RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/S/M/14/Suppl.2 
17 June 2005 
 (05-2568) 
Council for Trade in Services 
Special Session     
 
 
 
REPORT OF THE MEETING HELD ON 1 JUNE 2005 
 
Note by the Secretariat1 
 
Supplement  
 1. The Special Session of the Council for Trade in Services resumed its formal meeting of 21, 
22  and 25 February 2005 and 27 April 2005 on 1 June .  The agenda for the meeting, chaired by 
Ambassador Alejandro Jara of Chile, is contained in document WTO/AIR/2506.   
2. The Chairman
, reconvening the meeting of 21, 22 and 25 February and 27 April, recalled that 
on 27 April, the Council had agreed to keep item E open in order to take up any formal statements related to the Symposium on Cross Border Supply of  Services held on 28-29 April.  He suggested the 
Council proceed as he had indicated.   
3. It was so agreed
. 
E. REVIEW OF PROGRESS IN THE NEGOTIATIONS , INCLUDING PARAGRAPH 15 OF THE 
PROCEDURES FOR NEGOTIATIONS  
4. A representative of the Secretariat  reported that   a Symposium on Cross-Border Supply of 
Services, organized by the WTO Secretariat at the request of the Special Session of the Council for 
Trade in Services had been organised on 28 a nd 29 April 2005.  This was the third Symposium 
organized in the services area since the Doha Ministerial meeting.2 
5. The purpose of this Symposium was to allow tr ade negotiators, experts and stakeholders to 
discuss issues related to cross-border supply of servi ces.  As a result of technological developments, 
this mode of delivery had gained increasing importance over the preceding ten years and, more recently, the emergence of offshoring activities had fuelled additional interest.  In many services 
sectors, current levels of cross-border trade dwar fed what had been witnessed at the end of the 
Uruguay Round.  A number of services which had re quired physical proximity between the consumer 
and the supplier could be traded cross-border via the Internet.  Electronic delivery had thus added a 
new dimension to cross-border trade in services.  It had created many business opportunities, in 
particular for developing countri es, and had also opened new persp ectives for small and medium sized 
suppliers in all countries.  Against this bac kground, many WTO Members, including developing 
countries, felt the need to pay closer attention to the issue of cross-border supply in the ongoing 
services negotiations.   
6. The Symposium aimed at enhancing the unders tanding of participants of the economic 
significance of cross-border services transactions, pr oviding insights into the experience of private 
sector service suppliers and discussing regulators' expe rience.  It was meant to assess the role of the 
                                                     
 
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. 
2 The two previous symposia focused respectively on the assessment of services and on the movement 
of natural persons (mode 4). TN/S/M/14/Suppl.2 
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General Agreement on Trade in Services (GATS) in  the liberalization of these transactions.  The 
Symposium was, of course, without prejudice to discu ssions in the Special Session, or to the positions 
of delegations on issues under consideration. 
7. The Symposium was divided into six different sessions which allowed coverage of a broad 
range of different questions rela ted to cross-border trade.  (The programme was circulated as 
JOB(05)/59;  moreover, an outline of the presentations was circulated as JOB(05)/58/Rev.1.)  Without 
entering into details, he briefly recalled the main themes discussed during those two days.  The first 
session had given an overview of the economic importance of cross-border trade, with a focus on recent trends, including outsourcing.  During the second session, representatives from the private 
sectors had shared their experience in relation to  the opportunities and challenges of cross-border 
trade.  During the third session, experienced regulat ors had identified specific regulatory issues and 
concerns arising in relation to cross-border trade and possible ways of addressing them. 
8. The second part of the Symposium concentrated on the role the GATS for the liberalization of 
cross-border trade in services.  The fourth session sought to give an assessment of the current 
situation, with a discussion of key GATS provisions and patterns of specific commitments.  The fifth 
session identified the "virtues" of the GATS for cross- border trade, but also some constraints existing 
with the current framework, including classification issues.  The sixth and last session had allowed 
discussion of various regulatory i ssues related to cross-border trade and how they could be addressed 
under the GATS;  the relevance of the on-going negotiations on domestic regulations was also 
discussed.  A panel concluded the Symposium, with a discussion of possible approaches to promote further liberalization of cross-border trade under the GATS and some concrete proposals were made 
in that regard.   
9. Overall, 21 speakers had been invited to inte rvene under the various sessions.  Presentations 
were valuable and informative.  Various speaker s, from developed and developing countries, came 
from the private sector (information technology (IT), Business Process Outsourcing (BPO), computer services, financial services, etc.), and governmental regulatory agencies (financial services, education, 
for instance).  Other speakers were from academia a nd from international organizations:  World Bank, 
UNCTAD, OECD, and the WTO Secretariat.   
10. Some 250 – 300 participants had attended the Symposium.  Purs uant to the WTO Technical 
Assistance and Training Plan 2005, funds had been ma de available to finance the participation of 
one capital-based expert from each developing co untry participating in the services negotiations;  
more than 100 Members benefited from this opport unity.  Finally, he said that all papers and 
PowerPoint presentations had been posted on the WTO web-site.
3  The Secretariat stood ready to 
assist, as Members might deem useful and appr opriate, with any necessary follow-up to the 
Symposium. 
11. The Chairman  drew the Council's attention to a joint statement on the Symposium contained 
in document Job(05)/90. 
12. The representative of India , said that Job(05)/90 from Australia, Chile, Hong Kong China, 
India, Mexico and Chinese Taipei, outlined the lessons  that had been drawn from the Symposium.  He 
said that the purpose of the document was to prese nt a rough summary of the the presentations and 
discussions at the Symposium.  The first nine paragr aphs outlined the contents of the Symposium.  He 
said that one of the main purposes of the Symposium had been to see how it related to the negotiations 
and how its inputs might be folded into the negotiati ons.  Hence, paragraph 10 sought to list certain 
possible areas for further discussion based on the i ssues that were outlined in the preceding portions 
of the document.  In this regard, some main points identified by the co-sponsors included:  the 
importance of cross border supply across the Membersh ip and the range of sectors and areas in which 
                                                      
3 The address is: http://www.wto.org/english/tr atop_e/serv_e/sym_april05_e/sym_april05_e.htm  TN/S/M/14/Suppl.2 
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cross border supply was important.  Whereas in th e Uruguay Round trade through mode 1 had been 
considered technically unfeasible in a number of are as, this situation had changed drastically since.  
The discussion on business services had highlighted this  fact as well as that trade in these services was 
highly dynamic.  In this light, paragraph 10 sugg ested that Members develop a list of commercially 
meaningful and clearly specified activities, sect ors or sub-sectors, for the purpose of possible 
commitments by Members.  The co-sponsors realised  that questions had been raised about these 
services and emerging classification or whether new classification was required, but felt rather that the question of how to relate commitments to actua l market opportunities should remain a focus of 
discussion for the Special Session.  Secondly, on the nature of commitments across mode 1 and mode 
2 and referring earlier technical discussions in th e Council on this subject, he said that how 
commitments practically could be undertaken c ould be further discussed without re-visiting earlier 
technical issues that had not been resolved.  Thir dly, he noted that requests on cross-border supply 
had been made, and in this light, it might be help ful to develop the list he had mentioned and an 
understanding on the type of commitments that c ould be undertaken to supplement the request-offer 
approach through a model schedule, understanding or other scheduling tool.  Finally, on regulatory 
issues, he recalled that the WPDR was pursuing th e mandate in Article VI.4 and that disciplines 
would apply to modes 1 and 2 as well.  This rai sed the question as to the extent to which the 
regulatory issues mentioned would be addressed by disciplines under Article VI.4 and whether other 
issues specific to cross border supply existed.  He sa id that much interest had been expressed at the 
Symposium on these issues and he suggested that Members have an opportunity to discuss them 
further.   
13. The delegations of Rwanda
, Switzerland , the Dominican Republic , Thailand , the Philippines , 
the European Communities , Korea , Pakistan , Brazil , Canada , Japan  and the United States  thanked the 
co-sponsors for their communication and the Secretariat for the organisaiton of the Symposium.   
14. The representative of Rwanda  said that the Symposium had helped to strengthen capacity 
building and had proved highly useful to her delega tion.  She said that it proved helpful to her 
delegation that the papers and pr esentations were available on the WTO website.  She thought that it 
would be essential to organize such events at a regi onal level where important cross border trade was 
occuring.  She requested that the Secretariat take this suggestion into account in planning its future 
work.  Workshops could also be organised at a nationa l level, in particular since regulators and private 
sector actors could not always be present in Geneva for longer periods.  
15. The representative of Switzerland  said his delegation had found the Symposium informative 
and useful.  It highlighted the cr ucial importance of mode  1 and mode 2 and the interlinkages between 
all four modes.  The Symposium had demonstrated  how much Members needed to progress in the 
negotiations and to raise the existing level of commitments to meet current business needs and 
realities, and to make all categories of countries  beneficiaries.  Switzerland believed that the 
participation had been good and he  hoped that Members had shared the results with capitals.  In 
conclusion, his delegation invited Members to ma ke ambitious commitments in mode 1 and other 
modes of supply in their revised offers.  His delegation would be willing to pursue discussion of topics raised at the Symposium.   
16. The representative of Australia
 was pleased to be a co-sponsor of the communication on the 
outcome of the cross border Symposium and thanked the Secretariat for its efforts in organising the Symposium.  Australia had been a strong supporter of its organization and an Australian speaker had 
made a presentation on regulatory issues involved in cross border trade in education services, for 
which Australia had a particular interest in commitmen ts undertaken by trading partners in this sector, 
and was one area in which mode 1 and mode 2 commi tments could be improved.  The joint statement 
highlighted that, while in the current round of services negotiations some Members had offered new 
commitments in mode 1 in their initial and revised of fers, Australia believed th at more could be done 
to encourage mode 1 and mode 2 commitments and supported Switzerland's call for ambitious TN/S/M/14/Suppl.2 
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commitments in both of these modes.  He encouraged  Members to give careful consideration to the 
joint statement, and particularly the section relating to "final observations". 
17. The representative of the Dominican Republic
 said that the presentations and discussions had 
been of a high quality.  She said that the issues ra ised at the Symposium and in the joint statement 
were of interest to her delegation.   
18. The representative of Thailand  said the paper underscored the economic importance of cross 
border trade in services, the growth of which was increasing in light of technological innovations.  
Her delegation had found the Symposium highly useful  and many of the interesting points raised at 
the event were taken up in the joint statement.  For example, her delegation agreed that the GATS 
modal structure could become more artificial in terms of the ways businesses operated if 
commitments in one sub-sector were not taken in  a consistent manner across the four modes of 
supply.  In order to complete a business project in one sub-sector, at different stages of the project, the ability to supply across modes 1, 3 and 4 was key.  She acknowledged that Members had reasons to be 
cautious about cross border provision of heavily regulated services, such as financial services which 
required a strong supervisory regime in order to  effectively serve several policy objectives.  
Challenges remained on how to address the issue of  consumer and user risk and how to promote 
closer cooperation among regulators so as to avoid unnecessary duplication of supervision.  
Regulatory capacity was catching up with business realities, and hence legal structures such as e-
commerce laws inter alia , needed to be in place to exploit new economic possibilities.  Possible 
disciplines under Article VI.4 to promote good regulato ry practices could fill in the regulatory gap in 
certain sectors.  With respect to new services,  her delegation sought to see the list of emerging 
business opportunities, and she said that, in principle, the lack of formal classification in the CPC, 
should not impede Members from arriving at an u nderstanding of the new services at issue.  Her 
delegation reserved its position on the proposed m odel schedule until such time as any such document 
had been elaborated.  
19. The representative of the Philippines
 said the Symposium had been informative and useful.  
Referring to the joint statement, he said that, while most of the paper's observations were likely shared 
by most delegations, his delegation thought that its value was augmented by the fact that it sought to 
focus the discussion on vital areas of mutual interest.  His delegation could associate itself with the issues identified in paragraph 10.  The paper highlight ed many important aspects of the state of trade 
in cross border supply, for instance, the importanc e of cross border trade, increasing interlinkages 
between modes of supply in business models, how  countries had kept mode 1 unbound in many 
instances, and the increase in new or combinati on of existing services that were sometimes not 
captured in the scheduling framework of the GATS.   
20. Making a few more specific points, the representati ve of the Philippines said firstly that his 
delegation was struck by the affirmation that cross border trade should not be treated as a north-south 
issue.  Indeed, advances in science and technolog y made it viable for both developed countries and 
developing countries to have equal access to oppor tunities and costs from outsourcing arrangements, 
for example, business process outsourcing.  Both  developed countries a nd developing countries 
seemed to be benefiting from cross border trade in recent years.  The importance of such trade to 
developing countries was well documented, while de veloped countries had experienced lower labour 
costs and greater competitiveness for their firms.   However, his delegation wondered if Members 
should not temper their justified exuberance at the increase in cross border trade by noting that the 
issue was not yet a North-South one.  He was co ncerned by some pronouncements, official and 
unofficial, by some governments about preventing outsourcing through legislation or instituting measures which might limit this dynamic area in the future.  Secondly, the Symposium underscored 
the need for commitments by developed trading pa rtners under modes 1, 3 and 4 in certain services 
such as computer and related services, and call cen tre services.  The Philippines shared this view, 
because it was not always sufficient for it to be tech nologically possible to provide a service;  rather, 
there might also be need to establish some form  of commercial presence and/or move workers or TN/S/M/14/Suppl.2 
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executives across borders for training.  He sought to underline that, in addition to the need for more 
commitments in various modes, Members could not fail to take into consideration proposals and 
discussions on the need to re-examine and improve, where appropriate, transparency, efficiency and 
rationalisation of domestic regulations and/or en try procedures.  Thirdly, some questions and 
comments at the Symposium had highlighted the tremendous digital divide between developed 
countries and developing countries, particularly the least-developed countries.  Computers, internet 
access and other technological tools were vital to cross border supply, which posed a serious 
challenge for a number of countries which experien ced a lack of necessary technological wherewithal.  
Fourthly, there was the view that access regimes were  relatively liberal in reality and that they should 
be locked in through wider commitments in the services negotiations.  This was likely an accurate 
assessment of the situation on the ground.  In goods and services there did seem to be a divergence in 
commitments between commitments and the access regime  in place.  However, he did not believe that 
this was attributable to a lack of commitment to tr ade liberalization in services, but rather reflected a 
reluctance on the part of some countries to open these areas because services were often relatively 
new and the consequences of liberalization could often be unclear.  In this context, he said that there 
had nonetheless been many autonomous liberalization programmes in place for many years.  He said 
that his delegation looked forward to active participation of these issues in the future. 
21. The representative of the European Communities  said the Symposium had been informative 
and useful and that one of the main messages that had emerged from it was the linkages between 
different modes of supply.  Another contributi on was the fact highlighted on the importance of 
appropriate domestic regulation for mode 1 across all sectors and the particular challenges that 
regulators face in this regard.  Referring to the jo int statement, she said that her delegation differed 
with some of the views expressed in paragraph 9 on regulatory issues.  It was her delegation's 
understanding that it was not mainly for financial ser vices that regulatory concerns were relevant, but 
across all sectors.  Referring to paragraph 7, her delegation also had some questions related to the 
scheduling framework and commitments under GATS,  and in particular the sentence, "It is 
understood that services are covered unambiguously in the existing GATS framework only when they 
are clearly identified under an existing sectoral classification".  Her delegation did not share this interpretation and its reading was that the scope of the GATS was not necessarily linked to existing 
classification.  There were definitions of what were measures covered by GATS which did not limit 
the services covered by GATS to any classification.   Her delegation would reflect further on the 
paper's final observations and w ould revert to the paper.   
22. The representative of Korea
 agreed that the Symposium had been helpful, enlightening and 
raised many interesting questions.  She was glad to see that the co-sponsors of Job(05)/90 recognised 
that there existed different regulatory issues in th e financial services sector and educational services 
sector.  Korea believed that market access locked in  at current levels of liberalization would be 
helpful, especially with respect to to business services.  Her delegati on thought that it could be useful 
if the detailed technical issues on modes 1 and 2 were  dealt with in the CSC or friends groups.  She 
looked forward to further discussion.   
23. The representative of Pakistan  said the Symposium had been highly informative and useful.  
Among others, the seminar had permitted his country's  key officer to be present in Geneva and to 
appreciate the importance of the submission of Paki stan's initial offer, to which he had devoted 
considerable attention upon return to  capital with a view to filing it.  With respect to the initial offer, 
he said that the delay in its submission was owed in  large part to the extensive national consultations 
that had taken place.  He hoped that Members woul d welcome positively Pakistan's initial offer.   
24. The representative of Brazil  agreed with comments on the importance of cross border trade 
and for developing countries to realize their potential in terms of participation in trade in services, 
particularly in exports.  Secondly, he noted and ag reed with the co-sponsors in paragraph 9 that there 
were some sectors, particulary in financial services,  where there were concerns that related to cross 
border supply which needed to be addressed.  Finally , he took note of the suggestions in paragraph 10 TN/S/M/14/Suppl.2 
Page 6  
 
and encouraged the co-sponsors to come forward with  more detailed information in this regard and 
sought to reserve his delegation's position. 
25. The representative of Canada
 said it was helpful that the materials circulated at the 
Symposium were available on the WTO website.  Canada supported what it thought was a main 
finding of the Symposium that improved commitmen ts by Members would benefit both developing 
and developed countries.  His de legation believed that technological  developments had increased the 
range of services that could be traded internationa lly through modes 1 and 2,  which needed to be 
borne in mind.  Canada encouraged Members to examine the possibility of making more commitments in mode 1 and mode 2, particuraly in  the area of information technology and selected 
business process outsourcing related sectors.  He looked  forward to further discussion of this issue. 
26. The representative of Japan
 said that it was important to advance the liberalization of mode 1 
and mode 2 in terms of achieving a balanced outco me in the negotiations.  He noted that some 
domestic agencies were wary of undertaking commitments in these modes.  His delegation could support holding active discussions on this issue. 
27. The representative of the United States
 said that her delegation would revert to the joint 
statement at the next formal meeting.  
28. The representative of India  sought to respond to a number of questions that had been posed.  
Responding to the concern from the European Commun ities on a sentence in paragraph 7, he said that 
it was not the co-sponsors' intention to indicate what  the scope of the GATS was, but rather they had 
sought to recapitulate some of the points raised by  the presenters on the issue of classification and the 
fact that, unless the activity was specifically mentioned, it might or might not be covered.  The 
suggestion was simply that these issues might be di scussed further, especially given that in cross 
border trade new services and new combination of se rvices were becoming important.  On regulatory 
issues, he agreed that these were not specific to  only some services; however, it appeared that the 
concerns in an area such as financial services were  more prevalent.  He recognised that there were 
issues related to commitments in 1 and mode 2 an d he felt that the Special Session would be an 
appropriate forum to pursue discussion of this issue. 
29. The Chairman  noted that all delegations that ha d taken the floor had underlined the 
importance of the Symposium.  He echoed the comments thanking the Secretariat for the organization of the event.  He said that the Symposium had also attracted good participation.  He said that there had 
been some initial reactions to Job(05)/90 and others had indicated they would revert to it.  He had 
noted that the paper included an indication that some ideas might be translated into negotiating 
proposals, and hence he assumed that the paper woul d be discussed further at the next meeting.  The 
Chairman suggested that, before he adjourned the m eeting, the Council take note of all the statements 
made. 
30. The Council so agreed
.   
__________