RESTRICTED  WORLD TRADE  
ORGANIZATION  S/C/M/99 
6 September 2010 
 (10-4592) 
Council for Trade in Services  
  
 
REPORT OF THE MEETING HELD ON 30 JUNE 2010 
 
Note by the Secretariat
1 
  
1. On 30 June 2010, the Council for Trade in Serv ices held a meeting under the Chairmanship of 
Ambassador Elin Johansen (Norway).  The ag enda was contained in document WTO/AIR/3574. 
2. The Chairperson
 said that, under Other Business, the Secretariat would like to make a brief 
statement about the posting on the WTO website of the Air Services Agreements Projector.  The representative of Australia
 said that her delegation wished to add an item of Other Business 
concerning the delayed entry into force of the certified EC-25 schedule. 
3. The agenda was adopted , as modified. 
A. NOTIFICATIONS PURSUANT TO ARTICLES III:3  AND V:7 OF THE GATS 
4. Starting with the notifications made pursuant to Article III:3 of the GATS, the Chairperson  
drew delegations' attention to the notifications received from Peru, in documents S/C/N/546 to 550, 
and from Barbados, in documents S/C/N/552 to 556. 
5. The Council took note  of the notifications made. 
6. The Chairperson subsequently pointed to a notification pursuant to GATS Article V:7 
received from China and Pakistan, and circulated in document S/C/N/551. 
7. The Council took note  of the notification, and referred  the agreement notified to the 
Committee on Regional Trade Agreements for consideration. 
B. COMPLIANCE WITH GATS NOT IFICATION REQUIREMENTS  
8. The Chairperson  recalled that, at its meeting of April 2010, the Council had agreed that the 
Secretariat would update the statistical account of  the notifications made under the relevant GATS 
provisions contained in JOB(09)/10/Rev.1, and use the opportunity to correct any factual mistakes that delegations had identified in that Note.  Acco rdingly, the Secretariat had produced a revised Note, 
circulated as document JOB(09)/10/Rev.2. 
9. A representative of the Secretariat
 explained that the updated Note was a revision of the 
previous one, and included all the information c ontained in the earlier Note as well as factual 
corrections that delegations had communicated to th e Secretariat.  The Note was structured in two 
parts:  the first contained an account of the main  notification requirements in the GATS, while the 
second part provided a statistical account of the notif ications submitted pursuant to those provisions. 
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. S/C/M/99 
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  10. The representative of Switzerland
 thanked the Secretariat for the revised Note in document 
JOB(09)/10/Rev.2.  He said that the number of no tifications and of notifying Members under Article 
III:3 of the GATS had significantly increased in 2009 as compared to previous years.  The high 
number of notifications in 2009 was especially rema rkable given that in previous years many 
notifications had been submitted by newly acceded c ountries pursuant to the terms of their accession.  
This seemed to indicate a deficit in compliance with notification obligations and his delegation 
welcomed that this was being addressed. 
11. He added that notifications were important, as transparency allowed Members to identify new 
trade opportunities as well as possible trade barriers.   Gathering and sharing Members' experiences 
with notification requirements would be valuable.  His delegation was convinced of the importance 
and the need to prioritise the notification exercise.   He proposed that the item of "compliance with 
GATS notification requirements" remain on the age nda of the following meeting of the Council. 
12. The Chairperson  said that the Council had taken note of the Secretariat document and of the 
intervention by Switzerland. 
C. SECTORAL AND MODAL DISCUSSIONS  
13. The Chairperson  recalled that, at the meeting held in April 2010, the Council had addressed 
three new Background Notes produced by the Secretariat on financial services, education services and mode 3.  As indicated in the airgram, delegations w ould have an opportunity to revert to those areas at 
the end of the discussion of that agenda item. 
14. For that meeting, the subjects up for discussion were maritime services, logistics services, 
accountancy services and legal services.  The Chairper son recalled that the Secretariat Notes were 
intended to provide a basis for Members' discussi ons in the Council on sectors and modes of supply.  
The Notes should not be the sole focus of the deliber ations.  Accordingly, she encouraged delegations 
to offer their own written submissions, contri butions and comments on the areas concerned. 
15. In line with the practice adopted at previous m eetings, the substantive pa rt of the debate under 
that agenda item would be held in informal m ode.  The presentations by the Secretariat and by 
international organisations, and the statements of any delegations wishing to place their interventions 
on record would be incorporated in the minutes of th e meeting.  For the substantive part of Members' 
informal debate, instead, the Chairperson would produce, under her own responsibility, a non-
attributable summary.  The summary would be circul ated shortly after the me eting, and subsequently 
recorded in the minutes of the meeting. 
16. The Chairperson also recalled that the Counc il had agreed that, for that meeting, the 
Secretariat would invite, on an ad hoc basis, the OECD, the Internati onal Federation of Accountants, 
the International Accounting Standards Board, and th e International Bar Association, which were not 
observers to the Council, to shar e with Members any relevant work  that they had produced in the 
sectors under discussion. 
17. In line with the practice adopted at previous meetings, she would request these international 
organisations to briefly introduce their contributi ons immediately after the Secretariat had presented 
its own papers, and befo re opening up the floor for general discussion. 
1. Maritime transport services (Background No te by the Secretariat, S/C/W/315) 
18. A representative of the Secretariat
 said that the Note drew a picture of the economic and 
regulatory developments in the maritime transport industry over the past 20 years.  On the economic 
side, the story was one of boom and bust, largely driven by the process of globalization.  On the  S/C/M/99 
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  regulatory side, the main developm ents related to competition, secur ity and private management of 
ports.  On the pure "blue sea" side of the sect or, he noted that liberalisation had advanced. 
19. The representative of Chinese Taipei  thanked the Secretariat for the updated and very 
informative Background Note.  As the Note stated in  the very beginning, “maritime transport is the 
lifeblood of the world economy.”  In 2006, more than 40 per cent of world exports were carried 
through maritime services.  This was especially true  for Chinese Taipei's economy.   In fact, more 
than 60 per cent of its imports and exports were delivered by maritime shipping. 
20. Chinese Taipei echoed the views previously e xpressed by Japan and the other Friends of 
Maritime Transportation.  The representative only wish ed to highlight two points.  First, maritime 
services were relatively liberal in actual practice.  But surprisingly, the sector  was one of the least 
committed ones, next only to health and education.   Many Members had either not made sufficient 
offers or no offers at all.  As a recently acced ed Member with already numerous commitments made 
at the time of accession, Chinese Taipei had contribut ed further in making more commitments in its 
revised conditional offer, which included extensive coverage of maritime services.  He encouraged 
other Members to do their best to reflect current levels of liberalization.  A more liberal and 
transparent global shipping regime would certainly contribute greatly to world trading activities. 
21. Second, he requested a factual correction in Table 4 on page 10 of the Note.  For purposes of 
consistency, Kaohsiung port, which ranked twelfth in the section for 2008, needed to be indicated as a 
port in “Chinese Taipei”, as was the ca se in the sections for 1998 and 2001. 
22. The Council  conducted the rest of the discussion in informal mode.  The Chairperson  
produced the following summary of the main points raised (also contained in JOB/SERV/19). 
23. Almost all of the 13 delegations that took th e floor noted the importance of  maritime 
transport services for their economies and stressed th at there was a gap between the overall liberal 
practices in the maritime transport sector and the relatively low number of GATS commitments.  
They therefore called for new or improved commitments  in the area along the lines of the plurilateral 
request on maritime transport.  Several delegati ons mentioned the importance of the Maritime Model 
Schedule in that regard.  In addition, dele gations made the following specific points. 
24. One delegation noted that, as reflected in th e Background Note, the sector had experienced 
tremendous growth over the last ten years.  It was highly liberalized, with no signs of emerging severe 
protectionism.  Nevertheless, the sector was still treated exceptionally in the GATS.  Commitments 
were limited and not definitive, and the most -favoured-nation (MFN) principle, one of the 
cornerstones of the multilateral system, had not entere d into force due to the special regime foreseen 
by Decision S/L/24.  Since the present economic crisis had increased pr otectionist temptations, 
improved commitments, including from emergi ng economies whose maritime interests had 
considerably increased, and full application of MF N were therefore essential to establish a durable 
level playing field. 
25. One delegation underlined its longstanding commitment to open markets and free competition 
in international maritime transport.  The B ackground Note was a well-resourced paper and a good 
reference document for future work on maritime tran sport in the WTO.  This delegation appreciated 
that the focus was not to confined to the OE CD area, but included emerging economies and other 
parts of the world.  Some issues could have b een more developed:  the increasing importance of 
transshipments and feeder operations in internatio nal container networks and the implications on 
international cargoes.  Similarly, a more detailed d escription of regulations affecting access of foreign 
ships to port services (non-discrimination of access) would have been useful as well as an overall 
analysis of the maritime provisions of FTAs.  Also , it would have been desirable sometimes to more 
clearly identify the definitional scope;  for example,  did paragraphs 22 to 25 cover only the container S/C/M/99 
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  sector or, rather, the totality of maritime transport and its sub-segments?  Similarly, the first shipping 
company having used kite auxiliary/sail technologies, Beluga Shipping, was not refered to.  Also, this 
delegation was concerned that pa ragraph 70 relating to security developments could be read, 
erroneously, as meaning that regulators were starting to relax their post 9/11 measures.  Further, there 
was also a slight interpretation problem in footnote  43;  the new consortia block exemptions did not 
extend the lock-in period, but modified the rul es to calculate the maximum lock-in period and 
extended the notice period from six months to 12 m onths for highly integrated consortia.  Finally, 
paragraph 95 gave the impression that the EU had issued several specific competition rules governing tramp pools and cabotage services.  That was not the case, those two sub-sectors were dealt with by the same regulation, but in a different manner. 
26. Another delegation requested that its name be added to the list of countries, in the typology in 
paragraph 27, whose fleet was not commensurate with the importance of its foreign trade.  Also, the 
Secretariat would be provided with a more preci se description of the country's competition review. 
27. One delegation sought clarification on the descrip tion, in paragraph 165, of the present status 
of MFN exemptions in this sector.  A representativ e of the Secretariat responded that the use of the 
words "no longer necessary" was imprecise indeed .  The intended message was that, under Decision 
S/L/24, the MFN obligation was suspended until the end of the Doha Round (except for the maritime 
commitments undertaken), thus obviating the need  to lodge MFN exemptions for the time being. 
28. One delegation indicated that its offer in th e Doha Round covered the full spectrum of 
maritime transport services.  Since the Backgr ound Note underlined the importance of foreign 
registered vessels in Members' controlled fleet, this delegation was interested in the views of others 
concerning the GATS implications.  Several techni cal comments were provided:  for instance, the 
date of adoption of the ILO "Super Convention" was 2006 and not 2005;  its entry into force was 
imminent.  In paragraph 50, Dubai Port World should be changed into  DP world, paragraph 80 should 
be corrected as the proposed competition reform ha d not yet been adopted due to other maritime 
reform priorities, and in paragraph 87 it ought be cl arified that capacity stabilisation agreements had 
not been banned. 
29. One delegation underlined the importance of port services.  It concurred with remarks in 
paragraph 115 on the difficulties met by certain por t operators in their international operations.  A 
more extended discussion of this issue would have  been helpful, given the scope for further 
liberalisation.  The delegation noted with interest  the observations containe d in paragraphs 122 and 
123 regarding dormant legislations, waivers and obsolet e legislations and agreements.  This raised the 
question of whether and to what extend some sc heduled restrictions and MFN exemptions were 
indeed necessary;   there might be room for elim ination.  Paragraph 165 indicated scope for progress 
concerning MFN exemptions. 
30. One delegation requested, in the third column of  Table 4 (page 10), that the port of Kaohsiung 
be related to "Chinese Taipei" rather than to "China". 
31. One delegation indicated that maritime tran sport was one of the government's policy 
priorities.  Over time, a complete maritime clus ter had emerged with specialised technology and 
innovative solutions.  Hence, open markets were es sential, and so were international standards on 
safety and environment.  All WTO Members should aim at ratifying the International Maritime Organization (IMO) Conventions and implementing in ternational standards within a reasonable time 
frame.  This delegation also calle d on other Members to ratify the ILO "Super Convention" as well.  
While one-third of the Membership already had commi tments, this share would increase to more than 
one-half if Members were added that  had submitted or signaled relevant offers.  Interestingly, most of 
the recently acceded Members had unde rtaken commitments in the sector.  S/C/M/99 
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  32. One delegation underlined its economy's role as a significant international port operator and a 
main provider of maritime manpower.  In this contex t, reference was made ag ain to the importance of 
the ILO "Super Convention".  Also, this dele gation noted that the Maritime Model Schedule 
suggested an unbound entry for ship crews, and that  commitments on services auxiliary to all modes 
of transport also covered maritime transport. 
33. One delegation felt that the Note on maritime transport was one of the most interesting 
Background Notes, and added some factual comm ents:  there was no link between the Marshall 
Islands' registry and the government of the Unite d States, and the title of Table 9 should refer to 
international port operators rather th an to international container lines. 
34. Another delegation, referring to the importance of  the fleet registered under its country's flag, 
considered it essential that new or improved GATS co mmitments ensured that relevant services were 
not subjected to limitations on market access or national treatment. 
35. Finally, one more delegation, while expressing satisfaction with the Note, proposed factual 
amendments.  In paragraph 83, th e reference to the Minister of Transport should be replaced by a 
reference to the Minister of Trade and Industry, and the granting of a block exemption in 2006 should 
be included.  Also, the country's commitments on maritime agency services were not reflected in 
Table 10. 
36. The Secretariat thanked delegations for their comm ents and asked them to submit their factual 
proposals in writing so that they c ould be properly taken into account. 
2. Logistics services (Background Note by the Secretariat, S/C/W/317) 
37. By way of introduction, a representative of the Secretariat  recalled that logistics services as 
such were not a sector in the GATS classification W/ 120.  What the Secretariat had tried to do in the 
Note was to describe the logistics industry based  on industry concepts and figures.  The Note 
identified three main components of the sector:  warehousing, freight forwarding, and so-called "contract logistics", i.e. the complete outsourcing of  all transport storage and distribution functions to 
specialized third parties providers.  The paper noted that the sector was not very concentrated yet and 
that some actors from the South were clearly emer ging.  It also underscored the overall openness of 
regulatory regimes for logistics, and describ ed the commitments undertaken by Members. 
38. The representative of Hong Kong, China
 welcomed and thanked the Secretariat for producing 
the very first Background Note specifically devoted to logistics services, which shed light on the state of play and trends in the sector and Members’ related GATS commitments. 
39. As compared with other services sectors, the so-called ‘negotiating’ history of logistics 
services was relatively short.  While there had been scattered discussions and proposals on various 
services relevant to the logistics chain, only in th e recent five years or so Members had adopted a 
more holistic and coordinated approach to discussi ng and negotiating commitments in this sector.  
This was probably due to the under-awareness by many Members of the importance of logistics 
service in the past.  The sector’s wide and multid isciplinary coverage, and the absence of a specific 
logistics services category in the W/120 classification list might also have complicated the discussion. 
40. Hong Kong, China was therefore glad that the No te had reaffirmed the importance of logistics 
services as essential backbone infrastru cture services, vital to the expansion of global trade and 
economic development.  The logistics sector played a significant role in economies at different stages 
of development. S/C/M/99 
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  41. The business potential of logistics services was larg e and was still growing, in particular for 
developing economies.  The Note highlighted th e increasing role developing economies played in 
some logistics services.  The paper also noted an im portant trend, i.e. the em ergence of major logistics 
operators in emerging economies, which were beco ming more international, to support domestic 
exporters.  Furthermore, wh ile some logistics services might curren tly be dominated by larger players, 
smaller operators also played a role in many logistic s services.  It was fair to say that this sector was 
of strategic importance for all economies as an area of growth.  It was also the platform for other services and the production of goods to develop their competitive edges. 
42. More and more economies were taking steps to liberalize their logistics services and put in 
place various regulatory reforms to enhance the effi ciency and governance of the sector.  Hong Kong, 
China commended these liberalization efforts, unilate ral or otherwise, and encouraged Members to 
continue along this path.  The Note had not id entified obvious cases of systemic regulatory barriers 
impeding trade in the logistics sub-sectors covered by the paper, but some discriminatory practices, in respect of licensing for example, were identified in certain logistics services. 
43. The Note also pointed out the lack of relevant information for a thorough analysis of the 
sector.  This could explain why it was thinner an d in some aspects less comprehensive than the 
Background Notes on other sectors.  The lack of transparency of the sector, as well as the 
unavailability of market data, obs tructed genuine and fruitful di alogues.  The representative hoped 
that the Secretariat Note would be the first buildi ng block for Members to engage and to contribute to 
a common data bank. 
44. Hong Kong, China's hope was that the de facto regimes of many economies for logistics 
services were liberal.  It might well be the case in actual practice, but this had not been borne out by 
the commitments undertaken in the sector, or by  the indicated readiness of Members to undertake 
more commitments.  In this regard, the representa tive wished to remind Members of the collective 
request on logistics services seeking commitments acro ss a range of services essential or related to the 
provision of logistics services.  Hong Kong, China was ready to top up its own commitments by 
committing extensively on the core logistics servi ces, and hoped that other Members would adopt a 
similarly positive attitude. 
45. Trading and logistics services was one of H ong Kong, China's economic pillars, accounting 
for about 26 per cent of GDP.  The logistics sector alone contributed about 4 per cent of GDP and provided 6 per cent of total employment.  Hong Ko ng, China's open and non-discriminatory regime 
certainly played a key contributing role to the prosperity of the sector.  It strongly believed that all 
economies, developing or develope d, would benefit immensely from a more vibrant logistics sector. 
46. The Council
 conducted the rest of the discussion in informal mode.  The Chairperson  
produced the following summary of the main points raised (also contained in JOB/SERV/19). 
47. All delegations that took the floor underlined the importance of logistics services for overall 
economic performance, and the need for GATS co mmitments to ensure a predictable and open 
framework for these services. 
48. According to one delegation, the Background Note  demonstrated the effects of globalisation, 
in terms of both in- and outsourcing, on the vari ous components of the supply chain over the last 
decade.  Paradoxically, the multiplication of logistics flows had occurred concurrently with a lowering 
of logistics costs due to increased efficiency.  It wa s also clear from the Note that the logistics sector 
covered a range of services, including air, mar itime, warehousing, distribution and management 
services.  However, the Note probably did not fully re flect the difficulties encountered by suppliers in 
the sector, such as inconsistencies in customs duty thr esholds;  restricted investment regimes affecting 
not only the ability to set up a commercial presen ce, but also the ability to transfer funds and  S/C/M/99 
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  repatriate profits;  subjective and inconsistent customs valuation de terminations;  difficulties securing 
air traffic and landing rights for cargo flights;  restrictive licensing arrangements;  limitations on the use of electronic documentation;  the need in some countries to provide certificates of origin, which increased costs to exporters;  and different docum entation requirements for postal parcels, where 
typically no advanced documentation was needed , as compared to courier services where typically 
advanced notice, confirmation of receipt at wareho use and confirmation of delivery to client were 
required.  The overview of WTO Members' commitmen ts in the sector pointed out the importance of 
achieving more commitments in these sectors as part of the Doha Round. 
49. One delegation stressed the overall economic contri bution of logistics services, and their role 
for developing economies.  The present Background Note was the first of its kind, since the 
negotiating history of logistics services was relativel y short.  The Note had not identified entrenched 
protectionist patterns, except some licensing issues.   There were, however, transparency problems.  
Members' offers should reflect the economic importance of the sector, along the lines of the plurilateral request. 
50. One delegation indicated its economy's status as  a major player in logistics and supply chain 
management.  There was an apparent confusion in  the Note between asset-based contract logistics 
services, also known as third-party logistics (3PL), and freight forwarding services.  The latter were one variant of non-asset based fourth party logis tics services (4PL).  For example, both DHL and UPS 
were nowadays 3PL providers, with extensive assets, while the Note had categorized them as freight 
forwarders.  Also, it would have been interesting to get an overview of other 4PL providers (other 
than freight forwarders) such as management consultants etc., which focused on supply chain 
planning and logistics organisati on without owning the assets.  The analysis of regulatory barriers and 
Members' commitments showed that, despite high leve ls of opening in most sectors, there were still 
restrictions in place to pursue legitimate policy obj ectives, such as security, safety and environmental 
protection.  It was also interesting to note that , according to the Secretariat, foreign operators had 
recently withdrawn from some countries.  This was very much at odds with the paradigm of 
promoting growth through trade e xpansion.  Finally, internationa l logistics providers often faced 
problems that were to be addressed in the negoti ations on trade facilitation, such as lack of 
information on customs procedures.  It would be interesting to see how much these problems affected the operation of logistic chains. 
51. One delegation referred to the heterogeneity of the logistics sector as reflected in the Note.  
Two issues were worth further discussion.  First,  the regulatory environment faced by logistics 
companies.  For example, in some countries, but not in others, several logistics services could be 
provided in tandem by one single company.  Second, the ultimate beneficiaries of liberalized logistics 
services.  There were clear indications that these included the whole of the manufacturing sector and consumers in general. 
52. One delegation found the Note helpful, but regr etted the limited coverage of 3PL and 4PL as 
the consulting services sector had considerably deve loped.  Reference was made to classification 
problems:  the activities of non-asset based providers might not be fully captured by the item "management consulting" of the CPC. 
53. The Secretariat thanked for the comments made.  If further work was needed, for example 
with a view to improving information on regulatio n in the sector, this presupposed a cooperative 
effort between delegations and the Secretariat. 
3. Accountancy services (Background Note by the Secretariat, S/C/W/316) 
54. A representative of the Secretariat
 said that accountancy services were an essential input into 
the production of both physical goods and other servi ces.  Perhaps most important was accountancy's S/C/M/99 
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  role in respect to the implementation and enforcem ent of prudential requirements and other financial 
regulatory measures.  Financial accounting standards in particular had received significant attention.  
The latest G20 statement reemphasised the importance the G20 placed on achieving a single set of high-quality, improved global accounting standards.  The statement also stressed the importance of 
further improving the involvement of stakeholders , including outreach to emerging market economies, 
within the framework of the independent accounting standard-setting process.  The role of the sector 
in dealing with the financial crisis was seen as central. 
55. The Background Note described some of the essentia l features of the sector.  For instance, it 
noted that accountancy services had been defined differently by WTO Member governments depending on their regulatory frameworks.  The delineation between accountancy and some other 
professions was not consistent across jurisdictions, as, for example, in the case of the legal profession 
with respect to taxation.  The Note also pointed to the disconnect between the ever-globalising market 
for accountancy and the national, and even sub-natio nal, regulatory structures for accountancy firms. 
56. The Chairperson
 indicated that, following the Secretariat's invitations, a representative of the 
World Bank Centre for Financial Reporting Refo rm and a representative of the International 
Federation of Accountants (IFAC), organisations whose work was relevant to the discussion of 
accountancy services, were present at the meeting.  A written contribution had also been received 
from IFAC, and made available to dele gations in document JOB/SERV/16. 
57. A representative of the World Bank  said that he would focus in his intervention on why the 
Bank took a particular interest in accountancy services, reiterate the importance of high quality 
financial reporting, discuss some of the major developments that had taken place since the Uruguay 
Round, set out some of the current challenges with  respect to the regulation of accountancy services, 
and emphasize the importance of trade considerations in that context. 
58. The representative from the World Bank Centre for Financial Reporting Reform in Vienna 
noted that the Bank had been charged by the internati onal community to play a very specific role with 
respect to accountancy worldwide.  It was also  member of the Financial Stability Board and an 
observer at the G20.  The Bank was a very active pa rticipant in the various international regulatory 
and standard-setting processes affecting accountancy  services and enjoyed very deep partnerships 
with the relevant organizations at international, regional and national levels.  Specifically, the Bank 
was responsible for a diagnostic programme, the so-called Accounting and Auditing Reports on the 
Observance of Standards and Codes (A&A ROSC).   The overall programme was a joint programme 
between the Bank and the IMF, by virtue of a manda te conferred following the Asian financial crisis.  
The programme assessed the extent to which countries around the world were aligned with 
international standards, recognizing that accountin g and auditing were at the heart of regulation 
relevant to financial stability.  It ensured that a system was in place globally to mitigate the risks of 
crises such as the one of the previous decade.  It was important that trade c onsideration be fully taken 
into account in the process.  The Bank also went beyond diagnosis, and provid ed technical assistance 
and financial support to partner countries as they undertook reforms in the area.  Unusually for the 
World Bank, it did not operate only with lower a nd middle-income countries, but also with more 
advanced economies.  For example, it was curr ently completing an assessment in the United 
Kingdom. 
59. Why did accountancy matter?  As indicated at a recent conference, without transparency, 
there was not trust;  without trust, there was no cred it;  without credit, there was no investment;  and 
without investment, there was no growth.  Financ ial reporting was an essential building block for 
financial intermediation, foreign investment and sustainable economic development.  There were 
great parallels between the work of the WTO in ensuring that trade considerations contribute to 
economic growth and the role of  accountancy for development.  S/C/M/99 
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  60. Since the end of the Uruguay Round, the main lesson learnt was the very important 
contribution of high-quality financial information through prudential supervision.  Basically, if the 
numbers were not right, there was no hope of ha ving proper systems of banking supervision, 
insurance supervision, securities regulation, corporat e governance or even tax administration.  So if 
one wanted properly resourced and functioning States , stable financial systems were necessary.  If one 
wanted an economic process that truly improved the life of people, financial reporting was an 
essential foundation.  This explained quite clear ly why the Bank took an interest in it. 
61. Accounting was not something to think about just in times of crisis, but also in more stable 
times.  Better financial information, better acco untancy services enabled better decision-making, 
better allocation of scarce resources and thereby contribut ed not just to financial stability but also to 
private sector growth, financial sector developmen t, development of capital markets and of course 
were a major contribution to economic growth.  If growth was combined with fairness, equity and 
inclusion, this would provide an  enormous contribution to fighting poverty and improving the life of 
people. 
62. The landscape had changed significantly since the Uruguay Round and the follow-up work, 
be it in the WPPS or the WPDR.  There was an increasing realisation of how important accountancy 
services were to sound regulation, financial stab ility and economic growth.  The sector had moved 
from a model primarily based on professional self-regula tion to one with stronger external regulation 
by the State.  Globally, a new type of regulator  had emerged with the auditor oversight bodies.  
Created initially in response to some of the fina ncial scandals of the early 2000s, they were now 
prevalent in most parts of the world. 
63. There had been major reforms of the gove rnance of the bodies setting international 
accounting and auditing standards, making them mo re independent of the accountancy profession and 
therefore more responsive to the public interest.  That change in governance had led to a far greater 
use of international standards.  Various intern ational regulatory bodies, each of which had taken a 
narrow sectoral interest in questions of accountan cy, had started working more closely together,  
ensuring a more consistent approach to issues of accountancy regulation and a strengthened input into 
the setting of international standards and the organisa tions setting them.  This had been led to a large 
extent by the Financial Stability Board, initially with a mandate from the G7 and the G8, and more 
recently from the G20.  The G20 were naturally a much more inclusive, representative and indeed 
economically far more powerful grouping than the G7 or the G8 over a decade earlier. 
64. Through its ROSC programme, the World Bank had gained insights into systems for the 
regulation of accountancy around the world.  In te rms of market developments, concentration had 
increased.  As they had become more global, account ancy providers had become fewer.  Although the 
networks of accountancy service providers had a gl obal presence, the actual services were supplied by 
national member firms which were regulated nationally .  The networks remained off-shore, they were 
not regulated, but since many of the key judgmen ts about methodological approaches, decisions and 
individual engagements were made at the level of  the network, a very important component of 
accountancy was outside any system of domestic regula tion and this was a challenge that needed to be 
addressed. 
65. The EU represented a good example of how great er integration between countries could take 
place in a way that fostered greater trade in accountancy services while still protecting the public interest and strengthening prudentia l and other regulations.  Recognitio n of authorizations to provide 
regulated accountancy services had enabled provider s moving from one Member State to another to 
obtain proper recognition for their home-country  licences.  The EU had imposed minimum 
harmonization of licensing requirement, particularly in the area of audit.  Further, it had relaxed 
ownership requirements.  National firms no l onger had to be owned by nationally licensed 
professionals, thereby permitting the emergence of tr uly EU-wide audit firms operating across the 27 S/C/M/99 
Page 10  
 
  Member States.  A very comprehensive architect ure for the regulation, oversight, monitoring and 
enforcement of accounting and auditing had been de veloped, involving not only regulators with a 
specific focus on accounting but also banking, secur ities and pensions regulators.  The recent 
de Larosière Report had further strengthened the regula tory architecture, and this integrated approach 
to accounting regulation was likely to improve furthe r.  Where appropriate, the use of international 
standards had increased, and large public interest entities were now required to follow international 
financial reporting standards.  These measures all incl uded specific provisions to facilitate interactions 
with third countries. 
66. That did not mean that solutions had been foun d for all current challenges.  As mentioned in 
each communiqué ever since its first meeting in Washington, the G20 had placed significant emphasis 
on accountancy, recognising its role in recovering from  the crisis and mitigating the risk of future 
ones.  Getting accounting standards right was seen as a key element to respond to the current crisis.  
However, fundamental questions ha d been raised about whether curre nt international standards should 
be changed.  The debate was most active in the ar ea of accounting standards, but questions about the 
role of auditor had also been raised.  Why had th e audit function not given greater warnings of the 
looming crisis?  Auditors were doing their j ob right, but were they doing the right job? 
67. There was continuing cause for improvement in  the governance of international standard- 
setting organizations.  Prudential s upervisors had to play a greater role and give emerging economies 
the appropriate room in the setting of international standards.  Steps had been taken to enhance the 
coordination of the relevant international regulat ory organizations, but there were still significant 
problems of disconnect between separate national syst ems of regulation, which, when combined, did 
not add up to an integrated system of global regula tion.  Both the Asian and the current crisis had 
highlighted the need for integrated regulation of the global financial system.  A system purely domestic in focus was no longer fit for purpose.  A particular challenge was dealing with providers 
operating through international networks when th e networks themselves were not regulated.  
Standards had to be adopted, the institutions to enfo rce them had to be created, appropriate capacity to 
ensure compliance had to be built and these national institutions needed to cooperate properly across 
borders to fill the gaps in the system. 
68. The sector had exhibited increased concentrati on and the implications of this process on 
competition and choice had to be considered.  In pa rticular, the impact of the emergence of a small 
number of systemically important networks of accountancy services providers who themselves might 
now be too big to fail had to be evaluated.  A sy stem of regulation to ensure the safety and soundness 
of these networks had traditionally not been an area of accountancy regulation.  There were no 
standards and codes for the regulation of the totalit y of the accountancy sector, but only standards and 
codes in individual areas.  Therefore there was work  still to be done.  As regulation had changed since 
the Uruguay Round, the barriers to trade had changed too. 
69. Trade considerations were important.  Th e WTO and its Members had an important 
contribution to make to the debate as it moved forw ard.  Systems of domestic regulation could create 
obstacles to trade in accountancy services, but it was al so true that impediments to trade could hamper 
effective regulation.  Trade barriers prevented the joining-up of separate national systems, and that 
weakened global regulation.  Improved trade coul d contribute to improved regulation.  Trade in 
accountancy services could help address domestic cap acity constraints in areas essential to sound 
regulation, financial stability and economic growth. 
70. On-going regulatory reform initiatives did no t necessarily take full account of these trade 
considerations.  As with most crisis responses, ther e was a push to get things done quickly, but also a 
danger that they be done perhaps too narrowly.  The absence of full consideration of trade 
implications was something to be regretted.  The GATS, particularly Articles VI and VII, the 
Guidelines for Mutual Recognition and the Discip lines for Domestic Regulation in the accountancy  S/C/M/99 
 Page 11 
 
 
  sector remained relevant.  Since the nature of re gulation had changed, a case could perhaps be made 
for looking again at the Disciplines on Domestic Re gulation to ensure that they fully captured and 
addressed new aspects of regulation.  Great benefits  could be gained from the operationalisation of the 
WTO work to date.  This was not just a questi on of hoping for progress in the current negotiations, 
but of making sure that the voice of trade was fully heard in all the discussions on regulatory matters. 
71. The poor of the world, the most vulnerable, had suffered enormously yet again from a 
financial crisis and it was just simply unacceptable th at nothing should be done to mitigate the risks of 
future crises.  Many international organisations we re doing something in this area, and the WTO too 
has a contribution to make. 
72. A representative of the International Federation of Accountants  (IFAC) expressed his 
gratitude for the invitation to attend the Council's di scussions on accountancy services.  He welcomed 
the Secretariat Background Note as a valuable contribution. 
73. IFAC was composed of professional accountancy organisations, with 159 members from 124 
countries.  Its work had two primary focuses.  Fi rst, the setting of standards and guidance for its 
member bodies.  The areas of most significance to th e Council were:  the setting of auditing standards, 
the International Standards on Aud iting, which were the basis for a uditing services provided by all the 
major auditing firms conducting trans-national audits in  most of the world;  the development of the 
Code of Ethics for Professional Accountants, which included the standards for auditor independence;  
the setting of international accounting education standards, which specified the requirements for 
recognition as professional accountants at a general sta ndards level and set international public sector 
accounting standards.  In addition, IFAC also  had a function in promoting the adoption and 
implementation of standards.  One particular aspect thereof was the translation of those standards into 
major languages. 
74. Second, IFAC worked for the development of  the accountancy profession around the world.  
The representative echoed the comments made by the World Bank about accounting's and auditing's 
fundamental contribution to a sound economy.  For that reason, IFAC saw the development of the 
accountancy profession in each country as important to its overall economic development. 
75. IFAC had provided written comments to the Secretariat Note, in document JOB/SERV/16.  
He wished to highlight only two elements.  The firs t related to part IV on regulatory structure, which 
echoed what the World Bank representative had said on developments since 1998.  In particular, when 
referring to standard-setting struct ures, it was important to recognise that since the Enron crisis and 
other similar events in terms of financial reporti ng, the governance and oversight of those standard-
setting functions had changed significantly.  In pa rticular, the standard-setting processes, with the 
exclusion of the International Public Sector Acc ounting Standards Board, were overseen by a Public 
Interest Oversight Board which had significant author ity in relation to the appointment of members, 
the board's due process, the terms of reference, etc.   That Board was appointment by the members of 
the Monitoring Group, which was made up of in ternational regulators a nd other international 
organisations and comprised the International Organisation of Securities Commissions, the 
International Association of Insurance Supervisor s, the Basel Committee, the European Commission 
and the World Bank and, as an observer, the In ternational Association of Independent Audit 
Regulators.  In the period since the previous Background Note there had been significant internationalisation of accounting and auditing st andards, but also significant changes to the 
regulatory and governance arrangements of those standard-setting processes. 
76. The final point was to emphasise the Addendum to JOB/SERV/16.  IFAC encouraged the 
WTO to seek a framework of objectiv es for the global accountancy profession, and to enhance its role 
in facilitating debate and cooperation in the area of the accountancy profession.  The representative S/C/M/99 
Page 12  
 
  particularly endorsed the comments by the World Bank on the need for accountancy services and the 
profession to move as rapidly as possible to wards integrated, more global solutions. 
77. The representative of India
 thanked the Secretariat for the update of the previous Background 
Note on accountancy services, which was a very important sub-sector of professional services.  The Note was very useful and informative.  Howe ver, his delegation had some observations, from a 
developing country perspective. 
78. The Note did not seem to adequately reflect upon the ground realities of the structure of the 
accountancy sector in many developing countries, where small and medium-sized firms dominated.  For example, the accounting profession in India was st ructured as partnerships, with few partners or 
proprietorship concerns.  Out of more than 11,000  accountancy firms, about 9,700 had less than five 
partners.  This was consistent with the struct ure and nature of the Indian economy, which was 
dominated by small and medium-sized enterprises. 
79. India was not sure whether replication of the prevailing dominant structural pattern of the 
accountancy profession in other countries, particular ly developed ones, with the dominance of few 
firms, would lead to the desired objective of fost ering competition along healthy lines.  This might 
reduce the choices available and be detrimental to competition.  Moreover, the presence of 
oligopolistic structures, ‘Big 8’ or ‘Big 4’ , had not always ensured sound financial reporting 
frameworks in developed countries, as was eviden t by the well-known cases of accounting failures. 
80. Also, in Annex 12 of the Note, India would have liked to see a comparison of mode 4 
commitments in the relevant sectors.  In mode 4,  a comparison of commitments taken for independent 
professionals would have been of particular inter est in the accountancy sector, given the structure of 
the industry in India.  Further, as referred to in  page 10 of the communication from the International 
Federation of Accountants in document JOB/SERV/16,  India would have liked to see a paragraph in 
the Note on the challenges facing the accountancy profession in developing countries. 
81. The Council
 conducted the rest of the discussion in informal mode.  The Chairperson  
produced the following summary of the main points raised (also contained in JOB/SERV/19). 
82. With respect to accountancy services, Members commended the Secretariat for a useful and 
informative Note, as well as the World Bank and th e International Federati on of Accountants (IFAC) 
for their interventions.  Seven de legations made comments on the Note  and the World Bank and IFAC 
interventions.  One delegation announced that a plurilateral request for accountancy services would 
soon be submitted.  Several delega tions observed that more information on the accountancy sector in 
developing countries, which was primarily comprised of small and medium firms, would have been 
desirable.2 
83. One delegation questioned whether replication of  the prevailing structure of the accountancy 
profession in other countries, with dominance by only a few firms, would lead to the desired objective of fostering competition on healthy lines.  That  might reduce the choices available and could be 
detrimental to competition.  Moreover, the presence of oligopolistic structures, whether ‘Big 8’ or 
‘Big 4’ firms, had not always ensured sound fi nancial reporting, as was evidenced by some well-
known cases of accounting failures.  Also, in Annex 12 of the Secretariat Note, this delegation would 
have liked to see a comparison of mode 4 commitme nts in relevant segments, including commitments 
taken for independent professionals. 
84. Another delegation noted that international sta ndards for accountancy led to a greater level of 
regulatory convergence and credibility, and a more fa vourable environment to competition, including 
                                                     
 
2 The Secretariat Note also highlights the a pparent unavailability of such information.  S/C/M/99 
 Page 13 
 
 
  prevention of cartels and abuse of dominance.  In addition, standardization and the consequent 
harmonization had proved the most efficient tool  for economic liberalization in the accountancy 
sector, without compromising the quality of the service and the protection of the consumer.  Accountancy, bookkeeping and auditing should be clearly differentiated, the delegation also stated, as 
they had different implications in terms of liberalization. 
85. One delegation noted that the observance of  international standards, including the 
international financial reporting standards (IFRS),  could impose high costs on smaller developing 
countries.  A case in point was the requirement to  separate accounting a nd management consulting 
activities.  Another delegation observed that acc ountancy services were the second most committed 
sub-sector of professional services, next only to e ngineering services, and that all 21 newly acceded 
Members had made commitments covering the three major sub-categories.  A third delegation noted 
that remaining impediments included local ownershi p requirements, overly burdensome fees, and lack 
of transparency in the treatment of foreign professionals. 
4. Legal services (Background Note by the Secretariat, S/C/W/318) 
86. A representative of the Secretariat
 said that, since the 1998 Background Note, the legal 
services sector had experienced continuous grow th, fuelled by increased interdependence of 
international business and the emergence of new fields of practice, in particular in the area of business 
law. 
87. The updated Background Note highlighted in par ticular four trends that characterized the 
growing internationalization of legal practice:  fi rstly, growing globalization of business had led law 
firms to follow their clients into host markets;  secondly, these companies had increasingly developed 
capacity also in local law practice;  thirdly, several  truly global law firms had emerged; and, fourthly, 
these international law firms no longer sent their own la wyers abroad, but tended to staff their offices 
increasingly with local lawyers. 
88. The Background Note also addressed the definition of legal services.  It explained why most 
Members had found the CPC classification not to reflect  regulatory practice.  The Note also contained 
a detailed overview of specific commitments a nd MFN exemptions, and touched on liberalization 
trends in the context of Ec onomic Integration Agreements. 
89. The Council  conducted the rest of the discussion in informal mode.  The Chairperson  
produced the following summary of the main points raised (also contained in JOB/SERV/19). 
90. Six delegations commented on the Secretar iat's Background Note on Legal Services. 
91. Several delegations noted the high value that the sponsors of the plurilateral request placed on 
the further liberalization of legal services.  As business transactions did not take place in a legal 
vacuum, these services formed an essential pillar of business infrast ructures that supported and 
facilitated goods and services transactions.  Law firms were 'trade makers', a nd the main rationale for 
opening trade in legal services was the facilitation of trade and investment.  The primary objective of 
the plurilateral request was to lib eralise international trade as a means of facilitating the supply of 
comprehensive legal services covering multiple juri sdictions (foreign, domestic, international). One 
delegation stressed the importance of establishing a supportive environment in particular for highly 
specialized legal services related to investme nt and international business transactions. 
92. Another delegation noted that its country's le gal service exports occurred mostly under modes 
1 and 4, with only 22 per cent of exports emanating from a commercial presence of suppliers abroad.  
These figures could be taken to indicate that greater focus should be placed on regulatory issues 
relating to modes 1 and 4 supplies, rather than mode  3.  Conversely, it might also be argued that the S/C/M/99 
Page 14  
 
  data simply reflected that legal service suppliers adapted to existing access or regulatory barriers, and 
that mode 3 barriers continued to be of prime importance.  The delegation expressed interest in 
sharing experiences with other Members in this regard. 
93. One delegation emphasized that the description of classification issues in the Note was 
pertinent and welcomed the focus of the Note on existing alternatives and important classification 
issues (i.e. the definition of international law and of  "third country law").  A clear understanding about 
classification in the sector could help to advance the process of liberalization - by guiding Members in undertaking meaningful and valuable commitments.  Common definitions helped clarify the coverage 
of the sector and the scope of commitments.   There was consensus on terminology among many 
Members, as expressed in the Joint Statement on Le gal Services (S/CSC/W/46).  The imperatives of 
modern international legal practice suggested that commitments should be made with regard to all 
legal services (included in CPC 861, supplemented with arbitration and conciliation services) and 
lawyers should be permitted to practice any law fo r which they were qualified to practice.  
Restrictions on recruitment or association with fore ign lawyers or law firms were too onerous and, 
hence, should be removed to the greatest extent possi ble.  Finally, the delegation drew attention to the 
section in the Note on liberalizati on trends, or the lack thereof, in dealing with legal services in 
economic integration agreements. 
94. One delegation noted that legal services libera lization and the permission of partnership and 
cooperation with local lawyers benefited not only large firms, but also individual legal experts 
supplying their services.  This delegation also stat ed that some measures iden tified in the Secretariat 
Note as barriers did serve legitimate policy objectives such as consumer protection or quality 
assurance, and welcomed further discussion on such measures. 
95. One delegation mentioned that its schedule, like that of many other Members, departed from 
the standard W/120 and CPC classification.  Th e work undertaken by the International Bar 
Association was considered to be particularly useful. 
96. According to another delegation, the Secretariat Note showed that the rise of international law 
firms had increased the opportunities for local lawyers.  Seven of the ten largest law firms had more 
than 60 per cent of their staff abroad, but the majo rity of these lawyers were educated in the host 
jurisdiction. 
5. Sectors and modes discussed at the meeting held on 28 April 2010 (financial services, 
education services and mode 3) 
97. No interventions
 were made on these three topics that had been discussed at the Council 
meeting held on 28 April 2010. 
6. Further comments 
98. One delegation asked that an additional Background Note be produced, on engineering 
services, to complement the ones on architectur al and construction services produced in 2009. 
99. A representative of the Secretariat  said that the Secretariat could certainly produce a new 
Note on engineering services, and that it would in form Members of the timeline at the following 
meeting of the Council. 
100. The Chairperson  thanked Members for their contributions.  She recalled that, as agreed, she 
would be producing a summary, under her own res ponsibility, of the main issues raised.  This 
summary would be circulated rapidly (document JOB/SERV/19) and subsequently recorded in the 
minutes of the meeting.  The minutes would also contain the presentations of the various papers  S/C/M/99 
 Page 15 
 
 
  circulated and the statements made by representa tives of international organisations, as well as 
interventions that delegations ha d asked to be placed on record. 
101. She said that the Council would revert to this ite m at its next meeting in September, when it 
would address the following sectors:  environmental services and postal services. 
102. After September, there would only be two sector s left for discussion under that agenda item, 
namely distribution services and road freight trans port services, in addition to engineering services as 
had just been requested.  However, she reminded delegations that, at the Council meeting held in 
February 2010, it had been agreed that the Secr etariat would produce a fresh update of the Note 
entitled "A Review of Statistics on Trade Fl ows in Services", contained in document 
S/C/W/27/Add.2.  This Note would be also be  up for consideration under this agenda item. 
103. Concerning the sectors for discussion in September, i.e. postal and environmental services, 
the OECD and the Universal Postal Union, which were not observers to the Council, had produced 
relevant and interesting work that they could helpfu lly share with Members.  In line with previously 
adopted practice, she would be inviting them, on an ad hoc  basis, to the September meeting of the 
Council to offer their contribution. 
D. THIRD REVIEW OF MFN  EXEMPTIONS – ORGANISATION OF WORK  
104. The Chairperson  recalled that, at its meeting of 24 J une 2005, the Council had decided that 
the third review of Article II (MFN) exemptions w ould start no later than June 2010.  In April 2010, 
the Council had agreed that the third review of MFN exemptions would start at that day's meeting. 
105. According to paragraph 4 of the Annex on Ar ticle II Exemptions, the Council was mandated 
to examine in a review whether the conditions wh ich had created the need for the MFN exemptions 
still prevailed.  The first two reviews had proved to  be helpful information exchange exercises.  In 
addition, the Council had held substantive discu ssions on various issues arising from the review 
process, which had deepened Members' understand ing of the GATS.  During the second review, 
Members had expressed their views extensively, an d these views had been recorded in the minutes 
(contained mainly in documents S/C/M/76, S/C/M/78, and S/C/M/79).  The Chairperson encouraged 
delegations not to reiterate the views expressed in the previous review and to make the third review an 
advanced exercise in pursuing the objec tives of the Annex on MFN Exemptions. 
106. For that day's meeting, however, the issue to  be addressed was of an organisational nature, 
i.e., how should the Council conduct the third revi ew?  She recalled that the first two reviews had 
been conducted in dedicated meetings, sector-by- sector, through a question-and-answer process.  
Members had been requested to submit written ques tions three weeks in advance of the review 
meetings, and these questions had been answered in wr iting or orally at the meeting.  The Secretariat 
had been asked to prepare background materi al, notably two updated compilations of MFN 
exemptions and statistical information on the number of MFN exemptions. 
107. She sought Members' views and suggestions on whether the Council should follow the same 
process in the third review and, if so, when the first meeting should take place. 
108. The representative of Hong Kong, China , speaking also on behalf of China, Korea, Mexico 
and Switzerland, said that MFN treatment was the cornerstone of the multilateral trading system.  
That cardinal principle ensured that the benefits  of global trade liberalisation accrued to all WTO 
Members, irrespective of size and level of develo pment.  Therefore, MFN exemptions, as the name 
implied, had to be the exception to this principle.   However, some exemptions had been listed for an 
indefinite period of time.  Paragr aphs 5 and 6 of the Annex on Artic le II exemptions provided that 
exemptions terminate on the date provided for in the exemption, should not exceed a period of ten S/C/M/99 
Page 16  
 
  years and were subject to negotiations in subsequent  trade liberalising rounds.  In support of, and to 
facilitate their termination, the Annex mandated the Council to revi ew all exemptions granted for 
periods of more than 5 years.  The Review had to examine, amongst others, whether the conditions 
which had created the need for the exemption still prevailed. 
109. That was the third time that the Council undertook the task of reviewing MFN exemptions.  
Some 15 years after the first exemptions had b een listed, the representative emphasised the 
importance for all Members, not least those th at had listed MFN exemptions, to participate 
constructively in the review to make it a substant ive and meaningful exercise.  In terms of the 
organisation of the review, he proposed that th e Council draw on the experience of the past two 
reviews.  In previous reviews, dedicated formal me etings of the Council had been held, to provide the 
opportunity for Members to discuss outstanding questions and issues arising from the review session 
and to exchange views on a sector-by-sector basis, through a question-and-answer process.  Questions 
had been submitted in writing before the dedicated meetings for concerned Members to reply verbally 
or in writing.  The third review could be organised  in a similar manner, during the services clusters.  
The Secretariat should update the compilations on MFN exemptions in JOB(04)/114, JOB(04)/115 
and Corrigendum 1, and JOB(04)/132, for circulat ion to Members sufficiently in advance of the 
dedicated sessions, to facilitate the discussion.  As for the suggested timi ng, he thought that the 
September cluster could provide a good opportunity for Members to hold the first dedicated session of 
the review.  The representative said that they looked forward to a constructive, efficient and effective 
review. 
110. The representative of Japan
 supported the suggestion to hold  the first dedicated session of the 
review in September.  He said that the GATS provi ded some flexibility, but that the MFN obligation 
was the most important WTO principle:  MFN exem ptions could not be maintained forever.  His 
delegation hoped that all Member s would make positive contributions during the third review.  He 
added that those Members that had announced thei r readiness to remove their MFN exemptions could 
also usefully share their experi ences with the entire Membership. 
111. The representative of the European Union  concurred with the suggestion that the Council 
follow previous practice with regard to the organi sation of the review in dedicated sessions.  He said 
that three weeks to provide answers to questions  was a short period of time, especially for those 
Members that needed to consult wide ly internally to provide replies;  one month thus would be a better 
timeframe.  He added that holding  the first dedicated session in September would overload the cluster, 
and suggested that the beginning of October would allow more time for Members to engage 
constructively in the process. 
112. As a co-sponsor of the statement made by Ho ng Kong, China, the representative of China  
emphasised that the MFN principle was the cornerst one of the multilateral trading system and that 
MFN exemptions should be the exception.  The thir d review offered an opportunity for Members to 
examine whether the conditions which had created the need for the exemption still prevailed.  He said 
that the third review should be modelled on previous ones in terms of organisation, and requested that 
the Secretariat update its previous reference documents.  In terms of timing, the first dedicated session 
should take place either during the September or the November cluster. 
113. The representative of Chinese Taipei  also emphasised that MFN was a fundamental principle 
of the WTO.  His delegation valued that once-every-five-years opportunity to review existing MFN exemptions.  As for organisational matters, he sh ared the views expressed by Hong Kong, China, and 
supported modelling the third review on past practice.   Specifically, he favoured dedicated sessions, to 
be held during the services clusters so as to enable  the participation of capital-based experts.  His 
delegation was flexible as to whether the first de dicated session was held during the September or the 
November cluster.  The Secretar iat should update releva nt documents, to be used by Members as 
references to conduct the review.  S/C/M/99 
 Page 17 
 
 
  114. The representative of Canada  supported the timing outlined by the EU in terms of the first 
dedicated session of the review. 
115. The representative of Brazil  expressed a preference for the first dedicated session to be held 
during the November cluster. 
116. The representative of Hong Kong, China  thanked delegations for their interventions and their 
interest in the review.  There seemed to be a con sensus as to the format for conducting the review, and 
the only issue still to be resolved was the timing of the first dedicated session.  He was in favour of 
holding this session during the September cluster;  given that the review was going to be organised 
sector-by-sector, combining it with the cluster woul d allow for the presence of capital-based experts 
and for a more efficient and effective process.  Nevert heless, if delegations felt that they needed more 
time to prepare for the review, his delegation could ag ree to deferring the first dedicated session to the 
November cluster. 
117. The Chairperson  said that, as had been indicated by Hong Kong, China, there was consensus 
as to the organisation of the review.  Members agr eed that it should follow previous practice, with 
dedicated meetings, a sector-by-sector approach, a question-and-answer process and on the basis of 
updated documents to be prepared by the Secretaria t.  Delegations' views differed as to the timing of 
the first dedicated session.  Her sense was that so me time would be needed for Members to prepare 
their questions and for the Secretariat to produ ce updated documents.  In that sense, she felt that 
September might be too early and suggested that it might be possible to schedule the first meeting in-
between clusters, for instance around the week of 18 October. 
118. The representative of Hong Kong, China  said that, given that the participation of capital-
based experts could be beneficial, his preference was for the review meeting to be held during the 
cluster.  His delegation might be able to bring e xperts to Geneva also for a mid-October session, but 
he was conscious that this might not necessarily be possible for all delegations. 
119. The representative of South Africa  concurred with Hong Kong, China on the benefits of 
ensuring the participation of capital-based experts, and therefore preferred that the first meeting be 
held when experts were already in Geneva.  The representative of Turkey  concurred. 
120. The representative of the United States  asked how long review meetings normally lasted.  A 
representative of the Secretariat  replied that in the past they had lasted one full day. 
121. The representative of the European Union  could go along with the proposal outlined by the 
Chairperson.  He was concerned that clusters mi ght otherwise be overloaded, and that it might be 
difficult to know which sectoral experts mi ght need to be present for the review. 
122. The Chairperson  indicated that the Secretariat would circulate a list of the sectors that would 
be addressed during the first dedicated meeting.  Sh e proposed that this be held during the services 
cluster scheduled for the week of 22 November a nd that the deadline for the submission of written 
questions for that meeting be 22 October.  The Secr etariat would circulate this information in writing 
to Members. 
123. It was so agreed . 
E. OTHER BUSINESS  
124. The representative of Australia  expressed her delegation's on-goi ng concern about the lengthy 
delay in the entry into force of the certified EC-25 schedule.  She recalled that it had been more than 
three years since the EU had notified the certifica tion of the amended schedule of commitments.  Her S/C/M/99 
Page 18  
 
  delegation was one of a number of affected Me mbers with whom compensation arrangements had 
been agreed, but there was still no defined date for entry into force of these a rrangements.  This posed 
both systemic and commercial concerns for Australia .  She urged once again the European Union and 
its Member States to expedite the entry into fo rce of the amended schedule of commitments, and 
sought an update on progress to that end. 
125. The representatives of Brazil
, China , Japan  and Hong Kong, China  echoed the statement 
made by Australia. 
126. The representative of the European Union  indicated that the ratification process of the 
certified EC-25 schedule had started a few years earlier.  The process had been legally complicated by two elements:  a procedure in front of the European  Court of Justice and the change in institutional 
order of the Union.  16 Members had ratified th e consultation process, which had started with a 
"mixed agreement" that required the approval of both the Member States and the European institutions.  The Lisbon Treaty, which confirmed in large part the exclusive competence of the Union 
in the matter, had in the meantime entered into for ce.  The procedure in front of the Court of Justice 
was also concluded, just before the entry into force of the Treaty, with Opinion 1/08, which had 
clarified issues relating to the scope of the exclusiv e competence of the Union in trade matters and in 
particular as related to consolidation issues.  Hi s delegation was still examining the extent to which 
those two legal developments might accelerate the consolidation process.  The EU had taken careful 
note of Members' concerns and would be providing  more information at the next meeting of the 
Council. 
127. As had been indicated at the beginning of the meeting, the Chairperson
 said that the 
Secretariat wished to make a brief statement on the posting on the WTO website of the Air Services 
Agreements Projector (ASAP). 
128. A representative of the Secretariat  indicated that it had just recently posted on the WTO 
website the Air Services Agreement Projector (A SAP), an analytical tool which displayed the 
characteristics of Air Services Agreements in terms of relative openness and aviation traffic.  ASAP 
had previously existed only in a CD-Rom form at.  The Secretariat had given delegations a 
demonstration of the workings and information contained in the ASAP CD-Rom on 1 March 2007.  
Compared with the CD-Rom, the application recently  posted on-line contained the same information, 
with some updates provided to the Secretariat by New Zealand, Australia and Guatemala.  The Secretariat hoped that Members would find the app lication useful, and would welcome any feedback. 
129. The Council took note
 of the statements made. 
__________