WORLD TRADE  
ORGANIZATION  S/C/26 
1 December 2006 
 (06-5776) 
  
  
 
ANNUAL REPORT OF THE COUNCIL FOR TRADE IN SERVICES  
TO THE GENERAL COUNCIL (2006) 
 
 
1. Since its last report to the General Council, the Council for Trade in Services held five formal 
meetings, on 23 September 2005, 9 Februa ry 2006, 11 April 2006, 22 June 2006 and 
12 September 2006.
1  During this period, the Council addressed the following matters: 
I. TRANSITIONAL REVIEW UNDER SECTION 18 OF THE PROTOCOL ON THE 
ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA 
2. At its meeting held on 23 September 2005, the Council for Trade in Services conducted and 
concluded the fourth transitional review of the implementation by China of its WTO commitments, 
pursuant to section 18 of the Protocol on the Accession of the People's Republic of China 
(WT/L/432). The Council took note of the report (S/F IN/15) of the Committee on Trade in Financial 
Services, which formed part of the Council's report on this matter to the General Council, contained in 
document S/C/25. 
II. REVIEW ON AIR TRANSPORT UNDER ANNEX ON AIR TRANSPORT SERVICES 
3. In accordance with paragraph 5 of the Anne x on Air Transport Services, the Council for 
Trade in Services is to review pe riodically, and at least every five years, developments in the air 
transport sector and the operation of the Annex wi th a view to considering the possible further 
application of the Agreement in this sector.  In acco rdance with the decision taken at the conclusion of 
the first Review, on 24 October 2003, the Council form ally commenced the second Review at its last 
2005 meeting, i.e. on 23 September 2005.  On 12 September 2006, the Council held the first meeting 
dedicated to the second Review of Air Transport Services (S/C/M/84). 
III. REOPENING OF THE FOURTH PROTOCOL FOR ACCEPTANCE BY THE 
PHILIPPINES 
4. At its meeting on 11 April 2006, following the request of the Philippines contained in 
document S/C/W/268, the Council for Trade in Services decided to reopen the Fourth Protocol to the 
General Agreement on Trade in Services, relating to basic telecommunications for acceptance by the 
Philippines.  The decision is contained in document S/L/251. 
IV. REQUEST FOR AD HOC OBSERVER STATUS BY THE UNIVERSAL POSTAL 
UNION (UPU) 
5. At its meeting on 11 April 2006, following a request for ad hoc  observer status received from 
the Universal Postal Union (UPU), circulated as JOB(06)/72, the Council for Trade in Services, 
following previous practice, decided to grant ad hoc  observer status to the Universal Postal Union. 
                                                      
1 Reports of the meetings are contained in documents S/C/M/80 to 84 and should be read in 
conjunction with this report.   S/C/26 
Page 2  
 
  V. NEGOTIATIONS PURSUANT TO ARTICLE XXI 
6. At its meeting of 22 June 2006, the Council for Trade in Services had an exchange of views 
on the issue of modification of specific commitme nts pursuant to GATS Article XXI (S/C/M/83 and 
JOB(06)/214). 
VI. NOTIFICATIONS MADE TO THE COUNCIL PURSUANT TO GATS 
ARTICLES III:3, V:5, AND V:7 
7. At its meetings held on 23 September 2005, 9 February 2006, 11 April and 22 June 2006, the 
Council for Trade in Services took not e of the following notifications: 
(a) Notifications pursuant to Article III:3 of the GATS: 
  Albania    (S/C/N/343-346, S/C/N/349-358) 
  Macao, China    (S/C/N/347-348, S/C/N/347/Corr.1-348/Corr.1) 
  Honduras   ((S/C/N/364)  
 
(b) Notifications pursuant to Article V:7 of the GATS: 
  Mexico and Nicaragua    (S/C/N/359) 
  The European Communities and Chile   (S/C/N/360) 
  Thailand and New Zealand   (S/C/N/361)   Morocco and the United States   (S/C/N/362)   Korea and Singapore    (S/C/N/363)  
  The United States and El Salvador  (S/C/N/365)   Honduras, Nicaragua and the United States  (S/C/N/366)  
  El Salvador     (S/C/N/367) 
 
VII. WORK OF THE SUBSIDIARY BODIES 
8. The activities of the subsidiary bodies are refl ected in their respective reports, which are 
annexed to this report, as follows:  
 Annex  I Report of the Committee on Trade in Financial Services (S/FIN/16) 
 Annex  II Report of the Committee on Specific Commitments (S/CSC/12)  Annex  III Report of the Working Party on Domestic Regulation (S/WPDR/9)  Annex  IV Report of the Working Party on GATS Rules (S/WPGR/16)  
 
_______________ 
 
  S/C/26 
 Page 3 
 
 
  ANNEX I 
  
 
WORLD TRADE  
ORGANIZATION  S/FIN/16 
28 November 2006 
 (06-5702) 
  
 
 
ANNUAL REPORT OF THE COMMITTEE ON TRADE IN FINANCIAL SERVICES TO 
THE COUNCIL FOR TRADE IN SERVICES (2006) 
 
 
1. Since its last annual report to the Council for Trade in Services (S/FIN/14), the Committee on 
Trade in Financial Services has held three form al meetings, on 19 Septembe r 2005, 7 February 2006, 
and 11 April 2006.1  In this period, the Committee addressed the following matters:  the acceptance of 
the Fifth Protocol to the General Agreement on Trade in Services;  technical issues;  and recent developments in financial services trade.  Addi tionally, the Committee carried out the fourth 
transitional review of the implementation by Chin a of its WTO commitments, pursuant to section 18 
of the Protocol on the Accession of the People's Republic of China. 
I. ACCEPTANCE OF THE FIFTH PROTOCOL TO THE GATS 
2. Three Members have not yet accepted the Protocol :  Brazil, Jamaica, and the Philippines.  
Some Members expressed concern that the three Members have not yet accepted the Fifth Protocol.  At the Committee's request, these Members reported periodically on the situation of their domestic 
acceptance procedures.  
II. TECHNICAL ISSUES 
3. The Committee continued its consideration of  the communication from Brazil on electronic 
commerce and financial services (JOB(05)/103), whose aim was to revisit the issue of the distinction 
between modes 1 and 2 in the case of cross-border fi nancial transactions conducted through electronic 
means.  
III. RECENT DEVELOPMENTS IN FINANCIAL SERVICES TRADE 
4. During the period under consideration, the Committee heard a presentation on the regulation 
and supervision of China's banking sector by Mr . Deng Hongguo, Deputy Director-General, Banking 
Supervision Department of the China Banking Regulatory Commission (CBRC).  
                                                     
 
1 Reports of these meetings are contained in documents S/FIN/M/50 to 52.  They should be read in 
conjunction with this report. S/C/26 
Page 4  
 
  IV. TRANSITIONAL REVIEW UNDER SECTION 18 OF THE PROTOCOL ON THE 
ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA 
5. At its meeting on 19 September 2005, the Co mmittee carried out the fourth transitional 
review of the implementation by China of its  WTO commitments, pursuant to section 18 of the 
Protocol on the Accession of the People's Republic of China.  The report submitted by the Committee 
to the Council for Trade in Se rvices on this matter is contained in document S/FIN/15.   
_______________ S/C/26 
 Page 5 
 
 
  ANNEX II 
 
 
 WORLD TRADE  
ORGANIZATION  S/CSC/12 
21 November 2006 
 (06-5593) 
  
 
 
ANNUAL REPORT OF THE COMMITTEE ON SPECIFIC COMMITMENTS  
TO THE COUNCIL FOR TRADE IN SERVICES (2006) 
 
 1. Since its Annual Report of 2005 to the Counc il for Trade in Services, the Committee on 
Specific Commitments held five formal mee tings:  on 22 September 2005, 8 February 2006, 
10 April 2006, 22 June 2006, and 5 October 2006.
1  During the reporting period, the Committee 
addressed four items:  classification issues;  scheduling issues;  editorial conventions for the submission of the second round of revised offe rs;  and relationship between new and old 
commitments.  
I. CLASSIFICATION ISSUES 
2. The Committee addressed a revised proposal on  the classification of energy services from 
Indonesia (S/CSC/W/42/Rev.1 and S/CSC/W/42/Rev.1/ Corr.1) at the first two meetings of the 
reporting period, and a second revision of the proposal (S/CSC/W/42/Rev.2) at the April and June 2006 meetings. 
3. Informal discussions on classification issues we re held on 19 January and 8 February 2006, 
with a focus on Tourism and Travel-Related Servic es; Recreational, Cultural and Sporting Services; 
and Transport and Logistics Services.  The chairman  prepared an informal annotated agenda, dated 
12 September 2005, as well as informal summaries of the discussions, dated 31 January and 7 March 2006.  The informal discussion on 8 February 2006 concluded the cycle of exchanges of classification issues in informal mode.  Upon request  by Members, the Secretariat issued a Room 
Document dated 9 May 2006, with a compilation of a ll documents prepared in the context of this 
informal exchange. 
4. In an informal Note, dated 31 January 2006, the Chairman provided an overview of selected 
classification issues on which earlier discussions had not revealed differences of opinion among those 
delegations who had expressed their views.  In an in formal Note dated 5 April 2006, the Chairman set 
out more specific suggestions on how certain of these classification issues could be addressed by the 
Committee.   
5. At the meeting of 10 April 2006, the Chairman reported that during informal discussions, 
Members' attention had been drawn to  an error in the French version of the Services Sectoral 
Classification List where parts of the headings of the sub-sectors corresponding to CPC 9401 and CPC 9403 had been inverted.  The correct corresponden ce was set out in the report of the meeting, as 
well as in a corrigendum to the Scheduling Guidelines (S/L/92/Corr.1).  
                                                     
 
1 Reports of these meetings are contained in documents S/CSC/M/38, S/CSC/M/39, S/CSC/M/40, 
S/CSC/M/41  and S/CSC/M/42.  They should be read in conjunction with this report.  S/C/26 
Page 6  
 
  6. At the meeting of 5 October  2006, delegations arrived at a common understanding to the 
effect that dredging services, which are not expl icitly mentioned in the CPC, are covered by 
CPC 5133 - "Construction work for civil engineering for waterways, harbours, dams, and other water 
works."  
7. Throughout the reporting period, the Committee discussed other classification issues that 
arose during earlier informal discussions in 2004 and 2005 .  The issues concerned  (i) a technical error 
in the Maritime Model Schedule ("MMS");  (ii) th e extension of additional commitments as described 
in the MMS also to private port operators;  and ( iii) the classification of certain distribution services.  
II. SCHEDULING ISSUES 
8. During the reporting period, the Committee con tinued its discussions on general scheduling 
questions.
2  For the meeting in September 2005, the delegation of Hong Kong, China provided a 
Room Document, dated 31 August 2005, containing examples of entries in existing schedules and offers.  At the same meeting, it was decided to hold discussions on general scheduling issues 
henceforth in informal mode.   
9. On the basis of a Room Document, dated 4 April 2006, by the European Communities, 
Members discussed the scheduling of residency and domicile requirements.  Upon request by 
Members, the Secretariat prepared a background No te (JOB(06)/159) providing an overview of the 
discussions concerning residency requirements that ha d taken place in the context of the development 
of the Accountancy Disciplines and the Scheduling Guidelines. 
10. For the meeting in September 2005, the Chairman had prepared an annotated agenda, 
JOB(05)/184.  He further provided informal summa ries of the discussions and updates subsequent to 
each meeting, dated 28 November 2005; 2 Marc h 2006; 9 May 2006; and 18 July 2006. 
11. At the meeting of 8 February 2006, the Committee addressed a Communication from the 
Republic of Korea (S/CSC/W/49), submitted in res ponse to JOB(04)/171 by Hong Kong, China, on 
economic needs tests in Korea's schedule to which a list of criteria had been added in the revised 
offer.  Several aspects of ENTs were discussed, such as their specification and relationship with 
quantitative limitations under Article XVI. 
III. EDITORIAL CONVENTIONS FOR THE SUBMISSION THE SECOND ROUND OF 
REVISED OFFERS 
12. At the meeting of 22 June 2006, the Committee took note of editorial conventions proposed 
by the Chairman with the objective of facilitating the preparation and submission of the second round 
of revised offers.  The editorial convent ions are contained in JOB(06)/181.   
IV. RELATIONSHIP BETWEEN OLD AND NEW COMMITMENTS 
13. Discussions on the relationship between ex isting schedules and the new commitments 
resulting from the current negotiations commenced at  the April 2006 meeting on the basis of a Room 
Document by Canada, dated 5 April 2006.  Discu ssions at the June and September 2006 meetings 
were conducted in informal mode.  The Chairman pr epared an informal summary of the discussions, 
dated 18 July 2006, and updated 19 October 2006.  
_______________ 
                                                     
 
2 An overview of documentation submitted in this regard is contained in the Annual Report of the 
Committee on Specific Commitments to the Council for Trade in Services (2005), S/CSC/11.  S/C/26 
 Page 7 
 
 
  ANNEX III 
 
 
 WORLD TRADE  
ORGANIZATION  S/WPDR/9 
20 November 2006 
 (06-5585) 
  
  
ANNUAL REPORT OF THE WORKING PARTY ON DOMESTIC REGULATION  
TO THE COUNCIL FOR TRADE IN SERVICES (2006) 
 
 
1. Since the Annual Report of 2005
1, the Working Party on Domestic Regulation (WPDR) held 
five formal meetings and several informal meetings2.  Both formal and informal papers were 
submitted to the Working Party.  Some Members al so submitted proposals in the form of room 
documents. 
2. In October and November 2005, the Working Part y held several meetings to prepare a draft 
ministerial text and an illustrative list of possible el ements for consideration by Ministers at the Sixth 
Ministerial Conference in Hong Kong, China.  On 15 November 2005, the Chairman of the Working 
Party submitted a progress report (JOB(05)/280) to the Chairman of the Special Session of the 
Council for Trade in Services including a recommended text on domestic regulation (JOB(05)/279) and an illustrative list of possible elements for Ar ticle VI:4 disciplines (attached to JOB(05)/280). 
DEVELOPMENT OF REGULATORY DISCIPLINES UNDER GATS ARTICLE VI:4 
3. In the period covered by this report, the Wo rking Party received several submissions by 
Members on the development of regulatory disci plines under GATS Article VI:4.  Many new and 
revised submissions were formulated in the form of  text proposals for possible Article VI:4 regulatory 
disciplines.  After the Sixth Ministerial Conference, Members strived to fulfil the ministerial mandate to develop Article VI:4 disciplines on domestic regul ation before the end of the current round of 
negotiations and to develop text for adoption for this purpose. 
4. The Working Party held several rounds of info rmal discussions to address on an individual as 
well as a thematic basis
3 all the proposals submitted by Members.4  The Working Party examined the 
following new and revised submissions relating to the development of Article VI:4 disciplines: 
Communication from the Separate Customs Territo ry of Taiwan, Penghu, Kinmen and Matsu, 
Definitions of Qualification Requirements , Qualification Procedures, Licensing 
                                                      
1 S/WPDR/8, 23 September 2005. 
2 Reports of these meetings are contained in documents S/WPDR/M/31 – 35.  They should be read in 
conjunction with this report. 
3 The thematic discussions were based on a fr amework proposed by the Chairman in document 
JOB(05)/169. 
4 See summaries of informal meetings held on 6 and 7 September 2005 (JOB(05)/221); on 20 and 
23 September 2005 (JOB(05)/223);  on 7 October 2005 (JOB(05)/308);  on 17 January 2006 (JOB(06)/16);  on 
6 February 2006 (JOB(06)/32);  on 9 March 2006 (JOB(06)/65);  on 27 March (JOB(06)/124);  on 2 May 2006 (JOB(06)/157);  on 1 and 2 June 2006 (JOB(06)/226);  and on 19 and 20 June 2006 (JOB(06)/235). S/C/26 
Page 8  
 
  Requirements, Licensing Proce dures and Technical Standards , S/WPDR/W/37, 
6 October 2005; 
Communication from Switzerland and Mexico, Proposal for Disciplines on Technical 
Standards in Services , S/WPDR/W/32/Rev.1, 27 October 2005; 
Communication from Brazil, Colombia, Domi nican Republic, Indonesia, Peru and the 
Philippines, Elements for Draft Disciplines on Domestic Regulation , JOB(06)/34, 
24 February 2006 and JOB(06) /34/Add.1, 15 June 2006; 
Communication from Brazil, Indonesia and the Philippines, JOB(06)/133, 2 May 2006 and 
JOB(06)/133/Add.1, 15 June 2006;  
Communication From the African Group on Domestic Regulation, Room Document, 
2 May 2006;  Communication from Chile, India, Mexico, Pakistan, Peru and Thailand, Proposed 
Disciplines on Qualification Requirements and Procedures , JOB(06)/160, 30 May 2006; 
 
Communication From the ACP Group, Pro Development Principles for GATS Article VI:4 
Negotiations , JOB(06)/136/Rev.1, 19 June 2006; 
 Communication from China and Pakistan, Proposed disciplines on Domestic Regulation 
under Article VI:4 of the GATS , JOB(06)/158, 29 May 2006; 
 
Communication from Australia; Chile; Colombia ; Hong Kong, China; Korea; New Zealand 
and The Separate Customs Territory of  Taiwan, Penghu, Kinmen And Matsu, Article VI:4 
Disciplines – Proposal for Draft Text , JOB(06)/193, 19 June 2006; 
 
Communication from Antigua and Barbuda, Barbados, Cuba, Dominica, Dominican 
Republic, El Salvador, Fiji, Grenada, Guatem ala, Honduras, Jamaica, Mauritius, Mongolia, 
Nicaragua, Paraguay,  St. Kitts and Nevis, St . Vincent and the Grenad ines and Trinidad and 
Tobago, Trade-Related Concerns of Small, Vuln erable Economies in the Working Party on 
Domestic Regulation , JOB(06)/66/Rev.2, 10 July 2006; 
 
Communication from the United States, Outline of US Position on a Draft Consolidated Text 
in the WPDR , JOB(06)/223, 11 July 2006. 
 5. The Working Party also examined an informal paper by the Secretariat on Domestic 
Regulatory Provisions in Economic Integration Agreements, which contained an overview of 
regulatory provisions contained in economic integra tion agreements notified under Article V of the 
GATS to date.  This informal note had been circ ulated to Members as document JOB(05)/175, dated 
14 September 2005. 
6. At the formal meeting held on 19 and 20 June 2006, the Working Party asked the Chairman to 
prepare a first consolidated text of possible Artic le VI:4 disciplines, based on the proposals submitted 
by Members.  The Chairman prepared this text, which was circulated to Members on 12 July 2006 as 
document JOB(06)/225.  Members provided some pr eliminary comments on the draft text by the 
Chairman at the informal meeting held on 13 July 2006.  No further discussions on the development of regulatory disciplines under Article VI:4 nor on any other issues covered under the mandate of the 
Working Party were taken up since the suspension of  the Doha Round of negotiations, decided by the 
General Council on 27 and 28 July 2006. 
_______________ S/C/26 
 Page 9 
 
 
  ANNEX IV 
 
 
 WORLD TRADE  
ORGANIZATION  S/WPGR/16 
23 November 2006 
 (06-5660) 
  
  
ANNUAL REPORT OF THE WORKING PARTY ON GATS RULES  
TO THE COUNCIL FOR TRADE IN SERVICES (2006) 
 
 1. Since its annual report for 2005, the Worki ng Party on GATS Rules held four formal 
meetings:  on 21 September 2005,  on 10 February 2006, on 10 April 2006, and on 21 June 2006.
1  
The three negotiating mandates the Working Party is entrusted with were put on the agenda of each 
meeting: emergency safeguard measures (Article X), government procurement (Article XIII), and 
subsidies (Article XV).   
2. In the lead-up to the Hong Kong Ministeria l Conference, the Chair of the Working Party 
undertook various informal consu ltations and convened three informal meetings with a view to 
suggesting text on GATS Rules for the draf+t Minist erial Declaration.  The Chairperson submitted its 
report to the Special Session of the Council for Tr ade in Services, including an assessment of the 
status of work and a recommendation regarding the relevant section of the Ministerial Declaration 
(JOB(05)/273).  Paragraph 4 of Annex C to the Mi nisterial Declaration contains guidance on the three 
GATS Rules topics.    
I. NEGOTIATIONS ON EMERGENCY SAFEGUARD MEASURES UNDER GATS 
ARTICLE X 
3. At the meeting of September 2005, delegations exchanged views on possible ways forward in 
the light of the report of a workshop held in Indonesia on ESM, and engaged in discussions on the 
topic of safeguard-type entries in schedules.  At th e meetings of February and April 2006, delegations 
discussed a room document from the delegations of Brunei Darussalam, Indonesia, Malaysia, 
Myanmar, the Philippines, and Thailand, which offered thoughts on the issues of domestic industry, 
vested rights, determination of injury, modal issu es, and special and differential treatment.     
4. At the meeting of June 2006, delegations pursued their discussion on issues relating to 
emergency safeguard measures in the light of a Note from the Secretariat that provided a summary of main views expressed in the Workin g Party since the last extension of the negotiations in March 2004 
(JOB(06)/165).  Delegations also discussed the defi nition of domestic industry on the basis of a room 
document from the delegations of Brunei Da russalam, Indonesia, Malaysia, Myanmar, the 
Philippines, and Thailand.  Divergent views continue d to be expressed on the various aspects raised in 
relation to emergency safeguard measures,  including desirability and feasibility.
2 
                                                      
1 Reports of these meetings are contained in documents S/WPGR/M/53, S/WPGR/M/54, 
S/WPGR/M/55 and S/WPGR/M/56.  They should be read in conjunction with this report.   
2 Discussions on emergency safeguard measures are reflected in paragraphs 4-41 of S/WPGR/M/53, 
paragraphs 2-16 of S/WPGR/M/54, paragraphs 3-21 of S/WPGR/M/55, and paragraphs 2-26 of S/WPGR/M/56. S/C/26 
Page 10  
 
  II. NEGOTIATIONS ON GOVERNMENT PROCUREMENT UNDER GATS 
ARTICLE XIII 
5. At the meetings of September 2005, February  2006 and April 2006, delegations continued 
their discussion of a communication from the Eur opean Communities, which touched upon such 
issues as special and differential treatment, non-discr imination, thresholds, va luation of contracts, 
technical specification and qualification of su ppliers, procurement met hods, time periods, tender 
documentation, and contract award (S/WPGR/W/52).   
6. At the meeting of June 2006, delegations ex changed views in the light of a communication 
from the European Communities that  proposed a legal text for an Annex to the GATS on government 
procurement (S/WPGR/W/54).  Other questions rai sed included the relationship to the plurilateral 
Government Procurement Agreement and MFN applica tion.  A number of delegations continued to 
reiterate that, in their view, the negotiating ma ndate under Article XIII did not entail market access 
issues, while others thought that these were covered.
3   
III. NEGOTIATIONS ON SUBSIDIES UNDER GATS ARTICLE XV 
7. At the meeting of September 2005, delegations continued their discussion in the light of the 
communication from Chile, Hong Kong China, Mexi co, Peru, and Switzerland (JOB(05)/96) on a 
provisional definition of subsidy for the purpose of the information exchange.  At the meeting of February 2006, delegations discussed a comm unication from Switzerland (S/WPGR/W/16/Add.5), 
which provided a response to the questionnaire releva nt to the information exchange required under 
Article XV:1. 
8. At the meeting of April 2006, delegations  continued deliberations on the information 
exchange, as well as on the provisional definition of  subsidy, including on the basis of a Note from 
the Secretariat (JOB(05)/4/Add.1) that provided an update on the synthesis of views expressed on that 
issue.
4  A number of delegations cont inued to express concerns regard ing the lack of progress on the 
information exchange.  The Working Party asked  the Chairperson to conduct consultations on 
obstacles encountered by Members in sharing of in formation required for the purpose of negotiations 
under Article XV.      
 
__________ 
                                                      
3 Discussions on government procurement are reflected in paragraphs 57-62 of S/WPGR/M/53, 
paragraphs 35-42 of S/WPGR/M/54, paragraphs 22-31 of S/WPGR/M/55, and paragraphs 38-53 of 
S/WPGR/M/56.   
4 Discussions on subsidies are reflected in paragraphs 42-56 of S/WPGR/M/53, paragraphs 17-34 of 
S/WPGR/M/54, paragraphs 32-44 of S/WPGR/M/55, and paragraphs 27-37 of S/WPGR/M/56.