RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/S/M/14/Suppl.1 
30 May 2005 
 (05-2198) 
Council for Trade in Services 
Special Session     
 
 
REPORT OF THE MEETING HELD ON 27 APRIL 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 on 27 April 2005.  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, recalled that a facsimile 
had been sent by the Secretariat with a list of documents that he would open for discussion under 
item B, and informed delegations of his intentio n to re-open item E, "Review of Progress, Including 
Pursuant to Paragraph 15 of the Guidelines for Negotiations", for comments.  He suggested the 
Council proceed as he had indicated.   
3. It was so agreed . 
B. PROPOSALS RELATING TO THE NEGOTIATIONS UNDER ARTICLE XIX  OF THE GATS 
4. The Chairman  referred separately to the communicati ons related to air transport (TN/S/W/29 
and TN/S/W/33), postal courier including express delivery (TN/S/W/26 and TN/S/W/39) and mode 4 (TN/S/W/31, TN/S/W/32).   
5. The representative of Mexico
, speaking on behalf of the co-sponsors of document 
TN/S/W/31, sought to remind delegations of some  of the discussions that had taken place at the 
meeting on 22 February, including in in formal mode.  He said that a number of the issues raised in the 
paper were of particular importa nce to the co-sponsors.  Referring  to the differences between W/31 
and W/32 in terms of the categories identified, he reiterated that the legal nature of commitments 
sought by the co-sponsors of W/31 at the end of the negotiations related to market access and not only 
transparency.  He sought to highlight a number of points.  Firstly, the offers submitted to date in 
mode 4 had an overlap with commitments offered in  other modes and particularly with respect to 
mode 3.  Secondly, W/31 indicated different cate gories and included categories that were not framed 
in terms of the degree of preparation or educa tion of natural persons.  Thirdly, W/31 drew a 
distinction between commitments linked to mode 3 an d those that were independent of mode 3 which 
could be the subject of market access negotiations.  Fourthly, the paper referred to the importance of 
the reviews, requirements and examinations that related specifically to the rendering of services 
through mode 4.  In this regard, there had been  perhaps less movement to design disciplines on the 
criteria for economic and labour necessity tests.  Th e co-sponsors believed that more attention needed 
to be given to these necessity requirements for comm itments included in the various offers.  Referring 
to the Chairman's summary on mode 4 discussions at the previous session of the meeting, he recalled 
                                                      
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. TN/S/M/14/Suppl.1 
Page 2  
 
that this topic should remain on the agenda given th e importance of it to the co-sponsors in addition to 
many others.   
6. The representative of El Salvador
, referring to the proposals on mode 4 submitted in 
February, recalled the importance of seeking great er legal clarity and certainty on mode 4 
commitments.  With respect to mode 4 categories co ntained in TN/S/W/31, El Salvador agreed with 
the ways in which the groups of persons had been delineated and analysed.  She sought clarification 
on the issue of wage parity and specifically that th ere would not be pre-requisites for service provision 
by independent professions (IPs) and contractua l service suppliers (CSSs).  She sought further 
clarification on how less qualified workers had been referred to in TN/S/W/32.   
7. The representative of Mexico , referring to the question on wage parity said that there had 
been informal discussion on this topic.  Generally, he  said that wage parity was related to the different 
regulatory systems that prevailed in Members' economies and the commitments undertaken.  He said that the different regulatory regimes would apply differently, and he gave the example of intra-
corporate transferees (ICTs) and the source of remu neration for those persons.  The question of wage 
would depend on the appropriate regulatory system in the given jurisdiction and the kind of person 
and movement involved.  He reiterated that this would continue to be a subject of discussion.   
8. The representative of Canada
, referring to the question by El Salvador on TN/S/W/32 said 
that he had noted the question and would undertak e to respond to it at the next meeting.   
9. The Chairman  drew the Council's attention to document TN/S/W/34 on logistics services.  
10. The representative of Bolivia  expressed her delegation's support for the joint statement.  
Efficiency in logistic-related sectors was of para mount importance for the economic development of 
countries.  She said that the data that had been included on the costs to economies of logistics services 
had been helpful.  She recalled that these could be up to 40 per cent of the value of the export and 10 
per cent could be represented by freight costs.  Th e liberalization of these services should be linked to 
the investment of resources in this sector.  Boli via considered that the problem was centred on a 
deficiency of infrastructure rather than of entrepreneurship.  She sai d that, given the concerns outlined 
in the document, Bolivia had conc luded sub-regional agreements that  contributed to the effective 
integration of countries in light of the geographic and economic realities faced by the signatories.   
11. The Chairman  drew the Council's attention to documents TN/S/W/27, TN/S/W/35 and a 
previous room document related to telecommunications.  He refe rred separately to document 
TN/S/W/36 on small and medium sized enterprises.    
12. The representative of New Zealand  noted that the contribution contained in W/36 was useful 
and timely and that she could agree with most of its  content.  The list of sectors in which the greatest 
export potential lay for services SMEs was containe d in paragraph 8.1 of the communication.  New 
Zealand would also consider incl uding consulting services, as it ha d been New Zealand's experience 
that consulting exports had been taken up by SMEs .  New Zealand also noted the point made in 
paragraph 8.3 on infrastructure trade services liber alization.  New Zealand's support of maritime 
services trade liberalization was based on its recogni tion of the importance of infrastructural services 
to an export-driven economy composed primarily of SMEs.  New Zealand supported the call made in 
paragraph 8.3 for a greater level of commitmen ts on mode 4 delinked from commercial presence, 
which seemed particularly crucial to successful e xport by small enterprises and a greater level of 
transparency around whatever criteria might be att ached to temporary entry for this purpose.   
13. The Chairman  drew the Council's attention separately to documents TN/S/W/37 on legal 
services, TN/S/W/38 on computer and related services, Job(05)/22 on maritime transport services, 
TN/S/W/28 on environmental services and Job(05)/17 on financial services.   He also drew attention to 
a room document from Colombia, Peru and the Philippines relating to mode 4 and regulatory issues.       TN/S/M/14/Suppl.1 
 Page 3 
 
 
14. The representative of Colombia , recalling her comments at the dedicated session on mode 4 
issues in February foreshadowing the communicati on contained in the present room document, said 
that the document related to administrative proce dures for visas.  She said that portions of the 
document were drawn from the submission by her delegation in the WPDR contained in 
S/WPDR/W/29 as well as from one from a group of Me mbers in the Special Session.  The proposal 
sought to draw attention to the administrative pr ocedures regarding visas or entry permits and the 
relationship these had with market access.  Colomb ia considered this topic to be of critical 
importance.  She said that solutions were need ed that would facilitate access to the relevant 
documents and the gaining of benefits from commitm ents negotiated in the round.  The document's 
introductory section outlined why administrative me asures for the granting of visas and labour 
permits, in the view of the co-sponsors, were cove red by GATS.  The Agreement established that the 
Annex on the Movement of Natura l Persons contained ge neral standards and principles which were 
applicable to the supply of services through mode  4.  The Annex established clearly the kinds of 
measures that were covered by the Agreement and those which were not.  The Annex exempted those 
measures applied by a Member which regulated the entr y and temporary stay of persons in its territory 
provided that such measures were not applied in su ch a manner so as to nullify or impair benefits 
accruing to Members under the commitments undert aken.  She underscored that the Agreement 
referred to the word "measure" as defined in its Ar ticle XXVIII and relevant jurisprudence.  The term 
was a broad one that included laws, regulations, rul es, procedures, decisions, administrative actions or 
any other form of measure.  Colombia believed th at the administrative measures which affected the 
granting of visas or entry permits woul d be covered by the Agreement.   
15. The representative of Colombia  said that Part II of the paper referred to the problems which 
had been identified by the private sector in consulta tions.  Colombia had presented similar concerns in 
the WPDR on how these measures created obstacles to  market access and were also expanded upon in 
the paper.  Part III of the communication outline d some possible approaches which, from the co-
sponsors' perspective, were elemen ts which could be taken into acc ount and be the basis for future 
discussions.  She hoped that effective solutions coul d be found that would provide suppliers with 
adequate opportunity to take advantage of negotia ted commitments.  The first possible approach 
consisted of the objective application of procedur al requirements for both visas and entry permits.  
The second involved consistency in the application of timeframes, since th ese hampered the rapid 
entry of the service provider.  The third a ddressed objective and streamlined procedures for 
applications in relation to the supply of a service.  Colombia believed that Members could assign 
various visa categories to the categories of persons  for which they would undertake commitments and 
that the appropriate application of these visa categories was important.  Finally, transparency was an important element and she recalled an earlier submi ssion from a group of Members on this topic.  The 
communication had put forth approaches to improve transparency and the ability of service suppliers 
to take advantage of mode 4 commitments.  It pr oposed appropriate publica tion of the procedures and 
measures so as to ensure their e fficient application.  She welcomed further comment on the room 
document she had presented.       
16. The representative of the Philippines
 recalled that mode 4 services suppliers often 
encountered difficulties that were not necessarily rela ted to a lack of market access.  In these cases, 
existing market access was negated or impeded by m easures often related to visas and entry permits.  
He did not mean to imply that market access was not a concern for mode 4 service suppliers, for 
indeed, it was a problem for these suppliers.  It was for this reason that the co-sponsors thought it was 
important to think of approaches related to prob lems with visas and entry permits, many of which 
were outlined in Colombia's working paper submitte d to the WPDR.  He said that there had been 
discussion in the WPDR as to wh ether these measures would be susceptible to disciplines under 
Article VI:4.  Colombia had also raised the question as to whether there could also be a parallel forum 
in which these same concerns could be discussed.  It  was for this reason and in light of the broader 
ambit of work in the Special Session, that the co-s ponsors had sought to raise some of these concerns 
in the Special Session.  He recalled that some of  the possible approaches we re outlined in the room 
document.  Recalling that there had been some qu estions raised about whether measures relating to TN/S/M/14/Suppl.1 
Page 4  
 
visas and entry permits were covered under the GA TS and referring to paragr aph 4 of the Annex on 
the Movement of Natural Persons, he said that th e Philippines believed that there was a recognition 
that measures related to the entry and temporary stay  in the territory of a Member were carved out of 
the GATS "provided that such measures are not app lied in such a manner as to nullify or impair the 
benefits accruing to any Member under the terms of a specific commitment."  It was on the basis of 
this qualification that the co-sponsors maintained that measures related to visas and entry permits 
were covered under the GATS.  Specifically, they be lieved that if the manner in which the measures 
were applied nullified or impaired benefits ste mming from specific commitments then these measures 
would be covered under the GATS.  Given that ne gotiations were underway, the co-sponsors felt that 
it was appropriate for Members to seek to address some of the problems that might arise from the 
application of such measures, so as to ensure that, in their application, they would not nullify or 
impair any benefit that might arise from modest mode 4 commitments.   
17. Referring to the section of the paper that ou tlined possible approaches and specifically the 
approach on objective application of procedural requirements, the representative of the Philippines 
said that, if a survey of existing visa regimes were  conducted, one would find different categories of 
visas and differing requirements and procedures.  Some believed that there existed a correlation 
between these visa categories and some of the comm on categories that had been raised for discussion 
in the working paper from a group of Members that had been mentioned earlier that morning.  However, this direct correlation did not always  exist and was perhaps too ambitious a request, 
although he said that this correlation would be prefe rred.  He recognised that each visa regime had its 
own categories and corresponding procedures and requi rements, and hence the paper did not suggest 
harmonization of categories.  Rather, the paper subm itted that the procedural requirements applied in 
the visa or entry permit process should be applied in  an objective manner.  While he suspected that 
this was already the case for many, he said that there would be benefit in providing for internal 
discipline so as to ensure that any excessive or undue  discretion, which could lead to undue delay in 
the granting of visas, could be mitigated.  The second approach, which sought  consistency in the 
application of timeframes, did not imply a uniform  timeframe for evaluating visa or entry permit 
applications.  Rather, the appro ach argued in favour of applying a timeframe established by a Member 
for all visa applications.  Naturally, there would be  exceptional circumstances in individual cases that 
might require more time; however, these should rema in exceptions applied on an individual basis.  He 
was aware that in many jurisdictions this was the case.  In some cases, however, there also existed 
ancillary processes that were required to be complete d before the visa application could be submitted.  
In these cases, the visa  process might only take a few days, while the ancillary procedural 
requirements could take an unduly long period of time.  The co-sponsors saw a benefit to having 
timeframes identified and consistently applied for th ese processes as well.  With respect to the third 
approach on streamlined procedures, he said that the co-sponsors were not necessarily calling for the 
creation of a new category, but rather sought to highlight the advantages and facilitated access from 
which a service supplier could bene fit if he were able to supply additional information about the 
temporariness of his stay or the certainty of the activity he sought to engage in.  This could be particularly relevant, for example, in the case of cross-border trade of IT- or computer-related services for which delivery times and a temporary presence in th e territory of the other Member was critical to 
a supplier's competitiveness.  The fourth approach re lated to transparency and raised points about the 
identification of relevant elements and their operationalisation, which were topics about which 
Members had differing views.  He said the co-spon sors had built on a previous submission from a 
group of Members on this topic.  The co-sponsors fe lt that this approach would address many of the 
problems identified in S/WPDR/W/29.  In summary, he hoped that the communication would provide guidance for Members and provide a tool for them to  ensure that specific co mmitments undertaken in 
mode 4 would not be nullified or  impaired.  He looked forward to further discussion on this 
document.   
18. The representatives of Canada
, Chile , Hong Kong, China , China , Mexico , Kenya , Thailand , 
European Communities , Australia , South Africa , United States  and Japan  thanked the co-sponsors for 
their paper.  TN/S/M/14/Suppl.1 
 Page 5 
 
 
19. The representative of Canada  noted the paper's detail, particularly with respect to its legal 
analysis, and said that it would be sent to capital.  He  anticipated that his delegation would revert to it 
at subsequent meetings.  On first review, he thoug ht that it was a helpful document and he had noted 
that the proponents were not arguing that market access was not important.  On the contrary, market 
access in mode 4 was important, as were issues rela ted to transparency and processing.  He thanked 
them for bringing focus to this point and for thei r willingness to move from general to specific.   
20. The representative of Chile  said that the paper would be referred to capital and hoped to 
revert to it at the next meeting.  Referring to th e four different approaches outlined in the paper, he 
said that they contained interesting specific ideas on which to move forward on mode 4.  He noted 
that some of the issues raised were also contai ned in paper authored by the National Foreign Trade 
Council on recommendations to improve regulati ons for movement of natural persons.   
21. The representative of Hong Kong, China  agreed that the regulator y issues raised were an 
important complement to the on-going discussions on mode 4.  Making a few preliminary comments, 
he said that the paper was a useful extension of the discussion in the WPDR and particularly on 
working paper S/WPDR/W/29.  Notwithstanding th e debate about the coverage of the GATS and 
Article VI:4 in relation to the measures raised in  this working paper, he said that it had been 
recognised that the problems raised were on-the-gr ound realities faced by service suppliers and it was 
important to approach them in a problem-solving mode.  Hong Kong, China believed that solutions 
should be privileged over a debate about where th ey should be discussed.  Referring to the specific 
proposals made in the paper, he said that many of  them addressed the key problems faced by mode 4 
service suppliers in terms of accessing markets of interest especially when they submitted a visa 
application.  Seeking a few clarifications a nd referring to the first approach on the objective 
application of procedural requirements, he not ed the suggestion for Members to undertake to 
standardise, to the best extent possible, the pro cedural requirements applicable in granting a visa or 
permit in a category.  He asked what procedural  requirements were specifically envisaged as being 
subject to standardisation, particularly in light of a sentence that the objective of this approach was to 
ensure that visa applications would be "examine d objectively in relation to a standard set of 
procedural requirements."   
22. With respect to the second approach on the cons istency in the application of timeframes, the 
representative of Hong Kong, China sought a clarifi cation about the nature of this time limit, and 
particularly to what extent the time limit would represent a norm or obligation on the part of the 
processing authority. He said that in Hong Kong, China norms called "performance pledges" existed 
for visa application procedures processed by the immi gration authorities.  He said that in the vast 
majority of cases, the timeframe was adhered to ; however, there were exceptions for which the 
timeframe might not be met for a variety of reasons.  In this regard, he sought clarification about the 
nature of the timeframe referred to.  With respect  to streamlining procedures for applications in 
relation to the supply of services, he sought a clarification as to whether the proposal would require 
the immigration authority to create a separate cate gory of visa for mode 4 service supply.  In this 
regard, he recalled an earlier proposal suggesting a similar approach and said that it might be 
worthwhile to look at the two together for any syne rgies.  On the approach on transparency, he noted 
that the paper had identified a number of issues  which existing GATS obligations might not fully 
address.  He further noted that the possibility of  addressing these lacunae in the discussion on Article 
VI:4 should not be overlooked.  Referring to the suggestion that informa tion be made available 
through contact points on issues related to visa an d entry permit requirements and procedures, he 
sought a clarification as to why obtaining this in formation would be conf ined to contact points 
established under Article IV:2 and what role the enquiry points established under Article III:4 might 
play.  He said that the elements on transparency outli ned in Part D of the paper would be relevant to 
service suppliers seeking access to developing count ries as well.  Hence, making the information on 
visa and entry permit requirements and procedures available more widely would benefit all.   TN/S/M/14/Suppl.1 
Page 6  
 
23. The representative of China
 said that China attached importance to mode 4 regulatory issues.  
Although her delegation sought more time to examine more closely the specific proposals contained 
in the paper, China thought it was useful.  China fu lly agreed that any existing or new market access 
concessions should not be negated or diminished by administrative measures relating to visas and 
entry permits applied by Members.  China was not convinced by the argument  by some Members that 
the GATS allowed Members to apply visas as they wi shed and that visas were entirely excluded from 
GATS disciplines.  Like standards and licensing re quirements and procedures, China believed that 
Members were allowed to use these measures, but needed to apply them in a manner that did not 
nullify or impair benefits accruing to other Members.   
24. The representative of Mexico  said that in light of the recen t distribution of the paper, his 
delegation had no formal questions or comment, but that it would be studied in capital in consultation 
with the relevant regulatory authorities.  The documen t contained elements that could be the object of 
possible negotiations in mode 4.  His delegation was particularly interested in the approaches outlined 
in parts C and D regarding procedures which related to the simplification of applications for service 
providers and transparency.  He would seek furt her input from Mexico's migratory authorities and 
reserved the right to revert to the paper at a future meeting.   
25. The representative of Kenya  agreed with the co-sponsors that the administration of laws, 
regulations, and other measures app lied by Members often did impair benefits accruing from specific 
commitments.  He further agreed that the lack of a distinction between temporary movement and 
permanent migration by migration regimes by Members had created excessive discretion in the granting of visas and entry permits for the purpose of supplying services in sectors where specific 
commitments had been undertaken.  Referring to the suggested approaches, su ch as transparency in 
the application and administration of visas and stre amlining procedures related to visa applications,  
he said these would contribute to enhancing specific co mmitments in mode 4.  Overall, he said that 
the contribution was useful, particularly in terms of trade facilitation in services, which he said should 
be given the same weight as in trade in goods.  His delegation would study the paper carefully and 
reserved the right to revert to it at the next meeting.    
26. The representative of Thailand
 said the submission was positive and built on existing 
proposals and discussions.  Making some preliminary remarks, her delegation's views centred on the 
line of legal argumentation put forward in the paper, particularly with regard to the definition of the 
term "measure", which she found comp elling.  Thailand was inclined to agree with the view of the co-
sponsors that the nature of the footnote in the A nnex on the Movement of Natural Persons was that of 
an exception to the MFN principle rather than a general exception of measures relating to visas in 
respect to the supply of a services from the GATS per se . Therefore, the Special Session was the 
appropriate forum for a discussion on regulatory issues related to mode 4.  He r delegation hoped there 
would be further discussion at the next meeting.   
27. The representative of the European Communities  said that the paper would be studied in 
detail in capital.  On a preliminary basis, he noted with interest that the doc ument raised more specific 
issues, notably of a legal nature.  His delegation reserved the right to revert to the communication at the next meeting.  
28. The representative of Australia
 echoed comments by others that the communication raised a 
number of legal issues.  His delegation would send th e paper to capital for study.  On the issue of 
transparency and the establishment of contact point s, he requested that the proponents clarify whether 
the proposal sought a dedicated mode 4 contact point .  He said that Australia's immigration authorities 
had a website which included much of the informati on listed on the last page of the communication.   
29. The representative of South Africa  said that many of the points raised in the paper her 
delegation shared, especially the possible suggested  approaches, which South Africa was thinking of 
implementing in its immigration regime.  She said th at it would be important to continue to discuss TN/S/M/14/Suppl.1 
 Page 7 
 
 
these issues in a solution-oriented mode.  She reitera ted some of the points raised by Kenya, including 
the need to distinguish between temporary versus  permanent movement.  Members needed to seek 
ways to advance trade facilitation for service suppliers.  
30. The representative of the United States  said that the paper would be reviewed carefully in 
capital and reserved the right to make formal commen ts at the next meeting.  With respect to the 
points raised on transparency, she took note of po ints made about the usefulness of additional 
transparency disciplines, in part to address the concer ns raised with respect to mode 4.  She recalled 
that the United States proposal on horizontal ser vices disciplines on transparency could help to 
address this issue.  
31. The representative of Japan  had taken note of the introductory comments by the co-sponsors 
and specifically by the representative of the Philippin es, that mode 4 consiste d of various issues both 
in terms of market access and regulatory issues.  He   noted that the document sought to highlight the 
measures related to the temporary entry and stay of natural persons and that these formed part of the 
coverage of mode 4.  However, he noted that these measures had a particular status under the GATS, 
including the Annex on the Movement of Natural Pers ons.  He said it was true for mode 4 that there 
were other measures related to the ab ility to supply the services.  It would be useful to further explore 
these aspects and the special features of the measures re lated to the entry and stay of natural persons.   
32. The representative of the Philippines , responding on a preliminary basis to comments made 
and referring to the question from Hong Kong, China on the objective application of procedural requirements and standardisation in  this regard, said that the co-sponsors recognised that each 
Member should have the latitude to create categories of visas or entry permits.  He said that each 
Member would have the flexibility to prescribe the requirements or criteria for each category.  He 
recognised that, when an application was made, certa in procedures would be followed in each or all 
categories, but that the co-sponsors saw advantage in  ensuring that the steps in the visa application 
procedure were the same for all visa applicants a pplying in a particular category.  Referring to the 
question on specific procedural requirements and noti ng that this would vary from country to country, 
he clarified that the co-sponsors were suggesting th at, where an application for a certain category of 
visa could be submitted by mail, the procedure should a pply to all such applications.  In this regard, 
the paper referred to an objective application of pr ocedural requirements, although he said there were 
other operationalisations of this concept.  With r espect to questions on timeframes and the extent to 
which they would set a norm, he gave the example of the processing time for a particular type of visa of two weeks for which the relevant authority sou ght to calibrate the actual processing time with the 
norm.  In the case that Hong Kong, China had give n, the compliance rate with the norm was very 
high.  With reference to the question about exceptions  to the norm, he reiterated that there would be 
need for exceptions to be granted on a case-by-case b asis where warranted.  He highlighted that such 
exceptions to the norm should not be granted wholesale to a particular category, for example, in the 
hypothetical case where the timeframe would not apply to contractual service suppliers.  This type of 
implementation of the norm would undermine the objec tives of standardisation, for example for mode 
4 service suppliers from developing countries who sought to move through this category.   
33. On the question of seeking to create a separat e category under the streamlined procedures 
approach, the representative of the Philippines reca lled that India had advocated the creation of a 
service provider or GATS-visa.  While the co-sponsor s were not prejudging this approach, they were 
arguing that a service supplier who could provide a dditional information on th e temporary nature of 
their entry and stay for the purpose of service suppl y should be able to benefit from a streamlined 
procedure within the existing categories of visas used in the regimes of each country.  In other words, 
if qualification for a streamlined procedure require d the submission of additional information, he 
could see no reason why the submission of this add itional information should not be allowed for that 
specific category of visa or any kind of visa category in  existence in that Member's regime.  This did 
not preclude the possibility that there could be a visa specific to GATS, but rather envisaged scope for 
a fast-track approach.  He cite d the example of a GATS-type visa in the United Kingdom, and could TN/S/M/14/Suppl.1 
Page 8  
 
imagine a situation where a service supplier could m eet the requirements to benefit from fast-tracked 
processing of an application in an existing visa categ ory.  On the question from Australia on contact 
and enquiry points, he noted that Article III was la rgely intended for the benefit of fellow Members, 
and said that, to the extent that the practical in formation required by service suppliers might not be 
available through enquiry points, the contacts point c ould be used for this purpose.  He recalled that 
Article IV was meant to benefit and assist service suppliers supplying in any mode to exploit trading 
opportunities in targeted trading partners.  Referring to paragraph 2 of Article IV, he said that it 
contained no reference to mode 4; however, he said that  if the contact point sought to fulfil the role he 
had just outlined, then there would be reason for it to provide information to mode 4 suppliers.  
Ensuring that the existing contact point could provid e information for mode 4 service suppliers would 
obviate the need for a new contact point dedicated to mode 4.  He took note that Australia already had 
a dedicated contact point and said it would be ideal if  others were willing to do the same.  Where such 
a dedicated point did not exist, the co-sponsors were suggesting that contact points be used to fulfil 
what was required under Article IV.   
34. The Chairman
 drew attention to document TN/S/W /39 on education services submitted by 
Switzerland.   
35. The representative of Switzerland  said that education was a shared competence between 
federal and cantonal governments.  The educational system in Switzerland was characterised by the 
co-existence of two well-fledged systems.  Sw itzerland had a strong and comprehensive public 
education system which aimed to fulfil a numbe r of national policy objectives, including instilling 
democratic values and ensuring that every individual benefited from free educa tion or education at a 
very reasonable cost.  This was a key issue in th e constitution and political system.  The fulfilment of 
these goals was assured by the Confederation and to a larger extent by the cantons, as most 
competencies related to education fell to them.  The public system included compulsory primary and 
secondary schooling and post-compulsory schooling included professional or vocational education 
and higher education.  The shared nature of responsibilities between the Confederation and the 
cantons was more visible at the higher educational level:  the Confederation was responsible for two 
Swiss Institutes of Technology in Zürich and Lausa nne and for the University  of Applied Sciences;  
the cantons were responsible for more academic uni versities and essentially all other areas.   Turning 
to a description of education services offered by the private sector, he said that Switzerland also had an expansive, diversified and well -rounded private education sector that  had a long history.  It was a 
dynamic sector that met a real demand and covered a ll levels of education fro m pre-school through to 
professional education.  It was characterised by a large number of suppliers and was particularly 
active in the area of higher professional education in  which 23 per cent of this category of students 
were enrolled.  Moreover, the main association of private schools had 260 members, although he said 
this was an approximate number as it did not includ e all private institutions.  This was a fairly large 
number, which was explained by the fact that it included institutions rangi ng from pre-school to post-
graduate schools.  Hence, taken together, the p ublic and private institutions comprised a mature 
system, in terms of the number of operators, the relationships between them , and the diversity of 
institutions providing educational services, wh ich in addition to schools included business 
associations, foundations, etc.  There were also cases  where it had been decided that public education 
services could be provided by experienced private institutions.  There were also cases where public 
institutions decided to move be yond their mandate and provide private services on a purely private 
basis in a competitive market.  These were the signs of a complex and mature system.   
36. The representative of Switzerland said that it was against this background that, in 1994, 
Switzerland had undertaken GATS commitments in e ducation services, which were recalled in the 
proposal.  He said that the schedule was clear an d self-explanatory despite the complexity of the 
regulatory system and the activities offered.  He  noted that Switzerland's specific commitments 
applied to private education services.  It was obvious that Switzerland was not prepared to undertake 
commitments on public institutions.  The commitments  provided an open regime for private education 
services, particularly for non-compulsory and hi gher and adult education, which reflected the TN/S/M/14/Suppl.1 
 Page 9 
 
 
competitive system that existed in Switzerla nd.  Switzerland granted non-discrimination among 
private services and its commitments gave legal sec urity to any private operator wishing to supply a 
private education service.  The paper also touc hed upon the question of what constituted private 
services, which he repeated were services supplied in  principle by private institutions, although there 
were some special cases.  The paper presented the th ree cumulative criteria that drew a distinction in 
this regard.  He said that Switzerland's experien ce had been a successful one and demonstrated that a 
strong and efficient public education sector could co-e xist with an equally strong and dynamic private 
educational system and that combined they met market demand and fulfilled all policy objectives, 
including a public education regime and a liberal  commercial regime.  Switzerland had implemented 
these commitments for ten years with no major adve rse effect, the success of which he underlined 
given the sensitivities that were often attributed to this sector. 
37.   The representative of Switzerland said that  his delegation was not implying that trading 
partners should do exactly the same.  Decisions rega rding private education were linked to questions 
about existing national regimes and specific contexts.  Nor was Swit zerland implying that the criteria 
for distinguishing private and public should be the same for other Members.  However, Switzerland 
did believe that, in the context of the negotiations, it was worthwhile for Members to reflect on ways 
to make some progress in this sector.  Switzerland had not made any requests on educational services, which did not mean that Swiss institutions were not  supplying services abroad.  On the contrary, there 
were exports and export potential.  Switzerland was of the view that there was reason to believe that 
others could experience the benefits that it ha d gained by granting a secure and predictable 
environment.  These benefits included:  mee ting demand, creating innovative educational and 
research environments and rendering a country  more attractive to foreign companies. 
38. The representative of Switzerland recalled that the educational system in Switzerland was 
characterised by shared competencies at the fede ral and cantonal levels, re levant legislation and 
activities by public and private institutions.  Against this background, three cu mulative criteria were 
used to define, in Switzerland, a public education service.  The first of these was that the degree 
and/or curriculum were specified by the state within the framework of its educational policy.  In other 
words, the title or degree issued and the curriculum n eeded to be in line with the education system in 
force.  Giving a negative example, he said that many universities, both public and private, issued 
Master of Business Administration (MBA) degrees, which occurred outside the regular curriculum.  These titles were not degrees that were defined by the government or the state, and hence, did not represent a public education service.  The second cumu lative criterion was that the service supplied 
corresponded to the fulfilment of a public mandate which was defined by law and corresponded with 
the cantonal or federal state educational policy.  In this regard, the granting of an authorisation for a 
school to establish itself or of a subsidy did not co rrespond to the carrying out of a public mandate.  
Switzerland had a national accreditation system for universities and higher education institutions both 
at the federal and cantonal levels which validated  and recognised the quality of the teaching supplied 
in these educational institutions.  The accreditation system did not correspond to the fulfilment of a 
public mandate, although many Swiss and foreign private institutions requested this accreditation so 
as to guarantee the quality of the services supplied.  The third cumulative criterion related to public 
need, which was in no way a limitation on market access,  but rather was related to whether the State 
needed this service to fulfil the educational mandate  with which it was entrusted.  The question could 
be formulated differently, namely, if the service did not exist, should the state create this service?  It 
was in the light of these three cumulative criteria that Switzerland defined a public education services.   
39. The representative of New Zealand
 said that education was an export sector of significance 
for many Members, including New Zealand.  However,  as had been noted in the Swiss intervention, it 
was a sensitive sector given the critical role of education in Members' economies, cultures and 
societies.  It had not often been a focus of discu ssion in the Special Session.  New Zealand welcomed 
the paper and thanked Switzerland for re-introducin g education services on the agenda.  New Zealand 
found a number of elements in the Swiss paper to be attractive in that it reiterated two important 
principles her delegation had outlined  in its own negotiating proposal contained in S/CSS/W/93.  The TN/S/M/14/Suppl.1 
Page 10  
 
first element was that there was scope for Member s to find a balance between the private education 
sector and public sector education policy objectives, and secondly, that commitments on the former could be made without compromising the latter.  Ne w Zealand agreed that th is had been effectively 
illustrated by Switzerland's experience of the co-e xistence of a strong and comprehensive public 
education tradition with a successful private education sector and the scheduling of specific 
commitments based on the policy settings that underlay  this situation.  Switzerland's example of the 
criteria used to delineate between private and pub lic education New Zealand found to be illuminating 
and useful, and thought that it was the type of analysis that other Members might apply to their own regulatory environments.  For those Members th at were active exporters or sought to position 
themselves as centres of education excellence, this ty pe of analysis could be used to draw a clean line 
between trade and education policy objectives and ga ve domestic constituencies the reassurance that 
they needed that the balance between those two obj ectives would continue to be respected as specific 
commitments on education services would be exch anged.  New Zealand looked forward to the 
reaction of other delegations to the contents of the paper.   
40. The representative of Norway
, thanking Switzerland for its proposal, said that it contained 
useful information on how education services had b een regulated in Switzerland to the benefit of 
accessibility and quality of those services.  He had not ed that access to high quality education was one 
of the most important factors in driving economic  and cultural development and enhancing social  
mobility within societies.  Norway shared Switzerla nd's view that the flexibility of the GATS made it 
an appropriate approach for sectors such as educati on and that Members were encouraged to examine 
ways of identifying types of education services that  could be the subject of GATS commitments in 
order to promote the exchange of education servi ces.  He endorsed the statement made by New 
Zealand in terms of the quality of education servi ces and the appropriateness to use the GATS as a 
framework to balance private and public sector education.   
41. The representative of Australia , thanking Switzerland for its contribution, said that education 
services were an important sector in the GATS and an area that could benefit from greater information 
sharing and discussion.  Referring to the chart on page  2 of the document, he said that his delegation 
was not surprised that it indicated that Australia ha d the highest percentage of international students 
studying at the post-graduate level.  In 2004, ove r 320,000 international students were studying in 
Australia which was an indicator of the importance of  this sector to Australia.  He had noted some of 
the similarities between the Swiss and Australian edu cation systems, including in terms of the federal 
structure and the roles and responsibilities of the di fferent levels of government in this sector.  
Echoing comments by New Zealand, he highlighted two important themes, namely, the importance of 
education services commitments in the GATS as a framework to promote education services 
liberalization and the ability fo r public and private education services to co-exist and increase 
diversity within the education sector.  Australia recognised that governments could and did play a 
significant role in the education sector, which reflected the importance of education in the 
development of society, in values and culture, a nd in economic prosperity .  Australia acknowledged 
that governments should retain the ability to de termine their domestic funding and appropriate 
regulatory policies and measures in this sector.  Austra lia also believed that liberalization of trade in 
education services was a means of pr oviding individuals access to a wide  range of education options.  
The benefits associated with liberalizing education and the greater facilitation of cross-border flows of 
students and education service providers included, for example, facilitating access to education and 
training courses in qualitative and quantitative terms th at were not otherwise available in the country 
of origin.  It provided a competitive stimulus to inst itutions with flow-on benefits to all students.  It 
enhanced international engagement with the world socially, culturally and intellectually.  Finally, it 
provided the foundation for an increasingly mobile  international workforce and strong people-to-
people links across borders.  Australia had ma de commitments on education services and was 
pursuing requests in the current round of nego tiations to some 20 Members to open education 
markets.   TN/S/M/14/Suppl.1 
 Page 11 
 
 
42. The representative of Malaysia , thanking Switzerland for its pa per, said that it had generated 
some interest in capital as Malaysia had proposed  for the first time to undertake commitments in 
higher education under CPC 923.  In this context, sh e said that the issue had been debated extensively 
and especially the issue of delineating public and pr ivate services.  In Malaysia's case, public and 
private education services were classified according to  type of institution and the Act by which they 
were registered.  Therefore, as in stitutions funded by government or with government equity, they 
were excluded from Malaysia's schedule.  She sou ght to indicate Malaysia's openness to foreign 
private education services, which could co-exist with  public education services that were carved out 
from the GATS. 
43. The representative of the European Communities , thanking Switzerland, said that his 
delegation attached great importance to the role of the public education system that ensured that all 
citizens could access high quality education services.  The European Communities GATS 
commitments in the area of education services fully recognised and respected this key objective.  By 
way of clarification, he said that it could be usef ul if Switzerland gave examples of private education 
services that fell under its commitment and clarified if private universities providing courses based on 
national standard programmes were covered by its commitments.    
44. The representative of Chinese Taipei , thanking Switzerland for its submission, said that 
Chinese Taipei identified with the views contained in the paper.  Education inevitably played a crucial 
role in providing qualified human resources required for industry and services.  Chinese Taipei agreed 
that the Swiss policy of a liberal education servi ces market with public and private sectors working 
side-by-side provided a number of advantages.  Th e flexible Swiss educational system could be a 
good model.  Chinese Taipei also shared the view th at the flexibility of the GATS was an appropriate 
framework for education.  Chinese Taipei was geographically roughly the same size as Switzerland 
and hence paid great attention to a sound educa tional system.  Chinese Taipei had also made a 
commitment under higher educational services as it shared the view of Switzerland on the importance of education in its economy.  Chinese Taipei encour aged other Members to include education services 
in their commitments. 
45. The representative of Switzerland
, responding to the question from the European 
Communities, recalled that the three criteria that he had outlined earlier were cumulative.  They 
applied independently of the nature of the school wh ich provided them, either private or public.  He 
said that one example was the Lausanne Hotel School  which was a university level private school and 
benefited from a solid international reputation.  The degrees and services it provided were recognised 
as being public services.  By contrast, in Geneva, there were some private universities which operated 
in a completely private fashion and had no connect ion with the public educational services, either 
cantonal or federal.  The same situation ex isted at the secondary level that led to a maturité  or 
baccalauréat  degree, for which there were some private entities that provided the federal maturité  
degree that was a public degree, and in th is respect, served a public function.   
46. On behalf of the Council, the Chairman  thanked Switzerland for its presentation.   
47. The representative of the European Communities , making an oral statement on the importance 
of mode 3 commitments, said that it was estimated  that between one-half and two-thirds of world 
trade in services took place through commercial pr esence.  Whereas all modes of supply were 
important, he said that it should be recognised that  mode 3 was and would remain by far the most 
significant mode of supply.  As had been highlight ed by many delegations at the meeting of the 
Special Session in December 2004, UNCTAD in its  2004 World Investment Report (WIR) observed 
the marked and continuing shift in the composition of foreign direct investment (FDI) from goods to 
services and he sought to highlight certain fi ndings from the UNCTAD report.  Firstly, FDI in 
services could bring capital, skills and technology into a country.  Secondly, FDI could help link 
countries to local value chains in services.  Thirdly,  developing countries had an offensive interest in 
FDI and outward FDI in services had begun to grow visibly from the 1990s.  Developing countries' TN/S/M/14/Suppl.1 
Page 12  
 
share in the global outward FDI  services stock had climbed from 1 per cent in 1990 to 10 per cent in 
2002, which was faster than in other sectors.  Fourthly, FDI in services could improve export 
competitiveness as many services served as inputs to ot her sectors, including export sectors.  Fifthly, 
the WIR highlighted that benefits were more likely to be realised if the conditions were right, for 
instance, in terms of a contribution to competition.  He said that recent discussions on services had 
focused primarily on  the supply of services through modes 1, 2 and 4.  However, the possibilities for 
delivering services through these modes of supply rema ined limited in many sectors.  Therefore, 
substantial commitments in mode 3 were of param ount importance in the current negotiations.  Most 
WTO Members had long realised that the attraction of FDI was in their own best interest in order to 
create a stable source of external financing, drive economic growth and to ge nerate employment.  An 
important component in improving the investment climate was the establishment of a reliable and 
transparent framework of rules governing the est ablishment of foreign service providers.  The 
European Communities believed that the GATS provi ded the ideal vehicle for signalling to foreign 
investors that a WTO Member was serious in its efforts to establish a nd maintain a favourable 
investment climate.  The European Communities ur ged WTO Members to look at their existing mode 
3 commitments and consider how these commitmen ts could be improved upon with a view to 
enhancing the investment climate and attracting hi gher levels of FDI.  Specifically, the European 
Communities believed that commitments in mode 3 should include the right to establish new and 
acquire existing companies and the right to chose the form of establishment, whether in the form or 
wholly-owned subsidiaries, joint ventures or branches.   
48. The representatives of Japan
, Canada , Chinese Taipei , Norway , United States , Switzerland , 
Hong Kong, China , Korea  and Australia  thanked the European Communities for its statement.   
49. The representative of Japan  voiced his delegation's strong support for the statement by the 
European Communities.  Referring to the points highlighted by the Eur opean Communities taken 
from the WIR, he agreed that FDI in services could improve export competitiveness and that the 
benefits were more likely to be realised if the conditions were right in terms of contributing to 
competition.  This demonstrated that the liberalizat ion of trade in services, particularly in mode 3, 
contributed to the creation of an environment in  which Members could atta in export competitiveness 
for goods and services alike.  This was of benef it to exporting companies, both in their capacity as 
exporters and consumers of services.  Secondly, many countries had experienced these changes 
through autonomous liberalization and he recalled that autonomous liberalization was different from 
specific commitments in that the commitments gave greater certainty to investors.   
50. The representative of Canada  reminded Members that Canada was one of a group of 
Members that had discussed the UNCTAD WIR on a pr evious occasion.  He sought to underline the 
importance of mode 3 commitments in the on-going negotiation for Canada and to flag two gaps in 
the negotiation.  The first gap for Canada was in terms of the large number of requests that Canada 
had made of other Members that dealt with mode 3 restrictions (such as the type of legal entity, the 
number of suppliers or the participation of forei gn capital) which had not been responded to in an 
substantial manner.  This was an  important gap from the Canadian perspective.  The second gap was 
that negotiators appeared to be out of step w ith the domestic realities.  UNCTAD devoted a fair 
amount of attention each year to identifying liberali zation activity with respect to foreign investment 
regimes, and for 2003 UNCTAD had reported that  some 240 liberalization measures had been 
undertaken.  He said that as Members began to  think about assessments and progress in the 
negotiation, it was important to reflect on whethe r the liberalization that Members were pursing as a 
matter of sound domestic policy was being capture d in the negotiations and locked in through 
commitments.  He recalled the more extensive comments that he had made on an earlier occasion on the WIR and the importance of mode 3 commitments.    
51. The representative of Norway
 recalled that his delegation's earlier statement at the December 
meeting of the Special Session related to the WI R.  He said that the European Communities had 
drawn attention to the important fact that many rest rictions for mode 3 remained in place and that this TN/S/M/14/Suppl.1 
 Page 13 
 
 
had a direct impact on FDI.  Norway was particul arly concerned with restrictions on services which 
played a supportive role, such as in relation to tr ansport, telecommunications and financial services, 
and promoted economic development.  Partic ular emphasis should be put on removing these 
restrictions and Norway endorsed the st atement by the European Communities. 
52. The representative of the United States  expressed its support of the European Communities 
statement and the importance of investment and mode 3 commitments in promoting the economic 
development of all countries, and developing countries in particular.  The United States agreed that 
commitments in this mode were especially im portant and should be a major objective in the 
negotiations.   
53. The representative of Switzerland  recalled that his delegation had had opportunity in the past 
to support statements on the importance of all modes,  however, he agreed that less attention had been 
drawn to mode 3 and, viewed from this perspectiv e, the European Communiti es statement was timely 
and important.  His delegation looked forward to fu rther discussion on this topic and could agree with 
the supportive statements made by previous speaker s.  He recalled that Switzerland attached great 
importance to the quality of commitments.  He said th at mode 3 commitments, in light of the complex 
regimes that often surrounded a commercial presence, at times posed technical scheduling difficulties.  
He encouraged Members to pay careful attention to improve the technical clarity of limitations 
scheduled in the horizontal and sectoral portions of schedules.  He said there was room for improved clarity and transparency and encouraged Members in this regard.   
54. The representative of Hong Kong, China
 said that the statement was a timely one on an 
important mode of supply.  She agreed that FDI was important in the deve lopment of service sectors 
in the overall economies of Members and for employment creation.  She said that one way to create 
real and new business opportunities, which was an objective Hong Kong, China aimed to achieve in 
the round, would be to remove or substantially reduce mode 3 restrictions, particularly those in 
relation to foreign ownership and control.  She remi nded delegations that many restrictions in mode 3 
existed in the form of ENTs and that many of these were unspecified.  Discussion on mode 3 hence 
required addressing the issue of ENTs as well.  H ong Kong, China believed that the improvement of 
mode 3 commitments along with urgent and proper a ttention to mode 4 would be the main driver in 
efforts to attain the level of ambition Members had set for the round.   
55. The representative of Korea  said that, given the characteristics of services and the direct 
contact with consumers, commercial presence was an important form of delivery for the sake of consumer protection.  Mode 3 also brought ab out positive spill-over effects, such as technology 
transfer, to the host Member.  It was for this reason that many Members sought to attract FDI through 
various incentives.  Korea's experience in overcomi ng an earlier financial crisis demonstrated that 
legal predictability of an open envi ronment was one of the most importa nt instruments to attract FDI.  
In this regard, Korea believed that GATS was a us eful tool as an FDI incentive without requiring the 
burden of fiscal resources.   
56. The representative of Australia
 offered his country's support for the statement by the 
European Communities.  He said that Australia  had long been a capital importing country and FDI 
had played an important role in its economic development and growth, particularly in services sectors.  
Australia agreed that all modes of supply were important, but that mode 3 had been somewhat 
neglected in terms of negotiating proposals.  Like the European Communities, Australia urged 
Members to look at their existing mode 3 commitments and inscribed limitations.   
57. The representative of th e European Communities  thanked those Members that had expressed 
their support for his delegation's statement.  He sai d a number of interesting additional elements had 
been highlighted in Members' interventions.  His delegation would consider preparing a written 
submission for the Special Session's next meeting.   TN/S/M/14/Suppl.1 
Page 14  
 
58. The representative of United States
, speaking on behalf of the friends of energy, sought to 
note that the group was considering a statement at th e next meeting on the Energy Services Week that 
had been held in March.  In the in terim, she wanted to note the success of this event.  It had been the 
first occasion at which negotiators and experts from capital had had the opportunity to hold a series of 
informal meetings on scheduling any services commitm ents related to energy.  The friends had found 
highly informative the week's meetings, introductory  workshop, seminar at which different Members 
had shared their experiences with regulatory refo rm, and bilateral meetings.  The United States had 
held some 19 bilateral meetings during the week, which had been productive.  The group was also 
impressed by the 41 delegations that had participat ed in the meetings.  These delegations represented 
countries with declining oil and gas fields that were  interested in technological benefits offered for 
foreign energy services providers.  Also present we re countries with export interests, such as in 
pipeline and transport or oil and gas services, as well as net importers of energy services that were interested in obtaining efficient and secure supply of  energy for their economic activities and citizens.  
Also present were some LDCs for whom only a sm all percentage of the population received electric 
power and were interested in determining which energy source and accompanying energy services 
would be most appropriate to their level of econom ic development.  The 41 delegations represented a 
broad and representative spectrum of the membership.  For energy friends, the bilateral negotiations 
that provided the core of the week's activities serv ed to justify the work that the group had been 
undertaking over the preceding years in developing complementary guidelines for scheduling energy 
services.  Delegations had set their minds to sch eduling the various W/120 sectors that had been 
identified in the various papers ta bled.  One of the questions raised in the seminar was what the 
United States had done in its initial offer.  In th is regard, in the United States offer in relation to 
services incidental to mining, the United States had made use of the details of the proposed guide for 
scheduling commitments on energy services in the WTO, and in particular in the following sub-
sectors:  on-land site preparation, drilling, solids co ntrol, well testing, ceme nting, and plugging and 
abandoning of wells.  She thanked those delegations  that had participated in making the energy 
services week a success and looked forward to  future work in this area.     
59. The Chairman
 suggested that the Council take note of the statements that had been made.   
60. It was so agreed . 
 
E. REVIEW OF PROGRESS IN THE NEGOTIATIONS , INCLUDING PARAGRAPH 15 OF THE 
PROCEDURES FOR NEGOTIATIONS  
61. The Chairman  informed Members that as had been agreed  earlier in the meeting, he had been 
engaged in consultations in vari ous formats over the preceding weeks.  For most Members, May was 
a very important marker in terms of making progr ess in the negotiations and Members would likely 
have to face a reality check in the light of the new of fers at the next meeting.  He said that July would 
be a symbolic date at which Members would ha ve an overall look at the negotiations so as to 
programme work after the summer and leading to Hong Kong.  Members would have to face the facts 
brought out in the revised offers and come up with  some broad general conclusions.  Under his own 
responsibility he would reflect the sentiment of the wi der membership in his report to the TNC.  He 
hoped that he would be able to make a glowing repor t in July in terms of the numbers and quality of 
the offers.  The current situation posed a critical  problem, since the numbers remained bleak:  52 
offers representing 76 Members had been tabled.  The latest offers received were Indonesia and 
Honduras.  Not including LDCs, some 40 initial offers  remained outstanding.  Judging from what he 
had heard from Members on previous occasions, this was not a promising critical mass.  He was not 
sure how this situation informed the May deadlin e, but he pleaded with Members that had not 
submitted an initial offer to do so as soon as possible.   
62. The Chairman reported that he had held so me consultations with the African Group and 
LDCs with reference to the work  on S&D related proposals that ha d been referred to the Council TN/S/M/14/Suppl.1 
 Page 15 
 
 
through the Chairman of the Council for Trade and De velopment in Special Session.  He said that a 
meeting attended by a number of delegations had been held and at which the African Group had 
responded to some of the points that had been raised in discussions in 2003.  He said that further meetings would be held, including possibly an ope n-ended meeting in order to allow for comments 
generally and on the responses that had been give n by the African Group.  He said that Members 
would be informed about any meetings  and that he was aware of the request that he report back to the 
Chairman of the CTD in Special Session on work on these proposals.  He said that he had been in 
touch with LDCs about how to best organize a day or two in the June cluster for bilateral meetings in 
which they could reiterate their requests and help  advance their participation in line with the 
modalities for the special treatment for LDCs.  The LDCs  had also indicated that they wished to have 
an open-ended meeting to consider some ideas they had in terms of these same modalities.  He said 
that he would be a convening a meeting for this purpose and, he understood, to discuss a paper that 
the LDCs would be presenting.   
63. The Chairman said that there had also been discussion among colleagues involved in the 
services negotiations, at various govern ment levels, about advancing the services agenda.  He said that 
the points of departure had been that most, if not all, Members were dissatisfied in terms of the 
numbers and quality of offers in market access as we ll as the work in rule-making.  He recalled that 
by July he would need to report on his impression of Members' views on the state of the negotiations and their level of satisfaction.  He said that Memb ers would then need to think seriously about how 
much progress they sought to make by Hong Kong.  He said that in a number of private conversations 
and meetings he had held at diffe rent levels the question of benchm arks or targets to guide progress 
had been raised, although much conf usion surrounded the meaning of these terms.  He said that clarity 
would be required in this regard.  He said that Members needed to be political to determine the 
instruments most susceptible to foster progress.  Perhaps no instrument was needed, or perhaps one 
would prove helpful.  He said that his sense was th at Members felt that something was needed that 
they could aim at if the dynamic of the negotiations  was to be altered.  Perhaps it would not need 
formal agreement by all Members, but could be a t ype of understanding.  Perhaps it need not be only 
one instrument, but a combination of many elements.  He reiterated that in his conversations he had 
heard numerous approaches, and had had the impres sion that more discussion and clarity about any 
elements and their format might prove worthwhile.  He  said that he had also heard resistance by some 
because they were not comfortable or because they thought it would not work.  He said that, in light 
of the May deadline, the most probable occasion for a focused discussion by ministers on services 
could occur at a meeting in July.  He said that more  efforts would need to be devoted to clarify this 
question of instruments which might be effectively used to improve the negotiations.  He said that 
industry representatives that he had spoken with had expressed their concern and interest that progress 
be made in their sector of interest.  Finally, he  said that more work had been pursued in some 
subsidiary bodies and he invited any Chairs to give any updates in the interest of transparency.  As he 
was aware of developments in the Working Party on Domestic Regulation, he invited the Chairman of 
the WPDR to provide an update.   
64. The Chairman of the WPDR
 reported that the Working Party had held an informal meeting on 
31 March.  Discussion at this meeting revolved mainly  around four papers that had been tabled in 
February, but which Members had had little time to discuss.  From the many detailed comments that 
had been made, a number of common themes had emerged, including scope and application of 
possible disciplines, and possible benefits and burde ns.  He said that there was a desire to make 
progress, and delegations were keeping their options  open on how to move forward.  He said that 
there had been discussion on how a possible matrix of proposals on the table might be used by delegations to move the process forward.  He recal led that an informal meeting was scheduled for 2 
May to discuss the four most recent papers a nd likely a new submission on the application of 
disciplines on different levels of government and non-governmental bodies.  He said that the WPDR 
continued to make purposeful progress, characteri sed by constructive proposals and good discussion.  
He said delegations were aware of the substantial amount of work that would lie ahead if progress 
were to be made, and particularly in the light of the landmark dates in 2005. TN/S/M/14/Suppl.1 
Page 16  
 
65. The representative of Honduras
 announced that her delegation ha d circulated its initial offer 
in document TN/S/O/HND on 31 March.  Throu gh its offer Honduras demonstrated its commitment 
to the liberalization process in trade in servi ces.  Important commitments were proposed in 
telecommunications, which was a key sector to trad e.  Liberalization of telecommunications was a 
substantial contribution to the ne gotiations.  Honduras was proposing to  undertake the reference paper 
on basic telecommunications as an autonomous liberalization measure and in its schedule.  She 
informed Members that at the next cluster the e xperts from capital who had worked on the draft offer 
would be present and would make a formal presentation.  She invited any Members that might wish to 
hold bilateral meetings during this time to contact her delegation given that they would stay in Geneva 
a short time. 
66. The Chairman , on behalf of the Council, thanked H onduras for its important contribution to 
the negotiations in services and assumed that dele gations would want to take advantage of the 
presence of capital-based experts at the next meeting.     
67. The representative of Hong Kong, China  welcomed the news from Honduras, was encouraged 
by the submission of its offer at the current stag e, and looked forward to substantive and improved 
initial and revised offers by the end of May.  Re ferring to the comments by the Chairman, she agreed 
that much work remained to be done and referre d to the proposals that had been discussed under the 
previous agenda item.  Hong Kong, China encouraged  all Members to give more attention and devote 
more resources to the services negotiations.  She said that all Members, and particularly developing countries and LDCs, would find it useful if the Secretariat were asked to develop specific tools to assist all Members in the negotiations.  Her delega tion had some preliminary ideas, for instance, a 
gathering of relevant information on classifica tion, scheduling, negotiating proposals or model 
schedules and checklist guidelines that had been subm itted recently or in the past.  Other relevant 
items might also be included for each of the services sectors.  She had an open mind with respect to this tool, but thought that it might be useful to ha ve relevant elements in one piece of paper for each 
sector to facilitate reference by capital expert s.  She suggested that the Chairman conduct 
consultations on this point.    
68. The representative of Japan
 welcomed the comments made by  the Chairman and agreed that 
Members faced a challenge, in particular with regard to the revised offers and the Hong Kong 
Ministerial meeting.  Japan would support the Chai rman in his consultations and sought to contribute 
to the achievement of good progress in Hong Kong.  He thanked Honduras for the submission of its 
offer.  He urged other Members who had not submitted th eir initial offers to do so as soon as possible.  
Referring to conversations with some colleagues, he said that efforts were bein g made in capitals and 
he looked forward to seeing the fruit of this effort.  With respect to revised offers, he assumed that all 
were working hard and making their fullest efforts.  With respect to the process thereafter, he said that 
it was important for Members to focus attention on revised offers as Members would then be in a 
position to evaluate the offers.  He said that Member s might wish to consider individually, and to the 
extent possible, collectively how they  viewed these offers.  He said th at this would naturally lead to 
positions on future work.  There was no doubt that the Hong Kong Ministerial would be an important 
occasion at which to concretise progress.  He hoped  that Members would soon be in a position to 
undertake an in-depth exchange of views in this regard for preparations for Hong Kong.  Generally 
speaking, he hoped that Hong Kong would result in a substantial package in which services would be 
treated in an appropriate and balanced manner.  He said that ministers would need a tool to evaluate 
the package and, in this regard, his delegation was willing to explore with Members the best ways in 
which to undertake this work.  He had taken fro m the ideas raised by the Chairman that it was 
important to reflect on what would need to be ach ieved and the tool that would be required for 
ministers to gauge achievements and the balanced nature of the package.  Turning to the rules 
negotiations, he thanked the Chairman of the WPDR  for his report and said that work was moving in 
the right direction.  He hoped that good progr ess could be made in 2005 to which Japan would 
contribute.  Referring to the suggestion by Hong K ong, China, he found it interesting and, in a TN/S/M/14/Suppl.1 
 Page 17 
 
 
preliminary fashion, wondered whether a compila tion was feasible and appropriate, and said that 
Japan would wish to participate in any consultations.  
69. The representative of Switzerland  thanked Honduras for the submi ssion of its initial offer and 
he hoped more offers would follow.  With respect to the timely and relevant items referred to by the 
Chairman, he agreed that the submission of offers was a key aspect of the process.  It was clear that 
Members were at a key phase in the process leadi ng to Hong Kong that could not be a failure.  
Members collectively needed to be ready by Hong Kong and could not afford a sub-optimal result.  
An optimal result would require preparation and a mu ch hard work.  Switzerland considered it crucial 
for Members to submit their offers by the May deadli ne and for these offers to be of a high quality in 
terms of commitments undertaken and the avoidance of ambiguities and future litigation.  High 
quality of offers consisted of cove rage of all aspects and effectively considering the requests made by 
Members, particularly from developing countries.   While the number of offers submitted was 
important, Members would look to see whether the inte rests that had been flagged in requests were 
met and the concomitant substance present.  He recalled that progressive liberalization was a key 
objective in Article XIX.  Noting that the main method of negotiation was the request-offer process, 
he said it was positive that additional requests had be en tabled which supported the process.  He said 
Members needed to engage further in the exerci se of explaining what they sought from the process 
and were willing to give.  He encouraged Members to be more active in formal and informal settings, 
including in friends groups and bilaterals in order to move work forward.  He noted the substantial 
amount of work involved in meeting with trading pa rtners, reviewing all sectors and restrictions and 
discussing further steps.  This was the work that w ould need to be completed in order to have a good 
result by Hong Kong.  Referring to the question of  assessment, benchmarking and transparency for 
the benefit of capitals and ministers, he suggested th at it would be useful to include on cover pages of 
the revised offers a tabular summary of the offer.  He thought that this would involve a small amount 
of additional work but would be very helpful to th ose reading the revised offers.  This was but one 
small suggestion in the context of assessments and benchmarks.  More broadly, he was aware that 
there were numerous ideas that had been floated and said that Switzerland was pragmatic and could 
live with most of the suggestions that had been  made, including use of model schedules, checklists 
and the level of commitments that went beyond aut onomous liberalization or standstill, etc.  It was 
important to draw a distinction between neutral benchmarks on the one hand and the assessment of 
what an offer brought in terms of benefits and new markets on the other.  The latter needed to be left 
to unilateral judgements and bilateral discussions because it was ultimately for each Member to assess 
whether a particular offer or the overall package w ould yield benefits to its  exporters in various 
markets.  This assessment would vary by Member .  With respect to neutral benchmarks, Switzerland 
believed they might be helpful, although he ha d detected some confusion among Members on this 
issue.  With respect to quantitative benchmarks, he  affirmed that these were technically feasible and 
said that Switzerland had used a similar methodology in ternally in its assessment  of the offers.  This 
assessment included an evaluation of the quality of  the commitments proposed.  It would be up to 
Members to determine if such an approach would be  helpful.  Turning to the rules negotiations, he 
said that it was a key element for which Members w ould need to take stock prior to Hong Kong.  
Switzerland was active and interested in most rule s areas.  Noting the stage of progress in rules, 
Switzerland believed that the most likely area to ach ieve a concrete outcome prior to Hong Kong was 
domestic regulation, and he  had been encouraged by the Chairm an's earlier report.  He supported 
more work and more activity in the WPDR.  He  recalled that it was important because, although 
market access commitments might have been achiev ed, inappropriate domestic regulation hampered 
service providers and reduced their benefits.  Switzerland estimated a direct benefit for its services providers would result from improvements in regulatory frameworks in all sectors.    
70. The representative of the United States
 sought to support the proposal made by Hong Kong, 
China and believed that it made sense to have c onsultations to develop the outlines about possible 
work that the Secretariat might undertake and looke d forward to participation.  The United States 
thanked Honduras for the submission of its initia l offer.  Making a few general remarks on the 
negotiations, she noted the impending deadline for the submission of revised offers by the end of May TN/S/M/14/Suppl.1 
Page 18  
 
and encouraged all Members to respect the dead line and submit meaningful revised offers.  The 
United States supported efforts to put together a first approximation on services for an eventual text 
on services to be included in the Hong Kong Ministerial Declaration.  The United States believed it would be important to include an element on market access, and to look carefully at the ways that the 
process could be moved forward to produce meaningful results.  In this regard, she joined with others 
in encouraging those Members that had not submitte d an initial offer to do so as soon as possible.  
Referring to other areas that the United States be lieved should be addressed in a first approximation, 
she said that it was important that work continue  on domestic regulation a nd thanked the Chairman 
for his leadership and looked forward to further in formal meetings.  She hoped that others would be 
able to support the United States proposal on horizontal transparency and that the proposal could be 
an important part of a strong package on domestic regulation that reflected the interests of many 
Members.  The United States believed that an element stating a work plan on rules would need to be 
included in response to the interests that had been  expressed by Members in a number of the rules 
areas.  The United States felt that it was important to  include an element that directly addressed and 
included the promotion of the participation of de veloping countries overall in the negotiations, and 
particularly the LDCs.  The United States believed that it would be productive to work on the notion 
of developing model offers and re quests, particularly for the LDCs, in order to enable their greater 
participation in the process.   
71. The representative of Chile
 thanked Honduras for the submission of its initial offer.  She 
wished to make a few suggestions on work that coul d be done before the next cluster and thereafter in 
order to help Members prepare their revised offers or to assess those offers either individually or 
collectively.  Chile could support the suggestions  put forth by Hong Kong, China and wished to 
participate in consultations.  She suggested that  the Council invite UNCTAD to present at the next 
meeting a paper entitled "Trade in Services a nd Development Implications" which the UNCTAD 
Secretariat had produced for a recent Trade and Development Board.  She wondered whether the 
Chairman could encourage Members of friends groups  to share their assessment  of the offers that 
would be tabled in May in order to provide  updates on their views in this regard.   
72. The representative of Canada  agreed that there was some confusion about what was being 
referred to by the terms "benchmark" and "assessment".   In Canada's view, it was up to every Member 
to make a judgement as to whether they were getting enough out of the negotiating process and to 
make recommendations to ministers.  He took th e point that Members needed to find a way to 
translate for ministers and stakeholders the very complex programme of work in the Council and the 
negotiation.  Canada saw this ch allenge at two levels.  Firstly , a quantitative assessment which was 
likely targeted at the ministerial level as it was glob al in nature and described the overall situation.  
Canada recognised that this approach had some  limitations and shortcomings because a simple 
numerical expression of the number of GATS commitmen ts made or received did not necessarily tell 
the whole story.  Nonetheless, it did provide an indicative gauge of progress.  Secondly, a qualitative 
assessment, which was of importance to Canada.  He reiterated that Canada believed that, at the end 
of the day, this would be done by each Member in dividually, but stated that there was work which 
could be done in terms of gathering up the vari ous expressions of quality that had been brought 
forward to the Council.  He noted that plenty of ideas had been brought forward in the preceding months, including Canada's views on mode 3 and small and medium-sized enterprises.  He recalled 
some of the other ideas raised on mode 4.  While there would be many expressions of assessments, 
the challenge remained to bring them together at a general level in order to give ministers an idea of 
the objectives sought in terms of quality of the offe rs.  This was a challenge before the Members and 
the Chairman in the time before th e July approximation.  He said that much work on benchmarks or 
level of ambition would need to be done at a number of levels and he looked forward to this work.  
With respect to Hong Kong, China's suggestion, he agr eed with others to further explore any tools that 
the Secretariat could provide as the process moved fo rward.  He looked forward to participation in 
any consultations.   TN/S/M/14/Suppl.1 
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73. The representative of Australia  said that Australia believed that it was very important that all 
Members meet the May deadline for tabling improve d offers on services and to submit outstanding 
initial offers as soon as possible.  He thanked Hondu ras for the submission of its offer and said he 
would welcome advice from those that had yet to subm it an offer on the status of their initial offer.  
Australia believed that it was important to ensure that services were a central element of the Doha 
single undertaking and that Members needed to be  committed to a solid outcome along side those on 
agriculture and NAMA.  For Australia, the best wa y to demonstrate this commitment would be for 
Members to table offers in May.  He advised that Australia would do so in May.  With respect to benchmarking, Australia believed th at it would be useful if ministers signalled their support for 
liberalising services commitments by agreeing to so me political level benchmark.  There had been 
various discussions in various forums  and he said it might be useful to continue to explore what 
options might be possible.  Australia was of the view that it would be useful to have some 
benchmarking process underway by July to assist  Members measure mark et access; however, like 
others, Australia believed that each Member would have its own view as to the value of the May 
offers depending on their individual interests and markets.  While consensus on some common 
methodology for evaluation might be difficult to agree to by July, he said that it was worth exploring 
the various models that had been raised in various forums.  At the same time, Australia could suggest 
that individual Members provide assessments of others’ offers to the Chairman who could prepare a comprehensive overview for his report for the first approximation.  Australia encouraged Members to 
use the recommendations ma de at the February Special Session by a number of friends groups.  The 
work of these groups provided some useful indicat ors in the form of checklists, model schedules and 
clarification of classification issues that were available to the wider membership and could be of great 
assistance in helping Members measure services market  access issues.  With respect to rules, and 
thanking the Chairman of the WPDR for his report, he said that there had been good progress in this 
area and said that Australia would remain engaged in  the discussions for an outcome by Hong Kong.  
On the proposal by Hong Kong, China, he said that  a compendium document could be of use and he 
sought to participate in any cons ultations in this regard.   
74. The representative of the European Communities
 thanked Honduras for the presentation of its 
initial offer and said that the European Communitie s was on track for the submission of its revised 
offer by May.  He recalled the present situation faced by Members and said that no benchmark was 
required to assess what was currently on the table, which was completely unsatisfactory in terms of 
numbers and substance.  He agreed that May would be an important marker, reiterated the importance 
for his delegation of this date and encouraged Me mbers to submit initial and revised offers by this 
deadline.  He recalled the importance for offers to be  substantial in light of the unsatisfactory situation 
that currently prevailed.  This situation needed to be  redressed in the revised offer exercise in order to 
avoid the serious risk of crisis in the negotiations .  Were this point reached, Members would need to 
revisit the appropriateness of the negotiating methods that had been relied on to date.  He reiterated 
that substance would be very important as was the submission of offers in a timely fashion.  He 
recalled that the window of time for work was a sma ll one, both in terms of the preparations for the 
first approximation and for the Hong Kong Ministerial Meeting.  It was therefore important that the 
offers be submitted in a timely way in order to avoid further reducing this window.  The European 
Communities believed that there would be a tremendous  amount of work required in preparing for the 
first approximation and the Hong Kong Ministerial.  Referring to the Chairman's statement in 
February that he would conduct c onsultations in various formats, he encouraged the Chairman's 
efforts in this regard, reiterated the European Co mmunities' support for his further efforts, and said 
that his delegation would wish to participate in an y consultations touching upon the proposal made by 
Hong Kong, China.   
75. The representative of New Zealand  said that her delegation saw more initial and revised 
offers as the first and most important benchmark to  meet.  She thanked Honduras for the submission 
of its initial offer.  She expressed her delega tion's support for Hong Kong, China's proposal for 
drawing together the work that had been done in  various sectors and sought to be included in any 
related consultations.  With respect to benchmarking,  she agreed with the Ch airman's comments that TN/S/M/14/Suppl.1 
Page 20  
 
what Members sought for the Hong Kong Ministeria l was something to aim at to address her 
delegation's concern with the low quality of offers .  Her delegation believed that benchmarking had a 
role to play in this process.  As New Zealand had noted in February, it believed that benchmarking 
consisted of an analysis of the progress achieved to da te and a means to set some sort of target to aim 
for further progress.  She could envisage a role for both quantitative and qualitative analysis along the 
same lines as Canada had indicated.  New Zealand th ought that a quantitative analysis could be useful 
in yielding the numbers that ministers would find useful in order to see how far the negotiations needed to progress to be consider ed a success.  This was a type of political benchmark that Australia 
had also referred to.  New Zealand believed that quan titative analysis at the official level would have 
an important role in fleshing out underlying details  and in highlighting the areas in which quality was 
highest or lowest.  This could be done individually by Members, or  by friends groups  –for which New 
Zealand saw an important role in this process.  She said her delegation w ould be happy to see any 
friends groups of which it was a Member undertake a collective analysis of offers in the relevant 
sectors and considered that such information could be  forwarded to the Chairman for inclusion in his 
report in July.  New Zealand supported the consu ltations that the Chairman had undertaken on the 
subject of benchmarks and indicated its wish to be  included on any consultations on this issue.   
76. The representative of Norway
 said that a benchmark was not required to assess the current 
situation, which was characterised by low quality offers and the need for improvement.  Norway 
encouraged all Members to put forward revised offers  that had substantive c overage, and particularly 
from those Members that had submitted conservative  initial offers.  Turning to the question of 
preparations for the Hong Kong Ministerial, Norw ay believed that work on a quantitative analysis 
could be achieved rather quickly and encouraged the Chairman, under his own responsibility, to make 
a factual analysis of the offers on the table by the next cluster.  This would provide Members with a 
broader picture of the state-of-play.  His delegation was supportive of any efforts by the Chairman and the Secretariat in this regard.  He expressed s upport for the suggestion by Hong Kong, China for a 
compendium of proposals made to date that could be helpful to delegations and sought to be included 
in any relevant consultations, including on be nchmarking.  He also expressed support for the 
suggestion by Chile to invite UNCTAD to presen t its report.  Norway could also support New 
Zealand's suggestion that friends groups make qualitative assessments of offers in their sectors.  
While Norway believed that all initiatives to help Members make progress were useful, in the end, 
each Member would make its own assessment as to the new busin ess opportunities that could arise 
from proposed commitments.  A common analysis w ould help inform capitals and increase the 
attention given to services.  It would also help those countries that did not have the administrative 
capacity to study a large number of complex offers.   
77. The representative of Rwanda
, speaking on behalf of the African Group and making some 
preliminary remarks on the issue of benchmarks whic h she thought was an issue that should be further 
studied, drew attention to existing development benchmarks contained in the LDC modalities and 
Article IV.  Despite the existence of these benc hmarks, she said that they had been hardly 
implemented.  The priority in her delegation's vi ew was to focus on how to implement the existing 
development benchmarks.  Anticipating that some mi ght ask why attention shou ld be focused on these 
benchmarks, she recalled that the African Group be lieved that after the Uruguay Round there had 
been an imbalance in terms of benefits that accrued from the commitments undertaken in favour of 
developed countries over developing countries.  Th e African Group believed that it was for this 
reason that development benchmar ks should be given greater prio rity over other benchmarks.  
Recalling that the DDA had at its heart development aspects of the round, she said this gave reason 
for Members to focus on development benchmarks before turning attention to overall benchmarks.  
One way in which to do this was the proposal that had been put forth by the Chairman on a dedicated 
session to discuss the LDC modalities.  Her delega tion supported the proposal by Chile to invite 
UNCTAD to present its note.  She requested that he r delegation be included in any consultations on 
benchmarks.   TN/S/M/14/Suppl.1 
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78. The representative of Mexico  thanked Honduras for the presentation of its offer, said his 
delegation would review it carefully and possibly requ est a bilateral meeting.  He also thanked the 
Chairman for the consultations that he had he ld on various issues, including on S&D proposals the 
required consideration of which was on the right tr ack.  He expressed his delegation's support for the 
proposal made by Hong Kong, China to request that the Secretariat draw up a compendium that would 
be useful for future work in the Council and po ssibly in subsidiary bodies.  Referring to Chile's 
suggestion to invite UNCTAD, Mexico thought that this presentation on trade in services and 
development implications would be useful.  Recalling references  to various parameters and 
guidelines, he said that there could be differe nt approaches to measuring progress made in the 
negotiations, both in terms of quantity and quality.  In terms of a quantitative analysis, he said that his 
delegation would have no difficulty with carryin g out a general exercise on the basis of the 
Chairman's informal presentation in February.  In terms of individual analyses, he said that Mexico 
had conducted these evaluations of spec ific offers in which Mexico had a trading interest.  He said 
that there could be quantitative individual evalua tions carried out by Members individually and on a 
group level to determine in what sectors and modes commitments might be modest.   He thought that 
it could be useful, from a quantitative point of view, to see where more general and specific 
commitments might be undertaken and where there might  be lacunae in terms of sectors or modes.  
This would help each Member determine, from a qualitative point of view, the progress made.  The question of a qualitative evaluation was more co mplex because Members might draw different 
appreciations from any indicators, parameters or gui delines.  It was for this reason that discussion of 
this point might take time and prove  unproductive.  He said that it might be useful for the Chairman to 
continue his consultations in order to bring cl arity and understanding to the terms used and what 
Members sought to evaluate qualitatively.  Common indicators would allow Members to determine where there might be shortcomings in progress.  He  reiterated that this was a slippery issue and 
suggested that the time was perhaps not appropriate  to discuss it.  However, if Members wished to 
discuss it, Mexico did not want to hamper the process  and sought to be included in any discussions.   
79. The representative of Argentina
 said that many of the points that he sought to make had been 
made in the earlier intervention by Rwanda.  He sai d that he thought that Members needed to be 
careful with a linear or simplistic analysis of th e negotiations in trade in services.  A numerical 
analysis did not necessarily reflect the reality of th e negotiations in themselves and in relation to the 
overall negotiations.  Even though some numerical information about offers might prove helpful, 
Argentina believed that these alone might lead to a more rushed conclusion on the state-of-play of the 
negotiations than would be the case if the analysis were founded on a more solid basis.  Information 
on the numbers of offers, commitment proposed , sectors covered, improvements offered and 
restrictions removed were good indicators because th ey could be used for qualitative assessments on 
the scope of the offers.  Drawing a parallel with a similar exercise in the Ur uguay Round, he said that 
he was not sure that the negotiations had progressed  to an appropriate stage allowing Members to 
engage in such an exercise.  The number of o ffers and proposed commitments on the table were not 
indicators that would help ministers arrive at a cl ear assessment of the situation.  On the issue of 
establishing a benchmark, he said that benchmarks would not be the same for all Members because 
the trade objectives of each were  different.  For Argentina, a good benchmark would be that a 
majority of Members responded favourably to a majority of the requests that it had made, although naturally, requests varied between Members.  A nother example would be a benchmark to include 
commitments on distribution services in the area of agriculture or on modalities on mode 4.  However, 
these benchmarks might not be the same for other Members.  This was a delicate issue and an individual evaluation was perhaps the best approach.  Referring to the remark by one Member about 
changes that had occurred since the Uruguay Round in  relation to the offers and what could be 
achieved by the Hong Kong Ministerial, he said that th is was an indicator which could be examined in 
the light of progress made in the other areas of the negotiations.  Members would be able to determine 
from this whether a reasonable result would have emerge d.  It was for the reasons that he had outlined 
that Argentina was reticent to embark on a discu ssion on benchmarks.  Rath er, Argentina believed 
that the best approach was to pursue the nego tiations based on the Negotiating Guidelines which 
outlined the relevant parameters.  Referring to th e advice by some that they would present their TN/S/M/14/Suppl.1 
Page 22  
 
revised offers in May, he said that some Members had earlier indicated that they would not consider 
undertaking commitments in some sensitive areas, such  as audio-visual, health and education services.  
This meant that, for legitimate reasons, at least  one Member would not be able to undertake 
commitments in these areas, and in this context, w as it helpful to establish a benchmark that called for 
commitments in all twelve sectors for instance?   For Argentina, ultimately, individual evaluations 
would be important, although it w ould not oppose a more overall exercise.  However, he expressed 
caution in transmitting self-assessments to others, su ch as the Secretariat, through any documents.  
Each delegation needed to carry out this assessment fo r itself so that each minister could evaluate the 
negotiations in terms of his or her country's interests.  In summary, Argentina was hesitant to embark 
on a benchmark-based exercise, because the evalua tion that might result might not correspond to 
Member's individual realities.  The benchmarks in cluded in the Negotiating Guidelines should be used 
instead. 
80. The representative of Chinese Taipei
 thanked Honduras for the presentation of its initial offer.  
She also thanked the Chairman for his opening re marks.  All Members were aware that the time 
before the end of July provided few opportunitie s to focus Members' attention on the services 
negotiations.  In this context, Chinese Taipei fu lly supported the Chairman's efforts.  The most 
pressing deadline before Members was the presentation of  revised offers in May.  Chinese Taipei was 
engaged in preparing its revised offer and expected to  table it before the end of May.  In terms of 
benchmarks, although Chinese Taipei realised the neces sity of a concrete benchmark to indicate the 
likely outcome of the services negotiations, her dele gation held some reservations in this regard.  
Given the diversity of interests among Members, Ch inese Taipei believed that it would be difficult to 
arrive at a minimal and balanced formula for qua ntifying the scope of commitments and assessing the 
quality of offers.  However, Chinese Taipei rema ined open-minded on this issue and was willing to 
participate in any discussions that would help the negotiations renew with momentum.  Chinese 
Taipei supported the suggestion made by Chile that  friends groups make th eir own assessments that 
could be presented to the Special Session.  Her delegation also supported the suggestion made by 
Hong Kong, China to task the Secretariat w ith preparing some informative tools.   
81. The representative of Colombia  welcomed the initial offer by Ho nduras.  She said her country 
had been working on its revised offer and that in ternal consultations, she hoped, would be completed 
shortly so that it could be tabled in the coming m onths in line with the July  Package.  She expressed 
her delegation's support for the tool proposed by Hong Kong, China and sought to be invited to any 
consultations in this regard.  With respect to be nchmarks, Colombia agreed with Mexico that the 
Chairman consider pursuing his consultations as th ere remained many differing ideas on the subject.  
Colombia thought that it might be worthwhile to try to define the concepts more clearly.  Her 
delegation believed that the evaluation of offers sh ould be done on an individual basis.  There was 
also the possibility for Members to submit these ev aluations in the Special Session which she said 
might complement information provided by other Members.  For example, it might be the case that 
for a particular sector or mode a group might have similar evaluations.  She said that Colombia used 
the parameters set out in the Negotiating Guidelin es as a starting point for its evaluation and also 
looked at its initial requests in comparison to the offe rs of trading partners.  On the basis of these 
parameters, Members individually carried out their ev aluations.  She concurred with Argentina that it 
might be difficult to conduct a joint evaluation because interests and country interests varied.  
Colombia also supported the suggestion by Chile to invite UNCTAD to make the presentation it had 
referred to.   
82. The representative of Brazil  said that it was difficult to disagree with the Chairman's 
comments and his efforts to move the negotiations fo rward.  He said that Members had difficult issues 
before them in addressing the poor nature of initial o ffers and how to respond to this situation.  He 
said that by drawing attention to the problem, th e Chairman was raising awareness and encouraging 
capitals to work more seriously on the presentation of their revised offers.  At the same time, by 
referring to the term "crisis" so often, one had to  wonder what the reaction of capitals would be and 
whether they would hold back on making some commitments in their revised offers in case a TN/S/M/14/Suppl.1 
 Page 23 
 
 
subsequent offer was required.  He hoped that this  was not the case.  Referring to benchmarks, he said 
that there had been a useful discussion, and he r ecalled that some 20 years ago it had been recognised 
that the request-offer method had not been sufficient to ensure liberalization of trade in industrial 
goods.  He said that the difficulty was to come up wi th an equivalent formula for services.  The idea 
of a benchmark, it appeared, sought to skip the form ula step and move to the result phase.  He noted 
that benchmarks existed neither for industrial tariffs nor in agriculture for domestic support or 
agricultural tariffs.  In the same way, there were  also no benchmarks for making an overall assessment 
of the final result of the agricultural or industrial tariff negotiations.  In this light, services benchmarks 
and a measurement of the result of the negotiation we re rather difficult to conceive of, although he 
conceded that it was an interesting discussion.  Referring to one suggestion to make bindings at 
standstill levels, he said that many Members we re concerned about ensuring that appropriate 
regulation was in place before they could think abou t liberalising.  He recalled the preamble of the 
GATS and the right of Members, and particularly de veloping countries, to regulate services sectors in 
accordance with their development needs and their po licy objectives.  In this context it was hard to 
see what the net effect of a standstill level of liberalization would be, as there might be an 
"unfairness" effect among developing countries.  As well, he did not see how this approach could be 
squared with the preamble to the GATS.   
83. In terms of quantitative targets which woul d amount to harmonization in some services 
sectors, the representative of Brazil agreed with the comments made by Rwanda and Argentina.  Unlike the case for industrial tariffs for which, in principle, there were no a priori  exclusions, there 
did seem to be a priori  exclusions of sectors and modes in some areas, which would make agreement 
difficult.  He did not contest, as had been alluded to by Switzerland, that it would be technically 
feasible to elaborate a quantitative benchmark, howev er, he wondered whether it would be politically 
feasible.  He said that the example of the difficult y that had been experienced in achieving agreement 
on accounting standards among a small group of Memb ers raised the question as to whether the 
Council might be able to agree to a benchmark.  He said that, if Members set the objective of 
establishing benchmarks, they would run a risk of failure and use of this failure as a pretext for 
something else.  His delegation was cautious a bout setting objectives for establishing benchmarks.  
Brazil had no difficulty with informal discussions  on this subject, which were ideas likely worth 
pursuing, and he agreed with Rwanda that the discussion should begin by looking at development 
benchmarks.  He said that the key to the devel opment in the DDA was not in the CTD but in the 
market access negotiations, and he thought that th e services negotiations could lead the way in this 
regard.  Giving a further example of the difficult y in establishing a benchmark and referring to the 
communication contained in TN/S/W/32, he quoted  paragraph 1 of the document that "it can be 
difficult to assess (and in some cases even unde rstand) the market access opportunities offered 
through WTO Members' horizontal Mode 4 commitments. "  He said that at some point an assessment 
of the offers would need to be made, however, Members also needed to bear in mind the time 
remaining and be more optimistic about May.  Wh ile it was easy to come to a negative assessment of 
the initial offers, he hoped that it would be easier to come to a more positive conclusion with respect 
to the revised offers.   
84. The representative of Korea
 thanked Honduras for the submi ssion of its initial offer and 
hoped that more new offers would be forthcoming.  His delegation supported the proposal by Hong 
Kong, China to task the Secretariat with the prepar ation of a sectoral compendium and thought that it 
would be useful and an informative update on sp ecific sectoral issues.  Regarding benchmarks, 
criteria or indicators, Korea had observed the vari ous views, reservations and reticence expressed by 
others.  However, Korea believed that there coul d be a common denominator that could act as a 
collective tool to complement the request-offer process so that the negotiations could be more 
efficient and effective as well as a more predictabl e and transparent.  Korea believed that for small 
developing countries like itself such a tool would be helpful.  Otherwise, Members could continue to 
hide behind the large players until the end of th e game.  Korea acknowledged the difficulty of 
establishing such a tool given the timeframe before  July.  Therefore, his delegation supported the 
Chairman's role for an objective and candid assess ment of the current situation which could give TN/S/M/14/Suppl.1 
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ministers some indication of the probable scenarios th at lay ahead if a collective complementary tool 
was not fashioned on a collective basis.  He pledge d his delegation's support in any consultations by 
the Chairman.    
85. The representative of Kenya
 welcomed the submission of Honduras' offer.  His delegation 
encouraged those that had not submitted their initial offers to do so as soon as possible.  Kenya sought 
to reiterate its commitment to the process despite th e resource constraints it faced in the context of the 
services negotiations.  With respect to benchmarki ng, he agreed with comments by others that 
different Members had different views on what benc hmarking would constitute.  Kenya believed that 
some benchmarks where contained in the Negotiating Guidelines for trade in services.  This included 
the effective implementation of Articles IV and XI X:2 which referred to appropriate flexibilities for 
developing countries as well as the increasing participa tion of developing countries in services trade.  
In his delegation's view, these were benchmarks a nd any proposal for benchmarks that would be 
inconsistent with the Negotiating Guidelines woul d be difficult to accept.  His delegation could 
support the proposal by Chile to invite UNCTAD to make the presentation the representative of Chile 
had referred to.  On Hong Kong, China's proposal, his delegation was willing to take part in the 
discussion on the appropriateness of this proposal.   
86. The representative of El Salvador  thanked Honduras on the presentation of its initial offer.  
On the question of the evaluation of the commitmen ts contained in initial offers, she had listened 
carefully to the different opinions expressed by Me mbers.  Her delegation viewed with concern the 
quantitative and qualitative approach on a collective le vel.  She agreed with other delegations that 
each Member had its own appreciation of th e benefits of commitments offered.   
87. The representative of South Africa  thanked Honduras for the submission of its initial offer.  
Her delegation appreciated the difficulties associated w ith the preparation of an initial offer, as it was 
in the process of elaborating its own.  Her de legation remained unclear about the notion of 
benchmarks in light of the many interpretations i ndicated by Members.  Some Members had said that 
benchmarks sought to assess progress to date in terms of the initial offers submitted, while others had 
referred to it as a tool to set concrete objectives and results.  She recalled the existence of the 
Negotiating Guidelines and the benchmarks they c ontained.  While some were somewhat vague, 
which explained perhaps why they had not been adhe red to, others referred to the sectors and modes 
of interest to developing countries.  She wondere d whether the reference to  benchmarks sought to 
operationalise the benchmarks in the Negotiation Gu idelines, whether they informed any of the 
development objectives contained in Article IV and whether there were any timelines associated with 
these benchmarks, for instance, if the starting poin t was the end of the Uruguay Round or the current 
initial offers.  Her delegati on would be interested in clarification of some of these notions.  For her 
delegation some of the ideas appeared problematic, for instance, the use of friends groups to assess 
progress.  Noting that South Africa participated in three of the sixteen friends groups, she said that 
this approach would imply a small number of Members conducting an assessment on behalf of the 
membership as this would put non-members of friends groups at a disadvantage.  With respect to the 
suggestions to task the Secretariat to prepared a compendium, she expressed a reservation in this 
regard in light of the fact that the interests of Members' services suppliers varied by Member.  She 
said it would be helpful to her delegation to have a clearer indication as to the notions that were being 
discussed, for instance, whether they would imply d eep commitments in mode 4.  She reserved her 
delegation's position on this issue.  
88. The representative of China , referring to the tabling of revised offers, said that her delegation 
was working hard on its revised offer, although she was not in a position to indicate when China 
would submit it.  She said that this work was underw ay despite the fact that China had faced great 
challenges in implementing its accession commitments.  China expected to see revised offers from its 
major trading partners in May which not only locked  in their existing services liberalization efforts 
but also had end points in the sectors of interest  to China and other developing Members.  With 
respect to benchmarks or measurement of progress in the negotiations, Chin a shared the view that TN/S/M/14/Suppl.1 
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Members could have different forms of measurement in mind, and that as a result, it might be difficult 
to determine a common benchmark.  China believed that, if a common benchmark or reference point 
was pursued, three points should be highlighted and we re relevant to all Memb ers in her delegation's 
view.  Firstly, she recalled the fundamental principle of MFN, said that a large number of reservations to MFN persisted, and believed that would not be good for the system for a large number of 
exceptions to remain at the end of the negotiatio ns.  Secondly, she said that Members' schedules 
included many ENTs and believed that these reduced the predictability and cer tainty of commitments 
that Members had undertaken in the negotiations.  Ch ina believed progress needed to be made in this 
area.  Thirdly, on development, she recalled that the round was a development round and the comments by other Members that the results of th e Uruguay Round had been asymmetrical in terms 
of benefits for developed and de veloping Members.  China believed that this issue needed to be 
addressed seriously through the increasing particip ation of developing economies in services trade 
through the liberalization of sectors of interest to them.  Referring to Members that had stated their 
preparedness to use a quantitative assessment tool to evaluate o ffers, she wondered whether these 
Members had in mind an assessment similar to the one that the Chairman had made informally in 
February.  Finally, with respect to the proposal fro m Hong Kong, China she requested clarification on 
it.   
89. The representative of Malaysia
 welcomed the submission of the initial offer by Honduras.  On 
the topic of benchmarks, her delegation ec hoed the comments by Rwanda on development 
benchmarks and the extent to which they had been  fulfilled.  On revised offers, she informed the 
Council that her capital was pursuing its work and it w as only a matter of time before it should be able 
to table it.  She did not think that it was necessary to cloud this topic by looking at new parameters or 
benchmarks beyond those that had already been d ecided upon and were contained in the Negotiating 
Guidelines.  She said that developing any new benc hmarks would further bur den Malaysia's resource 
constraints.  She reiterated Malaysia's position that  liberalization needed to be based on domestic 
capacity both in terms of market access and regul atory frameworks and was not a game of hide-and-
seek as had been alluded to by one delegation.   
90. The representative of Singapore  wanted to join others in highlighting the importance of the 
May timeframe for the revised offers.  Like othe rs, Singapore sought a good outcome in the services 
negotiations and in all parts of the DDA.  With a view to assisting to the services negotiations, 
Singapore would submit its revised improved offer in  May.  Singapore suppor ted Hong Kong, China's 
suggestion for a compendium that would capture the proposals that had been made on the various 
sectors.  His delegation thought that this would be  a useful one-stop reference point or tool for 
delegations, and in particular de veloping countries.  This compendium could build on the useful 
information exchange papers that the Secretariat had circulated in 1999.  On the tricky issue of 
benchmarks, his delegation was s till reflecting on it, however, he had taken note of the discussions.  
Among others, he said that Argentina had made some valid conceptual points that delegations needed 
to reflect upon.  He indicated that his delegation wished to participate in any consultations on 
benchmarks.  
91. The representative of Thailand  thanked Honduras for the submission of its initial offer and 
supported Chile's proposal to inv ite UNCTAD to present its paper on trade and development.  Her 
delegation was aware of the discussions on be nchmarks as a means to advance the services 
negotiations.  However, it appeared that at the current juncture, Members had different views on 
benchmarks, their possible form, and how to ensure  that the eventual translation of a benchmark 
would not upset the balance of the negotiations or sk ew them towards the interests of a small group of 
Members.  Her delegation sought to reflect furt her and hear other Members' views on possible 
collective tools that could assist Members to fair ly and effectively evaluate, analyse and measure 
progress made in the negotiations.  In this connectio n, her delegation sought to be involved on any 
future consultations the Chairman  might hold on this matter.   TN/S/M/14/Suppl.1 
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92. The representative of the Dominican Republic
 joined others in expressing concern about the 
discussion on benchmarks, which was a very sensitive point.  She said that the discussion did not include an understanding of where Members sought to take  this issue and could be a loss of time that 
could be used for other work.  She echoed many of  the thoughts expressed by Argentina and Kenya.  
The Dominican Republic considered that each Memb er was in a position to evaluation the offers and 
determine what it was giving and gaining in th e negotiations.  Her delegation believed that 
benchmarks in services might set a precedent that might not be well greeted by other negotiating groups.  If a Member believed that  it needed assistance in conducting its evaluation, there would be 
other avenues to obtain this assistance.  The Domi nican Republic did not agree to the suggestion to 
give friends groups an official role in assessing the of fers in terms of their be nefits and lacunae.  The 
Dominican Republic believed that further discussi on on this point would de lay the presentation of 
initial and revised offers, because Members would fi rst seek to know any outcome on the question of 
benchmarks before presenting an offer.   
93. The representative of India
 said his delegation was working hard to put in a revised offer by 
the deadline.  On benchmarks, he said that it a ppeared to be somewhat premature to foresee the 
outcome of discussions; however, it was clear that it was easier to set a benchmark in mode 3 (for 
example a foreign capital participation target) than in modes 1 and 4 and therefore further reflection 
on how to make any benchmark s ubstantive would be required.  He recalled India's comments on 
domestic regulations made on previous occasions and said that one issue that had not been touched 
upon was mutual recognition agreements, including bila teral agreements that had not been reported to 
the WTO which was a concern to his delegation.  India sought an opportunity to participate in any 
MRA that was being entered into.  His delegation s ought to be involved in the consultations that the 
Chairman might hold on the i ssues that had been raised.   
94. The representative of Peru  had followed closely the discussion on evaluations and further 
liberalization of services trade.  He agreed with the comments by Argentina and Rwanda in terms of 
the concerns they had expressed about any evaluation.   Peru believed that countries should focus on 
revised offers and that ambitious offers that re flected the interests in a balanced manner of all 
Members would be more useful than an evaluatio n for achieving progress in market access.  He 
informed Members that Peru had put forth some 16  revised requests and had met with some of the 
relevant delegations.  He said that  Peru intended to submit its revi sed offer within the deadline and 
urged Members to submit ambitious revised offers in  order to further progress.  He thanked Honduras 
for the submission of its initial offer. 
95. The representative of Barbados  congratulated Honduras on the submission of its initial offer.  
Barbados associated itself with the comments ma de by Rwanda on devel opment benchmarks as her 
delegation believed that these types of benchmarks were found in Article IV of the GATS as well as 
the Negotiating Guidelines.  Barbados believed that  Members needed to consider how these indicators 
could be implemented before consid eration of any new parameters.  
96. Making a few non-exhaustive remarks, the Chairman  began by thanking Honduras for the 
submission of its initial offer and the Chairman of  the WPDR for his report.  He recalled that 
delegations had underlined the importance of the Ma y deadline in terms of the submission of revised 
offers that would contain substan tial improvements and met the expect ations of Members.  Some had 
pointed out that May was a key phase in the negotiations.  Referring to Hong Kong, China's 
suggestion on certain tools to collect factual inform ation on a sectoral basis to assist delegations, he 
said that he would hold consultations on this issu e.  As no objections had been made to Chile's 
proposal for UNCTAD to present the UNCTAD Secretar iat note that she had referred to, he assumed 
that it met with the Council's approval and would contact UNCTAD in this regard. 
97.   On the topic of assessments, benchmarks, pa rameters, targets as had been referred to by 
delegations, the Chairman said that there was not a divergence of views because the notion itself had 
not been clearly defined.  He could say that an initial reflection had taken place, some elements of TN/S/M/14/Suppl.1 
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which he felt were worth highlighting.  Firstly , the evaluation of the offers was an individual 
undertaking by delegations, since the value of an offer and how it would go about determining that 
value would vary by Member.  At the same time, it w as important to bear in mind that in June, by way 
of the mechanism of reporting to the TNC and he nce to the wider public, Members would be called 
upon to express their views on progress and the Chairman  required to reflect these views in his report.  
He said that he would be very happy to report th at Members were satisfied with the numbers and 
quality of offers.  What would be required for July  would be at least a rough appreciation of progress 
because this would be instrumental in organising wo rk in the autumn.  He said that for that occasion 
the Secretariat could provide some facts that could be organised in different ways to help Members 
undertake their individual assessments that could be condensed into collective views about the 
perceptions of Members.  In a similar manner, he  could report orally that week to the TNC that 
Members were dissatisfied with the state of affair s because these were the views that he had heard 
from Members.  He said that he would hold consultations to discuss what the Secretariat might be able to provide in this regard.  It was not his perception that a single definitive quantitative method 
would be the appropriate tool to approach this issue because, as had been pointed out by a number of 
Members, while one proposed commitment might be of substantial benefit to one of its trading 
partners, in another case, proposed commitments in  many sectors might hold little benefit.  Hence, 
caution was required in interpreting numbers because th ey might not reflect quality.  He reiterated that 
after the next formal meeting and the July meeti ngs of the TNC and General Council about the state 
of the negotiations in all areas and the balance among them, it would be up to delegations to decide 
the outcome they sought at Hong Kong.  In what  areas would delegations seek ministers' guidance 
and how did they want the negotiations to progress?  He said that if Members were satisfied, then they 
could report that delegations sought to stay the course .  However, if they were  not satisfied, then there 
would need to be a change to foster progress, a nd in this case, delegations would need to provide 
suggestions an any changes.  This scenario natura lly led to a discussion on be nchmarks, parameters or 
targets.  One point that he had re peatedly heard in this regard, particularly at higher levels of the 
political hierarchy, was that something to focus on  was required in order to spur governments.  
Although he was not making any specific suggestions in  this regard, he said that there could be a set 
of instruments, imprecise, not formally agreed to, or of a general or sectoral character, and he urged Members to reflect on these issues.  Speaking frankly, he said that references to Article IV and development was a starting-point, but that as the process moved forward more specificity would be required were these clauses to provide direction and focus in the negotiations.  He reiterated that he 
was not espousing the need for benchmarks, but was reflecting comments that he had heard, including 
comments made at the meeting that more reflectio n and prudence was required so as to ensure that 
this issue did not distract from the main purpose of improving offers.  He had taken note of the comment made by one delegation that a discu ssion could prove counter-productive if Members 
decided to await its outcome before submitting a re vised offer.  Taking into account the need to 
approach the issue with caution, he had gathered fro m the discussion that it was worthwhile to explore 
the issue further in informal formats.  On the point s raised by some regarding friends groups, he had 
noted the point that they were informal groups, could not be instructed, and could engage in work as they saw fit.  Their views could not become defi nitive or substitute for Members' individual opinions 
or collective views.  Some felt that it could be he lpful for groups of governments that had an interest 
in given sectors to share their views with others in order to help others  make their individual 
assessments.   
98. The Chairman underlined that the Council had work to pursue on S&D proposals and LDC 
modalities and said that he would organize consulta tions as well as an open-ended informal meeting 
as required.  He said that any documentation in this regard would help Members prepare for a 
meeting.  On future meetings, he informed the C ouncil that the proposed dates for the next cluster of 
meetings had been changed to 19-30 September.  Finally, referring to the forthcoming Symposium on 
Cross Border Trade, he suggested  that the meeting be kept formally open should Members wish to 
revert to the item on the Symposium for any formal statements.   
99.
 It was so agreed . TN/S/M/14/Suppl.1 
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100. The Chairman
, noting that the representative of Peru was attending his last meeting of the 
Special Session in his current function, thanked him for his precious contribution to the Council's 
work and wished him all the best in his future e ndeavours.  The Chairman suggested that, before he 
adjourn the meeting, the Council take  note of all the statements made. 
101. The Council so took note .   
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