WORLD TRADE  
ORGANIZATION  S/C/24 
28 September 2005 
 (05-4276) 
Council for Trade in Services   
 
 
 
ANNUAL REPORT OF THE COUNCIL FOR TRADE IN SERVICES  
TO THE GENERAL COUNCIL (2005) 
 
 
1. Since its last report to the General Council, th e Council for Trade in Services has had five 
formal meetings on 26 November 2004, 30 November  2004, 9 February 2005, 23 February 2005 and 
24 June 2005 1.  During this period, the Council addressed the following matters: 
I. REVIEW OF MFN EXEMPTIONS 
2. At its dedicated meetings held on 30 Novemb er 2004 and 23 February 2005, the Council 
undertook the second review of MFN exempti ons mandated under the Annex on Article II 
Exemptions.  The review was conducted on a secto r-by-sector basis through a question-and-answer 
process, following the previous practice.  At its  regular meeting on 24 June 2005, the Council 
addressed outstanding questions on MFN exemptions  and concluded the second review by deciding 
that the next review should begin in  2010 and no later than June 2010. 
II. TRANSITIONAL REVIEW UNDER SECTION 18 OF THE PROTOCOL ON THE 
ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA 
3. At its meeting held on 26 November 2004, the Council conducted and concluded the third 
transitional review of the implementation by Chin a of its WTO commitments, pursuant to section 18 
of the Protocol on the Accession of the People's Republic of China (WT/L/432). The Council took note of the report (S/FIN/13) of the Committee on Trad e in Financial Services, which formed part of 
the Council's report on this matter to the Gene ral Council, contained in document S/C/23.  
III. REPORT TO THE COUNCIL BY ALBANIA 
4. At the meeting held on 26 December 2004, Albania made a report to the Council on its 
preparations to fulfil its GATS commitments in international public voice telephone services, as 
required by the General Council's waiver decision (WT/L/567). 
IV. DERESTRICTION OF DOCUMENTS 
5. At its meeting held on 26 November 2004, th e Council reached an agreement that, with 
respect to any future discussion relating to the invo cation of Article XXI of the GATS, the record of 
the discussion would be contained in an informal doc ument and would subsequently be circulated as 
an addendum to the formal report of the meeting af ter the conclusion of the negotiations under Article 
XXI and the certification of any changes to the relevant schedule of commitments. 
                                                     
 
1 Reports of the meetings are contained in documents S/C/M/75, S/C/M/76, S/C/M/77, S/C/M/78 and 
S/C/M/79.  These should be read in  conjunction with this report.   S/C/24 
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 V. NOTIFICATIONS MADE TO THE COUNCIL PURSUANT TO GATS 
ARTICLES III:3, V:5, AND V:7 
6. At its meetings held on 26 November 2004, 9 February 2005 and 24 June 2005, the Council 
took note of the following notifications: 
(a) Notifications pursuant to Article III:3 of the GATS: 
  Uruguay     (S/C/N/306-308) 
  Hong Kong, China    (S/C/N/312-320)   Albania      (S/C/N/321-324 & 329-342)   Honduras     (S/C/N/326-327)  
 
(b) Notifications pursuant to Article V:5 of the GATS: 
The European Communities  (S/SECRET/9&  S/SECRET/9/Corr.1) 
 
(c) Notifications pursuant to Article V:7 of the GATS: 
  The EFTA States and Chile   (S/C/N/309) 
  The Unites States and Australia   (S/C/N/310)   Thailand and Australia    (S/C/N/311)   Panama and El Salvador    (S/C/N/325)   Japan and Mexico    (S/C/N/328) 
 
VI. WORK OF THE SUBSIDIARY BODIES 
7. The activities of the subsidiary bodies are refl ected in their respective reports, which are 
annexed to this report, as follows:  
 Annex I  Report of the Committee on Tr ade in Financial Services (S/FIN/14) 
 Annex II Report of the Working Part y on Domestic Regulation (S/WPDR/8) 
 Annex III Report of the Working Party on GATS Rules (S/WPGR/15) 
 Annex IV  Report of the Committee on Specific Commitments (S/CSC/11)   
 
 
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  S/C/24 
 Page 3 
 
 
 ANNEX I 
 
 WORLD TRADE  
ORGANIZATION  S/FIN/14 
20 September 2005 
 (05-4145) 
  
 
 
 
 
ANNUAL REPORT OF THE COMMITTEE ON TRADE IN FINANCIAL SERVICES TO 
THE COUNCIL FOR TRADE IN SERVICES (2005) 
 
 
1. Since its last annual report to the Council for Trade in Services (S/FIN/12), the Committee on 
Trade in Financial Services has held three formal meetings, on 23 November 2004, and 10 February 
and 23 June 2005.2  In this period, the Committee addressed the following matters: the acceptance of 
the Fifth Protocol to the General Agreement on Trade in Services; technical issues; recent developments in financial services trade; and a joint statement by a group of Members on financial 
services liberalization. Additionally, the Committee carried out the third transitional review of the 
implementation by China of its WTO commitments, pursuant to section 18 of the Protocol on the Accession of the People's Republic of China. 
I. ACCEPTANCE OF THE FIFTH PROTOCOL TO THE GATS 
2. Three Members have not yet accepted the Protocol :  Brazil, Jamaica, and the Philippines.  
Some Members expressed concern that the three Members have not yet accepted the Fifth Protocol.  At the Committee's request, these Members provided pe riodically information on the situation of their 
domestic acceptance procedures.  
II. TECHNICAL ISSUES 
3. The Committee discussed a communication from Brazil on electronic commerce and financial 
services (Job(05)/103), whose aim was to revisit the i ssue of the distinction between modes 1 and 2 in 
the case of cross-border financial transacti ons conducted through electronic means.  
III. RECENT DEVELOPMENTS IN FINANCIAL SERVICES TRADE 
4. During the period under consideration, the Comm ittee heard presentations by the Chairperson 
of the Financial Supervisory Commission in Chin ese Taipei, and the Vice-Chairman of the Cairo & 
Alexandria Stock Exchange. 
IV. TRANSITIONAL REVIEW UNDER SECTION 18 OF THE PROTOCOL ON THE 
ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA 
5. At its meeting on 23 November 2004, the Committee carried out the third transitional review 
of the implementation by China of its WTO commitm ents, pursuant to section 18 of the Protocol on 
                                                     
 
2 Reports of these meetings are contained in documents S/FIN/M/47 to 49.  They should be read in 
conjunction with this report. S/C/24 
Page 4  
 
 the Accession of the People's Republic of Chin a.  The report submitted by the Committee to the 
Council for Trade in Services on this matter is contained in document S/FIN/13.   
V. JOINT STATEMENT ON FINANCIAL  SERVICES LIBERALIZATION 
6. At the meeting held on 23 June 2005, Memb ers addressed a communication by Australia, 
Bahrain, Canada, Chinese Taipei, the European  Communities, Japan, Norway, Oman, Panama, 
Singapore, Switzerland, and the United States on the liberalization of financial services (TN/S/W/43). 
Some Members expressed concern with the presenta tion of this communication at the Committee on 
Trade in Financial Services. 
 
 
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  S/C/24 
 Page 5 
 
 
 ANNEX II 
 
 WORLD TRADE  
ORGANIZATION  S/WPDR/8 
23 September 2005 
 (05-4209) 
  
   
ANNUAL REPORT OF THE WORKING PARTY ON DOMESTIC REGULATION  
TO THE COUNCIL FOR TRADE IN SERVICES (2005) 
 
 
1. Since the Annual Report of 2004
3, the Working Party on Domestic Regulation (WPDR) held 
three formal meetings and four informal meetings4.  Both formal and informal papers were submitted 
to the Working Party.  Some Members also submitted proposals in  the form of room documents. 
2. At the formal meeting held on 22 June 2005, Members approved the appointment of 
Mr. Peter Govindasamy of Singapore as the new Ch airman of the WPDR, replacing the previous 
Chairman, Mr. David Cairns of the United Kingdom. 
I. ORGANIZATION OF WORK 
3. In the period covered by this report, the Wo rking Party received several submissions by 
Members on the development of regulatory disci plines under GATS Article VI:4.  At the formal 
meeting on 22 June 2005, the Chairman  gave an overview of the inform al meetings held on 31 March 
and 2 May 2005. 
4. Until the formal meeting of 22 June 2005, th e discussions were organized on a proposal-by-
proposal basis; at the informal meeting held  on 6 and 7 September 2005 Members began discussing 
the elements contained in the proposals on a themat ic basis, based on a framework proposed by the 
Chairman in document JOB(05)/169.  The themes put forward by the Chairman for this first round of thematic discussions were: Licensing Requireme nts; Licensing Procedures; Qualification 
Requirements; Qualification Procedures; Technica l Standards; Transparency; Objectives; Scope; 
Application; Definitions; and Development Consider ations (including S&D and Technical Assistance) 
with regards to the above items. 
II. DEVELOPMENT OF REGULATORY DISCIPLINES UNDER GATS ARTICLE VI:4 
5. In the period covered by this report, the negotiations on regulatory disciplines under 
Article VI:4 of the GATS gained momentum with the submission of several formal and informal 
papers by Members.  Members re-stated in various occasions their commitment to disciplines on 
domestic regulation in the Working Party preferably by the end of this Round of negotiations, without 
prejudice to horizontal or sectoral approaches. 
6. The Working Party further examined Mexico's paper on technical standards, entitled Mexico's 
Experience of Disciplines on Technica l Standards and Regulations in Services  (S/WPDR/W/30, dated 
                                                     
 
3 S/WPDR/7, 26 November 2004. 
4 Reports of these meetings are contained in documents S/WPDR/M/28 – 30.  They should be read in 
conjunction with this report. S/C/24 
Page 6  
 
 24 September 2004)
5; an informal paper by the United States, entitled Proposal for Transparency 
Disciplines in Domestic Regulation (JOB(04)/128, dated on 15 September 2004); a paper by 
Colombia,  entitled Examples of Measures Relating to Admini strative Procedures for Obtaining Visas 
or Entry Permits (S/WPDR/W/29, dated 7 July 2004); an informal paper by Hong Kong, China, 
entitled Relationship of Regulatory Disciplines with National Treatment  (JOB (04)/24, dated 31 
March 2004); a paper by the European Community and Its Member States, entitled Proposal for 
Disciplines on Licensing Procedures , (S/WPDR/W/25, dated 10 July 2003); as well as an informal 
paper by Japan, entitled Draft Annex on Domestic Regulation  (JOB(03)/45/Rev.1, dated 2 May 2003). 
7. The Working Party examined new submissions re lating to the development of Article VI:4 
disciplines: a paper by Switzerland, entitled Proposal for Disciplines on Technical Standards in 
Services (S/WPDR/W/32, dated 1 February 2005);  an informal paper by Bolivia, Chile, India, 
Mexico, Pakistan and Thailand, entitled Proposed elements for disciplines on Qualification 
Requirements and Procedures  (JOB(05)/50, dated 30 March 2005); an informal paper by Switzerland, 
entitled Initial Elements for Modalities for Negotia tions on Disciplines on Domestic Regulation 
(JOB(05)/68, dated 2 May 2005) ; a paper by Australia, entitled Development of Disciplines on 
Domestic Regulation for the Legal and Engineering Sectors  (S/WPDR/W/34, dated 
6 September 2005); and a paper from Chinese Taipei, entitled Transparency Disciplines on 
Domestic Regulation in th e Telecommunications Sector , S/WPDR/W/36, dated 14 September 
2005. 
8. As well Canada submitted a paper entitled Transparency Template - Canada’s Revised 
Horizontal Mode 4 Offer  (S/WPDR/W/33, dated 25 May 2005). 
9. The Working Party also further reviewed th e measures, including the additional examples 
provided by delegations, listed in the informal Secretariat paper on Examples of Measures to be 
Addressed by Disciplines under GATS Article VI:4  (the latest version is JOB(02)/20/Rev.10, dated 
31 January 2005).  The discussion on the examples also benefited from two new informal papers 
submitted by Brazil, entitled Examples of Measures to be addressed by disciplines under GATS 
Article VI:4  (JOB(04)/169, dated 19 November 2004) and Hong Kong, China, entitled Comparison of 
Regulatory Examples with Accountancy Discipl ines and Proposals for Regulatory Disciplines  
(JOB(04)/166, dated 19 November 2004). 
10. The Secretariat updated its compilation of the resu lts of the consultations  with international 
professional organizations concerning  the potential suitability of the Disciplines on Domestic 
Regulation in the Accountancy Sector  (S/L/64, dated 17 December 1998) for other professions.  The 
most recent version of this compilation is  JOB(03)/126/Rev.6, dated 15 September 2005. 
III. PRESENTATION ON TECHNICAL STANDARDS BY THE INTERNATIONAL 
ORGANIZATION FOR STANDARDIZATION (ISO) 
11. At the formal meeting held on 22 June 2005, at the request of the Working Party, the 
Secretary General of the International Organisation for Standardization (ISO), Mr. Alan Bryden, gave 
a PowerPoint presentation on ISO's work and its relevance for the WPDR discussions on technical standards.  Members expressed their appreciation for the presentation, which was followed by a 
question and answer session. 
_______________ 
 
                                                     
 
5 At the formal meeting on 7 February 2005, Mexico gave a PowerPoint presentation on technical 
standards.  S/C/24 
 Page 7 
 
 
 ANNEX III 
 
 WORLD TRADE  
ORGANIZATION  S/WPGR/15 
22 September 2005 
 (05-4190) 
  
   
ANNUAL REPORT OF THE WORKING PARTY ON GATS RULES  
TO THE COUNCIL FOR TRADE IN SERVICES (2005) 
 
 1. Since its annual report for 2004, the Working Party on GATS Rules held three formal 
meetings: on 24 November 2004, on 7 February 2005, and on 20 June 2005.
6  The three negotiating 
mandates the Working Party is entr usted with were put on the age nda of each meeting: emergency 
safeguard measures (Article X), government procurem ent (Article XIII), and subsidies (Article XV).  
The Working Party also held one informal meeting.   
2. In the three areas, discussions referred to the need  to consider work priorities in the context of 
upcoming key timelines and the current state of discussions, including as mentioned by the 
Chairperson in the annotated agenda circulated  as JOB(05)/115.  Various delegations expressed 
concerns regarding the lack of progress across the three areas of negotiations as well as the information exchange foreseen in paragraph 1 of Article XV. 
I. NEGOTIATIONS ON EMERGENCY SAFEGUARD MEASURES UNDER GATS 
ARTICLE X 
3. At the meetings of November  2004 and February 2005, delega tions continued their discussion 
on emergency safeguard measures on the basis of an informal communication from a group of 
ASEAN Members
7 (JOB(04)/175), which presented answers to questions raised with respect to their 
proposal.  Issues touched upon in the discussion included:  situations justifying the use of a safeguard 
measure; the definition of domestic industry; availa bility of appropriate statistics; the relationship 
between safeguard measures and obligations in bila teral investment treaties; link to progressive 
liberalization; and the use of safeguard-type entries in schedules.   
 4. At the meeting of June 2005, a repr esentative from UNCTAD presented a paper on 
emergency safeguard measures that the organizati on had earlier circulated.  The ensuing discussion 
touched upon a number of issues, such as the pur pose and effects of a safeguard mechanism in 
services, relevant comparisons with rules in the area of goods, special and differential treatment, 
domestic industry, procedures and indicators, comp ensation, as well as possible approaches for a way 
forward.
8  Divergent views were expressed on the various  aspects raised in relation to emergency 
safeguard measures, including desirability and feasibility.    
                                                     
 
6 Reports of these meetings are contained in documents S/WPGR/M/50, S/WPGR/M/51, and 
S/WPGR/M/52.  They should be read in conjunction with this report.  
7  Brunei Darussalam, Indonesia, Malaysia, Myanmar, the Philippines and Thailand.   
8 Discussions on emergency safeguard measures are reflected in paragraphs 33-55 of S/WPGR/M/50, 
paragraphs 55-79 of S/WPGR/M/51, and paragraphs 4-37 of S/WPGR/M/52. S/C/24 
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 II. NEGOTIATIONS ON GOVERNMENT PROCUREMENT UNDER GATS     
ARTICLE XIII.  
5. At the meetings of November  2004 and February 2005, delega tions continued their discussion 
of an earlier proposal by the European Comm unities for a framework under GATS for government 
procurement in services (S/WPGR/W/48).  At the meeting of June 2005, the European Communities 
presented a communication on the structure of an  annex to the GATS on procedural rules for 
government procurement (S/WPGR/W/52).  Issues rai sed in the discussion included the application of 
the MFN obligation, the relationship to the G overnment Procurement Ag reement (GPA), modal 
application, the possibility of distinguishing be tween goods and services, scheduling approaches, 
comparisons with approaches taken in regional tr ade agreements, thresholds, and elements of 
procedural rules.  As requested, the Secretariat prepared the following Note: Main Approaches to the 
Undertaking of Commitments on Government Pr ocurement in Economic Integration Agreements: 
Summary Observations  (S/WPGR/W/51).   
6. A number of delegations con tinued to reiterate that, in their view, the negotiating mandate 
under Article XIII did not entail market access issues, while others thought that these were covered.  
Some delegations drew attention to  the General Council's decision, in the July Package, that there be 
no negotiations on the Singapore issue of transparen cy in government procurement, while others 
pointed out that the July Package also called on Me mbers to intensify efforts to conclude the rule-
making negotiations, includi ng those on Article XIII.
9  
III. NEGOTIATIONS ON SUBSIDIES UNDER GATS ARTICLE XV 
7. At the meeting of November 2004, delegati ons pursued their discussion on issues relating to 
the information exchange, the definition of subsidy,  and trade distortion, including in the light of a 
previous communication from the delegation of Hong Kong, China (JOB(04)/127).  At the meeting of 
February 2005, delegations discussed an informal  communication from the United States, which put 
forward some thoughts regarding the information exchange.  The delegation of Singapore also 
presented an informal communication which enumer ated a number of relevant issues for the 
negotiations, in particular with respect to defin ition (JOB(04)/180).  At the meeting of June 2005, 
delegations discussed an informal communication fro m the delegations of Chile, Hong Kong, China, 
Mexico, Peru and Switzerland, which put forwar d suggestions regarding the development of a 
provisional definition of subsidy and suggested next  steps for the information exchange, including 
timelines (JOB(05)/96).   
8. During the three meetings, the issues raised , and on which various views were expressed, 
included the scope and depth of the information ex change provided for in Article XV:1, the selection 
of sectors and timelines for the provision of informa tion, the relevance of the ASCM concepts for a 
provisional definition in services, the treatment of  public services, and flexibility for developing 
countries pursuant to Article XV:1.  As requested, the Secretariat prepared the following informal 
Note: Synthesis of Views Expressed on the Definition of Subsidy  (JOB(05)/4).10 
_______________ 
 
 
                                                      
9 Discussions on government procurement are reflected in paragraphs 56-70 of S/WPGR/M/50, 
paragraphs 37-54 of S/WPGR/M/51, and paragraphs 38-58 of S/WPGR/M/52. 
10 Discussions on subsidies are reflected in paragraphs 4-32 of S/WPGR/M/50, paragraphs 2-36 of 
S/WPGR/M/51, and paragraphs 59-81 of S/WPGR/M/52. 
  S/C/24 
 Page 9 
 
 
 ANNEX IV 
 
 WORLD TRADE  
ORGANIZATION  S/CSC/11 
23 September 2005 
 (05-4208) 
  
   
 
ANNUAL REPORT OF THE COMMITTEE ON SPECIFIC COMMITMENTS  
TO THE COUNCIL FOR TRADE IN SERVICES (2005) 
 
 
1. Since its annual report of 2004 to the Council for Trade in Services, the Committee on 
Specific Commitments held three formal meetings :  on 25 November 2004, 11 February 2005, and 
21 June 2005.
11  In the reporting period, the Committee addr essed three items:  classification issues;  
scheduling issues;  and editorial conventions for the submission of revised offers. 
I. CLASSIFICATION ISSUES 
2. The Committee addressed a revised proposal on  the classification of energy services from 
Indonesia (S/CSC/W/42/Rev.1 and S/CSC/W/42/Rev.1/Corr.1) at all meetings during the reporting 
period.  At the meeting of 25 November 2004, th e delegation of Japan submitted written comments 
and questions on Indonesia's initial classification pr oposal (JOB(04)/165).  At the meeting of 21 
June 2005, the delegation of Indo nesia provided written replies to these comments and questions.  
3. The Committee discussed submissions on the classification of telecommunication services by 
the European Communities (S/CSC/W /44) at its meetings on 11 Febr uary and 21 June 2005, and the 
United States (S/CSC/W/45 and Corr.1) at its meeting on 21 June 2005.   
4. At its meeting of 21 June 2005, the Committee discussed a joint statement on legal services 
by a group of WTO Members (S/CSC/W/46). 
5. Throughout the reporting period, the Committee di scussed classification issues in informal 
mode.  Issues in the following sectors were a ddressed: Consulting Services; Postal and Courier 
Services; Audiovisual Services; Construction and re lated Engineering Services; Distribution Services; 
Education Services; Energy Services; and Environmental Services. 
                                                      
11 Reports of these meetings are contained in documents S/CSC/M/35, S/CSC/M/36, and S/CSC/M/37.  
They should be read in conjunction with this report.  S/C/24 
Page 10  
 
 II. SCHEDULING ISSUES 
6. During the reporting period, several communications containing specific questions on initial 
offers were submitted to the Committee.  Three su bmissions were tabled by Brazil, (JOB(03)/189, 
JOB(04)/12, and JOB(04)/174), and one by Hong Kong,  China (JOB(04)/174).  At the meeting of 21 
June 2005, the delegation of Hong Kong, China pr ovided written replies to questions on its initial 
offer (JOB(05)/116). 
7. The Committee further addressed general scheduling questions on the basis of 
communications from Hong Kong, China (JOB( 04)/81 and JOB(04)/133), and Chinese Taipei 
(JOB(04)/82 and JOB(04)/172).   
8. The Committee took up technical issues related to the clarity and specificity of economic 
needs tests (ENTs) on the basis of contributions from Hong Kong, China (JOB(04)/171) and, with 
regard to Mode 4 specifically, a comm unication from Canada (S/CSC/W/47). 
III. EDITORIAL CONVENTIONS FOR THE SUBMISSION OF REVISED OFFERS 
9. At the meeting of 11 February 2005, the Committ ee considered editorial conventions suggested 
by the Chairman in JOB(05)/6.  The Committee took note of the suggestions made by the Chairman, 
i.e. to continue the use of the editorial conventions  for initial offers set out in JOB(02)/88, and, in 
addition, to facilitate the comparison between initia l and revised offers by shading the background of 
any changes (new text; modified text; struck throug h text) introduced in th e revised offers to the 
documents containing the initial offers.   
 
__________