WORLD TRADE  
ORGANIZATION  S/C/28 
19 November 2007 
 (07-5025) 
  
  
 
ANNUAL REPORT OF THE COUNCIL FOR TRADE IN SERVICES 
TO THE GENERAL COUNCIL (2007) 
 
 1. Since its last report to the General Council, the Council for Trade in Services held four formal 
meetings, on 30 November 2006, 1 Marc h 2007, 7 June 2007 and 2 October 2007.
1  During this 
period, the Council addressed the following matters: 
I. TRANSITIONAL REVIEW UNDER SECTION 18 OF THE PROTOCOL ON THE 
ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA 
2. At its meeting held on 30 November 2006, the Council for Trade in Services conducted and 
concluded the fifth transitional review of the implementation by China of its WTO commitments, 
pursuant to section 18 of the Protocol on the Accession of the People's Republic of China 
(WT/L/432).  The Council took note of the report (S/FIN/17) of the Committee on Trade in Financial Services, which formed part of the Council's report on this matter to the General Council, contained in 
document S/C/27. 
II. REVIEW OF AIR TRANSPORT UNDER THE ANNEX ON AIR TRANSPORT 
SERVICES 
3. In 2007, the Council for Trade in Services held  two meetings dedicated to the second review 
of air transport as mandated by the GATS Annex on Air Transport Services, on 1 March and on 
2 October.  Reports for these meetings are cont ained in documents S/C/M/87 (dated 10 April 2007), 
and S/C/M/89.  
4. At the March meeting, the Council addressed de velopments in the sector with relation to 
bilateral Air Services Agreements on the basi s of the Secretariat Quantitative Air Services 
Agreements Review (QUASAR) methodology and database (S/C/W/270/Add.1).  The European 
Communities submitted a communication presenting the ma in developments in the sector in the EC 
since 2000 (S/C/W/280).  Members reverted to repair and maintenance services on the basis of a Secretariat note (S/C/W/279), that had been requested  by the delegation of Costa Rica at the previous 
review meeting.  Members' discussions of the ope ration of the Air Transport Annex were mainly 
stimulated by a submission by Australia, EC, Ne w Zealand, Switzerland, Norway (JOB(06)/237) 
which proposes extending the scope of the GATS to  ground handling and airport operation services. 
5. At the October meeting the Council addressed, on the basis of the Secretariat note contained 
in document S/C/W/270/Add.2, developments in the following aviation areas:  plurilateral Air 
Services Agreements;  economic and financial situa tion of scheduled passenger airlines;  low-cost 
carrier services;  non-scheduled passenger services;  regional air transport services;  general aviation 
services;  air cargo services;  slots;  alliances and c ooperation amongst airlines;  ownership;  and other 
significant economics and regulatory developments.  The Council also reverted to QUASAR, on the 
                                                     
 
1 Reports of the meetings are contained in documents S/C/M/85 to 89 and should be read in 
conjunction with this report. S/C/28 
Page 2  
 
  basis of a communication from Australia (JOB(07) /136) and a Secretariat note outlining possible 
improvements to the methodology (S/C/W/284).  As  for the agenda item on the operation of the 
Annex, a communication by Canada and the United States (JOB(07)/143) provided the basis for the 
debate.  No decision was taken as to further steps for the review, and the Chairman was mandated to 
hold informal consultations in this regard. 
III. NOTIFICATION FORMAT FOR REGIONAL TRADE AGREEMENTS 
6. At its meeting on 1 March, the Council for Trade in Services considered a new format for the 
notification of regional trade agreements (RTA s), including those under Article V of the GATS, 
recommended by the Committee on Regional Trade Agreements (WT/REG/16) at its 44
th Session.  At 
the request of the Council, the Secretariat prepared  a draft decision for the purpose of adopting the 
proposed new format for RTAs and formally modifying the existing Guidelines for Notifications 
under the GATS , contained in S/L/5, as far as notifications  made pursuant to GATS Article V:7 were 
concerned.  This draft decision, circulated in doc ument S/C/W/282, was considered by the Council at 
its meeting on 7 June 2007.  The Council agreed  to revert to it at its next meeting. 
IV. NOTIFICATION PURSUANT TO GATS ARTICLE XXI 
7. At its meeting on 7 June 2007, the Council for Trade in Services considered a notification 
from the United States made pursuant to GATS Arti cle XXI (Modification of schedules), regarding a 
modification to its Schedule of Specific Commitmen ts  (GATS/SC/90).  The exchange of views on 
this issue is contained in document JOB(07)/87. 
V. NOTIFICATIONS MADE TO THE COUNCIL PURSUANT TO GATS 
ARTICLES III:3, V:7, AND VII:4 
8. At its meetings held on 30 November 2006,  1 March 2007 and 7 June 2007, the Council for 
Trade in Services took note of the following notifications. 
(a) Notifications pursuant to Article III:3 of the GATS 
  Switzerland       S/C/N/376-384 + 396  
  Armenia       S/C/N/389 
  Bolivia        S/C/N/390  
 
(b) Notifications pursuant to Article V:7 of the GATS 
  Honduras       S/C/N/368/Rev.1 
  Guatemala       S/C/N/369   Jordan and Singapore      S/C/N/370 
  Japan and Malaysia      S/C/N/371 
  United States, Guatemala, Honduras,       El Salvador and Nicaragua     S/C/N/372 
EFTA States and the Republic of Korea    S/C/N/373 
  Costa Rica and Mexico      S/C/N/374 
United States and the Kingdom of Bahrain   S/C/N/375 
Brazil (on behalf of MERCOSUR)    S/C/N/388 + Corr.1 United States, the Dominican Republic,     El Salvador, Honduras, Nicaragua and Guatemala  S/C/N/391 
  Panama and Singapore     S/C/N/392   India and Singapore      S/C/N/393 
Brunei Darussalam, Chile, New Zealand and Singapore  S/C/N/394  S/C/28 
 Page 3 
 
 
  (c) Notifications pursuant to Article VII:4 
  Switzerland       S/C/N/395 + Corr. 1 
 
VI. WORK OF THE SUBSIDIARY BODIES 
9. The activities of the subsidiary bodies are refl ected in their respective reports, which are 
annexed to this report, as follows:  
 Annex  I Report of the Committee on Trade in Financial Services (S/FIN/18) 
 Annex  II Report of the Committee on Specific Commitments (S/CSC/13)  Annex  III Report of the Working Party on Domestic Regulation (S/WPDR/10)  Annex  IV Report of the Working Party on GATS Rules (S/WPGR/17) 
 
 
 
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  ANNEX I 
 
 WORLD TRADE  
ORGANIZATION  S/FIN/18 
13 November 2007 
 (07-4926) 
  
  
 
 
ANNUAL REPORT OF THE COMMITTEE ON TRADE IN FINANCIAL SERVICES TO 
THE COUNCIL FOR TRADE IN SERVICES (2007) 
  
 
1. Since its last Annual Report to the Council for Trade in Services (S/FIN/16), the Committee 
on Trade in Financial Services has held tw o formal meetings, on 27 November 2006, and 
6 June 2007.
1  In this period, the Committee addressed the following matters:  the acceptance of the 
Fifth Protocol to the General Agreement on Trade in Services;  technical issues;  recent developments 
in financial services trade; and the transitional re view of the implementation by China of its WTO 
commitments, pursuant to section 18 of the Protocol on the Accession of the People's Republic of 
China. 
I. ACCEPTANCE OF THE FIFTH PROTOCOL TO THE GATS 
2. Three Members have not yet accepted the Protocol :  Brazil, Jamaica, and the Philippines.  
At the Committee’s request, these Members reported pe riodically on the situation of their domestic 
acceptance procedures.  At the meeting held in June  2007,  the representative of Brazil indicated that 
the main impediment to the acceptance of the Prot ocol had been removed, as legislation had been 
passed putting an end to the State monopoly in the re insurance sector.  Parliamentary work was still 
ongoing with a view to completing the acceptance proce dure.  At the same meeting, the representative 
of Jamaica reported that domestic consultations in volving relevant stakeholders from the public and 
private sectors were still ongoing with a view to arriving at a final decision regarding the ratification 
of the Protocol.  However, Brazil, Jamaica, and the Philippines were not in a position to indicate a 
concrete timeframe for accepting the Protocol.     
II. TECHNICAL ISSUES 
3. During the reporting period, no discussions took place under this agenda item.  
III. RECENT DEVELOPMENTS IN FINANCIAL SERVICES TRADE 
4. At the meeting held in June 2007, the Committee discussed briefly some suggestions made by 
the Chairperson regarding issues that could be tack led under this agenda item.  The Committee finally 
agreed that the Chairperson would hold informal consultations with a view to identifying suitable 
issues for future discussion. 
                                                      
1 Reports of these meetings are contained in documents S/FIN/M/53, and S/FIN/M/54 and Corr.1.  
They should be read in conjunction with this report. S/C/28 
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  IV. TRANSITIONAL REVIEW UNDER SECTION 18 OF THE PROTOCOL ON THE 
ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA 
5. At its meeting on 27 November 2006, the Committe e carried out the fifth transitional review 
of the implementation by China of its WTO commitm ents, pursuant to section 18 of the Protocol on 
the Accession of the People's Republic of Chin a.  The report submitted by the Committee to the 
Council for Trade in Services on this matter is contained in document S/FIN/17.   
 
 
_______________ 
 
   S/C/28 
 Page 7 
 
 
  ANNEX II 
 
 WORLD TRADE  
ORGANIZATION  S/CSC/13 
13 November 2007 
 (07-4924) 
  
   
ANNUAL REPORT OF THE COMMITTEE ON SPECIFIC COMMITMENTS  
TO THE COUNCIL FOR TRADE IN SERVICES (2007) 
 
 1. Since its Annual Report of 2006 to the Counc il for Trade in Services, the Committee on 
Specific Commitments held three formal meetings:  on 1 December 2006, 7 June 2007, and 
18 September 2007.
1  During the reporting period, the Committee addressed three items:  
classification issues;  scheduling issues;  and relationship between new and old commitments.  
I. CLASSIFICATION ISSUES 
2. At the meeting of 7 June 2007, a group of Members introduced a Communication titled 
"Understanding on the scope of coverage of CPC 84 - Comput er and Related Services" 
(S/CSC/W/51).2 
3. At the meeting of 18 September 2007, the delegation of the European Communities circulated an 
informal Note on the classification of distribution (JOB(07)/138), in which it set out the classification it used for distribution services in negotiati ons of its preferential trade agreements. 
II. SCHEDULING ISSUES 
4. During the reporting period, no discussions took  place under the agenda item of "Scheduling 
Issues". 
                                                     
 
1 Reports of these meetings are contained in documents S/CSC/M/43-45.  They should be read in 
conjunction with this report.  
2 Communication of 24 January 2007 from Albania, Australia, Canada, Chile, Colombia, Croatia, the 
European Communities, Hong Kong China, Japan, Mexi co, Norway, Peru, the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu, Turkey and the United States.  On 6 March 2007, the delegation of New 
Zealand was added to the list of sponsors, see document S/CSC/W/51/Add.1; on 30 April, the delegation of 
Singapore was added to the list of sponsors, see document S/CSC/W/51/Add.2; on 12 June 2007, the delegation of Israel was added to the list of sponsors, see document S/CSC/W/51/Add.3; and on 27 September 2007, the 
delegation of Costa Rica was added to the list of sponsors, see document S/CSC/W/51/Add.4. S/C/28 
Page 8  
 
  III. RELATIONSHIP BETWEEN OLD AND NEW COMMITMENTS 
5. Discussions on the relationship between exis ting commitments and commitments resulting 
from the current negotiations continued at the meeti ng of 1 December 2006 in informal mode.  At the 
subsequent formal meeting on 7 June 2007, the issu e was briefly touched upon, but was not further 
addressed at the meeting of 18 September 2007.  
 
_______________ 
  S/C/28 
 Page 9 
 
 
  ANNEX III 
 
 WORLD TRADE  
ORGANIZATION  S/WPDR/10 
13 November 2007  
 
(07-4922) 
  
   
ANNUAL REPORT OF THE WORKING PARTY ON DOMESTIC REGULATION  
TO THE COUNCIL FOR TRADE IN SERVICES (2007) 
 
 
1. Since the Annual Report of 2006
1, the Working Party on Domestic Regulation (WPDR) held 
two formal meetings and several informal meetings2. 
2. In the period covered by this report, the Work ing Party advanced its work on the development 
of a draft text of regulatory disciplines pursuan t to GATS Article VI:4, as mandated by the Hong 
Kong Ministerial Declaration.  To facilitate this task and based on Members' proposals and 
subsequent inputs, the Chairman of the Working Part y prepared a first draft text of possible regulatory 
disciplines, which was contained in a room document dated 18 April 2007. 
3. Members agreed that the 18 April 2007 text by  the Chairman constituted an acceptable basis 
for negotiations.  Several consulta tions on this text have taken place since April 2007 focusing on all 
the elements of possible Article VI:4 disciplines.  In these consultations, Members have engaged in 
paragraph-by-paragraph negotiations with a view to reaching compromise solutions on specific 
provisions in the text.  A first thorough reading of the entire text was completed on 
17 September 2007.  The Chairman made a report on these informal consultations on his draft text at 
the meeting of the WPDR held on 17 September 2007. 
4. At the meeting of the Special Session of the Council for Trade in Services held on 
28 September 2007, the Chairman announced that based  on his consultations with Members he would 
table a revised version of the text he had circulated on 18 April 2007. 
 
_______________ 
  
 
 
                                                     
 
1 S/WPDR/9, 20 November 2006. 
2 Reports of these meetings are contained in documents S/WPDR/M/36 – 37.  They should be read in 
conjunction with this report.  S/C/28 
 Page 11 
 
 
  ANNEX IV 
 
 WORLD TRADE  
ORGANIZATION  S/WPGR/17 
16 November 2007 
 (07-4994) 
  
   
ANNUAL REPORT OF THE WORKING PARTY ON GATS RULES  
TO THE COUNCIL FOR TRADE IN SERVICES (2007) 
 
 1. Since its annual report for 2006, the Working Party on GATS Rules held three formal 
meetings:  on 19 April 2007, on 4 July 2007, and on 17 September 2007.
1  The three negotiating 
mandates the Working Party is entrusted with were  put on the agenda of each meeting:  emergency 
safeguard measures (Article X), government procurem ent (Article XIII), and subsidies (Article XV).  
One informal meeting was also held, as well as various informal consultations.   
I. NEGOTIATIONS ON EMERGENCY SAFEGUARD MEASURES (ARTICLE X) 
2. At the meeting of 19 April, delegations exch anged views on a room document proposing legal 
text on the use of emergency safeguard measures in services, presented by the delegations of Brunei 
Darussalam, Cambodia, Indonesia, Malaysia, Myan mar, the Philippines, Thailand and Viet Nam.2  
Discussions were principally held in informal mode.  Issues raised included the relationship to market 
access commitments, modal application, conditions of application, causal link, and special and 
differential treatment.  Divergent views conti nued to be expressed on various aspects such as 
desirability and feasibility.3 
II. NEGOTIATIONS ON GOVERNMENT PROCUREMENT (ARTICLE XIII) 
3. At the meetings of April, July, and Septembe r 2007, delegations exchanged views on the most 
recent proposal from the European Communities, con cerning a legal text for an Annex to the GATS 
on government procurement (S/WPGR/W/54).  Issues ra ised included the possible benefits of opening 
procurement markets, procedural rules, special and differential treatment, and MFN application.  
No common understanding has been reached yet on the scope of the negotiating mandate under 
Article XIII.4   
                                                      
1 Reports of these meetings are contained in documents S/WPGR/M/57, S/WPGR/M/58, and 
S/WPGR/M/59.  They should be read in conjunction with this report.   
2 Outside the period of reference of this annual report, a WPGR meeting is due to be held on 
29 November 2007 at which the above mentioned delegations intend to present a communication JOB 07/155 (circulated on 19 October 2007) containing a revised version of the room document.  
3 Discussions on emergency safeguard measures are reflected in paragraphs 2-30 of S/WPGR/M/57, 
paragraphs 12-14 of S/WPGR/M/58, and paragraphs 2-5 of S/WPGR/M/59. 
4 Discussions on government procurement are reflected in paragraphs 31-37 of S/WPGR/M/57, 
paragraphs 8-11 of S/WPGR/M/58, and paragraphs 6-8 of S/WPGR/M/59.   S/C/28 
Page 12  
 
  III. NEGOTIATIONS ON SUBSIDIES (ARTICLE XV) 
4. At the meetings of April and July 2007, delegations discussed a Secretariat Note that 
compiled information on subsidies contained in  TPR reports (S/WPGR/W/25/Add.5), as well as an 
informal communication from Hong Kong, China and Me xico on non-actionable subsidies in trade in 
services (JOB(07)/27).  The Chairperson also reported,  at the April meeting, on the consultations she 
had been asked to undertake on obstacles encounter ed by Members in sharing information as per 
Article XV:1.  At the meeting of September 2007, discussions conc entrated on a room document from 
Hong Kong, China that provided additional view s on non-actionable subsidies on the basis of 
questions raised in JOB(07)/27.
5  Members expressed various views on the issues raised. 
 
__________ 
 
  
 
                                                     
 
5 Discussions on subsidies are reflected in paragraphs 38-59 of S/WPGR/M/57, paragraphs 2-7 of 
S/WPGR/M/58, and paragraphs 9-15 of S/WPGR/M/59.