RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/S/M/38 
12 November 2010 
 
 (10-6040) 
Council for Trade in Services 
Special Session  
 
 
 
REPORT OF THE MEETING HELD ON 1 OCTOBER 2010 
 
Note by the Secretariat1 
 
 
1. The Special Session of the Council for Trade in Services held a formal meeting on 
1 October 2010, chaired by Ambassador Fernando de Mateo of Mexico.  The agenda for the meeting, 
contained in document WTO/AIR/3617, was adopted. 
A. IMPLEMENTATION OF THE MODALITIES FOR THE SPECIAL TREATMENT FOR LEAST -
DEVELOPED COUNTRY MEMBERS IN THE TRADE IN SERVICES NEGOTIATIONS  
2. The Chairman  noted that at the last meeting of the Special Session held in July, the delegation 
of Zambia had presented, on behalf of the LDC Gr oup, a revised draft of its waiver proposal.  A 
detailed discussion of the draft had revealed some outstanding issues, including the definition of origin of the service suppliers who would bene fit from preferential treatment under the waiver.  
Recently, the European Union had circulated a pr oposal to define LDC service suppliers for the 
purpose of this preferential treatment (RD/SERV/24 of 24 September).  He called on the European 
Union to introduce its proposal. 
3. The delegation of the European Union
 confirmed that origin was one of the issues that had 
been identified in the discussions on LDC modalities.  It was important that those discussions, based 
largely on the draft tabled by Zambia, make progress.   To further this objective, the EU had tabled a 
room document to foster further discussion on the issu e of origin.  If Members agreed to a mechanism 
allowing for preferences to be granted to LDCs, it  would be important that they ensured that the 
disciplines of the GATS were not undermined by those preferences, and that they benefited the 
countries targeted by the waiver.  The EU had looked into different options, and thought that it could 
contribute to that debate by its proposal based on Article XXVIII of GATS.  This GATS provision 
was not written with the granting of preferences in  mind, but inspiration could be sought from it in 
order to ensure that services supplied by juridical persons from LDCs were in fact from LDCs and not 
other countries. 
4. The delegation of Zambia  recalled that at the last session of the Special Session held in July, 
the LDC Group had submitted a JOB document c ontaining the Group's position on the waiver 
decision.  Preliminary comments had been made by some delegations, while ot hers had indicated their 
intention of submitting their comments once consulta tions with their respective capitals had been 
finalized.  The Chairman had also indicated his inte ntion to hold informal consultations in order to 
take the negotiations forward.  Since the last mee ting, not many consultations had been undertaken on 
the proposal for a draft waiver decision, apart from the Room Document just presented by the EU, and 
preliminary discussions held with the EU on 29 September.  The Group thanked the EU for its 
submission, which was currently under examination,  and looked forward to substantive discussions 
                                                      
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/38 
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  with the EU in the coming weeks.  The Group also  looked forward to hearing from other Members on 
the Group's proposal contained in the JOB documen t following consultations undertaken with their 
respective capitals.  This would help the Group to  plan ahead and hold, as appropriate, informal 
consultations before the November cluster of meetings so that the remaining differences in positions 
on the scope and other aspects of the draft waiver could be carefully ironed out. 
5. The delegation of Argentina
 wished to know whether the EU was planning to provide a more 
detailed explanation at the present meeting, since at this preliminary stage Argentina had some 
questions to raise.  For instance,  in the chapeau of the proposal the service supplier was defined as a 
juridical person.  The first question was why it ha d not been foreseen that a service supplier might 
also be a natural person?  The second question w as what distinction there was between those who 
carried out business operations normally, and those wh o carried out "substantive" business operations.  
Was there a difference in the degree or quality of the business? 
6. The delegation of Argentina also had doubts about  the drafting of paragraphs (a) and (b).  
These provisions used the word "or", which meant th at the definition would have to fit one or the 
other category, but not both.  In paragraph (b), th e person could be an owner, or the service supplier 
could be owned or controlled by a natural or a juridical person.  Argentina did not understand why 
such a distinction was made under paragraph (b), when in the chapeau only a "juridical" person was 
mentioned.  There was also a link between paragraphs (a ) and (b).  In spite of the use of the word "or", 
at the end of paragraph (b), the entity was descr ibed as one identified under paragraph (a).  Maybe 
these issues were simply about language or editing, but the meaning was not clear. 
7. The delegation of China  believed that the GATS-consiste nt language proposed by the EU 
would resolve the concerns of Members on the origin  of service suppliers from the LDCs.  For China, 
the LDC modalities stood very high on its negotiati ng agenda, it hoped that this issue could be 
resolved as soon as possible.  China hoped that the remaining issues relating to the scope of coverage 
would be resolved in the same manner.  As Chin a had already observed, this was only a copy of 
GATS language, and nothing was adde d to or subtracted from existing GATS provisions concerning 
rules of origin of service suppliers.  This was a wi se way to solve the problem.  If there were concerns 
from Argentina as to why there was a difference betw een the language in the chapeau and paragraphs 
(a) and (b), the Secretariat could provide information on this. 
8. The delegation of Pakistan  supported more precise wording in the waiver proposal, especially 
in the area of origin, and the EU proposal was theref ore welcome.  Pakistan w ould be looking in detail 
at how to add to or amend the draft waiver proposal in order to make it more "LDC waiver friendly".  
Perhaps, as Argentina and China had mentioned, th e origin definition for mode 4 should be made 
more operational.  In the EU proposal, the two pa ragraphs focused clearly on services supplied by a 
juridical person.  Service suppliers who were na tural persons operating unde r mode 4 might need a 
clearer description of the origin rules affecting them, and Pakistan would be looking forward to 
working with the delegation of EU and the LDC Group in this regard. 
9. The delegation of Korea  said that the EU proposal used the same definition of a juridical 
person of another Member as that contained in  Article XXVIII of the GATS.  But the proposed 
language seemed to mean than any juridical person of an LDC could be a service supplier whether or 
not it supplied a service.  More clarification was needed, and if there were  no difference between the 
EU proposal and the GATS definition, it w as not necessary to duplicate the wording. 
10. The delegation of India  said that it had been involved in the waiver initiative from the 
beginning, and was reflecting on the EU proposal.  As was the case for China, India accorded a high 
priority to LDC modalities.  It was willing to en gage in constructive discussion in any format to 
resolve any remaining differences.  India called upon Members to ensure an early finalization of the 
waiver instrument.  TN/S/M/38 
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  11. The delegation of Chinese Taipei  understood that the draft language reflected the language of 
Article XXVIII(m) of the GATS.  It seemed reasonabl e at first glance, but there was possibly a need 
to define "juridical person", and perhaps other te rms as well. As mentioned by Korea, and to avoid 
duplication, perhaps there was a need to apply the principle of mutatis mutandis  where relevant 
definitions already existed in the GATS. 
12. Regarding the drafting contribution made by Zambia in communication JOB/SERV/18, 
including the Ambassador’s furthe r elaborations, and without prejudi ce to its final position, Chinese 
Taipei had made two observations, of a conceptual nature, at the previous meeting.  To summarize: 
(1) the scope of preferential treatment could go  beyond the confines of GATS Article XVI in order 
that measures might be tailored to the specific needs of LDC Members, and (2) the requirement to 
accord MFN treatment to all LDC Members could be made more flexible so as to increase Members’ 
willingness to provide any preferential treatment to sp ecific Members in need.   What Chinese Taipei 
envisaged was a more effective and flexible policy tool, which Members could use to better integrate 
LDC Members into global trade in services.   
13. The delegation of Japan  recognized that LDC modalities were an important element in the 
DDA negotiations.  With regard to the definition of  service and the service suppliers of LDCs, Japan 
noted that it related to the revised draft as a whole.  Japan recognized that the origin still needed to be 
clarified, especially in the case of cross-border tr ade.  In this regard, Japan appreciated the EU 
proposal of a definition of the service suppliers of LDCs.  Japan recognized that the EU proposal was 
a good basis for future discussions, and would continue to reflect on it.   
14. The delegation of Switzerland  agreed with the basis of the EU proposal on defining LDC 
origin for the purpose of a waiver.  However, Switzerland shared the view expressed by other 
delegations on including this defin ition in the modalities.  The definition existed within the framework 
of the GATS, and was applicable in principle to a ny text that was linked to it.  Switzerland did not 
feel it was a good idea to take a specific definition from the GATS and put it in a modality document,   
no matter which modality it was.  Such a practice would create the problems raised very clearly by 
preceding speakers – for example why this definition and not others, and what about other provisions 
of the GATS.  There were also serious questions w ith respect to the modalities that already existed. 
These modalities did not copy verbatim  excerpts from the GATS.  And did this mean that Members 
would need to draft any future modalities in this way?   There were a series of questions that went well 
beyond the issue of whether this definition was desirable in this particular case or not. 
15. Clearly, the proposed definition was directly or  indirectly linked to new paragraph 5 which 
was added in the modalities text, and the Swiss de legation wanted to make the same point with 
respect to that provision.  Paragraph 5 merely  repeated an existing clause from the GATS, and 
moreover it did this in the framework of a modality which was not really binding.  The use of the 
proposed LDC waiver by a WTO Member was optional,  and in that case it was difficult to see why it 
was important to include a provision of this type si nce in any case the treatment could be granted or 
not as the Member in question so wished.  Perh aps there was some better solution, like the mutatis 
mutandis  implementation clause mentioned by the de legation of Chinese Taipei.  Such an 
interpretation clause would enable Members not to insert specific language in definitional and 
operational paragraphs, thus avoidi ng an unfortunate precedent for drafting of subsequent modalities. 
16. The delegation of Brazil  said that the waiver was in the best interests of all Members.  
Without prejudice to comments and suggestions it mi ght subsequently make, Brazil believed that the 
EU proposal could greatly contribute in reaching a consensus on this important issue. 
17. The delegation of Australia  supported the mechanism of an LD C waiver to allow Members to 
offer special and differential treatment.  It w ould examine closely the EU proposal, and looked 
forward to discussing it in more detail in the future. TN/S/M/38 
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  18. The delegation of Argentina
 said that, on re-reading the relevant paragraph in the GATS, it 
withdrew its request for comments on this part.  Ar gentina did however, question why the EU in its 
proposal was moving away from the definition of service supplier contained in GATS Article XXVIII(g).  Argentina had no problem in principle in  having a specific definition as proposed by the 
EU insofar as it was really necessary and that the de finitions in the GATS could not be applied.  
However, the EU needed to explain why there was a need to differ from definitions existing already in 
the GATS. 
19. The delegation of Uruguay
 had the same question as Argen tina – why was there a need for a 
definition already contained in GATS Article XXVIII ?  It was important to understand the purpose of 
this waiver – perhaps Members needed a different  type of definition which could highlight the 
development objective that Members we re seeking through this instrument .  In this case, it was better 
to pursue a definition of economic interest for citizen s or residents, and the legal or juridical persons 
who have an economic interest, without looking at the financial origin of the company operating in a 
given country.  In any case, if there were an Amer ican company that wanted to establish itself in an 
LDC, and export from its territory and had an ec onomic interest for that country, why couldn't 
Members contemplate that and not just talk about th e existing definition?  There was a need to find a 
definition that would enable Members to pursue the objective of the economic interest or objective of 
the waiver, and that would be a possibility of moving away from the GATS. 
20. The delegation of the European Union  thanked others for their comments and suggestions. 
With this text, the EU intended to touch only on th e question of juridical persons.  This aspect was the 
most relevant for the discussion at this point, but did not exclude other discussions on the notion of 
natural persons.  The proposed text was not identi cal to Article XXVIII.  It made reference in 
paragraph (a) to any other Member and in paragraph (b) to other Members.  The EU had attempted to 
narrow down the scope of the definition by using th e text existing in GATS.  That goal could be 
achieved in different ways – it c ould be a text, or it could be a mutatis mutandis  clause to which 
several delegations had referred. What already existed in the GATS was built for MFN treatment, 
whereas the waiver proposal concerned was about  something that was preferential in nature. 
21. Another question was why there wa s reference in the EU proposal  to "substantive business of 
operations".   This notion already existed in Ar ticle XXVIII(m), and also Article V:6.  The EU 
thought it best to stick to existing notions existing in the GATS, build on what existed and adapt it to the possibility of granting preferential treatment to LD Cs.  As to the question of an investment in an 
LDC, and whether that investment should benefit al so from the preferential treatment, the answer is 
yes.  That was the objective of the proposal. The inv estment needed to be genuine, and not a means to 
circumvent the preferential treatment that could be granted. 
22. The delegation of Zambia
 drew Members' attention to the fact that at the last meeting, most 
Members had indicated that they were making preliminary positions on the draft waiver.  They had yet to state their substantive positions.  It request ed therefore that the Chairman conduct informal 
consultations that addressed, paragraph-by-paragraph,  the provisions of the draft waiver, including the 
EU proposal which is meant to be an am endment to the proposed waiver text. 
23. The delegation of Colombia
 said that it would look carefully at the EU proposal, and fully 
endorsed the statement made by the delegation of Za mbia.  It was much bette r to have discussions and 
consultations paragraph-by-paragraph on the entire pr oposal for a waiver for LDCs, and not break it 
down into items for individual discussion. 
24. The delegation of Argentina  echoed the support expressed by Colombia for what was said by 
Zambia, and welcomed the organization of an  informal consultation on this topic.   TN/S/M/38 
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  25. The Chairman  reiterated the importance of continuing discussions on this topic, and as 
suggested by the delegations of Zambia, Colombia and Argentina, he intended to organize informal 
consultations to look more carefully at the LDC proposal paragraph-by-paragraph, including 
discussions on the EU proposals and any others that  might be submitted.  Naturally, the topic would 
also be on the agenda of the next cluste r of services meetings planned for November. 
26. The Council took note  of all the statements made, and agreed  to revert to this item at its next 
meeting. 
B. WORK OF SUBSIDIARY BODIES - REPORTS BY CHAIRPERSONS  
27. The Chairman  said that the four subsidiary bodies had met recently, and that Chairpersons 
who wished to report on any recent progress in their discussions could do so.   
28. The Chair of the Committee on Specific Commitments , said that, since her last report to the 
Special Session of the Council for Trade in Servic es in July, the Committee had held one formal 
meeting, on 28 September. 
29. The Committee had continued to focus its discu ssion on the relationship between old and new 
commitments.  Despite the new proposal from Ca nada submitted in July, the Committee remained 
divided on whether particular language in the final protocol was needed in order to prevent rollbacks 
in new schedules.  Given that the Committee had he ld intensive discussions on this issue for nearly 
four years, she had urged delega tions to explore the scope for compromise.  In this context, 
delegations had agreed to look into the details of  the verification exercise.  The discussion at the 
meeting on Tuesday focused on the Secretariat's in formal Note "The Roadmap for the Verification 
Exercise" (JOB/SERV/21).  Delegations had interven ed actively on this topic.  Questions raised 
mainly related to the timing of the exercise and how to deal with disagreement in the process 
regarding entries in new schedules.  These questions showed that delegations had yet to decide what 
kind of exercise they wished to have: a consultative exer cise as in the past or an exercise as part of the 
negotiation process.  It was agreed that the Committee should continue to discuss the issues related to 
the verification exercise and that the Secretariat w ould present a revision of the Note to facilitate the 
discussion.    
30. With respect to classification issues, it was confirmed that CPC experts would make a 
presentation on the latest version of the CPC at the next meeting of the Committee, which would take place during the week of 22 November.  After that  presentation, delegations might be in a better 
position to identify their specific interest in the di scussion on classification issues.  The compilation of 
the classification issues raised in the Secretariat's sectoral Background Notes (JOB/SERV/22) had 
been circulated to Members before the meeting.  Under the agenda item "scheduling issues", there had 
been no intervention.  Overall, th e Chair wished to encourage delegations to make contributions to 
stimulate debate. 
31. The Chair of the Committee on Trade in Financial Services
 said that the Committee had held 
a formal meeting on 29 September.   The first i ssue discussed at the meeting, based on a proposal 
from Pakistan, was the "Impact of Regulatory and Compliance Aspects of Banking and Other 
Financial Services under the GATS".  As backgr ound for the Committee's dedicated discussion, the 
Secretariat had prepared a Note on this issue, which was well received by Members.  
32. Reflecting the broad scope of the Secretaria t Note, contributions during the meeting had 
emphasized the opportunities and challenges associated  with the introduction of new information and 
communication technologies, in terms of new product s, processes, distribution channels or forms of 
organization.  In addition, attention was drawn to important advances in the theory of finance and 
related product innovation.  Dele gations generally acknowledged both the efficiency-promoting TN/S/M/38 
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  effects of these developments on vi rtually all economic sectors, including finance itself,  as well as the 
need for proper regulation at national and intern ational levels. Several Members reported on their 
national experiences, both in terms of problems enc ountered as well as attendant regulatory action.  
33. Virtually all delegations who ha d taken the floor commented on two issues raised at the end 
of the Secretariat Note.  These were, first, whether technical change had resulted in the introduction of 
genuinely new products that did not exist at th e time the commitments were made and, second, 
whether it might be necessary to reconsider the di stinction between modes 1 and 2 in the case of 
electronically supplied financial services.  Many of th e statements made were on a preliminary basis.  
It was agreed, therefore, to give capitals some more  time for reflection and take these issue up again at 
the next meeting.  This may also provide an opportunity for more Members to elaborate on their 
national experiences with new products  and relevant policy responses. 
34. A second issue that prompted quite a number of interventions was China's proposal to 
schedule a dedicated discussion on Trade in Fi nancial Services and Development. Members 
welcomed this initiative which had first been intr oduced at the previous meeting of the Committee, 
and various proposals were made to specify focus a nd (potential) content of the envisaged discussion.  
The Chinese delegation undertook to prepare, for cons ideration at the next meeting of the Committee, 
a list of questions that might be addressed on that occasion.  
35. Thirdly, the proponents of the first dedicated discussion on the financial crisis and trade in 
financial services, held at the Committee meeting in  July, gave a positive assessment of this event.  
After further consideration, they intended to revert  to this issue at the Committee's next meeting.   
36. Finally, concerning the still outstanding accepta nce of the Fifth Protocol to the GATS by 
three Members – Brazil, Jamaica and the Philippines – there was no news to repor t.  The next meeting 
of the Committee would be held during the next ser vices cluster, foreseen for the week of 22 
November.  
37. The Chair of the Working Party on Domestic Regulation
 (WPDR) said that, since his last 
report in July, one formal meeting had been held, on  27 September.  At the meeting, delegations had 
engaged in a detailed exchange on the various draft obligations on licensing and qualification 
requirements and procedures, together with thei r relevant definitions.  The discussion had been 
focussed and the atmosphere was generally constructiv e.  Due to time scarcity, not all issues on the 
agenda had been addressed, and the Working Party would take up the remaining topics at its next 
meeting.   
38. As in the past, the proposal by a group of Members to streamline chapters V-VIII of the 
Chairman's draft into two chapters, one on licensi ng and qualification requireme nts, and the other on 
licensing and qualification procedures, had been rece ived constructively.  Se veral delegations noted 
inherent differences between licensing and qualification matter s, and questioned whether all 
provisions lent themselves to harmonization.  Howe ver, there appeared to be a growing recognition 
that at least some of the provisions, e.g. paragr aphs 21 and 35, 22 and 36, or 23 and 37, could be 
drafted in such way that they simultaneously apply to both licensing and qualification procedures.   
39. More generally, the divergence of delegations  concerning ambition remained wide.  It 
appeared that for many delegations, any DR obliga tion with which a services regulator might have a 
problem was rejected out of hand.  However, this approach would result in a set of disciplines that 
would not change anything on the ground.  Such an approach would also not comply with the 
mandate set out in Article VI:4 of GATS, namely to develop disciplines that aimed to ensure that 
licensing and qualification requirements and technical  standards in a Member's jurisdiction were 
based on objective and transparent criteria; to gua rantee that such requirements were not more  TN/S/M/38 
 Page 7 
 
 
  burdensome than necessary to ensure the quality of the service, and to ensure that procedures were not 
in themselves a restriction on the supply of the service.  
40. The Chair recognized the many difficulties trade negotiators faced when they interacted with 
sector regulators and sought to influence the way trade-related aspects of services regulation were 
administered.  These problems were particularly  acute when discussing horizontally-applicable 
disciplines, as Members had decided to do.  The Chair recalled that the decision to work on horizontal 
disciplines was not made to the exclusion of work on particular sectors, or even on specific regulatory 
problems, and he encouraged Members to keep in mind this possibility.  
41. Finally, the Chair reported that at its formal meeting, all Members supported the idea of 
organizing a workshop on regulatory practices, but that  further consultations on the precise objectives 
and format of such an event were needed.  The Chai r would continue to consu lt in this regard with a 
view to providing a clearer outline for the workshop  at the meeting in November.  Delegations had 
been flexible on the timing of the workshop, and he  believed Members should ai m for the event to be 
held early next year.  
42. The Chair of the Working Party on GATS Rules  said that, since the last report to the Special 
Session, the Working Party on GATS Rules had met fo rmally on 28 September.   On the subject of 
subsidies , she was very pleased to report that a good start had been made with the Work Programme 
on Information Exchange.  Fifteen submissions had so far been received, and these had been 
circulated in documents JOB/SERV/Add.1 to 9.  Counting individual Member States of the EU, the 
information provided covered 42 WTO Members.  More  submissions were in the pipeline.  While the 
submissions did not yet cover the entire membership , the information on the tables already provided a 
significantly greater coverage of Members as compared to the five submissions2 previously received 
between the years 1997 to 2005.  
43. For the next cluster in November, the Working Party would have a dedicated discussion on 
subsidies.  The purpose was to allow Members to  exchange views and comments on the information 
provided, and to consider any systemic issues that could be relevant for the negotiations.  In this 
regard, delegations were encouraged to provide written inputs or questions , which could take any 
form deemed appropriate (e.g. formal or informal documents) in advance of the meeting for 
circulation by the Secretariat.  This would fac ilitate discussions, especially if there were specific 
questions on particular submissions .  The Chair would be holding cons ultations shortly to prepare for 
this event.   The Chair noted that, as on previous occasions, the Working Party also had on its agenda 
the proposal submitted by the delegation of Sw itzerland (RD/SERV/4) for disciplines on export 
subsidies.  
44. On government procurement, the delegation of th e European Union circulated a proposal for  
dedicated discussions on the developmental dimensi on of government procurement in services.  The 
proposal was contained in document RD/SERV/23.  T hough there were some questions on the timing, 
the response of Members had been generally positive.   The Chair would thus undertake consultations 
on the idea of taking up the first topic on the "ec onomic importance of government procurement in 
services in developed and de veloping countries" during the November cluster.  
45. On emergency safeguard measures, Members agreed to postpone the presentation on ESM-
relevant data until after the Council discussion of an updated Background Note  on international trade 
statistics.  In the meantime, the proponents of this  topic had indicated that they would be consulting 
on other ideas for discussion.   
                                                      
2 Norway, New Zealand, Hong Ko ng China, Poland and Switzerland. Submissions are contained in 
S/WPGR/W/16/Add.1-5. 
 TN/S/M/38 
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  46. Overall, the Chair believed that there was new en ergy in the Working Party, and efforts were 
being made to meet the mandate  of the Hong Kong Ministerial Declaration for the GATS Rules 
subjects.  She wished to thank delegations for thei r support, and looked forward to continuing on this 
positive track. 
47. The delegation of Zambia
, on behalf of the LDC Group, said that, although the LDCs were 
not expected to make any commitments in services, the discussions in the subsidiary bodies were very 
important to them, as they recognized that whatever was agreed in the discussions would affect LDCs.  
LDCs took note of the discussion in the WPDR, and the need to ensure that  the agreed disciplines 
resulted in some meaningful market access.  The LDCs welcomed Members' commitment in the CSC 
to make sure that there were no rollbacks at the conclusion of the Round.  A verification exercise of 
the revised schedules seemed inevitable to ensure th e absence of rollbacks.  However, the timing for 
this exercise should not cause further delay in conc luding the Round.  It was therefore important that 
negotiations in services did not lag behind other areas, even though one need ed to recognize the 
systemic issue of progress in the services nego tiations being dependent on progress made in NAMA 
and Agriculture.  The issue of ensuring that ther e were no rollbacks was important for LDCs not only 
because it had the potential to significantly reduce the already small market share of services trade for 
LDCs, but also because it might erode the poten tial benefits from the implementation of LDC 
modalities. 
48. The Council  took note of the reports and statements made. 
C. REVIEW OF PROGRESS IN NEGOTIATIONS , INCLUDING PURSUANT TO PARAGRAPH 15 OF THE 
GUIDELINES FOR NEGOTIATIONS ; AND ORGANIZATION OF FUTURE WORK 
49. The Chairman  said that delegations all recognized that the services negotiations, like other 
areas of the Round, had shown little overall progress si nce the March stocktaking.  But in spite of 
these gloomy circumstances, at the last formal mee ting in July some delegations had made interesting 
suggestions for advancing the discussions on servi ces.  These included the "clustering" of service 
sectors, and a proposal for a plurilateral request on accounting services.  Over the August break, it was to be hoped that delegations had reflected further on these matters, and that at the present meeting 
they would be able to give further precision to th ese ideas, or otherwise state how best to move ahead 
in the negotiations.  In terms of meetings, delegations would recall th at a cluster during the week of 
22 November had already been decided, and that it would include a review in the regular Council of 
lists of MFN exemptions. 
50. The delegation of Australia
 said that modalities were a key i ssue that needed to progress in 
the negotiations.  The services negotiations were ta king place a week after a summit organized by the 
Global Services Coalition in Washington, which had highl ighted the role that services could play in a 
successful conclusion to the Doha Round.  Australia had been pleased to participate in this important 
event, all the more so because its newly-installed Mi nister for Trade, had come to Washington to the 
services summit to demonstrate the Australian government's strong ongoing commitment to the services negotiations, and its interest in ensuring that the negotiations produced substantial and 
commercially meaningful results. 
51. In his remarks to the summit, the Austra lian Minister for Trade had underscored the 
importance of services to the global economy, and th e need for seamless regulation to ensure that 
behind-the-border barriers did not undermine hard-w on market access gains.  He had also provided 
empirical evidence of what was already known – that all WTO Members had a significant amount to gain from services liberalization in the Doha Round.   He had also launched a study by Australia's 
Centre for International Economics showing that, on the basis of the offers currently on the table, 
developed countries would gain 0.2 per cent and de veloping countries 0.7 per cent of GDP.  Better 
offers would yield better ec onomic growth all around.   TN/S/M/38 
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  52. Over the course of the previous week in Ge neva, the Australian delegation had had a busy 
week with a range of plurilateral and bilateral me etings in addition to the programme of regular 
committee meetings.  Australia had concentrated its efforts on exploring new ways to inject creative 
thinking into the services negotiations, as a way of creating momentum in the Round as a whole. 
53. The bulk of Australia's effort had been concentr ated on developing its proposal for a logistics 
and supply chain services plurilateral proposal.  Au stralia had previously briefed the Council on its 
objective of creating an integrated approach to l ogistics and supply chain services that recognized the 
need to cover all services sectors in the s upply chain process.  These included warehousing, 
transportation and distribution services – all critical in  getting products from suppliers to consumers.  
Australia's proposal sought to identify key market access interests across a broad cross-section of the 
Membership. 
54. Australia aimed to work within the request and offer process to provide Members with an 
opportunity to respond to a single, commercially meani ngful request.  This request would  (a) address 
criticism that WTO services negotiations could no t deliver commercially meaningful outcomes for 
business, (b) appeal to a range of industry constitu encies to engage support for the Doha Round, and 
(c) support the other main pillars of the Round, sin ce all agricultural and indus trials exporters had an 
interest in efficient and effective supply chains.  Australia planned to keep refining its ideas on this 
approach up to the next cluster, in consultation with other Members, and looked forward to further 
discussion of the ideas it had put forward, and which could help give moment um to the negotiations. 
55. Australia had also been using the week to advance work on a new plurilateral request on 
accounting services.  As previously stated, Australia  believed that the absence of a collective request 
on accounting services was an oversight and an omission from the various professional services 
collective requests.  Australia, along with seven other co-sponsors, had therefore developed a new 
plurilateral request on accounting services which ad dressed the market access and national treatment 
limitations identified in the Secretariat's recent b ackground note.  Last week, Australia had written to 
twenty WTO Members on behalf of the co-sponsors to  invite them to a plurilateral consultation in 
November.  This would provide Members with suffi cient time to properly consider the request and 
undertake domestic consultations as required. 
56.  To obtain a strong outcome in the services ne gotiations, it was essential to ensure that all 
elements of the services negotiations were advanci ng.  LDC modalities remained a key issue on which 
Members needed to make progress, and Australia was pleased to see a new proposal from the EU on 
this issue which it would be pleased to discuss further. 
57. Domestic regulation remained another vital ar ea of the services negotiations.  Australia's 
minister had been clear on this point in Washington  the previous week.  During the current week, the 
WPDR had undertaken a focused discussion of th e Qualification and Licensing provisions in the 
Chair's text, and on the proposal on this area of  the disciplines co-sponsored by Australia.  The 
discussion has been helpful in gaining a better unders tanding of Members' positions  on that part of the 
proposed disciplines, and on the alternative structur e proposed by Australia and others.  Australia 
placed great value on the development of disciplines th at would meet the principles of Article VI:4 of 
the GATS, but there remained a lot of work to do. 
58. The delegation of Australia anticipated that  November would be a busy period in the 
negotiations, and there would be an even heavier pr ogramme of work.  It looked forward to working 
with a range of delegations to make progress, give n the importance of the services negotiations to the 
overall Doha outcome. 
59. The delegation of Canada  said that during the week’s discussions there had been a wide 
recognition that services remained one of the pillars  at the heart of the DDA. This was no surprise TN/S/M/38 
Page 10  
 
  given the role services played in the modern global economy. Canada had been pleased by the 
constructive tone of the meetings held over the c ourse of the week, and the collective sense from the 
Members that they needed to deliver a relevant out come.  As Australia had outlined very well, these 
were some of the reasons, coming out of the Globa l Services Summit and elsewhere, why all eyes 
were on the services negotiations in Geneva.  
60. However, it was also clear that much work rema ined to be done, especially with respect to 
market access, for the services nego tiations to reach a successful, ambitious conclusion.  Overall, it 
was evident to Canada that delegations had not yet narrowed down the outstanding technical issues to 
the point where they could be elevated for decision- making to the senior levels.  Furthermore, Canada 
could not ignore the fact that little progress ha d been achieved in the services market access 
negotiations in the past two years, with many Members refusing to discuss this item altogether. 
61. In Canada's discussions with Members over the course of the week, one theme came up 
repeatedly:  many Members felt that they had not seen their interests reflected enough in what was on 
the table, in part because there was still very little clarity on what Members could expect to achieve in 
terms of liberalization at the conclusion of the Roun d.  While Canada recognized the need for clarity 
in all areas of the negotiations, it believed that servi ces was a laggard in this regard.  If the political 
leadership was to be in a position to make the hi gh-level decisions necessary to conclude the Doha 
Round, Members would need to achieve a much clearer picture of the potential gains in services market access.  Services was of equal importance to other areas, and needed equal work to advance it, 
as Members were far from being at a stage of cl arity needed for the final political decisions. 
62. There had been a number of new proposals recently put forward to reinvigorate the services 
negotiations. Canada had joined Au stralia and other Members in pu tting forward the new plurilateral 
request on accounting services.  On clustering, Cana da was also supportive of fresh thinking and 
remained open to these proposals, having contributed  constructive comments to the proponents of 
these proposals over the course of the week.  Ca nada was mindful that  renewed negotiating 
momentum would be generated if new ideas attrac ted a broad cross-section of Members ready to 
engage in substantive negotiations. 
63. On the issues under discussion in the subsidiary  bodies, delegations had made some progress 
and had deepened their understanding of the technical i ssues to be resolved.  However, there was still 
a good deal of technical work to be done. 
64. Looking forward, Canada welcomed the upc oming Ambassador-level discussion on services, 
and hoped that it would prove to be a source of renewed momentum in the services negotiations. 
Members would need to ensure that they were prepar ed to do more than just repeat previous positions 
if they aimed to see new ideas emerge from this pro cess. This reinforced the need to achieve further 
progress on technical work, both in market access and rules.   Canada looked forward to the November cluster, and was hopeful that Members would return ready to engage on a substantive level 
on the full range of issues before them.  
65. The delegation of China
 sensed that there were positive signs in the negotiations, and hoped 
that Members would make full use of their time to  prepare for a possible "window of opportunity" in 
the next year.  During the cluster, China had held  several bilateral consultations with interested 
trading partners.  The cluster of m eetings had been helpful, and it was hoped that the practice could be 
continued in November, and in the coming months when needed.  Although the request/offer method 
had been criticised as old-fashioned and "medieval", it was important that it remain the prime mode of 
negotiation for services.  With respect to the clus tering of service sectors, China recognized that it 
might attract more interest from business.  Howeve r, while enhancing the capacity of the demandeurs 
to make requests in packages, it might put undue wo rk pressure on the other side in having to respond  TN/S/M/38 
 Page 11 
 
 
  and coordinate responses to the clustered requests.   China remained open to this initiative and hoped 
that it would advance the negotia tion, but nonetheless had concerns. 
66. One important issue that China wished to str ess was that the negotiating sequence set out in 
the Hong Kong Ministerial Declaration should no t be changed.  The Declaration represented a 
consensus reached by Ministers in Hong Kong, an d formed an important step in the negotiating 
history reflecting the Doha mandate.  It was a bala nce established by ministers for the three market 
access pillars of agriculture, NAMA and services.   
67. Although there was a lack of progress in mark et access, China was happy to see fruitful 
discussions during the previous week in the subsid iary bodies.  On domestic regulation, China was 
encouraged to see the progress made in the transp arency provisions, and hoped this progress could be 
locked in.  Although Members had quite divergen t views on licensing and qualification procedures 
and requirements, China felt that the discussion had been useful, and encouraged Members to 
continue on this track and come up with construc tive suggestions to obtain a convergence of views. 
68. At the meeting of the Committee on Trade in Financial Services, Members had conducted 
fruitful discussions on various topics, and China shared  the view reflected in the Chairman's summary 
on the agenda item that China had proposed on financial services and development.  China was 
encouraged that this received support from Members,  and China would continue to work closely in 
this area with Members toward a revised and more fo cused proposal before the next cluster.  At the 
meeting of the Committee on Specific Commitment s, Members had held fruitful and focused 
discussions on the relationship between the old and new commitments, and the verification process.  
China appreciated the Secretariat Note and the explanation on the verification roadmap, and the 
discussion of classification issues.  Such technical discussions were important for ensuring the legal 
certainty of the final outcomes of the negotiations, and China encouraged Members to continue their 
work in this regard.  In the WPGR negotiations , China appreciated Members' efforts to submit 
information on services subsidies.  China viewed the WPGR negotiations as progressing, and looked 
forward to the dedicated discussion in the next cluster on the information submitted. 
69. On next steps in the negotiations, China urged developed Members to make the first move, by 
making improved offers in mode 4 and services sect ors where developing Members had an export 
interest.  Mode 4 could be a critical element to break  the current deadlock in the services negotiations.  
Unfortunately, the existing offers of developed Me mbers on mode 4 were very far from the mode 4 
collective requests of developing Members.  De veloped Members needed to make substantive 
improvements on mode 4 in their second revised of fers, followed by developing Members' improved 
offers.  This was a critical step for future progr ess in services negotiations.  The real issue behind the 
current lack of momentum was that developed Members were reluctant to meet requests from developing Members, particularly in mode 4.   It was for developed Members to take the lead.  
According to the saying, "opportunity knocks but once", and Members needed to seize that 
opportunity. 
70. The delegation of Chile
 said that much progress had been made in discussions in the 
subsidiary bodies.  In the market access negotia tions, certain important steps had been taken with 
respect to the launching of new initiatives, for example with respect to the formulation of a plurilateral 
request on accounting services.  This was a very important sphere of activity in Chile.   
71. With respect to market access, it was clear that the sequencing established in the Hong Kong 
Ministerial Declaration should not be an impediment for delegations to continue useful work in this 
area.  Chile would also like Members to consider th e possibility of having a cluster of more than one 
week.  Apart from the various activities being contem plated by the subsidiary bodies and the regular 
Council, it would be necessary to have more time available also for market access.   TN/S/M/38 
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  72. On domestic regulation, Members needed to inte nsify their work.  Further informal meetings 
could be held between clusters, as a means of not  losing work being carried out during the cluster 
period.  Chile reiterated its full commitment to an  ambitious result of the services negotiations, and 
was convinced that many benefits would ensue from opening up of this area, particularly for 
developing countries. 
73. The delegation of Brazil
 appreciated the productive and stimulating discussions carried out 
during the week in the regular Council and its subsidia ry bodies. It had also participated in bilateral 
meetings to discuss the overall process of negotiations , and specific points of mutual interest.  Those 
meetings had allowed Brazil to clar ify better its position on the negotiati ons and, of course, to have a 
clearer understanding of the positions of other Members.   
74. Regarding the review of progress in negotiations , Brazil wished, once again, to reiterate its 
view that progress reached so far in market acces s was satisfactory, and in accordance with mandates 
and timelines.  Brazil had listened attentively to  the suggestions made by some Members on new 
approaches.  As mentioned on previous occasions, Br azil remained open to considering new ideas in a 
constructive way, in order to help shape them in  the light of the current context of the Round.  
However, Brazil feared that such ideas might turn ou t to be a mere recycling of previous exercises in 
the area of market access negotiations.  Members need ed more clarity on how a possible new exercise 
would be structured, and on the results it would aim to achieve.  Brazil understood that the following 
week of meetings of small brainstorming groups would provide Members with  the opportunity to see 
very clearly the linkages between services and the other pillars of the Doha Round negotiations, and 
to better understand the delicate balance achieved in 200 8.  This meant that a change in the level of 
ambition in the area of services would probably raise similar demands in other areas of negotiation.   
75. Despite what had been said at the recent Global Services Summit, it was important to repeat 
that the services negotiations should not bear the resp onsibility for the revitalization of the Round.  On 
the implementation of the modalities for the special treatment of LDCs, Brazil wished to renew its willingness to work constructively in order to achieve a text of waiver that was in the best interest of 
all Members. In this vein, it thanked the European Union for the recent proposal to be incorporated in 
the draft waiver, which could greatly contribute to reaching consensus on this important issue. 
76. The delegation of India
 did not have much progress to report from the services week,  
although it had held a number of bilaterals.  Th ere was no apparent movement on the part of key 
developed countries on  mode 4.  In fact, it was disappointing to see some of the biggest proponents of free trade and liberalisation turn into protectionists at the very mention of opening up mode 4.  The 
lack of movement by developed countries in modes and sectors of interest to developing countries 
was against the development mandate of the D oha Round and Article IV of the GATS.    
77. Regarding some of the new approaches being suggested to "rejuvenate" market access 
negotiations, India continued to have strong reser vations on such approaches which, it believed, 
attempted to fundamentally change the modalities of ne gotiations at this stage.  It was India's view 
that lack of momentum in services negotiations w as not because of any basic problem with the way 
Members were negotiating, but because of linkages w ith other areas of the negotiations, and the lack 
of political will to address the serious deficiency in  the offers from developed countries in modes and 
sectors of interest to developing countries.  Indi a echoed the call by China to developed Members to 
make substantive offers in mode 4, in order to impart momentum to the market access negotiations in 
services. 
78. India was deeply concerned about the protectionist measures that had been taken recently by 
some Members.  Some of these measures included increasing the cost of accessing markets in mode 4,  and putting numerical limits on mode 4-related move ments where there were previously none.  India 
also had deep concerns regarding bans being impo sed on outsourcing in certain jurisdictions.  While  TN/S/M/38 
 Page 13 
 
 
  the WTO inconsistency of some of these measures c ould be questioned, they definitely vitiated the 
negotiating atmosphere and lead to a trust deficit. 
79. In domestic regulation, India did have some useful discussions.  However, divergences of 
opinion still remained, and at times the discussion te nded to turn into a lengthy scholarly debate over 
the meaning of words which had already been u sed innumerable times in other WTO agreements. 
India supported the call given by Chile to intensify negotiations in this area, and to hold informal 
sessions to narrow down differences leading to the production of a bracketed text.  For India, domestic regulation disciplines were an important deliverable of the Round, as without it market 
access was only an illusion without any real gains.  
80. On GATS rules, India was encouraged by the number of submissions made by Members as a 
part of the Chair’s program on information exch ange.  India called upon those Members who had not 
submitted information so far to participate meaningf ully in the Chair’s program.  This exchange of 
information was the much-awaited fulfilment, though pa rtial, of the fifteen year old mandate of GATS 
Article XV.  India looked forward to the dedicat ed discussion in November under the Chair’s work 
program.  It also looked forward to the fulfilment of  the other part of mandate, to develop disciplines 
to deal with trade distortive effects of subsidies. 
81. India also noted that the following week woul d see the beginning of a new dynamic of small 
groups in the services negotiations.  Like others, Indi a hoped that this would lead to creative solutions 
for the path forward. 
82. Regarding LDC modalities, India had been involved in this initiative right from beginning.  It 
had heard with interest the concerns expressed by  Members, and was examining the EU proposal.  
Like China, India accorded a high  priority to LDC modalities.  India was willing to engage in 
constructive discussions in any format to resolv e remaining differences, and called upon Members to 
achieve an early finalization of the waiver instrument.  
83. The delegation of New Zealand
 found that cluster activity was once again relatively quiet 
compared to others.  As other de legations had noted, it was somewhat of a "preparatory" cluster ahead 
of what would be a more extended and intensive session in November.  Most notably, the reasonably 
limited number of scheduled plurilateral Friends m eetings vis-à-vis earlier clusters contrasted 
somewhat with the strong messages heard durin g the previous week at the Global Summit in 
Washington, where industry and politicians alike reaf firmed the importance of the Round for trade in 
services, and the importance of services to the Round.   But there was a need to bring the market 
access negotiations up to speed, to a point where they could be discussed at a political level.  For New 
Zealand, the market access discussion was not entir ely dormant.  Further work during the week on 
new approaches (clustering) had allowed Member s to understand better what was being proposed 
across a range of sectors. 
84.  New Zealand believed that clustering of sectors was a mechanism that allowed Members to 
take a "bigger picture" view of negotiations;  it supported efforts for achieving an ambitious outcome 
that reflected real-world circumstances under which ser vices were traded; and it gave senior officials 
and Ministers a more tangible and comprehensible m eans of identifying the key sectors in which they 
needed to see good commitments from others.   New Zealand heard increasing support amongst the 
Membership for this approach, notwithstanding sp ecific concerns some Members might have with 
certain proposals.  New Zealand would continue to work closely and constructively with clustering 
proponents as they developed their proposals.  In th is regard, it noted with interest the recent proposal 
to apply this approach to the Energy and Environm ent sectors.  In addition, New Zealand, as one of 
the co-sponsors, was pleased to note the issuance dur ing the previous week of the plurilateral request 
on accountancy services.  This request nicely rounded out the package of plurilaterals, and gave an TN/S/M/38 
Page 14  
 
  impetus to the market access negotiations.  New Zeal and looked forward to discussing the request in 
further detail with recipient Members in November. 
85. Outside of market access, the week had provide d for a good deal of time and engagement on a 
wide range of technical issues that would suppor t eventual market access outcomes.  Work in the 
Committee on Specific Commitments in particular (ver ification; classification issues) helped to lay 
the groundwork for clear and efficient scheduling at th e appropriate time.  On domestic regulation, the 
week had provided an opportunity for a dedicated and extensive discussion on licensing and qualification requirements and procedures.  Members ha d not yet exhausted their efforts in this area, 
and New Zealand looked forward to further enga gement on these themes in November.  There was 
now a good range of technical and market access issues that would benefit from more extensive 
discussion in November, and New Zealand supported the suggestion of an extension of the cluster to 
two weeks. 
86. The delegation of Japan
 said that, although the DDA negotiations were in difficulty, ministers 
at the recent APEC, G8 and G20 summits meeting had shown they were aware that improvement of 
market access was important in achieving an outcome to the Round.  Expectations for advancing the 
service negotiations were getting stronger.  Harnessing  this momentum, Japan continued to work very 
hard on the services negotiations.  Keeping in mind the next summit mee ting in Yokohama, and the 
G20 summit meeting in Seoul, Members needed to advance the service negotiations on the basis of 
new creative ideas and technical discussions, in domes tic regulations and GATS rules, and move the 
discussions to a higher level. 
87. The delegation of Hong Kong, China  said that the cluster week had been less intensive than 
previous ones, but it was by no means less important .  After the summer break, the cluster had served 
to prepare Members for more intensified negotiati ons in the weeks and months to come.  Members 
had all heard the call from the Global Services Co alition that it hoped to see new approaches in 
Geneva to accelerate wider market access negotiati ons.  Services market access was an area where 
Members had exchanged many words over the year s, but there had perhaps not been sufficient 
substantive negotiations in recent times.  Members ce rtainly needed to find ways to reinvigorate the 
negotiations.  Hong Kong, China was aware of the various initiatives such as clustering being 
developed by some Members, as well as the pl anned brainstorming activ ities.  Hong Kong, China 
welcomed these initiatives, and hoped to see them bear fru it.  In this connection, it was also time for 
Members to start considering how discussions in th e Special Session should be structured so as to 
channel energy into real negotiating activities.  Hong Kong, China was pleased to note from the 
reports of the chairs of subsidiary bodies that  Members remained fully engaged in technical 
discussions on various fronts.  Domestic regulati on, GATS rules and the protocol to handle the 
relationship between existing and new commitments we re all important subjects that Members needed 
to agree on to arrive at a final deal.  Work need ed to proceed diligently on these topics.  Hong Kong, 
China also looked forward to participating in th e forthcoming consultations on LDC modalities, and 
hoped that these could progress expeditiously.  As mentioned on previous occasions, this was an 
important area in which it was possible to register much needed forward momentum. 
88. The delegation of Pakistan  said that a positive outcome from the current cluster was the 
activity in the subsidiary bodies.  The CTFS had in  recent months taken up again its responsibility to 
discuss technical issues, without prejudice to th e market access negotiations.  Pakistan supported 
further work on the existing proposals introduced in the CTFS, in order to have an on-going agenda.  
On the WPGR, Pakistan believed that this was probabl y the neglected area, especially when it came to 
government procurement and ESM.  ESM had not been neglected per se , but in recent months there 
had not been any activity.  Pakistan encouraged Members to engage in that area and discuss the 
outstanding issues.  On the issue of informati on exchange on subsidies programmes, Pakistan was 
also very positive.  Pakistan apologised for not submitting a paper on time, but would be submitting it 
with the hope that there would be a discussion durin g the cluster on the submissions received.  On the  TN/S/M/38 
 Page 15 
 
 
  CSC, Pakistan had seen very constructive and usef ul discussions over the issues of roll-back and the 
protocol language, and this would complement efforts in the market access negotiations. 
89. With regard to the Special Session, absolute ly nothing was happening in reality.  Members 
had to recognize this.  Momentum created from outsi de needed to be transl ated into the Special 
Session, so that Members could achieve something.  The sequencing of issues agreed in Hong Kong 
did not mean that Members could not work on services.  The sequencing meant that Members would 
agree on Agriculture  and NAMA mo dalities prior to services modalities.  But this was a final step 
that did not stop Members from working on services issues.  Pakistan therefore encouraged the 
Chairman to hold informal sessions, within or between  clusters.  There were a number of issues that 
Members could work on, such as LDC modalities.  Pakistan encouraged Members to draw on the 
external momentum and translate that into the work of the Special Session. 
90. The European Union  said that for too long real market access negotiations in services had 
been de facto paralysed by waiting for progress in other areas of the DDA negotiations.  It was high time for all Members to re-engage in serious market access negotiations in services.  Members could and should collectively move to clearly identify what  they wanted to obtain at the end of the DDA, 
and which gaps needed to be filled in the area of services.  In this context, there were some positive 
signs in the negotiating dynamics.  On the one hand, interesting work was being done to focus market 
access requests, and that had been taking place part ially during the current cluster week.  Members 
were also discussing initiatives in several areas such as ICT, logistics and supply chains, and 
accounting, that might help identify clearly what w as needed to conclude the Round on market access.  
This work was promising and needed to advance qui ckly to allow demandeurs and recipients alike to 
have a clear view on the key market access issues to be  solved at the end of the Round.  On the other 
hand, the small groups at Ambas sadorial level would offer a new platform to discuss cross-cutting 
issues, and help identify what Members really need ed to conclude the services negotiations. It was 
important that the group dealing with services hol d discussions focusing on the key elements to 
conclude the Round on services, and at a techni cal level Members had a responsibility to help 
ambassadors focus on the key subjects.  Finally, Members needed to advance on the market access 
negotiations at the November cluster, and all Memb ers needed to contribute to the necessary technical 
work, notably in market access, LDC modalities and domestic regulation.  The work done collectively 
doing this current week, notably on market access and clustering, went in the right direction.  Further 
work needed to proceed on these tracks to prepare properly for No vember.  The EU joined others in 
requesting that sufficient time be given for discussions  at the next cluster – a week and a half would 
serve the purpose. 
91. The United States
 said that the Global Services Su mmit held the previous week in 
Washington highlighted the importance of the libera lization of trade in services to overall economic 
development.  Trade ministries from many parts of the globe had participated in the event and the 
conclusions were overwhelmingly in support of continuing efforts to advance liberalization of trade in 
services.  In that respect, the United States appreciated  the hard work that Members such as Australia 
had put in advancing creative ideas.  Despite strong evidence of the economic benefits of 
liberalization, the United States continued to be c oncerned about the lack of meaningful engagement 
in the market access side of the services negotiations in Geneva.  Negotiations on services market access could not restart instantly.  There needed to be capital engagement by the different ministries 
involved.  There was no magic wand that could be waved to suddenly create an acceptable outcome.  
It would take a sustained level of constructive e ngagement on the issues.  While the United States 
understood the dynamics of the negotiations and the linka ges with other areas, as well as the reference 
to the sequencing issue, this was no excuse to do nothing on services.  To be successful, Members needed to find an outcome that balanced Members'  interests, and services would be an important part 
of that outcome. TN/S/M/38 
Page 16  
 
  92. Over the past year or so, there had been constructive engagement in areas like domestic 
regulation and LDC modalities.  Of course, not all of  the issues had been reso lved in those areas, but 
some progress has been made and Members had been working together.  The same could not be said 
for market access.  During the curre nt week, there had been additional brainstorming on how to create 
positive engagement.  One idea discussed further was th e "clustering" together of related topics as a 
means of bringing greater clarity on issues of interest to Members.  Areas discussed included 
information and communications technology services,  logistics and supply chain services, energy and 
environmental services. Members had also discussed professional services, financial services, construction services, and issues relating to mode 4.  No firm conclusions were reached on how best 
to proceed, but Members did try to be constructiv e in examining the negotiating objectives.  They 
explored different combinations or configurations, as Australia had said, that could result in 
commercially meaningful outcomes in services.  Perhap s such an effort would provide a way forward.  
The United States was also interested in any ot her ideas that Members might have for creating 
constructive engagement, and looked forward to pursuing those ideas throughout the autumn.  The 
United States was flexible on the November cluste r, and supported the idea that Chile presented, 
echoed by the EU and New Zealand, of extending the cluster so as to have additional days to focus on 
market access issues. 
93. The delegation of the Philippines
 said that it had noted referenc es during the meeting, as well 
as in informal discussions over past few days, to ne w ideas or approaches with a view to re-energizing 
the services negotiations. The Philip pines remained unconvinced that there was a problem with 
existing tools and methods under the GATS, the Doha Declaration, Annex C of the Hong Kong 
Declaration, and the Negotiating Guidelines.  However, it maintained an open mind on such 
initiatives, as long as they remained faithful to th e shared vision of facilitating the participation of 
developing countries in trade in services, while taking  account of their economic situation and level of 
development.  The Philippines also fully expected  that these initiatives would not disturb the delicate 
balance in the GATS and Annex C, nor undermine the flexibilities available to Members under the 
GATS, especially developing Members.  In this  regard, the Philippines thanked Australia, in 
particular, for continuing to consult with other Me mbers, including the Philippines, as they developed 
their ideas on logistics supply-chain services. 
94. If Members exerted efforts to re-energize the ser vices negotiations, particularly in the market 
access front, then commensurate progress in rules – both in domestic regulation and GATS rules – would also be required.  As the Philippines had st ated time and again, there could be no DDA package 
in services without a credible outcome in the ru les negotiations, including domestic regulation and 
emergency safeguards.  On ESM, in particular, the Philippines had been working with the WPGR 
chairs in exploring certain technical issues in info rmal dedicated sessions of the Working Party. The 
Philippines looked forward to continuing these tech nical and focused discussions, and urged other 
Members, especially those who remained critical of safeguards in services, to engage constructively in 
this process.  On the LDC waiver, the Philippines welcomed the proposals that had been tabled by 
Zambia and the EU, and expressed its appreciation fo r the Chairman's efforts. The Philippines looked 
forward to more intensive discussions, with a view to finding a mutually accep table solution to this 
critical issue.  On the next cluster, the Philippin es did not object to a 10-day or 2-week cluster in 
November if there was a consensus for that proposal .  However, it urged the Chair and the Secretariat 
to schedule the meetings in such a way that a day or two was reserved for bilaterals in both weeks, 
since some senior officials could not be away from capitals for such a long time.  
95. The delegation of Korea
 supported Chile's suggestion to hold a long cluster in November in 
order to promote active bilateral and plurilateral ne gotiations.  In early November, G20 leaders would 
meet in Seoul to discuss various topics, including  the DDA for which one could expect some degree 
of political support.  In addition, some leading c ountries had engaged in high level discussions to find 
a way forward.  Given that Korea did not expect that Members could move the market access 
negotiations forward in the November cluster, ex tending the period of the cluster could be a good  TN/S/M/38 
 Page 17 
 
 
  idea.  Korea highly appreciated the various ef forts to revitalize the services market access 
negotiations, and fully sup ported further discussion of these issues.  In particular, Korea hoped that 
clustering initial meetings in key service areas c ould bring more support from Member countries in 
the November cluster.  Disciplines on domestic re gulation were another important area which needed 
to be developed further.  It was important to  recall that the Hong Kong Ministerial Declaration 
provided that Members should develop such disci plines before the end of the current Round of 
negotiations. 
96. The delegation of Colombia  said it was clear that negotiations  were still lagging behind and a 
lot more had to be done apart from agriculture and NAMA.  Members needed to  be clearer and more 
ambitious regarding the interests of developing countr ies, such as in mode 4.  Domestic regulation 
was one of the issues where greater progress was n eeded.  Recently, there had been some positive 
developments.  First of all, work had been carried out in the various subsidiary bodies, in particular 
the exchange of information on service subsidies.   The initiatives on clustering were also most 
welcome. They were a useful means to generate greater discussion, and to attract the attention of more 
participants.  However, such initiatives had to in clude more items of interest to other groups of 
countries, and in particular developing countries.  Th ere had to be a genuine will to move forward in 
the negotiations, and Colombia urged the Membership, in particular the larger Members, to show the 
necessary will.  
97. The delegation of Indonesia  noted the challenging nature of the work ahead, but held the view 
that negotiating differences in se rvices could be overcome through the hard work of all Members. 
Nevertheless, as had been mandated by Ministers, the services negotiations could not be seen in 
isolation from other area of negotia tions, namely agriculture and NAM A.  It had been well understood 
that progress in the services negotiations would not be independent from progress achieved in the two 
other areas of the negotiations. In this respect, Members had to keep in mind the importance of 
achieving a balanced package overall in the Doha negotiations.   
98. On domestic regulation, Indonesia was encourag ed by active and constructive contributions 
of Members during the WPDR meeting at the beginning of the cluster.  This was evidence that the 
issue was important to all Members.  The remaini ng gaps were still wide but not unbridgeable.  In 
moving the domestic regulations ne gotiations forward, however, Members had to keep in mind the 
importance of the principle of the right to regulate,  and the special needs of developing countries and 
LDCs.  On GATS rules, Indonesia associated itself with the statement made by the Philippines on 
behalf of a group of ASEAN countries on ESM.  With  respect to the work program on the information 
exchange of subsidies, Indonesia welcomed the s ubmissions put forward by several Members.  The 
submissions would certainly shed light on the un iverse of domestic subsidies given to the services 
sectors.  In this connection, Indonesia inform ed the Council that its capital was still undertaking 
domestic consultations to collect necessary info rmation for the submission.  Concerning LDC 
modalities, all subscribed to the view that they shoul d facilitate the participation of LDCs in trade in 
services.  In this respect, Indonesia valued the in formal consultations held  between LDCs and the 
wider membership. 
99. The delegation of Nigeria  reiterated that it was seriously dedicated to the services 
negotiations. It noted that there had been construc tive engagement by Members, as highlighted in the 
reports of the subsidiary bodies. New ideas had also been floated.  Although Nigeria remained open to 
new ideas, what was important was the willingness to  engage technically and politically.  A delicate 
balance in all areas of the negotiations was very im portant.  Members needed to give consideration to 
the concerns of the LDCs in particular and to deve loping countries in general.  In this regard, Nigeria 
welcomed the Chairman’s approach for the quick resolutions of the LDC modalities waiver.  It was 
important that Members take advantage of the re maining opportunities, bearing in mind that the 
longer it took to conclude the negotiations, the hard er it was to justify the argument on the urgency for 
concluding the negotiations. TN/S/M/38 
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  100. The delegation of Turkey
 said that the negotiations on domest ic regulation, although behind 
schedule, were making good progress, and that the concerns of some Members on a single approach might be overcome with further clarification in th e related paragraphs.  Turkey also welcomed the 
workshop on regulatory practices, and was willing to contribute.  In the CSC, Turkey welcomed the 
roadmap for the verification exercise, in which timing seemed to be the core issue.  As suggested by 
some Members, allowing a period for consulta tion between Members before submitting written 
questions might ease the work.  If all Members fo cused and did their best for a comprehensive 
verification exercise, there might not be any need  for additional language in the protocol.  There 
seemed to be no good reason to spend precious time on this issue, since there was no consensus on 
whether to include additional language in the protoc ol.  On the linkages betw een financial services 
and trade and development, Turkey supported the proposal of China and would gladly contribute to 
discussions on this subject.  Reactions had been re ceived from capital, and would be submitted after 
all responses from the relevant public  institutions had been received. 
101. On GATS Rules, Turkey looked forward to the dedicated discussion on subsidies in services.  
An expert from capital would be present for the discu ssion, and Turkey was ready to answer questions 
from the Membership.  However, as stated before, Tu rkey did not know whether conclusions could be 
drawn from an information exchange about trade dist ortive effects of subsidies, since it was difficult 
to compile and assess the answers which differed greatly in content and sectoral coverage.  On government procurement, Turkey welcomed the EU  proposal.  Like many other countries, Turkey 
believed that there was a tight schedule in November, and that Members needed to start this three-step 
process in February to ensure a satisfactory participation.  On the attempts of some Members to 
increase the momentum in the market access negotiations, Turkey appreciated all efforts to this end.  
However, such attempts should not place an extr a burden on recipient countries and prolong the 
process of finalizing negotiations.  Nevertheless, Tu rkey was ready to discuss any efforts to move 
forward.  Finally, Turkey agreed  with Chinese Taipei that issu es discussed in the small services 
brainstorming groups should be  shared with the Membership. 
102. The delegation of Egypt
 said that, on domestic regulation, it greatly appreciated the efforts 
exerted to streamline the text, even though it re mained highly sceptical of the impact of the 
streamlined structure on the legal viability of th e underlying provisions.  In this regard, Egypt 
welcomed the holding of a dedicated discussion, in or der to clarify how to deal with controversial 
issues facing Members in devising ba lanced and harmonized disciplines. 
103. Regarding GATS Rules, a dedicated discussion on the development dimension of government 
procurement in services would help address how th e GPA operates, and as well shed light on the 
experiences of countries and the business community.  On subsidies, although a difficult exercise, the 
process of gathering information on service subsid ies granted by governments could help move the 
process further, and consequently avoid the trade distortive effects of subsidies.  Egypt hoped to 
benefit from sharing experiences in that respect.   On specific commitments, although pleased with the 
pace of discussions in the Committee on  Specific Commitments  and the proposal made on the steps of 
the verification exercise, Egypt thou ght that the roadmap still had a long way to go in order to resolve 
issues such as:  timing and duration of verificati on exercise; reaching consensus on a definition of 
rollback; and deciding how to approach the verifi cation process, whether line-by-line or overall 
assessment.  On financial services, Egypt looked forw ard to more focused and clearer discussions on 
the development aspects of financial services that  would better preserve the stability of the whole 
economy.  On LDC modalities, Egypt was in favour of special and differential treatment for LDCs 
that ensured their equitable participation in the ne gotiations on trade in services, and at the same time 
did not jeopardize flexibilities for developing countries.    Finally, Egypt looked forward to the next 
cluster as a step towards achieving progress in th e negotiations on market access in services.  
104. The delegation of Argentina  said that it would listen caref ully to any new proposals on 
negotiating approaches.  However, it shared the vi ew of some other delegations that the problems  TN/S/M/38 
 Page 19 
 
 
  faced by Members did not result from the negotiating process.  The reports received from other parts 
of the DDA negotiations showed that progress had also not been satisfactory.  So, as various 
delegations had said, services needed to move along w ith the other pillars of the DDA.  Argentina, for 
its part, was not all that optimistic about the prosp ects of this.  However, Argentina would continue 
working on the various issues and sectors to try and reach a balanced result in services. 
105. The delegation of South Africa  said that, although it was open to other negotiating 
approaches, it had reservations about the suggested cl ustering method.  It noted the importance of the 
logistics supply chain and distribution services.  However, it was concerned about the systemic 
implications that might arise as a result of such clustering, particularly with respect to document 
W/120. 
106. South Africa welcomed the outcomes of discussions on services liberalization in forums 
outside of the multilateral process.  However, the ma in site of negotiation remained the WTO.  As 
stated in previous meetings, South Africa viewed  this exercise as a single undertaking, of which 
services was an integral part.  In this regard, it was difficult to accept the intensification of market 
access negotiations in services while there remained a l ack of clarity in other areas of the Round, such 
as agriculture and NAMA, where South Africa had in terests and sensitivities.  Services was not the 
key to unlock the Round.  It was important to r ecord progress in other areas of the Round.  South 
Africa was certainly not satisfied with the progr ess in agriculture and NAMA.  Having said that, it 
remained committed to a balanced and fair outcome of the Round.  South Africa’s judgement was that 
the overall package currently on the table was simply not development friendly. 
107. The delegation of Ecuador  said it understood the interest of certain Members to see the 
discussions intensify, and thus to expand the duration of the next cluster up to a week and a half.  
However, it wished to underscore the difficulties that small delegations faced, especially if meetings 
lasted more than a week, particularly in November.  Ecuador hoped that the Chairman could take these concerns into account when organizing the next cluster. 
108. The delegation of Cuba
 said that it gave particular importance to the services sector, which 
represented more than 70 per cent of its income.  For this reason, Cuba supported what had been said 
by other delegations as to the importance of seeing that future work took into account the 
development mandate of the Round.   Cuba supported the interventi on by the delegation of Ecuador 
with respect to increasing the duration of the next cl uster.  Cuba’s delegation was rather small, and it 
could give rise to difficulties in participating actively in the meetings. 
109. The delegation of Norway  said that Members had held useful discussions and made progress 
during the week.  Work had been constructive, and services were now more in the forefront.  Norway 
had participated in useful plurilateral and informal bilateral meetings.  Devel opments in the subsidiary 
bodies had been positive.  On the LDC waiver, Norway  agreed that the topic was very important, and 
hoped that the forthcoming consultations w ould bring Members closer to agreement. 
110. New ‘cluster’ proposals had been put forward to contribute to progress in the negotiations on 
market access. These included im portant elements that hopefully would advance the negotiations, 
keeping in mind the importance of ensuring broad su pport for such initiatives.  The September cluster 
had been useful in preparing for the November one .  Norway was looking forward to the continuation 
of the services negotiations, not least in market ac cess.  Regarding the duration of the meetings in 
November, Norway was flexible.  However, there had to be sufficient time to continue the discussions 
on new approaches. 
111.  The Chairman  said that all were aware that services were not being negotiated in a vacuum – 
it was part of a whole undertaking as established in th e Doha Declaration.  Th ere were gaps remaining 
in the services negotiations, with differences and di vergences on various issues.  However, he hd a TN/S/M/38 
Page 20  
 
  strong feeling that Members were now starting to move – things were beco ming unblocked, and the 
negotiations were slightly further ahead than before the cluster.  There had been some very relevant 
discussions and exchanges of views and, as these de veloped and consolidated, Members would find 
that they could make future progress.  Of course, Me mbers had to take into account the fact that they 
were not negotiating in isolation, or in a vacuum.   
112. The Chairman wished to encourage Members to  continue their contacts and discussions, and 
to carry on thinking about the prop osals that had been made on the various issues.  At the next cluster, 
he intended to reserve the period of 15-26 November – with meeti ngs of the usual services bodies.  
With respect to the bilateral and plurilateral meetings, Members were the ones responsible for 
ensuring that they took place. 
113. The delegation of the Philippines
 requested that the Chairman free up at least one day in the 
second week for bilateral meetings, since in the past it had had to decline bilateral meetings with 
others because delegations could not simultaneously cover two events.  One way to do free up this 
day would be to ask the Council for Trade in Services Regular Session to meet in the first week of the  
cluster. 
114. The Chairman  said that he would certainly try to accommodate the Philippines' proposal.  He 
would see to it that there was one day available for bilateral meetings during the second week.   
115. The Council  took note of the statements made, and decide d to revert to this item at the next 
meeting. 
D. OTHER BUSINESS  
116. Since there was no other business, the Chairman  adjourned the meeting. 
 
 
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