WORLD TRADE  
ORGANIZATION  TN/S/35 
22 March 2010 
 (10-1510) 
Council for Trade in Services  
Special Session  
 
 
 
NEGOTIATIONS ON TRADE IN SERVICES 
 
Report by the Chairman, Ambassador Fernando de  Mateo, to the Trade Negotiations Committee  
for the purpose of the TNC stocktaking exercise  
 
 1. The purpose of my report is to assist the Trade Negotiations Committee in conducting the 
stocktaking called for at the 7th Ministerial Conferen ce.  In providing input for this exercise, I have 
dealt with each of the four major areas of the services negotiations:  market access, domestic 
regulation, GATS rules, and the implementation of LD C modalities.  In each area, I have attempted to 
describe the achievements made since my last written  report to the TNC in July 2008, the remaining 
gaps, and how the gaps might be filled.  To ensu re a report that is both factual and accurate, I 
requested and received the views of Members duri ng the Special Session held on 16 March 2010.  
The report is, however, made entir ely under my own responsibility. 
2. The report takes stock beginning with the Ministerial gathering held in July 2008.  That point 
in time was marked by two landmarks in the servi ces negotiations.  The first was the services text, 
attached to my July 2008 Chairman's Report
1, which sets out the elements required for the completion 
of the negotiations.  The second landmark was the Signalling conference, which yielded some 
indication of what Members would be willing to  include in their revised services offers.2  Since then, 
the services negotiations have been pursued in the four main areas, through successive rounds of 
bilateral, plurilateral and multilatera l consultations and meetings.   
I. MARKET ACCESS 
3. The services text of July 2008 reaffirms the obj ectives for market access contained in the core 
negotiating mandates, including GATS Artic le XIX, the Negotiating Guidelines3, and Annex C of the 
Hong Kong Ministerial Declaration.  For its part , the Signalling conference indicated how certain 
Members might meet these market access objectives through commitmen ts in their revised offers. 
4. At the Special Session held on 16 March 2010, I asked Members to provide me with inputs on 
the state of play in market access  for services.  Coordinators of 20 plurilateral request-offer groups, 
representing the co-sponsors of collective requests, de livered oral reports covering most sectors and 
all four modes of supply.4  Virtually all coordinators painte d a picture of little or no significant 
progress made since July 2008.  They acknowledged th at in some sectors and modes there had been 
encouraging indications arising from the Signallin g conference, even if in some cases these 
                                                      
1 TN/S/34 of 28 July 2008. 
2 Results reported in JOB(08)93 of 30 July 2008. 
3 S/L/93. 
4 Coordinators for the following 20 sectoral and modal groups reported on the following areas:  Air 
Transport, Architectural/ Engineering, Audiovisual, Computer and related services, Construction, Cross-border 
trade (modes 1/2), Distribution, Educa tion, Energy, Environmental, Financia l, Legal, Logistics, Maritime, MFN 
exemptions, Mode 3, Mode 4, Postal/Courier, Telecommunications, and Tourism.  In addition, a statement was 
made by the coordinator of a proposed plurilateral request in Accounting services. TN/S/35 
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  indications could not subsequently be confirmed.  For the coordinators, the market access meetings 
held since July 2008 had served mainly to clarif y technical points which, while useful, did not 
constitute real negotiations on substance.  In thei r view, the remaining gaps – between offers (or 
signals) and requests, and between offers (or signa ls) and applied regimes – were substantial, and 
needed to be bridged in order to achieve a succ essful outcome to the Round.  The coordinators 
considered that these gaps could be closed only through substantive engagement, driven by decisive 
political will. 
5. In response to the presentations of the coordi nators reports, Members expressed different 
views as to the status of the market access nego tiations.  While all agree that the market access 
negotiations have fallen short of th eir potential, many hold different views on what would constitute a 
satisfactory outcome.  Some developing country Me mbers point to an asymmetry, in the offers or 
signals made, between developed a nd developing country Members, to the disadvantage of the latter.  
This, in their view, is contrary to obligations in  GATS Article IV to liberalize sectors and modes of 
supply of export interest to developing countries.  Some Members point also to the need for the rule-
making negotiations in services to produce an out come complementary to  the market access 
negotiations.  Finally some Members hold the view that the state of the market access negotiations is 
already far advanced compared to the stat us of the agriculture and NAMA negotiations. 
6. Based on these discussions, it is clear that ther e has been little or no significant progress in the 
market access negotiations since Ju ly 2008.  Gaps in sectoral cove rage and levels of commitment 
need to be filled in order for Members to be satis fied with the outcome of the services negotiations.  
In filling these gaps, rule-making in the services negotiations will need to move in tandem with 
market access.  Members can ma ke progress in market access in services once the political will has 
been summoned to resolve problems in other areas of the Round.  
II. DOMESTIC REGULATION 
7. During the Special Session held on 16 March,  the Chairperson of the Working Party on 
Domestic Regulation made a report aimed at providi ng inputs for the stocktaking exercise, on which I 
largely base my assessment of th is area.  Many Members are convinced of the importance of a 
satisfactory outcome on domestic regulation as a m eans of ensuring the effectiveness of scheduled 
commitments.  However, delegations concur that ga ps in the negotiations remain to be closed, both 
with regard to technical aspects of the future di sciplines, as well as their level of ambition.  Several 
Members also observe that, politically, the level of  ambition of the disciplines is closely connected 
with advances on the market access side of the services negotiations, and more broadly with progress 
in other areas of the DDA. 
8. Members take the view that there has been an increased and constructive engagement by all 
sides in the negotiations since the issuance of the revised Chairman's  draft text of March 2009.  The 
work programme over the past year, including the s ubmission of textual proposals by delegations, has 
moved the negotiations forward.  There is also a clear sense among delegations that more focussed 
work needs to be carried out for the negotiations to come to fruition.  Several delegations note that the 
Chairperson's annotated text, which compiles work undertaken over the last year, is an important 
element for future work.  Numerous delegations su ggest that future work should follow a thematic 
approach, that would allow for addressing various cr oss-cutting issues.  Other delegations would wish 
the Chairperson to maintain the fl exibility to structure the work in the most efficient way.   
9. In the discussion in the Special Session fo llowing the WPDR Chair's report, Members 
generally concurred with the assessment that had b een provided by the Chairperson.  They recognize 
the substantive nature of the presen t negotiations and the constructive e ngagement that is taking place.  
Members acknowledge that satisfact ory domestic regulation disciplines are important to ensure that 
market access commitments are not negated throug h trade restrictive regulation.  Several Members  TN/S/35 
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  highlight the important balance of strong disciplines and the preservation of the right of Members to 
regulate.  Several Members stress that the Chairper son's annotated text is an important element for 
continued work.  Some Members suggest, in the n ear term, addressing technical and drafting issues. 
III. GATS RULES 
10. During the Special Session held on 16 March,  the Chairperson of the Working Party on 
GATS Rules made a report aimed at providing inputs for the stocktaking exercise.  The report covers 
the three areas of negotiations:  emergency safe guard measures (ESM), subsidies and government 
procurement.  I base my assessment largely on this re port.  Members, in the light of the mandate for 
GATS Rules in Hong Kong Ministerial Declarati on calling for more focused discussions, recognize 
that useful and extensive technical  work has been undertaken on a ll three areas over many years, and 
not least over the last 12 months. 
11. On subsidies , many Members welcome the Work Programme for the Exchange of 
Information recently agreed by the Working Party,  in fulfilment of the requirement contained in 
Article XV of the GATS.  In their view, the inform ation exchange will enable further work to be 
undertaken on other issues in the negotiations, partic ularly on the identification of problems created 
by subsidies, if any exist.  On emergency safeguard measures , considerable technical work has been 
undertaken, which has been useful to clarify certa in concepts and concerns with regard to the 
application of safeguard measures.  Political diffe rences still remain wide, but proponents consistently 
assign a fundamental importance to including an ESM within the GATS.  On government 
procurement , there have been more focused discussions, over recent months, on the proposal for an 
annex to the GATS.  The economic importance of this  area is frequently highlighted.  However, as in 
the negotiations on ESM, political differences rema in wide on the issue of including government 
procurement-related market access commitmen ts into the framework of the GATS. 
12. In terms of next steps, Members call for more fo cussed technical work on all three areas.  As 
for subsidies, which has recently received heightened  political attention, the successful completion of 
the Work Programme will require positive participa tion from Members.  On the other two subjects, 
further guidance is required to resolve fundamental political differences on the desired outcomes. 
13. In the discussion in the Special Session fo llowing the WPGR Chair's report, Members 
generally concurred with the assessment that had be en provided by the Chair.  On subsidies, many 
note with satisfaction the progress that has been ma de with the launch of the Work Programme for 
Information Exchange, which could facilitate more focused discussions in this area.  Some Members 
stress that, to be meaningful, the information exch ange would need the participation of all Members 
based on the agreed criteria and timeline.  To go beyond information exchange, it would be necessary 
to establish whether there are any problems crea ted by subsidies in services that require the 
development of disciplines, keeping in mind that subsidy measures are subject to the non-discrimination rules in the GATS (MFN and na tional treatment).  On ESM and government 
procurement, some Members stress their expectation that the negotiations will lead to concrete and 
credible outcome.  Other Members, however, take the view that neither a safeguard mechanism nor 
market access commitments for govern ment procurement is warranted. 
14. Overall, there remain political differences in a ll three GATS rules subjects, that have resulted 
in diverging levels of engagement by Members.  C onsiderable effort has nevertheless been made over 
the last year to revive discussions, particularly through technical work, so as to fulfil the mandate 
from the Hong Kong Ministerial Declaration for more focused discussions.  In this connection, some 
Members stress that technical work should be advanced taking into account the concerns and 
sensitivities of all Members, but that it need not  await the full re-engagement in market access 
negotiations.  However, technical work will not r esolve the main obstacles in GATS Rules. Political TN/S/35 
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  guidance is required on fundamental  differences over the objective a nd expected outcome of these 
negotiations.  
IV. IMPLEMENTATION OF LDC MODALITIES (LDC WAIVER) 
15. The services text attached to my Chairman’s Report of July 2008 underscores the continuing 
importance of developing appropriate mechanisms for according special priority to LDCs, including 
with respect to sectors and modes of supply of intere st to them.  The services text indicates also that 
Members consider that a waiver solu tion offers the most satisfactory outc ome to this issue.  Since July 
2008, a series of consultations have resulted in the circ ulation in February 2010 of a draft legal text of 
a waiver with respect to preferential treatment benefiting all LDC Members. 
16. At the Special Session held on 16 March 2010, I heard unanimous support from Members for 
the objectives underlying the draft waiver, and satis faction at the progress made since July 2008.  
Nonetheless, some Members still have questions on el ements of the waiver, including issues relating 
to its scope, duration, and the definition of the orig in of services and service suppliers.  As well, it is 
clear that for some Members an LDC waiver s hould be seen as part of a package, and that 
negotiations on the waiver should not outpace those in other areas of the services negotiations. 
V. CONCLUDING REMARKS 
17. While Members diverge in their specific interest s in the services negotiations, they converge 
on the need for their successful conclusion as one of  the main pillars of the DDA.  Arguably, an 
ambitious outcome of the services negotiations w ould be consistent with the overall policy and 
regulatory reforms already undertaken by many WTO Members and often reflected in bilateral and regional agreements.  It is also clear that a successful outcome of these negotiations could go a long 
way in contributing to the development dimension of the DDA. 
18. The picture is not even across the four areas of  the services negotiations.  While little or no 
significant progress has been achieved on market acc ess since July 2008, progress has been registered 
on domestic regulation and the implementation of LDC modalities.  On GATS rules, however, gaps 
remain, despite recent headway concerning the ex change of information on subsidies.  While 
negotiating gaps obviously require intensive enga gement by Members, progress in the DDA single 
undertaking would need to be achieved in a commen surate manner across the different areas of the 
negotiations. 
 
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