RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/S/M/17 
30 January 2006 
 
 (06-0397) 
Council for Trade in Services 
Special Session  
 
 
  
REPORT OF THE MEETING HELD ON  31 OCTOBER, 3 AND 24 NOVEMBER 2005 
 
Note by the Secretariat
1 
 
 1. The Special Session of the Council for Trade in Services held a formal meeting on 
31 October, 3 and 24 November 2005.  The agenda fo r the meeting, chaired by Ambassador Fernando 
de Mateo of Mexico, is cont ained in document WTO/AIR/2705. 
2. The Chairman
 drew the Council's attention to the report of the last meeting contained in 
document TN/S/M/16.   
3. Referring to the agenda for the meeting, the Chairman proposed that the Council adopt the 
agenda. 
4. It was so agreed . 
A. REVIEW OF PROGRESS IN NEGOTIATIONS , PURSUANT TO PARAGRAPH G OF ANNEX C OF THE 
DECISION ADOPTED BY THE GENERAL COUNCIL ON 1 AUGUST 2004  (WT/L/579)   
5. The Chairman  recalled that on 1 August 2004, the General Council adopted a set of 
recommendations of the Special Session, contained in Annex C of document WT/L/579.  Citing paragraph (g) of this Annex, he said "For the pur pose of the Sixth Ministerial Meeting, the Special 
Session of the Council for Trade in Services shall review progress in these negotiations and provide a 
full report to the Trade Negotiations Committe e, including possible recommendations."  The 
Chairman noted that this mandate was divided into two parts, namely a "review of progress" and "a 
full report, including possible recommendations".  He suggested that the Council begin with the 
review of progress, including reports from the Chai rs of the Working Party on GATS Rules (WPGR) 
and the Working Party on Domestic Regulation (WPDR) , and any formal statements by delegations.   
6. The Chair of the Working Pa rty on Domestic Regulation
 sought to report on the review and 
status of work in the WPDR and on its work on recommendations to the Sixth Ministerial Conference.  
On status of work, he said that since the Fifth Mi nisterial Conference, the Working Party on Domestic 
Regulation had intensified its work on the deve lopment of regulatory disciplines pursuant to 
Article VI:4 of the GATS.  Good momentum had been generated by the submission of numerous 
proposals by Members on many aspects of possible domestic regulation disciplines.  Members also 
continued their discussion on regulatory examples.  On the basis of the discussions in the Working 
Party and his broad consultations with Members, he had gathered that Members wished to have 
disciplines on domestic regulation that would help their services exports and exporters.  Members had 
also indicated that there was a need for domestic coordination between trade ministries and regulating 
                                                      
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/17 
Page 2  
 
  agencies, so that the eventual disciplines did not overly impinge on regulatory autonomy and were in 
keeping with the GATS.  In the course of his consultations with Members, including groups of developing country Members, the notion of Memb ers' right to regulate had been continuously 
stressed.  He said that proposal-by-proposal discu ssions in the Working Party on the development of 
regulatory disciplines were followed in the second half of 2005 by three rounds of informal 
discussions in which Members addressed elements rai sed in their proposals on a thematic basis.  The 
themes that he had identified for these rounds of discussions were:  Licensing Requirements; 
Licensing Procedures; Qualification Requirements; Qualification Procedures; Technical Standards; Transparency; Objectives; Scope; Application; De finitions; and Development Considerations.  The 
sequence in which the items appeared had not reflec ted any order of priority and had been without 
prejudice to individual positions of Members.  The thematic discussions had raised a number of 
substantive issues and concepts.  The negotiating proposals and the issues raised in the thematic 
discussions had provided a useful resource for future  work of the WPDR.  He said that he had 
encouraged Members to keep up momentum in the negotiations by submitting new proposals and 
revising existing ones on the basis of the comments by other Members.  He had also encouraged 
Members to frame the issues and concepts that they might raise in specific lang uage.  This would help 
to focus the WPDR's work and facilitate Member s' domestic consultations.  To facilitate easier 
reference and access to the negotiating proposals, he  had suggested that Members consider submitting 
their proposals as JOB documents.  While the Sixth Mi nisterial Conference was not a point of arrival 
for the negotiations under Article VI:4 of the GATS, it nevertheless represented an important juncture 
in its work.  He said that much work lied ahead in 2006 and that the Working Party should make use 
of time available in an efficient manner.  Members should be prepared to co ntinue work seamlessly in 
the new year.  In this connection, he said that he would be undertaking c onsultations shortly on how 
to organize future work in the coming year.   
7. Turning to the issue of inputs to the Sixth Mi nisterial Conference, the Chair of the WPDR 
said that Members had emphasised the need for Mini sters to take stock of the negotiations under 
Article VI:4 of the GATS and to provide impetus fo r concluding such negotiations by the end of the 
Round.  He said that over the preceding two weeks delegations had worked hard, with a constructive 
spirit and in a problem-solving mode to attempt to  bridge gaps on the ministerial text and on a 
possible illustrative list of elements for Article VI:4 disciplines.  He recognized that in doing so many 
delegations had made concessions  and moved away from initial positions.  Although the WPDR had 
not reached consensus on a contribution of the WPDR 's inputs to the Sixth Ministerial Conference, it 
had moved close to an agreement.  He said that he intended in the very near future to continue 
consulting with delegations with a view to facilita ting a consensus.  He encouraged delegations to 
make an additional effort, which would allow him to  transmit the Working Part y's agreed input to the 
Sixth Ministerial Conference to the Chairman of the Special Session of the Council for Trade in Services.   
8. The Chair of the Working Party on GATS Rules
 sought to report on the status of work and 
the Ministerial Declaration.  He said that over the preceding year, the Working Party had continued 
and intensified negotiations on emergency safeguard measur es, subsides and government 
procurement.  A number of issues had been touche d upon in these discussions as reflected in previous 
reports by the Chair of WPGR to the Special Sessi on, as well as in its annual reports.  He thought it 
was fair to say that overall, these complex nego tiations had not yielded any significant progress.  
While some delegations attached importance to one or more of the topics, there had been no 
narrowing down of well-known divergences in positions on issues of importance.  As well, the level 
of ambition displayed by the proponents had not be en shared by many delegations.  Turning to the 
issue of the Ministerial Declaration, he noted that since the last cluster of services meetings, 
delegations had undertaken a number of consultations  amongst themselves.  In addition, the Working 
Party had held two open-ended info rmal meetings, on 25 and 27 October, with a view to finding 
common ground on inputs to work on the services section of the Ministerial Declaration.  He sought to report on the result of these discussions.   It app eared to him that delegations generally concurred  TN/S/M/17 
 Page 3 
 
 
  that three key elements should underlie any ministerial language on the three topics.  Firstly, work 
should continue and intensify, in  accordance with the respective ma ndates and deadlines.  Secondly, 
the language should not prejudge the result of the negotiations.  Thirdly, any language calling for 
focused discussions on a given topic should not be disproportionate in terms of progress made in the 
negotiations; delegations needed to take account of the state of play and be realistic and pragmatic.  
He said that these had been principles that had guid ed the Working Party in its deliberations.  He 
believed that the Working Party had made good pr ogress on converging on an input for the services 
portion of the text and were very close to a positiv e outcome, but would require a little more time.   
With the benefit of further cons ultations, he hoped to make a recommendation to the Special Session 
by its next meeting on 3 November.  He said that  at the end of open-ended informal meetings the 
previous week, and after intense negotiations and difficult compromise, the Working Party had 
reached a broad degree of agreement on language re lating to a common chapeau for the three topics, 
as well as the language on emergency safeguard measu res and subsidies.  He said that at its last 
informal meeting, the Working Party had not been  able to agree on the contours of a text on 
government procurement.  He belie ved that delegations understood th at it would be appropriate to 
also have language on government pr ocurement, but that some additional time would be needed to see 
how the Working Party might best converge on this aspect of its input.  He commended the flexibility 
showed by delegations, including proponents, which had heeded the call for realism and pragmatism.  
He said that this had allowed to the Working Pa rty to make progress.  He hoped that the Working 
Party's work would continue to be characterised by openness and pragmatism in order to enable it to 
finish its work expeditiously. 
9. The representative of th e European Communities  requested that his delegation's presentation 
of its communication, TN/S/W/55, as well as the an swers that it had provided to questions at an 
informal meeting on 27 and 28 October be reflected in the record.2 
10. The representatives of Australia ; Brazil  on behalf of Argentina , Brunei Darussalam , Cuba , 
Dominican Republic , Guatemala , Kenya , Indonesia , Malaysia , Paraguay , the Philippines , Thailand , 
Uruguay  and Venezuela ; Mexico ; China ; Pakistan ; Canada ; India and Korea  also requested that their 
comments made at this earlier informal meeting be reflected in the minutes.3 
11. The representative of the United States  wished to reserve the right to make a formal statement 
later in the meeting. 
12. The Chairman  thanked the Chairs for their reports and for their hard work.  He suggested that 
the Council take note of the reports by the Ch airs of the Working Parties on GATS Rules and 
Domestic Regulation, the statements made, and keep this item open before he adjourned the meeting.   
13. It was so agreed . 
14. Reconvening on 3 November, the Chairman  sought to report to the Council on informal 
consultations that had been held since the Counc il had last met formally.  On the morning of 
31 October, the Council had continued its discu ssion in informal mode on sectoral and modal 
objectives as expressed by Members.  It had been ag reed on that occasion that the Secretariat would 
prepare a second revision of JOB(05)/237 that would retain only precise objectives and barriers 
identified, and present these in bullet format.  He sai d that further inputs from delegations or groups of 
delegations remained welcome.  On the afternoon of 31 October he had c onvened consultations in 
order to discuss a number of issues relating to the draft ministerial text.  One of these issues had been raised by Barbados and a number of other Members with respect to small economies.  On Tuesday, 
1 November he had convened an ope n-ended informal meeting in or der for the Council to consider 
                                                     
 
2 See Annex I. 
3 See Annex I. TN/S/M/17 
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  the portions of the proposed draft ministerial text  that referred to LDCs, namely paragraph 10 of 
JOB(05)/262.  There had been some suggested chan ges which, he understood, were under discussion.  
At that same meeting, the Council had discussed la nguage on targeted technical assistance.  He said 
that he would consider any suggested chang es that would flow from these discussions in a 
forthcoming revision of Job(05)/262.  Turning to th e organization of the meeting, he said he would 
open the floor to delegations for any formal statements  that they might wish to make in the context of 
the Review of Progress pursuant to paragraph (g) of Annex C of the July Decision.   Before doing so, 
he invited the Chairs of the Working Party on GATS Rules and the Working Party on Domestic Regulation to supplement their reports delivered earlier  in the meeting.  He also said that, given the 
pace of work, it would be his intention to suspend the meeting at the end that day in order for the 
Council to meet again in the near future. 
15. The Chair of the Working Party on GATS Rules
 reiterated that his intervention was made 
under his own responsibility as Chair.  He drew de legations' attention to his report to the Special 
Session contained in JOB(05)/273, upon which he sought to elaborate.  Regarding the status of work 
in the Working Party, he recalled the statement he had shared earlier in the meeting and recalled that 
the Working Party had, since the July Package, intensified negotiations on the issues of emergency 
safeguard measures, government procurement a nd subsidies without narrowing down well-known 
divergences in positions on issues of importance in th ese complex negotiations.  With respect to input 
on GATS Rules topics for the draft Ministerial Declaration, he recalled his earlier statement that the Working Party was very close to finding common gr ound.  He was pleased to report that, subsequent 
to open-ended informal meetings on 25 and 27 October and 2 November as well as numerous 
consultations, the Working Party had achieved a br oad degree of support for language, which was his 
recommendation to the Special Session and was contained in his written report. 
16. The Chair said that the language  was as follows:  "Members must intensify their efforts to 
conclude the negotiations on rule -making under GATS Articles X, XIII, and XV in accordance with 
their respective mandates and timelines.  Members should engage in more focused discussions in 
connection with the technical and procedural questi ons relating to the operati on and application of any 
possible emergency safeguard measures in services .  Members should engage in more focused 
discussions and in this context put greater emphasi s on proposals by Members, including on proposals 
for a possible framework for government procurement.   On subsidies, Members should intensify their 
efforts to expedite and fulfil the information exch ange required for the purpose of such negotiations, 
and should engage in more focused discussions on proposals by Members, including the development 
of a possible working definition of subsidies in services."  
17. The Chair said that overall, he believed that the text complied with the three general 
principles that underpinned the efforts in developing input for the Ministerial Declaration to which he had referred earlier in the meeting.  The first of  these was that work on the three issues should 
continue and intensify.  The second was that language should not prejudge the results of the 
negotiations.  The third was that language calling for focused discussions on a given topic should not 
be disproportionate to progress made in these nego tiations.  He said that the recommended text, which 
had gathered broad acceptance, resulted from intense negotiations in which delegations from different 
sides, including all proponents, had shown both flexibility and pragmatism.  He commended the 
efforts and openness shown by all.  While the te xt was not perfect and was not any delegation's 
preferred solution, it represented a good and delicate balance that took into account the diversity of 
interests and concerns among the Membership and w as, in his view, the best possible compromise 
outcome.   
18. The Chair of the Working Party on Domestic Regulation
 recalled his oral report made earlier 
in the meeting on the WPDR's work since the last  Ministerial Meeting and inputs to the Sixth 
Ministerial Meeting.  He said that since that mee ting, he had held further consultations and convened 
an open-ended meeting on inputs for the next Minist erial Meeting.  He said that one matter that  TN/S/M/17 
 Page 5 
 
 
  Members sought to discuss further was how the Worki ng Party would refer to the illustrative list of 
possible elements in the ministerial text.  He said that he would be consulting with Members in the 
near future.  He hoped to be in a position to convey his report in the coming days.  He emphasised that 
Members had been working in a constructive spirit a nd problem-solving mode in order to bridge gaps.  
He believed that they would continue to work in this manner with a view to finalising the Working 
Party's inputs to the Sixth Ministerial Conference. 
19. The representative of the Philippines , speaking on behalf of the ASEAN states that were 
proponents of the proposal on an emergency safeguard measure (ESM) in services, sought to thank the Chair of the Working Party on GATS Rules for his efforts on arriving at the text.  He also thanked 
other Members for their flexibility and constructiveness, particularly  those that had expressed some 
concerns about the ESM proposal.  He sought to reiterate the fundamental political and economic 
importance placed by a number of ASEAN states on the issue of ESM and said that they were willing to take a leading role in more focussed discussi ons after the Hong Kong Ministerial Conference in 
both formal and informal meetings.  In his view , the challenge would be for all Members of the 
Working Party to engage in a constructive manner and come to the more focussed discussions with 
open-minds and a willingness to work together.  He  also thanked the Chair of the WPDR for his 
efforts and looked forward to working with him on achieving an input for the Ministerial Declaration. 
20. The Chairman
 invited the Council to take note of the reports and the statement made. 
21. It was so agreed . 
22. The representative of Barbados  said that, on behalf of a number of small economy 
delegations, her delegation had submitted a room document which had been circulated to Members at 
an informal meeting on 1 November.  She said that the information note presented a factual overview 
of the small economy work programme from its incep tion to the present.  The submitting delegations 
wished to share this information in the context of  related discussions in the Special Session and draw 
Members' attention to it.   
23. The representative of Korea  expressed his appreciation for the Chairman's efforts to fill the 
remaining voids in the text.  Korea thought that th e text would give a clear message that services 
negotiators should join others in resisting increasi ng pressures from interest groups.  He urged others 
to fill in the place-holder with the corresponding leve l of ambition in comparison to that in the other 
negotiation pillars in order to secure an overall balance and to support the GATS architecture from 
anti-globalization forces.  Referring to a specific po int raised at an informal meeting held on 28 
October on the notion of "commercial meaningfulness"  and the question of who should determine this 
meaningfulness, he said that, although the notion w as not explicitly inscribed in the Chairs' draft, 
Korea believed it was a concept intrinsic to every WTO document.  He said that his delegation had 
sought to provide Korea's view in document TN/S/W/ 52.  He clarified that his delegation had no third 
party in mind that would determine commercial m eaningfulness.  Korea thought that the concept 
should be decided mutually between the requesting Member and the requested Member.  However, he 
said that two conditions should be met, namely, acc ount of the degree of market development of the 
requested party and the commercial interests of th e requester.  He emphasized that the requested 
Member was expected to comply with the requests in good faith, taking into account its market conditions.  Korea believed that "commercial mean ingfulness" was a relative concept that was a 
continuous spectrum across sectors, Members and time.  Accordingly, Korea believed that its proposal provided flexibility in de termining commercial meaningfulness.  At the same time it placed a 
requirement on Members to determine commercial m eaningfulness in light of other international 
architectures that also dealt with commerce related issues. 
24. The representative of Australia
 thanked the Chairman for his efforts in preparing the draft 
text.  He said that, while there remained a few c ontentious issues, the package was emerging.  While TN/S/M/17 
Page 6  
 
  Australia supported many of elements that had been  included, it also believed that it was necessary to 
ensure a good balance between the qualitative and quan titative elements in the text.  It was in this 
context that his delegation was a strong supporter of numerical targets.  He was concerned that the 
overall level of ambition for services had not been made clear by the text and was a question that 
would need to be answered.  Australia supported a numerical target because it believed that a target 
would provide much greater clarity to the level of ambition that all sought to achieve in the 
negotiations.  Australia was very disappointed with the result of the request-offer process to date.  
After two years of involvement in request-offer bila terals, he said that only some 5 per cent of 
Australia's requests had been fully met and only some  35 per cent had been partially met.  This fell 
short of the kind of results that Australia require d for a successful outcome on services.  Australia 
considered that a simple, easily-understood mess age on ambition, includin g a specific numerical 
target, needed to be developed for Hong Kong.  He  requested that any subsequent draft maintain the 
place-holder in paragraph 9 of the draft text and looked forward to working with others that had 
similar ambitions on elaborating the text for paragraph 9.   
25. The representative of Cuba
 expressed her delegation's concern about the procedure that had 
been followed in preparing the draft ministerial text.  She said that, in spite of the lack of consensus 
that existed on certain points in the section on obj ectives, these points had remained.  The wording in 
the text had not been arrived at through consensu s.  She had been told that any wording to be 
eliminated required consensus.  She noted that Me mbers had been negotiating a text for a Ministerial 
Conference.  In spite of this, delegations had b een told that the document was prepared under the 
responsibility of the Chairman.  This procedure had left her delegation confu sed.  She had understood 
that the Chairman would be able to present repor ts under his responsibility, but not the text or 
wording for the Ministerial Conference, which could only be the outcome of a consensus.  As to the 
content of JOB(05)/262, her delegation had sent th e Chairman a letter with its comments as a means 
to contributing feedback to the text.  She felt co mpelled to recall that her delegation rejected the 
complementary approaches which endangered the architecture of the GATS, and particularly 
flexibilities for developing countries.  Taking into account the great differences between Members on 
these approaches, Cuba felt that the text should not  contain any mandatory language.  Cuba reserved 
the right to come forward with further comments on the text.  
26. The Chairman  stated that he had never implied that  consensus was required to remove text 
from his draft.  On the contrary, in order to have a text, consensus would be required.  He said that his 
draft enabled delegations to discuss their positi ons and views and facilitate movement towards 
consensus.  It was similar to a report on work and, naturally, there would be elements that some liked 
and about which others had concerns.  He reiterated that the text did not represent existing consensus.  
Rather, he had aligned elements that had been indicated by delegations in order to facilitate 
discussion.  This was his role as Chairman.  At some  point Members would need to reach a consensus.  
He acknowledged receipt of the letter referred to by  the representative of Cuba.  He assured that all 
proposals would be discussed and no consensus would be imposed.  On the contrary, his draft sought 
to engage a process leading to a text acceptable to all.  
27. The representative of Chinese Taipei  commended the Chairman for his efforts to produce a 
draft text under his responsibility.  Chinese Taipei  welcomed the initial and revised offers that had 
been tabled over the preceding months.  However, in light of the rapidly-approaching Ministerial 
meeting, he said that it was imperative that other Members that had not submitted an offer do so as 
soon as possible.  He reiterated his delegation' s opinion that the overall process in the services 
negotiations had been unsatisfactory to date, that  request-offer process alone was not producing the 
desired result for the Round, and that it was in urgent  need of strengthening.  Chinese Taipei sought to 
have included in a draft Ministerial Declaration for Hong Kong a number of elements.  Firstly, a clear 
political direction on services was required for the Hong Kong Meeting.  This was an important 
prerequisite for the successful conclusion of the Doha Round.  Secondly, Chinese Taipei sought the 
introduction of qualitative parameters and numerical  targets as this would promote a higher level  TN/S/M/17 
 Page 7 
 
 
  liberalization of trade in services.  However, he rec ognised that these targets needed to be realistic and 
practical.  Setting a target for improved offers would not be sufficient, but rather multilaterally-agreed 
numerical targets that expressed a level of ambition was required in order to ensure some real improvement in the quality and level of specific commitments.  The introduction of a common set of 
benchmarks would allow Members to access a highe r level of liberalization; would build on the 
request-offer approach; would allow Members to freel y construct their lists of commitments in order 
to reach the threshold; and would preserve an appropriate amount of flexibility and respect for 
national policy objectives.  In terms of the process, flexibility could be offered to developing countries 
and the specific difficulties of LDCs  recognised.  Allowance could be made for the fact that newly 
acceded Members had been required to make compre hensive commitments.  Thirdly, Chinese Taipei 
sought to have recognised by Ministers a plurilateral or sectoral approach as an important modality.  
Members' collective commitment to deepen the level of  ambition needed to be more clearly defined.  
If Members were to proceed with a plurilateral appro ach, they would need to rely on the Annex to the 
Chairman's report, and hence, the Ministerial De claration should make refe rence to the Annex.  
Fourthly, some of the core elements of rules should be dealt with in the Round, such as disciplines in 
domestic regulations, in a horizontal framework.  In this context, he thanked the Chair of the WPDR 
for his hard work.   
28. The representative of Venezuela
 expressed his delegation's full support for the comments by 
Cuba as regarded the procedures in the negotiation.  With respect to transpar ency, he requested that 
the Chairman outline the next  steps in the process.   
29. The representative of the Dominican Republic  enquired into the documents that would be 
discussed at forthcoming meetings. 
30. The Chairman  recalled that the open-ended informal  meeting scheduled for 1 November on 
sectoral and modal objectives as contained in an an nex had been postponed.  A new version of these 
objectives was under preparation, as had been ag reed at an open-ended informal meeting on 
31 October.  Delegations had con tinued to provide input and more inputs would be welcome.  As 
requested by Members, a second revision of JOB(05)/2 37 would be issued in a timely fashion.  
Secondly, in light of the comments and suggestions that had been made with regard to the draft 
ministerial text, a revision of JOB(05)/262 would also  be circulated.  The Council would continue its 
discussion on both the annex and the draft text as appropriate.  Before suspending the meeting, the Chairman proposed that the Council take note of the statements made, keep th is item open and revert 
to it in the coming days.  
31. It was so agreed
. 
32. Reconvening the meeting on 24 November, the Chairman  updated the Council, for the record, 
about the work that had been done since then in in formal mode.  On the basis of the very numerous 
inputs he had received from delegations at open-e nded informal meetings on 27 and 28 October and 
on 1 November, he had produced a revised draft text on 7 November in JOB(05)/262/Rev.1.  On 3 
November, the Chairman of the WPGR had provid ed a report to the Special Session contained in 
JOB(05)/273.  In his report, the Chairman of the WPGR had said that he was in a position to recommend language that had achieved a broad degree of support.  Sub sequent to the circulation of 
Revision 1 of the draft ministerial text on servi ces on 7 November, the Chairman had engaged in 
intensive consultations with indivi dual and groups of Members to seek  their views on the revised text.  
In addition to this, the Special Session ha d held a very productive open-ended meeting on 
18 November at which delegations  had provided numerous helpful suggestions for improvement to 
the draft in JOB(05)/262/Rev.1.  Noting that all Members were aware of the overall situation in the DDA Round, he commended delegations for being constructive, cooperativ e and "conditionally 
forthcoming" in the discussions.  He acknowledged having received many of the drafting suggestions 
made by delegations on 18 November in writing a nd assured them that he had done his utmost to TN/S/M/17 
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  strike a balance.  Compromise language could never be to the full satisfaction of any Member.  The 
second revision of the draft text had been divided into  two parts.  The first contained general political 
statements of principle, which would be included in the text of the Ministerial Declaration on services.  
The second part contained operational provisions wh ich should guide the negotiating process to its 
conclusion and which, similarly to the July 2004 P ackage, would be contained in an Annex to the 
Declaration.   
33. The Chairman emphasized that this text rema ined a draft text and did not enjoy formal 
consensus among Members.  It was made under his own responsibility and in no way prejudiced the 
positions of Members.  In his view, however, it did reflect possible common ground on most of the elements that Members had identified for this exer cise.  Also in his view, it represented a delicate 
balance which, while not fully satisfying any Memb er, he hoped Members could live with it as a basis 
for agreement by Ministers in Hong Kong.  All woul d have liked to see more or see less on certain 
points; however, what Members needed to ensure at the present juncture was that the process was 
carried forward.  As several delegations had note d in statements at an informal meeting on 18 
November, the positions of Members on the issue of setting numerical targets and indicators remained 
widely divergent.  As a result, he had not been  in a position to propose any compromise language on 
this issue.  Furthermore, the reference to this i ssue contained in paragraph 11 of Revision 1 had been 
dropped in Revision 2.  He had reflected this situ ation in the cover note of the latest revision and 
would reiterate this divergence in his report to the TNC.  In this connection, he informed the Council 
that he would note in his report to the TNC a ll outstanding divergences so as to ensure no position 
was prejudiced.  He welcomed any comments that delegations might wish to make.   
34. Before opening the floor to delegations, th e Chairman called upon the Chairman of the 
Working Party on Domestic Regulati on to update his earlier report. 
35. The Chairman of the Working Party on Domestic Regulation
 recalled that he had provided an 
update on his consultations on the WPDR's inputs to the Sixth Ministerial Conference at a meeting of 
the Special Session on 3 November 2005.  He reported that, since that date, he had engaged in broad 
consultations with Members on this matter. On the basis of these consultations, he had submitted the 
WPDR's inputs to the Special Session on 15 November  2005. These inputs consisted of two parts:  a 
draft ministerial text on domestic regulation and hi s report with an attached an illustrative list of 
possible elements for the domestic regulation disc iplines.  These inputs had been circulated as 
JOB(05)/279 and JOB(05)/280 respectively, which were documents circulated under his 
responsibility. He realised these Members had ag reed that JOB(05)/280 would be made publicly 
available with the final Ministerial Declaration, th rough the WTO website. Nonetheless, he stated that 
he had taken into account Members' inputs and his c onsultations, and that he had made an effort to 
ensure that both texts broadly reflect Members' interests and concerns. 
36. The representative of the European Communities  thanked the Chairman for again giving 
Members an opportunity to comment the emerging text, even though it was under his responsibility.  
Services represented for the European Communities the bulk of its economy and that a satisfactory 
outcome in the negotiations in services was absolutely vital to the EU.  It was in this context that he 
was compelled to reiterate the European Communities very deep concerns over the Chairman's text.  
From his delegation's perspective, s ubsequent versions of the drafts were being emptied of ambition.  
Hong Kong should report on any progr ess and should provide the launch- pad for the final push to the 
end of the Round.  In this context, he had three points to make about the text.  The first matter for 
alarm was the deletion of the paragraph on multilate ral numerical targets in the possible annex on 
services to the Ministerial Declaration.  This would mean that no reference would be made to the multilateral level of negotiations in services, but  only to bilateral and plurilateral request-offer 
processes.  It was not acceptable to discard th e multilateral level of negotiations which was 
specifically mentioned in GATS Article XIX and was needed to ensure broad and balanced 
participation to liberalization of trade in services.   His delegation insisted on the re-insertion of  TN/S/M/17 
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  multilateral numerical targets with appropriate fl exibilities for developing countries.  The second 
matter for deep concern was the imbalance of the qua litative parameters across the modes of supply of 
services.  His delegation supported strong qualitative parameters across all four modes of supply, 
which the European Communities believed should be  made prescriptive.  His delegation could not 
accept that one mode of supply, namely commercial presence (mode 3), would be subject to less 
ambitious qualitative parameters th an the other modes of supply.  Hence, the European Communities 
requested full parallelism and asked for the bindin g of existing levels of market openness to be 
mentioned as a qualitative parameter for mode 3.  Th e third area for concern resided in the lack of 
ambition as regarded the plurilateral negotiations, both  in terms of participa tion and the substantive 
objectives.  Plurilateral negotiations aimed at achievi ng a higher level of liberalization for a number of 
WTO Members.  It needed to be made clear th at these WTO Members should, together, represent a 
critical mass of countries in the sectors concerne d and that overall, there should be balanced 
participation in the plurilateral negotiations.  He reiterated the European Communities deep concern 
on the low level of ambition in the text which was de trimental to the EC's interests.  It was bound to 
have consequences on the level of ambition in other areas of the DDA if Members were to have a 
balanced outcome across the DDA negotiations.   
37. The representatives of the European Communities ; Thailand ; Cuba ; Australia ; the United 
States ; Chinese Taipei ; Brazil ; Switzerland ; Korea ; China ; Norway ; Turkey ; Hong Kong, China ; 
Canada ; India ; the Dominican Republic ; Honduras  and Pakistan  requested that their interventions 
made at an informal meeting held on 18 November be reflected in the minutes of the meeting.  
Indonesia  on behalf of Brunei Darussalam , Malaysia , the Philippines  and Thailand  requested that its 
statement by Indonesia on behalf of these same Member s at this informal meeting be reflected in the 
minutes.    Rwanda  on behalf of the African Group  requested that the statement by Egypt on behalf of 
the African Group at this same informal meeting be reflected in the minutes.4 
38. The representative of Rwanda  recalled that the LDCs had submitted some language for the 
revised text that had been discussed in a small drafting group of delegations and presented at an 
informal meeting on 18 November.  With specific rega rd to the text that referred to timelines, she 
noted that this language did not appear in the revi sed text.  She could not recall any opposition to this 
text at the informal meeting.  She enquired about this omission and hoped that it could be corrected.   
39. The representative of Thailand  sought to make comments also on behalf of Brunei 
Darussalam , Indonesia , Malaysia  and the Philippines .  She realised that it was a challenge to secure a 
delicate compromise in the text and noted that the Chairman had made a number of modifications to 
improve the overall balance of the text subsequent to a number of consultations.  She had taken note 
of the Chairman's introductory comments that, in hi s view, the text represented a delicate balance and 
did not satisfy all Members.  Some portions of  the proposed annex on objectives, approaches and 
timelines could be further improved.   The delegations on behalf of which she spoke were concerned 
about paragraphs 1, 2, 7 and 11,  amongst others, of the proposed annex.  The group had made its 
views clear on several occasions and in writing at the informal meeting on 18 November when a 
paragraph-by-paragraph discussion had taken place.  The group was not certain how the dismissal of 
its views in this regard could fit together neatly with the claim in the Chairman's cover note that the 
revised draft had been prepared on the basis of submissions from Members.  The group sought to 
defend the "bottom-up" approach of the process.  All Members recalled the comments of the Director-
General in his reply to an open letter received from NGOs that "views put forward by Members 
should receive even-handed treatment by the Chair. "  As such, the group had not expected any go-
ahead on any text unless there had been complete commitment from all Members.  The notion of "recalibration" in the group's view aimed to pr event any downfall of the multilateral system.  
Therefore, at Hong Kong, the group sought Ministers' guidance on what could realistically be the backdrop of negotiations post-Hong Kong while keeping the ambition of the Round high.  In this 
                                                     
 
4 See Annex II. TN/S/M/17 
Page 10  
 
  connection, the group believed that there should be c onsistency in any attempt to translate the concept 
of recalibration into a text-based product in all th ree key market access areas, namely, agriculture, 
NAMA and services.   
40. The representative of Peru
 noted that the revised draft text did not satisfy all Members, but 
had struck a delicate balance through the Chairman's  intensive consultations .  His delegation could 
live with the text and thought it difficult to cha nge the text without altering its delicate balance. 
41. The representative of Cuba  thanked the Chairman for his efforts in drawing up the text and 
was pleased that he had taken up some of the sugg estions made by his delegation.  Nevertheless, his 
delegation maintained its concerns with paragraphs 1, 2, 7 and 11 of  the annex.  He said that his 
delegation had made known its detailed views at an informal meeting on 18 November.  While aware 
that the text would be presented under the Chairman's  responsibility, his delega tion would continue to 
work towards a more balanced text that took into account the interests of developing countries, as was 
the stated objective of the Round.   
42. The representative of Australia  wished to make a few comments for the Chairman's 
considerations in preparing his report to the TNC.  A reference to numerical targets in the cover note 
to the latest revision of the draft text did not do jus tice to the past four or five months of discussion on 
this issue and he hoped that a more detailed explana tion could be given.  Australia's concern related 
primarily to ambition as a concept as well as elements  of ambition.  Australia was further concerned 
that the part of the draft text suggested for inco rporation into the Ministerial Declaration did not 
highlight that the services offers to date were poor.  It therefore did not provide the context as to why 
any annex on services went into detail about how to  improve the offers.  This fundamental judgement 
was necessary since, without such a statement by Mi nisters, the document would give the sense that if 
Members kept working as they had to date, there would be a good result.  His delegation did not share this view.  Even if it was only to highlight that  some Members were very concerned about the low 
level of ambition reflected in the offers on the table, this needed to be made very clear.  His delegation 
was also concerned with the elements of ambition th at were hinted at and not directly pointed to.  
There were three elements of ambition related to  market access:  cove rage, quality across modes 
(which Australia thought was captured in paragrap h 1, but would have favour ed language with fewer 
caveats), and quality on specific sectors. Member s had held a useful discussion on what ambition 
could look like in sectors.  While there was no consen sus that the levels discussed would need to be 
achieved, there was a clearer idea given in paragra ph 2.  He recognised that how Members referred to 
the document setting out sectoral and modal objectives was linked to how other elements of the draft 
ministerial annex would be presented.  More context could be provided to the Chairman's Annex, and 
a short reference to it did not do justice to the usef ulness of the exercise in te rms of transparency and 
defining levels of sectoral ambition.  The Chairm an's Annex could provide very useful guidance to 
capitals by indicating what Members would expect to see as an ambitious outcome.  No Member was 
suggesting that another would need to meet the leve ls of ambition in the sectors identified in this 
Annex.  Nonetheless, it remained an indicator of am bition in these areas and was a significant body of 
work that merited greater credence.   
43. On numerical targets, the representative of Au stralia noted that there were two significant 
proposals on the table that took different approaches.   His delegation believed that they needed to be 
reflected in the Chairman's report to the TNC and wished to suggest a number of questions that the 
Chairman might include in his report for discussion by  the TNC or Ministers.  Firstly, did numerical 
targets have a role to play in setting ambition?  Secondly, should targets apply in a mandatory fashion 
to individual Members or to a collective average to which all Members should contribute?  Thirdly, 
should such targets be based on achieving a certain le vel of coverage of sub-sectors or on delivering a 
certain number of improvements?  Fourthly, should a target link quality and quantity (i.e. that only commitments or improvements that met certain minimum quality thresholds would count towards 
satisfying the target)?  These questions, if the le vel of ambition in Hong Kong was right, would be  TN/S/M/17 
 Page 11 
 
 
  those for Ministers to resolve.  Finally, he reitera ted a drafting proposal made by his delegation at the 
informal meeting on 18 November that read:  "In order to create commercially meaningful new market opportunities in all WTO Members, it is ne cessary to substantially improve both the quality 
and quantity of offers." 
44. The representative of the United States
 stated that the principles, objectives and timelines set 
forth in the text provided an effective framework  for accelerating the services negotiations and giving 
Members a good start for improvements prior to Hong Kong.  She remarked that the contents of the 
section entitled 'objectives' referred more precisely to parameters and guidance.  The text represented 
an important step forward and it was imperative that the progress achieved in the Special Session on the services text not be undermined or reversed as a result of other factors.  She reiterated her 
delegation's position that, regardless of proceedings on Hong Kong text, owing to the structure of the 
services negotiations, Members would need to preser ve work in services as a minimum starting-point 
for the beginning of 2006.  The United States had some concerns to convey about the text.  She recalled that her delegation had worked very cooperatively on the services text demonstrating 
flexibility on Members' demands with respect to the objectives and modal indicators, and had also 
benefited from the work of other Members on th e plurilateral negotiations under the 'approaches' 
section.  She noted that timelines were critical give n the time-consuming and intensive work involved 
in the negotiating process, including consultation with  many constituencies, domestic regulators, civil 
society and industry. As a leading services economy, the United States had indicated a strong offensive position on modal objectives and particularly  on mode 3.  While noting Members' concerns 
about balance between modes of supply,  her de legation had repeatedly indicat ed its particular interest 
in mode 3 in addition to its healthy interest in a ll of the modes.  She regretted that her delegation's 
position had not been better reflected.  Paragraph 1 contained a chapeau that her delegation could 
support.  Notwithstanding the caveat it contained, her delegation took its pa rameters seriously and 
would work in a serious fashion with respect to its modal objectives subsequent to Hong Kong.  Nonetheless, in order to support this section of the text, the United States would need to see reflected 
the language that it had earlier proposed.  While appr eciating that the Chairman had sought to take 
into account her delegation's concerns in other parts of the text in seeking to achieve a balance, she 
noted that this balance had not been achieved fo r her delegation.  Her delegation had indicated 
repeatedly in consultations its interest in the rem oval or substantial reduction of restrictions for mode 
3.  She had not registered any particular controve rsy or concern by others with the United States 
request on these occasions.  Some of the other chang es to the text, such as on economic needs tests or 
on mode 4 were not balanced w ith paragraph 1c)i) on mode 3 which was a main area where the 
United States had expressed a particular offensive interest.  While her dele gation generally supported 
the substance of the draft text, the text did not me et the United States main request.  At a minimum, 
the United States would need to see the mode 3 text  improved which would, in  its view, contribute to 
achieving balance in paragraph 1.  Were this im provement not made, it would be difficult for her 
delegation to take the chapeau ser iously.  Her delegation's other si gnificant concerns regarded the 
language about mode 1 and she reiterated an earlier drafting suggestion to ensure that Members did 
not have the impression that low levels of market access in mode 1 were sufficient.  She agreed with the statements by other delegations that the te xt and guidance were necessary because the current 
state-of-play was poor.  Although the Chairman might not wish to include more language in the principles section, her delegation thought that a re ference to new opportunities for all Members would 
be a meaningful goal in addition to simple economi c growth.  On numerical targets, her delegation 
had heard the statements by the European Comm unities and Australia.  The United States position 
was well-known.  She appreciated that this issu e remained under discussion, although she noted the 
European Communities concerns, and had hoped that bracketed language would have persisted in the 
text in this regard.  To the extent that the Chai rman's cover note and report to the TNC would ensure 
that the issue could be considered thoroughly and seriously, the United States could agree with those 
that felt more context could be given by the Chai rman to help Ministers focus any discussion.  She 
also reminded Members that her delegation had made  some contributions on numerical targets.   TN/S/M/17 
Page 12  
 
  45. The representative of Chinese Taipei
 said that, having studied the draft text from both the 
defensive and offensive angles, Chinese Taipei had found that it provided a solid foundation for the 
services package overall.  As his delegation had hi ghlighted at the last informal meeting, the 
negotiations approach in services was completely different from that in the agriculture or NAMA 
negotiations.  Chinese Taipei sought to have reflect ed in the Ministerial Declaration a clear and 
precise roadmap indicating the direction the services negotiations should take from Hong Kong 
onwards.  If Members truly sought parallelism and bala nce across the three mark et access pillars, they 
should seek balanced elements that addressed outco mes rather than proceed through a comparison of 
the declaration texts.  Chinese Taipei was pleas ed to see that elements characterised by strong 
divergences had been removed from the text and incl uded in the Chairman's cover note, which left 
these issues to Ministers.  Chinese Taipei was also  disappointed that the words "lack of significant 
progress" had been deleted from the revised text.  Th e statement was factually correct and needed to 
be reflected in the text or the Chairman's report.   The lack of significant progress was the main reason 
why Members needed to strengthen the services ne gotiations.  He reiterated his delegation's full 
support in reaching an acceptable text for the Hong Kong Ministerial Declaration. 
46. The representative of Japan  said his delegation had a number of  concerns with the Chairman's 
text, some of which had been indicated by th e European Communities, Australia and the United 
States.  In general terms, Japan believed that the text was a good basis for discussion by Ministers at 
Hong Kong and supported the Chairman's suggestion to  forward the draft text to the TNC on this 
basis.  On numerical targets, Japan supported the setting of such targets in the services negotiations.  
At the same time, Japan recognised the wide divergences among Members on this point and could 
support the Chairman's suggestion to draw attention to this issue at a higher level. 
47. The representative of Jamaica  said that, while she recognised the effort that had been 
expended in preparing the text, he r delegation had some concerns with elements.  In previous 
consultations Jamaica had raised concerns, for inst ance, about paragraphs 1, 2 and 7 of the proposed 
annex.  On paragraph 1 of the annex, her de legation remained concerned about the level of 
prescriptiveness and would have prefe rred language of a more general nature dealing with modal and 
cross-cutting objectives.  Jamaica w as also of the view that such objectives should be adopted on the 
basis of consensus.  Jamaica was concerned that th e reference, in paragraph 2, to the Chairman's 
Annex on sectoral and modal objectiv es had been retained despite rep eated requests for its deletion.  
While noting the revisited formulation, Jamaica woul d have preferred the dele tion of this reference 
given that the sectoral and modal objectives Annex was not an agreed text.  Jamaica also had 
fundamental concern about the manda tory language of paragraph 7 on plurilateral approaches which it 
felt would erode the level of flexibility accorded to developing countries under the GATS.  While the 
Negotiating Guidelines contained a provision for th e plurilateral approach as a negotiating modality, 
this approach should not be applied on a mandatory  basis as contained in the revised draft text.  
Recalling that some Members had suggested changes to  this paragraph to make it less mandatory, she 
regretted that these requests had not been take n on board.  Jamaica supported the deletion of a 
reference to numerical targets and indictors given the negative impact such methodologies would have 
on developing countries' flexibility under the GATS.  In the areas of GATS rules and domestic regulation, Jamaica urged Members to intensify thei r efforts to conclude the negotiations in these 
areas, particularly on an ESM and domestic regulation.  Progress in these key areas would provide some balance to the market access negotiations on services.   
48. The representative of Brazil
 acknowledged that the Chairman had consulted widely in 
preparing his draft texts which captured the broadly agreed areas and removed the most controversial 
issues.  Brazil continued to be "conditionally fort hcoming" on services while awaiting the outcomes in 
other areas of its interest which would allow it to gauge whether an overall balance had been 
achieved.  On the second revision of the draft text, Brazil continued to have difficulties with 
paragraphs 1, 2 and possi bly 7.  On the plurilateral negotiations , his delegation was still examining the 
language to avoid any ambiguity as to its meaning.   On paragraph 1, his delegation was still not  TN/S/M/17 
 Page 13 
 
 
  comfortable with the level of prescriptiveness, par ticularly in modes 1 and 2, and would not be 
comfortable with some of the suggested changes for mode 3.  He said that a thin balance had been 
achieved and that his delegation would keep an eye on  these points at the TNC level.  On paragraph 2 
and the reference to the Annex on sectoral and m odal objectives, his delegation was not convinced 
about the need for such a reference.  All Members were aware of the existence of this document and 
could make use of its content.  The revised version of the Chairman 's Annex had removed some of the 
concerns contained in previous versions and had re tained only elements that referred to ambition.  
This was a matter of concern and he hoped that th is reference would be de leted.  On numerical 
targets, he said that the deletion of a reference ha d been an important step forward.  He said that 
extensive and full discussions on this issue had taken place since July.  The demandeurs had not made 
their case and had not been able to demonstrate th e feasibility of their proposals in response to 
technical questions.  Many of the proposals had been  poorly conceived and most were not compatible 
with the GATS architecture.  As such, these pro posals had been widely rejected by developing 
countries, including his own.  He requested that the Chairman, in his report to the TNC, reflect the concerns that had been raised about this issue.  We re questions to be put to Ministers on this issue, 
they should include whether it was fair for some developed countries to gain a "round for free" under 
the DDA.   
49. The representative of Malaysia
 associated his delegation with the statement made by Thailand 
on behalf of a number of ASEAN countries.  He said  that recalibration had become a prevalent theme 
that aimed to prevent a break-down in Hong K ong which would set Members and the WTO back 
months or years.  He said that, in order to prevent such a break-down in Hong Kong, Members had 
lowered the ambition for Hong Kong, although not for the Round.  He said that the Director-General 
had recently pointed out that the process for the services negotiations, as agreed at Doha, differed 
from that for agriculture and NAMA.  This was a fact that all Ministers had agreed to at Doha.  While 
the Negotiating Guidelines did not rule out supplemen tary approaches, he affirmed that any such 
approach would need to be agreed  to by all if the expectation was that all would participate.  
According to a recent letter from the Director-General to a group of  NGOs, the Chairman had used a 
bottom-up approach to the process and could not but draw on the views put forward by Members.  Members were in the process of preparing a draft ministerial document.  The guidelines to this process were to capture the progress achieved to date  without any surprises for delegations.  On this 
basis, he did not think that it would be appropria te to include in the document items which had not 
been agreed, otherwise efforts for recalibration would be in vain.  Drawing attention again to the letter 
from the Director-General, he quoted that "in sum,  the objective of the Chairman's text in this 
preparatory process is to provide delegations w ith a common basis for discussing the proposals and 
pursuing their interests in an equitable and transp arent manner.  These objectives call for even-handed 
treatment by the Chairman of all Members' submi ssions.  The Chairman and Members are fully aware 
that at the end of the process, any agreed text w ould need to enjoy consensus and be supported by all 
Members".  While noting that the draft text had been made under the Chairman's responsibility, he 
said that the elements outlined by th e Director-General in his letter w ould need to be taken on board.  
Finally, he had been reassured by the Chairman's earlier comment that all Members' concerns would 
be reflected in his report to the TNC. 
50. The representative of Singapore
 said that the Chairman's second revised text, in his 
delegation's view, represented the outcome of the intensive and broad consultations that he had 
undertaken since he had assumed the chairmanship .  He commended the Chairman for the efficient 
and transparent manner in which he  had conducted the process.  The text was not perfect, but sought 
to broadly represent Members' vari ous concerns and interests in the services negotiations.  Given its 
interests and concerns in the negotiations, Singapore would also have liked to see various parts of the 
text revised.  However, at the present juncture, Singapor e sought to be practical and helpful.  He noted 
that Members had provided their inputs to Revision 1 at an earlier informal meeting.  In Revision 2, 
the Chairman had done his utmost to capture as many inputs as possible without altering the delicate balance of the text.  While Singapore would have liked  to see additional changes, he agreed that it was TN/S/M/17 
Page 14  
 
  time for the text to be sent to the TNC.  The timelines in the text, he said, would need to be 
coordinated holistically in conjunctio n with other issues.  More genera lly, it was Singapore's view that 
Revision 2 should be adopted at Hong Kong.  He agr eed that the services ne gotiations by their very 
nature were different from modalities-based negotia tions in agriculture and NAMA.  Apart from the 
qualitative modal targets, which were stated in b est-endeavour language, the various elements of the 
text were largely procedural in nature.  The te xt did not prejudice any Member's position in the 
negotiation.  The framework was needed in order to facilitate progress in the negotiations in 2006.  On 
the issue of numerical targets, he had noted that it was of the utmost importance to some Members, 
while at the same time one of great concern for others.  Under these circumstances, his delegation agreed with the Chairman's approach to factually re flect this reality in the cover note to Revision 2.  
This approach kept the issue open without pr ejudicing any Member's views or concerns.  
51. The representative of New Zealand
 said that her delegation could live with the Chairman's 
text.  While it was by no means perfect and character ised by certain omissions or inclusions that were 
not to her delegation's liking, she agreed that it struck a fine balance and represented significant 
common ground.  New Zealand supported sending the draft text to the TNC, as well as the Chairman's 
intention to highlight the points of divergence in hi s Report.  This should include references to the 
level of dissatisfaction among dele gations with the progress of the negotiation as well as further detail 
on the discussion on numerical targets so as to allo w the appropriate decisions to be taken at the 
political level on their possible role in the negotiati on.  New Zealand believed that the text had taken 
the discussion as far as it could move forward in the Special Session and, like others, her delegation 
might have other issues that it could raise before  and during the Hong Kong Ministerial meeting on its 
elements.  Her delegation believed that the text pr ovided an excellent basis for those next steps.  
52. The representative of Colombia  noted that some delegations we re concerned about a lack of 
ambition while others considered that the various themes included in the draft went beyond what they 
were willing to accept.  Colombia believed that the text struck a balance that would make it possible 
to bring about a considerable amount of convergence on a number of specific themes.  While the text 
could stand improvement in a number of areas, Colo mbia believed that the text provided a basis for 
understanding and should give moment um to the negotiations in the new year.  His delegation could 
hence live with a text that was sufficient to help move the negotiations forward.  
53. The representative of Switzerland  said that his delegation embraced the direction given by the 
services draft text.  It was a sound basis for pursui ng work in 2006 and would provide much-needed 
momentum in the negotiations which would be cr ucial for the success of the Round.  His delegation 
was not completely satisfied with the text and would have wanted to see reflected, in the first part of 
the text, the low level of quality of the offers.  He hoped that this reality would be reflected in the 
Chairman's report to the TNC.  Switzerland would have wished to see more ambitious language for 
the targets, both in the chapeau and in modes 2 and 3, and more precise wording under the heading 
'timelines'.  His delegation was not completely satis fied with the text, but believed that it provided a 
delicate balance.  Adjustments might still be made, but that it was not the propitious time to do so.  
His delegation supported forwarding the draft text to the TNC. 
54. The representative of Chile  commended the Chairman for the transparency and inclusiveness 
with which he had carried out the many consultations  involving his draft text.  Chile was pleased that 
some of the suggestions that it had made, including those on the plurilateral negotiations and technical 
assistance, had been taken into account .  She agreed that the text was not an ideal one, but it was a 
compromise text that provided a work-plan for 2006.  It gave guidance on many important areas 
where work would be needed.  On the issue of ba lance, she said that paragraph 1 was particularly 
delicate and her delegation would be very reticen t to amend its language.  Referring to an earlier 
comment about the "bottom-up" nature of the process , she said that it had been elaborated on the basis 
of inputs from many different Members.  She noted that some of those inputs had been on the table 
for weeks and even months, and had been subjected  to a process of discussion and negotiations, which  TN/S/M/17 
 Page 15 
 
 
  had allowed for the refinement of the initial inputs.   Every Member that had participated could see 
some reflection of their position in the revised draft.  The elements it included were:  the implementation of the LDC Modalties (which had been considerably improved), guidance on rule-
making (which was of importance especially to deve loping countries), modal parameters (which gave 
guidance to colleagues in capitals  in areas such as mode 4), a paragraph on small economies, the 
intensification of the request-offer process (with guidance on plurilateral approache), and targeted 
technical assistance (that dealt with technical assistan ce overall, but also specifically with the next 
stage of the negotiation).  She said that many Members should derive comfort from the text because it reflected many Members' interests.  Chile could liv e with the draft text and supported the Chairman's 
sending it to the TNC on his own responsibility accomp anied by a report that hi ghlighted all of the 
outstanding issues for attention.  She said that Ch ile would participate actively at the TNC level and 
Hong Kong in seeking to impr ove and approve the text.  
55. The representative of Mexico
 said that the Chairman's text was balanced, although his 
delegation would have liked to see some additional el ements.  However, in the interests of striking a 
balance, Mexico had been flexible on some of its objectives and requests.  He agreed that the text 
should be forwarded to the TNC under the Chairman's  responsibility so that any further negotiations 
might take place in that forum.  He wished to make four additional points.  Firstly, with regard to the 
modal objectives in paragraph 1 of the annex, it woul d be difficult to move any amendments to this 
text which acknowledged the existing imbalance among the modes of supply.  It was important for 
Mexico to maintain this notion in the text if Me mbers sought to strike a balance on the end result of 
the negotiations.  Secondly, on paragraph 2, the te xt was neutral in outlining the objectives in the 
Chairman's Annex.  It would be important to maintain this Annex as a guideline and a useful 
reference for capitals.  Thirdly, on  paragraph 7, the text guaranteed  a plurilateral approach to the 
negotiations which was compatible with the Negotia ting Guidelines and in line with the request-offer 
negotiations.  Finally, on numerical targets, he agr eed that there was a complete divergence of views.  
Mexico had stated on many an occasion that it was willing to examine this issue and had found that 
the proposals contained inconsistencies with th e GATS.  He associated his delegation with the 
comments by Brazil that this approach would offer a free round to some Members.  He believed that 
the Chairman would have to exercise care in faith fully reflecting the views of Members on this issue, 
as it should not appear as though there were agreement for discussion on the basis of the proposals on the table.  On the contrary, if Members decided to  continue the debate, it would have to be based on 
new proposals that were compatible with the concerns raised.  
56. The representative of Jordan
 said that the draft text was a good basis for negotiations and 
reflected many of his delegation's concerns.  He we lcomed the deletion of a reference to numerical 
targets.  His delegation had concerns on two furt her points.  The first was with regard to the 
Chairman's Annex and particularly the sections dea ling with mode 4 which needed to reflect that 
these objectives were to be implemented by develo ped countries.  The second referred to paragraph 7 
and the obligatory language it employed.  Jordan believ ed that the nature of the procedure needed to 
be made more precise, namely, by repl acing the word "shall" with "may".   
57. The representative of Korea  said that, in general, the text could be used as a good basis for 
further discussion and supported the Chairman's sugg estion to forward it to the TNC.  However, 
Korea wished to express its reservations with parts of the text, particularly with the deletion of a 
reference to numerical targets.  His delegation did not  believe that the deletion of this reference helped 
to preserve the text's delicate balance.  On the c ontrary, the deletion would have a negative impact on 
the general level of ambition in the services negotiati ons and would impair the text's overall balance.  
In this regard, Korea favoured a clear reference to a num erical target in the draft text and preferably in 
the draft annex.  This would allow Ministers to discuss the issue at Hong Kong and possibly reach a 
compromise on a political level.  On timelines, Kore a believed that it was necessary to have a specific 
date for the submission of second revi sed offers and final offers in or der to give clear guidance for the 
future negotiations.   TN/S/M/17 
Page 16  
 
  58. The representative of Costa Rica
 said that the draft services text reflected the debate and 
concerns raised by Members.  He believed that the Chairman's text could be used as a basis for further 
discussions and did not prejudice the position of any Member, taking into account the balance that would be required in other areas of the negotia tions.  Nevertheless, Costa Rica could not accept any 
reference to numerical targets in the market acces s negotiations in services.  With regard to the 
revised text, Costa Rica was concerned with the wa y in which the plurilateral negotiations would be 
carried out.  It was his understanding that these ne gotiations could undermine the tenets of the GATS 
and the way in which developing countri es could benefit from the negotiations.  
59. The representative of the Philippines
 recognised the efforts made by the Chairman in seeking 
to work towards a consensus text .  He was also aware that the bottom-up approach required further 
efforts.  He associated his delegation with the st atement made by Thailand on behalf of several 
ASEAN states.  In his delegation's view, the D oha Round was a developmen t Round, and while the 
Philippines was committed to the services negotiations , it believed that these negotiations needed to 
be undertaken with a view to promoting the interest s of all participants on a mutually advantageous 
basis and to securing an overall balance of rights a nd obligations.  The process of liberalization should 
take place with due respect for national policy objec tives and the level of development of individual 
Members both overall and in individual sectors.  The Philippines believed that the structure of the GATS had been a major feature in negotiating the GA TS itself.  He affirmed that the negotiations 
were not solely about broadening liberalization across Members' sectors and modes, which was a 
legitimate objective, but needed to be tempered with the equally  legitimate need to respect the 
flexibility enjoyed by developing countries.  Henc e, when one spoke of ambition in the services 
negotiations, it was important to reiterate that, at the end of the day, the level of ambition could not be 
imposed by some on the many.  He shared the view expressed by the European Communities on the 
issue of cross-cutting ambition in the various mod es and he recalled the ASEAN proposal that there 
be a simplified paragraph that dealt with amb ition in a cross-cutting manner across modes.  He 
reiterated the group's proposal on paragraph 1 of th e draft annex text.  The level of detail and 
specificity in the draft annex to the Ministerial De claration gave his delegati on and its constituents a 
negative perception of the purpose of the negotiatio ns.  A factual report was essential prior to Hong 
Kong.  As there was agreement on certain paragraphs  in the text, the factual report should clearly 
indicate that the lack of consensus and strong diverg ences which existed on paragraphs 1, 2, 7, 11 and 
12.  The ministerial text should be consensus-b ased and could agree with the three paragraphs 
suggested for the Ministerial Declaration but not with the proposed annex.  Consensus could be 
arrived at through a number of approaches.  Members could arrive at agreement on the three 
paragraphs for the Ministerial Declaration with  some general prescription and direction by the 
Ministers to draw up the guidelines and procedures for achieving greater momentum, ambition and progress.  Ministers would indicate that these guidelines and procedures would be based on proposals under consideration by the Membership, which coul d be referred to in the Chairman's report in 
bracketed versions of paragraphs 1,  2, 7, 11 and 12, as well as other paragraphs in the annex for which 
no reservations had been made.  In order to preser ve the process and consen sus-based approach, it 
was in Members' interest to subject the annex to an  instruction for consideration or finalisation after 
Hong Kong.  As outlined in a joint statement date d 29 September 2005 by several ASEAN states, the 
GATS, the Negotiating Guidelines and the July  Package were a good basis for the successful 
conclusion of the services negotiations and that there remained room for improved engagement 
among Members at the experts level if only to allow fo r a deeper appreciation of the trade interests of 
Members and produce a productive dialogue.  A little more time was needed in the services 
negotiations and for Members to arrive at a truly consensus-based text.  He appreciated the pressure 
that had been applied to reach a text for Hong Kong on which there remained no consensus.  It 
remained the responsibility of the Chairman to ensure progress in Hong Kong and left it to his 
discretion to take into account the concerns expressed by Members. 
60. The representative of Venezuela
 acknowledged the efforts made by the Chairman in 
preparing his revised text.  She said that two positions had been expressed by Members, namely that  TN/S/M/17 
 Page 17 
 
 
  the Chairman had found a delicate balance and that he had moved closer, but had not arrived at, the 
needed text.  She said that the balance that would need to be achieved in all areas of the negotiations 
had been also reflected in the Chairman's strategy of moving directly to a draft ministerial text.  She 
recalled that in other negotiating bodies, it had been agreed that the Chairman would send a report that 
would serve as a basis for drafting a ministerial text at a later date.  Venezuela could live with the 
Chairman's text as regarded the three paragraphs proposed for the Ministerial Declaration, with the 
convergences and divergences reflected.   As for the annex, she echoed the comments by the 
Philippines.  Noting a number of other delegations had also raised concerns that  related to the annex,  
Venezuela believed that the Chairman's draft text, at  the current juncture, could be used as a basis for 
further negotiation.  It demonstrated how the proce ss had been carried out a nd required negotiations to 
continue on the basis of this draft text.  Other te xts would emerge from ot her bodies at the TNC on the 
basis of which Members could move forward to Ho ng Kong.  Venezuela's general position was that 
no changes should be made to the Chairman's draft text and that Members would be able to discuss 
the text further at a later point in time.  
61. The representative of Indonesia  wished to express his delegati on's concern with the substance 
of the draft text contained in Revision 2 of the Chai rman's note, which were similar to the concerns it 
had expressed about Revision 1.  His delegation's suggestions had not been taken into account and 
had not been reflected in the text.  With specifi c regard to paragraphs for which Indonesia had 
indicated its concerns and reservations, he enquired how the Chairman intended to deal with proposals 
that had not been reflected in the text.   
62. The Chairman , responding to Indonesia's inquiry, said th at he had taken into account all of the 
proposals that had been tabled.  Noting that the en tirety of every Member's positions could not have 
been included, he hoped that these were reflected at least in part in the revised draft that he had 
prepared.  He recalled that his report to the TNC would address the different proposals that had been 
made about the text.  
63. The representative of Argentina  said that all were aware that the negotiations were delicate.  
Argentina's positive participation in the current pr ocess continued to be conditional.  He noted that 
some had suggested the possibility of approving so me of the elements in services prior to reaching 
agreement in other areas of the negotiations, particularly  in agriculture.  This approach, he said, would 
require the Chairman to bear in mind the form of other negotiating bodies' reports in addressing in his own report some of the concerns in services that had been expressed by delegations.  He requested 
that the Chairman, in reflecting the concerns of some, such as Australia or the European 
Communities, also take into account the objections th at had been made by others.  His delegation had 
reservations about the annex, as it did on the issue of  numerical targets.  He was reassured that the 
Chairman, in submitting his report to the TNC, would take into account the very delicate balance that 
had been struck. 
64. The representative of China
 expressed her delegation's appreciation for the Chairman's efforts 
in seeking to build convergence among Members on vari ous elements of the draft by trying to take 
into account the concerns of all Members, including her own.  China believed that the revised draft 
had improved balance, notably because one of the mo st controversial components, namely numerical 
targets, had been left out.  In general, China associated her delegation with the comments made by 
Chile, insofar as the text contained several improveme nts to the July Package.  Together with the 
existing framework and the Negotiating Guidelines it would provide sufficient guidance to future 
negotiations.  Although the text needed to be improve d, namely in paragraphs  2 and 7 of the annex 
and certain aspects of the principles section, her delega tion was prepared to work on the basis of this 
text in the TNC. 
65. The representative of Norway  said that the Chairman's incl usive and transparent approach 
was highly appreciated by his delegation.  Norway be lieved that the text struck a delicate balance, TN/S/M/17 
Page 18  
 
  although all would have liked to have seen changes and none were completely satisfied.  However, his 
delegation believed that Members ha d accomplished what could realistic ally be achieved within the 
Special Session and hence supported sending the draft text to the TNC for further consideration.  
Reiterating a comment made at an informal meeting on 18 November, he said that issues where strong 
divergences remained should be duly reported to th e TNC as outstanding issues for consideration by 
Ministers at Hong Kong.  His delegation could supp ort the Chairman proceeding in this manner.  
66. The representative of Guatemala
 said that, as was the case with other negotiations, services 
had a balance within its own negotiations but also in relation to other areas.  An equilibrium would 
need to be found with other areas, such as in agriculture, in which Guatemala was a demandeur .  The 
draft text aimed at a high ambition and she hope d that it would satisfy the countries that had 
manifested a number of concerns.  Ambition would need to be determined in an individual way 
through commitments.  Guatemala had taken part in the discussion on the draft and had wished to see 
developing countries play a role in services.  It w ould be inappropriate to in clude language that would 
go against the principles that Members had agreed  upon.  Guatemala was pleased to see that the 
reference to numerical targets had been removed.  On paragraph 1 of the annex, Guatemala supported 
its inclusion, as it sought to ensure that commit ments would meet various objectives for developing 
countries.  The application of these objectives woul d need to ensure that developing countries 
maintained flexibility.  Guatemala saw the paragr aph as an invitation to the objectives and believed 
that many of the limitations it identified should be  removed to help devel oping countries take active 
part in the negotiations.  The text reflected the discussion that had taken place to date and she hoped 
that further progress would take place at the Ministerial Conference.  She hoped that the Chairman, in 
his Report to the TNC, would reflect the level of concern that had been indicated regarding 
paragraphs 1, 2 and 7.  
67. The representative of Turkey  said that the Chairman had sought to capture in a delicately 
balanced manner the widely differing views of Me mbers on various issues.  Generally, the revised 
draft contained improvements in many aspects.  It was a realistic and pragmatic effort to lay the 
ground for future work.  The Chairman's text w ould do its part in keeping the DDA on track.  The 
word "would" in paragraph 7(b) w ould be preferable to "shall" and would better reflect the views of 
the wider membership.  Although Turkey would have  liked to have seen addition changes, Turkey 
could go along with the Chairman's revised text for submission to the TNC.  
68. The representative of Hong Kong, China  wished to associate his delegation with the 
comments by Chile, New Zealand, Singapore, China and others that had expressed the view that the 
text, while not perfect, was balanced.  It included something for everyone, but not everything for 
someone.  Referring to the general statement made  by his delegation at an informal meeting on 
18 November, he recalled that Hong Kong, China ha d addressed the question of balance between the 
services text and other areas of the negotiations and the reason why his delegation did not think that 
balance could be achieved in the form of the text, but rather balance was required in terms of ambition 
and overall outcome.  The interventions by other de legations had confirmed his view that the Special 
Session had taken its work as far as it could and that  the issues related to balance would need to be 
addressed at the next level.  It was for this r eason that his delegation supported the Chairman's 
suggestion to send the text to the TNC under his ow n responsibility in a report that captured the issues 
of continued divergence and concern so that they c ould be addressed at a higher level for resolution.  
Referring to the text itself and responding to points made by some other delegations, he said that 
plurilateral negotiations were provi ded for in GATS Article XIX which indicated that "[t]he process 
of liberalization shall be advanced in each such round through bilateral, pl urilateral or multilateral 
negotiations directed towards increasing the gene ral level of specific commitments undertaken by 
Members under this Agreement" which was language that was echoed in the Negotiating Guidelines.  
In this sense, paragraph 7 of the draft annex was fully compatible with the GATS and the Negotiating 
Guidelines and his delegation would be concerned by suggestions to  further water down paragraph 7 
as it would undermine the negotiating framework, whic h was itself a concern that had been expressed  TN/S/M/17 
 Page 19 
 
 
  by many.  On numerical targets, he had taken note  that it was an issue outstanding, and he said that 
the deletion of the reference to it in the text did no t mean that it had been taken off the table.  Noting 
that many delegations attached importance to th is issue and linked it with the overall level of 
ambition.  he said that it should be reflected, in an  balanced manner, in the Chairman's report to the 
TNC to ensure that it would be addressed at a hi gher level.  Hong Kong, China preferred that only 
issues for which there was broader convergence am ong the membership appear in the text, as the 
Chairman had done in his revised draft.  
69. The representative of Uruguay  had noted a number of concerns voiced by others and said that 
the text represented a delicate balance.  Uruguay be lieved that the text was an acceptable basis for 
work ahead of the Ministerial Conference in the light of the single undertaking. 
70. The representative of Canada  agreed that the Chairman had achieved a pragmatic balance 
among Members that took into account the many drafti ng suggestions that had been put forward in the 
previous weeks and months.  The Chairman ha d provided Members with a possible basis for 
agreement by Ministers.  While Canada shared some  of the concerns that had been raised by the 
European Communities, Australia, the United States a nd Japan, it joined others in fully supporting the 
Chairman's proposal to send the text to the TNC acco mpanied by his report.  Canada associated itself 
with the comments by Hong Kong, China relating to pa ragraph 7.  On the issue of recalibration, he 
recalled that maintaining the ambition for the Rou nd and the 2006 timetable had unique implications 
for services.  The text was a useful step toward s redressing the imbalance between negotiating areas 
that had resulted from the July Package.  He stat ed that the machinery for services was different, 
which required Members to move farther at Hong K ong to ensure that the Council's work would be 
successful in 2006.  He pledged his delegation' s support for the Chairman in this regard. 
71. The representative of India  commended the Chairman's transp arency and inclusiveness in the 
process that had led to his draft text.  He agreed with others that the Chairman had struck a very 
delicate balance, which was testified by the mixed fee lings of all.  India too was not satisfied with 
parts of the text and had compromised on its objectiv es in the interests of achieving a balance for the 
draft text.  On the issue of balance between diffe rent areas, he recalled that the services negotiations 
proceeded in a different manner from other market access areas.  At the same time, the conclusion 
made by some that one did not require specificity was, in his delegation's view, incorrect because in 
fact the nature of the process meant that specificity  was required at Hong Kong.  He said that the text 
added this necessary value.  On paragraph 1, he affi rmed that it struck a fine balance and did not agree 
with assertions that compromises had only been ma de in one area.  Indeed, compromises had been 
made by others, including India in ar eas of interest.  He cautioned that  any attempt to alter the balance 
would not be a productive way of proceeding.  On pa ragraph 2, he had noted the changed language as 
well as the possibility for future revisions to th e Chairman's Annex, which took into account the 
concerns by some about their capacity at the current juncture to have provided input.  He said that the 
Annex was a useful tool that should be pursued.  On the issue of numerical targets, he said that, given 
the wide divergences, he agreed w ith the approach taken by the Ch airman to remove the relevant 
reference and possibly including the point in his repo rt.  He agreed with Mexico and Brazil that the 
content of some of these proposals would result in a "round for free" for some Members and his delegation shared their concerns.  India believed that the Chairman's proposed revised text was a 
sound basis for the next step and could support his forwarding it to the TNC. 
72. The representative of Rwanda
, speaking on behalf of the African Group , appreciated the fact 
that the Chairman had sought to take on board some  of the points it had raised in earlier meetings.  In 
particular, she appreciated the removal of the refe rence to numerical targets with which the African 
Group had serious difficulties.  Even though the African Group would have preferred that the 
Chairman proceed through a reporting mechanism sim ilar to that used in other negotiating areas, the 
Group could consider the text with certain modi fications.  In particular, the African Group had 
concerns with paragraphs 1, 2, 4(b) and 7 of the text.  Paragraph 1 was overly prescriptive and TN/S/M/17 
Page 20  
 
  paragraph 2 contained a reference to the Chairman 's Annex which was a source of concern.  On 
paragraph 4(b), the Group had proposed that the sen tence end with "proposals by Members" and that 
the remaining part of the sentence deleted.  On  paragraph 7, she recalled the Group's suggested 
language that ensured that the relevant process woul d be voluntary, namely that in the chapeau the 
word "should" and in sub-paragraph (b) the word  "shall" both be changed to "may".  The Group 
maintained its position.    
73. The representative of Antigua and Barbuda
, speaking also on behalf of Dominica , St. Kitts 
and Nevis , Grenada  and St. Vincent and the Grenadines , said that the Chairman's revised text included 
improvements, but that more could have been done to  provide comfort to the delegations on behalf of 
which he spoke.  The group had concerns regarding paragraph 1 because its prescriptive nature could 
prejudge the outcome of the negotiations.  On paragraph 7 and referr ing to the negotiating 
architecture, he wondered whether bilateral, plurilateral and multilateral approaches should be 
referred to together.  Sub-paragr aphs (a), (b) and (c) contained language which prejudged the outcome 
of the negotiations owing to their prescriptiven ess and omission of these items would resolve the 
concerns of this group.  He thanked the Chairm an for taking into account many issues raised by 
developing countries, particularly with regard to numerical targets.   
74. The representative of Barbados  said her delegation was pleased to see that the Chairman had 
included in his revised draft a number of devel opment-oriented provisions, particularly in the 
'principles' portion of the text that was intended for incorporation into the main body of the draft Ministerial Declaration.  Echoing comments by a nu mber of others, her delegation had a number of 
concerns with the revised versions, particularly wi th parts of the draft annex.  Barbados remained 
concerned that paragraph 1 was overly prescriptive and should be more general in nature.  Moreover, 
Barbados believed that any such modal objectiv es should be adopted on a consensus basis at the 
multilateral level.  Barbados would have preferred removal, in paragr aph 2, of the reference to the 
Chairman's Annex, which her delegation did not believe provided any additional value.  On 
paragraph 7, while Barbados recognised the basis for plurilateral negotiations as contained in the 
Negotiating Guidelines, it remained concerned that the modalities as reflected in the paragraph would 
reduce the inherent flexibilities contained in the GATS and the Negotiating Guidelines.  Her 
delegation was particularly concerned with the ma ndatory nature of the process as spelled out in 
paragraph 7(b).  Barbados also a ppreciated the deletion of the refere nce to numerical targets.  The 
proposals did not provide an appropriate basis for modalities that should be pu rsued in Hong Kong at 
the Ministerial Conference or thereafter.  
75. The representative Zambia
, speaking on behalf of the LDC Group , thanked the Chairman for 
having taken into account some of the Group's concer ns.  However, she also noted that a number of 
issues had not been raised in the text which sh e reiterated.  The Group supported the removal of 
numerical targets from the text and believed that pa ragraphs 1, 2, 7 and 11 re quired further revision.  
Paragraph 1 remained too prescriptive and wished to see it revised to take on board the suggestions by 
a number of Members.  On paragraph 7, she not ed that the language remained mandatory and 
reiterated an earlier drafting suggestion clarifyi ng that Members would voluntarily chose to 
participate in plurilateral negotiations.  Although she recognised that plurilateral negotiations, in 
principle, were in line with the GATS and the Ne gotiating Guidelines, she questioned the need to 
formulate additional procedural elements that lack ed in the bilateral request-offer process and in a 
mandatory manner moreover.  On paragraph 11, sh e echoed the earlier comments by Rwanda that 
some LDC language had been omitted.  She recalled that this language had been agreed upon by a 
small drafting group and had not been objected to by Members in an earlier open-ended informal 
meeting.  She took its omission to have been an ove rsight and requested that the Chairman correct it.  
She said that this language should not be treated as an issue on which there was no convergence.   
76. The representative of Tunisia  thanked the Chairman for ha ving taken into account a number 
of concerns expressed by Members in his revised te xt.  He regretted that a number of paragraphs  TN/S/M/17 
 Page 21 
 
 
  remained a source of concern for his delegation, whic h had also been pointed to by a number of other 
delegations, namely in paragraphs 1, 2 and 7.  His delegation was open to any new developments in 
the services negotiations so as to make progressive im provement in trade in services while taking into 
account the capacity of each developing country.  He  said that the assessment of the results would be 
based on the degree to which the principles decided at Doha would be respected.  He agreed that 
numerical targets was a controversial point and he appreciated the manner in which the Chairman had 
dealt with this issue.  He asked whether the cover note to the revised draft would be part of his report 
to the TNC or only the proposed text.   
77. The representative of the Dominican Republic  said that the text contained improvements, 
notably because it did not include a reference to nume rical targets, which was a source of concern for 
many Members.  Her delegation could support the propo sal that the three paragraphs be incorporated 
into the Ministerial Declaration.  Her delegation ha d a number of remaining concerns with the text.  
She requested that the language in paragraph 1(a)ii) be  more flexible with regard to the requirement of 
eliminating restrictions on commercial presence.  Sh e agreed with others that, in paragraph 2, no 
reference to the Chairman's Annex should be made in the ministerial text.  She understood that the 
Chairman would address the discussions on numerical targets in his report to the TNC.  She trusted 
that the Chairman would report on the high level of opposition expressed by Members on this issue.  
Her delegation believed that any a ttempt to introduce this issue at any level would reopen entirely the 
draft text.   
78. The representative of Bolivia  said that the revised text addressed the suggestions made by 
delegations, including her own.  It struck a balan ce which would allow Members to pursue their work 
in the coming year.  Bolivia, like others, would have  difficulties with the inclusion of a reference to 
numerical targets and hoped that the Chairman's re port would reflect the divergence of views on this 
matter and the reasons for these divergences.  
79. The representative of El Salvador  was grateful that the revised draft addressed many of the 
suggestions made by her delegati on, including those raised in an  earlier informal meeting.  On 
paragraph 1 of the draft annex, it was her dele gation's understanding that Members should try to 
ensure that new and improved commitments woul d occur as indicated, namely, according to the 
capabilities of each Member.  El Salvador reiterated that it would continue to work in services and 
would take into account the flexibilities provided to developing countries in the GATS as well as the 
Negotiating Guidelines.  It was important to bear in mind the objectives of the Round, namely, the promotion of growth of all trade partners and the development of all Member s in line with the goals 
outlined in the DDA.  
80. The representative of the United States
, referring to the three paragraphs that were proposed 
for inclusion in the Ministerial Declaration and the language concerning recently acceded Members, stated that her delegation's interpretation of th is language was that there was no presumption that 
every Member upon accession had undertaken extens ive market access commitm ents in the services 
negotiations.  The United States understanding of th is paragraph related to  the relevant Doha 
Declaration language.  This was the impression to  which her delegation would restrict itself, 
recognising that the Doha language did not specify wh ich commitments related to that concept.  She 
wanted to clarify that, through the services text, Me mbers were not declaring that all recently acceded 
Members had undertaken extensive market access commitments at the time of their accession in 
particular with respect to services. Referring to delegations that had indicated a concern about 
maintaining the delicate balance in paragraph 1 of  the draft annex, she asked how it was that MFN 
exemptions in paragraph 1)e)i) c ould be considered balanced in co mparison to the text pertaining to 
mode 3.  Recalling her concerns about balance between the modes, she said that the imbalance 
between 1)e)i) and 1)c)i) was particularly glaring.   Hence, the imbalance was not confined to the 
language on modes and she reiterated her earlier concerns.  In this regard, she recalled that the United 
States had made this point with increasing verve in  its communications, which had not given rise to TN/S/M/17 
Page 22  
 
  any controversy.  Her delegation expected that its c oncerns would be dealt with at some point so that 
it could demonstrate to stakeholders that it had been reflected in the text, particularly given 
imbalances elsewhere in the text.  
81. The representative of Honduras
 appreciated that, in presenting a revised draft, the Chairman 
had sought to take into account the concerns rais ed by Members, in particular with regard to 
numerical targets.  She also appreciated that the Chairman had removed this reference, as her 
delegation was not in a position to accept these target s.  Her delegation contin ued to have concerns 
with paragraphs 2 and 7 of the text.  She trusted th at the Chairman would reflect the serious concerns 
raised by Members regarding the issue of numerical targets in his report to the TNC.  This issue ran 
the risk of upsetting the delicate balance the Chairman had struck.  
82. The representative of Venezuela  sought a clarification from the Chairman as to the 
relationship between the text and any forthcomi ng process on the one hand and the final Ministerial 
Declaration on the other.  He had detected some confusion about which parts of the Chairman's draft 
text would be forwarded to the TNC. 
83. The Chairman  recalled that a number of questions had been posed to him for clarification.  
The first concerned the way in which the revised draft ministerial text would be forwarded to the 
TNC.  In this regard, he said that the draft te xt would be forwarded under his responsibility to the 
TNC as an attachment to his regular report to that body.  With reference to the point raised by the 
representative of Tunisia, he said that the points made in the cover note to JOB(05)/262/Rev.2 would need to be reflected in his report so as to provid e the context in which he was forwarding the draft 
text.  His report on the meeting would also flag  for the TNC and address in a balanced manner the 
various parts of the text with which Members had concerns, in addition to any issues not included in 
the draft text owing to wide divergences in positions.  It would be for the TNC to consider this draft 
text along with the inputs from other negotiating b odies.  Ultimately Ministers would decide how they 
wished to provide direction for the Round.  Wh ile the ambition for Hong Kong might have been 
recalibrated, the ambition for the Round remained.  The services text sought to establish a process for 
pursuing these negotiations.  Finally, with regard to the concern raised by Rwanda and Zambia 
concerning proposed text in paragraph 11 of the draf t annex relating to the LD Cs, he confirmed that 
this omission was indeed an oversight and offere d his apologies for any confusion this might have 
caused.  He informed the Council that he would re-i nsert the relevant language in paragraph 11 in the 
version of the draft text he would forward to the TN C in his report.  He congr atulated and thanked all 
Members for their efforts and participation in the m eetings and consultations that had led to his draft 
text.  He reiterated that the text would conti nue to be under his responsibility and did not enjoy 
consensus among Members.  However, he did h ope that it provided a basis upon which Members 
could seek convergence. The Chairman proposed that  Council agree that the Chairman proceed as he 
had outlined and take note of the st atements that had been made.   
84. It was so agreed
. 
B. OTHER BUSINESS  
85. As there was no Other Business, the Chairman  wished delegations success at the Sixth 
Ministerial Conference and proposed that, before he  adjourned the meeting, the Council take note of 
all of the statements made. It was so agreed . 
_______________ 
 
  TN/S/M/17 
 Page 23 
 
 
  ANNEX I 
 
Comments by selected delegations at an informal meeting of the Special Session  
of the Council for Trade in Services held on 27 and 28 October 2005  
 
 
1. The representative of the European Communities  sought to introduce a communication on 
Elements for Complementary Approaches in Serv ices at the multilateral and plurilateral levels 
contained in document TN/S/W/55 with a view to injecting momentum into the services negotiations.  
His delegation was presenting a concrete proposal that  specified, with numbers, the very high level of 
ambition that the EC pursued in the negotiations that was of paramount importance for developing 
and developed countries.  Unlike in the other market access pillars of the DDA negotiations, the 
collective definition of the level of ambition and of the sense of direction were lacking in the services 
negotiations.  The proposal also sought to assist th e Chairman in his work in preparing the draft 
Ministerial Declaration.  He said that the proposal  contained three targets, each of which had both 
quantitative and qualitative features.  The first targ et was a multilateral formula for new and improved 
commitments.  The European Communities was pr oposing that developed countries take new or 
improved commitments in 139 sub-sectors of the 163 sub-sectors, or in 85 per cent of the total 
number of sub-sectors.  For developing countries,  it was proposed that they undertake new or 
improved commitments in 93 sub-sectors, or two-thirds  of the target for developed countries or 56 per 
cent of the total number of sub-sectors.  Referring to the total figure of 163 sub-sectors, he elaborated 
that the starting-point for this number was the cl assification list contained in W/120, which contained 
154 sub-sectors.  For financial services, the 17 sub-sectors from the GATS Annex on Financial Services had been substituted for the 16 sub-sector s on financial services in the W/120 classification 
list.  For air transport services, the sub-sectors of p assenger and freight transportation were subtracted 
and added were sales and marketing and computer  reservation systems.  For maritime transport 
services, six sub-sectors were added (maritime car go handling, container station depot services, 
customs clearance, freight forwarding, maritime ag ency, and storage warehousing) in line with the 
maritime model schedule, while two sub-sectors we re merged (international passenger transport and 
freight transport).  Finally, "Other sectors not in cluded elsewhere" were disaggregated into four sub-
sectors that corresponded to CPC 95, 97, 98 and 99.  These various subtractions and additions brought 
the total number of sub-sectors to 163.  The ne w and improved commitments in the formula should 
correspond to qualitative parameters that were desc ribed in point 6 of the communication.  These 
parameters sought to give guidance to Members in undertaking new and improved commitments.  The 
paper also outlined measures for each of the four  modes and that the new or improved commitments 
should correspond to one or more of these measures.   This was the first target in the paper. 
2. Turning to the second target in the paper, name ly capping, the representative of the European 
Communities said that the basis of this calculation of this target was 163 sub-sectors.  The proposal 
defined a minimum level of commitments, and incl uded a description by mode, that was the minimum 
necessary to ensure that in reality the situation di d not amount to an "unbound".  For this reason, the 
paper outlined a low minimum qualitative threshold whic h, in the case of mode 1, indicated that there 
would be no commercial presence requirement that w ould apply to the entirety of the sub-sector.  In 
mode 2, the threshold would be no "unbound" for the entirety of the sub-sector, while in mode 3 
mention was made of discriminatory ENTs and the re quirement that no such ENT would be applied to 
the entirety of the sub-sector.  In mode 4 the minimum qualitative threshold would be the obligation 
not to inscribe a nationality requirement that would apply to the entirety of the commitment of the sub-sector concerned and the different categories of mode 4 service providers.  The minimum qualitative threshold and the schedules of Members shoul d not contain, for developed countries, more 
than 10 per cent of sub-sectors below these thresholds .  In other words, 10 per cent of sensitive sectors 
could be below this level.  For developing countries, it was proposed that the level of sensitive sectors TN/S/M/17 
Page 24  
 
  could be as much as 18 per cent.  The capping was an instrument of ensuring high coverage in the 
schedules of Members, which, together with the fo rmula, would be applied at a multilateral level.  
3. The representative of the European Communities sa id that the third target related to sectoral 
targets through a plurilateral dimension.  The propo sal's objective was to ensure that would take place 
plurilateral negotiations in sectors of key interest  to Members which aimed at a higher level of 
ambition.  The proposal referred to the Annex of the Chairman's Report to the TNC in July 2005 as 
giving indications of the sectors in which Members had expressed interest.  The proposal provided for 
mandatory participation in a minimum number of sec toral negotiations.  This number was linked to 
the number of sectors mentioned in the Annex.  It was proposed that developed countries would 
participate in three-quarters of these negotiations an d developing countries in half this number.  The 
European Communities sought to see re flected in the Ministerial Declaration mandatory targets.   
4. The representative of the European Communities said that his delegation was aware of the 
flexibility features contained in the GATS, would r espect them and had includ ed several features in 
the proposal to ensure that this flexibility for indi vidual Members would be respected.  For example, 
the paper noted that the targets would not be appl icable to LDCs, and that there were small and 
vulnerable economies in a similar situation.  There were a number of developi ng countries that were 
completely excluded from the obligation to implem ent the targets.  The targets were higher for 
developed countries than for developing countries.  A third feature of flexibility related to the choice 
of sectors.  Each Member would have the oblig ation to undertake new and improved commitments 
and ensure the minimum qualitative threshold; howe ver, it would have the freedom to choose in 
which sectors the new and improved elements would be undertaken.  A fourth flexibility feature was 
the built-in flexibility about the content of th e commitments themselves,  since the qualitative 
parameters did not relate to full commitments, but to partial or improvements to partial commitments.  
Members could choose among a list of restrictions th at would be removed or reduced.  Hence, there 
was scope for each Member to make its own choice a nd decide the extent to which it would reduce or 
remove a particular restriction, which gave fl exibility for each individual Member.  The European 
Communities' proposal for mandatory targets were fully within the scope of the GATS, the GATS 
negotiations and were necessary in order to provide  momentum and ambition to the negotiations.  He 
reiterated his delegation's commitment to flexibilit y; however, he said that it could not accept that 
flexibility provisions would be used to effectivel y refuse to participate in the negotiations.  His 
delegation often had the impression, from discussions in which it had participated, that this was the 
direction of some discussions and his delegation sought to see this corrected.  Negotiations were at a 
critical juncture and hence it was necessary to give  a sense of direction, ambition and specificity.   
5. The representative of Australia
 welcomed the tabling of the EC paper and said that it was the 
missing piece of the puzzle which would allow Memb ers to move more quickly towards finalizing a 
package.  He further welcomed the balance it brought  to the issue of improvements in the quality of 
offers by clearly addressing both qualitative and quan titative ambitions.  Australia welcomed the level 
of ambition that it outlined and looked forward to such a level of ambition being expressed elsewhere 
in the Doha Round.  It specifically built in the flexibilities provided for in Article IV and Article 
XIX:2.  On Article IV, the targets were not to be applicable to LDCs, which was a view his delegation 
had also endorsed.  The EC had gone further and di d not envisage the targets applying to "other small 
and vulnerable developing countries in a similar s ituation."  Given the recent circulation of the 
document, his delegation would need to reflect on th is suggestion and its implications for the GATS 
architecture.  However, he welcomed the pos itive sentiment expressed.  The proposal provided 
balance in addressing modes of supply of interest to developing Members wi th useful language on 
mode 4.  The target formulae, like Article XIX:2 fl exibilities, were clearly premised on the context of 
offers that proposed liberalization.  Without libe ralising offers, there was no need for flexibilities.  
However, by looking at the Article XIX:2 flexibiliti es one by one, he could note that the EC proposal 
allowed each of these flexibilities to be met.  With re gard to the flexibility to open fewer sectors, the 
multilateral EC targets were based at a sub-sectoral level.  This would allow Members to concentrate  TN/S/M/17 
 Page 25 
 
 
  their new or improved commitments on a selected number of sectors should they choose, thereby 
opening fewer sectors.  The flexibility for liberalis ing fewer types of transactions allowed Members, 
for example, to focus liberalization on a few key lim itations across the whole economy (i.e removal of 
ENTs across all sub-sectors or removal of a specific horizontal limitation).  Because such an approach 
would represent an improvement across many, if not all subsectors, this was a simple way of meeting 
the papers' ambitions.  With regard to the third fl exibility referred to in Article XIX:2, progressively 
extending market access in line with the developmen t situation, the notion of a 'new or improved 
commitment' would include the possibility of  a phased commitment, namely, a scheduled 
commitment to remove a particular limitation at a particular time.  This allowed flexibility to 
progressively extend market access.  Equally, the notion of 'new or improved commitments' included 
improvements which might include access conditions ai med at achieving the objectives referred to in 
Article IV, which was the last of the flexibilities set  out in Article XIX:2.  On the proposed capping 
target, his delegation would have so me questions about how this interacted with the first target and 
would need to reflect on the introduction of 'sensitive sector' or de minimus -like provisions.  Australia 
welcomed the sentiment in support of flexibility that motivated these ideas.  His delegation would 
need to reflect on sectoral targets, and in partic ular the suggestion that Members could opt out of 
plurilateral negotiations in those areas where they were most defensive.  Nonetheless, Australia 
recognised that this suggestion was an effort to c onsolidate flexibility for Members that was built into 
other elements of the paper.  Australia believed th at the communication was a useful contribution, was 
grateful for the level of ambition specified, and we lcomed the maintenance of flexibility as required 
under Articles IV and XIX:2 within an ambitious fra mework.  He hoped that, with this flexibility in 
mind, Members could move forward to an ambitious political statement in Hong Kong.  
6. The representative of Brazil  speaking also on behalf of Argentina , Brunei Darussalam , Cuba , 
Dominican Republic , Guatemala , Kenya , Indonesia , Malaysia , Paraguay , the Philippines , Thailand , 
Uruguay  and Venezuela  sought to make a statement on the co mplementary approach for the services 
negotiations.   A precondition agreed by Member s for the consideration of any complementary 
approaches in the services negotiations was that th ey should be compatible with the GATS and the 
Negotiating Guidelines.  Having examined the prop osals that contained quantitative and qualitative 
mandatory targets presented to date as part of th e complementary approaches, the group considered 
that such approaches were not comp atible with the GATS' preamble, Article XIX:2 and paragraphs 2, 
3, 4, 11 and 12 of the Negotiating Guidelines.  Therefore, it was not appropriate to include in the Hong Kong Ministerial Declaration any reference to  quantitative or qualitative mandatory targets.  
The group offered these thoughts so that the Chairman  could take them into consideration when he 
would prepare his draft document. 
7. The representative of Brazil, speaking on beha lf of his own delegation only, thanked the 
European Communities for the presentation of their proposal on complementary approaches.  He said 
that a link needed to be established with the pro cess of consultations to date.  The history of 
arguments that had been exchanged formed the cont ext for the current discussion.  While he did not 
intend to repeat these arguments, he appealed th at Members refrain from advancing tautological 
justifications that the approaches were compatible, because one believed it to be so.  He reiterated his 
delegation's call for real engagement.  He sai d that the European Co mmunities' proposal was 
incompatible, imbalanced, inappr opriate and highly unrealistic.  Referring to the EC proposal's 
references to the services core group, he said that he  was not aware that the Ministerial Meeting of the 
core group had prepared an issues paper.  Noting th at he had been present at this meeting, it was his 
recollection that India had prepared and presented an  issues paper.  He said that the only consequence 
of an attempt to portray a situation in another light was that future discussions within core group 
would have to take place more carefully.  He w ould not entertain a discussion on paragraph 3 and the 
attempt to create a new category of developing countries, as it would not meet with approval.   
8. Turning to the incompatibility of the compleme ntary approaches with Article XIX:2, the 
GATS preamble and the various paragraphs of the Negotiating Guidelines, the representative of TN/S/M/17 
Page 26  
 
  Brazil reiterated that flexibility was either mandatory  or not.  A proposal which limited the flexibility 
of individual Members to undertake commitments was incompatible with the Articles of the 
Agreement and the Negotiating Guidelines.  In this regard, he recalled the formal statement made by 
his delegation at the previous meeting of the Sp ecial Session and contained in JOB(05)/238.  The 
proposal was in compatible with elements discusse d at the core group meeting.  There had been 
discussion not to encroach on the individual flexibilities of developing countries.  It was also 
incompatible with the European Communities' own interpretation of the GATS.  In this regard, he 
recalled a EC paper entitled "Concept Paper on Po licy Space for Development" (WT/WGTI/W/154, 
dated 7 April 2003) that had been presented in the Working Group on Trade and Development in 
which the European Communities had argued that a multilateral framework on investment was not 
harmful to the policy space afforded by GATS flexib ility and that the positive-list approach ensured 
that policies could be pursued.   At the same me eting, a paper by Japan had also been presented 
(WT/WGTI/W/156, dated 7 April 2003).  In this sam e Working Group in June 2002, or the year after 
the adoption of the services Negotiating Guidelin es, the European Communities had stated in 
paragraph 4 of a document entitled "Concept Pa per on Modalities of Pre-establishment" 
(WT/WGTI/W/121) that "We believe that this ap proach [the positive-list approach] would allow 
enough flexibility for all WTO members. Each WTO memb er would be able to decide to open up (i.e. 
to commit) the sectors in which it wished to attract foreign investors in accordance to its needs and to 
its level of development. This would guarantee legal certainty and policy stability for potential 
investors.  But no member would be forced to take commitments in any given sector."  He had verified the French and Spanish translations of this  document and observed that this last sentence was 
not reflected in the EC proposal contained in TN/S/W /55.  Even if one disagreed with Brazil's view 
that flexibility was whole and rather believed that flexibility was a question of degree, one could not 
find flexibility in the proposal.  Many of the prop onents of a mandatory benchmark relied on the use 
of the term "multilateral" in the GATS Article XIX and the Negotiating Guidelines in order to 
advance their view.  He did not think that one word  taken out of context that ignored the Agreement 
and the Negotiating Guidelines could be a basis for an  argument.  Just as one could not consider the 
concept of  individual flexibility as a licence not to act on progressive liberalization, one could not use 
progressive liberalization as a licence to subvert the GATS architecture.   
9. Turning to the unrealistic nature of the Eur opean Communities' proposal, the representative of 
Brazil said that it inflated the ambition of services to  a level unparalleled in th e current negotiations.  
It sought to predetermine the outcome in Hong K ong and not at the end of the Round.  It further 
sought to accelerate the concept of progressive liber alization from a concept to be fulfilled through 
successive rounds to one fulfilled in a single Minister ial Meeting.  He reaffirmed that the European 
Communities' proposal was imbalanced as it raised th e level of ambition to the outer limits of other 
Members' sensitivities while leaving untouched the EC's own sensitivities, for example on MFN 
exemptions.  While he stood to be corrected, he understood that the proposal included a hidden credit 
mechanism.  Specifically, there would be offers in which developed countries would need to commit 
to 139 sub-sectors.  He wondered whether this w ould mean that each European Communities' member 
state would commit or whether there would be an inte rnal credit mechanism.  It was difficult to count 
the number of sub-sectors committed by the European  Communities and that this measurement was 
rendered complex because there was a combination of the target formulae with the capping element of 
the proposal.  This appeared to be an expressi on taken from the common agriculture policy.  To 
illustrate the case and assuming for the sake of ar gument that the European Communities had 100 
sub-sectors committed, he said that a distorted situation would arise in which the European 
Communities would need to commit to 39 more sub- sectors, while if a small developing country had 
only 30 sub-sectors committed, in order to reach th e target number of sub-sectors, it would need to 
make double the effort of a developed country in  the current Round.  Keeping with this same 
example, he said that the European Communities,  in order to reach the target could add 39 
commitments for Malta while excluding the 24 other member states to meet its target.  He reiterated 
that he stood to be corrected, and hoped that the pr oposal referred to each EC member state meeting 
the targets outlined.     TN/S/M/17 
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  10. Turning to the inappropriate nature of the European Communities' proposal, the 
representative of Brazil said that it considered neither  the discussion in the Special Session to date nor 
the Doha Mandate, that it attempted to re-write the Negotiating Guidelines and that it violated the 
basic agreements accomplished in the services nego tiations since their launch in 2000.  It would 
negatively affect efforts to bring positions closer together.  It did not seek to bridge gaps, but was 
designed to satisfy solely tactical considerations . He hoped that the rest of the membership would 
exercise discretion and not allow the proposal to contaminate the negotiating mood in the other areas 
of the Chairman's draft text.   
11. The representative of Mexico , referring to the statement by Brazil, said that some of the 
remarks that he had intended to make had been  touched upon, while he  had a number of other 
comments with regard to the European Communities' proposal.  He regretted that the proposal had 
come at such an advanced stage of the Council's discussion and wondered what  the effect would have 
been had the European Communities pr oposed its ideas at an earlier stage.  Given the recent nature of 
the submission, he wished to make a few prel iminary comments as his capital had not had an 
opportunity to study it.  On paragraph 2 and a refe rence to the services core group, his recollection 
was that India had tabled a paper at the meeting that  had been referred to and that there had been some 
consensus on the principles and some of the objec tives in that document.  Secondly, he had an 
observation about the relation between the EC proposal and the issues paper.  With regard to flexibility for developing countries, he said that  many of the proposals had rather 'inflexible 
flexibility'.  He enquired as to whether there was a dditional flexibility that he had not been able to 
discern from the proposal.  Citing a portion of the issu es paper that had been circulated in the core 
group that "any such approach should be improve ments from the existing commitments", he said that 
for Mexico this was a fundamental principle in th e negotiations.  Some of the formulae appeared to 
take into account Uruguay Round commitments.  No Member should be punished for having made a 
high number of Uruguay Round commitments, but no one should be rewarded  for these commitments 
either.  They were the result of a negotiation.  Discussion of 139 services sectors without a distinction 
between new and existing commitm ents could be a problem from which developed countries could 
benefit.  He sought clarification on this point.  Thir dly, it was unacceptable to draw distinctions within 
developing countries. Fourthly, quantitative target s would prove to be compatible with the 
Negotiating Guidelines.  He enquired how the specifi c figures put forth by the European Communities 
had been determined and whether these figures coul d be discussed or were rigid.  Mexico in its 
revised offer would be able to hold to the paramete rs;  however, Mexico did not believe that the issue 
at stake was about being ab le to keep to targets.  Sixthly, on the qualitative paramete rs, there appeared 
to be an imbalance as no reference was made to  the horizontal qualitative parameters put forth by 
some, such as MFN exemptions or ENTs.  He requ ested clarification on this point.  His seventh 
observation related to paragr aph 7 and the notion of " de-facto  bound" for which he sought 
clarification.  Referring to paragraph 8 of the proposal, there appeared to exist an exclusion 
mechanism for some sectors which would allow some delegations to de facto  and in an a priori  
fashion exclude some sectors from the negotiations .  This was not an acceptable approach.  He 
enquired how the specific percentages had been determ ined.  Finally, referring to the sectoral targets 
outlined in the paper, his delegation would wish to  support the plurilateral basis in the Chairman's 
draft text.  The proposal appeared to leave it to each Member to decide which sector would be subject to plurilateral negotiations, which did not seem to be consistent.  Members would need to be prepared 
to consider working in sectors for which it had more or less interest.  It would be difficult to have a 
decision as to which sectors would be the subject of negotiation or not and would be a step backward 
in the negotiations.   
12. The representative of China
 said that on numerical targets and parameters, her delegation 
shared the view expressed by the 14 Members on be half of which Brazil had spoken.  Leaving the 
question of incompatibility to one side, there was a question of feasibility.  Members were aware of 
the considerable amount of time NAMA and agricult ural colleagues had spent to determine the right 
numbers and without success to date.  She said it  was therefore inappropriate to work on such TN/S/M/17 
Page 28  
 
  proposals before the Hong Kong Ministerial Meeting.   China could go along with the plurilateral 
request-offer process suggested by some Members with  a view to intensifying the current request-
offer process.  However, it should be left to the Me mbers that received a plurilateral request to decide 
whether to meet with the requesting Me mbers in line with their own resources. 
13. The representative of Pakistan
 said that her delegation had been open to pursuing 
complementary approaches provided they catered to all GATS flexibilities in the context of GATS 
preamble, Articles IV and XIX and the Negotiating Guid elines.  Referring to paragraph 3 of the paper, 
she said that the European Communities, by propos ing that other small a nd vulnerable developing 
countries be exempt from complementary approaches, was introducing an alien concept and a departure from GATS.  Paragraph 5 of the pape r proposed that developed Members introduce 
improvements or make new commitments in 85 per cent or 139 sub-sectors of a total of 163 and 
developing Members in 67 per cent (or 93 of 163 sub-sectors).  She asked whether each improvement 
in a sub-sector would be counted separately, for instance whether two improvements in the same sub-
sector would each be counted towards the total of  93 or whether Members would be required to 
demonstrate an improvement or new commitment in 93 different sub-sectors.  She asked how the 
proposal would be reconciled with paragr aph 10 of the Negotiating Guidelines.   
14. The representative of Canada
 sought to make comments on the Chairman's draft text as well 
as on the proposal from the European Communities.  With regard to the draft text on approaches, 
Canada could support the text in paragraph 8 that descr ibed what could be a "plurilateral" approach to 
intensify the request-offer process.  He said that th e Chairman had captured quite well the results of a 
number of informal discussions.  He sought to note two specific points with respect to this element.  
The first was that the operationalization of this pa ragraph in 2006 would be guided, insofar as LDCs 
would be concerned, by paragraph 2, namely th at LDCs would not be expected to take new 
commitments.  The second was that Canada believed that it was important for paragraph 8(b) to stand 
as written.  Canada's view was that it should be unde rstood that there was an obligation to engage in 
the process.  In the bilateral cont ext, there was an understanding th at if a request was received, a 
country would be willing to engage the demandeur .  It should be clear that there was a similar 
expectation and responsibility in the context of plurilateral requests.   
15. Turning to the proposal from the European Communities, the representative of Canada 
thanked that delegation for it.  Unlike trade in  goods, it seemed that in services Members were 
compelled to try to break new ground.  The issu e of complementary approaches to the bilateral 
request-offer process was one of these areas of new ground  and he appreciated the work that had gone 
into the proposal.  He also appreciated the contex t within which the proposal had been made.  He had 
noted some of the critical comments that had been made earlier in the meeting on some of the details of the paper.  However, he said that Members needed  to take a step back in considering the proposal.  
The paper was on the table because progress in th e services negotiations had been completely 
unsatisfactory.  As the previous Chair had reported, based on assessment discussions over the 
summer, no delegation was satisfied with the emergi ng results.  There was unsatisfactory participation 
from Members vis-à-vis  offers, including initial offers.  Many of the offers that had been submitted 
had missed deadlines.  Most disconcerting of all, many  of the offers on the table represented little that 
was interesting in the way of new commitments.  All of this was the case despite several mutual 
agreements to participate in negotiations, to meet deadlines, and to engage in progressive 
liberalization.  The negotiation seemed to lack a cl ear sense of ambition.  The result had been that 
negotiators had continued to discuss, reject the ne ed for movement on national positions and wait.  In 
his delegation's view, this was not a recipe for succes s.  The EC had urged the development of a sense 
of "collective ambition" with respect to services ne gotiations.  Canada supporte d this point.  There 
would have to be a political engagement in this re gard at Hong Kong to ensure that services could go 
forward with the same drive and direction as the ot her core elements of market access.  Leaving 
Ministers to discuss only the fruits of five years of relatively piecemeal discussion would not give 
them much from which to identify directional elements  in a Declaration.  It was for this reason that  TN/S/M/17 
 Page 29 
 
 
  the Council had spent so much time on complementar y approaches.  A good amount of work had been 
done in this regard, including at a good earlier di scussion of modal and other parameters that could 
guide the Council's work and the discussion in Hong Kong.  Moreover, there was a good text in the Chairman's draft on plurilateral approaches which offered promise.  The EC had identified at a 
general level many of the same kind of issues a nd ideas and had brought forward another piece of the 
puzzle, namely the idea of numerical targets.  Wh ile there had been a number of questions on the 
specifics of the proposal, many of which were ques tions Canada shared (for example, how would EC 
count new and improved commitments , uncertainty around the capping concept, questions about ideas 
on plurilateral approaches), Canada thought it would be helpful to take a broader perspective for the 
moment.  Canada believed that in the effort to  achieve a political calibration of ambition at Hong 
Kong, it might be useful to augment plurilateral a nd modal elements with some political reference to 
quantitative ambition.  Provided that such ambiti on was put in the clearest and most directly 
communicable terms, and that it respected the flex ibilities of the GATS and Negotiating Guidelines, it 
might be a good way to assist Ministers in speaking about ambition.  Canada would continue to study 
the proposal and looked forward to the response of th e EC to the questions that have been raised.  He 
encouraged Members to explore creative ideas on ho w they could express the Article XIX collective 
ambition to "increase the general level of specifi c commitments undertaken by Members under this 
agreement", at least in part, in quantitative term s that were consistent with the GATS and the 
Negotiating Guidelines.   
16. The representative of India
 said that, at the current stage,  the proposal from the European 
Communities was disruptive.  Firstly, the core group  was an informal group that had no legal sanctity 
and sought to be helpful. For the sake of tran sparency, India and another Member had given an 
indication of some discussions.  Secondly, the discussi on to date had been confined to the situation of 
LDCs and the non-applicability of any target to th em. Noting that suddenly a new category of small 
and vulnerable developing countries ha d been added.  He agreed with many others that there was no 
mandate in the negotiation to discuss differentiati on and hence India could not entertain any such 
discussion.  On target formulae, he recalled earlie r discussions in which very  serious concerns and 
reservations had been expressed by a large number of Members.  The proposal was indifferent to 
these concerns, or worse, moved in the opposite dir ection away from attempting to find a balance.  
Like others, he had a number of questions about the genesis of the numbers that the proposal put 
forth.  He also enquired about whether developing countries would be required to make greater efforts 
than developed countries.  Fourthly, on qualitativ e parameters, he recalled earlier discussions on 
certain modal objectives and cross-cutting issues on wh ich he had sensed an emerging balance.  This 
balance was not reflected in the EC proposal.  I ndeed, ideas that had been discussed and discarded had 
re-emerged.  Fifthly, with respect to capping, thr esholds and sensitive sectors, he stated that, at the 
current stage of the negotiations, it was disruptive to  talk about issues which were completely new to 
services and went beyond the architecture of the GATS, let along questions such as how to determine 
which sectors were sensitive, etc.  Finally on sectoral  targets, he noted that the proposal only refered 
to sectors, which appeared to imply that Members' in terest was confined to sectors to the exclusion of 
modes.  The relation between targets on the one hand and sensitive sectors on the other was far from 
clear and appeared to suggest a priori  exclusions of many areas of interest to particular countries.   
17. The representative of Korea  expressed his appreciation for the EC's efforts to try to move 
forward the negotiations and for its hard work in internal consultations among its 25 member states.  
Setting aside some specific questions on the EC's paper that had been raised by Australia and New 
Zealand, he sought to touch up on some of the responses by other Members which he had some 
difficulty to understand.  Firstly, some Members had argued that the notion of 'multilateral' in Article 
XIX:4 could not used to spur work.  He cited the entire provision that "The process of progressive liberalization shall be advanced through bilateral, plurilateral or  multilateral negotiations directed 
towards increasing the general level of specific commitments undertaken by Members under this 
Agreement."  In light of the entire provision, Korea had difficulty understanding why utilising a multilateral approach directed towards increasing th e level of specific commitments was something TN/S/M/17 
Page 30  
 
  that Members could not or were not allowed to attempt.   Another Member had contended that 
broadening commitments was not a legitimate objectiv e.  He had difficulty understanding how Article 
XIX:4 precluded the broadening of commitments as a legitimate objective, in particular given the 
notion that negotiations were 'directed towards incr easing the general level of specific commitments'.  
The argument that there existed no legitimacy fo r broadening commitments could be understood to 
negate the objective of increasing legal predictability .  With regard to the notion of 'multilateral 
negotiations', in Korea's view the word 'multilateral'  did not refer exclusively to the MFN obligation.  
Rather, it also encompassed the concept of collectiv e efforts to complete the task Members had been 
given, namely, to achieve the progressively higher le vel of liberalization and no t solely flexibility.   
18. The representative of Korea noted that some Members had argued that progressive 
liberalization was subject to flexibilities.  In Korea's view, the inverse was true, namely that 
flexibilities were to be constrained by, or subject to  the central objective of progressive liberalization.  
In other words, the notion of flexibility should not be interpreted as one  which gave Members a 
completely free hand, with the possible exception of LDCs.   He wondered whether the Member that had evoked the notion of 'full-flexibility' had envi saged a situation where one had a completely free 
hand in the negotiations.  Referring to the related poi nt raised by a Member that flexibility was not a 
matter of degree and that anything mandatory was not  compatible with flexibility, in Korea's view, a 
multilateral negotiation was of a mandatory nature to a certain degree.  Indeed, were a negotiation not 
of a mandatory nature to some degree, it could not  be a 'multilateral negotia tion'.  Elaborating on the 
issue of degree, flexibility was certain ly a relative concept.  He said th at the level of development, the 
size of economies, the notion of 'opening fewer sect ors' and liberalizing 'fewer types of transactions' 
were relative terms. The right to specify sectors was also a relative concep t when applied in the 
context of a negotiation in the sense that liberaliza tion needed to respond the requests of the trading 
partners.  In other words, fully respecting the right  to specify sectors needed  to be seen within the 
context of the negotiation and the exchange of concessions.  The guidelines were negotiating 
guidelines and not guidelines for absolute flexibility.   He wondered whether those Members that had 
argued that flexibility was not a matter of degree c ould support an 'all-or-nothing' approach.  He asked 
whether precluding any complement ary approach amounted to denying any flexibility in negotiating 
positions and hence entailed inflexibility.   
19. Referring to a point raised on the history of  GATS negotiations, the representative of Korea 
affirmed that his delegation did respect this history.   However, history evolved and the contrary would 
prevent change and confine Members unnecessarily to p ast traditions.  If past traditions were on the 
verge of collapsing, ways to supplement and stre ngthen the structure was indeed a way to preserve 
history.  Elaborating on the point that the nego tiations were near collapse and referring to Korea's 
proposal for a quantitative target, he said that as th e level of market access commitments would begin 
to reach a critical stage, Members would be confronted by strong protectionist interests in strategically important sectors.  Under such circumstances, Korea thought that collective efforts would help 
overcome political resistance.  Some of this political resistance might be difficult to overcome through 
the plurilateral approaches and hence Korea belie ved that multilateral efforts were necessary to 
support the structure.  It was for this reason that Korea proposed to progressively address uncommitted sectors while providing some room for compromise by requesti ng bindings at existing 
levels of market openness for the newly committed sectors.  
20. Seeking to respond to questions that had b een posed about his delegation's proposal, the 
representative of the European Communities
 noted that the number of interventions and degree of 
interest shown suggested that it had raised releva nt issues.  He sought to clarify two fundamental 
misconceptions.  Referring to comments that the Eu ropean Communities had put forth the paper with 
a delay, he recalled that his delegation had stated  clearly on a past occasion that the negotiations 
needed to be re-energised, lead to a substan tive outcome, and be supported by quantitative and 
qualitative targets.  He further noted that since that  time, his delegation had progressively added detail 
to its idea and indicated that it would propose concre te ideas, which it had done through its proposal.   TN/S/M/17 
 Page 31 
 
 
  It could not be said that it was a surprise that th e European Communities would put forth a proposal.  
The second fundamental misconception was that Memb ers were somehow close to an agreement and 
this proposal came at a late stage.  While he s upported and thanked the Chairman for his efforts in 
helping the Council to prepare a draft text, he sought  to clarify that Members were not close to an 
agreement in this respect.  His delegation had not agr eed to anything in this regard.  On the contrary, 
in his earlier comments, he had noted that the discussi on of the text needed to be put in the broader 
context of qualitative parameters a nd quantitative targets.  For example, there had not been agreement 
on two important issues that had been discussed earlier in the meeting, namely, the first sentence of the second paragraph of the draft text, and, in the section dealing with mode 3,  the reference to 51 per 
cent foreign ownership.  Therefore, for his delegation it was clear that Members were not close to an 
agreement.  With reference to comments on tautol ogies and the statement by Brazil on behalf of a 
number of Members that mandatory targets were c ontrary to the GATS, he said that he had no 
recollection of any justification or argument in support of this view.  The European Communities and others had clarified their view that they saw no contradiction between the GATS and the membership 
agreeing to mandatory numerical targets.  Brazil a nd the co-sponsors of the statement had said that the 
flexibility of the GATS was not being respected, while he had explained in deta il the various features 
of the proposal that had been carefully included in order to ensure compliance with the flexibility 
mentioned in the GATS.  Referring to Australia's and Korea's statement, he said that they had also 
explained how the details on flexibility should be under stood.  Recalling that Brazil, in support of its 
argument, had cited certain communications from th e European Communities in the context of other 
negotiations, he said that the quotations highlighted  the content of those submissions and similar 
statements by his delegation on previous occasions, namely that a Member could choose the sectors in 
which it would undertake new commitments.  He saw no contradiction between this statement and the 
proposal.  The European Communities' paper sought numerical targets expressed through a multilateral decision of the entire membership that Members would take new or improved commitments in a number of sectors.  Each Memb er would choose in which sectors it would take 
commitments.  He reaffirmed that this proposal w as not contrary to his delegation's statements in 
other contexts.   
21. On the question of the starting-points for the proposed targets, the representative of the 
European Communities said that the starting-point s were the current commitments.  The target 
formula, namely 139 sub-sectors for developed count ries and 93 sub-sectors for developing countries, 
expressed a number of new and improved commitments that came on top of the current commitments.  
Whatever the commitments in a current schedule,  new or improved commitm ents would be made by 
developed countries in 139 sub-sectors and new or improved commitments would be made by 
developing countries in 93 sub-sectors. Referring to Brazil's enquiry that if the European 
Communities schedule covered 100 sub-sectors it woul d be required to take 39 new or improved 
commitments in order to fulfil the formula, he sai d that this scenario was incorrect.  Notwithstanding 
the number of sub-sectors currently subject to co mmitments in the European Communities schedule 
(and this number was above the 100 sub-sectors me ntioned), the European Communities would be 
required to take new or improved commitments in  139 sub-sectors the context of the Round.  The 
starting-point was the same for the target on capping , namely current commitments.  With respect to 
the question as to whom in th e European Communities would be required to undertake a 
commitments, he recalled that the European Co mmunities presented an offer on behalf of the 
European Communities and its member states and said that the European Communities offer would 
comply with any numerical target.  The Europ ean Communities schedule was largely harmonised and 
continued to evolve in this direction.  Theref ore, certain new or improved commitments might not 
always apply to all 25 members states, just as for other Members, certain commitments were only 
partially applicable to the territory of a Memb er. In economic terms, to count the European 
Communities as 25 individual markets was somewhat  absurd given the Single Market.  On the 
question as to whether the proposal covered horizontal restrictions or commitments in the targets, he 
responded in the affirmative and elaborated that were a Member to increase the foreign ownership 
cap, it would be allowed to count this improvement for the number of sectors to which the horizontal TN/S/M/17 
Page 32  
 
  limitation applied.  On the question related to cro ss-cutting issues, the paper did not cover these issues 
as such, for instance, there was no n eed to deal with ENTs in a sp ecific section as this was addressed 
under the different modes, as reflected in the propo sal.  On MFN exemptions, he said that these were 
not in the paper but that the European Communitie s was not closed to discussing this issue as it was 
part of the negotiations.  With regard to the issu e of the situation of small and vulnerable economies, 
he said that the European Communities had included  this reference, and indicated that LDCs and 
small and vulnerable economies would not be covere d by the targets, as a further element of 
flexibility for individual Members.  He was surprised to see that when  features to give flexibility to 
individual Members were designed, this became a source of criticism.  The European Communities 
was neither creating through this reference any new group or new category of developing countries 
nor proposing any specific list of these countries.  Rather, the European Communities was noting that 
there existed individual Members in a particular s ituation that should be taken into consideration 
when proposing the adoption of targets.  It was si mply a reflection of the fact that there were 
considerable differences and variations among differe nt developing countries.  He reiterated that it 
was a feature of flexibility.  He said that if Memb ers wished to engage in a more elaborate discussion 
on the way to specify flexibility for individual Members, his delegation would not be closed to such a 
discussion. With reference to the origin of the numbers in the proposal, the representative of the 
European Communities said that th ese reflected the high level of am bition that his delegation sought 
in the negotiations in comparison and in a bala nced manner with other areas of the DDA.  The 
numbers he hoped would not come as a surprise.  He suggested that Members had become used to 
results that were so poor that they had forgo tten expressions of ambition through requests.  The 
numbers should be seen in the context of requests ma de.  On the question of the different approaches 
in the paper and referring to the qualitative appro ach under a target formula, he said that these 
parameters were not expressed in a mandatory mann er.  The chapeau to paragraph 6 suggested that 
"developing modal qualitative parameters in order to  provide guidance for the scheduling of new and 
improved commitments", which was non-mandatory drafting.  The number of new or improved 
commitments would be mandatory and not the specific content of those commitments.   
 
_______________  TN/S/M/17 
 Page 33 
 
 
  ANNEX II 
 
Comments by selected delegations at an informal meeting of the Special Session  
of the Council for Trade in Services held on 18 November 2005  
 
1. Speaking at an informal meeting on 18 November, the Chairman  opened the floor for 
delegations' General Statements. 
2. The representative of the United States  said that his delegation sought a very high level of 
ambition for the services negotiations.  In his delegation's view, services was a critical element in a successful final package.  His delegation could not e nvisage a large package in the other core areas of 
market access, unless there was a very significant package in services.  The negotiations had been 
underway for five years, and pre-dated the DDA ow ing to the GATS built-in agenda.  He regretted 
that these negotiations had failed to yield signifi cant progress towards fulfilling Members' collective 
obligation to achieve a progressively higher level of liberalization.  Me mbers could not afford to delay 
any further in moving to more ambitious and subs tantive negotiations on services sectors and modes 
of supply.  Therefore, his delegation welcomed th e Chairman's text for the Hong Kong Ministerial 
and thought that generally, the principles, objectiv es and approaches it set forth provided an effective 
framework for Members to accelerate the services nego tiations and thereby achieve the goals of the 
membership. With a few modifications, his delegati on could fully support the text which represented 
an important step forward for the negotiations.  
3. The representative of Indonesia
 speaking also on behalf of Brunei Darussalam , Malaysia , the 
Philippines  and Thailand  noted the short time remaining before the Ministerial Conference.  This 
group were committed to working towards the multilate rally-agreed level of ambition in the services 
negotiations.  This level was embodied in the first paragraph of Article XIX of the GATS, namely a 
progressively higher level of liberalization.  This process was to take place with a view to promoting 
the interests of all participants on a mutually adva ntageous basis and to secure an overall balance of 
rights and obligations.  The group took strong exception to loose allegations that Members, 
particularly developing countries, did not share an  appropriate level of ambition in the services 
negotiations.  The group had remained keen and comm itted to negotiations in market access and rules.  
Referring to the informal meeting held on 29 Septem ber, the group had outlined its viewpoint on the 
possibilities for intensifying the request-offer appr oach in the services negotiations.  The statement 
was rooted in the collective belief that there remain ed room for improvement at the expert level in 
order to allow a deep appreciation of trade interest s of Members and to produce fruitful dialogue.  It 
was in this context that the group had remained consistently constructiv e and engaged in recent 
informal meetings at which had been discussed possibl e elements and the first draft of the ministerial 
text on services.  However, the group also affirmed  that the Doha Round was a development Round.  
The developing countries had agreed to launch the Round on the premise that the existing imbalance 
with respect to benefit obtained from participat ion in the multilateral trading system would be 
rectified in the negotiations.  In this regard, th e Council's challenge was to strike the appropriate 
balance between high ambition and flexibility of Me mbers, and particularly that of developing 
countries, that was enshrined in the GATS, in add ition to the balance betw een the market access and 
rules negotiations.  The group believed that Members, particularly developing countries, had neither a 
complete appreciation of the complexities of services, nor the technical capacity at the current 
juncture in order to participate meaningfully in flexible formulae approaches to the negotiations.  Any 
list or formula could only be meaningful or arbitrary at the end of the negotiation.  D emandeurs  
should understand the difficulty that developing  Members encountered in making offers. Given 
Members' different regulatory regimes and vari ous national authorities that assess and monitor 
development in all services sectors and sub-sectors,  developing Members in particular should be 
entitled to as much flexibility as thei r circumstances might require.   TN/S/M/17 
Page 34  
 
  4. The representative of Indonesia said that the group was deeply concerned by the proposal that 
would result in an imbalance in the outcome at Hong Kong, namely, a services text that was more 
advanced in detail, specificity and apparent amb ition as compared to agriculture and NAMA.  This 
was untenable and unacceptable since the DDA was in tended to primarily address the imbalances in 
the multilateral trading system, especially in the area of agriculture.  As a matter of principle, the 
group could not accept that agriculture, which w as of fundamental importance to developing 
countries, was accorded only a factual report while services, in which developing countries hardly had 
offensive interests and had not been adequately addressed by demandeurs , was treated to a draft 
ministerial text.  Members would recall that dur ing a recent informal meeting of the TNC, the 
Chairman of the TNC had reminded the Chairs of  the respective negotiating groups to practice a 
"bottom-up" approach when preparing their respec tive contributions to Hong Kong.  Secondly, based 
on the developments in the agriculture negotiatio ns, it did not seem that full modalities would be 
arrived at prior to Hong Kong, and hence it was n ecessary to recalibrate in all areas in order to 
streamline efforts for concluding the Round.  The po int had been made that the services area should 
not be singled out if agriculture and NAMA were  only to present a narrative or factual report to 
Ministers at Hong Kong.  In this regard, the Co uncil needed to recalibrate the discussion in the 
Council in order to achieve some consistency in ap proaches in line with the possible achievements at 
Hong Kong in agriculture, NAMA and services.  Th e group could not endorse that a non-consensus 
document would be brought up to any level of deci sion-making, particularly in Hong Kong.  Finally, 
while endeavouring to be constructive in the ne gotiations, the group had been concerned by the 
specificity of the draft ministerial text that th e Chairman had prepared.  The group had always 
believed that, unlike agriculture and NAMA, the services negotiations had existing modalities that 
were enshrined in the Negotiating Guidelines.  The group urged Members, both demandeurs and non-
demandeurs , to intensify the request-offer negotiations.  This was the only solution to the lack of 
significant process, and not numerical targets or the dilution of developing countries' flexibilities under the GATS.  The group urged the demandeurs  to demonstrate leadership in giving genuine 
market access to developing countries in sectors and mode s of export interest to them and in the spirit 
of the development dimension of the Round.  Th e group rejected any effort to undermine the GATS 
structure that predecessors had delicately negotiated in the Uruguay Round.   
5. The representative of Brazil
 said that services was an important part of the negotiations and 
that his delegation was committed to a positive and ambitious outcome in the services negotiations.  
There were two negotiations mandated after the Ur uguay Round, namely agriculture and services.  
His delegation could echo many of the points raised by  Indonesia.  There was an issue of appropriate 
balance between ambition and development and betw een market access and rules within the services 
negotiations.  The negotiations we re to be conducted under the Nego tiating Guidelines, which he said 
did not contemplate numerical targets, but rather contemplated the question of flexibility for developing countries, their growing participation in  trade in services, etc.  If ambition was equated 
with a re-drafting of the GATS architecture and the seeking of new modalities for the negotiations in 
services that went against the GATS architecture and the negotiating mandate, Members would not succeed.  He proposed that such attempts be eliminat ed from consideration, including a heading in the 
draft text that would leave such an approach to the negotiations open.  Re-drafting the mandate and 
the GATS would lead to failure and no text would be agreed to for Ministers in Hong Kong.  Agreeing to set aside any such proposals would remove an important obstacle to moving the 
discussions forward.  He clarified that he did not mean to say that there were not portions of the draft 
text that Brazil thought could be improved, and indeed his delegation would have sugges tions to make 
at a later point.  However, he sought to stress that numerical targets were not feasible because they would change completely the way in which th e services negotiations we re conducted under the 
GATS.  Members needed to proceed from a "bottom- up" approach, even though this might be time-
consuming, in order to meet with success in Hong Kong and the Round.  There could be no substitute 
for such an approach.  The representative of Indonesi a had also stated that it would be difficult to 
accept a text in services that did not bear a relationshi p to the level of progress in texts in other areas 
of the negotiations and hence recalibration was n ecessary in services.  In this regard, he said that  TN/S/M/17 
 Page 35 
 
 
  Brazil was prepared to be conditionally forthcoming.  Members could continue to work on the basis of 
the Chairman's text and await developments in agri culture and NAMA with the prospect of raising the 
levels of those texts.  A better outcome could be sought for Hong Kong in all areas of the negotiations 
if one viewed the situation in a more positive light.  Brazil was prepared to work on such a conditional 
basis.  His delegation could not proceed with a fu lly-developed text in one area while texts in other 
areas were limited to progress reports.  He urge d that Members proceed in services on a conditional 
basis and work with the text by the Chairman on the assumption that texts in other central areas would 
be forthcoming.  On S&D and the development di mension of the Round, he said that these themes 
needed to be borne out in all aspects of the negotiations.     
6. The representative of Cuba  expressed her delegation's support fo r the statements made by the 
representatives of Indonesia, Brazil and Zambia on beha lf of the LDCs.  Referring to a statement by 
the Chairman of the TNC at its meeting on 11 Novemb er and his appeal to recalibrate expectations for 
Hong Kong, Cuba believed that the Chairman should present the Council with a factual report as other 
Chairmen in other negotiating areas would do, especi ally given the major divergences regarding the 
draft text.  This text was far from being a te xt agreed upon by Members and her delegation had 
expressed on numerous occasions the concerns that it had with this text. Cuba did not accept 
qualitative, numerical, sectoral or plurilateral appro aches unless they were strictly voluntary.  Cuba 
believed that such approaches were inconsistent w ith GATS Article XIX:2 and paragraphs 2, 3, 4 and 
12 of the Negotiating Guidelines.  Therefore, her delegation was not satisfied with the drafting of 
paragraphs 3, 4, 5, 10, 11 a nd 15 of JOB(05)/262/Rev.1.  Her delegation would welcome initiatives 
aimed at introducing flexibility for developing coun tries as foreseen in the GATS and the Negotiating 
Guidelines. 
7. The representative Egypt  speaking on behalf of the African Group  said that the Group was of 
the view that an outcome at Hong Kong would need  to reflect a balance in the negotiations.  The 
Group believed that all areas of the negotiations were  important and should be looked at horizontally.  
Reiterating some issues of concern, which had been  communicated to the Chairman of the TNC, he 
said that the Group had strong reservations about co mplementary approaches that were incompatible 
with the GATS' spirit and structure.  The establishm ent of any quantitative element or collective target 
would clearly and profoundly undermine the flexib ility provided to developing countries in the GATS 
and the Negotiating Guidelines.  The Group strongly oppo sed the inclusion of numerical targets in the 
services text.  Furthermore, the Group had strong r eservations about the prescriptive nature of the 
proposed language on the issue of qualitative targets and parameters.  They favoured the revision of 
the language so as to make it less prescriptive.  Th is concern should be taken into account so that 
Members could move towards a common understanding on this issue.  He said that the Group had a 
number of specific proposals, including related to plurilateral approaches and rule-making. 
8. The representative of Honduras , referring to numerical indicators in the draft ministerial text, 
said that her delegation believed th at it would be counter-productiv e for the draft text to include 
harmful elements that ran against the grain of th e flexibilities embodied in the GATS and violated the 
Negotiating Guidelines.  This was a crucial point th at needed to be borne in mind.  Her delegation 
requested that this language be deleted from the text.  It was legitimate to se ek to raise the level of 
ambition in the negotiations; however, Members could not proceed in a manner that ran counter to the 
principles that guided the process. 
9. The representative of Switzerland  said that the Chairman's draft text was comprehensive and 
balanced and constituted a very go od basis for future work which would give new and badly-needed 
impetus to the services negotiations.  If Members wa nted the DDA to deliver ambitious and balanced 
results at the end of 2006, Ministers would need to  agree to a detailed approach for services in Hong 
Kong. Switzerland believed that such an approach w as crucial given the characteristics of the services 
negotiations in comparison to the other two market  access areas.  Modalities, namely formulae and 
numbers, were needed in agriculture and NAMA in or der to bring these negotiations to the end game.  TN/S/M/17 
Page 36  
 
  This was not the case in services which was charact erised by a time-consuming request-offer process 
that required considerable resources and efforts to r each a satisfactory outcome.  It was for this reason 
that the content of the services package for Hong K ong needed to provide precise guidance.  Without 
a clear approach endorsed by Ministers, the services negotiations would not deliver in due time.  This 
might undermine the capacity of the services negotiati ons to contribute to a balanced outcome across 
all subjects under negotiation.  In the end, what was at stake, was the successful outcome of the 
Round.  His delegation believed that the level of specifi city of the Chairman's text was the right one.  
Services was the "poor cousin" of the framework  document of the July 2004 Package and it was 
clearly lagging behind the two other market access negotiations, namely agriculture and NAMA.  The 
Chairman's draft text, hence would restore balan ce across the three market access negotiations to 
reach the same level of specificity.  Switzerland believed that it was only natural for Members to 
focus on these types of approaches.  He took issue with the view that the modalities for services had 
anything to do with modalities for NAMA and ag riculture.  The modalities for services was a purely 
programmatic document whereas the modalities for NAMA and agriculture contained 98 per cent of 
the results, including all figures.  Hence, these documents  could not be compared.  It was also for this 
reason that one could not wait for modalities to be completed in agriculture and NAMA before 
defining a precise and efficient approach to ser vices while foreseeing a successful and ambitious 
outcome to the latter.  The Chairman was on the right track and that his delegation was willing to 
work with others with a view to developing a substantive and operative document for the Hong Kong 
Ministerial Meeting. 
10. The representative of India
 said that the Chairman's text was proving to be a very useful one.  
Members were poised at a critical stage of the services negotiations, since Hong Kong provided likely 
the last opportunity for significant ministerial guidan ce and direction to achieve an ambitious result in 
services.  Such a result was a pre-requisite for pr oper balance across the various market access areas 
of the Round.  All Members were aware of the poor  quality of offers after two rounds of offers and 
the less than expected progress in the area of disci plines on the area of domestic regulations.  Some 
delegations had earlier spoken of the need for amb ition in services and India agreed.  However, he had 
also heard from some delegations that the current  text did not provide any ambition as it lacked 
mandatory numerical targets.  India found it hard to  believe that ambition in services could be defined 
only by numerical targets, which in any event, did not address the issue of quality.  On this issue, he 
agreed with the comments by Brazil.  India belie ved that the current text did provide ambition, 
although many had expected more in their areas of interest.  However, when looking at collective 
ambition, Members needed to be prepared to comp romise to some extent.  For its part, India had 
considerably modulated its ambitions in the hope that , in this process, Members could arrive at a text 
to which all could agree.  His delegation wished to see this spirit of compromise reflected in the 
positions of all delegations.  I ndia believed that the current services text provided Members with 
adequate direction and specificity while at the same time fully preserving the GATS architecture and 
flexibility for individual developing countries that was crucial for maintaining the requisite policy 
space.  It would be a pity if the one issue of num erical targets were to hold up the entire issue of 
ambition in services and would lead to a situation in which the current text could not be preserved.  If 
such a situation did materialise, serious questions w ould be raised about the real intentions of some 
Members.  He had also heard the opposite view fro m some Members that ther e was no need for such 
specificity in services given that Members might not have a similar deliverable in other market access 
areas.  There seemed to be a suggestion that the July Package could suffice for Hong Kong and that 
the current text could be discarded.  It was in th is context that Members ne eded to fully understand 
and reiterate the different nature of the services ne gotiations in comparison to the other market access 
areas.  The request-offer process w as the main methodology in the ser vices negotiations.  In addition 
there was the "bottom-up" GATS architecture.  This  implied that the services negotiations would need 
sufficient time to deliver results.  Members could not afford to miss the opportunity at Hong Kong if 
there was to be a successful out come to the Doha Round by 2006.  Members could not wait without 
specific direction for an indefinite period in servi ces because this would not leave adequate time to 
deliver the kind of results that would be needed for a balanced outcome across all three market access  TN/S/M/17 
 Page 37 
 
 
  areas.  In summary, it was important that Members not allow the services text to become hostage, 
either to other areas of the negotiations or to c ontroversial issues within these negotiations.  On the 
contrary, Members needed to harvest the very useful  elements in the text and work on this basis post-
Hong Kong to achieve the substantial results th at Members desired in the negotiations.   
11. The representative of Chinese Taipei  said that his delegation wished to make a few comments 
on the Chairman's revised draft text.  Firstly, it was quite clear that the request -offer approach used in 
the services negotiations was totally different from those used in negotiating agriculture and NAMA 
issues, which mainly relied on a formula and numbers.  Services embraced a very diverse spectrum of different sectors, and each individual sector was very difficult to measure in terms of the quality of market access.  For the services negotiations to reach a conclu sion alongside the other two issues, he 
said that a much more intense negotiating process was required, as well as much more time and 
resources.  For this reason alone, Chinese Taipei sought to see contained in the ministerial text a clear and precise roadmap of exactly what direction the services negotiations should take from Hong Kong 
onwards.  Secondly, if Members truly sought para llelism and balance across the three market access 
pillars, it would not come from a comparison of the declaration texts.  On the contrary, Members 
should be seeking parallelism and balance in the outco mes across those pillars.  Given the inherent 
differences between the nature of the issues, Chin ese Taipei did not believe that Members needed 
matching, balanced texts across all three pillars of market access.  Rather, Members would need very 
specific guidance for the negotiating process in order to achieve balanced outcomes.  Finally, Chinese 
Taipei saw the latest revised text as already prov iding a very good foundation and framework for the 
services package based on the GATS structure.  Ev en though Chinese Taipei supported the idea of 
having numerical targets to improve the depth and quality of the services negotiations, he could agree 
with the suggestion to remove from the text some  of the elements on which there was no consensus 
and include them in the Chairman's report, if it would help move the negotiations forward.  Doing so 
would leave the issue to Ministers to decide.  His delegation would continue to provide the Chairman any support he needed in preparing the services te xt and producing a credible package on services for 
Hong Kong. 
12. The representative of Australia
 said that the Chairman's text was an important achievement.  
Australia sought an ambitious outcome on services, not only for the sake of its own services providers, but also as part of a balanced outcome  in the Round.  The work accomplished by the 
Council before Hong Kong would be critical for setting the overall e nvironment for services trade for 
some years to come, and hence Members needed to reflect carefully on the Council's work.  All knew 
the differences between the service s negotiations and the modalities-based negotiations in agriculture 
and NAMA.  In Australia's view, balance would come  at the end of the Round.  However, given the 
nature of the services negotiations and the time n eeded to prepare offers (which was a difficult 
process, as those that had gone through it could cer tify), it was inescapable to his delegation that 
services would require more guidance from Hong Kong if  the negotiations were to be concluded in 
2006 with an important and ambitious services com ponent of an overall package.  His delegation 
believed that the draft text incorporated many of th e key elements of this guidance and should not be 
allowed to slip out of Members' hands.  His dele gation was willing to explore all ideas to progress the 
negotiations, including different approaches to setting ta rgets.  However, Australia felt that it was very 
important to include a place-holder on numerical targ ets in the draft text.  He was not proposing a re-
writing of the Agreement; however, in the light of more than a decade of experience with the GATS 
framework, Members were entitled to consider ways that they might help themselves do their business 
in a more efficient manner.  
13. The representative of Norway
 said his delegation supported fully the Chairman's text and 
believed that he had taken the right approach.  While  he agreed that there should be progress reports 
from Chairmen to the TNC, he sai d that Norway looked forward to a Ministerial Meeting in Hong 
Kong that would produce a Ministerial Declaration including paragraphs on each and every subject 
and annexes where possible.  Modalities meant differ ent things to different people and in different TN/S/M/17 
Page 38  
 
  areas of the negotiations.  In trade facilitation there had been discussion on modalities that had started 
the negotiations, while in agriculture and NAMA th e modalities seemed to refer to an end to the 
negotiations.  He did not think that the concept shed any light on the Chairman's annex.  Rather than 
discussing whether the annex contained modalities or not, Members should concentrate on the subject 
matter and the substance of the annex to the Ministerial Declaration.   With regard to this substance, 
Norway believed that the task of the annex was to move forward as quickly as possible, and where 
feasible, beyond the level of the July  2004 framework.  He was not sure if this level had been reached.  
His delegation supported the comments by Switzerland,  India and others that services were lagging 
behind.  The Chairman's text sought to deliver fo r services something that was similar to the July 
2004 framework.  Norway was not in agreement that a recalibration of the annex, in either direction, 
would be more than what Members sought in ag riculture and NAMA for Hong Kong.  Secondly, he 
noted that the purpose of the ministerial text would be to set goals to be achieved by the end of the 
Round.  Given that all hoped that this Round would conclude at the end of 2006, Members needed to 
set the stage for conclusion at Hong Kong, both in  terms of market access and rules issues, as 
indicated by Indonesia and Brazil.  More importa ntly, it also related to ministerial guidance on 
substance and process.  With particular refere nce to market access, Norway saw the need for 
ministerial direction on both qua lity and quantity so that the am bition on services could be met and 
not prejudiced.  The mechanics of the services negotiations was very different from the other negotiations, a fact which had to have an implicat ion on the annex in terms of substance and on 
process.  The services negotiations would require mo re time to finalise the Round after Hong Kong, 
given the number of sub-sectors, the modes, ENTs and other elements that would need to be taken 
into account.  The services negotiations could not be  likened to the process in NAMA where, once the 
formula and figures were arrived at, the end-game  was near.  This dynamic meant that Members 
would need to move forward at the present juncture in order to ensure that the desired outcome could 
be achieved by the end of 2006.  It was key that Members capture in the annex the progress that had 
been made and set the stage for intensified negotia tions in 2006 so that Members could fulfil their 
ambitions by the end of the Round.  On the difficu lties noted by some about the Chairman's annex and 
specifically on numerical targets, it seemed difficult fo r Members to agree to this issue at the Special 
Session.  He wondered whether it would need to be rai sed at a higher level, which lead to the question 
as to how the issue could be framed so that appropriate ministerial guidance could be given in Hong Kong.  In this regard, he had h eard suggestions from Chinese Taipei and Australia, for instance that a 
reference be included in the draft text or in the Ch airman's report to TNC, and he thought that ways 
could be explored further.  
14. The representative of Canada
, referring to an earlier heads of delegations meeting said that he 
had taken from that meeting agreement on a number of points.  The first was that Members would 
maintain full ambition for the Round, which included  the 2006 timetable.  Services would be a critical 
component of the single undertaking and that this deadline left Members no time to waste.  While 
other negotiating groups might be able to move quickly once they had resolved the issue of 
modalities, in services there was no short-cut and no substitute for bila teral and plurilateral 
interaction.  The second key outcome was that the ne gotiating Chairs should seek to build on the July 
framework to the greatest extent possible and that progress since then, to the extent possible, should 
be reflected in the ministerial text.  This had unique implications for services.  The July Package 
adopted detailed frameworks for establishing moda lities in agriculture and NAMA.  For services, 
there were simply recommendations from the Special Session related to the submission of offers.  
Hence, the July 2004 framework was a very unbalan ced text.  In fact, a lack of progress in services 
over the preceding 16 months demonstrated that the July Package had not pr ovided sufficient political 
guidance.  The July Package re presented a disparity between services and the other market access 
pillars, with services lagging behind.  The impli cation, which had been reaffirmed in recent 
discussions, was that services needed to make a larg er leap from the July Package to the Hong Kong 
Declaration.  If one was to attempt to consider the balance across the nego tiations, Canada submitted 
that one would need to consider the July 2004 r ecommendations and a text for Hong Kong on services 
together.  He was reassured that the work in servi ces to date was making steps towards rectifying this  TN/S/M/17 
 Page 39 
 
 
  horizontal disparity.  His delegation found that the text that had been assembled was pragmatic, 
realistic and a useful contribution to the proces s.  He commended the Chairman for accurately 
reflecting the views of all the Members.  The entire text reflected compromise, constructive debate and the efforts and progress achieved by all Member s since 2004.  In Canada's view, it was an 
essential platform for Members' work next year.  On the difficult issue in paragraph 11, Canada 
believed that it was possible for Members to quantif y ambition in services in a manner consistent with 
the Negotiating Guidelines and the GATS.  It would be unfortunate if Member s were to prematurely 
foreclose this possibility and he encouraged the Chai rman to find an appropriate manner in which to 
reflect this situation in his report.  Assessing the st ate of play in services in a realistic manner, he said 
that the text was a best endeavour text and was certainly not a modalities text.  Canada would have 
wanted to see many elements in the text that were  missing and some that were included that it would 
have liked to avoid.  Nonetheless, on balance, the text reflected progress and took a step in addressing 
Canada's concerns regarding the lack of ministerial guidance to date.  In the absence of such guidance, 
he had serious concern that the services negotiations  would remain adrift well into 2006, which was a 
precarious situation, as failure to advance the wo rk in the Special Session in early 2006 would 
jeopardise the services package and the Round as a w hole.  He therefore encouraged Members to 
remain constructive and pragmatic with regard to th is text, which Canada be lieved could be the basis 
for consensus.  He hoped that the Chairman would be  able to convey this sense in his pending report. 
15.  The representative of Hong Kong, China
 said that it was a major achievement to see the 
services package taking shape.  Many of the statemen ts on the services text, im plicitly or explicitly, 
had referred to parallelism with agriculture and NAMA and, in the view of those presenting those 
comments, the less then full modalities in these areas.  It was important to be clear on one point:  if 
the Round were to be completed in 2006, Hong Kong would need to remain an important staging-post 
for the intensive negotiations that would need to follow.  The task across all the negotiating areas 
needed to collect the necessary i ngredients to make Hong Kong a launching pad for putting the 
negotiations on the right and fast track in 2006.  Against this background, he could not see how the 
lowest common denominator across the board would help Members achieve this objective, especially 
when each area of negotiation had its particular dyna mic.  Secondly, on the question of balance, it was 
understandable that Members would seek balance across negotiating areas, particularly the three 
market access pillars.  Howeve r, this balance needed to be sought in the outcomes and any 
prescriptions for such outcomes, rather than in th e process of negotiations.  Many other delegations 
had pointed out that the services negotiations were not operating in the same manner as agriculture 
and NAMA, which needed modalities to bring their nego tiations to conclusion.  However, in order to 
bring services to a conclusion, Members needed a more intensified negotiating process and as much 
time, resources and efforts as Members could afford in  order to negotiate among trading partners in 
Geneva as well as consult in capitals.  It therefore stood to reason that services needed rather more 
specific guidance for the process of negotiations after Hong Kong.  Thirdly, if there were a real issue 
on parallelism, it was the level of ambition across the market access pillars .  In agriculture and 
NAMA the levels of ambition were set in the respec tive formulae and numbers.  In services, there was 
nothing in the current services text which set th e ambition in any comparable manner.  Some 
Members felt strongly that a quantitative approach, ev en numerical targets, could be used for this 
purpose.  Hong Kong, China continued to have an  open mind in this regard.  Members might not 
achieve a full prescription for the levels of ambiti on across the market access pillars in Hong Kong.  
Nonetheless, Members were maintaining the overall le vel of ambition for the Round and, therefore, in 
order to secure a high level of ambition, no options s hould be foreclosed prematurely.  The distinction 
should be maintained between issues related to the level of ambition and those related to negotiating 
process.  Finally, on the services text itself, he said that the latest text provided a good structure and basis for the services package.  Most of the el ements it contained commanded a broad consensus 
among Members as essential ingredients for intensif ying the services negotiations immediately after 
Hong Kong with a view to bringing them to a subs tantive conclusion.  He noted contentious issues 
such as numerical targets, and said that to his delegation it seemed sensible to distinguish between 
issues of convergence and divergence.  In order to  prepare Ministers for Hong Kong, Members should TN/S/M/17 
Page 40  
 
  be capturing the elements which commanded a br oad consensus among Members while highlighting 
outstanding issues of divergence for higher level atten tion.  The task of negotiators in Geneva was to 
capture as many converging elements as they could and reduce the list of outstanding issues.  From a 
practical point of view, it would seem reasonable to separate the two in the text and the Chairman's report respectively.  He echoed others' comments fo r the Chairman to continue his efforts to put 
together a text which captured elements commanding broad consensus and to report to the TNC on his 
own authority the key outstanding issue requiring resolution.   
16. The representative of China
 said that Hong Kong was a new landmark in the Doha Round 
negotiations in the sense that Members were one year away from the completion of the Round.  
Members recognized that the services negotiations  were different from agriculture and NAMA 
negotiations.  This difference could be seen in the GATS, which served as the basic framework for 
negotiations on liberalization of services trade.  It was also reflected in the Negotiating Guidelines and 
Procedures which had been agreed upon at the beginning of the current Round of services negotiations and had guided th e negotiations to date.  In order to  conclude the services negotiations by 
the end of 2006, Members might need to ask Minister s to give further guidance to their work in Hong 
Kong without deviating from the GATS structure and the Negotiating Guidelines and Procedures.  
After several rounds of discussion, China had the impression that Members were converging on many parts of the draft text that the Chairman had pr epared in JOB(05)/262/Rev.1.  Members could build 
upon this convergence to attain a text for the H ong Kong Ministerial Conference while leaving the 
most controversial components aside.  Members still needed to improve or re fine the language and in 
particular, the development dimension had not been ad equately reflected in the draft text.  As for the 
level of ambition, there were various ways of expressing it.  In goods, numerical targets had been 
traditionally the best way to express level of amb ition.  In the negotiation on services, which covered 
diverse sectors and sub-sectors, qualitative parameters, such as those contained in the draft text, could 
best reflect the level of ambition.  China could agree to take the draft as a basis for work on the 
services text at the Hong Kong Ministerial Conferen ce; however, the most controversial components 
would need be to set aside. 
17. The representative of Korea
 expressed his delegation's apprecia tion to those delegations that 
had demonstrated flexibility in the discussions on the ser vices part of the draft ministerial text.  It was 
a good sign that Members had reached a broad sense of consensus on certain elements of the text, 
especially on the portions of the text dealing with  negotiating principles and objectives.  Progress in 
services could be observed by looking at the substa ntive differences between the current text and the 
one in the July Package.  The la tter was an insufficient basis for securing a balanced level of ambition 
with the other negotiation areas.  By contrast, th e revised draft text was a good starting-point for 
future negotiations on a level playing field with th e other negotiation areas.  At the current juncture, 
two key issues were pending and would need to be addressed.  The first was how to reflect the notion of parallelism horizontally across the different are as of the negotiation.  The second was how to treat 
outstanding issues such as, inter alia , numerical targets, sectoral and modal objectives and the pursuit 
of plurilateral negotiations with the notion of a criti cal mass.  On the first, Korea understood that some 
Members were requesting a significant modification of the services text and cited parallelism across 
the negotiating areas and flexibilities in the GATS struct ure.  Korea firmly believed that parallelism 
should be applied to the end result of each negotia tion and not to the specific modalities.  In this 
regard, Members needed to be mindful not to fall into the trap of generalisation by equating full 
modalities in the services negotiation with those of th e other negotiation areas, especially agriculture 
and NAMA.  The treatment of outstanding issues was causally linked to the systemic issue of how to 
find the middle ground between progressive liberaliza tion and flexibilities within the GATS structure.  
Flexibilities could not exist in isolation, but rath er should be seen through the objective of progressive 
liberalization that created commercially meaningful  and real market access opportunities.  He said 
that this point of view had been confir med at the APEC meeting in Busan, Korea.  TN/S/M/17 
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  18. The representative of th e European Communities  sought to reiterate that for his delegation an 
ambitious outcome for the services negotiations remained a central and crucial element for assessing the result of the Round and for determining whethe r such results were balanced.  The European 
Communities had major offensive interests in services and sought real new market access 
opportunities for its services suppliers as a result of the Round.  Not wishing to enter into a discussion 
on the definition of less than full modalities, he said that the European Communities level of ambition 
for the Round remained intact, as was the need to obtain at Hong Kong a result in services which 
would be comparable to its level of  ambition and level of specificity to the result obtained in the other 
market access pillars.  Balance acr oss the different areas could not be established at that meeting, 
however, this should not mean that Members should ad just downward.  In order to achieve a market 
access result that was comparable across the board, more movement would be required in services 
than in agriculture and NAMA because the respecti ve starting-points were different and because the 
services negotiations were inherently more comple x and required more time.  All knew that what 
could be done for agriculture and NAMA in the span of six months would likely require more time in 
services where more domestic stakeholders in partic ular needed to be involved.  The starting-point 
was different because there had been no progress in services until the July  Package and because the 
Package was less specific on services and hence had further widened the gap.  His delegation, like others, had thought that the process could rely on revi sed offers.  This expectation had proven wrong 
and the situation had not been redressed, but in fact  had worsened with the disappointing overall level 
of revised offers.  In July 2004 and at present, the services negotiations lagged behind the agriculture 
and NAMA negotiations.  It was timely to correct this situation and it was all the more necessary to 
correct it given the nature of the services nego tiations which would require more time, even 
subsequent to any agreement on the level of specifi city and ambition by Members.  He stated that 
Members had not reached this agreement and that th e draft text did not reflect the level of ambition 
needed in services.  The text rema ined a best endeavour one, and Memb ers needed to cross the line, as 
in other areas of the negotiations, which would le gally commit them to a specific result.  The 
numerical targets that had been referred to by many needed to be assessed in this light.  The European 
Communities was fully aware and respected the GA TS structure and the flexibility it provided for 
developing countries.  However, flexibility did not entail an endless addition of firewalls that would 
transform the GATS to a best endeavour text.  His delegation was willing to assist the Chairman in finding the adequate level of ambition and specificity.  In this regard, a number of changes to the draft 
text would be required.  The text  was a good start, but would need to  be strengthened if the goal of 
progressive liberalization was to be fulfilled.  He re iterated that his delegation sought a reinforcement 
of the language on different topics, which related to three general issues:  on qualitative parameters in 
the chapeau and with regard to mode 3; on the objective of the plurilate ral negotiations; and the 
reference to numerical targets.  He said he would revert to more specific comments later in the meeting. 
19. The Chairman
 opened the floor for detailed comments on his revised draft text contained in 
JOB(05)/262/Rev.1.   
20. The representative of Brazil  said that he wished to make a few preliminary detailed comments 
about the draft text, which sought to provide comfor t to Members without detracting from the level of 
ambition that some Members might see in the document.  On paragraph 2, a reference to Article IV of the GATS would provide comfort as it was an importa nt provision for developing countries.  Article 
IV provided a clear reference to the objectives of the negotiations, which were to address sectors and 
modes of supply of export interest to developing co untries.  This addition would prevent a re-opening 
of the portion of the text on objectives in this re gard.  On paragraph 3, hi s delegation had concerns 
with the phrase "given the lack of significant progr ess".  For paragraph 4, hi s delegation's concerns 
were about the language in modes 1 and 2 due to  the problems his delegation had raised on many 
occasions regarding the confusion over the defini tions of modes 1 and 2, which posed specific 
problems for Brazil in financial services.  There were areas in modes 1 and 2 where the existing levels of market access could be brought into the schedul es; however, there were other areas for which there TN/S/M/17 
Page 42  
 
  were specific circumstances that did not allow Member s to meet this objective.  On paragraph 5, he 
had noted the changes made and said that his dele gation did not see a value added to including this 
reference.  All Members knew that the text existe d and how it might be used in the negotiations, but 
the benefit from a specific reference in the Minister ial Declaration was not clea r.   On paragraph 10 
regarding plurilateral request-offer process, although his delegation had no gene ral problem with this 
paragraph, two changes might be made that would provide comfort.  The first, on paragraph 10(b), 
appeared to contain mandatory language on participa tion, and he suggested that the word "shall" be 
replaced by "should".  This would add comfort a nd remove difficulties in approving the text.  On 
paragraph 10(c), since the Council would review prog ress in general, he suggested that the reference 
be eliminated.  The standing agenda item on "Revie w of Progress" would provide an opportunity for 
those participating in plurilateral negotiations to make any relevant statements.  On paragraph 11, he 
reiterated that his delega tion could not accept any reference to nu merical targets and indicators, even 
in brackets, and he suggested that the reference be deleted.  On pa ragraph 15(c), his delegation did not 
feel that this reference was appropriate since a pl urilateral negotiation could be envisaged so long as it 
was not institutionalised.  In dealing with plurilate ral negotiations, his delegation imagined a Member-
driven and informal process with no bureaucracy associated with it.  Paragraph 15(c) contained a 
latent element of institutionalisation through a notif ication requirement.  The retention of this clause 
would require his delegation to revisit its position on the plurilateral negotiations in general.   
21. The representative of the Dominican Republic
 noted that the Chairman's revised text had been 
submitted under his responsibility.  Noting that her country was part of the ACP Group, she referred 
to a letter dated 11 November that had been sent to the Chairman and which gave the Group's position 
on services.  She was aware that the Chairman's revision was dated 7 Nove mber and hoped that the 
letter's contents would be taken in to account for a forthcoming revision.  With respect to the text 
itself, she supported others' comments about paragraph 4 and had reservations with the language used.  
She requested that the phrase "as far as possible" proceed the phrase regarding the removal of existing 
requirements of commercial presence.  This was a sens itive point for her delegation.  On paragraph 5, 
her delegation did not think it appropriate to make reference to the Annex to the Report to the TNC 
which had been submitted in July.  If the Annex were  referred to, the text in paragraph 5 should be 
deleted since it was not clear how this Annex w ould be used and did not necessarily reflect the 
concerns of all Members.  On paragraph 10, she supported the proposal that "shall" be replaced by 
"should" or "may".  Her delegation had a prefer ence that the place holder in paragraph 11 not be 
included in the draft, since this was one of the mo st controversial elements that had been discussed  
and there was no agreement on it.  It would help progr ess if this point were removed.  Finally, the date 
indicated in paragraph 15(b) should rather be March, since it would not be possible for small 
delegations to prepare requests by February.  
22. The representative of Cuba  echoed the comments by the Dominican Republic concerning the 
letter from ACP countries.  On the draft ministerial text,  she said that the phrase "with appropriate 
flexibility accorded to individual de veloping countries" in paragraph 2 did not follow the wording of 
Article XIX and asked that the word s "accorded to" be replaced by "for " in paragraphs 2 and 4.  She 
also requested that, in paragraph 4, the phrase "as provided for in Article XIX of the GATS" be incorporated.  On paragraph 3, her delegation shared the concerns of others about the Chairman's text 
which indicated a lack of significant progress, and sh e asked that this reference be removed.  On 
paragraph 4, the phrase "to the extent possible"  should be included as it had appeared in the 
Chairman's first draft.  In paragraph 5, Cuba supported Brazil's comment that there was no need for 
this paragraph and should be dele ted.  With regard to paragra ph 10, she recalled her delegation's 
reservations about the plurilateral approach since the full consequences for developing countries were 
not clear.  Hence, Cuba sought less prescriptive lan guage and suggested that the word "interested" 
precede the word "Member" in sections (a) and (b).  In 10(b) Cuba agreed that "shall" should be 
replaced by "should" or "may".  In sub-item (c), he r delegation did not see the need to reflect the point 
as indicated.  On paragraph 11, Cuba reiterated th at it could not accept the concept of numerical 
targets and asked that the reference be deleted.  On paragraph 15, her delega tion was not in favour of  TN/S/M/17 
 Page 43 
 
 
  a specific reference date for the conclusion of th e negotiations and instead suggested that the phrase 
"negotiations by the end of 2006" be replaced by "neg otiations by the end of the Round".  In 15(b) she 
asked that the brackets and the words "by", "for" a nd "thereafter" be removed so that the sentence 
would read "as soon as possible".  She asked that th e same square brackets be removed in 15(c), (d) 
and (e) and replaced, for instance by "early enough". 
23. The representative of Australia  wished to provide some bala nced feedback in response to 
some of the earlier comments.  On paragraph 2, the words "progressively higher" should be 
maintained.  On paragraph 3, the assessment that th ere had been no significant progress was a fair one 
and other areas of the negotiations would choose to c onclude the same about their negotiations if they 
wished.  In services, the offers did not reflect significant progress.  Additional balance could be 
provided to the draft paragraphs dealing with prin ciples, since as the text stood, it focussed on quality 
indicators as a way of moving forward.  The quality indicators in the text were good and supported improvements in quality as a reflection of ambition.  He said that Australia also had ambitions in 
terms of quantity and coverage.  For this reason, he  suggested language for this section, for instance, 
"Members agree that in order to create commercia lly meaningful new market opportunities in all 
WTO Members, it is necessary to substantially impr ove both the quality and quan tity of offers."  On 
paragraph 4, the chapeau could be strengthened an d not weakened.  On paragraph 5, his delegation 
was impressed by the document on sectoral and moda l objectives and recognised all of its caveats.  It 
would be useful for capitals in helping to prep are offers and commended efforts to include it as a 
reflection of progress in defining a level of amb ition.  On paragraph 10(b), his delegation could 
entertain drafting suggestions; however, it was a fundamental tenet that a Member that received a 
request would respond to it.  While a Member needed not accept all of the elements of that request, it 
was obliged to respond to it.  It would fundame ntally undermine the request-offer negotiation if it 
became optional to respond to requ ests, bilateral or plurilateral.  Any drafting change would need to 
reflect this commitment to respond to requests, the first step of which would be to meet with the 
author of the request.  On paragraph 11, it was impor tant for Australia that the option of a numerical 
target not be foreclosed and that Ministers be in a position to agree to them if the level of ambition in 
other areas warranted it.  On paragraph 15(b), Austra lia did not wish to see a final and determinative 
date for plurilateral requests and recognised the constraints under which many were working.  His 
delegation would respond to requests regardless of wh en they were received.  However, it would be 
important for the plurilateral negotiations to be s ubstantively underway and Members interacting by 
March or April, for it would be unlikely that Austra lia would have the time to take the outcome of 
those negotiations to capital, consult with domestic stakeholders and include the outcome in a revised 
offer should the process be delayed.  A February date  for the submission of plurilateral requests would 
facilitate the process, although a later submission would not be foreclosed.   
24. The representative of United States
 said that the text was largely a useful document going 
forward and would put services roughly in the position that it should be vis-à-vis  the July Package's 
Annex in terms of the progress made in other areas.  It was her hope that the elements in the draft 
would remain intact for movement forward to  Hong Kong. On paragraph 1 of the principles 
statement, her delegation suggested that language be added in the second line to emphasise that the 
kind of growth referred to was new economic growth  and opportunities for all trading partners.  She 
supported an earlier suggestion on pa ragraph 3 that, for purposes of ba lance, wording should be added 
in terms of sectoral objectives.  On paragraph 4, her delegation would be conc erned by suggestions to 
strengthen the language which the United States felt was appropriate.  On the mode 1 objectives, her 
delegation suggested that in (a)i) the commitments be at least  at the existing levels of market access,  
and that in (a)ii) the language refer to the re moval of existing impediments to cross-border supply 
such as requirements of commercial presence.  With respect to mode 3, in (c)i), the substantial 
reduction or elimination of foreign equity particip ation should be included in the language and in 
addition, there should be a reference to restricti ons on establishment in that phrase; in (c)ii), the 
language should include a reference to substantia l reduction of quantitative limitations as well as 
economic needs tests.  With respect to the langua ge on guidance to sectoral and modal objectives in TN/S/M/17 
Page 44  
 
  paragraph 5, the United States suggested that the phr ase "In order to provide guidance for the request-
offer and other negotiatio ns, Members shall consider sectoral  and modal objectives expressed by 
Members" appear and that a reference be made to  the Chairman's Annex. The United States supported 
the idea of this Annex thinking it paralleled the solution in domestic regulation in terms of the 
reference to the illustrative list and hence could be  dealt with in a footnote. On the plurilateral 
approaches, the United States believed that the la nguage that appeared was a positive approach and 
she suggested language that any Member of a group of Members could also present additional tools to 
facilitate such negotiations, such as checklists, modal schedules and scheduling or classification 
guidelines.  With respect to numerical targets and i ndicators, the United States noted that a number of 
proposals had been tabled as part of an overa ll package on complementary approaches for the 
negotiations. Some form of numerical targets could be helpful in pursuing the mandate for 
progressively higher level of services market access li beralization.  Her delegation was aware of the 
concerns that some Members had raised regarding num erical targets, but did not think that this meant 
that the idea of a target needed to be completely  ruled out.  It was possible to develop a numerical 
target that supplemented the request-offer process while preserving the letter and spirit of the GATS, 
and that the GATS provided appropriate flexibility to develop such an alternative.  The United States 
therefore proposed that a collective target with an individual element could be used to set a minimum 
level of improvements for the coverage of sub-sect ors.  A collective target aimed at progressively 
increasing the level of specific commitments could be based on differing leve ls on contributions from 
all Members, excluding LDCs, thereby preserving appropr iate flexibility.  Different collective targets 
could be set for developed and de veloping countries or one collective target could be set for all 
Members.  This collective target could be supplemented by an individual element whereby, in 
contributing to the collective target, each Member  would ensure that new or improved commitments 
were reasonably distributed across those sectors and m odes of interest to Members.  In tabulating the 
results, new or expanded sectors could be counted as well as each sub-sector that contained improved 
commitments as a result of improvements to horiz ontal and modal coverage.  Enhancements to 
scheduling clarity, reduction of market access limitations (such as ENTs) as well as other 
improvements (such as reduction of MFN exemptions) could also be included.  A collective target 
could complement, but not replace, the bilatera l request-offer process as well as any plurilateral 
approaches.  A collective target could also encour age Members to bring more to the negotiating table 
by setting a minimum for broadening coverage a nd sub-sectors and improvements to their existing 
commitments.  The primary focus of the proposal  was an increase in the coverage of sectors and 
modes of supply.  It did not pretend to address th e quality of commitments.  This would be addressed 
in the plurilateral approach which provided greater  emphasis on quality by providing a structure that 
would enable Members to focus on key sectors and modes of interest, as well as the bilateral process which would bring all of these elements together as Members chose the sub-sectors to include and what level of commitments to undertake on key sector s and issues in response to specific individual 
requests.  This proposal was but an idea and we lcomed others' views and questions. She drew 
attention to a room document that outlined the idea.  She suggested that, sinc e this was an area in 
which there was a lack of consensus, it would make  sense for the Chairman to put brackets around the 
relevant language in the draft text as it moved forward rather than de lete it completely since it seemed 
to her that within the divergent views there was some support.  This could be a reasonable approach, 
in addition to any discussion that they Chairman might wish to include in transmitting the text as to 
the nature of the discussion. Finally, with respect  to the timelines portion of the text, her delegation 
believed that in sub-section (e) it would be usef ul to insert the phrase "Further negotiations as 
necessary", which might be a useful phrase to precede  the existing language in order to indicate that 
there would need further negotiations in the process.   
25. The representative of Pakistan
, referring to paragraph 11, sai d that her delegation did not 
consider mandatory numerical targets feasible.  Ho wever, Pakistan would strive to make the best 
possible commitments, which served its national inter ests, in the current Round.  With regard to 
paragraph 14, she supported an earlier proposal on te chnical assistance and referred to the concept of 
"other complementary measures" which were ne cessary for better offers and supporting successful  TN/S/M/17 
 Page 45 
 
 
  liberalization in trade in services.  Article XIX:3 called on the Council for Trade in Services to carry 
out an assessment of trade in services in overall term s and on a sectoral basis with reference to the 
objectives of the GATS as stated in paragraph 1 of  Article IV of the GATS.  Such an assessment 
could not be undertaken when no data was being collected at a disaggregated level for services 
sectors.  In this regard she sought to make three points.  Firstly, she drew attention to a training 
module produced by WTO in collaboration with the UN Interagency Task Force on Statistics of 
International Trade in Services, entitled "Measuring Trade in Services" and said it needed to be 
followed by all Members.  Those who lacked the technical capacity should be provided with expertise 
to improve their collection of trade in services da ta.  Secondly, regulatory capacity of developing 
countries needed to be strengthened, which could be  done by adhering to international standards.  
Efforts needed to be made, by using technical as sistance, to coordinate with regulatory bodies, 
especially those that were of importance to developi ng country service exporters, in order to establish 
common standards and criteria for business.  The application of common standards would make it easier for developing country service exporters to establish their credibility in export markets.  
Thirdly, awareness of the GATS and its related issu es had to be raised among service providers and 
professional trade associations in developing countries .  Such associations needed to be educated on 
the GATS in order to enable them to play an aggressive role in identifying export markets and 
coordinating with local as well as foreign regulator y institutions.  With respect to the European 
Communities formal proposal contained in document TN/S/W/55, the representative of Pakistan said 
that different interpretations coul d be made about the numerical targets proposed.  The paper proposed 
that developed Members introduce improvements or  make new commitments in 85 per cent or 139 
sub-sectors from a total of 163 sub-sectors.  Developing Members were proposed to make similar 
commitments in 67 per cent of the 163 sub-sectors.   It was not clear if each improvement in a sub-sector would be counted separately, for example, whether 2 or 3 improvements in the same sub-sector 
would be given separate credit towards the total of 93 sub-sectors, or whether improvement or new commitments were required in 93 different sub-sectors.  If the latter were the case, it could be a 
disincentive to liberalization.  Members might feel tempted to take back a second or third 
improvement in a sub-sector to save for future targets while still fulfilling requirement for one 
improvement in the requisite number of sub-sectors.  She asked for an example for part II of the paper 
to clarify the concept of capping and minimum thr eshold being linked to qualitative parameters.  It 
was not clear when sub-sectors would be taken to be de facto  bound and what "entirety of the sub-
sector concerned" entailed. 
26. The representative of India
 stated that the Chairman's draft text was a solid basis.  However, 
in light of the various comments and suggestions that had been made, he wished to make a few 
additional comments.  On paragraph 2 and 4, he  agreed with the suggestion to add the word 
"progressively" before "higher".  On  paragraph 3, it was important to reflect in some manner the many 
statements that had been made in the Council that progress had not been satisfactory.  It was a factual 
statement.  He took into account the concern by othe rs that there was a lack of progress elsewhere, for 
which he thought there could be scope either in the te xt or horizontally.  On paragraph 4, he said that 
this text had been the subject of intensive negotia tions and thought that the Chairman had worked out 
a balance between the different pa rameters, the chapeau and a taki ng into account of the concerns 
about flexibility, specificity and ambition.  Any attempt to disturb the balance would be 
counterproductive.  While it was true that all Memb ers in their own areas of interest might have 
higher expectations, all had tried to address this through collective ambition.  On the chapeau of 
paragraph 4, he said that the language was not prescriptive, and indeed he was not adverse to 
strengthening the language; however, he recognised the concerns that had been expressed by others in 
this regard.  Leaving the text was perhaps most prudent, and not lowering the level of the current 
formulation.  In terms of modal parameters, some sp ecific suggestions had been  made with regard to 
mode 3, and he cautioned that the balance acro ss modes and the other parameters should not be 
altered by seeking to selectively picking one mode wit hout looking at others.  Specific suggestions for 
mode 3 would require him to put forth suggestions for mode 4 and no doubt others to suggest further 
changes.  On paragraph 5, the sectoral and moda l objectives in the Secretariat document was useful TN/S/M/17 
Page 46  
 
  and it was one way of expressing the collective thoughts of Members.  Recognising that some 
Members might not have had an opportunity to artic ulate some of their objectives, he suggested that 
the document be a working document so as to allow Me mbers to make additions to it in the future.  
This might allay a concern that had been raised.  On paragraph 8 related to domestic regulation, he 
thanked the Chairman and some Members for thei r flexibility that various documents be made 
available on the WTO web-site, which was an importa nt issue for India.  He recognised the delicate 
balance that had been struck.  On paragraph 10(b), he agreed with the sugg estion that any response 
should be an individual one.  He agreed with co mments on paragraph 10(c) that a separate paragraph 
might best capture the underlying idea.  He was happy with the language in paragraph 13 on LDC Modalities.  On paragraph 14 he s upported the language provided by  Chile.  On paragraph 15, he 
agreed with other comments that these timelines needed to be looked at horizontally.  On 15(c) 
specifically, he agreed that there might be inconsis tencies with paragraph 10 and might best be left.  
Finally, on numerical targets, he reiterated India's earlier comments that there was a tremendous divergence on this issue and this concept should not be  maintained in the text.  However, he agreed 
with earlier suggestions that the Chairman, in  his report, could reflect divergences.   
27. The representative of the European Communities
 said that his delegation had a number of 
suggestions for amendments to the Chairman's draf t text.  His delegation could support an earlier 
suggestion by Australia concerning the first three paragr aphs, with the last word of the suggested text 
replaced by "commitments".  On paragraph 4, hi s delegation sought stronge r language by using the 
word "shall" in the place of "should strive to".  On the modes of this paragraph, he did not agree with 
earlier comments about the perceived balance; his delegation believed that the language for mode 3 
needed to be strengthened.  In this regard, he s uggested "Commitments at existing levels of market 
access on a non-discriminatory basis across sectors of interest to Members".  He also suggested 
"Commitments to substantially enha nce levels of foreign equity par ticipation allowing at least 51 per 
cent foreign ownership".  On paragraph 5, the European Communities supported an earlier drafting 
suggestion by the United States.  On paragraph 6, he said that the LDC language was a positive text.  
On paragraph 13(a), he wondered whether the words "including in" needed to be maintained.  On 
paragraph 8, he thanked delegations that had demonstrated fl exibility in arriving at an acceptable 
solution in domestic regulation.  On paragraph 10, his delegation wished to see an additional sentence 
in the chapeau that would read "Plurilateral negotia tions shall aim, on a sectoral basis, at deeper 
liberalization commitments made by a critical mass of WTO Members";  he also suggested after "following manner" to add "or through any other mechanism with similar effect."  Still under 
paragraph 10, point (a), he suggested that the words "(including modal schedules or checklists)" be 
added after "collective requests"; and the addition of  point (e) that would read "Commitments made 
by Members shall be spread across a minimum numbe r of sectors in the negotiations of which they 
have participated.  That number shall be determin ed by [date]."  On paragraph 11, his delegation 
wished to elaborate on the existing text so that it would read, "To complement the bilateral request-
offer process and contribute to progressive liber alization, Members shall establish by [date] 
quantitative market access targets.  The market access targets shall be reflected in the second round of 
improved revised offers by Members."  On para graph 15(d), the European Communities proposed to 
add the sentence:  "These offers shall include ne w or improved commitments taken in implementation 
of the different objectives and approaches."  The European Communities welcomed the United States 
room document and was pleased that another paper indicated that the GATS structure was perfectly 
compatible with numerical targets.  This paper needed to be further discussed, in particular the 
concept of collective targets it contained.  His dele gation had some concerns that a collective target 
could facilitate "free-riding" on the part of certa in Members.  A discussion of how this could be 
avoided and include high ambiti on was warranted.  Responding to the questions by Pakistan and 
referring to the question about whether improvements were counted by sector or improvement, he said 
that sectors were counted.  On the question of the capping mechanism, he clarified that the reference 
to a minimum qualitative threshold related by mode to the entirety of the sub-sector meant that a 
Member could not have limitations of the type menti oned in the paper that applied to the entirety of 
the commitments.  For example,  a limitation that applied to certain committed CPCs under a sub- TN/S/M/17 
 Page 47 
 
 
  sector would not be a minimum commitment envisaged by the proposal.  A commitment which 
applied to part of the sectoral or modal covera ge would qualify under the capping mechanism.  He 
was open to further questions.   
28. The representative of Korea  wished to make some selected comments on the draft text.  
Korea's basic position was to build on the content of  the draft in a transparent manner rather than 
watering it down.  On the paragraph referring to  sectoral and modal objectives, the quality of 
benchmarks developed by groups of friends would be worth incl uding in the services text.  This gave 
Members good reference and guidance to improve the quality of their offers on a voluntary basis.  
While Korea recognised the usefulness of the pl urilateral request-offer me thod under paragraph 10 as 
one of the ways to implement sectoral and modal objectives, his delegation wished to register its 
interest in plurilateral negotiations with the no tion of a critical mass in addition to the critical 
plurilateral request-offer process as suggested by the European Communities.  On paragraph 11, his 
delegation strongly supported the inclusion of conc rete language on numerical targets in the text, 
though it was open to the exact structure of the nume rical targets.  In this context, his delegation 
agreed with Australia that language referring to co verage be included in the principles portion of the 
text.   
29. The representative of Turkey  said that his delegation could go along with the text in its 
current format and saw it as guidance for work in pr ogress.  His delegation was curious to see how the 
question of numerical targets would be handled and believed that the entire text should not be 
squandered for this element.  In  this regard, he supported the position voiced by others that it be 
deleted since there were wide gaps in the views among Members.  Leaving aside the placeholder on 
numerical targets, he said that the main characteristi c of the text was its neutrality overall.  He urged 
that this fact be borne in mind before establishi ng negative linkages with other areas.  Members had 
no more time to create a brand new text and it was not  an appropriate time to re-open the existing one.  
Members were at a critical juncture at which Me mbers should be able to obtain good guidance from 
Ministers in Hong Kong.  The text, with some modifications on LDCs for example, would be 
instrumental in this regard.  Members needed the current text, with minor m odifications and deletions, 
as the minimum to facilitate the services negotiations in the future.  On LDCs, his delegation could go 
along with the language suggested by the LDC Gr oup; however, he sought further clarification 
regarding the mechanisms proposed in substitute pa ragraph 13(a) of their proposal.  On domestic  
regulation, his delegation could accept an illustrativ e list of possible elements for Article VI:4 
disciplines.  His delegation would have further comme nts in this regard once work on the list would 
begin in the new year.  It was useful to keep th e Special Session overview of the negotiations included 
in a separate paragraph rather than emphasising only plurilateral approaches.  On technical assistance, 
he was awaiting further instructions from capital.   
30. The representative of Brazil  wished to make a few comments on the plurilateral negotiations 
and on the United States proposal on numerical target s.  He noted that the concept of plurilateral 
negotiations, which had evolved from an informal pa per by a number of Members, had been reflected 
in the language in the draft text.  This informal  paper had implied an informal plurilateral process by 
which any Member or group of Members could organise themselves, present collective requests, etc.  It did not imply any institutionalisation of the process. Any such institutionalisation would be 
impossible, since there could be two or three gr oups for a mode or sector.  Hence, the process was 
totally informal, Member-driven and without any bureaucracy (i.e. no minutes of meetings, no 
negotiating group created, no chairs of groups, etc.).  This was the type of plurilateral group that 
Brazil understood to be under discussion and for wh ich it was willing to nego tiate language.  Another 
type of plurilateral was the type he saw the Eur opean Communities advocating, which was the type of 
plurilateral negotiation that Brazil was not prep ared to negotiate. Brazil could not accept any 
institutionalisation of the negotiations.  It was for th is reason that if paragraph 15(c) were maintained 
along with the relevant portions of paragraph 10, the la tter would need to be altered in order to reflect 
all the necessary qualifications and assurances that  Members were not entering into any sectoral TN/S/M/17 
Page 48  
 
  negotiations as he understood was proposed by the Eu ropean Communities.  It  was essential that 
Members decide either for the Eu ropean Communities approach or th e other informal approach.  It 
would be important for other demandeurs  that had not intervened, but tended to support the European 
Communities on this issue, to clarify their position.  If Brazil perceived that there was an intentional 
ambiguity to extract at the last moment a sectoral negotiation, he would be compelled to come forth 
with concrete language on the pl urilateral negotiations.  Secondly,  many developing countries were 
ultimately less concerned the use of the word "s hall" or "should" to describe the plurilateral 
negotiations, but rather were concerned with the f act that Members "shall meet" collectively.  If a 
collective request was sent to a Member, the Member would respond from capital and could choose to incorporate the request into their o ffer.  It was very different to require a Member to meet with the 
demandeurs , which was a matter of concern to many de veloping countries as they might not have 
sufficient resources to do so.  Brazil had no problem  to meet with other Members on a plurilateral 
basis, and had done so to date with the European Communities and the LDCs.  This concern needed to 
be acknowledged and a way to accommodate it found.  He did not think that Members were saying 
that there could be no plurilateral negotiations, but rather were concerned that they might imply an 
overly taxing effort on their part, particularly  given that it was not known how many plurilateral 
requests might be received and the on-going nature of the bilateral process.  The concern was with an 
avalanche of requests and obligatory meetings an d with the possibility that Members might be 
singled-out in the Special Session's review of pr ogress.  Separating these two issues would help to 
bridge the gap.  His delegation thus suggested that  the word "should" be used to provide comfort in 
the knowledge that Members would respond to a request.   
31. Turning to the United States proposal on numeri cal targets, the representative of Brazil said 
that, by presenting a collective request, he understood there to be an implicit recognition that the types 
of individual complementary approaches that had been  offered to date were inconsistent with the 
GATS architecture.  His delegation understood the propo sal as an attempt to avoid this inconsistency 
and retain the benchmarking approach through a coll ective approach.  Secondly, the proposal was fair 
in recording that only one Member's 'non-consensus issues paper' had been a part of this process 
without trying to manipulate the characterisation of  contributions that had been made.  Thirdly, 
paragraph 4 made it clear that the proposal did not address capping, which confirmed Brazil's view 
about capping.  He also had a number of requests for clarification.  The first was related to paragraph 
2 and "an individual element".  This might raise an element that was incompatible with the GATS 
architecture.  The second was related to the next sentence of paragraph 2 about scheduling clarity and 
MFN exemptions as elements accounted for in the tally ing of the collective target.  He asked how an 
element which introduced scheduling clarity would mesh with counting towards a sectoral collective 
target.   
32. The representative of Brazil said that, nonetheless,  his delegation retained problems with the 
proposal.  Firstly, proposals for benchmarks were  generally incompatible with the GATS, and 
moreover were unfair because they were self-serving a nd intentionally crafted to add ambition to only 
part of the membership to the exclusion of the pr oponents.  He recalled that some numbers of sub-
sectoral coverage had been circulated.  Referring to  the WTO website that provided some statistics in 
this regard, he said that the numbers it provid ed on sub-sectors made it clear that the proposed 
benchmarks would not have an impact on the prop onents.  Taking for instance the schedule of the 
European Communities, he noted that the EC-12 at  the end of the Uruguay Round had 112 sub-sectors 
and the EC-25 schedule (for which he had had to  make a number of assumptions) roughly 135 sub-
sectors.  Australia, Canada, Japan, Norway, Swit zerland and United States had 103, 105, 112, 111, 
115 and 110 sub-sectors respectively.  This ma de it clear why these Members were at ease in 
presenting benchmarks.  If one t ook developing countries, the numbers were much lower.  While 
some might argue that developing Members should be  hence offering more, the balance that had been 
reached in the Uruguay Round included the ability, in  other areas, to subsidise to the tune of billions 
of dollars and distort trade.  Either collective or  individual benchmarks created a situation in which 
the main contributors, in terms of new commitm ents, would be developing countries.  While  TN/S/M/17 
 Page 49 
 
 
  developing countries might be led to this situati on in a request-offer process, such a result could not 
occur through a pre-determined set of devises th at would oblige developi ng countries to give 
concessions in advance that should be negotiated through the request-offer process.  He had also 
counted new sectors included in offers, which a llowed for a comparison as to who offered to 
contribute in the current Round.  It was suspicious to his delegation that those that were trumpeting 
ambition were cautious in being ambitious themselves.  He hesita ted to use the parameters since 
Brazil did not feel that numbers alone were the pr oper way to measure progress.  However, he had 
done the exercise of applying the parameters used by others in order to see if there was any rationality 
to their exercise. To illustrate, he said that  Australia, Canada, Japan, New Zealand, Norway, 
Switzerland, United States and European Communities had proposed 8, 0, 7, 10, 4, 9, 5 and 7 new 
sub-sectors respectively.  The rhetoric about the re quest-offer not working should be re-visited in light 
of the numbers regarding developing countries.  Br azil had offered 31 new sub-sectors in its revised 
offer.  As developing countries were not by and large demandeurs  for numerical targets, he preferred 
to give anonymous but factual examples.  An im portant country in Asia had offered 41 new sub-
sectors.  Various Latin American countries had offere d, 6, 13, 18, 25 and 27 sub-sectors.  In the 
Caribbean various countries had offered 5, 11 and 20 sub-sectors.  In Asia, various countries had 
offered 9, 10, 19, 23 and 30 sub-sectors respectively.   He reiterated that the problem with using these 
numbers as a parameter for measuring progress was that they were likely not accurate since the 
quality of the offer required an examination of actua l scheduled restrictions.  This led to another 
difficulty with the Chairman's text, namely, that  in terms of adding sub-sectors, the developed 
countries proposed mandatory targets (which were unf air), whereas in terms of removal of scheduled 
restrictions (for which all had difficulties) th e developed countries supported best endeavour 
language.  It was for this reason that the paragraph on numerical targets could not be retained, since 
the other option for achieving balance would be to make all language mandatory which was not 
feasible.  Hence, the only option for balance was to  remove the reference to numerical targets.   
33. The representative of Chinese Taipei  reiterated her de legation's earlier comments that the 
latest revised text provided a very good foundati on and framework for the services package, because 
it included a good level of development and flexibility for Members.  On paragraph 3, she said that 
the phrase "lack of significant progress" was a factually  correct one that needed to be reflected.  She 
said that it was precisely owing to the lack of signi ficant progress that Members needed to rethink the 
objectives of the services negotiations.  On th e question of qualitative parameters, although her 
delegation shared certain concerns, such as the sensitivities associated with cross-border supply in 
particular sectors and the issue of improved commi tments in the categories of contractual service 
suppliers and independent professionals, Chinese Ta ipei recognized that the wording "Members 
should strive to ensure" in para graph 4 granted Members flexibility.   This language in the chapeau 
had accommodated her delegation's concerns.  Chinese Taipei could therefore support the language in 
the draft and did not require further changes.  Sh e echoed comments by India to maintain the balance 
in this paragraph.  Regard ing paragraph 5 on the sectoral and modal objectives expressed by 
Members, her delegation believed th is would be a very useful document, in particular for domestic 
services regulators.  Her delegation would rely on this Annex for the preparation of its revised 
requests and offers, and wished to see a link betw een these two documents.  On paragraph 7, she 
urged caution in re-opening a very delicately negotia ted and balanced text.  On domestic regulation, 
she said that this work was complementary for the market access negotiations.  In terms of plurilateral 
approaches, Chinese Taipei did not see paragraph 10 (b) and (c) as conflicting in any particular way 
with the GATS framework.  In fact, her delegation sought to see the plurilateral approach recognized 
at the Hong Kong Ministerial Meeting.  This a pproach was foreseen in paragraph 11 of the 
Negotiating Guidelines and in this context there w as no need to change the wording from "shall" to 
"should". Moreover, her dele gation considered that paragraph 15( b), which described the timeline for 
groups of Members to present their plurilateral request s, to be extremely important.  On paragraph 
15(c), she noted that the Council did review progress in this area and agreed with earlier suggestions 
in the regard.  Finally, regarding the numerical ta rgets and indicators, her delegation's position was to TN/S/M/17 
Page 50  
 
  maintain the issue.  Her delegation believed that th e issue could be included in the Chairman's report 
for further consideration by Ministers.   
34. The representative of the United States
 wished to respond to some of the questions that had 
been posed with regard to the United States propo sal and react to a number of comments that had 
been made on the draft text.  On paragraph 2, in response to a comment by China and the situation of 
recently acceded Members, she sugg ested that the sentence read, "W e recognise the special situation 
of recently acceded Members who may have unde rtaken extensive ser vices market access 
commitments at the time of accession".  On the sp ecific language proposed by China, she suggested 
that the phrase read, "and may factor this into the nego tiations".  In this regard, she noted that the level 
of commitments of newly acceded Members varied and hence Members should not presume that in 
every case the commitments were of such a high leve l that they would make a critical difference in 
the negotiations.  On the other hand, she acknowle dged that the level might be very high.  On 
paragraph 3, she agreed with tho se delegations that had said that th e noting of a "lack of significant 
progress" was a factual statement and that such language  should stand in paragraph 3.  In doing so, the 
United States was not implying that there had been no progress, but rather that it was important to 
highlight that a significant amount of progress needed to be made.  The United States reiterated its 
drafting suggestion on how to augment the language in that paragraph.  On pa ragraph 4, she supported 
the suggestion by others to insert the term "progressi vely" before "higher level of liberalization".  She 
reiterated the United States concern on the suggest ion to modify existing language that "Members 
should strive to ensure" and would oppose any change to this language.  With respect to mode 3 and 
the comments by India objecting to any strengthening, she said that the language suggested by the 
United States sought to obtain a balance in that  section of the text.  For example, under MFN 
exemptions, the phrase "substantial reduction of elim ination of exemptions" had been included and 
the United States had stated at a previous meeting that the same phrase should be inserted with respect 
to mode 3.  Her delegation would be very concerne d were this language not added for mode 3.  With 
respect to reference to the reporting mechanism that  could be included in pa ragraph 10, her delegation 
agreed that this concept could be given a broader c ontext and could be moved to the end of the text.  
With respect to the comments on the Chairman's Annex, the solution that had been found in the 
context of the WPDR might be useful for this Anne x.  This in no way would pre-suppose the status of 
the Annex and provided it as a reference which Members might choose to use or not use in bilateral or 
plurilateral negotiations.  In no way would it prejudg e any Members' position.  It was important that 
the Annex be referred to in a footnote to the ex isting paragraph, and the paragraph might be phrased 
to indicate that the Annex provided guidance to Me mbers in the negotiations.  There was a parallel 
between the solution on domestic regulation and a potential solution to address Members' concerns 
with the Annex.  She strongly urged Members to consider this solution. On the element included 
under 'timelines' with respect to Members notifying  the sectors in which they intended to engage 
plurilateral negotiations, her delega tion saw these as voluntary and not mandatory and believed that it 
could be a useful element without raising the c oncerns by some that this wording turned the 
plurilateral process into a more prescriptive or ma ndatory process.  On the comments by Brazil on the 
plurilateral process, while her delegation believed th at this process could be an important way to 
enhance progress, as had been done to date similarl y through friends groups, th e scope of this process 
would depend on Members' willingness to participate in it.  As a matter of course the process would 
be of a voluntary and informal nature.  She hoped that Members would wish to make this process as 
useful as possible.   
35. Addressing specifically the questions with resp ect to the United States collective targets 
proposal, the representative of the United States, refe rring to the operationalisation of the individual 
element, said that this individual element would be discretionary.  The United States believed that this 
element would have great value in distributing th e commitments that a Member would enter into; 
however, it would be discretionary.  In terms of how the individual target would be applied, the idea 
was to recognise that there were sectors and modes of particular interest to Members.  Hence, it would 
be useful in securing a more positive result for all Members to cover a certain number of sectors and  TN/S/M/17 
 Page 51 
 
 
  modes of supply in reaching the collective target.  Sh e reiterated that this was but one element of the 
proposal and should not be seen as a hard target.  With respect to the question on scheduling clarity, 
she gave the example of a Member that decided to  newly inscribe a CPC reference, which could be 
considered an improvement because in inscribing the CPC reference the scope of the commitment 
could be expanded.  She could imagine other exampl es where clarity would be improved, particularly 
in response to another Member's request.  On the point that market access targets could be seen as 
unfair, she appreciated the breadth of research done  by the representative of Brazil and noted that her 
delegation had done considerable re search as well.  It was significant to recall, when comparing 
developed and developing country offers, that im provements to existing commitments needed to be 
looked at in addition to newly inscribed sectors.  For countries which already had broad commitments, 
the value of the offer needed to be gauged thr ough improvements to existing commitments and not 
through new sectors alone.  She regretted that th is fact had not been mentioned in the Brazilian 
analysis.  Finally, on numerical targets, she reiterated that the United States offered this as an idea and 
an alternative, and believed that it did offer enough flexibility to be c onsistent with the letter and spirit 
of the GATS.  Her delegation had sought to build into the proposal every element of flexibility in 
order to achieve the appropriate flexibility afford ed by the GATS.  At th e same time the proposal 
sought to recognise that, with the exception of LDCs , all needed to make contributions.  A collective 
target could be seen as an effective way to do so.  In terms of achieving a progressively higher level of 
liberalization, for the United States, the concept coul d be expressed in an overall collective target that 
would be seen as a threshold and not as a maximu m point that Members would achieve in the 
negotiations.  She urged Members to keep an open mi nd, since as the debate continued, there might be 
some role for numerical targets.   
36. The representative of Thailand  said that, on paragraph 4, Members might have in mind their 
own pattern of relationships between key market access areas in services.  Thailand believed that 
qualitative parameters were active ingredients and that the language proposed by a number of ASEAN 
Members could be a fresh start and further elaborat ed in order to achieve consistency between modes 
and cross-cutting issues.  Elaborations could also ta ke into account anomalies or dispersion of mode 4 
commitments and regulatory concerns over mode 1 and mode 2.  Paragraph 5 of the Annex was 
comprised of a series of excerpts from information notes prepared by the Secretariat, which were 
useful, but that these excerpts should maintain this  original status and function.  While these notes 
were at Members' disposal, they needed not be mentioned in the Ministerial Declaration since a compilation of sectoral and modal objectives inhere ntly favoured those who were exporters of 
services.  In addition, the Annex could not replace the actual and formal request by a Member or 
group of Members in the bilateral or plurilateral cont ext.  Despite the caveat  of the document that it 
had no legal standing, its status would not be clea r if referred to by Ministers.  In summary, her 
delegation did not support any specifi c reference to the Annex in the Ministerial Declaration.  On 
paragraph 14, she expresse d support for an earlier suggested draft text as a good starting-point that 
captured elements that were useful for developing countries.  Targeted technical assistance should 
seek to serve the immediate needs of developing co untry Members in the context of the negotiations 
as well as their longer term needs, such as the comp ilation of statistical data and regulatory capacity 
building to sustain and enhance the process of progr essive liberalization.  As work on technical 
assistance language for the Ministerial Declaration was also under discussion in the Special Session of 
the Committee on Trade and Development, she sugg ested that the second sentence read "Targeted 
technical assistance should be given to developing countries allowing them to fully engage in the 
critical phase of the negotiations."  She thanked the United States for its submission and appreciated 
the efforts that it had made to consult with vari ous Members.  Nonetheless, Thailand found that any 
proposed collective numerical targets were problematic.  She could appreciate the desire by some to express a progressive increase in the general level of  specific commitments in numerical form, since it 
would be more readily understandable by Minister s or the public.  The initial and revised offers 
provided numbers which could be used for compar ative computations at the end of the Round if 
Members so chose.  She did not understand why it w as necessary to lay out a desired final outcome 
into a mandatory context when this could be achieve d through political will.  This would only prolong TN/S/M/17 
Page 52  
 
  the debate over the compatibility of targets with the GATS architecture.  This was a diversion from 
the issue of finding ways and means to ensure th e quality of offers, which was the main objective 
sought by the business community from the Round.  Her delegation believed that these items should 
hence be deleted from the text.  
37. The representative of Australia
 agreed with a point made by Brazil as his delegation too 
would hate to see numerical targets seen as a cynical exercise.  These targets would require a genuine 
effort by all.  Australia was willing to negotiate a target that would require such a genuine effort and 
move it beyond Uruguay Round commitments  and the levels in Australia's  revised offer if Brazil were 
willing to do the same.  He said that in Australia 's schedule no sectors were unbound.  At the three-
digit CPC level only 15 sub-sectors were unbound (six of which were residual "others" categories) 
and at the five-digit level some 17 sub-, sub-sect ors were unbound.  He said that in these small 
remaining areas for which Australia had no comm itment, it was willing entertain negotiations.   
38. In response to a point raised by Thaila nd, the representative of the United States  said that the 
proposal on a collective target should not be viewed as a ceiling, but rather as a threshold.  On the question as to why one would set a final target at th e current juncture rather than at the end of the 
negotiations, she responded that the United States pr oposal sought to help move the negotiations 
forward and would not be seen as a ceiling or an end-point.  On the Annex, she said it was an open 
and working document, in a manner similar to that for the illustrative list in domestic regulation,.  As 
she understood its function, the Anne x would remain open to proposal s that had yet to be submitted 
by Members and was one source among many others th at could be used in b ilateral and plurilateral 
negotiations.  She hoped that Members would see the Annex along the same lines as the illustrative 
list for work on domestic regulation.  On the LDC text , she suggested that in 13(b) be added the words 
"In responding to sub-paragraph (a), Members may consider" before the existing language.  She also 
suggested that in paragraph 13(d) the technical assistance and capacity building for LDCs be in accordance with paragraphs 8 and 12 of the LDC Mo dalities rather than a more general reference to 
the LDC Modalities.  Finally, in the paragraph on technical assistance, the words "allowing them" 
should be replaced by "to enhance their ability to".   
 
 
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