
Turkey wanted to help in efforts to reduce pove rty and achieve the millennium development goals.  
Turkey was one of the few developing countries th at provided duty-free and quota-free market access 
to LDCs.  The 4th UN Conference on LDCs would be held in Turkey in June 2011, and a paragraph 
in the Ministerial Declaration of the recent G 20 Summit had been included on LDCs. Turkey was 
looking for an early conclusion to these negotiations. 
30. The delegation of Colombia  said that this issue was an essential component of the DDA, as well 
of the objectives and goals of the WTO.  Colombia th erefore appealed to Members to give this matter 
priority treatment.  It took note of the revised LDC proposal, which it had read in a preliminary manner, and of the concerns expressed by other Me mbers about certain issues.  As a first comment, 
Colombia wished to state that it was very positive th at LDCs had tried to use more precise language in 
the revised draft, giving a greater degree of precisi on to many issues.  In particular, Colombia thanked 
the LDC Group for supporting many of its ideas with resp ect to paragraph 6 of the draft.  However, it 
wished to see further thought being given to the ne w concept introduced into pa ragraph 6, in the last 
sentence and footnote. 
31. The delegation of Korea wished to make some  preliminary comments on the revised draft.  
Members had come a long way in order to reach the specific and substantial modalities on the table. 
Korea wished to ask some preliminary questions and make some initial comments.  First, with regard 
to the paragraph 1, Korea wished to see option 2 in the previous draft maintain ed.  As a country that 
had just started substantial aid to  the developing countries and LDCs , it was important to have very 
specific and concrete formulae that it could apply, similar to those in the goods area where the duty-
free quota-free regime had worked very effectivel y with respect to development goals.  A second 
comment related to notification to the Council for Trad e in Services.  In order to have a consultation 
on the waiver, it was important that the CTS have a substantial role on the discussions.  However, this 
role was not very clear from provision in the revi sed draft.  Fundamentally, the approval for the 
waiver was in the hands of the General Council, so  it was important that the roles should be more 
clearly specified so that the approval process was done in a more fluent way in the Council, and 
would not get bogged down. 
32. In paragraphs 3 and 4 dealing with the relationship with other affected Members, it was 
important to strike a proper balan ce. In paragraph 6, the proposed te rmination date of 15 years was too 
long to reflect the actual market situation in ser vices, which could evolve rapidly.  What was 
important was to have a regular or annual review system of the waiver itself, and see whether it was TN/S/M/37 
Page 6  
 
  working effectively.  The services area was very complex, and it was important to have a tailor-made 
preferential system that would help LDCs to pursue export opportunities. 
33. The delegation of Australia
 said that it also attached great im portance the LDC waiver issue.  It 
was strongly committed to further discussion to try an d move the work forward.  The revised proposal 
was a step in the right direction.  It addressed some  of the issues that had been raised, and Australia 
was prepared to work with the proposal.  Some of  the issues (such as scope) needed deeper and more 
technical discussions, which Australia was very happy  to participate in so as to move these issues 
forward and address the legitimate concerns of LDCs. 
34. The Chairman  concluded by noting that de legations had pointed to various items in the revised 
text that they wanted clarified, modified, or droppe d.  He therefore wished to continue consulting on 
the matter, including through further informal meetings of the Special Session, on a paragraph-by-
paragraph basis.  He would convene an informal  meeting to start reducing the remaining gaps 
concerning the waiver proposal. 
35. The Council  took note of the statements made, and agr eed to revert to this item at its next 
meeting. 
B. WORK OF SUBSIDIARY BODIES - REPORTS BY CHAIRPERSONS  
36. The Chairman  said that the four subsidiary bodies had met recently, and that any Chairperson 
who wished to report on any recent progress in their discussions could do so. 
37. The Chair of the Committee on Specific Commitments , said that, since her last report to the 
Special Session in April, the Committee had held one formal meeting that had taken place earlier in 
the day.  Before the meeting, she had held exte nsive consultations on outstanding issues and future 
work of the Committee in three areas: the re lationship between old and new commitments, 
classification issues, and scheduling issues. 
38.  The relationship between old and new commit ments remained the fo cus of the Committee's 
discussion.  The delegation of Canada had presen ted a new proposal on possible protocol language, 
which had received mixed comments.  A number of delegations were still not convinced that there 
was a need for particular language in the protoc ol as a means to prevent rollbacks.  The Committee 
was also divided on whether it was desirable or helpful to carry out discussions on the parameters with which rollbacks could be determined.  Howe ver, delegations supported the proposal that the 
Secretariat prepare a road map identifying the possi ble steps to follow in the verification exercise, 
taking into account past practice and recent discussion.  
39. With respect to classification issues, delegations supported the idea of holding informal 
discussions, on a sectoral basis, of possible ga ps between document W/120 and market realities, 
which would start in November.  The Committee also agreed on the proposal to invite CPC experts to 
make a presentation on the latest version of the CPC, during the meeting in November.   
40. Regarding scheduling issues, while some dele gations expressed their interest in having 
discussions under this item, the Chair had encouraged  delegations to make written contributions to 
stimulate debate. 
41. The Chair of the Committee on Trade in Financial Services
 had held a formal meeting earlier in 
the week, preceded by a seminar on trade in non-lif e insurance services.  The most important item on 
the agenda was a first dedicated discussion on the fina ncial crisis and trade in financial services. The 
main purpose of the discussion was to learn about other international organizations’ research and 
activities regarding the impact of the crisis and of  measures taken in response to it, and to allow  TN/S/M/37 
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  Members themselves to exchange information and discuss their experiences with regard to the 
financial crisis. 
42. The discussion, which lasted the whole day, w as divided into two segments.  The first was 
devoted to presentations by four international organizations (the Bank for International Settlements, 
the Financial Stability Board, the International M onetary Fund, and the OECD), followed by a Q&A 
session.  The second segment was devoted to an ex change of information and experiences among 
Members.  Information about this dedicated discu ssion was contained in documents JOB/SERV/9 and 
Add.1. The papers and other material presented by these organizations were circulated to Members in 
documents JOB/SERV/12 to 15.  The Q&A session that followed these presentations was very interesting, with many delega tions taking part.  The second segment of the discussion also proved 
very interesting, again with many delegations pa rticipating, and often represented by capital-based 
financial experts.  
43. The discussion was informative, interesting, and timely.  It was indeed the first time that a 
WTO standing body had held a discussion on the fina ncial crisis.  There was universal recognition 
among Members of the value of such a discussion, including the exchange with experts from other 
international organizations.  It was clear that th e Committee remained a relevant forum for discussing 
issues that had a bearing on trade in financial services.   
44. The Chair did not wish to provide a full account of the discussion, as this could be found in the 
report of the meeting.  In general terms, the discussi on provided further insights into the effects of the 
crisis, the type of policy actions that Members had taken to mitigate the impact of the crisis, and the 
effects of such policy actions on financial markets.   This was apparent in both the presentations by 
international organizations and the statements by  Members about their own national experiences.  
Following a proposal made at the meeting, the Chair indicated that she would hold consultations on further work in relation to this topic, to see wh ere convergences might lie.  She was happy to receive 
any ideas that delegations may have in that regard.  
45. Apart from the dedicated discussion, which took al most the whole day, the other substantive 
issue in the agenda was "Trade in Financial Servic es and Development", which had been introduced at 
the request of China.  China's proposal was to st art a discussion on the impact of financial sector 
development, and trade in financial services, on economic development. The proposal was widely 
supported by Members, although many of them expressed the need to further consider the details of 
such a discussion.  The Committee woul d revert to this agenda item at  the next meeting, and, in the 
meantime, the Chair would conduct consultati ons with Members on how discussions might be 
structured.  
46. The meeting had been preceded by a seminar on trade in non-life insurance services. Here 
again, Members could find a summary report of th is seminar in the Committee meeting report, under 
the agenda item on Technical Issues.  However, the Chair said that the seminar was very interesting 
and timely, and allowed for an informative discu ssion and an interesting exchange of views and 
perspectives on trade and regulation in this sector.  In her view, the seminar provided a model that 
could be used for other sectors, to generate informative discussions on market and regulatory 
developments that could support negotiations.  
47. There would be a more complete summary of the seminar in the meeting report.  However, the 
Chair wished to focus on two issu es that came up during the seminar and which were, in her view, of 
direct relevance for ongoing discussions.  For one, the non-life insurance sector had been undergoing 
liberalization over the previous decades, and it appear ed to be more liberali zed than life insurance 
services, as evidenced by foreign insurance penetrati on in the non-life segment in various markets.  It 
was clear however, that market access and other discriminatory barriers still remained in several 
markets, in both developed and de veloping economies.  There was still therefore some way to go in TN/S/M/37 
Page 8  
 
  terms of trade liberalization in the sector. Anothe r important issue repeatedly raised during the 
seminar was the interaction between liberalization and regulation, or better still, the need to make sure 
that trade liberalization was accompanied by sou nd regulation.  One aspect of this liberalization-
regulation issue worth noting was that while the non-life insurance business was increasingly global, 
regulation and supervision was still ve ry much conducted at the national (or even state) level.  This 
called for better coordination of regulation at the in ternational level in order to minimize distortion to 
competition. 
48.  The next meeting of the Committee, which would include a dedicated discussion on the 
"Impact of Technological Developments on Regul atory and Compliance Aspects of Financial 
Services under the GATS", would be held in September.  
49. The Chair of the Working Party on Domestic Regulation
 said that, since the last report in April,  
the Working Party on Domestic Regulation had he ld one formal meeting, on 1 July 2010 and one 
informal meeting, on 16 June 2010.  At the formal meeting, the Working Party had held in-depth discussions on issues arising from the transparency chapter of the Chairman's draft of March 2009, as 
well as on general obligations, as contained in draf t paragraph 11.  Numer ous delegations provided 
language proposals to further refine the paragraphs, and the Chair noted  a degree of openness by all to 
consider the proposals that were made.  He would further consult on the basis of the proposals made, 
with a view to achieving further convergence on the issues at hand. 
50. With regard to future work, the Working Part y had agreed to conduct future discussions on a 
thematic basis, allowing also for a discussion of cross-cutting issues.  Based on consultations with 
various delegations, he had proposed, at the inform al meeting on 16 June, an indicative but flexible 
work plan which delegations were comfortable wi th.  At the meeting on 1 July, it was proposed to 
organise a workshop on best regulatory practices at  one of the upcoming clusters.  Members had 
expressed their openness to this idea, and had re quested him to consult informally about the 
parameters and timing of such an event. 
51. The Chair of the Working Party on GATS Rules
 said that, since the last report to the Special 
Session, the Working Party had met in formal session on 1 July.  Over the last few months, he had 
been consulting Members on new avenues for stimulating discussion in the Working Party on the three GATS Rules subjects.  
52. On emergency safeguard measures, Members had been considering the suggestion of having a 
presentation on services statistics so as to better in form the ESM negotiations of the adequacy and 
availability of potentially relevant data.   At the formal meeting of the Working Party the previous 
day, Members confirmed their agreement to have such a presentation, though the exact content and 
format needed to be further defined.  It was al so agreed that, to avoid replicating work being 
conducted elsewhere, the presentation would take pl ace some time after the Council discussion of the 
update of the background note on services statistics (S /C/W/27/Add.2).  In the interim, the Chair 
would continue to consult Memb ers on other proposals contained in  the room document of 30 March 
2009, on the way forward in the ESM negotiations. 
53. On government procurement, new ideas for stimulating the discussion amongst Members had 
been put forward.  In this connection, the suggestion of having a dedicated discussion on the developmental relevance of government procurem ent in services seemed acceptable to the Working 
Party.  It was proposed that the discussion would cover topics such as the development dimension of 
government procurement in devel oped and developing economies, the sharing of national experiences 
by Members on reforms in procurement practices, and the importance of government procurement 
within the context of the GATS.   The Chair woul d continue to consult delegations on the possible 
content and timing for the dedicated discussion, a nd he hoped to be in a position eventually to 
circulate an outline for further consideration.   TN/S/M/37 
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  54. On subsidies, the Chair was pl eased to report that, at the formal meeting, a good number of 
delegations had confirmed that  they would be providing their submissions under the Work 
Programme on Information Exchange (JOB/SERV/1) within the agreed timeframe.  This was a good 
sign and the Chair wished to thank those Member s for their efforts, and encourage others to 
participate actively, so that the programme w ould be a success.  The Working Party had also 
considered the additional questions submitted by the delegation of the United States (S/WPGR/W/59) 
with regard to the identification of the trade-distor tive effects of subsidies in services.  As on previous 
occasions, the Working Party also continued with its discussion of the proposal submitted by the 
delegation of Switzerland (RD/SERV/4) fo r disciplines on export subsidies.  
55. In sum, there had been a very useful discussi on on all three GATS Rules subjects in the current 
cluster, and the Chair encouraged Members to  continue with this spirit of engagement. 
56.  The Council  took note of the reports made. 
C. REVIEW OF PROGRESS IN NEGOTIATIONS , INCLUDING PURSUANT TO PARAGRAPH 15 OF THE 
GUIDELINES FOR NEGOTIATIONS ; AND ORGANIZATION OF FUTURE WORK 
57. The Chairman  said that at the last formal meeting on 30 April, delegations had raised a number 
of possible options for moving work forward in productive ways.  The discussion had taken place in 
the light of the Chairman’s Report to the March stoc ktaking exercise by the TNC, and its conclusions.  
It was worth emphasizing that the Chairman’s Repo rt had painted a far from rosy picture of the 
services negotiations.  While he had noted some a dvances in the negotiations on domestic regulation 
and the implementation of LDC modalities, there ha d been little or no significant progress achieved in 
market access since July 2008.  He had concluded that, in filling the remaining gaps in services, 
commensurate progress would need to be achieved in the other areas of the DDA negotiations.  For 
his part, the TNC Chair had concluded overall that  the way forward in the DDA was through a 'mix of 
technical and political preparations' to achieve a final package. 
58. The Chairman expressed his hope that Members could advance the discussion at the current 
meeting on the most productive ways forward for the services negotiations, including how Members 
could best organize their work.  In terms of meetings , the Chairman noted that in past years a services 
cluster, including a Special Session, had been held after the August break, toward the end of 
September.  If Members wished to pursue that option, then the week of 27 September was a 
possibility.  The Chairman wished to hear Members’ views on these issues. 
59. The delegation of Australia  said that at the most recent TNC informal meeting it had made clear 
the importance it attached to the services negotiations.  It had also made clear at a political level at 
recent meetings at the OECD and APEC that services was a high priority area for Australia, and one 
that had been lagging compared to some others in  the negotiations, and where there was a need to 
intensify work.  Australia was pleased to have par ticipated in the meetings during the current week, 
because clearly this was where work  needed to take place.  The other meetings had provided some 
momentum and focus, but it was in the Special Sessi on that delegations needed  to advance the work.  
Although there had been some significant changes at a political level in Australia in recent days, with 
a new Minister for Trade, Australia wanted to assu re delegates of its strong support for the services 
negotiations. The new Minister would be as strongly committed to this area of the negotiations as his 
predecessor.  
60. To ensure a good services outcome in the Round, it was essential that the services negotiations 
be well positioned by the time agriculture a nd NAMA modalities were agreed.  The services 
negotiations were complex and took time, and delegations needed to take them forward mindful of 
this.  With this in mind, Australia had made good use of the meetings during the week.  It had TN/S/M/37 
Page 10  
 
  convened meetings of legal services and accountancy fri ends, and had participated  in a range of other 
friends meetings.   
61. Australia was also in the process of putting th e final touches on a new plurilateral request on 
accountancy services among a group of co-sponsors.  In  Australia’s view, it was an oversight not to 
have included accountancy services as part of th e suite of professional services requests, and it 
planned to rectify this oversight in the second semester of the year. 
62. Recognizing the importance of an ambitious and balanced market access outcome not only in 
NAMA and agriculture but also in services, Australia had been exploring possible ways to generate momentum in the market access negotiations in ser vices.  One of the ideas it had discussed with a 
broad range of Members was to cluster together va rious related sectors under the umbrella of a single 
plurilateral proposal that better reflected business realities, and which could generate meaningful 
outcomes for business.  In thinking about possible sect ors that could benefit from such an approach, 
Australia considered that a logistics and suppl y chain proposal could be of interest to many 
delegations. This included developing countries, because of the critical role that logistics and supply 
chain services played in delivering agricultural a nd manufactured products.  Australia would develop 
its thinking further on these ideas before the next mee ting in September.  Australia was interested in 
discussing its ideas with all Members and partic ularly developing countries, recognizing the 
importance of ensuring a strong development outcome from the work.   
63. In the various other meetings held during the week, Australia thought that the discussions under 
the auspices of the Committee on Trade in Financial Services were productive, including the 
discussion on the global financial crisis and trade in  financial services, and in the seminar on non-life 
insurance.  Australia thought that the models utilized  in such seminars and discussions could be used 
very effectively in other parts of the services nego tiations, and Members needed to consider repeating 
them elsewhere.  Something similar in the domestic  regulation negotiations, for instance, could enrich 
and enhance the discussion. 
64. On domestic regulation, Australia understood that  the Working Party had undertaken a focused 
and detailed discussion of the transparency provisions of the Chair's text, which had been helpful in 
gaining a clear understanding of Memb ers' positions on that part of th e proposed disciplines. Australia 
placed great value on the development of disciplines th at would meet the principles of Article VI:4 of 
the GATS, and was working hard with others to try to work through the differences and narrow the 
gaps. 
65. Addressing the question of the next meeting, Austra lia took note of what the Chairman had said 
about the normal practice of holding a meeting after the summer break.  There was merit in doing that 
on the week of 27 September.  Australia hoped that in  the second half of the year work in all areas of 
the negotiations would increase, and the meetings during the week had shown that much discussion 
was required across many issues.  The delegation of  Australia said it had not been easy trying to 
attend all of the meetings and, in its view, it was worth considering whether a longer period than one 
week was required for them.  These matters also n eeded to take account of what else was going on 
more broadly in the negotiations, but  Australia hoped for some intensifi cation of work in the services 
Special Session as well. 
66. The delegation of the European Union
 noted that, unfortunately, almost no progress had been 
achieved in the services negotiations, particularly in  the market access, since the middle of 2008.  
How could Members remedy that?  First, they needed to underline that the Round could only be 
concluded if there was a meaningful outcome on services.  The area was important to the EU – which 
imported and exported 25 percent of world trade in services – but it was important also to every other Member.  There could be no economic development without services, so it was a sine qua non  to 
finish the Round successfully.  Members were now moving into a horizontal process, following the  TN/S/M/37 
 Page 11 
 
 
  TNC Chair's recommendations and their own collectiv e orientation since the stocktaking.  Members 
now had an understanding that work in the Round need ed to be pursued across the board, not only in 
agriculture and NAMA, and that work needed to be pursued at all levels and in all useful 
configurations.  The Hong Kong sequencing, while a r eality, should not be a limitation.  It in no way 
should prevent Members from accelerating work on services that needed to be done without waiting 
for any hoped for agreement in agriculture and NAM A modalities.  The services negotiations in all of 
their aspects needed to be very far advanced wh en agriculture and NAMA picked up again, for the 
very simple reason that it would only be possible to conclude agriculture and NAMA modalities if at 
that time Members had a reasonably clear assuran ce regarding the broad level of ambition to be 
expected in services. 
67. How could Members in practical terms move forw ard? Australia had referred to the need for 
political will and momentum in the DDA in general, but in services in particular.  In the G20 Summit, 
APEC and elsewhere there had rece ntly been some encouraging political signals about the importance 
of services as a constituent part of the Round.  Howeve r, Members needed also to inject momentum in 
the negotiations through a bottom-up process in Geneva .  During the current services cluster, the EU 
had heard, for the first time in a long while, in teresting and creative id eas on how to generate 
momentum, respectful of but not getting stuck by Hong Kong sequencing. 
68. The EU could see a number of avenues for future wo rk in the autumn.  First of all, the EU was 
attracted by the ideas that Australia had just put forward on the clustering and grouping of sectors, 
such as the logistics supply-chain management.  That was a useful way to address a number of service sectors in a way that reflected better the commercial r eality, and demonstrated interest of many if not 
all Members.  That kind of approach could comple ment the existing ones.  Members needed to pursue 
these approaches in areas other than  market access.  Domestic regulation was of critical importance 
for many Members, and there was a need to exit the vicious circle where the discussions on domestic regulation were being held hostage to the market  access negotiations.  The EU also wanted to see 
meaningful progress on GATS Rules and on specific co mmitments.  The EU wished to pursue this 
work in all areas across the board at the political a nd technical levels, and in Geneva, in order to 
create and sustain the necessary momentum.  The EU  was happy with the Chairman’s indications as 
to how he would plan to manage the work of the group in the autumn. Looking at the Round in a horizontal and more political manner, the EU hoped also  that senior official and head of delegation 
processes would be rolled out in the weeks ahead.   
69. The delegation of Japan
 recalled that the services negotiation was one of the market access 
pillars of the DDA, together with agriculture and NAMA.  Recently there had been a strong 
reiteration of the importance of services on various  occasions, including at the OECD Ministerial 
meeting in Paris and the APEC meeting.  In ad dition, during the recent G 20 meeting in Toronto, 
leaders had directed their representatives to use all negotiating avenues to pursue the objective of 
bringing the DDA to a balanced and ambitious conclusion as soon as possible, and to report on 
progress at the next meeting in Seoul.  In the context of the timeframe proposed in the G20 
Declaration, the next services cluster in late Septem ber would be a crucial opportunity to facilitate the 
services negotiations with a view to elaborating the best  picture of the state of play, to be reviewed by 
leaders in Seoul on 11 and 12 November. 
70. That raised the question of how delegations c ould best facilitate the services negotiations.  In 
Japan’s view, there were three points to bear in mind.  First, Members should be creative and open-
minded to new ideas which could bring much needed fresh air into the market access negotiations in 
services.  Two years had passed since the Ministerial meeting in July 2008.  Members needed to move 
forward from that point with sufficient clarity on what  was on the table.  In this regard, Japan thought 
that the assessment provided by each of the sectoral fri ends groups at the Special Session held on 16 
March, before the stock-taking, was a good referen ce point for what was on the table.  Second, 
continued technical work carried out in a balanced manner was needed for other important elements in TN/S/M/37 
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  services such as domestic regulation, GATS Rules a nd LDC modalities.  Third, in accordance with 
new negotiating themes of the DDA, such as a mo re practical approach or "added quantum", 
Members needed to work harder on services issues horizontally in various configurations.  Also, Members needed to be aware that, due to the uni que nature of the services negotiations, more time 
was required to reach a final deal than in agricu lture and NAMA, as the services negotiations did not 
use a formula-based approach.  More engagement of  senior officials and high- level participation in 
services was needed.  Japan was read y to participate, and to provide a venue for those discussions as 
and when needed. 
71. The current services cluster had been the occasion of many events and meetings, including the 
non-life insurance seminar and the dedicated session on the financial crisis, which Japan found very 
informative and useful.  In addition to the regular  Council and subsidiary bodies meetings, there had 
been many friends groups meetings and issues me etings, including the maritime transport friends 
group meeting and construction frie nds group meeting organized by Japan as the coordinator of these 
groups. Bilateral meetings had also been held.  Altogether Japan cons idered that the current cluster 
offered a good opportunity for Members to prepare the ground for the important next cluster in 
September.  Members had waited for the negotiating momentum to come for a long time, but it was 
increasingly evident that this momentum in servi ces would not come unless Members tried their very 
best to create it.  Compared to the situation of the past two years, Members were now offered more latitude to test their creativity and willingness under the Director General’s new "cocktail" negotiating 
approach.  Elements were already in Members’  hands and the recipes were known, so it was 
worthwhile to try collectively to move forward in services.  
72. The delegation of Chinese Taipei
  noted that there had been a fu ll agenda for this week’s cluster 
of meetings.  In general, it thought that the discu ssions in the Council and subsidiary bodies had been 
very constructive and useful.   Chinese Taipei was especially appreciative of the opportunities to 
exchange views and experiences with colleagues at  the non-life insurance seminar, and at the 
Committee on Trade in Financial Services Dedicated meeting dedicated to the financial crisis.  
73. After listening to the reports from the subsidiary bo dy chairs, it is clear that there were going to 
be quite a few exercises and agenda items to keep delegations busy over the coming weeks and 
months.  While the new momentum emerging from these bodies might be encouraging, there was no 
cause for complacency since no real progress had been  made in the market access negotiations, and 
the gaps between Members on sectoral coverage and levels of commitment still remained wide.  The 
services negotiations were not conducted in a vacuum. However, the special and complex 
characteristics inherent in the services negotiations meant that delegations could not simply wait until 
the last minute and then make a mad dash for a fruitful conclusion.  
74. Chinese Taipei had participated during the week in several meetings of sectoral friends, and 
continued to exchange views on how to re-invi gorate the seemingly stalled negotiations.  For 
example, delegations might wish to develop furthe r ideas on consolidating plurilateral groups to make 
them even more useful from the point of view of  practical business needs.  Chinese Taipei was open 
to any ideas that kept up the services negotiating momentum, and helped make Members ready for a 
balanced and ambitious outcome.  Members looke d look forward to the Chair’s continued guidance 
and consultations in this regard.   As for the tim ing for the next Special Session meeting, Chinese 
Taipei could go along with the suggestion that it co incide with a next cluster in late September. 
75. The delegation of Pakistan  said the need to unfreeze negotiations in services was increasingly 
recognized at all political levels.  This was demons trated by signals coming from various groups such 
as APEC and the G20.  It was obvious that an amb itious, balanced and equitable outcome in services 
was as important as the outcome in other negotiating areas, both with regard to market access and in 
the areas of non-tariff barriers to  trade in services dealt with in the negotiations on domestic 
regulation and GATS rules.  To create the desire d momentum, Pakistan proposed to set up a work  TN/S/M/37 
 Page 13 
 
 
  plan for the Special Session after the summer break,  if agreed by other Members.  In that work 
programme, there could be the possibility of initiating discussions on offers on the table so far, with a 
view to seek clarity in those offers and in the r esults of plurilateral and b ilateral requests.  This 
exercise would be without prejudice to Members' final offers, and keep in mind that offers tabled so 
far were conditional.  Meanwhile, various bilatera l and plurilateral groups could remain active to 
discuss and refine new proposals and approaches.  Th e results could be brought to the Special Session 
for discussion at the multilateral levels to take the pr ocess further.  Members could also continue their 
attempts to finalize their work on the proposed LDC waiver.  Pakist an would cooperate fully in the 
pursuit of any such work programme agreed by the Special Session. 
76. The delegation of India  said there had been very useful presentations and discussions in the 
Committee on Trade in Financial Services, in th e seminar on non-life insurance and the dedicated 
discussion on the financial crisis. The presentati ons on the financial crisis highlighted the 
competition-distortive aspects of some of the measur es taken in response to the crisis.  From the 
presentation, it was clear that regulation and lib eralisation needed to proceed together.  
77. On market access, India did not have much to report in terms of progress from the last cluster. 
Market access negotiations were not the main focus of the bilaterals that India had held during the 
week.  Some ideas concerning the lack of moment um in the market access negotiations in services, 
and how to rejuvenate them through different approaches, had been heard.  India took the clear view 
that the lack of momentum in services negotiations  was not due to any fundamental problem with the 
request/offer approach, but rather to  the reluctance on the part of some Members to move beyond their 
Uruguay Round commitments in critical areas of inter est to developing country Members, as well as 
lack of traction in other areas of negotiations. I ndia was not convinced that any departure from the 
request/offer approach was required at this stage of the negotiations.   
78. India did not at this stage wish to comment on the sectoral cluster approach proposed by some 
Members. However, it needed to be emphasized that  the basic reason for the lack of momentum was 
the absence of balance between what developing coun tries had brought to the table compared to what 
had been offered by developed countries.   India did not receive the desire d impetus from recent G20 
meeting held in Toronto.  Services ne gotiations could not move in vacuum. 
79. In the Working Party on Domestic Regulation, In dia was pleased to see some momentum.  It 
was to be hoped that this momentum would be sust ained in future meetings, and would be further 
reinforced by the holding of informal discussions to  narrow differences.  India looked forward to the 
early production of a bracketed text, in order to move the discussion towards a meaningful conclusion. 
India believed firmly that effective disciplines on do mestic regulations were essential to secure real 
market access. 
80. In the Working Party on GATS Rules, it was a good sign that a large number of Members had 
indicated that they were on track to meet the d eadline in the Chair’s Work  Program on Information 
Exchange.  India was for its part was working hard and expected to meet the deadline. All Members, 
especially those with larger shares of services trade,  were urged by India to participate effectively in 
the exchange of information in sectors of commerc ial significance, and to make the work program a 
success.   India welcomed the idea of a services cluster in September. 
81. The delegation of Hong Kong, China  was pleased to note the useful engagement of Members in 
the work of the subsidiary bodies during the clus ter.  The seminar on non-life insurance and the 
dedicated discussion on the financial crisis had facilitated useful exchanges amongst Members.  
Financial services was one of the most important  sectors for Hong Kong, China, and it welcomed 
initiatives that sought to further Members’ unde rstanding of how the sector operated, as well as 
addressing their practical concerns, in particular those of developing country Members, in making 
liberalization commitments in this sector. TN/S/M/37 
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  82. Technical work on the rule-making front was progressing steadily.  The thematic discussion in 
domestic regulation on transparency issues had made  a good start.  Hong Kong, China looked forward 
to deepening the discussion in the next cluste r.  Needless to say, the negotiation on domestic 
regulation was a major component of the services  negotiation, and Members had to keep up the 
momentum.  On GATS Rules, Members had taken forward the information exchange programme on 
subsidies.  Hong Kong, China urged all Memb ers to respond positively to the programme and 
expected a useful discussion on th e consolidated information when Members gathered again in the 
next cluster in September.   
83. Regarding the market access negotiation, howev er, Hong Kong, China had yet to see tangible 
progress.  Some Members were exploring various id eas to add new impetus to the negotiation.  Some 
initiatives were being tested, including those which sought to better fulfil an ambitious market access 
outcome by revisiting or regrouping some of the plurilateral requests in the light of the latest market situation.  Hong Kong, China noted these developments  with interest, and was prepared to engage in 
exploring creative ideas. 
84. A successful market access negotiation outcome ne eded to be balanced and at the same time 
sufficiently ambitious.  Hong Kong, China agreed that Members should stop "trading words" and 
engage in serious talks, and be prepared to test various trade-off possibilities without losing ambition.  
Members needed to ask whether the current services market access negotiation had reached a 
sufficiently advanced stage.  With the increasing emphasis put on the importance of the services pillar 
of the Doha negotiation, in recent months, at va rious ministerial settings, Hong Kong, China had a 
shared responsibility to ensure that the servic es outcome would have a cl ear shape when Members 
agreed on agriculture and NAMA modalities.  Member s had much work to do now and in the coming 
months, in order to ensure that this would be the case. 
85. In conclusion, Hong Kong, China wished to em phasize the fundamental importance of the MFN 
principle.  Currently many Members were still main taining their MFN exemptions without specified 
end dates, contrary to the GATS principle that such  exemptions should generally not exceed 10 years.  
Hong Kong, China was pleased to note that the Counc il for Trade in Services had decided to conduct 
the third MFN exemptions review in November. Memb ers needed to take this opportunity to critically 
review whether at least some of these exemptions should indeed be eliminated.  A review conducted 
fruitfully would certainly provide positiv e feedback to the services negotiations. 
86. The delegation of Canada
 recalled recent declarations from leaders and ministers, including 
from the G20 meeting held recently in Canada, to intensify technical and horizontal discussions, break 
out of silos, and find a balanced and ambitious out come to the current Doha negotiations.  It was for 
delegations in Geneva to translate this political will into concrete work.   In services, it was clear that 
sufficient progress had not been achieved, and that mu ch more work needed to be done before an 
acceptable outcome was reached.  The key questions were how to conduct this work and when.  In 
order to determine how best to move forward, Members needed to consider what was hindering 
progress in the services negotiations. 
87. Canada had heard from its partners, in partic ular emerging and devel oping country Members, 
that movement in services was contingent on progr ess in the agriculture and NAMA negotiations, or 
even to the agreement of modalitie s in these areas, based on the so-called Hong Kong "sequencing".  
Canada understood the linkages being made between the services negotiations and the agriculture and 
NAMA negotiations by its partners, and was also of  the view that services negotiations should not 
take place in a vacuum.  Services were a key pilla r of the DDA negotiations.  Canada supported recent 
calls by the Director General to move talks forwar d, including on a more horizontal basis.  As such, 
Canada did not share the view that the servi ces negotiations could wait until agriculture and NAMA 
modalities were agreed.  As all were aware, the services negotiations were very different from the 
agriculture and NAMA negotiations.  Services negotia tors needed to concentrate their efforts on  TN/S/M/37 
 Page 15 
 
 
  advancing services to the point where such horizontal  discussions could usefully take place.  Members 
were not yet there, and had a long way to go. 
88.  However, Canada had heard and noted that th e internal dynamics of the services negotiations 
was also an issue with Members, both developed a nd developing, who complained that there was little 
on the table to address their interests. This was a real challenge.  What could be done about this?  
During the week, Canada had heard new ideas on how  to move the services negotiations forward.  
Canada welcomed discussion of any initiative that  could demonstrate the potential to move the 
negotiations forward.  From Canada's point of view, any such initiative would need to have the 
potential to generate buy-in from a broad range of the membership by addressing and including issues 
that were of interest to all.  Canada encourag ed all Members to take the opportunity of the summer 
break to reflect on how services negotiations could i ndeed move forward in this crucial pillar of the 
Doha Round. Members needed to come prepared in September to engage in meaningful negotiations.  
Canada noted the very positive and constructive di scussions in the subsidiary bodies during the week, 
and hoped that this spirit would show itself prominently in the forthcoming market access 
negotiations.  Canada supported the pro posal for a cluster in September. 
89. The delegation of Brazil  expressed its appreciation for the productive and stimulating 
discussions carried out during the week in the Council  for Trade in Services and its subsidiary bodies.  
In the framework of the Committee on Trade in Fina ncial Services, for instance, both the seminar on 
non-life insurance and the dedicated discussion on the fi nancial crisis and trad e in financial services 
enabled delegations to increase their knowledge of such  issues in a very friendly atmosphere.  In the 
Working Party on Domestic Regulation, it was possi ble to identify considerable willingness to reach a 
higher degree of convergence, which would certainly require intensified work in the coming months. 
90. Regarding the review of progress in negotiations, Brazil did not have much to add to the points 
it had made on previous occasions.  Brazil was still of the opinion that progress reached so far in 
market access was satisfactory and in accordance with mandates and timelines.  Brazil therefore 
remained sceptical about a resumption of negotiatio ns in market access in the absence of progress in 
the other key areas of the Round, and without due consideration of the interests of developing 
countries.   Brazil was open, of course, to explore new ideas on how to proceed as long as they did not constitute a mere repetition of exercises undertaken in the past, in another context, and when 
developing countries had made the most meaningful contributions. 
91.  Finally, Brazil wished to comment on the hor izontal process and calls for "added quantum" in 
areas such as services.  In this respect, it was important to remind Members that, on the occasion of 
the last TNC, Brazil had warned against the repe rcussions that an "added quantum" would have for 
the balance reached so far, and that a higher level of ambition in services would also require a higher 
level of ambition in agriculture. 
92. The delegation of Chile
 said that Members had had a very intensive workweek.  Chile 
highlighted the work in the Committee on Trade in Fi nancial Services, in which there had been a very 
good dedicated session on the financial crisis and its implications for the GAT S.  The speakers had 
been of a very high level, and the debate which followed had been very  interesting.  In this respect, 
Chile thought that one needed to be very caref ul not to draw hasty conclusions from measures 
implemented to address the financial crisis, because they  were taken in a very particular context in a 
market crisis situation.  
93. When it came to market access, Chile was worri ed that no major advances had occurred.  As 
mentioned by other delegations , various bodies such as the G 20 had recently highlighted the 
importance of services for the Doha package, a nd any ambitious and successful result of these 
negotiations necessarily depended on a successful result in services.  There was promise also in some 
creative ideas, such as forming sectoral clusters  for negotiation.  Chile looked upon these ideas with TN/S/M/37 
Page 16  
 
  great favour, because they could give renewed moment um to the negotiations – possibly because they 
were more in line with the commercial and economic reality.  At the same time, many of the issues 
being discussed might be an important attraction for the developing countries.  Chile would therefore 
continue to participate in the discussion of these idea s, and at the next cluster at end September there 
might be more clarity and more concrete ideas on these initiatives. 
94. The delegation of the United States
 said that it had consistently maintained that an ambitious 
outcome for services market access was essential for a suc cessful conclusion of the Doha Round.  
And yet the services negotiations had been frozen for the past two years.  This lack of progress, 
particularly in market access, threatened the desired outcome of an ambitious and balanced 
agreement.  The prevailing assumption was that st agnation in services was a result of the Hong Kong 
timetable, which linked the last round of service s offers with the conclusion of modalities for 
agriculture and NAMA.  But the Hong Kong Declaration did not say that services negotiations should cease until modalities were concluded.  So wh y then had Members stopped negotiating?   
95. With respect to the level of progress as indicated by current offers and various signals, 
Members were clearly not satisfied.  Indeed, virtua lly all of the 23 plurilateral request/offer groups 
had expressed disappointment with progress to date.  So there was little point in proceeding to the 
final round of offers when Members did not know if they would be satisfactory.  What Members 
needed was to find ways to get back to work so that when the final offer phase was reached, there 
would be greater confidence in the quality of tho se offers.  That would require a high degree of 
creativity and good will.   
96. The United States understood that some new ideas ha d been floated, such as to bring greater 
focus to the services negotiations by clustering togeth er related sectors.  Australia had been exploring 
logistics and supply chain services, and the United States had been looking into information and 
communications technology, and the interrelations hip between computer, telecommunications, and 
cross-border services.  These ideas were promising, particularly if they better reflected commercial reality and helped to create a more manageable pr ocess.  As Members head ed into the summer break, 
they needed to redouble their efforts to be creativ e and work together to re-engage on services in a 
meaningful way, so that when they returned in the fall they would be in a position to engage in 
productive and worthwhile meetings.   
97. In parallel with renewed negotiations on market  access, the United States supported continued 
work on domestic regulations and rules. 
98. The United States could agree to a cluster toward s the end of September. With respect to the 
timing of the Committee on Trade in Financial Servi ces, it suggested that in that cluster the Chair 
might wish to consult with Members to see about the precise timing, and whether it made sense to 
have that meeting coincide with the regular comm ittee meetings, or if it looked like there might be 
other meetings that might stray into another week as Australia had suggested.  There might be a need 
to have some flexibility there.  It would be best  to have the Special Session later to enable a full 
reporting of the results of any meetings. 
99. The delegation of China
 said that it shared the concern of Members about the lack of progress in 
the market access negotiations in services.  This w as regrettable, considering the mandate of the 
Round.  While all Members agreed on the lack of progress, they might not all agree on the underlying reason.  On this point, China echoed what had been sa id by India – it was not a problem of the form of 
negotiations that had caused the lack of progress in market access, but rather that the developed 
Members had failed to go beyond their Uruguay R ound commitments to meet the requests from 
developing Members reflecting their exporting interests.   So at this stage, Ch ina maintained that the 
Hong Kong sequence was still valid in order to  achieve a balanced and ambitious Round.  TN/S/M/37 
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  100. China recognized that services was one of the thr ee pillars of the market accession negotiations 
in the Doha Round.  To achieve the ultimate goals  of the Round, and responding to the calls of the 
G20 leaders in Toronto, China suggested that Member s make technical preparations for the end game.  
This would not occur during the current year, but there could be a window of opportunity in the following year. 
101. As well, and in order to break the freeze in the negotiations on the market access, China 
suggested that Members discuss mode 4 in the Speci al Session.  In China there was a saying – pull a 
hair and the whole body will move.  In China’s view , mode 4 might just be such a hair.  Members 
could discuss in depth what the difficulties were for further commitments on mode 4.  What were the 
concerns, were they valid, and if so how could th ey be resolved?  In China’s view, it would be 
extremely helpful for Members to move forward in this area.  China encouraged Members to make 
preparations on this during the summer break and in  preparation for the September cluster.  China 
suggested that the Secretariat prepare a note or a report on this topic, or organize a preliminary meeting on the state of play.  
102. As to the timing of the next cluster, China agr eed with a cluster in September.  However, it 
could be useful for the Chair to organize an info rmal consultation with all Members two or three 
weeks ahead of time in order to discuss organization ma tters related to the cluster.  As stated, China 
tentatively proposed a discussion on mode 4, and woul d be glad to consult with interested Members 
on this topic.  As to the new modes of negotia tion proposed by different Members, especially 
Australia, China appreciated their initiative and innova tive spirit.  However, as China had made clear 
in previous meetings of the Special Session, form was not that important.  There was a Chinese saying 
– you can change the form, but if the substance do esn't change then it won't make any difference.  
There was also another Chinese saying – in order to speed up work you need to sharpen your tools.  
China welcomed other initiatives, and would be wo rking with Members in a constructive spirit. 
103. Looking back at the past cluster, China was encouraged by the good momentum from Members 
who showed a willingness to move on, especially in  the subsidiary bodies, and on the discussion on 
LDC modalities.  Though they were not big leaps, they were a good sign.  China hoped that this 
momentum could be maintained, and therefore supported open-ended cons ultations on outstanding 
issues in these areas. With a constructive spirit the negotiations on services could be move forward 
towards a fruitful and balanced result. 
104. The delegation of South Africa
, as one of the co-sponsors of the proposal for a dedicated 
session on the financial crisis in the Committee on Trad e in Financial Services, was delighted with the 
result. The debate was enriching and very usef ul, and it was precisely what was envisaged when 
South Africa co-sponsored the paper leading to the event. 
105. On market access, South Africa viewed this as an element of the single undertaking embodied 
in the DDA.  It was difficult therefore to accep t the suggestion that Members move rapidly to 
intensify the market access negotiations in services, wh en there was a lack of clarity in the other areas 
of the round – such as agriculture and NAMA – wh ere South Africa had interests and sensitivities.  
Trade in services was not the key to unlock the Round.  There needed to be movement in other areas, 
which in South Africa’s view was not  the case for agriculture and NAMA.  
106.  South Africa remained committed to a balanced and fair outcome of the Round, but it judged 
that the overall package currently on the table was simply not development-friendly. Developing 
countries, and South Africa in particular, had made  significant concessions and offers in all areas of 
negotiations. Notwithstanding this significant contribu tion, developing countries heard in Paris a few 
weeks ago the new and troubling concept of "added  quantum", which South Africa interpreted as 
"give us more".  South Africa did not share the vi ew that services was falling behind.  The problem 
confronting delegations was not a lack of meetings , but rather a political problem.  Since the current TN/S/M/37 
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  sequencing approach had been agreed by minister s in their declaration at Hong Kong, it was for 
ministers to instruct as to whether this sequencing was to be reviewed.  As for the proposal for a 
September cluster, South Africa was always read y to participate constructively in meetings.  
However, it reiterated its reservations regard ing the proposal to intensify the market access 
component of the  services negotiations.   
107. The delegation of Indonesia
 said it was aware of how challenging the tasks were before 
Members – particularly that of bridging the re maining gaps on issues in the services negotiations. 
Indonesia reiterated that the negotiations on trade in  services could not be seen in isolation – progress 
on these was interlinked with progress in the other negotiations, particularly agriculture.  It was 
Indonesia’s firm belief that Members needed to k eep in mind the importance of achieving a balanced 
package in the overall Doha negotiations. 
108. With regard to the work on domestic regulation,  Indonesia welcomed the work plan put forward 
by the Chair to address the remaining gaps among Members on the draft text.  In moving the negotiations forward, Indonesia believed however th at the balance and convergence that Members had 
achieved so far, and reflected in the revised Ch air's text of March 2009, should be maintained.  
Indonesia also thought that the draft text needed to reflect better the principles of the right to regulate, 
and the special needs of developing countries and LDCs, taking into account their level of 
development. Indonesia therefore appreciated the draft waiver text presented by the LDC Group on preferential treatment.  Concerning the area of GATS Rules, Indonesia welcomed the plan of holding 
dedicated discussions on statistical data.  This w ould shed light and give further guidance on how 
decisions on the emergency safeguard measures s hould be assessed.  With respect to the Work 
Programme on the Information Exchange on Subsidies in Services, Indonesia said that its authorities 
were still undertaking domestic consu ltations to collect the necessary information for the submissions, 
but would meet the suggested time frame.  In clos ing, Indonesia reiterated its readiness to participate 
actively in the continuing services negotiations. 
109. The delegation of Korea
 said that it was difficult to exaggerate the importance of the services 
negotiations.  The delegate said that he had been in volved in the services ne gotiations for more than 
ten years, and during that time these negotiations ha d been considered by many to be the most 
important.  With respect to the sequencing referred to in the Hong Kong Declaration, it was important 
that Members moved on.  At the end of the DDA negotiations, everything would be on the table – at 
present, Members were only in the process of ne gotiating.  Korea had di fficulty understanding why 
other negotiations had to be consid ered, while delegations could talk later at the end when everything 
was on the table.  The services negotiations technica lly were very complicated.  What was important 
was not the procedures, but rather the specific co mmitments made on market access.  Korea therefore 
welcomed new approaches, whether they were calle d horizontal, or a "cocktail", or regrouping, or 
cluster approach.  Everything actually had been tested before – there was little that was new.  
110. The delegate of Korea said he had that same day chaired a very useful meeting of the APEC 
services group. There had been very constructive discussions, workshops, and seminars, and areas 
such as health, tourism, environment, cross-border trade, and professional services had been explored. 
Another APEC meeting would be he ld in September just before the services cluster, comprising 
seminars and workshops.  Korea woul d be very happy to bring those results to other delegations and 
see if there were any new inputs that could contri bute to the services negotiations in Geneva.  Korea 
supported Hong Kong, China's suggestion for having  the MFN exemption review. This was a very 
important issue for Korea, and it had not advanced.  As was agreed by trade ministers in APEC, and 
also in the G20, next year would provide a window  of opportunity to finish the Round, and Members 
needed to prepare for that. 
111. The delegation of New Zealand  supported the previous statements by the EU, Australia, Japan 
and others.  In particular, it agreed with the view that sequencing, or waiting for progress in  TN/S/M/37 
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  agriculture and NAMA, was an insufficient reason to do nothing.  Delegations had been directed, 
whether by the Director General or through recent ministerial meetings, to look for progress across all 
fronts, and that included market access in services.   There was a range of useful work streams to 
pursue.  New Zealand supported the consideration of new approaches, in particular those ideas which 
sought to define and focus the services outcome in  a commercially meaningful way, and were of 
demonstrable relevance to development.  Logis tics and supply chain services was one example, and 
there were likely to be others.  In addition, there was useful work to continue in domestic regulation, 
GATS Rules and the Committee on Specific Commitm ents, as outlined by those who had already 
spoken.  New Zealand supported the proposal for a cl uster in September, and the suggestion that it 
might need to be longer, in order for the various workstreams to be addressed properly, including time 
for friends' meetings, bilaterals  and other meeting formats. 
112. The delegation of Argentina  proposed that the reports of the Chairs of the Working Parties, 
which contained important conclusions on work do ne and proposals for future work, should in the 
future be circulated to Members.  That would add clarity and transparency if these could be circulated 
at the same time as the minutes.   
113. Argentina welcomed, as had India and South Africa, the dedicated discussion on the financial 
crisis in the Committee on Trade in Financial Servi ces.  The speakers had been excellent, and  much 
of the information had been extremely valuable.  Argentina took note of the different measures taken 
by Members in the context of the financial crisis, and the trade- and competition-distortive effects of 
those measures.  There were also some important discussions on domestic regulation and in the Working Party on GATS Rules.  With regard to the market access discussions, Argentina, like Brazil, 
South Africa, India  and China, continued to str ess the importance of the other negotiations in the 
Round and, in particular, agriculture.  Argentina di d not agree that work was not being undertaken on 
this issue.  Argentina had held a number of bilatera l meetings, but the fact was that there would be no 
interest in moving forward market access if, as India had said, there was no clear benefit deriving for developing countries in the Round.  As for new ap proaches, all were welcome and they would be 
studied.  However, they needed to be seen in the context of the rest of the negotiations, and should not 
simply repeat requests that had already been made. 
114. The delegation of Switzerland
 said that services were obviously an important pillar of the DDA.  
In fact, it was inconceivable to complete the R ound without having a solid services package.  This 
meant a package containing market access commitments  and rules. A philosophical debate could be 
launched on sequencing, but the bottom line was that Me mbers needed to cross the finish line together 
in all areas of the Round.  Given that the services negotiations were more technical than those in 
agriculture and NAMA, services negotiators needed  to work more and not wait for the Hong Kong 
sequencing to happen.  If services nego tiators waited, then they would not get to the finish line, which 
would stop or delay any conclusion of the Round. There was a need to work, and there was no lack of examples where work was needed.  
115. Switzerland appreciated the reports of the chairs of the subsidiary bodies. On market access, 
progress had frankly been zero since 2008.  Members had achieved practically nothing, and there was 
a consensus on that. Nobody was satisfied with progress in the market access negotiations.  The 
lesson to be drawn was that Members had to do mu ch better.  Switzerland was open to new ideas on 
market access, and sectoral clustering was certainly one of them.  There was no need to reinvent the 
wheel, but if new approaches could help in gain ing more active stakeholders pushing Members to 
finish, this was positive.  But this was just a co mplement to what already existed, which was the 
bilateral negotiations.  These remained very importa nt for Switzerland, as were the plurilaterals.  
There was work to be done, and Switzerland was ther efore agreeable to follow the path proposed by 
the Chairman, in particular the cluster of meetings at the end of September. TN/S/M/37 
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  116. The delegation of Egypt
 said that the cluster was very useful and productive, especially the 
seminar on trade in non-life insurance services and the dedicated session on the financial crisis that 
provided allowed delegates to deep en their knowledge of these two important topics.  The technical 
discussion on domestic regulation during the services  cluster – on transparency and on paragraph 11 
of the Chair's text – was very useful.   On GATS rules, Egypt recognized the progress made in the 
area of subsidies.  Egypt was now gathering in formation about the subsidies programmes in its 
services sector. Egypt supported the proposal on the presentation of services statistics to help the discussions on emergency safeguard measures.  Regard ing the next cluster, Egypt was prepared to 
participate constructively. 
117. The delegation of Singapore
 said it was keen to see a good package in services.  Singapore had 
always tried to be a constructive voice in the ne gotiations.  All Members knew that the services 
negotiations were linked to the other areas of the DDA negotiations.  While modalities in agriculture 
and NAMA might be necessary to facilitate progress in  negotiations, they were not sufficient for the 
conclusion of the overall negotiations .  Singapore thought that it would be helpful if all areas of the 
Round kept pace with one another.  However, this approach would need the support of all Members if 
it were to lead to a fruitful outcome. 
118. With respect to the meetings during the week, Singapore said that they had been useful in 
gaining a better understanding on other Members' approaches and constraints with respect to services.  
Singapore would agree with most Members that more  work needed to be done to find the balance 
between what each Member desired and what wa s achievable.  As always, Singapore supported 
maintaining the momentum in the subs idiary bodies, and was prepared to continue to contribute to it.  
Singapore supported the proposed cluster of services meetings in late September. 
119. The Chairman  said that the suggestion by Argentina to distribute the reports of the Chairs of the 
subsidiary bodies was a good one, and that this woul d be done electronically.  He then observed that 
there had been a considerable number of opinions,  ideas, proposals, and suggestions put forward for 
the negotiations, and that this important discussion would need to continue.  The first thing he 
intended to do after the break was to start consultations to determine the exact dates on which to hold 
the meetings for the next cluster.  He would c onsult with delegations on the organization of the 
discussion.  The cluster would take place during the week of the 27 September. 
120.  The Council  took note of the statements made, and deci ded to revert to this item at the next 
meeting. 
D. OTHER BUSINESS  
121. Since there was no other business, the Chairman  adjourned the meeting. 
_________