RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/S/M/15 
15 September 2005 
 
 (05-4048) 
Council for Trade in Services 
Special Session  
 
 
 
REPORT OF THE MEETING HELD ON 27 AND 30 JUNE AND 1 JULY 2005 
 
Note by the Secretariat1 
 
A. ASSESSMENT OF TRADE IN SERVICES .........................................................................................2  
B. MANAGING REQUEST -OFFER NEGOTIATIONS UNDER THE GATS:  THE CASE OF 
ENVIRONMENTAL SERVICES .......................................................................................................8  
C. IMPLEMENTATION OF THE MODALITIES FOR THE SPECIAL TREATMENT FOR LEAST -
DEVELOPED COUNTRY MEMBERS IN THE TRADE IN SERVICES NEGOTIATIONS ......................14  
D. CONSIDERATION OF PROPOSALS ON S&D  TREATMENT PROVISIONS .......................................18  
E. PROPOSED INFORMATION TOOL FOR THE NEGOTIATIONS ........................................................19  
F. PROPOSALS RELATING TO THE NEGOTIATIONS UNDER ARTICLE XIX  OF THE GATS ..............22  
G. WORK OF THE SUBSIDIARY BODIES – REPORTS BY THE CHAIRPERSONS .................................29  
I. REVIEW OF PROGRESS IN NEGOTIATIONS , INCLUDING PURSUANT TO PARAGRAPH 15 
OF THE GUIDELINES FOR NEGOTIATIONS ..................................................................................33  
K.  ORGANIZATION OF FUTURE WORK...........................................................................................33  
J. OUTLINE OF THE CHAIRMAN 'S REPORT TO THE TRADE NEGOTIATIONS COMMITTEE ..............99  
L.  OTHER BUSINESS ....................................................................................................................102  
 
 
1. The Special Session of the Council for Trade in Services held a formal meeting on 27 and 
30 June and 1 July 2005. The agenda for the meeti ng, chaired by Ambassador Alejandro Jara of Chile, 
is contained in document WTO/AIR/2603. 
2. The Chairman  drew the Council's attention to the report of the last meeting contained in 
document TN/S/M/14 and supplements 1 and 2.  He was aware that Ca nada would wish to introduce a 
paper under "Other Business". 
3. The representative of the European Communities  said that a document on mode 3 was under 
preparation that it would wish to present under Other Business. 
4. The representative of the United States  said that her delegation wished to postpone its 
presentation under Item H of the agenda until the next meeting.   
5. The representative of Japan  indicated that his delegation wished to present a forthcoming 
paper on construction services from a group of Members. 
                                                      
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/15 
Page 2  
 
 6. The representative of Korea
 said that his delegation would wish to present a forthcoming 
paper on MFN exemptions.   
7. On the item related to cross-border supply, the representative of India  said that a discussion 
paper was forthcoming. 
8. Referring to the importance of the item Review of Progress, the representative of Brazil  
encouraged colleagues to move through as much work  on the first day of the meeting in order to 
dedicate sufficient time to the review of progress. 
9. On the item Implementation of the LDC Modalities, the representative of Rwanda  requested 
that this item be kept open for discussion later in the week when representatives of LDCs who were 
attending an LDC Ministerial in Livings tone, Zambia would be in Geneva.  
10. The Chairman  suggested that the agenda be adopted taking into account these points, and that 
the UNCTAD presentation, which had been agreed to  under the item "Review of Progress" when the 
Council had met on 27 April, given its content, be presented under Item A. 
11.  It was so agreed . 
12.  The Chairman  said that he hoped that the Review of Progress would be given particular 
importance at the present meeting.  He asked Members to refer to a note by the Chairman contained in 
Job(05)/99 when preparing their statements.  He said that he needed Members' inputs in order to make 
his report to the TNC.  He said that this summer the TNC and the General Council would have to do a 
"reality check" on the overall negotiations, and establish a road-map for work in the second half of the 
year.  He said that his note requested that Memb ers give a comprehensive and detailed evaluation by 
individual Members of the offers on the table.  He sa id that structuring interventions on a sectoral or 
modal basis would be helpful, and that the crite ria used to evaluate the offers and Members' 
expectations in terms of outcomes in specific co mmitments or rules would also be useful.  He 
encouraged those with extensive evaluations to s ubmit those in writing and provide an oral summary 
under Review of Progress. 
13. Referring to the report to the TNC he would subm it after the meeting, the Chairman said that 
it would include main introductory points, a secti on with a numerical summary of the offers, an 
overview of the quality of the offers based on input Members would provide, comments on the LDC 
Modalities, a word on S&D, and finally a section on the expectations of Members in the round.  He 
would also include a section containing some of his own views.  He encouraged Members to provide input for his report.   
A. A
SSESSMENT OF TRADE IN SERVICES  
14. The Chairman  drew Members' attention to a co mmunication from Cuba contained in 
TN/S/W/44.   
15. The representative of Cuba  said that document TN/S/W/44 contained a contribution from 
Cuba to the negotiations though an assessment of trade in services and liberalization, in particular in 
developing country economies.  She said that the assessment of trade in services was an important 
component of the negotiations and that the devel oping countries needed to be sure that multilateral 
rules and commitments in services would contribu te to defining rational policies nationally and 
internationally.  Cuba believed that economic grow th should not be confined to only a few countries, 
that the growing participation of underdeveloped countries was effec tive and that these contributed to 
reducing the existing asymmetry between Members.   Citing World Bank data, she said that the 
services sector provided the fastest accelerator of GDP growth in low- and middle-income countries.   TN/S/M/15 
 Page 3 
 
 
 While services exports from developing countries had increased at a faster rate than those of 
developed countries, it had been focussed mainly  in Asian countries.  The contribution to many 
underdeveloped country economies had been much  less since the end of the Uruguay Round.  
Referring to page two of the document, she pointed  out that Latin American's share of trade in 
services had fallen from 4 per cent in 1994 to 2.3 pe r cent in 2003.  Africa's share in world services 
trade over the same period had remained unchanged.  She said that Members needed to seek the ways 
and means that would provide developing countries, as stipulated in the Agreement, with a greater and 
more effective share in world services trade.  She sa id that a number of studies held the concordant 
view that deregulation and liberalization had not necessarily resulted in improved prices.  Indeed, in certain instances, they had served only to change the economic agent that provided the service, such 
as moving from a public to a private provider or from a national to a trans-national supplier.  The 
difference in the developing versus developed co untries' capacity to export services was due to 
barriers faced in several sectors that were dominated  by trans-nationals, which were often based in the 
United States and the European Union.  For these reasons, Cuba believed that, in order to ensure 
effective services industries, developing countries needed to implement regulatory and institutional 
processes prior to and during the peri od of liberalization.  Liberaliza tion of trade in services could be 
beneficial when it took place in an orderly manner and met the development goals of the developing 
countries undertaking it.   
16. The representative of Cuba said that, pursuant to  paragraph 44 of the Doha Declaration and 
the July Package, and in order to ensure positiv e results from the negotiations for a majority of 
developing countries, it was essential to strengthen S& D provisions.  Greater market access needed to 
be given by developed countries to the greater be nefit of developing countries.  Likewise, the 
development of national policies were of great im portance to Members who sought to integrate their 
economies effectively into the international trad e in services economy.  The development of the 
tourism sector in Cuba was an example.  It w as fundamental for Members to set up a regulatory 
framework in order to ensure the objectives of their policy would be achieved in a competition-
favouring context without shifting away from nationa l industries that guaranteed customer access to 
services.  Cuba believed that, without the ability to obtain technology, capital and markets, it was 
useless to open the national market.  Competition with  transnationals needed to yield development.  
Otherwise, Members would only worsen existing asymmetries.   
17. The representatives of Brazil
, Pakistan , Argentina , Guatemala , Rwanda  and the Dominican 
Republic  thanked Cuba for its working paper.  
18. The representative of Brazil  said that the paper raised a number of conceptual issues that 
needed to be taken into account in the services nego tiations.  It broached in an appropriate light the 
question, among others, of S&D.  
19. The representative of Pakistan  sought to reserve the right to revert to the paper.  She 
expressed her delegation's support for the comments made by the representative of Cuba regarding 
developing countries, because these were issues common to all developing countries, including from 
Asia.  
20. The representative of Argentina  said that the data about the slowing pace of trade in services 
in Latin America was of concern to his delegation.   He said that it would be worth analysing this 
information in the context of the information provided by the Chairman in his state-of-play presentation.   
21. The representative of Guatemala
 said that the paper recalled developing countries' concern 
with the pattern of commitments undertaken to date. TN/S/M/15 
Page 4  
 
 22. The representative of Rwanda
 believed the issues raised in th e paper were of importance to 
African countries and LDCs.  She noted that trad e in services between 1994 and 2003 had stagnated 
in Africa, which was an issue of concern for her delegation.  She sought an opportunity to further 
discuss some of the issues raised, including that regulatory and institutional frameworks should be set 
in place before liberalization and that comp etition needed to yield development.   
23. The representative of Dominican Republic  said that the Cuban submission was a contribution 
to on-going thinking on trade in services.  Together with other formal or informal assessments, it 
could provide new elements for the assessment that  could explain some of the phenomena referred to 
in the paper and shed light on the content of offers.   
24. The Chairman , noting the lack of English and French translations, presumed that delegations 
would wish to revert to this paper once these had been made available.  He then welcomed the 
representative of UNCTAD, Mrs. Lakshmi Puri, Dir ector, Division on International Trade in Goods 
and Services and Commodities, to present a recent UNCTAD Secretariat document entitled "Trade in 
Services and Development Implications". 
25. The representative of UNCTAD  thanked the Council for its invitation.  She said that 
nationally and in the developing world, services we re moving from the periphery to the core of 
economic activity and to the centre of their trade and development concerns.  She said there was an 
increasing interconnectedness between services modes on the one hand, and services, agriculture and 
manufacturing on the other.  This had implica tions for developing countries' supply capacity, 
competitiveness and market access as well as between ser vices trade, investment and technology.  She 
said that services played a crucial role in the UN 's work on attaining the millennium development 
goals (MDGs) as the mid-term review of the Declar ation approached.  She said that services played a 
role in this regard, in terms of poverty reducti on, hunger reduction, illiteracy, environment issues, 
access to water and energy, etc.  She said that the ro le of global enterprises in services trade needed to 
be examined and borne in mind when assessing the direction, pattern and structure of trade in services.  She said that services industries had been marked in recent years by mergers and acquisition 
activities and the concentration of ma rket power.  The rules set by the market were often ahead of the 
rules set in the GATS negotiations.  She said that regi onal and bilateral agreements also played a role 
in setting the rules of the trading game.  All of these factors would have an impact on how the GATS 
negotiations would progress and bring about the li beralization of trade in services as well as the 
increasing participation of developing countries in in ternational trade in services.  GATS negotiations 
had reached an important juncture and the devel opment dimension of liberalization needed to be 
factored into the equation.  Referring to UNCTAD' s mandate to support natio nal and regional services 
assessments to promote the increasing participation of developing countries' trade in services and the 
development of developing countries, she sai d that UNCTAD had esta blished development 
benchmarks because they sought to deliver developm ent through GATS and other liberalization.  The 
assessment was important because it would enable developing countries to plan strategically their 
services sector, learn through trial-and-error, use the experiences to build stakes in trade in services, 
and improve synergies between development of domes tic services capacity and GATS commitments.   
26. Turning more specifically to the topic of development benchmarks, the representative of 
UNCTAD asked how they were linked to negotiatio ns.  UNCTAD felt that these benchmarks could 
help to capture progress.  She said that a numbe r of benchmarks had been used in UNCTAD's 
national, regional, horizontal and sectoral assessmen ts.  These included: the contributions of services 
to the national economy (through GDP, employment , higher value creation and retention) and 
increasing the share of services exports in total trad e, in trade balance and export value-added.  She 
said that the negotiations could second these goals thr ough the removal of barriers to trade in sectors 
and modes of interest to developing countries, pa rticularly mode 4.  Another benchmark was the 
development solidarity of devel oped countries and liberalization supported by capacity building, 
including specifically the operationalisation of Article IV in a proactive manner and beyond the  TN/S/M/15 
 Page 5 
 
 
 current best-endeavour spirit.  She said that market  entry issues was another development benchmark.  
In terms of competitive indicators it was important to look at the issue of participatory supply through 
joint ventures, transfer of technology and learning by doing.  She said that it was only through the participation of local industry in services sectors th at a critical mass could be created for exports in 
developing countries.  Trade in services and soci al indicators included poverty reduction, gender 
equity issues, subsistence and employment issues.  In terms of LDCs, there were a number of specific 
features which had been identified and which a ddressed single services sector dependency, export 
diversification, and low-value added.  She said that it was crucial that the ne gotiations respond to this 
need and these various benchmarks by translating th e special consideration for LDCs into specific 
capacity building and market access related actions.   
27. In terms of the insights that had been gain ed from the assessment, the representative of 
UNCTAD said that during 2002-2003, the average grow th rates of global trade in services reached 4 
per cent in developing countries and 7 percent in  developed countries and yet developing countries 
remained net importers of services.  For some countries,  particularly in Africa, the share of services in 
GDP was declining.  A strong and economically important informal services economy had been 
observed in many countries.  While UNCTAD was s till assessing the role of this sector, preliminary 
information suggested that the integration of the in formal economy into international trade in services 
was not as high as in those countries where the formal sector was more robust.  She said that UNCTAD had also sought to identify the sectors a nd modes of export interests to developing 
countries.  These were not limited to mode 4, but in cluded tourism, constructio n, ICT-related, health, 
education, recreational, audio-visual and professiona l services in a range of modes.  Hence, a broad 
export basket was possible and an appropriate respon se to this was required in the GATS negotiation.  
Technology and communications revolutions were  driving tremendous change in services trade, 
including through global outsourcing.  The prominence of FDI was becoming more evident.:  55 per cent of inward stock in developing countries was accounted for by services and 85 per cent of outward 
stock from developed countries to developing countri es was services related.  Also observed was the 
increasing importance of South-South trade, regi onal and inter-regional trade in sectors such as 
financial, tourism, construction, health, educati on and energy services.  A growing concentration of 
trade was another trend that was increasing in im portance.  The vulnerability of LDCs and their 
concentration on low-technology related services was an important trend.   
28. Referring to other insights from the study, the representative of UNCTAD said that the role of 
infrastructure services was a key driver to de veloping countries' involvement in the GATS 
negotiations in their efforts to attr act investment.  It also needed to  be supported thr ough technical and 
financial support.  She recalled that many infrastru cture services had the characteristics of merit or 
public goods and hence the state had the challenge of ensuring universal access and availability for 
these services.  She said that public-private partne rships (PPPs), including through donor funding, 
were important as the state alone could not always fulfil this mandate, and pr ivate ventures alone were 
often not viable.  Hence, this was an important co mponent of development cooperation.  She said that 
developing countries were seeking commitments in business services because they offered many 
benefits, including through professional services.  In  this regard, she said that there had been an 
experts meeting on this topic.  She said that while the paper had referred to mode 4 issues that needed 
to be addressed in the negotiations, there were also  mode 1, mode 3 and mode 2 issues which also 
needed to be addressed when considering developi ng countries requests.  Another insight was that 
global outsourcing had enormous potential in increasi ng the participation of developing countries in 
trade in services.  It was a win-win proposition; ho wever, it was important to ensure that no new 
restrictions were placed on this activity.  The f acilitation and liberalization of global outsourcing, 
especially through mode 1 and computer relate d services, would be important for developing 
countries.  On mode 4, UNCTAD's research had indi cated that, under any sector, this remained a core 
priority for developing countries.  Quoting Martin Wolf, she said that the controls on mode 4 created 
the world's biggest economic distortion of world trade.  She referred to the direct and indirect benefits 
that studies by Alan Winters and the UNU indicated would accrue from high-skilled migration.  These TN/S/M/15 
Page 6  
 
 benefits were in the order of 3-11 per cent of wo rld GDP.  She said that the OECD and the European 
Communities had emphasised the importance of progr ess on mode 4, including with regard to the 
development aspect of the Round as a whole.  All acknowledged that liberalization of mode 4 would 
be greater than any other part of the services nego tiations.  She said that some of the problems facing 
this part of the negotiation included sensitivities such as security and job displacement.  She said that 
it was important that some issues, such as ensuring the temporary nature of the stay, could address 
these sensitivities, including concerns with illegal migra tion.  She said that the assessment identified a 
number of mode 4 categories that were of inter est to developing countries and for which there had 
been little progress.   
29. Turning to some of the challenges and objectives developing countries needed to bear in mind 
in the negotiations, the representative of UNCTA D said that supply capacity issues prevented 
developing countries from seeking an aggressive ag enda and made them hesitant to undertake 
commitments.  Development, social, equity and tr ade considerations needed to be reconciled while 
bearing in mind sensitive issues such as competition,  universal access and efficient networks.  The 
assessment had demonstrated that a social safety net, a competitive business environment, and an 
appropriate reform process could be put in place th rough gradual liberalization.  She said that the 
progressive nature of liberalization needed to be ta ilored to each Member.  She also underlined that 
financial assistance for the seeding of PPPs was im portant.  Referring specifically to the GATS 
negotiations, she said that there were discussions on how to evaluate the GATS package.  It was not 
her intention to enter this debate.  She said that  GATS was an area in which all countries had strong 
interests and high stakes.  From the perspective of developing countries, there were a number of 
issues that needed to be addressed, including the development benchmarks, quantity, quality and 
depth and coverage of offers.  She said it would also be important to preserve the architecture of the GATS.  The trade-offs for developing countries would al so need to be considered  in terms of the parts 
of the package on S&D, implementation, rules and services.  The paper said that some improvements had been made in terms of the liberalization a nd development content of the negotiations, but a 
quantum leap had not occurred.  She reiterated that  UNCTAD would continue its work to complement 
the market access and rules-related GATS negotiations.   
30. The Chairman
, on behalf of the Council, thanked the representative of UNCTAD for her 
thorough and interes ting presentation.   
31. The representative of India  said that UNCTAD's description of development benchmarks, as 
that term was used in the UNCTAD context, had been  enlightening.  He sought to highlight the point 
made about the inter-related nature of modes, as well as the fact th at cross-border supply was one of 
the most dynamic elements at play in this regard.  The continuing importance of mode 4 had also been 
highlighted.  He said that these points would be useful in the assessment of offers.  
32. The representative of Korea  sought some further information on the importance of 
infrastructure services, referring to paragraph 19 of  the paper which spoke of services as inputs to 
other sectors of the economy.  He wondered whether there were any specific statistics available from 
UNCTAD about the input ratio of infrastructure services for other areas of the economy.  He 
presumed that national input-output tables could be used for this purpose and he wondered if there 
were any commonalities among countries that coul d be taken into account with regard to 
infrastructure services.   
33. The representative of Hong Kong, China , referring to paragraph 19, said that the observations 
on infrastructure services had been of interest.  Serv ices such as transport, logistics, distribution, 
telecommunications, financial and business services were crucial to the competitiveness of economies 
and for moving goods and services and reducing tr ansition costs and supporting trade.  They 
contributed to an important percentage of GDP and employment in developing countries.  In this 
regard, the presentation had been timely and reaffirm ed Hong Kong, China's belief that infrastructure  TN/S/M/15 
 Page 7 
 
 
 services increasingly formed the backbone of deve loping countries' economies and their development 
was crucial to their overall econom ic development.  The question facing Members was how the DDA 
could react to this belief and facilitate these objec tives.  The submission of revised offers was an 
opportunity for specific action to be taken, in cluding by making requests concrete, clear and 
operational and offers responsive to the development need of developing countries.  She said that this 
was a task facing both developing and developed economies.   
34. The representative of Rwanda  said that the work of UNCTAD was highly useful to LDCs 
who were often unable to carry out their own assessments.  On the point about supply-side 
constraints, she emphasised that it was important for financial and technical assistance in order to help 
countries address these challenges.  She said that this was in line with the African Group's S&D 
proposals which aimed to create targets so that r ecipient countries would benefit.  Referring to the 
comments about high-skilled migration that could contribute from 3 to 11 per cent of GDP, she noted that for many LDCs, this figure could be as high as 28 per cent, such as for Lesotho.  She noted that 
not only high-skilled migr ation was important, including non-pr ofessional services, for this was the 
skill level from which LDCs would benefit.   
35. The representative of Brazil
 stressed the difference between development of services for 
development and the services negotiati ons for development.  One dealt with the policies for services 
for developing countries and the other with the role of the services negotiations for developing 
countries.  Both were touched upon in the study and were correctly addressed.  Brazil felt it was 
important to make this distinction.  On the services negotiations, the study made a good case for the 
specific importance of mode 4 and their complexity.   
36. The representative of Mauritius  asked whether a study had been done on the development 
implications for vulnerable and small services s uppliers that relied on one or few sectors.   
37. The representative of UNCTAD  thanked Members for their comme nts.  On the infrastructure-
related data, she said that all assessments examin ed the extent to which infrastructure services 
contributed to the economy and trade.  She said wo rk on this point was on-going and more statistics 
on a sectoral and regional basis would be made available.  Secondly, she said that her comments on 
high-skilled services had been taken from a recent UNU study.  She noted that this study followed on 
an earlier one by Alan Winters about, inter alia , the greater gains that would accrue from 
liberalization of lower skilled levels in mode 4 (e.g. 3 per cent increase leading to $150-200 billion 
welfare gains).  She recalled that LDCs had a comparative advantage in the latter categories.  In terms of services for development and services negotia tions for development, she took on board the 
comments made.  She recalled that developing countri es had been referring to mode 4, both in terms 
of market entry (or trade facilitation) issues in mode 4 as well as specific sectors or occupational 
categories.  She said that more developing countries were refining their request s, interests and market 
access in this area.  Finally, she said that UNCTAD was working with Mauritius on a project 
connected with the trade in servi ces assessment which included the question of small suppliers and 
their participation in international trade in services as well as how services markets were becoming 
concentrated and how small suppliers were dealing with this trend.   
38. The representative of the United States
 asked whether the figures cited about remittances 
included both permanent and temporary employment or whether they had been separated.   
39. The representative of UNCTAD said that the fi gures included permanent migrants; however, 
she said that studies also indicated that temporary workers were more likely to send remittances home 
than permanent workers, and indeed a majority  of remittances were accounted for by temporary 
workers.   TN/S/M/15 
Page 8  
 
 40. The Chairman
 said that three additional UNCTAD documents had been brought to his 
attention which he thought might be  useful to delegations, namely, "Trade and Development Aspects 
of Professional Services and Regulatory Framew orks", "Moving Professi onals Beyond National 
Borders: Mutual Recognition Agreements and the GATS", and "Managing Request-Offer 
Negotiations under the GATS:  The case of energy services." 2 These were available in the room.  He 
proposed that the Council take note of the statements made.  
41. It was so agreed . 
B. MANAGING REQUEST -OFFER NEGOTIATIONS UNDER THE GATS:  THE CASE OF 
ENVIRONMENTAL SERVICES  
42. The Chairman  recalled that the OECD and UNCTAD had jointly prepared over the past 
months a number of studies which aimed at as sisting WTO Members in managing request-offer 
negotiations under the GATS.  He said that prev ious studies released (some of which had been 
presented in other services bodies) included mana ging request-offer negotiations in legal and 
insurance services.  The key objective was to help officials of WTO Members gain a greater insight 
into the particular issues of importance in selected  services sectors and how they might be approached 
in the negotiations.  He drew Members' atten tion to a recent study in this series entitled "Managing 
Request-Offer Negotiations Under the GATS:  The case of environmental services" and welcomed Mr. Massimo Geloso Grosso of the Trade Directorate of the OECD. 
43. The representative of the OECD
 thanked the Council for the opportunity to present the paper.  
He said that the OECD document had been recently circulated to OECD members and was part of a 
joint project with UNCTAD that developed a number of  sectoral studies.  Turning first to some of the 
characteristics of environmental services, he said that  this sector was difficult to identify as a coherent 
sector.  Traditionally, it had been understood in terms of infrastructure that provided water and waste treatment services, but more recently demand had increased for other non-infrastructure and related support services such as environmental consultancy servi ces.  This was due to several factors, which 
included new regulatory requirements for pollu tion control and management, growing public 
sensitivity to environmental problem s and trends in privatisation a nd liberalization that had created 
private demand for a variety of e nvironmental  services.  He said that these developments had been 
reflected at the international level through attemp ts to provide a modern definition of the sector, 
among the most comprehensive of which was from the OECD and Eurostat which had been originally 
developed for analytical purposes, as well as from  the European Communities.  These proposals gave 
three broad categories of services including infrastructure services (water supply, waste water 
management, and solid and hazardous waste manage ment services), non-infrastructure services (air 
pollution control, remediation and clean up of soil and water, noise abatement, etc.), and related 
support services (consulting, contracting, research and development, etc.).  The latter did not consist 
of environmental services per se ; however, they were important to the provision of the first two.  
These distinctions were used in the pa per solely for analytical purposes.  
44. With respect to environmental infrastructure services, the representative of the OECD said 
that historically these had been provided by g overnments for several reasons, including ensuring 
socially equitable access and their natural m onopoly characteristics such as for network-based 
services.  More recently, changes in the provision of  these services had led to a stronger presence of 
the private sector, particularly in developing co untries because of their limited capacity. Significant 
benefits could be achieved, including increased investment, which would improve infrastructure 
performance and introduce competition where feasible  (as this possibility tended to be relatively 
                                                     
 
2 Please see UNCTAD documents TD/B/COM.1 /EM.25/2, UNCTAD/DITC/TNCD/2005/2 and 
UNCTAD/DITC/TNCD/2003/5 respectively.  TN/S/M/15 
 Page 9 
 
 
 limited in the case of environmental services).  Th ese changes were gradually bringing these services 
into the international market and exposing them to tr ade.  Although the benefits could be significant, 
liberalization needed to be underpinned by a str ong regulatory framework in order to achieve public 
policy objectives, and new regulatory instruments and effective regulatory authorities were required.  In this process, different countries faced various  circumstances necessitating approaches adapted to 
local conditions.   
45. Turning more specifically to regulatory instrume nts and firstly the issue of regulating tariffs, 
the representative of the OECD said that this w as perhaps the most controversial aspect of 
liberalization, particularly of network services.  Private sector involvement in these services could lead to increased prices, although this depended on the price that was charged under the governmental 
monopoly, since it often did not even cover the cost of  the services let alone the investment costs.  He 
said it should be stressed that these were capital-in tensive ventures and needed to be paid for, for 
example by consumers, tax payers or aid donors.  Therefore, cost reflective tariffs were necessary to attract investment in order to maintain, modernis e and expand the facilities.  A key challenge was to 
set tariffs that struck a balance between the inter ests of investors and consumers, so as to attract 
needed capital while ensuring that tariffs were re asonable and contributed to the achievement of 
universal access objectives.  He acknowledged the difficu lt nature of this challenge, which to be met, 
required strong administrative and regulatory capacity.  Experience with this policy to date had been 
mixed.  In terms of regulating to achieve univer sal access, governments might need to apply measures 
to meet the needs of the poor or the geographically  remote, as the private sector might have little 
natural incentive to meet these objectives.  To ensu re this, approaches included:  network expansion 
obligations, subsidies that targeted poorer consumer s or use of natural resources, or subsidies that 
encouraged operators to expand service access.  He said that ensuring sufficient administrative 
capacity to oversee these objectives was a significant ch allenge.  Thirdly, he tu rned to regulating to 
meet service standards.  He said that that this was a major issue given that many functions of society 
depended on these services.  Standards could s tipulate quality, reliability, continuity and 
environmental effects.  A number of approaches exis ted to induce companies in this regard, including, 
depending on the level of surv eillance required, mandatory service obligations or market-based 
instruments.  He said that for developing countries in particular, where large portions of society did not have access to services, one option was flex ible regulation that could create incentives for 
operators to invent creative approaches that me t the minimum standards and expanded access.  
Fourthly, it was necessary to have effective regulator y institutions in situations of natural monopoly or 
limited competition, as they performed crucial task s that required significant expertise in evaluating 
the structure and performance of markets, such as tariff setting, enforcing standards, and in cases of 
limited competition, access for essential facilities.  The discharging of such tasks required maintaining 
principles of regulation, such as the independe nce of the regulator from political influence, 
accountability to reduce corruption and inefficiency , capacity in terms of human and financial 
resources, and the transparency of regulations and users' involvement.   
46. Turning to environmental non-infrastructure a nd support services, the representative of the 
OECD said that there was a knowledge gap for these  services.  Among the principal characteristics of 
these services were that they were usually not subj ect to trade restrictions, could be supplied through 
all modes of supply, were generally provided by SMEs, and were technology intensive but less capital 
intensive.  For these reasons, liberalization could lead to significant benefits, through the exploitation 
of competitive advantages, trade through all modes,  transfer of technology,  and benefits to the 
environment.  With respect to regulation and other co mplementary policies, he first noted that most of 
these services were provided business-to-business or business-to-government and they required a 
qualified labour force.  This characte ristic decreased the ri sk of market failure that would result in a 
failure to achieve social objectives,  although he said that some regula tory spheres remained important, 
such as service standards and competition policy.  He said that the ability to take advantage of market 
access required supporting domestic policies, includi ng investment in higher-skilled labour and the 
mutual recognition of qualifications whic h could affect trade in all modes.   TN/S/M/15 
Page 10  
 
 47. In terms of the GATS framework, the representative of the OECD asked whether it could 
accommodate and support national policies.  He recalled the GATS' flexibility and progressive 
liberalization which allowed governments to determin e if they were ready to undertake a commitment 
in a sub-sector or to exclude it from its specific commitments should the sub-sector be sensitive or the regulatory structure not exist.  He said that lim itations could be included which took into account the 
public sector aspect of these services and allowed for re gulatory flexibility.  He then gave a number of 
examples from existing schedules of some of the approaches and limitations that Members had listed.  Referring to environmental non-infrastructure and s upport services, he said that these could be subject 
to scheduling given their economic and environmenta l importance, their generally liberalised nature, 
and the reduced regulatory risk associated with liber alization.  He said that commitments could be 
made in all modes, including sector specific commitmen ts on mode 4.  He said that it was important 
to ensure that commitments in support services we re not undermined by a lack of commitments in 
related areas.  In this regard, he referred to the checklists contained in the paper that could be used as 
aide-mémoire  in the negotiations.  Other checklists cont ained the range of measures which affected 
trade in environmental services, information pertin ent to requests and offers, and questions on other 
measures, including related to government  procurement and regulatory measures.  
48. The representative of the European Communities
 said that the paper offered a thorough and 
balanced analysis that clarified many aspects of the environmental services negotiations and provided 
useful insights into recent evolution in the market .  His delegation considered that it was relevant 
reading for negotiators given its hands-on approach and its indication of key issues for consideration 
in the negotiations.  He felt that the checklists were also quite helpful.  He welcomed the clarification 
on how commitments could be undertaken on envi ronmental services, notably in cases of public-
private partnerships (PPPs), as well as the suggesti ons on how the GATS' flexibility could be used in 
order to preserve the regulatory space necessary in this  sector, as well as concepts of public service.   
49. The representative of Korea  agreed that the checklist would be helpful in the negotiations.  
Posing a question that had been previously raised in the environmental friends group, he sought the 
representative's view on the relationship between PPPs and government procur ement considering the 
increasing possibilities of out-sourcing in environmen tal services provided by public institutions.   
50. The representative of Mexico  said that the document highlighted effectively the differing 
structures of environmental services markets and re gulatory frameworks in different countries.  He 
said that commitments had not been included in Mexi co's offer for a variety of reasons, which did not 
mean that this could not occur at a future point in time.  He said that distinguishing infrastructure from 
non-infrastructure from support services was enlightening and would assist his country's reflection on 
how these services could be integrated into its offer,  in particular with respect to non-infrastructure 
services.  He said these could have an important economic impact.  Infrastructure services were subject to governmental management in many co untries such as in Mexico, and often at many 
government levels. Hence, he thought that most attention should be focused on non-infrastructure 
services.  With regard to other support services, he said  that this was covered, at times, by work under 
other areas, such as professional services.  He said that Mexico had made an important offer in this regard. 
51. The representative of Switzerland
 agreed with others on the importance of the this sector in 
the negotiations in terms of trade as well as from the environmental point of view.  He said that, as 
government representatives, it was the duty of negotia tors to integrate various government policies 
into their activities.  It was for this reason that  Switzerland had always sought to promote progress in 
this sector.  Switzerland had an efficient e nvironmental services industry which sought trade 
opportunities.  Switzerland also believed that the re moval of obstacles to trade in environmental 
services would help the consumer to obtain the best available technologies at the best price.  This was 
important given the budgetary and financial constraint s faced by governments and industry.  A cleaner 
and sounder environment was an important goal.  He said that industry was facing more stringent  TN/S/M/15 
 Page 11 
 
 
 environmental standards.  While governments set the se standards, it was important to help companies 
meet them in the most economical and efficient manner.  Switzerland had ma de improvements to its 
commitments in its initial and revised offers and had made a broad range of requests to trading 
partners.  He supported the idea of the tools include d in the OECD paper as they would be helpful to 
capital-based experts.  On the issue of classification, he noted that Switzerland was one of two 
countries that had opposed a new classification for en vironment services, which it had integrated in its 
bilateral requests.  He stressed that the Swiss proposal was separate from the OECD approach and 
said that Switzerland had used the approach in its proposal to schedule environmental services.  The 
main feature of the Swiss proposal was that, like W/ 120 and the services portion of the CPC, it did not 
cover water. The Swiss proposal sought  to ensure that this situation remained the case, as Switzerland 
did not want to see a restructuring of the W/120 and the balance enshrined in the use of the CPC.  He 
had taken note that the paper recalled the tradition in the industry to consider certain environmental 
activities as services; however, Switzerland preferred for the point of departure for discussion on 
classification to be the GATS framework.  He re iterated that his delegation supported work on 
classification and hoped initiatives would lead to br oad agreements.  Making a few comments on 
North-South issues, he believed that environmenta l services were important for developing countries.  
Environment issues were often seen as a challenge, including increasingly for developing countries, 
and this aspect of the DDA had to be kept in mi nd when Members discussed environment issues.  On 
environmental services and mode 4, he said that  SMEs were often active in non-infrastructure 
environmental services and possessed advanced technologies.  SMEs often noted that mode 4 was one of the obstacles they faced in diffusing  their environmental technologies.  
52. The representative of Chile
 noted that the distinction between infrastructure and non-
infrastructure and support services was important to bear in mind when considering and preparing 
commitments.  On the other hand, there were also  interesting examples of regulatory approaches and 
experiences contained in the paper.  She said th at over the coming months, the CSC would address 
environmental services in an informal session and she thought that it would be useful to have the 
OECD checklist on hand. 
53. The representative of Pakistan  noted that her delegation had proposed to open some sub-
sectors of environmental services in its offer.  She underscored that there were areas of overlap 
between the goods and services sector in environmenta l issues.  She also said that some indigenous 
technologies were less expensive and more adap ted to developing countries' environments.  
54. The representative of South Africa  said that the slide on non-infrastructure and support 
services made reference to the transfer of technol ogy.  He asked the representative of the OECD to 
elaborate on how this transfer took place.   
55. The representative of Australia  shared the conviction that this  was an important sector in the 
DDA.  Referring to paragraph 17 and the comment th at Australia had been in favour of using the 
OECD-Eurostat classification system, he said that it had been used in Australia's initial and revised 
offers and urged all Members to consider commitm ents on the Eurostat model, because it allowed a 
clearer comparison and analysis of offers on environment services and better reflected actual trade in this sector.  On limitations, he noted that in the case of Australia's commitments, water for human use 
was explicitly excluded.   
56. The representative of the United States
 sought to highlight one of the concerns mentioned by 
Switzerland about the classification section of the pape r.  The United States did not consider water for 
human consumption to be part of the environmental services sector.  In fact, the CPC specifically 
omitted water for human consumption from CPC 9401 which covered wast e water services.  
However, the United States did not want this ob servation to overshadow the positive contribution 
made by the paper.  She sought to highlight a num ber of elements which the United States thought 
would be helpful to Members in undertaking meani ngful commitments in environmental services.  TN/S/M/15 
Page 12  
 
 She said that section IV on the economic and envir onmental benefits that environmental services 
liberalization could bring was critically important.  This section mirrored some of the observations 
outlined in environmental services studies conducte d by the US International Trade Commission, 
which found that foreign environmental service pr oviders often partnered with domestic firms in 
providing services.  Through this partnership they  provided capacity building and access to new 
technologies.  She said that the case studies provided specific examples and lessons learned in 
balancing liberalization of environmental services with universal service and pricing goals.  Section 
VI highlighted the flexibility that Members had in scheduling commitments under the GATS.  This 
could be used to schedule commitments in a manne r that would provide time for implementation of 
new or revised regulations.  The United States al so believed that the negotiating checklist provided 
important guidance to allow Members to evaluate ex isting offers and to refine their requests.   
57. The representative of Brazil
 saw several problems with the presentation made by the OECD. 
Brazil had a serious problem with checklists becau se, although they appeared innocent, they covered 
concrete interests.  Brazil therefore did not want to work with checklists proposed by Members, let 
alone with ones proposed by external organisations.  He said that if Members wished to use checklists 
to evaluate each others' offers, that was their pr erogative; however, the paper before Members created 
a diffuse image of a collective interest which did no t exist.  Members could use checklists to further 
their interests, but the idea should not be given that all Members should use this checklist as a 
collective negotiating tool, since this did not exist.   He recalled that the Council was a negotiating 
body and not a technical symposium and elements di scussed should be seen from the point of view of 
their negotiating value.  Brazil found it strange that the presentation had focused on specific 
inscriptions by some Members in their offers.  He r ecalled that in the previous formal meeting of the 
CSC many Members expressed hesitation about the use of names of countries.  Nevertheless, in the 
presentation, countries were referred to, and the sa me delegations that had expressed concern about 
the use of specific names in the CSC felt that the approach of the OECD was valid.  He did not see the 
difference between these two circumstances.  Anothe r element that had caught his attention was the 
idea that Members should negotiate a cluster around environmental services because consultancy and 
other services that had to do with environmental ser vices were included.  The idea of clusters he noted 
had been rejected many times in many fora and he found it strange to encounter it again.  He said that it was curious that mode 4 was only mentioned with  reference to the category of intra-corporate 
transferees which only benefited investor countries a nd not those that received investment.  This could 
create specialists that would have access to invest or countries under forms of mode 4, for example 
independent professionals.  He found it interesting that only the aspect of mode 4 that was of interest 
to developed countries had been mentioned.  He sai d that, while the regulatory challenges that could 
be faced by some had been raised, the relations hip between the undertaking of commitments and the 
regulatory capacity of States had not been discussed.  The treatment of the environmental sector raised challenges for countries.  He recalled th at the Council was a negotiating body, and what 
mattered was the incidence of undertaking commitments  on domestic regulation in a broader sense.  It 
appeared that the paper somewhat confused liber alization and commitments.  Each Member had to 
deal with liberalization challenges and many sector s.  However, to make an automatic assumption 
between liberalization and commitments was not a gi ven, and was not reflective of the reality of 
services negotiations.  He said that he might re vert with more comments on a later occasion. 
58. The representative of Israel
 shared the opinion expressed by others on the importance of the 
environmental services sector in terms of trade benefits as well as their environmental impact.  She 
said that Members of the Special Session of the CTE were also working to find a definition of 
environmental goods and a list.  Although services was within this mandate, the efforts had to date 
focused on goods.  The delineation of infrastruct ure and non-infrastructure related services was 
useful.  She said that her delegation viewed th e classification and checklists as suggestions or 
voluntary tools for Members.  She said that her delegation would reflect upon these elements.    TN/S/M/15 
 Page 13 
 
 
 59. The representative of Canada  said that environmental services represented a priority sector in 
the negotiations.  Canadian firms ha d gained international recognition for their solutions in areas such 
as climate change, clean energy technology, wast e water technology, solid and hazardous waste 
management, engineering and envi ronmental consulting and air pollution control.  Canadian firms 
were highly effective agents for the service of e nvironment development around the world.  Canada 
sought greater liberalization in environmental ser vices and further commitments from Members in 
this regard.  Progress on environmental services commitments and liberalization was one measure by which Canada would judge the success of the GATS ne gotiations.  Canada welcomed the fact that the 
OECD paper emphasised the importance of environmental services and the benefits of greater liberalization in this sector.  Canada had been suppor tive of the OECD's efforts to develop a checklist 
for environmental services, not least because commitm ents in related sectors were central to the 
effective delivery of environmental services.  These  included technical testing and analysis services, 
scientific and technical consulting services, engineering services and construction services.  He associated himself with the comments of the United States and others with respect to some of the 
issues related to classification.  Canada did not n ecessarily agree with some of the implications in the 
paper with respect to Members' views on classi fication proposals to include water collection, 
distribution and purification services.  He reitera ted that overall the paper was very positive.  
60. The representative of Morocco
 said that his country had made very liberal commitments in 
this important sector in 1994.  Morocco's commitmen ts had no restrictions on mode 3.  However, he 
echoed comments by Switzerland and supported the fact that the classification contained in W/120 covered neither water nor its distribution.   
61. The representative of Argentina
, referring to classification, said that his delegation was 
analysing the different proposals bearing in mind not only commercial concerns but the concerns of 
regulators and consumers.  Argentina believed th at water for human consumption was excluded from 
the services classification.  He said that Articles XVI and XVII were not applicable to government procurement for environmental services or any ot her sectoral classification.  In identifying the 
approaches Members had used in taking commitments,  the document underlined the need to make full 
use of flexibility in scheduling commitments.  Bearing in mind the present negotiating modalities, 
Argentina believed that this approach and the avoi dance of any attempt to benchmark was necessary.  
It was clear that maintaining flexibility was rela ted to the sensitive nature of the sector and to 
safeguard different regulatory approaches in differing markets.   
62. The representative of the OECD
, referring to the question on the relationship between 
government procurement and public-p rivate partnerships (PPPs), said that it was partially addressed in 
the paper.  He recalled that there was no agreem ent in the WPGR as to whether PPPs were to be 
considered government procurement.  In the absen ce of multilaterally agreed definitions which could 
take some time to develop, the best option was clar ity in the scheduling commitm ents as to what they 
cover, such as the PPPs included perhaps with an ex planatory annex.  On the issue of classification, 
he said the paper sought to deal with these issues in as balanced a manner as possible and to reflect 
the views of all.  On the comments from Pakistan a bout locally adapted technology, he said that this 
was a good point.  The general perception was that developing countries interests in this area might not be that important, but this was misplaced si nce, particularly for non-infrastructure services, 
developing countries were becoming active expor ters of some services.  In the case of non-
infrastructure services, there was the possibility of  South-South and South-North trade, because of 
comparative advantages arising from cheaper labour.  In this connection, there was a need for 
complementary policies such as investment in educat ion and mutual recognition of qualifications.  On 
the issue raised by South Africa on transfer of technology, he said that this could occur through mode 1 supported by telecommunication technologies,  but more importantly in mode 3 with the 
associated transfer of technologies, and mode 4 and personal contact and transf er of knowledge.  He 
acknowledged the points made by Brazil, and echoe d comments by Israel, that the purpose of the 
checklist was not to mandate its use; it was a list of questions that had be en developed to help TN/S/M/15 
Page 14  
 
 Members if they so chose to use it.  With rega rd to the comments on mode 4 and intra-corporate 
transferees, he noted that the presentation referred to  contractual service suppliers which, particularly 
in the case of environmental non-infrastructure services, could be quite important.  On the issue of regulation, liberalization and co mmitments under the GATS, while he acknowledged the point made, 
it appeared to him that these are as were linked, and hence a Member needed to be confident about its 
regulatory capacity before it could liberalize which only then led to the question about undertaking 
commitments.  He reiterated that the paper had l ooked at some scheduling techniques that had sought 
to ensure that Members preserved their regulatory flexibility and the public  aspect of service when 
contemplating commitments.   
63. The Chairman
, on behalf of the Council, thanked the representative of the OECD for his 
presentation and noted that it had elicited a great deal  of interest.  He proposed that the Council take 
note of the statements made. 
64. It was so agreed . 
C. IMPLEMENTATION OF THE MODALITIES FOR THE SPECIAL TREATMENT FOR LEAST -
DEVELOPED COUNTRY MEMBERS IN THE TRADE IN SERVICES NEGOTIATIONS  
65. The Chairman  recalled that the Modalities for the Special Treatment for LDCs in the 
negotiations had been adopted by the Council Sept ember 2003.  Over the previous months, a broad 
range of the Membership had expressed concern about  the participation of LDCs in the negotiations 
and had suggested ways in which this participati on might be facilitated.  As he had indicated on 
previous occasions, it had been his intention during the cluster to assist LDC delegations set aside a 
day or two to take up their concerns and interest s in the negotiations, specifically through arranging a 
series of bilateral consultations between the LDC Gro up and trading partners they had identified.  He 
informed the Council that these bilateral consultations were scheduled to take place that week so as to 
coincide with the presence of capital-based experts.  He said that in consultations subsequent to the 
last formal meeting, members of the LDC Group had indicated that they wished to have an 
opportunity to discuss the issue of the LDC particip ation in the negotiations and the implementation 
of the LDC Modalities with Members.  Accordi ngly, he had convened an  open-ended informal 
meeting of the Council on 1 June at which the LDC Group had presented a draft of the 
communication contained in document Job(05)/114, to which he drew Members' attention.  He said 
that this document had already been introduced on  that occasion and Members had responded to it.   
66. Speaking on 27 June, the representative of Rwanda  recalled that the LDC Group had prepared 
a document, Job(05)/114, which contained speci fic questions and requested information from 
Members on their experiences in implementing the LDC Modalities.  She noted that on 1 June, the 
LDC Group had received additional ques tions.  In order to add value to the discussion, she appealed 
to Members to provide responses to the questions  about their experiences in implementing the 
Modalities.  
67. There were no objections to the proposal by the Chairman  to take note of the statements 
made, keep this item open and revert to it later in  the meeting.  Speaking on 1 July, the Chairman 
drew attention to a communication from the LDC Group contained in Job(05)/114. 
68. The representative of Rwanda  said that, before turning to Job(05)/114, she sought to give a 
report about the bilaterals the LDC Group had held  that week.  She report that the LDC Group 
countries had held recent bilateral c onsultations with their trading part ners.  Overall, all delegations 
had welcomed the participation of LDCs in th e negotiations, and had indicated that the LDC 
Modalities were important and would ensure th at LDC concerns were taken on board.  Many 
delegations had further indicated their desire to  implement the LDC Modalities.  A majority of  TN/S/M/15 
 Page 15 
 
 
 delegations expressed the view that, in line with the LDC Modalities, they did not expect LDCs to 
make any commitments except those consistent with  national policy objectives .  The bilaterals had 
centred on market interests for LDCs, implementa tion of the LDC Modalities and how best technical 
assistance could be channelled to address capacity c onstraints in these countries.  Many delegations 
had also agreed that LDCs had special capacity constraints and that these should be taken into 
consideration in the negotiations by giving them th e utmost flexibilities.  Many Members also wished 
to consider ways and mechanisms through whic h capacity could be built and she said that the 
discussion of the LDC Modalities was an important step in doing so. 
69. Turning to Job(05)/114, the representative of Rwanda recalled that the paper had been 
introduced at an informal meeting held on 1 June .  She reiterated that the LDC Modalities, among 
others, highlighted the important role that th e services economy played in achieving social and 
developmental objectives, including poverty reduction and sustainable development.  Secondly, the 
LDC Modalities reinforced the flex ibilities which LDCs were already accorded.  They reiterated that 
Members were committed to making specific commitmen ts in sectors and modes of supply of export 
interest to LDCs.  She said that the LDC Group envisaged a process for the implementation of the 
Modalities.  The Group considered information ga thering about programmes that non-LDC Members 
had put in place or intended to put in place to achieve implementation of the Modalities to be 
important.  The Group saw the need to assess these programmes and initia tives in light of LDC needs,  
to adjust the them in light of LDC needs and to in stitute mechanisms in the Special Session to ensure 
and monitor effective implementation of the M odalities.  The Group had identified four action-
oriented paragraphs in the Modalities that it believed required urgent attention.  Paragraph 6 said that 
special priority would be given to LDCs in provi ding effective market access in sectors and modes of 
supply of interest to them.  Paragr aph 9 recognized that mode 4 was of particular interest to LDCs and 
that Members were committed to considering undert aking commitments that would provide market 
access to LDCs in mode 4.  Paragraph 7 envisaged  the development of appropriate mechanisms to 
effectively provide access for LDC exports.  Paragr aph 8 provided for measures aimed at increasing 
LDC participation in trade in services.  For each of the important action-oriented paragraphs, the 
LDCs asked specific questions and sought respon ses from other Members.  Overall, the LDC Group 
sought to learn of measures or initiatives by Members to implement these paragraphs.  The Group also sought to learn how Members thought best a notificat ion mechanism could be adopted in the Special 
Session.  The Group was interested to know whethe r any additional measures could be developed in 
this respect, and particularly, whether further t echnical assistance could be discussed.  Finally, the 
representative of Rwanda, on behalf of the delegati on of Zambia, requested that Zambia's statement 
made at the informal meeting of 1 June 2005 be included in the report of the formal meeting.
3 
70. The representative of Uganda  said the meeting was a timely opportunity to analyse issues 
related to LDCs.  His delegati on had listened carefully to comme nts made under the review of 
progress and was encouraged to see the increased number of offers.  He thanked those delegations that 
had recently submitted an offer and said they woul d be studied with a view to determining their 
quality for LDCs and Uganda in particular in sector s and modes of export interest.  He said it was 
important to ask why no LDC had tabled an initial o ffer, for it was not a reflection of a lack of 
commitment to contribute to the negotiations and the objectives of the multilateral trading system.  Rather, it was a reminder of the difficulties that LD Cs faced in participating in the liberalization 
process under the GATS.  Much information remain ed unattainable.  He said that Uganda had 
contemplated tabling an initial offer, but had opted  for caution and to move slowly.  There were many 
reasons for its caution.  Under the World Bank a nd IMF structural adjustment programme, Uganda 
had carried out extensive autonomous liberalizati on and it was not clear whether credit would be 
featured in the negotiations.  Uganda was carrying out a series of national studies to weigh the impact 
that this reform had had on its economy with a vi ew to judging the impact of potential liberalization 
and bindings under the GATS.  He said that his go vernment awaited the outcome of these studies 
                                                     
 
3 Please see Annex 1. TN/S/M/15 
Page 16  
 
 before proceeding.  In addition, Uganda's Urugua y Round commitments had liberalized the telecoms 
and tourism sectors and it was examining the linkages created with other areas of the economy.  This type of research would allow his country to prepare its  offer.  He said that Uganda had tabled specific 
requests to some Members.  As hi s delegation continued to analyse some of the revised offers, it 
appealed to the membership to deliver on developmen t-oriented concerns.  In this regard, he called 
upon the membership to pay special attention to the Modalities for the Special Treatment for LDCs, 
which could be used to open up Members' mark ets in sectors and modes beyond highly skilled 
professionals.  He recalled that his delegation had st ated on many an occasion that, in addition to the 
category of professionals, Uganda and other LDCs would benefit greatly from market access in the 
semi-skilled and other-than-professionals categories.  His concern was that this issue had not been 
addressed, even in the revised offers.  He calle d upon Members to contribute to the development 
component of Doha by delivering on this issue.  
71. The representative of China
 said that his delegation was one of the Members that had held a 
bilateral consultation with the LDC Group in which there had been a very good exchange of views 
and information and deepened mutual understandi ng.  His delegation had invited the LDC Group to 
indicate their specific interests in China's services markets.  He high lighted that China understood the 
importance of LDC participation in the negotiations  and acknowledged the hard work and effort that 
had been required in preparing the LDCs' request  and document Job(05)/114.  China fully supported 
their request that Members, to the extent possibl e, consider undertaking commitments to provide 
access in mode 4 which was of interest to LDCs. 
72. The representative of Nepal  welcomed the recent offers.  He associated his delegation with 
the statement made by Rwanda on behalf of LD Cs.  LDCs were lagging behind in the process of 
liberalization.  The services sector was very im portant for LDCs and the services negotiations would 
need to reflect the Round's development dimension.   Mode 4 was very important for LDCs and he 
supported the statement by Rwanda expressing hope th at Members would consider the LDCs request 
and mode 4 particularly. 
73. The representative of the European Communities  welcomed the paper tabled by the LDC 
Group. It had been discussed in bilateral consu ltations along with the recent request on mode 4 
submitted by the LDC Group.  The European Comm unities believed that the paper was a good basis 
for taking forward the implementation of the LD C Modalities which her delegation supported.  She 
suggested as a first step that it might be helpful to  focus on an information gathering exercise.  There 
was a need for full and transparent information about technical assistance and other measures that 
were undertaken in support of the Modalities.  For its  part, the EC was funding trade assessments in a 
number of developing countries and was seeking to target its assistance more effectively towards 
LDCs.  She said that the EU had planned to provide technical assistance in services to 12 or more African LDCs in 2005, mostly through the Internat ional Trade Centre.  The EU also had various 
programmes to encourage domestic and foreign investme nt in LDCs in the context of its development 
assistance and those projects were run in many cases by the European Investment Bank.  Her 
delegation could provide full details as part of an  information gathering exercise which might be 
coordinated by the Secretariat.  Her delegation supported the establishment of a regular reporting and 
monitoring mechanism, the output of which could be  discussed in the Special Session.  She said that 
this topic might also be relevant to the discussion of  the special and differential treatment proposals.  
74. The representative of the United States
 welcomed the paper by the LDC Group and said that 
her delegation had held some very productive and informative discussions with the Group.  Her 
delegation hoped to continue the discussion on the paper by the Group, and she said that the US was continuing to provide technical assistance and targe ting additional funding for the International Trade 
Centre.  The US had already provided funding fo r a services pilot project in Bangladesh and Rwanda 
and was looking at addi ng other LDCs to the project.  The representative of the United States  TN/S/M/15 
 Page 17 
 
 
 requested that her delegation's comments made at an  informal meeting on 1 June be included in the 
report of the formal meeting.4 
75. The representative of Norway  thanked the LDC Group for the qu estions containe d in its paper 
on the implementation of the LDC Modalities, which hi s delegation fully supported.  Norway had met 
with the LDC Group and held a good initial discussion on various issues.  As for the questions in the 
document, Norway was reviewing them in capital and hoped to be able to continue the dialogue 
perhaps in the setting suggested by the EC.  He sai d that Norway focused its technical assistance on 
providing funds to broad programmes and trust funds  in various international organisations such as 
the ITC, UNCTAD, the World Bank and the WTO Global Trust Fund, to which Norway had pledged 10 million Norwegian Kroner.  Norway provided a significant amount of official development 
assistance through its contributions to internatio nal organisations, funds and programmes.  In 
Norway's view, this was the most efficient way of assisting LDCs and ensuring coherence in the use 
of funds.  He said that his capital was working on preparing more ample information on specific 
programmes. 
76. The representative of New Zealand
 recalled his delegation's more general comments on 
development under the item of review of progress and sought to focus on the LDC Modalities paper 
and specifically mode 4.  His delegation had held a positive meeting with the LDCs and, in relation to 
mode 4, the LDCs had emphasised the need for greater commitments in terms of semi-skilled workers.  From New Zealand's perspective, its offer had endeavoured to expand the category of 
independent professionals beyond the traditional cate gory of professionals to encompass some of 
these semi-skilled workers.  Secondly, he saw the pr esent discussion was tied to Job(05)/131, most of 
the contents of which his delegation agreed with .  New Zealand believed that the criteria for 
assessment was largely agreeable and realistic, particul arly in terms of the wage parity requirement.  
Finally, he said his delegation woul d give further consideration to the issue of technical assistance and 
would be pleased continue discussions with the LDC Group. 
77. The representative of Malaysia
 said her delegation was sympathetic to the concerns of the 
LDCs.  She said that Malaysia had incorporated and established certain mechanisms in its various 
economic processes to integrate the LDCs into th ese processes.  These included  technical assistance 
and capacity building measures, such as  allowing longer transitional periods. 
78. The representative of Australia  said his delegation had appreciated the opportunity to meet 
recently with the LDCs, and had had a very useful ex change on aspects of mode 4.  In particular, the 
discussion had related to Australia's mode 4 offer a nd he hoped there would be further discussions in 
subsequent clusters.  Australia was very sensitive to the needs of the LDCs  for technical assistance, 
and had recently provided funds for a programme on services scheduling issues in Mauritius for 12 
southern and east African countries including LD Cs.  ASEAN LDCs would be involved in the 
programme he had mentioned under the review of progress. 
79. The representative of Canada  thanked the LDC Group for their paper Job(05)/114, which was 
being reviewed in capital.  Canada  was still considering the various elements in the paper, including 
the proposed mechanisms for monitoring and revi ewing the implementation of Article IV:3.  He 
sought an opportunity to reflect upon the paper and pursue the discussion at a later point in time. 
80. The representative of Rwanda  thanked Members for their comments and appreciated the 
requests for additional time to examine the propo sal further.  The LDC Group would begin assessing 
the information available and would start its anal ysis on how implementation of the Modalities could 
be achieved so that there were proposals on the table for the Chairman to include in his reports to the 
TNC subsequent to the present meeting and in the preparations for Hong Kong.  The Group also 
                                                      
4 Please see Annex 1. TN/S/M/15 
Page 18  
 
 thought that it might be useful for the Chairman to  organise an informal meeting for the LDCs in the 
near future.  She hoped for an opportunity to meet  with the Chairman to discuss dates and proposals 
that might be included in his report. 
81. The Chairman
 said that the LDC suggestion was logical .  He said that many delegations had 
expressed their thanks for Job(05)/114 and some had said that it was a good basis on which to 
continue a discussion.  Some were reviewing it a nd sought ways to improve the efforts on technical 
assistance and capacity building. There had been a suggestion about regular reporting, which he 
thought merited some further consideration.  Others  had reported that bilatera l consultations with the 
LDCs had been a useful exercise, including with respect to the review of progress, and had said that continuing them might be useful.  He said this wo rk was on-going and that he would engage further 
consultations.  He proposed that the Council take note of the statements and that it revert to this item 
at the next meeting. 
82. The Council so agreed
.  
D. CONSIDERATION OF PROPOSALS ON S&D  TREATMENT PROVISIONS  
83. The Chairman  recalled that three GATS-specific proposal s had been referred to the Special 
Session of the Council for Trade in Services in May 2003 by the General Council with the 
understanding to consider those proposals and repor t back to the General Council, which had been 
done in July 2003.  As Members were aware, the Ge neral Council's July Decision, in paragraph 1(d), 
"instructs all WTO bodies to which proposals in Ca tegory II have been referred to expeditiously 
complete the consideration of these proposals a nd report to the General Council, with clear 
recommendations for a decision, as soon as possible a nd no later than July 2005."  He recalled that 
this item has been on the agenda of the Council sin ce its last meeting of 2004.  Since October 2004, 
he had held numerous consultati ons at which the Council's work on these proposals had been raised.  
As he had reported under this item at the last meeting, the proponents of the proposals had been 
preparing to interact with Members through a written document.  He subsequently held a number of 
consultations dedicated specifically to the cons ideration of the GATS-specific proposals on S&D 
Treatment provisions referred to the Special Se ssion.  The discussions had touched upon the two 
proposals put forth by the African Group on the basis of extensive written clarifications provided by 
that group to the questions posed by Members as cont ained in Job(03)/118.  Su bsequent consultations 
provided an opportunity for delegations to engage in  a further series of questions and responses.  He 
said that, in general, the discussions had remained at  a declaratory and exploratory level, with the non-
proponents seeking clarification about the scope, natu re and implications of the proposals.  He had 
sensed from the questions raised by the non-proponent s and the responses of the proponents that there 
remained a divergence of views about the two propo sals from the African Group in their current form.  
Hence, it appeared that the Special Session was not  in a position to put fort h any recommendations at 
the current juncture. He recalled that the Genera l Council was scheduled to hold its last meeting 
before the summer break on 27 and 29 July at wh ich discussion would take place of the S&D Work 
Programme and specifically the S&D proposals under Category II.  According to paragraph 1(d) of 
the July Package, the Special Session was mandated to report to the General Council in time for its 
July meeting.  Hence, the present meeting of th e Special Session was the last opportunity for the 
Council to formally report to the General Council.  The Chairman said that he had sought to hold 
further consultations the week prior to the formal meeting to hear trading pa rtners' positions regarding 
the proposals.  He was advised that there had been some interaction among Members and these should 
precede any further consultations.  He welcomed any updates in this regard.  The Chairman said that 
the Council could report that the divergences were such that it had and would have no 
recommendations, or else, it could report that work  was in progress and efforts were being made, and 
hence that the Special Session would require more ti me if the General Council were so amenable.    TN/S/M/15 
 Page 19 
 
 
 84. The representative of Rwanda  said that the informal consultations that the Chairman had held 
had been useful in enabling the African Group to understand the views of Members on the proposals.  
The Group's assessment was that there remained divergent views on many issues.  In order to 
complement the Chairman's efforts, the African Group had also held bilateral consultations with some 
Members, particularly with those that had expressed serious reservations on some issues.  These 
consultations were on-going and prom ising.  She believed that more consultations and bilaterals by 
the African Group might prove useful in moving in the right direction.  The Group was compiling the responses that it had provided into one document wh ich she hoped would be circulated in the near 
future.  As for next steps, the Group believed th at there was work in progress and that further 
consultations might yield results.  Hence, the Gr oup sought to continue work.  She wondered if 
another informal consultation might be needed be fore the July meeting of the General Council. 
85. The representative of Bolivia
 said that her delegation had a preference to inform the General 
Council that work was on-going and that more time would be necessary to pursue work.   
86. The representative of the United States  sought to note that her delegation had been holding 
consultations with the African Group on S&D propo sals and would hold a bilateral meeting.  The 
United States recognised the importance of this in itiative in the framework for the Doha S&D work 
programme.  As a general matter, the United Stat es believed that GATS Article IV should not be 
amended and that the focus should be on how to impl ement the provisions of Article IV.  The chapeau 
of Article IV indicated that the provision's purpo se was to increase the participation of developing 
countries in world trade through negotiation of speci fic commitments in services.  The United States 
believed it was important in the cons ultations to view the core elements of Article IV:1 (regarding 
strengthened domestic services capacity, access to dist ribution channels, and liberalization of market 
access in sectors of export of interest to de veloping countries) in the context of the current 
negotiations.  She recognised that the elements of Article IV were on-going and would apply to any 
subsequent negotiations. 
87. The Chairman  proposed that he prepare a report that  would list the various consultations and 
meetings that had been held to  consider S&D proposals and would refer to the documents that had 
been produced.  He would add that there were effo rts still underway and that the Council was not in a 
position to make clear recommendations for decision by the General Council.  He would also indicate 
that, if the General Council so agreed, the Special Session would continue its efforts and report to the 
General Council as it might specify.  In addition, he proposed that the Council take note of the 
statements made. 
88. It was so agreed . 
E. PROPOSED INFORMATION TOOL FOR THE NEGOTIATIONS  
89. The Chairman  recalled that at the meeting held on 27 April, the suggestion had been made by 
Hong Kong, China that the Secretariat be tasked with  preparing a series of sectoral and modal notes as 
an "information tool" to assist delegations in the ne gotiations.  It was agreed that he would engage in 
consultations in order to refine delegations' understanding of the info rmation that such a tool would 
include and to determine if they felt it would be he lpful to them.  As requested, he had conducted a 
number of consultations in this regard.  The sugges tion had been made that the Secretariat draw up a 
"draft" outline of an information tool.  A copy of th is draft outline had been faxed to delegations on 
19 May, had been introduced by the Secretariat at an open-ended informal meeting on 1 June, and 
discussed at another open-ended informal meeting on 15 June.  At these meetings, delegations had 
appeared to be willing to agree in principle to task the Secretariat with the drafting of a series of notes 
as an information tool; however, there had been some reservations expressed about some of the 
sources of information that the Secretariat might u se and the inclusion of some empirical information TN/S/M/15 
Page 20  
 
 on current and proposed commitments.  At the informal meeting on 15 June, the Secretariat was 
requested to prepare a revised draft outline that t ook into account these concerns as well as a list of 
sectors and modes for which a tool could be written.  This revised outline and li st were contained in a 
fax from the Secretariat dated 24 June. 
90. A representative of the Secretariat
, referring to the revised version of the outline, said that this 
revision had been prepared on the basis of consu ltations held with delega tions and took account of 
some of the concerns raised by them about the prev ious draft.  He said that the section relating to the 
sources of information had been clarified, in partic ular the points about consultations with Members, 
as well as any other material that might be recei ved from delegations and upon which parts of the 
notes could be based.  He highlighted that Anne x 1 on page 3 was indicated as being subject to 
consultations, given the concerns that had been expressed about information relating to offers and 
commitments.  He said that the structure of th e original draft had been maintained, although the 
sample references to postal-courier had been remove d such that the revised outline did not relate to 
any particular sector.  He stressed that the outlin e was a structure that the Secretariat would follow 
generally and that the relative importance could vary from one sector to another depending on the 
information available on the sector or mode of supply.   He referred to an attached list of sectors and 
stressed that it had been compiled based on current proposals.  It was not meant to confine the scope 
of the exercise to the sectors listed or mode 4.  He said that these were the areas in which the Secretariat had found enough material, by way of propo sals, on which to base a note.  He said that if 
Members tasked the Secretariat with these notes, it would need to consult with Members through an 
open-ended informal meeting of the Special Sessi on in which Members would update the Secretariat 
about their thinking on state-of-the-art issues and priorities in each sector/mode.  He imagined that 
Members might wish to add sectors or modes to the list during those informal meetings.  He reiterated that the list needed to be put in perspective, name ly, that it did not have any negotiating connotation in 
terms of prioritising and sectors or modes, but was based on existing negotiating proposals. 
91. The representative of Brazil
 said that he was awaiting instructions from capital on the latest 
version of the draft outline and hence he asked th at his delegation have the opportunity to make 
additional comments later in the meeting.  He noted  that the reference to friends groups under the 
sources of information had been removed, which addressed Brazil's concern about any 
institutionalisation of the relationship between the friends groups and the negot iations.  On annex 1, 
which contained a statistical overview of commitme nts, he said that, although there was a comment 
that this was subject to further consultations, he said that his delegation could not go along with the 
annex, given the judgement that the Secretariat had indicated in consultations it might need to 
exercise in compiling the annex's information.  On this list of suggested sectors and the footnote disclaiming any relationship with the negotiations, he  said that his delegation might need to propose 
some changes later in the week. 
92. The representative of India
 had taken note of the Secretariat's comments that the lists were 
non-exhaustive and additiona l proposals or sectors and modes could be added.  In this regard, he 
noted cross-border supply.  On annex 1, he said that the issue might not need to be decided immediately and referred to the Chairman's consultations, his state-of-play presentation and the points he raised in his note, Job(05)/99.   
93. The representative of Guatemala
 said that her delegation also sought an opportunity to return 
to this item later in the meeting.  She agreed w ith the observation that there was no agreement on the 
inclusion of annex 1. 
94. The representative of Turkey  said that he was awaiting instructions and echoed Brazil's and 
India's comments on annex 1.  On the list of sectors, he inquired if additions could be proposed, and in 
the case that the response to this  question was affirmative, expressed his delegation's interest in 
adding construction and relate d engineering services.    TN/S/M/15 
 Page 21 
 
 
 95. The representative of China  sought an opportunity to revert to this item later in the meeting.  
He said that his delegation might also wish to suggest  changes to the list of sectors.  Referring to the 
meeting reports as a source of information, he inqu ired if informal discussions, such as those in the 
CSC, would be included.   
96. The representative of Canada  said that the tool would facilitate work.  Referring to the 
proposed list of sectors in the fax and the W/120 list,  he wondered if Members could remain free to 
raise sectors it contained as they saw fit.   
97. A representative of the Secretariat  said that sectors or modes could be added to the list.  He 
cautioned that the work of the Secretariat would rely on Members' proposals and hence, it would be 
difficult to prepare a note for which there was mini mal input from Members.  He reiterated that the 
purpose of the notes was to provide a complete and structured account of Members' proposals.  With 
respect to how these inputs might be flagged, he said that a sector- and modal-based discussion could 
take place in informal mode in the coming days so that the Secretariat could begin to prepare the notes 
as soon as possible.  This would allow most, and hopefully all, of the notes to be ready in time for the September cluster.  
98. The Chairman
 suggested that the Council take note of  the statements made, keep this item 
open and revert to it later in the meeting. 
99. It was so agreed . 
100. Speaking on 1 July, the Chairman  recalled that some delegations were awaiting instructions 
from capitals. 
101. The representative of Brazil  said that his delegation could approve the tool with a number of 
changes.  First, the reference to offers as a sour ce of information should be deleted.  Second, under 
item 6, the addition after "other relevant issues and questions" of the words "raised in negotiating 
proposals".  Third, the deletion of annex I.  Fina lly, on page 5 the addition of engineering and 
construction services and a re-positioning of  the text of the footnote to th e top of the list.  It was also 
his delegation's understanding that the list in no way provided a precedent to establish priorities in the 
negotiations related to sectors. 
102. The representative of India  reiterated that his delegation wish ed to add cross-border supply to 
the list of sectors and modes concerned by this tool. 
103. The representative of Bolivia  said her delegation was concerne d about the statistics contained 
in annex I, particularly given the possible err oneous interpretations wh ich could result.  Her 
delegation supported the suggestion fo r the deletion of the annex.  As for the list of sectors and 
modes, she hoped that, after approval, her delegation might still be able to make a suggestion in this 
regard.   
104. The representative of the European Communities  sought to include mode 3 in the list of topics 
to be covered.  He wondered whet her, if annex 1 were eliminated, much substance would remain in 
the tool.  
105. The representative of the Dominican Republic  said that the tool would be useful so long as it 
confined itself to an informative, global summary and avoided a quantitative analysis of the individual 
Member's commitments, which could misrepresent th e level of openness which had been granted.  
She said that she was awaiting instructions related to  annex I and the list of sectors.  She agreed that 
other modes of supply should be included. TN/S/M/15 
Page 22  
 
 106. The Chairman
 recalled that the suggestions that had been made by the delegations of Brazil, 
India and the European Communities.  It was unders tood that the list of sectors and modes was not 
exhaustive.  He said that informal consultations w ould occur and that a quantitative analysis could be 
added if all agreed.  He proposed that the Council task the Secretariat with the preparation of the 
information tool on this basis.   
107. It was so agreed . 
108. A representative of the Secretariat  said that the timing of informal consultations would be 
communicated by fax.  In order to facilitate dele gations' preparation for them, the Secretariat would 
circulate a list of all the proposals that had been made in each sector or mode, including construction 
and engineering, cross-border supply and mode 3.   
F. PROPOSALS RELATING TO THE NEGOTIATIONS UNDER ARTICLE XIX  OF THE GATS 
109. The Chairman  drew Members' attention to a proposal on financial services contained in 
TN/W/S/43.   
110. The representative of Japan , on behalf of the group of co-s ponsors, recalled that the working 
paper's content had been discussed in a room documen t at the previous meeting.  The thrust of the 
proposal was that the liberalization of financial services would benefit all Members as it was a service 
fundamental to economies.  Its liberalization would facilitate the efficiency and stability of markets 
and would contribute to economic development.  He  said that the proposal had been introduced and 
discussed in the Committee on Trade in Financial Se rvices.   He welcomed Hong Kong, China's 
indication that it was interested in becoming a co -sponsor of the document.  He hoped that Members 
would take into account the proposal's contents when preparing their offers.  He said that there would 
be discussions on how to further the negotiations, including through plurilateral or multilateral 
approaches.   
111. The representative of Hong Kong, China  confirmed her delegation's desire to formally co-
sponsor the working paper.  She also said that th e importance of financial services and the substantial 
interest Members had expressed it in, demonstrated th at it was a sector that provided room for trade-
offs.  Secondly, the co-sponsors' collective objec tive was to stress the importance of substantial 
improvements in the current round of negotiations in financial services.  Thirdly, she said that the 
question of reciprocal MFN exemptions in the area of financial services was an area of concern to her 
delegation and reiterated that th is exemption could be addressed through ambitious commitments.  
112. The representative of Korea  said that his delegation had referred the paper to capital and 
appreciated the importance of the liberalization of financial services.  Korea supported the main points 
made by the paper on the importance of commercia l presence and the benchmark of the right to 
establishment by eliminating any restrictions on initial entry and expansion as well as removing 
discrimination of foreign supplie rs' nationals on boards of directors.  Korea agreed that the 
classification and definitions in the Annex on Fi nancial Services should used and transparency 
enhanced.  On cross border supply, he hoped that the experiences and best practices on regulatory 
aspects could be shared among the Membership in order to make appropriate commitments depending 
on the particular sub-sector.  As stated in paragra ph 3, the opening of the financial sector to foreign 
participation involved strengthened regulation and supervision particularly in the case of cross-border 
supply, given the technological innovation enabling transac tions in these modes.  He said that just as 
discussions on technical issues on cross-border trad e of financial services should not impede the 
market access negotiations, the con cerns about regulatory aspects needed to be addressed in order to 
make progress in the market access negotiations on cr oss-border supply.  In this respect, he wondered  TN/S/M/15 
 Page 23 
 
 
 whether a more efficient channel of information sh aring could be explored on best practices for proper 
regulation if the bilateral process was not eff ective in ensuring further participation.   
113. The representative of Brazil  drew a distinction between liber alization and consolidation.  
Liberalization was achieved while considering dom estic economic growth; ho wever, consolidation 
should consider the overall WTO environment.  He no ted that the indication that those economies that 
opened financial services grew one per cent faster than those that di d not was a consequence and not a 
cause of this growth.  In this regard, a stable and developed environment was necessary in order to 
achieve a full level of financial liberalization.  He  said that full liberalization, including the full 
liberalization of capital accounts, needed to be consid ered with great care, especially in the light of a 
number of financial crises in Asia and South America over the preceding years.  He said that these 
countries were more liberal and had been attacked by private speculators.  He said that if these 
countries had made full commitments, they would have  had to have suffered the financial loss as well 
as potentially losing a WTO dispute.  He noted  that the World Bank believed that financial 
liberalization needed to be taken on a step-by-step basis in order to avoid possible speculative attacks 
on currency.  In order for this goal to be achieve d, a stable macroeconomic environment was required 
and he cited aspects of Brazil's policy in this rega rd.  This included a surp lus of trade which was a 
source of hard currency.  This was not a problem  faced by developed countries; indeed many had 
large trade or fiscal environments.  He said that onl y when a financial system was completely stable 
could a country envisage consolidating full libera lization.  Referring to the modalities proposed, on 
the first about the removal of ENTs, he encouraged some of the co-sponsors to remove these.  On the 
second on transparency, Brazil reaffirmed that this issue should be taken up in a global manner at the 
same time as discussion on Article VI:4 and not sectorally.  
114. The representative of New Zealand  said that while his country was not a significant exporter 
of financial services, it was broadly supportive of th e views expressed in the paper, which effectively 
demonstrated the benefits of further liberalizati on.  He said that more than 90 per cent of New 
Zealand's financial institutions were foreign ow ned and New Zealand's experience confirmed that 
foreign participation and competition led to tec hnology innovation and lower-cost financial services, 
which were key ingredients to growth  in the financial and other sectors.  In terms of reducing costs, he 
said that New Zealand had a highly competitive and internationalised banking sector and had 
benefited from new financial products  which, in turn, had benefite d business and consumers alike.  
Likewise, New Zealand had benefited from being at the forefront of banking technology and had been 
one of the first countries to enjoy widely-availabl e EFTPOS transactions.  New Zealand was a small 
economy and geographically distant from many of its  main export markets and embraced initiatives to 
reduce barriers for exporters.  The provision of st able and low-cost financial services was a benefit 
that was passed on to exporters.  Referring to pa ragraph 7, he noted that New Zealand had very few 
barriers to the establishment of a mode 3 presence in  this sector, as evidenced by the high degree of 
foreign participation and the diversity of that pa rticipation.  New Zealand was similarly open for 
mode 1 and mode 2.  Its experience demonstrated that opening the financial services market could be 
a substantial benefit to all economies, including t hose without a significant locally-owned financial 
services sector.   
115. The representative of the European Communities  welcomed the submission of this working 
paper, which underlined the importance of financ ial services for growth and development.  The 
European Communities believed that financial servi ces was a key infrastructure sector of the economy 
and was a prime sector for which Members should consider making commitments.  He encouraged 
other Members to show the commitment to libera lize this key sector by supporting the statement and 
making commitments.   
116. The representative of the United States , as a co-sponsor of the paper, naturally strongly 
supported the statement and agreed with others abou t the key importance of this infrastructure sector, 
including for development.  She also noted that a number of countries had taken cross-border TN/S/M/15 
Page 24  
 
 commitments and had done so w ithout undermining their economic stability or ability to regulate 
activity.   In addition, she noted that the transpar ency objectives that were set out in the paper were 
not inconsistent with other discussions on horizontal transparency.   
117. The representative of Japan
, on the distinction between autonomous liberalization and 
commitments, said that these were two different aspects of liberalization.  He recalled that the paper 
dealt with commitments in the context of the GATS and the importance of liberalization and stability.  
On the concern about speculative attacks, he noted  the broad safety net provided under the GATS to 
ensure macroeconomic stability through the right to  regulate and the specific paragraph related to 
domestic regulation in the A nnex on Financial Services.  
118. The Chairman drew attention separately to document TN/S/W/39 and Job(05)/30, which had 
been discussed on a previous occasion.  As dele gations had no further comments on these documents, 
he drew attention to Job(05)/90 on the cross-border symposium. 
119. The representative of India  said that a new document would be made available later in the 
week and he sought an opportunity to  present it later in the meeting.   
120. The Chairman  drew the Council's attention to the re maining 13 proposals listed on the agenda 
that had been discussed in a preliminary fashion at the previous meeting.   
121. The representative of New Zealand , referring to TN/S/W/29 and TN/S/W/33, said that the 
former was from a group of Members advocating the d esirability to make commitments in the field of 
ground-handling.  It was a policy paper that encour aged commitments prior to the next air transport 
review.  This paper was responded to by anothe r group of Members in TN/S/W/33, which was an 
interpretative paper that, rather than addressing th e policy points, focused on whether it was possible 
to make such commitments.  He indicated that it was his delegation's view that it was firmly and 
clearly possible to make such commitments, as well as being desirable and he recalled that a number of Members had stated the same.  He said that New Zealand and some other Members were in the process of preparing a response to th ese interpretative points because they felt that it was important to 
put on the record that it was desirable, legally possi ble and within the mandate of the Annex to make 
such commitments.   
122. The Chairman
 drew attention to documents TN/S/W/46 and TN/S/W/47 on mode 4 
commitments and economic needs tests (ENTs) and transparency of horizontal mode 4 commitments 
respectively. 
123. The representative of Canada  said that both papers addressed the issue of transparency in 
mode 4, which was a point which his delegation ha d promoted for some time.  The first proposal 
suggested that Members voluntarily make availa ble, for each mode 4 commitment scheduled, the 
immigration laws and regulations relevant to the application of visas and employment authorisations; 
procedural information with respect to the application of visas and employment authorisation; information on the types of foreign worker progr ammes available and the criteria for entry; and 
clearly defined conditions applicable to ENTs a nd/or field instructions and operational guides for 
immigration officers.  At the time as the submission of Canada's revised services offer, he said that 
Canada had provided this informati on in a completed template in TN/S/W/42.  With respect to ENTs, 
Canada agreed that it was important to provide  greater clarity on ENTs.  The key to improved 
transparency related to ENTs was to apply the rules already set out in GATS Article XVI and the 
Scheduling Guidelines to which Members had alread y agreed.  Members were not supposed to use 
ENTs to limit the number of natural persons, and if th ey did, they were to cite and describe them in 
their schedules.  Canada's proposal on ENTs suggested  that Members adhere to the existing rules and 
Scheduling Guidelines with respect to ENTs and la bour market tests (LMTs).  Canada encouraged 
Members to engage in further substantive discu ssion on mode 4 ENTs and LMTs and attempt to  TN/S/M/15 
 Page 25 
 
 
 define them or at least agree on common elements.  He looked forward to further transparency with 
respect to mode 4.   
124. The representative of Australia  said he could support Canada's initiative and referred to 
TN/S/W/47.  He said that the approach outlined a very practical means of increasing the level of 
transparency in mode 4.  The information that was included in the draft template by Canada would 
greatly assist service providers in a practical way to enjoy the benefits of mode 4 commitments by 
individual Members.  Australia was in the process of collating the information in the template and 
providing additional regulator y, procedural and other informati on relevant to each of the mode 4 
commitments.  He hoped to be in a pos ition to provide this information soon. 
125. The representative of India  shared the view that both transparency and ENTs were important 
aspects of mode 4 liberalization and would add to mo re predictable commitments.  Referring to the 
paper on transparency, he recalled that another gr oup of Members had presented a paper on the same, 
contained in Job(04)/142.  One of the templates refe rred to a point raised by Canada in W/47, namely 
details and links with other web-si tes without having to provide the fu ll details of other general laws 
that might have a bearing on mode 4 commitments.  He asked how Canada rela ted this portion of its 
template to the Job proposal, especially with respect  to the other provisions of transparency.  While 
the information indicated by Canada was one aspect of  mode 4 transparency, he noted that there were 
other aspects that had not been touched upon.  He asked if the voluntary nature was limited to the 
specific elements that Canada had in its proposal or  whether it would apply to all the elements of the 
mode 4 proposal.   
126. The representative of Switzerland  said that the initiative by Canada was useful.  Noting the 
voluntary nature of the proposal, he said that this would mean that they would not form part of the 
schedules.  The main merit of the proposal was th at it would help service providers, which would only 
be the case if a large number of Members implemented the proposal.  He said that businesses were interested in many countries.  At the appropriate stage he thought that discussions on the point in an 
appropriate forum could be undertaken about how an  addendum containing this information might be 
elaborated. 
127. The representative of Hong Kong, China
 agreed that transparency was an important element 
of mode 4 and noted that in her delegation's re vised offer, there was contained an additional 
commitment on transparency in mode 4.  The re levant authorities in Hong Kong, China considered 
that the proposed template was a useful tool for service providers and were in the process of collating 
the information with a view to presenting it to Members at a suitable juncture.   
128. The representative of Chinese Taipei  agreed that steps should be taken to make the 
information related to the movement of natu ral persons more user-friendly under the GATS 
framework as it would help to improve predictabilit y.  The proposal was an appropriate basis for 
further discussion.  Chinese Taipei's view was th at, because the terminology on mode 4 used by 
different Members was open to differe nt interpretations, it could be diffi cult to make an assessment of 
the overall level of liberalization.  Therefore, in addition to a discussion on the common elements 
under each category of mode 4, she believed that a prerequisite was the improvement in mode 4 
scheduling which would help better inform ser vices suppliers and allow them to discern the 
opportunities for temporary entry into foreign markets.   With regard to the paper on ENTs, it was her 
delegation's view that the clarification of criteri a applied to ENTs would help enhance market access 
for foreign service suppliers.  It would help preven t the discriminatory appli cation of measures, which 
was a practice that could undermine the legal certainty and predictability of market access 
commitments.  In practice, it seemed to her that most unspecified ENTs or LMTs served as preventive 
measures for the protection of local service supplie rs.  Therefore, Chinese Taipei wished to pursue 
discussion on these two papers.  TN/S/M/15 
Page 26  
 
 129. The representative of United States
 noted that the proposal was a positive contribution to 
mode 4 transparency and believed that it was one of  many ways that such transparency could be 
achieved.  The United States, for example, was prep aring a consolidated website to provide better and 
enhanced information with respect to tempor ary entry under its laws and regulations.   
130. The representative of Canada , referring to the comments from India, said that the objective of 
the proposal was to provide and facilitate the prov ision of information that would be helpful to 
businesses.  The voluntary nature of the proposal woul d be the best way to encourage the provision of 
such information.  It was not Canada's assess ment that binding any of the approaches would 
necessarily produce more useful information or ind eed more information of use to business.  There 
were also some important legal c onsiderations that he suspected could give rise to some problems for 
Members.  In the Canadian legal system, names of  laws could change without necessarily changing 
the substance of what was provided for.  Hence, he was not sure what the legal implications would be 
if these laws were bound as additional commitments.   
131. There were no objections to the suggestion by the Chairman  to take note of the statements 
made, keep this item open and revert to it at a late r stage in the meeting.  Speaking on 1 July, the 
Chairman recalled that a number of delegations ha d indicated they wished to introduce very recent 
submissions.  He drew the Council' s attention to a joint statement on MFN exemptions contained in 
Job(05)/125.  
132. The representative of Korea  said that the co-sponsors of the informal document sought to 
draw the attention of all Members to the importance of making substantive progress in the negotiations through the elimina tion and reduction of MFN exempti ons, which was a key component 
of the services negotiations under the Doha Developmen t Agenda, and the need for action to this end.  
He said that the MFN principle was the corner stone of the WTO system and underpinned the 
multilateral trading system.  Any departure from th e MFN principle derogated from the principle of 
non-discrimination and potentially undermined the value of any market access openings or liberalization bindings.  Even though the GAT S had allowed circumsc ribed and time-limited 
exemptions for specific measures under Article II and the Annex on Article II Exemptions when the 
GATS had entered into force at the end of the Uruguay Round negotiations, all these exemptions 
needed to meet the provisions of the Annex, were to  be reviewed periodically, were in principle not of 
a duration longer than ten years, and were subjec t to negotiation in subseq uent trade-liberalizing 
rounds.  
133. The representative of Korea recalled that the second review of MFN exemptions had been  
conducted in November 2004 and February 2005 and followed the first review conducted in 2000.  
Apart from fulfilling the mandate for the review of the exemptions with a view to their elimination, he 
said that the review would be more meaningful we re it to lead to a constructive outcome for the 
elimination and reduction of MFN exemptions dur ing the DDA services negotiations.  In particular, 
the co-sponsors reminded all Members that the elimination and reduction of the existing MFN 
exemptions was one of the key elements of the current services negotiations under the DDA, in 
accordance with the Negotiating Guid elines (S/L/93, 29 March 2001), as subsequently reaffirmed by 
the Doha Ministerial Declaration (WT/MIN(01)/DEC /1, 20 November 2001).  In this regard, the co-
sponsors expressed grave concern about the lack of  progress in eliminating and reducing the existing 
MFN exemptions, and called for greater attention to be  paid in addressing this issue at the multilateral 
level.  They thanked those Members which, in the course of the review of MFN exemptions, had 
expressed their willingness to consider the eliminatio n of MFN exemptions.  They also appreciated 
those Members that had removed all or part of thei r MFN exemptions in their offers.  Unfortunately, 
despite two years of negotiations through the bila teral request-offer process, only 36 exemptions in 15 
initial offers were proposed to be either eliminat ed or reduced in scope, with 425 exemptions still 
remaining.  This clearly demonstrated the lack of progress in the negotiations on MFN exemptions, 
which was not commensurate with the overall level of ambition for the services negotiations and the  TN/S/M/15 
 Page 27 
 
 
 high quality of offers required by the General Council Decision on the Doha Work Programme 
adopted on 1 August 2004 (WT/L/579).   
134. The representative of Korea stated that th e co-sponsors sought to emphasise that the 
elimination and reduction of MFN exemptions needed  to be an indispensable element in assessing the 
overall progress of the services negotiations as well as th e quality of individual offers.  In the light of 
the second review of MFN exemptions and in order to make meaningful progress in eliminating the 
existing MFN exemptions, the co-sponsors urged a ll Members to take a series actions to move 
forward the negotiations on MFN exemptions as part of the overall services negotiations.  Firstly, 
Members would be required, in their services offers, to offer to eliminate as many MFN exemptions 
as possible, especially those which were (i) no longer needed or never invoked; (ii) inconsistent with 
the GATS or incompatible with the principle of progr essive liberalization; and (iii) already covered by 
other provisions in the GATS.  Secondly, Member s would be required to give consideration to 
establishing a quantitative target for eliminating ex isting MFN exemptions in the current round of 
services negotiations.  Such a quantitative target w ould aim at reducing a substantial proportion of the 
total number of MFN exemptions.  Thirdly, for MFN exemptions that were maintained, Members 
would be required to further clarify, circumscribe and/or reduce the scope of the measures covered by 
the exemptions, as well as specify the duration of th e exemptions.  Members would also be required to 
ensure that the next review of such exemptions would be conducted in a substantive and meaningful 
manner.  He said that the co-sponsors would revert with more specific proposals to move forward the 
negotiations on MFN exemptions.  He invited other Members to preserve this basic principle of the 
GATS and preserve the multilateral nature of commitments. 
135. The representative of Switzerland  thanked those delegations that had prepared the joint 
communication.  He stressed the importance of th is issue, even though Switzerland had a number of 
MFN exemptions, which was not the case for those that  had prepared this paper.  He supported the 
thrust of the presentation, and sought an opportunity  to study the paper more carefully.  Switzerland 
believed that substantial progress w ould be made if Members were to reduce the number and scope of 
MFN exemptions, or make remaining exemptions mo re precise.  Switzerland had sought to contribute 
to this process as best as possible.  The number of its MFN exemptions had been reduced by half in its 
revised offer in comparison to existing commitme nts.  Another exemption had been made more 
precise with the effect that its scope had become much  narrower.  He considered this one of the main 
achievements of the Swiss revised offer.  With rega rd to specifying the duration of the exemption, he 
said that Switzerland would have some difficulties as the course of affairs could not be foreseen.  
However, Switzerland was committed to the pro cess and would make its fullest efforts.  
136. The representative of Japan  expressed his delegation's support for the statement by Korea and 
reiterated that MFN exemptions were extremely important and would be an essential part of the 
package that his delegation envisaged for Hong Kong.  Introducing a joint statement on the liberalization of construction and related engineering services contai ned in Job(05)/130 and speaking 
on behalf of Australia, Canada, Egypt, the Europ ean Communities, Guatemala, Japan, Korea, Mexico, 
Norway, New Zealand, Singapore, Switzerland, Tu rkey, Chinese Taipei and the United States, the 
representative of Japan recalled that at the Febr uary meeting of the Council a large number of 
Members from all continents and various levels of de velopment had called for ambitious offers in this 
sector.  With this in mind and in an effort to  communicate a view shared by many developing and 
developed Members, the delegations  he had referred to had submitte d the joint statement on 30 June 
2005 in order to address the importance of liberaliza tion of the construction and related engineering 
services.  The co-sponsors sought to emphasise a numbe r of points.  Firstly, construction and related 
engineering services represented fundamental econom ic activities that permeated all economic sectors 
and provided infrastructure.  Construction services were closely tied with growth in other service 
sectors, such as tourism, retail trade, real estate, financial services, energy services and environmental 
services.  Secondly, construction services constitute d one of the largest single sectors in many 
economies and was a strategically important industry for creating employment and sustaining growth.  TN/S/M/15 
Page 28  
 
 Thirdly, as a percentage of GDP, the construction sector was of special importance to developing 
economies and carried particular significance for them  because of its role in building social and 
industrial infrastructure, training of local personnel, transfer of technologies and improved access to information channels.  Fourthly, along with cons truction services, related engineering services also 
played an important role in the development of in frastructure. Due to rapid urbanization and economic 
growth, many countries, particularly  developing countries, were undert aking large projects to improve 
their infrastructure. Such undertakings were of ten accompanied by technology diffusion, which 
offered additional benefits to c lients in the host country.  For example, new technologies used by 
foreign service providers in their project design an d development work were  often transferred to 
clients in the host country as part of the project.  He said that a first step for countries to take 
advantage of the broad benefits that constr uction services offered for economic growth and 
development was to attract foreign investment in the construction services sector.  He said that scheduling improved revised GATS offers in this sector as a whole would help foster increased foreign investment in construction services and he ur ged all WTO Members to do so.  In this context, 
it was especially important for all Members to el iminate discriminatory measures against foreign 
service suppliers in mode 3.  The co-sponsors had been encouraged by the oral statements from a 
large number of Members from all continents and all le vels of development that had been made at the 
February meeting, which called fo r ambitious offers in the cons truction and related engineering 
services sector. 
137. The representative of the European Communities
 expressed his delegation's support for the 
presentation of this joint statement which stressed  the significance of the construction sector in 
developing infrastructure for economic develo pment. The statement was supported by many 
developing country co-sponsors.  He called on Members to make am bitious offers in this sector, 
particularly bearing in mind paragraph 6 of the jo int statement.  He highlighted the need to present 
offers covering all sub-sectors of CPC 51.  He said  that an offer which covered the construction of 
buildings but not the construction of the foundatio ns provided a very few business opportunities for 
foreign construction service providers.  Therefore, it was very important that all the phases of the 
construction enjoy the same commitment so th at offers provide genuine added value. 
138. The representative of India  wished to introduce a room document to stimulate discussion on 
some of the issues that had been raised by dele gations subsequent to the symposium on cross-border 
supply as well as to raise a number of relevant issu es.  The first issue was the importance of cross-
border supply and a large number of new sector al activities in which cross-border supply was 
becoming commercially important.  The paper attempted to highlight some of these areas, such as 
professional services, business services, other business services, computer related services, R&D services, tourism, etc.  In order to capture new developments and new sectors, a number of questions were put forth for Members' consideration.  One of  the issues was whether, in computer and related 
services (CPC 84) for example, it be useful to consider commitments at a two-digit level.  He said that 
in the initial offers, and to a greater extent in th e revised offers, Members had taken commitments at 
the two-digit level, which essentially meant that the entire sector was covered.  The paper also pointed 
out that there might be certain similar areas where two-digit commitments might not be the preferred 
approach.  Another area that Members might consid er was CPC 87 (other business services) because  
for many of these other business services, Members had already taken commitments or had regimes that were fairly liberal.  One approach was to sched ule at a two-digit level.  Another approach could 
be to list each and every activity that was co mmercially meaningful.  In the case of the latter 
approach, the paper raised some issues as to the coverage of certain activities that were becoming 
increasingly important.  The paper gave one illust rative example on telephone call centres and asked 
whether these services would be covered unde r CPC 8790, which included telephone answering 
services.   
139. The representative of India said that a second set  of questions related to the nature of 
commitments in cross-border supply.  One of the issues arising from the symposium had been the  TN/S/M/15 
 Page 29 
 
 
 issue of the relationship between mode 1 and mode  2 commitments.  While there had been technical 
discussions on the subject, the question was whether there might be a more practical way that would see similar commitments in modes 1 and 2 where they were feasible and where activities were 
commercially significant.  He said that some offers had adopted this approach  which could be further 
discussed.  Related to scheduling was the kind of commitments in market access and national 
treatment that could be subject to cross border suppl y.  It had been noted in the symposium that many 
fewer restrictions were inscribed in existing comm itments and that the actual restrictions in cross 
border supply, compared to other modes of supply, were  few.  This liberal situation could be captured 
through commitments both in the market access and national treatment for the selected sectors and 
sub-sectors.  A third issue addressed in the paper was that of levels of commitments and negotiating 
approaches.  Referring to the analysis that had taken place under the review of progress and stating 
that a more intensive analysis of the revised offers  was needed, he said that it appeared that gaps 
existed in the revised offers in areas identified as being commercially important.  Noting the possible 
approaches contained in the Negotiating Guidelines,  he wondered whether lib eral bindings could be 
captured through model schedules in terms of cross bord er supply.  He said that other issues had been 
addressed in the paper, including possible specific sectoral sensitivities in relation to cross-border 
supply, and in this regard he recalled the flexib ility of scheduling approaches that could allay such 
concerns.  Finally, the symposium had raised a hos t of regulatory issues that the paper sought to 
address through two questions.  It recalled that Members sought to develop disciplines under Article 
VI:4, which would apply equally to modes 1 and 2 and indeed the other modes of supply as well.  
Would not the development of disciplines in this area address regulatory concerns?  If not, were there 
additional regulatory issues that might be rele vant and how could these be addressed under the 
negotiations?  The co-sponsors believed that these we re questions that might be worthy of more 
intensive discussions at a later juncture when time pe rmitted.  He reserved the right to revert to this 
issue. 
140. The representative of the European Communities
 sought to introduce a written statement on 
mode 3 commitments, which built on an oral statemen t that had been made at the April meeting of the 
Special Session and for which several delegations ha d indicated their support.  In the interests of 
brevity, he said that the statement recalled the importance of mode 3 in terms of world trade in services.  It further recalled several important and interesting findings from a recent UNCTAD report 
that showed the increasing role of developing countr ies in services-related investment.  The statement 
urged Members to review their existing mode 3 commi tments because, despite the importance of this 
mode, there remained obstacles in the schedules of  many Members.  In the European Communities' 
view, these were among the most important obstacles as had been elaborated upon in the European Communities' intervention under the review of pr ogress.  The statement also highlighted the 
importance of ensuring that commitments in this ar ea provided a high degree of legal certainty.  He 
looked forward to further discussion on this statement at the next meeting. 
141. The Chairman
 said that a number of new proposals ha d been made and he wondered whether 
informal discussion of them prior to the next formal meeting might be useful.  He said he would consult informally on this suggestion.   He suggest ed that the Council take note of all the statements 
made.   
142. It was so agreed
. 
G. WORK OF THE SUBSIDIARY BODIES – REPORTS BY THE CHAIRPERSONS  
143. The Chairman  thanked the out-going Chairpersons of the subsidiary bodies for the hard work 
and dedication over the preceding year.  He congratul ated the new Chairpersons on their elections.   TN/S/M/15 
Page 30  
 
 The Chair of the Committee on Specific Commitments
 said that since the last report of his 
predecessor in February, the Committee had held one informal meeting on 3 May, as well as one formal meeting, on 21 June 2005, where it had addr essed its regular agenda items of scheduling and 
classification issues.  Under the first st anding item on its agenda, scheduling issues,  the Committee 
continued its examination of general schedu ling questions on the basis of various written 
contributions from Hong Kong China, Chinese Taipei , and various oral contributions.  Several 
Members had indicated their preference for an info rmal discussion of these questions in light of 
concrete examples provided by the delegation of H ong Kong, China.  He suggested that a possible 
early occasion for such an informal discussion coul d be 19 July, which had been reserved for an 
informal meeting on classification issues.  It was his intention to consult on possible parameters and 
timing for an informal scheduling discussion.  The Committee continued discussion on technical 
matters related to economic needs tests (ENTs), in particular in light of a recent communication from 
Canada on mode 4 and ENTs (S/CSC/W/47), as well as a room document from Korea.  A large 
number of Members had engaged in the discussion, and there seemed to be considerable interest in an 
exchange of information on the criteria and operation of various ENTs.  He said he expected a series 
of very good discussions at forthcoming meetings.  Under the agenda item of classification issues, the 
delegation of Indonesia provided replies to questions  on its revised proposal on the classification of 
energy services (S/CSC/W/42/Rev.1 and Corr.1).  Th e Committee also addressed a joint statement by 
a group of Members on legal services (S/CSC/W/46) , and briefly touched on communications by the 
European Communities (S/CSC/W/44) and the United States (S/CSC/W/45 and Corr.1) on the classification of telecommunication services.  He repor ted that the Committee had agreed to step up 
its informal work on classification in order to comp lete one cycle of discussions on all sectors before 
the Hong Kong Ministerial meeting.  In addition to the regular meeting during the September cluster, 
additional meetings were foreseen on 19 July (at which the Committee was to take up energy and 
environmental services and revert to issues raised at the formal meeting), and in early November.  Delegations had also welcomed the idea to take up classification proposals made in the CTS Special 
Session subsequently in the CSC.  On the basis of an annotated agenda, the Committee had addressed 
classification issues in the areas of construction and related engineering services, distribution services, and education services.  The discussion had been very  helpful in clarifying the status of several 
proposals, and clarified approaches taken with regard to certain classification issues.  Delegations had 
also identified additional questions pertaining to the above sectors, which the Committee would revert 
to at its next informal meeting. 
 
144. The Chair of the Working Party on Domestic Regulation
 reported that since the previous 
Chair's report to the February 2005 meeting of the CTS Special Session, the Working Party on Domestic Regulation (WPDR) had held one formal  meeting, on 22 June 2005, as well as 2 informal 
meetings, on 31 March and 2 May, respectively.  Re ferring to the recent formal meeting, he reported 
that it had began with a report by the out-going Chai rperson, together with a text for delegations 
which was made available at the meeting, on the outcomes of the two informal meetings held on 31 
March and 2 May.  The first age nda item related to his appointment  as Chairperson.  On the item 
pertaining to the Discussion of Concepts Relating to the Development of Regulatory Disciplines, 
Canada presented a new paper, entitled Communi cation from Canada: Transparency Template – 
Canada's Revised Horizontal Mode 4 Offer (S WPDR/W/33), regarding voluntary transparency 
measures.  Several delegations  questioned whether the document was appropriate for WPDR 
discussions.  Discussion of the five negotiating proposal s currently under debate had been fairly light.  
A number of delegations noted that they had al ready commented extensively during the informal 
meetings, and asked for those comments to be reflect ed in the formal report of the meeting.  The 
Secretariat presented a Matrix of Current WPDR  Proposals for Regulatory Disciplines, which was 
circulated as a room document.  The Matrix was a "cut and paste" compilation, by general themes, of 
the seven current negotiating propo sals for regulatory disciplines.  He recalled that he had stressed 
that the matrix was not intended as any kind of fo rmal negotiating basis for future work.  The sole 
intention of the Matrix was to serve as an info rmation note for the WPDR's discussions on issues 
relating to the development of disciplines under Article  VI:4.  It was prepared under the Secretariat's  TN/S/M/15 
 Page 31 
 
 
 own responsibility and was without prejudice to th e positions of Members and to their rights and 
obligations under the WTO.  At the request of Members, the Matrix could be updated with new 
proposals and/ or revisions to existing proposals.  A number of delegations stated that the Matrix was 
a useful information note.  He had indicated that  he would undertake consultations on what Members 
sought next to do with the Matrix.  Referring to  the Development of Disciplines for Professional 
Services and specifically consultations with in ternational professional services organizations, the 
Secretariat had noted that comments had been received from the World Union of Profession, and that further comments were expected.  There were no further reports from Members' regarding their own 
domestic consultations on the applicability of the A ccountancy Disciplines to other professions.  He 
said that at the request of the WPDR, Mr. Al an Bryden, the Secretary General of the ISO 
(International Organisation for Standardization) ha d given an informative presentation of the ISO's 
work on international services standards.  Ap art from its relevance for the Working Party's 
discussions on technical regulations and standards,  the presentation had helped to raise Members' 
awareness of ISO's work in this area.  He said that  Members had agreed that the next formal WPDR 
meeting would be held as part of the next cluster in September.  The meeting had closed with the 
Working Party agreeing that the Chairperson would hold consultations on the issues of next steps for 
furthering the development of regulatory disciplines, what Members sought to do next with the Matrix 
and the structuring of discussions on negotiating propo sals, and the format for more detailed reporting 
of the results of the informal meetings.  He sai d that there was good momentum in the WPDR's work. 
Numerous proposals and communications had been tabled.  These proposals and communications, and the WPDR discussions, had raised a number of  issues that could facilitate and provide further 
focus to the WPDR's work.  He felt that the Working Party should build on this momentum and had 
encouraged active participation from all Members,  including through the submission of more  
proposals to further work.  He said that in recent c onsultations, it had been gathered that Members' 
primary objective was to develop disciplines whic h helped Members' exporters.  Another often 
repeated point was that there was a need for domestic coordination between trade ministries and 
regulating agencies, so that the eventual disciplines did not unduly impinge upon regulatory autonomy 
and would be in keeping with the principles of GA TS.  In the context of the overall WTO work plan, 
the Hong Kong Ministerial and the end of the DDA were key milestones for the work of the WPDR. 
145. The Chairman of the Committee on Financial Services
 reported that the Committee had met 
on Thursday, 23 June 2005.  There was no news to re port with regard to the outstanding ratifications 
of the Fifth Protocol to the GATS.  Under the agenda item on Technical Issues, Brazil had presented a 
communication entitled "Electronic Commerce and Financ ial Services", in which it revisited the issue 
of the lack of distinction between modes 1 an d 2 in the case of financial services transactions 
conducted through electronic means, such as over the Internet.  During the debate a few suggestions 
had been made for work in this area, such as the possibility of inv iting international standard setting 
organizations to share information with the Comm ittee on their work and initiatives regarding the 
supervision of this kind of cross-border transactions, or the possibility of requesting the Secretariat to 
update a note on the issue written almost eight years ago.  As agreed by Members, he said he would conduct informal consultations on th is matter prior to the next meeting in order to see whether, and if 
so, in which way, the Committee should take up th ese suggestions.  A representative of the Cairo & 
Alexandria Stock Exchange made a presentati on on the organization, regulation, and recent 
performance of the Egyptian capital market.  Th e presentation had been highly appreciated by 
Members.  In that regard, he took the opportunity  to thank the Egyptian delegation and especially the 
Vice-Chairman of the Stock Exchange, who had co me from Cairo especially for this meeting.  A 
group of Members presented a joint statement on fi nancial services liberalization, which had been 
discussed earlier in the Council.  The statement discussed the importance of financial services 
liberalization for economic growth, stability and de velopment; and suggested some objectives for the 
negotiations.  In addition to substantial comments to  the paper, there was a brief procedural debate 
regarding whether the document could be discussed in the Committee taking into account its mandate.  
As agreed by Members, he said he would hold info rmal consultations on this  matter before the next TN/S/M/15 
Page 32  
 
 meeting.  The Committee would meet again during th e next cluster of services meetings in September 
2005.  
146. The Chairman of the Working Party on GATS Rules
 reported that the Working Party on 
GATS Rules had held a formal meeting on 20 June 2005.    The three usual items had been inscribed 
on the agenda, in addition to the election of the new Chairperson.  With regard to emergency 
safeguard measures, as requested last Februa ry, a representative from UNCTAD had presented a 
paper that the organization had previously circulat ed.  Extensive discussions followed, which touched 
upon a number of issues that had been brought up in the Working Party over the last years including the definition of domestic industry, S&D treatment, compensation, and data availability.  Diverging 
views were expressed on various aspects.  On gove rnment procurement, the European Communities 
presented a new communication, S/WPGR/W/52, pr oposing an Annex to the GATS on Government 
Procurement.  Some specific questions had b een put forward, such as on the relevance of 
distinguishing between goods and services, thres holds, relationship with GPA, possible MFN 
exemptions, inclusion of market access elements.  However, interventions had tended to reflect long-
held views, including on whether the negotiati ons should touch upon market access issues.  On 
subsidies, the delegations of Chile, Hong Kong China, Mexico, Pe ru and Switzerland presented a new 
paper, JOB(05)/95, which proposed a provisional de finition of subsidy and suggested next steps, 
including timelines, for the information exchan ge.  Specific questions and comments were put 
forward on the proposed definition, and different vi ews were expressed on the proposal relating to the 
information exchange including on sectoral covera ge, timelines, and the relevance of ASCM 
concepts.  He said Members would continue this di scussion at the next meeting.  In conclusion, he 
wished to stress to delegations that 2005 would be  an important year in the negotiations and that 
Members needed to think pragmatically about what  could prove achievable over the remaining period 
of time.  At the start of the meeting, he shared the assessment that discussions on ESM and 
government procurement were still characterized by important divergences of views, different 
expectations and levels of ambition.  No signi ficant progress had been made in moving towards any 
consensus.  Negotiations on subsidies were still at an early stage.   While some of the well-know 
divergences of views had cropped up during the formal  meeting, he had nevertheless discerned some 
openness on different sides to consider new id eas, alternatives or approaches to work.  
147. The representative of Chile
 wished to make a few comments of a general and systemic nature 
regarding the status of the documents produced by the Chairpersons of the subsidiary bodies.  She 
said there existed a host of different types of inform al papers, most of which were not available on a 
website or translated.  For Chile this was a problem, since it was a small delegation that could not 
attend all meetings.  As a result, her delegation di d not always learn what business had transpired and 
not all persons in capital read English fluently.  It was therefore difficult to follow work in the 
subsidiary bodies at a critical juncture when there might be progress.  She did not seek to discuss this 
in the Special Session, but rather requested that the Chairman hold consultations on this issue.  
148. The representative of Hong Kong, China  expressed his agreement with the comments made 
by Chile and looked forward to consultations.  
149. The representative of the United States  supported consultations.   
150. The Chairman  said he would hold consultations and s uggested that the Council take note of 
the Chairpersons' reports and the statements made. 
151. It was so agreed .   TN/S/M/15 
 Page 33 
 
 
 I. REVIEW OF PROGRESS IN NEGOTIATIONS , INCLUDING PURSUANT TO PARAGRAPH 15 OF THE 
GUIDELINES FOR NEGOTIATIONS  
K.  O RGANIZATION OF FUTURE WORK 
152. Speaking on 27 June, the Chairman  recalled that a number of Members had requested at the 
last meeting that he update a factual presentation on the state-of-play of the negotiations.  He said that 
68 initial offers, representing 92 Members had been r eceived.  Some 24 offers remained outstanding if 
one did not include LDCs; if one took into account LDCs, 55 offers remained outstanding.  Revised 
offers submitted totalled 21.   
153. The Chairman recalled that when he had made his presentation at the last cluster, 47 initial 
offers had been presented.  He said that more than two years after the target date for submission of 
initial offers, and more than a year after the July  Package, 24 offers remained outstanding (not 
counting LDCs).  Of the 24 missing offers, all but six were from Africa or from acceding Members.  
The most recent development since the last cluste r was that 21 revised offers had been received 
subsequent to the target date for revised offe r of May 2005.  All developed economy Members had 
submitted a revised offer.  He stated that his presen tation sought to give a fact ual and detailed look at 
the offers and a general picture that would help  determine if the state of play had changed 
significantly since the last cluster.  While the assessment he could give was important, it was not 
sufficient because it could not captu re the qualitative aspects of offers .  The qualitative inputs would 
need to come from delegations which he could then report to the TNC.   
154. Referring to a chart that showed the number of  offers – initial and revised – that proposed 
improvements in relevant sectors, the Chairman noted  that, for almost all sectors, the majority of 
offers proposed no improvements.  He said that th e situation remained modest in such sectors as 
postal-courier services, other communication services,  distribution, education, health, recreational 
services, and various segments of transport services .  Overall, while some progress had been made, 
these appeared modest if one bore in mind that some  42 new submissions had been received since the 
last cluster (21 new initial offers and 21 revised offers).   
155. The Chairman then pointed to two charts that highlighted some differences between 
developed and developing economy Members.  These presented, for example, the number of offers 
from developing economy Members that proposed improvements in relevant sectors as a percentage of the total number of offers received fro m developing economy Members.  For developed 
economies, sectors such as "other communication services", health, or recreational services had not 
attracted much attention, while professional, co mputer and "other business services" had attracted 
some.  For other sectors, a majority of developing co untry offers did not propose any improvements.   
156. The Chairman said that one could also examin e the offers to see whether they added to 
existing commitments.  The lack of offers in many sectors was surprising given that current levels of 
bindings were very modest.  He then presented a chart which, by sector, indicated which offers 
proposed:  no new bindings for existing commitments, improvements, or inclusion of a sector for the 
first time.  He recalled that the chart only indi cated whether improvements were proposed in given 
sectors and did not look at the dept h or value of these improvements, including whether they implied 
any liberalization or simply reflected the status quo .  He said that the charts confirmed that offers did 
not  change significantly existing patterns of commitme nts in terms of sectoral coverage or the extent 
of sectoral bindings.  Even if the proposed changes entered into force, less than half of schedules 
would have commitments (of any kind or scope) in  sectors such as road transport, air transport 
services and distribution.  It could also be observed that improvements often come from Members that 
already had some commitments in a given sector and removed some existi ng limitations or expanded 
the sectoral scope of their commitments.   TN/S/M/15 
Page 34  
 
 157. The Chairman said that another gauge of the ex tent of bindings was to look at the number of 
sub-sectors included in schedules.  While this did not provide a sector-by-sector snapshot, it did provide a more general picture of the extent of bindings.  Recalling the some 160 sub-sectors listed in 
the W/120 list, he said that were offers to ente r into force, the proportion of sub-sectors for all 
Members that would be bound would be 35 per cen t, which rose to 45 if one looked only at those 
Members that had made an offer.  He recalled that the charts reflected bindings only across sectors 
and not necessarily actual liberalization, which would lik ely be too small to be discernable on a chart.    
158. The Chairman said that the numbers begged questions such as whether Members had 
concerns with taking on commitments and whether th e lack of bindings reflected a hesitation to use 
the scheduling flexibility of the GATS.  He wonde red whether friends groups  could suggest model 
solutions on how to address policy constraints and indi cated the main or most harmful barriers that 
could be reduced or eliminated.  He wondered if governments needed assistance in expressing sector-
specific policy concerns in terms of scheduled limitations. 
159. The Chairman said that discerning the depth of commitments was more challenging.  If one 
looked only at additional sectoral entries, mode by  mode, the proportion of "unbound" was highest in 
mode 1 at 40 per cent.  If one looked instead at where improvements were proposed in sectors, more 
than 50 per cent of these related to mode 3, which could be explained by the fact that mode 3 had the 
most limitations at the sector-specific level.  Less than 30 per cent of improvements were made with respect to mode 1.  Some improvements were also observed for mode 4; however, a more accurate picture would need to take into account the improvements proposed in the horizontal section of the schedule.   
160. Turning to horizontal commitments, the Chairm an said that, despite its importance for all 
sectors included in schedules, only slightly more th an half of offers proposed improvements to the 
horizontal section and most of these improvements related to mode 4 (70 per cent of developed 
country offers and 39 per cent of developing country offers).  Nineteen offers proposed improvements 
in mode 3 in the horizontal section.   
161. The Chairman said that only a small proportion of offers proposed improvements to lists of 
MFN exemptions.  Were the current proposed improvements to come into force, some 400 exemptions would remain and the number of MFN ex emptions would be reduced by less than 10 per 
cent.   
162. Finally, the Chairman said that the offers c ontained a number of other elements that were 
disturbing.  He recalled that Members could not, thro ugh their offer, reduce the level of treatment they 
had bound, but rather that Article XXI foresaw such a scenario.  He said that some offers did not seem 
to follow the editorial conventions for the preparation of offers and revised offers:  some elements 
presented as improvements appeared to be, at best, te chnical corrections.  It was also disappointing to 
see that some Members appeared to be introducing or  repeating in their offer scheduling mistakes or 
inaccuracies, in spite of the scheduling guide lines and years of discussion in the Committee on 
Specific Commitments (CSC), for example, ENTs without clear criteria, general references to 
domestic laws without reference to the measure inc onsistent with market ac cess or national treatment, 
or MFN-type issues listed in schedules.  He said th at these had a bearing on the quality of the offers.  
He hoped that the presentation would be helpful to  delegations when making their presentations under 
this item. 
163. The delegation of Brazil
 sought confirmation that the presentation by the Chairman had been 
made under his own responsibility and did not necessarily  reflect the concerns of Members.  Although 
the presentation might contain useful information,  his delegation did not think that the mere 
aggregation of offers was sufficient to evaluate the current state of affairs.  He sought to study the 
presentation further and perhaps make comments on it  TN/S/M/15 
 Page 35 
 
 
 164. The Chairman  confirmed that the presentation was made under his own responsibility and 
agreed that it alone was insufficient to make a fu ll assessment of the offers.  Speaking on 30 June and 
referring to a message sent to delegations earlier in  the week, the Chairman recalled the order of 
business for the remainder of the meeting.  
165. The representative of Morocco  said he had the pleasure to announce that the Kingdom of 
Morocco had recently submitted its initial offer on services within the framework of the Doha 
Development Agenda.  This was a clear indication of Morocco's interest in the negotiations and of its 
contribution to the progress of work, particularly with in the crucial context of the preparatory process 
leading to the Ministerial Conference in Hong Kong.  He thanked the Secretariat for having held in 
Rabat in March 2004, a national seminar on services which had made it possible to strengthen work 
on the services of the Kingdom of Morocco in this sphere.  He said that the Moroccan delegation had 
come from capital for the presentation of the offer and was at the disposal of all Members should 
there be any clarifications or replies sought to an y questions.   He said that it was a great honour to 
present the initial offer from Morocco.  He stated th at the initial offer from Morocco was the result of 
work carried out by the National Committee on Trade in Services which met within the framework of 
the Ministry of Foreign Trade at Rabat and br ought together representatives of ministries and 
professional associations concerned by the negotiati ons on services.  The work which has made it 
possible to produce this initial offer from Morocco on  services was based on a detailed examination of 
requests which had been formulated by Members since the launching of the negotiation process and 
he thanked the delegations that had addressed requests to Morocco.  He said that the requests were a 
sign of interest in services sectors in Morocco.  Th e initial offer was in line with Article XIX of the 
General Agreement on Trade in Services relating to  the negotiation of specific commitments referred 
to in paragraph 15 of th e Doha Declaration dated 4th November 2001 and the Decision adopted by the 
Council on the 1 August 2004.  This offer containe d a list of specific commitments, both horizontal 
and sectoral, the list of exemptions on the provisions of Article II of the Agreement as well as the reference paper related to teleco mmunication services.  The typographi c conventions which were used 
in the initial offer were in line w ith the agreed editorial conventions .  He said that Morocco's initial 
offer proposed the lifting of horizontal restricti ons relating to exchange regulations.  Moreover, 
Morocco proposed commitments in a number of  services activities including distribution (both 
wholesale and retail), maritime transport services, courier services, integrated engineering services and related consultation services, bot h scientific and technical.  A number of restrictions on access to 
Moroccan markets would be lifted in comparison  to present commitments with respect to, for 
example, the provision of tourist services, services in the field of telecommunications, road and air 
transport services as well as banking, insurance and other financial services.  The initial offer from 
Morocco was a strong signal to the providers of services around the world and particularly to those who invested in the services sector.  It was a cl ear indication that Morocco was moving firmly 
towards a consolidation of the reforms which had b een carried out at the national level in order to 
liberalise the services sector.  He said that the presen t initial offer from Morocco was not a legal text.  
It was presented solely for the negotiations beari ng in mind the need to ensure an overall balance 
among the results of the negotiations in all areas of the Doha round.  Morocco's initial offer was 
conditional, including on the presenta tion of others' substan tial and satisfactory offers of interest to 
Morocco.  The initial offer in no way prejudged the fi nal position of Morocco as regards the results of 
the negotiations in services and th e overall negotiations within the fra mework of the Doha Agenda.  
Morocco presented its initial offer as proof of its w illingness to contribute to further liberalization and 
progress on the liberalization of trade in services w ith a view to achieving the objectives of economic 
development and increased participation in trade in  services.  In conclusion he stressed that, in 
accordance with the Guidelines and Procedures for the Negotiations on Trade in Services (adopted by 
the Council on Trade in Services on the 20 March 2 001), Morocco would continue to participate in 
the on-going negotiations. 
166. The representative of Tunisia
 said that his delegation had the pleasure of announcing the 
submission of its initial offer in services on 31 Ma y 2005.  A number of technical issues had been TN/S/M/15 
Page 36  
 
 finalised in cooperation with the Secretariat of th e WTO and he said the offer would be distributed 
shortly.  Tunisia's offer was the result of inten se consultations which had involved all concerned 
parties.  Tunisia had taken into consideration as much as possible the requests it had received.  
Tunisia's initial offer contained improvements in telecommunications and commitments in new 
sectors such as environmental services and health servi ces.  Through the submission of its initial offer, 
Tunisia indicated to trading partners its commitm ent to the Doha Agenda, the development of its 
services sector and its determination to tackle in a constructive manner the future phases of trade in 
services.  The initial offer of Tunisia was conditional, including on the presentation by other Members of substantial and satisfactory o ffers in the sectors and modes which were of specific interest to 
Tunisia.  The present offer in no way pre-judged the final position of Tunisia with respect to the 
results of the services negotiations and the genera l negotiations within the framework of the Doha 
Agenda.  He thanked the Secretariat for the assistan ce it had provided in the preparation of Tunisia's 
initial offer. 
167. The representative of the United Arab Emirates
 recognized that the trade in services 
negotiations sought to achieve a progressively higher level of liberalization and to provide effective 
market access.  In response to the requests received  from Members and pursuant to Article XIX of the 
General Agreement on Trade in Services and paragra ph 15 of the Doha Ministerial Declaration, he 
was pleased to announce that the United Arab Em irates was submitting its in itial conditional offer. 
This initial offer improved the United Arab Em irates' existing commitments by including new 
commitments in financial services, business services, professional services and transportation services by reducing market access limitations and restric tions on market access and national treatment.  For 
example, there was no limitation on the participatio n of foreign capital for representative offices or 
branches of foreign companies, which meant that 100 per cent foreign ownership was granted.  For 
some specific sectors and sub-sectors, participati on of foreign capital had been improved to 75 per 
cent.  Commercial presence in these sectors and s ub-sectors was conditional upon realising benefits in 
the form of technology transfer, research and development programmes, technical assistance and 
education and training of local human resources.   The United Arab Emirates had responded to 
numerous requests to provide greater flexibility co ncerning the United Arab Emirates' policies and 
procedures for the temporary entry and stay of foreign service suppliers.  The UAE believed that 
services negotiations were an integral part of mark et openings and the Doha Agenda's results needed 
to be successful and expand economic prosperity a nd growth.  More importa ntly, foreign affiliates 
enabled United Arab Emirates' service firms to expand into new and rapi dly growing markets and 
enhance their global competitiveness.  He said that the benefits of an open services market also 
brought benefits to the world as a whole, includi ng both developed and deve loping countries.  The 
UAE's initial offer had been developed in consulta tion with domestic authorities and local and federal 
governments, private sector and the WTO committee.  This offer was part of a long-term process of expanding choice and opportunity for UAE's service suppliers and consumers, particularly in key 
sectors like insurance and professional services.  He said that the United Arab Emirates reserved the 
right to withdraw, modify or reduce its offer in whole or in part at any time prior to the closure of the negotiations if the offers made by the United Arab Em irates' negotiating partners in areas of interest to 
the UAE within the framework of the Doha Development Agenda were not satisfactory. 
168. The representative of Trinidad and Tobago
 said his delegation was pleased to present its 
conditional initial offer in services to the WTO.  This initial offer, he believed, represented a 
commitment to the WTO and to the services negotia tions.  Trinidad and Tobago was a vibrant and 
growing economy with services accounting for more than 60 per cent of the GDP.  Moreover, the 
services sector was a major employer with over 65 per cent of deliverables being engaged in service 
activities.  The government of the Republic of Trinid ad and Tobago had recognised the benefits to be 
derived from trade liberalization and as such in pursu ing a path to development in the context of its 
2020 Developmental Plan.  Within this plan was a clear focus on the services sector.  The government 
recognised that the services sector, given its contri bution to the economy, was the pillar on which the 
country would experience future growth and sustai nable development.  This recognition was given  TN/S/M/15 
 Page 37 
 
 
 prominence throughout the current development of a national services trade policy which would guide 
the development of this sector in a holistic and sustainable manner.  Trinidad and Tobago believed 
that the multilateral framework for the negotiation of rules was critical to incr easing global trade.  It 
believed that the WTO experience had in fact brought  tangible benefits to all.  In this context, 
Trinidad and Tobago wished to put on record its co mmitment to the multilateral trading system and to 
the rule making system as a whole.  In keeping w ith this commitment, Trinidad and Tobago's initial 
offer in services had undergone a comprehensive re view to ensure that it provided scope and 
flexibility for the development of its sector.  His de legation believed that the initial offer provided, 
within the context of Article XIX of the GATS, a reasonable and generous commitment to the pursuit 
of the goal of achieving progressively higher levels of liberalization.  Moreover, as a developing 
country, the offer reflected Trinidad and Tobago's commitment to have meaningful discussions on the 
reduction and elimination of adverse effects on trad e in services.  The initial offer therefore focused 
on the sectoral areas of business services, communication services, tourism and travel related services and transport services.  In the area of professional services, in particular, Trinidad and Tobago had made an initial offer that furthered its existing GATS commitments.  In other areas he had identified, 
the offer would allow his country to pursue the path  of growth.  Trinidad and Tobago stood willing to 
hold bilateral discussions with delega tions on its offer with the aim of providing clarity where needed.  
Technical questions would also be entertained.  Trinidad and Tobago welcomed the opportunity to 
present its initial services offer and reiterated its commitment to the services negotiations and to the 
multilateral trading system. 
169. The representative of Jamaica
 said it was his pleasure to inform the Special Session that 
Jamaica had submitted its conditional initial offer on services.  This offer was being tabled in a spirit 
of constructive engagement and purs uant to paragraph 15 of the Doha Ministerial Declaration and the 
General Council Decision of August 1, 2004.  He said that the r esource constraints of small 
economies such as Jamaica were well known and that this was particularly the case in the area of services.  Indeed, although there had been consider able pressure from many quarters for offers and 
revised offers to be tabled, many developing countr ies continued to have difficulty in formulating 
requests and lagged far behind deve loped Members in doing so.  Despite this imbalance in the 
services negotiations, Jamaica had sought to cont ribute to advancing these negotiations and had 
proceeded with the submission of its offer.  He sai d that the preparation of the offer had entailed an 
extensive and time-consuming consultative process which involved a wide cross-section of interested 
parties at the national level and whic h also required co-ordination at a regional level.  This was a very 
challenging process in light of Jamaica's capacity a nd resource constraints.  Making a few contextual 
comments, he said that, in Jamaica, the services s ector accounted in 2003 for 72 per cent of GDP and 
employed three-quarters of the labour force.  In  such circumstances, the trade performance of the 
services sector, its efficiency and productivity, w as critical to growth and development, if only by 
virtue of its sheer size of GDP.  Jamaica believed that the liberalization of trade in services 
autonomously and through the GATS could play an  important role to ensure that critical 
infrastructural and other services were provided comp etitively.  However, in Jamaica's view, it was 
important that the process of liberalization be appr oached and undertaken progressively and with due 
regard for the implications for building domestic  capacity, preserving policy space and strengthening 
and diversifying services exports.  Jamaica placed importance on the fact that the GATS provided 
scope for this kind of approach to be taken th rough the flexibilities built into the Agreement.   
170. The representative of Jamaica said that his count ry's offer comprised two primary elements, 
namely, improved commitments on telecommunica tions services and the removal of the MFN 
exemption in relation to the establishment of the Caribbean single market and economy.  Jamaica's telecommunications sector had undergone significant transformation over the preceding years.  This was reflected in the improved commitments containe d in the offer.  Jamaica had moved well beyond 
its existing commitments on telecommunications ser vices with the introduction of full competition in 
the sector in March 2003.  Full liberalization of the sector had been achieved ten years before 
September 2013, the date of full liberalization which was indicated in Jamaica's Uruguay Round TN/S/M/15 
Page 38  
 
 schedule of commitments.  The improved commitments  reflected the end of the exclusive monopoly 
and the introduction of competition for certain ser vices including voice telephone services, mobile 
telephone services, domestic and international voice telephone services and teleconferencing services.  
Amendments had been made to all but three servi ces in the schedule.  The existing market access 
commitments for voice-over internet, video transm ission services and international voice data and 
video transmission services, supplied to firms invol ved in information processing, located within the 
free zones, had been retained in order to allow th e government to first develop a policy framework for 
these services, before making any improved commitme nts in these areas.  Further consultations were 
therefore underway on the provision of voice, data and video transmission services to firms in the free 
zones.  Significant strides had been made in the telecommunications sector since the advent of full 
competition with the dismantlement of the m onopoly arrangement.  The sector had realised 
tremendous growth and development.  The teleco mmunications sector had become a leading sector 
for attracting investment (some $700 million wort h) and Jamaica had achieved a tele-density 
comparable with that of many developed countri es.  Improved commitments in the sector, he said, 
should lead to the further modernisation of the economy and build-out in the telecommunications 
sector.  Some of the other anticipated benefits  of improved services included reduced transaction 
costs, further technology penetration, enhanced  competition, increased communications capacity, 
greater investment in the development of enhan ced networks and increased product choice for the 
consumer.  The second element of the offer, he said, was the removal of the MFN exemption as it related to the establishment of the CARICOM singl e market and economy.  He recalled that in 
January 2003 member states of CARICOM had notified the WTO of their services regime under 
Article V of the GATS.  By virtue of this notifi cation and taking into account the relevant provisions 
of Article V of the GATS, Jamaica had decided to remove the MFN exemption.  Jamaica reserved the 
right to amend, supplement or withdraw the offer in part or in its entirety at any time during the negotiations.  Jamaica also reserved the right to ma ke any amendments or revisions of a technical 
nature to its offer.  The elements of Jamaica's initia l offer were reflective of its overall approach to the 
negotiations.  He reiterated the c onsiderable importance his delegation attached to the principle of 
progressive liberalization as enshrined in Article XI X of the GATS.  Jamaica's participation in the 
negotiations would be based on gradual liberaliza tion in line with overa ll national development 
objectives with due respect for national policy objectiv es.  Jamaica affirmed its commitment with its 
offer to the services negotiations and to the overall objective of the progressive liberalization of trade 
in services through enhanced market access, incre ased transparency and predictability while giving 
due respect to national policy objectives. 
171. The representative of Cuba
 reiterated her delegation's comm itment to contribute to the 
negotiation process.  She thanked the Secretariat for the technical support it had provided to her 
delegation in Geneva and in capital.  She inform ed all Members that Cuba had presented its initial 
offer, which would be distributed in the coming days .  Cuba sought to highli ght the conditional nature 
of its initial offer, which it was making in order to contribute to the negotiations in services and within 
the framework of the Doha Work Programme.  At the same time, she felt compelled to state that the 
offer was subject to reciprocity and to balan ce which Cuba hoped would characterise the whole 
process.  The main objective of its offer was to have  technical adjustments made to its schedule and to 
make certain that the changes reflected legislation in  force in Cuba, especially with regard to foreign 
investment.  It was for this reason that Cuba had taken into account a number of requests which 
Members had made of it through the negotiation pro cess.  Cuba's offer was distinguished by a number 
of characteristics.  Firstly, Cuba had modified th e participation of foreign investment according to 
legislation (Bill No. 77 of 1995) which eliminated the limitation for 49 per cent foreign capital in a 
joint venture, which had been the level prescribed in legislation adopted in 1950.  The new schedule 
explicitly stated that the percentage of participa tion of capital was subject to the negotiation between 
partners and, for a joint venture, nominative partic ipation was required.  The offer also stated that 
branch offices were included in the schedule according to  regulations in force.  Cuba stated that its 
initial offer included commitments in three new sub-sectors: architectural services, engineering services and other construction services.  All of these commitments were in line with regulations in  TN/S/M/15 
 Page 39 
 
 
 force.  With regard to financial services, the offe r separated life insurance from accident insurance in 
order to better reflect the organisation of these ser vices in Cuba.  She said that, depending on progress 
in the negotiations in other areas, including in services, alongside with other development issues to 
which Cuba gives high priority, Cuba's offer could be  withdrawn or modified at any point in time.   
172. The representative of Nicaragua  recalled that her government had already presented an offer 
in services which it was refining with the Secretaria t.  The offer represented a special effort on the 
part of Nicaragua and demonstrated its interest in the process of gradual liberalization in services.  It 
also sought assist the development of Nicaragua, in addition that of all Members.  Nicaragua's offer 
contained improvements and clarifications at a horizontal level as well as at a sectoral level in sectors such as telecommunications services, business servi ces, professional services, transportation services 
among others.  She said that the preparatory process at  national level had includ ed consultations with 
industry as well as with regulatory bodies in Nicarag ua as well as with the economic commission of 
the National Assembly.  All of these efforts combined had been technically and politically difficult.  It 
was for this reason that her delegation wished to  express its gratitude for the technical assistance 
provided by the WTO Secretariat and by other Member s.  Her delegation's initial offer related to one 
part of the services negotiations and outlined the key sectors within Nicaragua's National Plan for 
Development.  She reiterated that the submission of an offer was but one part of an overall process of the negotiations under the Doha Age nda that would move forward or evolve according to the balance 
which would be struck in the overall negotiations. 
173. The representative of Croatia
 said he had the honour to present Croatia's conditional initial 
offer in services.  The offer was submitted pursuant to Article XIX of the General Agreement on 
Trade in Services and took into account the need to  secure an overall balance in the WTO negotiations 
pursued under the Doha Ministerial Declaration and the Decision adopted by the General Council on 
August 1st, 2004, including Annex C, which contained the recommendations of the Special Session of 
the Council for Trade in Services.  The offer w as submitted in a positive manner as a contribution to 
the on-going negotiations and took into account the recent accession of the Republic of Croatia.  The 
substance of the initial offer was limited at the present juncture because it was based on the 
comprehensive and extensive liberalization measur es which had been bound in the accession process.  
This meant that Croatia had committed 122 sub- sectors including all major key sectors and sub-
sectors. This represented five times more than  the WTO average.  Th e extensiveness of the 
commitments already made by Croatia in the accessi on process had been recognised by Ministers in 
the Doha Ministerial Declaration.  The offer incl uded notable amendments to the telecommunications 
and banking services sectors.  Croatia reserved the righ t to revise and supplement its offer in whole or 
in part at any time prior to the conclusion of the services negotiations.  Croatia further reserved its right to make corrections on a technical level and to  further clarify terms a nd conditions contained in 
its initial offer.  Finally, he re called that Croatia had already li beralised its market and bound its 
commitments to a very large extent, and hence, a ny further steps that Croatia could consider would 
depend largely on the commitments that the large majority of other WTO Members would be willing 
to undertake.  He welcomed any comments Member s might have in the future and reiterated his 
delegation's constructive approach.  
174. In the interests of time, the Chairman
 invited Members wishing to present documents, room 
documents, joint statements, etc., to take the floor.   
175. The representative of Japan , speaking on behalf of a group of Members interested  in maritime 
transport, said that the room document he was presenting contained a number of attachments which 
contained an analysis of maritime transport services.  He sought to highlight a number of points this analysis made.  He said that a group of Members interested in maritime transport services had evaluated the latest offers tabled by WTO Members in maritime transport services.  These Members had renewed their efforts to consider positive ways  forward.  They had noted that only a limited 
number of quality offers had been tabled in mar itime transport services and that this was far from TN/S/M/15 
Page 40  
 
 satisfactory.  He said that maritime transport was an important facilitator of world trade and a 
significant exportable service in many countries, bot h developed and developing, that made direct 
contributions to their national GDP.  In light of its  importance, binding substantial liberalization in 
maritime transport services was crucial to ensuri ng the overall success of the trade negotiations.  He 
recalled that three joint statements had been subm itted to the Special Session and a seminar had been 
held.  The group of Members reaffirmed that the maritime model schedule was an important tool and 
facilitated the undertaking of commitments in maritime transport services. The group urged all Members to reassess their current positions and to  contribute to the negotiations by tabling high 
quality and meaningful initial and revised offers as soon as possible in maritime transport services. 
176. The representative of Canada
 said that both of the papers submitted by his delegation related 
to transparency.  In this interests of time, he said that he would shorten the remarks he had intended to 
make.  Referring to document TN/S /W/41 entitled Market and Regulatory Information of Interest to 
Service Providers, he said that the paper described actions that the Governme nt of Canada had taken 
recently in the context of its revised offer.  It s poke to one of the recurring themes of the negotiation, 
namely, the need for increased transparency.  He said that the genesis of the proposal was Article IV:2 
of the GATS which acknowledged the benefits of facilitating developing c ountry service suppliers' 
access to market and regulatory information by calling on developed country Members to establish 
contact points.  He said that Canada had creat ed an on-line GATS contact point, which built upon the 
principles of Article IV:2, through which services,  market and regulatory information could be 
accessed quickly and accurately.  The contact point pr ovided a wide variety of information related to 
the supply of services across all modes.  It provide d information on Canadian services technology and 
sectoral information, including business opportunities.   His delegation hoped that this would be of 
particular use to SMEs and particularly SME servi ce suppliers from developing countries and that this 
initiative would serve as a constructive contribution.   Referring to the second Canadian document 
which contained a transparency template based on Ca nada's revised horizontal mode 4 offer, he said 
that the paper had been touched on by his delegation in  the past.  It spoke to the important issue of the 
lack of transparency in the area of mode 4 commitments.  Canada had promoted improved 
transparency in this area for some time and, in the proposal, suggested a format that Members could 
voluntarily make available for mode 4 commitments,  such as information on their immigration laws 
and regulations relevant to the application of visas and employment authorisations, procedural 
information with respect to visas, information on t ypes of foreign worker programmes, etc.  Canada 
had provided this information in the form of a co mpleted template and encouraged other Members to 
do the same.   
177. The representative of Australia  thanked Canada for its initia tive in supporting the mode 4 
transparency template.  Australia was pleased to  promote greater transparency of its horizontal 
mode 4 commitments through use of the template .  The template provided electronic links to 
Australia's immigration laws and administrative gui delines relevant to Australia's current horizontal 
commitments and revised offer covering mode 4.  The details collated and included in the template 
provided links to readily available information that would give a detailed understanding of the 
comprehensive nature of Australia's horizontal mode 4 commitments and revised offer as well as 
details and an understanding of the processes involved in accessing Australia's temporary entry 
provisions applicable to foreign service suppliers.  He encouraged other Members with horizontal 
mode 4 commitments to consider completing the transparency template. 
178. The representative of Switzerland  thanked those delegations  that had announced the 
submission of their revised offers.  It was very go od news and showed progress in the negotiations.  
Making a few comments subsequent to a meeting of  a number of countries interested in logistics 
services, he recalled that, at the previous meeting,  a group had presented a joint statement on logistics 
services in document TN/S/W/34.  The group was pl eased that the statement had attracted a high 
number of co-sponsors, which were very diverse and balanced in terms of de veloped and developing 
Members.  The group was comprised of both larg e and small countries, coastal and landlocked  TN/S/M/15 
 Page 41 
 
 
 economies.   He said that exporters of freight logistic services were also keenly aware of the key role 
this sector played in trade.  The sheer size and composition of the group and of the co-sponsors of the joint statement demonstrated the broad interest in and benefits derived from freight logistics services 
worldwide.  He said that when the group had been created in January 2002, it was comprised of three 
Members, but had grown since.  He noted that the joint statement had been co-sponsored by some 20 
Members.  He said that the friends of logistics services had devoted efforts to an analysis of the offers, 
the purpose of which was to provide an overall pi cture of commitments undertaken and the offers 
made in logistics services.  He hoped that this synops is would be made available shortly.  He said that 
the sector had been called a new sector in the cont ext of the negotiation and extended over a range of 
diverse activities.  The group was aware that so me of these activities were sensitive to some 
Members, some of which were part of the gr oup.  These applied mainly to specific modes of 
transport.  The ambition was to allow the analy tical work to be conducted while respecting the 
positions of members of the group.  The group was determined to intensify its efforts to seek improved commitments by Members in this vital s ector.  The group was convinced that doing so 
would bring a positive contribution to the prog ress of the services negotiation under the Doha 
Development Agenda. 
179. The representative of Cuba
, referring to document, TN/S/W/45, noted that the document had 
not been translated from Spanish, but hoped that tr anslations would be made available and that the 
proposal would be studied and analysed by all Memb ers.  Making a few brief comments, she said that 
it dealt with the examination of the progress made  in negotiations, includi ng the application of 
paragraph 15 of the negotiating guidelines, with respect to construction and related engineering 
services.  For Cuba, the construction and related engineering services sector was of strategic 
importance for the creation of jobs and sustainable growth.  There were various obstacles which had clear repercussions on the movement of professionals and foreign workers.  The obstacles also affected commercial presence because  of the close connection between modes 3 and 4.  An example 
was the restrictions related to the number of natu ral persons who could be employed as compared to 
those related to standard licences and qualificati ons for mode 4.  In Cuba's view, there were 
contradictions at the national and regional levels w ith respect to the quotas of physical persons in that 
refusals affected the employment indices of the suppl ying country.  A number of the initial offers of 
developed countries had increased the restrictions wi th respect to the recognition of professionals and 
specifically the equivalences of nationals from other countries.  This was only one example of many cases that affected market access, but also meant th ere was a lower level of pay between nationals and 
foreigners.  Difficulties persisted in relation to the processing and approval of visas and labour 
permits and it was often the case that authorisations  were granted for very short periods for qualified 
technicians.  Often it was almost impossible to obtain this type of visa for highly qualified professionals.  There were restrictions which were imposed on the commercial presence of companies related to managerial, professional and foreign la bour.  There were, among others, nationality and 
residency requirements for persons employed by fo reign companies. There were limitations that 
existed in the initial offers of some developed countri es.  In light of the limitations and the conditions 
which were maintained in some of the initial o ffers, for developing countries such as Cuba, the 
evaluation of the negotiations could not be considered positive.  The situation as regarded many offers 
was very different to what was contained in Artic le IV in relation to mode 4 in particular and 
especially for the LDCs.  She believed that this w ould have repercussions on the level of reciprocity 
which could be provided by these countries within  the framework of the negotiations.  Cuba 
maintained the objectives it had outlined in document S/CSS/W/145 of 22 March 2002. 
180. The representative of India
 thanked those Members that had  presented their initial offers.  He 
sought to present a proposal on behalf of Bolivia , Chile, Columbia, Dominican Republic, Guatemala, 
India, Indonesia, Mexico, Pakistan, Peru, Philippi nes and Thailand contained in Job(05)/131, which 
was a response to the call by the Chairman for Members to indicat e how they had been assessing 
offers in areas of particular interest to them.  The group had decided to focus on mode 4, which was 
one of the areas of critical importance in the round to a large group of Members.  He said the group TN/S/M/15 
Page 42  
 
 shared some thoughts on the parameters for the assessment of mode 4 offers. The document was 
largely based on previous submissions by the group both in terms of the review of progress as well as some of the negotiating proposals it had made.  He also underlined that it contained certain common 
elements that Members in the group had been using and would continue to use to analyse initial and 
revised offers.  At the same time he cautioned that th ere were specific areas of interest in addition to 
those that were mentioned in the paper which individual Members would mention in their own 
individual assessments.  Turning to some of the parameters the group thought were critical for 
assessing the mode 4 offers, he said the first was the inclusion of categories of natural persons that 
were not necessarily linked to commercial presence.  This was particularly important for developing 
countries and the group had highlighted some sp ecific categories from among the others, such as 
contractual service suppliers a nd independent professionals.  The group had elaborated on possible 
definitions and parameters for these categories.  Th e second parameter was the extent to which there 
was reasonable coverage, either in the horizontal sec tion or specific sectors, of the occupations or sub-
sectors of interest to Members.  He said that this  was one of the important gauges of commitments in 
mode 4.  At the same time, the group recognised the importance of other categories, such as intra-
corporate transfers, business visitors and where relevant, the miscellaneous category of others. 
181. The representative of India said that a third parameter was in relation to the removal of 
restrictive market access conditions wh ich were attached to the various categories.  In the interests of 
time he would mention only two, the first of which was either the removal of the economic needs test 
or, where they were required under exceptional circum stances, applying them in a non-discriminatory 
manner on the basis of definitions, criteria, etc.  Th e second related to the duration of stay and the fact 
that both the duration of stay should be clearly specified and should not be too short, as this would 
deny business realities.  Commitments should include some provisions for renewals of temporary stay.  The point was also raised about the absen ce of numerical quotas as well as the case of ENTs, 
which when needed to be applied, should have clearly  specified criteria.  Fourthly, the group also felt 
that transparency was important and he recalled that  some of its views had been shared on previous 
occasions.  The group did not believe that the link between market access categories and the required 
application conditions related to  documentation requirements and pr ocedures should be mentioned in 
mode 4 commitments.  However, the possibility for a "single stop" provider for information on all such procedures was a step that would be welcomed.  Any type of binding that might be developed for 
these issues could be explored and would be an impor tant element in the assessment of mode 4 offers 
he said.  Finally, he felt that another crucial issue not directly related to market access was the issue of 
qualification requirements and procedures and the issu e of recognition of qua lifications which, he 
noted, was being taken up in other fora.  The gr oup had assessed the revised offer on the table in 
terms of mode 4 and, in its view, while there were some improvements by some Members compared to the initial offers and Uruguay Round commitments,  there were still wide gaps in terms of the 
parameters he had just outlined.  While acknowledging the effort made by some Members in trying to 
include some of the categories, especially those related to commercial presence, the group found that 
some schedules had no coverage of such categories.  Furthermore, the sectoral coverage of the categories, the broadening of the coverage, and th e use of ENTs left much to be desired.  He 
acknowledged that these were but the first of the re vised offers that had been submitted and said the 
group would revert to its assessment at a later point in time. 
182. The representative of Korea
 wished to reiterate the call for progress in services by APEC 
ministers on behalf of APEC members and referre d to document TN/S/W/40. The APEC members  
were seriously concerned about the slow progress in  the services negotiations. An urgent effort was 
required to infuse momentum into the negotiations and to ensure a speedy and balanced outcome from 
the Round.  She recalled that competitive services sectors promoted innovatio n and permitted the easy 
interaction of all economic sectors.  Meaningful offers  in sectors and modes of supply of interest to all 
economies, with particular attention to those of in terest to developing ec onomies, would support these 
aims further.  APEC ministers recognized the im portance of targeted technical assistance for WTO 
developing Members with a view to enabling them to  participate effectively in the negotiations.  She  TN/S/M/15 
 Page 43 
 
 
 noted that efforts should be made by Members to  conclude the negotiations on rule-making under 
GATS Articles VI:4, X, XIII and XV in accordance w ith their respective mandates and deadlines.  
She recalled that in Santiago in November, 2004 APEC members had called on Members to submit 
their initial offers urgently if they had not done so  and to meet the agreed deadline of May 2005 for 
the submission of improved revised offers.  All A PEC members had aimed to achieve this and called 
on all other WTO Members to do likewise.  She said that the submission of revised offers would make 
a substantial and tangible contribution to the H ong Kong WTO Ministerial Conference in December. 
183. The representative of Venezuela  wished to express its support for the paper presented by 
Cuba and referred to paragraphs  14 and 15 of the negotiating guidelines on trade in services which 
had been mentioned by ministers in Doha.  Paragra ph 15 suggested that the evaluation, and the degree 
to which the objectives of Articles IV and XIX of the Agreement were being met, was an activity 
which was to be carried on an on-going basis.  It stat ed as well that the negotiations had to be adjusted 
in order to take account of the provisions of these two Articles. 
184. The representative of Singapore  sought to make a few general comments about the 
negotiations.  He said it was very heartening to lis ten to the various delegations that had presented 
their initial offers and in particular the initial offers made by small economies such as Barbados, 
Trinidad and Tobago, St. Lucia, Jamaica, El Salv ador, Cuba, Nicaragua, Albania and others.  He had 
no doubt that these offers represented a tremendous e ffort in terms of national coordination and he 
offered his congratulations.  At the same time, he  recognized that about 24 developing countries had 
yet to table an initial offer and he thought Members needed to find ways to help them arrive at their 
initial offers.  He understood that the Secretariat ha d been helping various de legations informally and 
that the Chairman had also been talking with va rious delegations informally.  He expressed his 
support for both the Chairman's and Secretariat's ef forts to reach out to those remaining countries to 
help and encourage their participation.  He un derscored that, although the process had moved to 
revised offers, the importance of obtaining initial offers from every Member should not be underestimated, leaving aside the LDCs.  He said that  this was the modality that had been agreed to 
and he hoped all were co mmitted to respecting it hope fully before Hong Kong. 
185. The representative of Singapore turned to the i ssue of Singapore's revised offer and the note 
circulated by the Chairman.  He recalled that his delegation's revised offer had been tabled on the 31 
May.  It was a significant offer by Singapore's st andards in terms of the coverage and depth of 
commitments made.  In terms of sectoral coverage, the revised offer covered all twelve major sectors 
compared to its initial offer which had covered only seven sectors.  The additional sectors covered in 
the revised offer were distribution services, educa tion services, environmental services, health related 
and social services and other services not included el sewhere.  In addition to new sectors having been 
committed, Singapore also proposed improvements to those sectors that were already committed in the initial offer.  He said that his delegation had received requests, both initial and revised, from 18 
Members.  Overall, Singapore believed that its revised offer addressed a reasonable amount of the 
requests that were made of it.  For example, in distribution services, some 70 per cent of Members 
requests had been met.  Similarly, for education services, some 60 per cent of the requests made had 
been responded to favourably.  He sought to unde rline the point that Singapore had made a serious 
effort to take into account the various requests made of  it to the extent possible.  It had also made an 
effort to meet the May deadline to  table the revised offer and believe d it was crucial for all countries, 
both developed and developing, to contribute to the process in order to ensure a good outcome at 
Hong Kong. 
186. Turning to the requests Singapore had made of others, the representative of Singapore 
reported that his delegation had submitted revise d requests to 24 Members in April. Of these 
Members, nine had tabled their revised offers while four had not tabled an initial offer.  He urged 
Members that had not tabled their revised offers, or  initial offers, to respond positively to the mandate 
in the July Package and to keep in mind the revi sed request that Singapore had made of them.  His TN/S/M/15 
Page 44  
 
 delegation had examined the revised offers of ot her Members and greatly appreciated the significant 
amount of effort that had been invested in their fo rmulation and submission.  He noted that there had 
been improvements that had been made by Member s in both the horizontal and sectoral commitments 
and commended these efforts.  Although some of his delegation's requests had been met by Members 
that had tabled their revised offers, he said that ther e remained gaps in the o ffers with respect to its 
revised requests, particularly in sectoral commitment s.  Singapore had a keen interest in several major 
sectors;  however, many of its requests in these sectors, for example business services, communication 
services, construction services, distribution services, ha d not been met.  For example, in construction 
and related engineering services, only 20 per cent of  Singapore's requests had been met or partially 
met.  In distribution services, only 8 per cent had b een met.  He requested that Members positively 
reconsider Singapore's requests in  subsequent revised offers. 
187. On process, the representative of Singapore said it was obvious that a lot of work needed to 
be done in the services area and clear direction was re quired.  In this regard, he believed that some 
kind of work programme or road map that should be  prepared for the TNC before the end of July 
could provide a way forward for the negotiations in the period leading to Hong Kong.  He thought that 
at least three aspects could be reflected in such  a work programme or road map.  Firstly, the 
importance of continuing with the initial and revise d offers in the context of the existing modalities 
and the request and offer approach would need to  be underlined.  His delegation was open-minded to 
discussing complementary approaches, but believed that Members should tread carefully and not 
detract from the fundamental modality of the reque st and offer method that was envisaged in the 
services Negotiating Guidelines and Procedures and in  the July Package.  The second element that 
could be included was an outline of some kind of p ackage to be negotiated on  domestic regulation.  
He said that there had been some progress in this  area and thought that Members could be somewhat 
hopeful in this regard.  Thirdly, on rules, he belie ved that a progress report on the mandates relating to 
Article X on ESM, Article XIII on government procur ement and Article XV on subsidies was needed.  
Most importantly, he thought that a candid analysis of what would be possible and realistic, and what 
would not be possible and realistic, was required. 
188. The representative of the European Communities
, referring to the note by the Chairman, said 
that it asked Members to provide a detailed assessmen t of the current situati on, which was the purpose 
of his intervention.  He sought to underscore  that the European Communities was seriously 
disappointed with the current situation in the servi ces negotiations.  The revised offers mandated by 
the July Package had not, in the European Communi ties' view, redressed the situation created by the 
poor performance of the round of initial offers.  The substantial liberalization commitments the 
European Communities had requested of its WTO partne rs had not been put on the table and the level 
of ambition it had demonstrated had regrettably not been reciprocated.  He asserted that, for his delegation, an ambitious outcome for the services negotiations implied new market access opportunities, which were missing in the offers tabl ed.  The limited improvements had come, in the 
vast majority of cases, from those WTO Members that had already seriously engaged on the occasion 
of the submission of their initial offers.  Those impr ovements, in his delegation's view, did not change 
the overall picture and he said that the overall pi cture would not change with the few additional 
revised offers that might be submitted in the comi ng weeks and months.  He observed that all of the 
signals were very clear in this regard.  In the European Communities' view the time had come to 
seriously consider the ways of addressing the shortc omings in the services negotiations with a view to 
devising ways to give sufficient impetus and ensure  a proper level of ambition and results in the DDA 
negotiations on services. 
189. The representative of the European Communiti es sought to explain in more detail, with 
certain sectoral and mode-related c onsiderations, the reasons that le d had led his delegation to draw 
these conclusions and to communicate his delegati on's expectations in view of the Hong Kong 
Ministerial.  Turning first to certain indications by sector and referring to the transport sector, he said 
that for maritime transport, which was a key sect or for the DDA, the European Communities saw a  TN/S/M/15 
 Page 45 
 
 
 gradual build-up of offers and noted that some 40 Members had existing and proposed commitments.  
Unfortunately, not all offers were of sufficient quality .  In some cases, the re-launch of the results of 
the 1996 negotiations, which should have been automatic , had not been put forth.  He said that solid 
commitments in maritime was vital to world trad e and recalled that these services comprised the 
backbone of all the main global trade lanes by both volume and cost.  On air transport, he remarked 
that few Members had introduced new commitments even  in the three areas directly mentioned in the 
Annex on Air Transport.  His delegation expressed di sappointment in this result.  For the remaining 
part of transport, most activity had taken place in the services auxiliary to all modes of transport and 
in particular in logistics.  The EC supported work on logistics. 
190.   Turning to the telecoms sector, the represen tative of the European Communities said that its 
coverage remained unsatisfactory since it was incl uded in only half of the offers.  This was 
disappointing for a network sector that was critical  to any economy.  The elimination of foreign 
ownership limitations and the adhere nce to the reference paper were two of his delegation's principal 
goals which were very far from being met.  On fina ncial services, the offers on the table were, with a 
few exceptions, disappointing and did not address the European Communities' main interests.  The 
situation was particularly disappointing in insu rance where poor existing commitments had been 
hardly improved.  In banking, offers were far from capturing existing liberalization.  The statement on 
liberalization of financial services that had been discussed earlier in the meeting gave more precise indications on the type of improvements needed to redress this situation.  On environment services, he observed that needs for environment services we re increasing worldwide and the European 
Communities believed they were important as a servi ce that reaped benefits for the environment in 
addition to the services exporters and importers.  Moreover, the liberalization of environmental 
services was the subject of the specific mandate in the Doha Declaration and he said that special 
attention should be devoted to it.  Taking into acc ount that infrastructure segments represent over 80 
per cent of the global environmental services market , the European Communities hoped to see further 
commitments in particular in mode 3, with the co nditions that countries considered necessary in cases 
where companies were invited to provide services to  consumers directly.  Finally, he observed that 
countries hesitated to commit modes 1 and 2 despit e the fact that environmental services could be 
delivered through this mode of supply.  He sai d that this had been th e European Communities' 
approach in its own revised offer for advisory ser vices.  He encouraged others to do the same, in 
particular because advisory services enabled the transfer of know-how that many countries sought. 
191. With respect to computer and related ser vices, the representative of the European 
Communities indicated that his delegation sought full commitments in this sector.  It sought 
commitments that were consistent over the whol e sector.  This could best be obtained through 
scheduling the sector as a whole, namely the two-digit level, CPC 84.  He noted that only 15 Members, other than the EC, had committed or offere d to fully commit the whole sector and eight had 
offered the schedule at the two-digit level.  Th ese figures were encouraging but needed to become 
substantially higher.  On distribution, the Europ ean Communities' main priority related to wholesale 
and retail in mode 3.  From th e development point of view, this was the area where there were 
opportunities for investment as well as transfer of  technology and know-how in developing country 
Members.  He noted that only half the Member s were putting forth meaningful commitments in 
distribution and most offers did not contain any improvement.  Distribution was in fact one of the sectors with the lowest level of commitments.  Turning to construction services, the EC request 
focused on unrestricted market access on national treatment in all sectors for mode 3 and for related 
mode 4 commitments in this infrastructure sector ke y for economic development.  He noted that, to 
date, several developing country Members had ma de offers in this sector which underlined its 
importance.  He further noted that less than half of  the 20 Members that had submitted an offer in this 
sector had responded adequately to the European Comm unities' requests.  Efforts therefore needed to 
be continued and intensified to presen t more substantial offers in the next phase of the negotiations.   TN/S/M/15 
Page 46  
 
 192. On professional services, the representative of  the European Communities said that, although 
certain revised offers appeared to move in the right  direction, including in terms of the terminology 
used, his delegation was concerned with a lack of effective market access in key areas such as legal, 
accountancy, engineering and architectural services.  In particular, in the field of legal services, 
important barriers remained as regarded access to  the foreign legal cons ultancy markets and the 
possibility to enter into partnership or employ locally  qualified lawyers.  The quality of offers did not 
reflect the growing importance of south-south trade in  the interest of developing country Members in 
professional services.  On business services, his dele gation's main interest was in services which 
supported other economic sectors.  This included, among others, management consulting and related 
services and advertising.  Although many Members had commitments in some of these sectors, only a 
few Members had made comprehensive offers in many of them.  On energy services, he said that this 
was a sector that was attracting increased attention in  the negotiations as had been demonstrated at the 
energy services week in March.  The work undertak en by the friends of energy in this respect 
represented a significant support and guide for the Members to undertake commitments while at the 
same time underlining the importance of national policy objectives and regulatory framework.  The 
offers reflected partly these developments.  Howe ver, the number of offers included in energy 
services was still very limited and did not reflect th e importance of this sector for developed and 
developing countries. 
193. On postal and courier, the representative of th e European Communities recalled that the EU 
had requested that Members commit in all the areas, starting from express delivery, parcels, registered 
mail, and on all areas that did not fall under unive rsal service obligations.  In order to do so, 
commitments could be taken both under postal/courier with a clear specification of the activities 
covered.  The European Communities also propo sed that countries adopt a set of additional 
commitments referring to definitions such as uni versal service, anti-competitive practices and 
licenses.  While some Members had started to follow such an approach, the co mmitments in this area 
were very disappointing.  His delegation therefore encouraged Members to consider the importance of 
taking commitments in the non-universal service areas as an important tool for the development of an 
efficient postal/courier system.   News agency services was one of the less addressed areas in offers.  Only two Members had made substantial offers in th is sub-sector and he said much remained to be 
done to ensure that key countries took commitment s on news agencies.  On tourism he said that, 
although it was the most committed sector, there rema ined room for improvement by all Members, 
which would be of interest to developing co untries.  Such improvements would be good for 
development purposes and for consumers.   
194. Making a few comments on modes of supply and referring to individual modes of supply in 
services, the representative of the European Commun ities said that his delegation believed that the 
DDA negotiations needed to include a balanced and harmonious approach to all of them.  He noted 
that this view had also been highlighted in recen t symposia organised by the WTO.  In respect of 
mode 3, while most Members had long realised that the commercial presence of foreign service 
providers created a stable source of external financing, drove economic  growth and generated 
employment, a significant number of restrictions rema ined with regard to this mode.  The European 
Communities encouraged Members to take commitme nts that reduced, and when possible eliminated, 
obstacles related to the right to establish new comp anies and, for existing companies, the right to 
choose a form of establishment, the right to acquire real estate and the removal or narrowing of wide-
ranging and unspecified needs tests.  Most Memb ers, including developing country Members, had 
indicated their particular interest in mode 4.  This  was an area which the EC had also made the central 
focal point of its requests and offers.  Members th at had used the EC's common formatting paper, he 
said, had considerably increased the clarity of thei r commitment and he encouraged others to follow 
suit.  The coverage of graduate trainees, a sub-category that his delegation viewed as development 
friendly, was extremely disappointing.  More commi tments were also needed on contract service 
suppliers and independent professionals  and those on intra-corporate transferees needed to be further 
expanded and improved.    TN/S/M/15 
 Page 47 
 
 
 195. The picture the representative of  the European Communities had described raised  the question 
as to whether the negotiating method that was being used was the most appropriate one in order to 
achieve a substantial outcome in the services nego tiations.  Despite the fact that the Negotiating 
Guidelines of 28 March 2001 clearly indicated in para graph 11 that "liberalization shall be advanced 
through bilateral, plurilateral or  multilateral negotiations" Members ha d thus far exclusively relied on 
the bilateral request offer process. The poor results were, in his view, at least partly due to the 
limitations of this negotiating me thod which did not appear to be the most conducive to delivering 
meaningful results.  In this context and with a view to energising the negotiations, his delegation 
considered it was high time to explore the possibilit y of complementing the request offer process with 
multilateral and plurilateral approaches.  He stress ed that these would complement, and not replace, 
the bilateral request offer process.  Such an appr oach would be fully comp atible with both the GATS 
architecture and provisions and with the Nego tiating Guidelines.  The European Communities 
believed that the July "first approximation" should mention that there was an opportunity to explore 
complementary methods and that the General Counc il should mandate the Special Session to proceed 
to such a direction.  In addition, a discussion at  the Ministerial level could help better steer the 
exploratory phase. 
196. Finally, the representative of the European Communities sought to say a few words on what 
should be the different elements of the services pack age in view of the Hong Kong Ministerial and on 
how Members should organise our future work.  He sa id that the initial shape of such elements should 
be reflected in the July approximation, and stated that from September onwards and until the Ministerial, those elements would need to gradua lly be elaborated.  He said this would require 
intensive work both in formal and informal mode and in different formats.  He encouraged the 
Chairman to undertake such work.  He felt that there needed to be an acknowledgement of the 
importance of the services sector and that the ser vices market access negotiations constituted a core 
element of the round.  In this regard, the Eu ropean Communities believed that Members should 
reiterate the need for an ambitious outcome in the services negotiations in order to ensure a balanced 
overall outcome of the round.  He recalled th e unsatisfactory situation and stressed the 
appropriateness of exploring alternative complement ary approaches to spur the negotiations.  He said 
that the rules negotiations, including on domestic re gulation, needed to find a place in the package.  
He said that the negotiations on government pr ocurement, subsidies and emergency safeguard 
measures and domestic regulation did not appear to point towards completion by Hong Kong.  He said 
that the objective for Hong Kong should therefore be to take stock of the situation and to provide all 
necessary guidance on all the rules negotiations.  The developmental component also needed be 
included in the services package.  The on-going discu ssions on special and differential proposals and 
on LDCs could, in the European Communities' view, pr ovide a basis for this element.  Finally, he said 
there was a need to prepare the ground for the post-Hong Kong process, the mention of which should 
include, but by no means be limited to, the date for the submission of the next round of offers.  
Overall, he said that Members needed to mainta in the objective of an ambitious outcome for the 
negotiations and he urged all Members to act  collectively to achieve this outcome.  
197. The representative of  Brazil
, referring to the Chairman's request that delegations present their 
assessments of the current services negotiations as we ll as some ideas for future work, said he wished 
to contribute to this exercise.  He said that it was true that the services negotiations faced difficulties 
and that there was hard work to be done in order to  build a meaningful set of commitments.  Strictly 
speaking, however, the same assessment could be made  of all the other segments of the negotiations 
of the round.  On services, his impression was that the difficulties were not insurmountable and 
should not be cause for alarm.  Brazil believed that political attention was needed most of all, for 
instance in agriculture, while serv ices was a question of accomplishing a great deal of technical work 
in the months to come particularly with a view  to overcoming the imbalance which favoured the 
developed countries.  Turning first to difficulties in market access, he said that the correct approach 
was not just to put together aggregate figures that drew an anonymous panorama, but rather to examine country-specific problems or group-specific problems, which lay behind those figures.  He TN/S/M/15 
Page 48  
 
 recalled that to date some 68 initial offers repr esenting 92 Members and 22 revised offers representing 
46 Members had been presented.  Given that only one  month had elapsed since the target date for the 
presentation of revised offers and that many Memb ers had announced that they would soon submit 
their revised offers, he said that it was somewhat premature to talk a bout the lack of a large number of 
revised offers.  The question to be addressed, his delegation believed, was the fact that many initial 
offers, mostly offers by LDCs were still not on the table.  He asked why LDCs had not chosen to 
present their offers.  While he did not seek to inte rpret the LDCs' views, he had little doubt that this 
situation was related to the fact that LDCs rema ined unconvinced that they had something to gain 
from services negotiations.  He recalled that paragraph (c) of Annex C of the July Package had been  intended to overcome this misapprehension in calling fo r special attention to be given to LDCs.  In his 
view, to date this mandate had not been fulfilled.  The same reasoning applied to the other developing 
countries that had not presented initial offers.  If th e services negotiations offered nothing for them, he 
asked, why should they submit offers?  He identified the first problem and its cause, namely the lack 
of many initial offers and misapprehension on the pa rt of developing countries, including LDCs.  He 
said that were this cause not addressed and were a sy stem not devised to provide for LDCs' and other 
developing countries' interests in services, the offers outstanding would likely not be submitted. 
198. The representative of Brazil said that a second set of problems stemmed from the quality of 
the revised offers that had been presented.  He sai d that their quality was variable as some were more 
comprehensive than others.  Brazil's offer, like many  of the offers from developing countries he said, 
reflected an effort to bring about new commitment s, to incorporate new s ectors and to consolidate 
new opportunities.  Others, mostly by developed c ountries, were a re-telling of old Uruguay Round 
commitments, which contained no improvements, or at times some backtracking in areas of interest to 
developing countries.  They retained dozens of economic needs tests without giving transparency to the relevant criteria.  Some offers were transpar ent, while others either hid important areas using 
dubious inscription techniques or cancelled out sectoral commitments through horizontal restrictions.  One offer, for instance, allegedly proposed numerical  ceilings in mode 4;  however, since the numbers 
were not given, strictly speaking, they could not be  considered numerical but discretionary barriers.  
He said that some of the traditional demandeurs  in sectors like transportation or financial services 
failed to provide a reasonable level of market ac cess in the same sectors that they insistently 
demanded from others.  Given these specific probl ems, Brazil believed that it would not be 
appropriate to consider the offers as a whole,  but rather it was necessary to analyse specific 
shortcomings of specific offers.  This analysis need ed to be done, not in a vacuum, but in light of the 
main negotiating reference which was Annex C.  Sp ecially, paragraph (d) calle d for quality offers and 
for special attention to be given to sectors and m odes of supply of export interest to developing 
countries.  He was aware that the formal meeting was not the occasion to enter into the details of 
individual offers.  Rather, bilate ral meetings and subsidiary bodi es of the Council should be the 
venues for such technical work.  He reiterated th at in general the revised offers of developed 
countries, in Brazil's view, were very disappointing.  He said that it was the deficiencies of these 
revised offers that should be examined primarily , since developing countries were making a much 
bigger effort.  He remarked that the developed coun tries with the biggest economies had so far offered 
nothing in mode 4 and close to nothing in specific sectors.  He said that were Members not to correct this imbalance, Annex C would be subverted an d they would risk having a round for free for 
developed countries.  He hence identified a second pr oblem and its solution, namely the poor quality 
of some revised offers and an offer-by-offer analys is.  He said that this could be done bilaterally, 
plurilaterally or multilaterally, in line with Annex C and the GATS structure with a focus on specific 
problems of specific offers.  He said that any sort of benchmarking would dissolve these specific 
problems in a formless amalgam and transform i ndividual responsibilities into alleged collective 
failures, which was not an acceptable approach.  Na turally, each country or group of countries could 
have its own standards to evaluate offers and Br azil welcomed the initiative by India and a group of 
Members to indicate the framework they would u se to assess mode 4 commitments.  He said it was a 
very different thing to press all Members to accept one Member's standards for evaluation.  Such as 
approach would destroy confidence and, he warned, make a deal very unlikely.    TN/S/M/15 
 Page 49 
 
 
 199. Turning to the information tool that it had been proposed the Secretariat prepare, the 
representative of Brazil said that this idea was usef ul as it sought to create more workable ways to 
deal with a great number of Members' proposals on  several aspects of services.  Naturally, this 
initiative, he said, could not replace the role of  Members in evaluating offers and discussing each 
others' positions.  He said that a th ird set of problems in the servi ces negotiations related to rules 
negotiations, namely on safeguards, subsidies, government procurement and domestic regulation, 
which had achieved different levels of progress.  He  said that all of these areas needed attention in 
order to fulfil the mandate in paragraph (e) of Annex C, which itself was based on the mandate contained in the GATS.  He remarked that, in  domestic regulation, di scussions had acquired good 
speed.  He said that the question that confront ed Members was how to move from existing proposals 
to negotiating mode.  In subsidi es, the fundamental question of de finitions persisted and a more 
technical discussion was required.  Government procurement could progress as long as the mandate of GATS Article XIII was not put into question.  As many delegations had pointed out in the WPGR, the 
GATS was clear in indicating that market access and national treatment dimensions were not to be addressed in any government procurement disciplines.  Regarding safeguards, there appeared to be a 
strong case for their necessity and feasibility.  Sa feguard-like clauses were inscribed in many 
Members' schedules as well as in regional agreements on services.  The question was how to deal with them multilaterally.  He said that these realities begge d the questions as to how to enter a negotiating 
mode in domestic regulation, how  to define subsidies, how to  discuss government procurement 
without detracting from GATS and how to devise a mu ltilateral safeguard clause.  He said that the 
possible answers to those challenges were manifold, but that they required a great deal of technical 
work in the appropriate bodies under the appropriate  mandate.  He stressed that the full development 
of the GATS rules would in itself be a great step forward and would provide a reliable juridical framework for trade in services as well as a stimulant for further specific commitments.  In short, the 
situation was complex but manageable. Members had most of the instruments they needed, such as 
the technical bodies and the procedures, to indicate their expectations.  He said that the abstract 
concept of levels of ambition became pointless if Members tried to use it as a parameter for the 
negotiation.  The search for levels  of ambition could not justify benchmarks that were based on 
parameters that would accentuate the present imbala nce between developed and developing countries' 
interests in services.  No generic approach c ould capture the specific problems faced and most 
certainly could not solve them.  The causes of the problems could not be masked, because they 
stemmed from specific offers and positions.  He sa id that only by dealing with the causes of the 
problems could Members generate enough momentum, c onfidence and the adequate balance, to bring 
the process forward.  He reiterated that Brazil was fu lly prepared to contribute  to the Council's work 
in order to overcome the present difficulties. 
200. The representative of Hong Kong, China
 thanked the Chairman for the note he had prepared 
in Job(05)/99 which he said had greatly facilitated his delegation's preparation for the meeting. He 
said that the Chairman in his note stated that the services negotiations had not been progressing in a 
satisfactory manner, which he said respectfully was an under-statement.  He observed that 27 months 
after the deadline for initial offers, only 68 Member s had submitted an offer and one month after the 
deadline for revised offers, only 21 o ffers had been received.  He said that even if the offers tendered 
had been of excellent quality the situation could still not have been described as satisfactory.  He said 
that those Members which had conducted their own assessment of the offers had concluded that the 
offers left a great deal to be desired.  While he acknowledged that it was early in the process to draw 
definitive conclusions about the shape of the overall p ackage, he said that Me mbers awaited with keen 
interest the revised offers of a number of major ma rket participants and a critical mass of Members.  
The observations he could make at the present j uncture were that, unless Members collectively found 
ways to make much more substantive progress in the negotiations, they were  quickly headed for a 
serious crisis in the services negotiations.  He also observed that a number of the revised offers 
contained improvements in sectors and modes of supply of interest to Members and in particular to 
developing countries.  In this regard, he expressed his delegation's appreciation for the initial offers 
from a number of developing Members.  Some of these offers included some impressive entries which TN/S/M/15 
Page 50  
 
 reflected these economies' liberalization efforts and corresponded to their requests made to the rest of 
the membership.  He said that the attention given by  the revised offers to infrastructural sectors such 
as logistics, transport, business services, inform ation technology and telecoms services, were 
important to economic development, as had been  shown earlier in the meeting by UNCTAD.  
Notwithstanding this, the improvements in the revised  offers, while demonstrating the membership's 
willingness to strive for progress in politically difficult ar eas, remained rather m odest.  In other words, 
his delegation interpreted the offers  as signs of engagement, but not ac tions to actually move forward.  
201. The representative of Hong Kong, China said that his second observation was that the core 
reality remained that the overall package of offers  did not reflect a high level of ambition for the 
round.  There remained much work in terms of impr oving the offers on the table so as to make them 
commercially meaningful.  The present package of of fers would not achieve a balance with the other 
negotiating subjects, especially other market access p illars.  The urgent task was therefore to create a 
situation in which the services negotiations, apar t from bringing new commercial opportunities to 
businesses, could fulfil its role of providing a balance for the overall Doha Round.  His third 
observation was disheartening in that he had sensed that Members might be tr apped in a vicious cycle 
of offers of low ambition leading to further offe rs of low ambition.  Hong Kong, China like other 
Members no doubt, in the process of compiling their revised offers, had encountered difficult questions from their domestic constituencies as to wh at they would receive in return for the offers 
they were making.  It was difficult to see how the current pace of small increments of improvements through each series of requests and offers would lead  to substantive and meaningful results.  He said 
that,  while the current round of revised offers bein g tabled would not be the last round of offers 
submitted , time was running out given that services o ffers required a considerable amount of time to 
be prepared.  Hence, one conclusion he drew w as that unless Members found a way to increase the 
level of ambition and break this vicious cycle, th e chance of reaching a substantive outcome in the 
services negotiations, irrespective of how many furt her deadlines for revised offers would be set, was 
becoming slim.   
202. The representative of Hong Kong, China said hi s delegation believed Members were at a 
critical juncture.  For this reason, he sought to give a rath er elaborate evaluation of the state-of-play of 
the market access and rules negotiations, which would be made available in a written statement that 
would set out, inter alia , his delegation's detailed account of what it would have liked to have seen in 
other Members' offers and its levels of ambitions  in some of the sectors and modes of supply of 
interest, including telecommunications, logistics, ma ritime transport, audiovisual and computer and 
related services.  He said that, in presenting th is written statement, his delegation sought to 
complement the other presentations that had b een made, for instance by Switzerland on logistics 
services.   
203. Turning to the first detailed analysis on telecommunications, the representative of Hong 
Kong, China said that his delegation subscribed to  the joint statement on the liberalization of 
telecommunications services and fully associated itself with the statement made by Singapore on 
behalf of a number of delegations in respect of th eir evaluation on and aspirations for this sector.  He 
appreciated the efforts by some developing countries  in capturing the autonomous liberalization they 
had undertaken.  However, his delegation remained dissatisfied with the offe rs in telecom which it 
considered as far from meeting its level of ambiti on for this sector in the round.  Specifically, the 
offers were lacking in a number of aspects.  First, Hong Kong, China wa s looking for comprehensive 
sectoral coverage, meaning that the commitments should cover both basic telecom and value-added 
services, and that commitments should be based on common, generic, functional and technologically-
neutral classifications and definitions.  However, quite a number of offers had used proprietary 
classifications and definitions.  Second, Hong Kong, Chin a sought full commitments and removal of 
all market access and national treatment limitations, especially those which were particularly restrictive.  However, numerical quotas, exclusiv e license, restrictions on supply through specific 
networks, foreign equity, forms of establishment,  ENTs, and nationality a nd residency requirements  TN/S/M/15 
 Page 51 
 
 
 remained in many offers. Third, Hong Kong, Chin a sought full commitment to the reference paper.  
However, only 35 out of 60 offers had done so, a nd only 5 offers had newly offered to commit to the 
reference paper.  Fourth, Hong Kong, China sought the removal of all MFN exemptions, including the 
ones for accounting rates (which were unnecessary in view of the Understanding on Accounting 
Rates), but also other exemptions not conducive to mu ltilateral liberalization of  the sector.  However, 
only four out of a total of 18 MF N exemptions had been offered to be removed.  These observations 
were borne out by the statistical analysis that had been circulated as a room document.  He said that 
Hong Kong, China was ready to fully embrace the obj ectives it had set out for this sector in its own 
commitments and hoped for favourable responses from its trading partners. 
204. Turning next to logistics services, the represen tative of Hong Kong, China said that his 
delegation subscribed to the joint statement on the liberalization of logistics services (TN/S/W/34) and 
had co-sponsored the logistics checklist (TN/S/W/20).  It had also fully endorsed the statement made 
by Switzerland on behalf of a group of interested Members regarding logistic s services.  Regarding 
the offers on the table, Hong Kong, China was pleased to see that some Members were using the 
logistics checklist as a tool to guide undertaking co mmitments, especially in respect of core freight 
logistics services, related freight logistics services and non-core freight logistics services.  He had also 
found the logistics checklist a useful tool for evalua ting offers in terms of coverage of the range of 
services that were involved one way or another in th e logistics chain.  Hong Kong, China was still in 
the process of using the checklist to evaluate offers.  Preliminarily, he noted that some offers gave 
fairly good coverage to the range of services in th e checklist, especially in the categories of auxiliary 
services and transportation.  There were also ma ny gaps in the offers when analysed using the 
checklist.  Offers in certain modes of transport a nd distribution services were not very impressive.  In 
quite a number of offers the coverage of core l ogistics services, including services auxiliary to all 
modes of transport, was still far from satisfactory. 
205. Turning to maritime transport services, the representative of Hong Kong, China said his 
delegation had consistently  taken a keen interest in pursuing maritime transport services since the 
Uruguay Round.  Hong Kong, China had co-sponsored, together with a large number of delegations, 
three joint statements concerning liberalization of  and negotiations on mar itime transport services 
submitted in 2000 (S/CSS/W/8), 2003 (TN/S/W/11) and at the previous meeting (Job(05)/22).  Hong 
Kong, China had scheduled commitments and offe red improvements according to the Maritime 
Model Schedule, which it had used in evaluating th e offers.  He also fully supported the statement 
made by the delegation of Japan, on behalf of a group of Members with interests in maritime transport 
services.  In this regard, he shared the concerns expressed about the low quality of offers in maritime 
transport services as measured against the maritime m odel schedule.  One-third of the offers had no 
commitment on maritime, and even for those o ffers on maritime, many gaps remained when 
compared with the maritime model schedule.  Despite the Decision of the Council to resume 
negotiations on maritime transport services on the b asis of the 1996 conditional offers or improved 
ones, there were still Members that had not included their previous conditional offers in their offers 
for this Round. 
206. Turning to audiovisual services, the representativ e of Hong Kong, China said that despite the 
strong interests expressed by a number of key participants, including Hong Kong, China in the negotiations, there was little progress in substance.   In particular, his delegation was gravely 
concerned with the attempts by certain Members to create an a priori  exclusion of this sector in the 
current round of services negotiations.  In this rega rd, Hong Kong, China, together with a number of 
other Members, had co-sponsored a joint statement concerning audiovisual services.  He said that, in 
order to move forward the negotiations in this key sector of interest to many Members, a target that his delegation sought was for all Members to expl ore with an open attitude how commitments could 
be made in audiovisual services in line with their national policy objectives using the flexibility of the 
GATS.  He was particularly mindful that those Members that had tried to exclude this sector from TN/S/M/15 
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 negotiations had also emphasised the flexibility of the GATS for the purpose of making commitments 
in other sectors that had sensitivities to their trading partners. 
207. Turning to computer and related services, th e representative of Hong Kong, China said his 
delegation subscribed to the joint statement on the negotiations on computer and related services 
(TN/S/W/38).  He fully associated his delegation w ith the statement made by Chile on behalf of 
Members interested in the liberalization of this sector.  Hong Kong, China maintained a fully liberal 
regime in this sector and looked forward to achieving the aim of full liberalization of this sector across 
the broad membership. 
208. He said that his delegation, in addition to a number of specific interests, also had keen 
interests in a number of cross-cutting issues which were of both systemic a nd substantive importance 
to market access negotiations.  Turning to the firs t of these cross-cutting issues, MFN exemptions, he 
reiterated that Hong Kong, China attached particular  importance to MFN exemptions.  Together with 
a number of co-sponsors, his delegation presented a statement (S/C/W/258) on the importance of the 
MFN principle, the temporary nature of MFN exem ptions and the systemic importance of the MFN 
exemptions review.  Moreover, in recognition that MFN exemptions were also subject to negotiations 
as part of the on-going services negotiations, Hong Kong, China had co-sponsored a joint statement 
(Job(05)/125) concerning the negotiations of MFN exemptions.  In its view, MFN exemptions 
represented a major derogation from the MFN principl e, which was the cornerstone of the multilateral 
trading system and underpinned non-discriminatory tr ade.  The existence of MFN exemptions, he 
said, could give rise to uncertainty over prefer ential treatment that might be accorded in a 
discriminatory fashion and could potentially undermine the value of market access concessions 
offered.  Those MFN exemptions which purported to  apply reciprocity conditions could also have a 
chilling effect on negotiations for further market access commitments.  In this regard, Hong Kong, 
China noted with grave concern the lack of progr ess in removing MFN exemptions despite the clear 
interest expressed by a number of Members in th is regard.  The fact that over 400 MFN exemptions 
remained and that Members had offered to rem ove fewer than 10 per cent of these was a cause for 
concern.  He stated that his delegation soug ht the removal of a substantial number of MFN 
exemptions and, for those that were justifiably ma intained as exceptions, a greater degree of clarity 
and specificity, including their duration. 
209. Turning to classification and scheduling, the representative of Hong Kong, China said that 
another cross-cutting issue of particular importance were "the three C's": clarity, certainty and comparability of schedules.  Referring to a suggestion by another Member to add "coherence" to this 
list, he said that these four elements were essen tial, as schedules of specific commitments represented 
legally binding obligations to main tain market opening conditions.  He said that in order to allow the 
value of commitments to be clearly evaluated, they needed to be specified with sufficient legal clarity 
and certainty, and needed to be made comparable through the use of common classifications and definitions.  He said that, given the two panel cases on services, the importance of coherence in a 
Member's schedule would be important so as to a void legal uncertainty over the interpretation of 
commitments.  In this regard, the on-going work in the CSC on classification and scheduling issues, 
he said, could provide useful technical inputs to individual Members in formulating their offers or 
evaluating others offers.  Hong Kong, China also  believed that the information tool aimed at 
providing assistance to individual Members in the negotiations would provide a useful source of 
reference on classification and scheduling in individua l sectors and modes of supply.  He recalled that 
the delegation of Switzerland in an earlier submis sion to the Council (TN/S/W/21) had also provided 
a number of useful guidelines that could help enha nce "the four C's" of scheduling.  Hong Kong, 
China would be evaluating the quality of its trading partners' offers not only on substance, but with 
these elements in mind.  
210.  Turning to cross-border trade in services, th e representative of Hong Kong, China said that, 
building on the lessons learned from the cross-borde r symposium held in April, his delegation was  TN/S/M/15 
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 also looking for greater attention to be given to  improving commitments in cross-border trade in 
services.  The continued development of global communication infrastructure and the use of new 
technology had created a huge potential for the su pply of services on a cross-border basis in areas 
such as information technology a nd other business services.  He noted that his delegation, along with 
a number of other Members had co-sponsored a paper that aimed at exploring issues that would help 
facilitate the improvement of commitments for cross- border trade.  He said that in order to fully 
realise the potential of cross-border supply of services, especially by electronic means, Members would need deeper liberalization of enabling services such as telecom and other information 
technology services. 
211. Turning to the issue of the rules negotiati ons, the representative of Hong Kong, China 
reiterated that his delegation consider ed rule-making to be an integral part of the services negotiations 
alongside market access.  It attached great importa nce to the rules negotiations which could further 
strengthen the legal clarity and certainty of commit ments and raise the overall confidence level in the 
negotiations.  Indeed, Hong Kong, China considered that clear and pro-liberalization rules in services 
could serve the dual purpose of raising the comfort level of regulators and the confidence level and 
investment stability for foreign service providers.  His delegation therefore sought outcomes in rules 
that could support the market access component of th e negotiations.  However, it also recognised that 
rule-making was by nature an on-going task and, he  observed that it appeared increasingly likely that 
Members would be unable to finish all the rule-making work within the round.  Therefore, in order to reach meaningful outcomes in rules negotiations, hi s delegation believed that Members needed to be 
realistic about what could be accomplished within the round bearing in mind the timeframe and work 
plan ahead.  Inevitably, unfinished rule-making would need to be left for furt her work in the future.  
There was the need for a reality check on each of  the rules subjects with a view to gauging the 
different levels of ambition in each rule-making area, the level of support for each item and the 
possible outcome for each.  In the light of this  reality check, Members needed to arrive at 
corresponding work plans.  This exercise was par ticularly timely given the "first approximation" as 
well as the task of mapping work prior to the Hong Kong Ministerial Conference. 
212. Referring more specifically to domestic regula tion, the representative of Hong Kong, China 
remarked that this area of rule-making had attract ed the greatest interest for the development of 
disciplines.  Many Members had expressed an interest  in pursuing disciplines applicable to all five 
areas of measures under Article VI:4 with some al so envisaging that such disciplines would apply 
horizontally across all sectors.  Hong Kong, China believed that the appropriate juncture had been 
reached for developing an outline of possible elemen ts (both cross-cutting and in specific areas) for 
regulatory disciplines by the Hong Kong Ministerial C onference.  These elements could, in turn, form 
the basis for further intensive negotiations and th e development of disciplines after the Ministerial 
Conference.   
213. Referring specifically to subsidies, the re presentative of Hong Kong, China said that, 
notwithstanding the relatively early stage in which the discussions on subsidies were in comparison to 
other rule-making areas, there appeared to be good momentum in further substantive work, especially 
in respect of the information exchange.  He expressed his delegation's grave concern that the 
information exchange required by the negotiating mandate remained unfulfilled.  Hong Kong, China 
looked forward to constructive engagement from Members to make progress on the information 
exchange and the development of necessary disciplines.  He said that in view of the continued failure 
to fulfil the mandate for information exchange , however, his delegation would be looking for 
guidance from Ministers to complete the informati on exchange in order to provide a more solid 
information base upon which negotiations could make substantive progress.  Meanwhile, his 
delegation looked to continue discu ssions on substantive and technical  issues related to the subsides 
negotiations.  On emergency safeguard measures, he said that the negotiation on ESM continued to 
pose both intellectual and political challenges.  On the one hand, discussions had not enabled 
Members to identify in a substantive manner the crux of the problem.  On the other hand, the political TN/S/M/15 
Page 54  
 
 case for a safety valve when undertaking liberal binding commitments and moving beyond the status 
quo continued to be made.  This raised the ques tion of the linkage between the presence of a safety 
valve and a more liberal level of commitments.  In terms of a way forward, he said that Members should continue to frame the problems in a substa ntive manner by focussing on concrete situations 
where bound, liberal commitments had given rise to th e need for a safety valve and how a safety valve 
could be devised and applied in such situations.  Meanwhile, his delegation saw the need to address 
the political issue of how to give reassurance and pr ovide comfort to regulators and stakeholders when 
making liberal market access commitments.  To this  end, Members would need to think creatively and 
explore different alternatives, including interim ones.   
214. The representative of Hong Kong, China said that, in  the light of its evaluation of the state-of-
play, its conclusion was that Members could not continue to drift.  There were a number of occasions 
in the near future prior to the Hong Kong Minist erial Conference that would allow Members to pick 
up the pieces and to put the services negotiations on a healthier track.  He urged other Members to respond as fully as possible to the Chairman's note in  Job(05)/99 and he hoped that his delegation had 
assisted the Chairman in providing him with a sense of how it saw the current situation and what it 
sought in this round.  He hoped that the Chair would be in a position to report to the TNC, but he also 
expressed the hope that the Chairman would use the July approximation as an opportunity to outline 
for Ministers and senior officials the reality of  the services negotiations and to ask them for 
instructions and an endorsement on the steps that needed to be taken in the run up to Hong Kong and 
beyond in order to rectify the situation.  Hong Kong, China sought clear guidance from Ministers on both substance and processes.   In order for this  to materialise, Members needed to lay the 
groundwork properly.  He urged the Chairman to ma ke a detailed and honest evaluation of the current 
state-of-play in the services negotiations to the TNC and to present to the TNC with what he detected 
from Members' statements to be the aggregate level of ambition.  He further urged the Chairman to 
recommend to the TNC that consultations be held prior to the Hong Kong Ministerial Conference on 
what could be done within the negotiating mandate, structure and guidelines to supplement the present 
negotiating approaches.  He said it was important to be better able to express the aggregate level of 
ambition in a manner that complemented the determin ation of the level of ambition in other areas of 
negotiations under the DDA.  He said it was clear th at any such approaches would have to be in line 
with the Negotiating Guidelines and Annex C of the Ju ly Package.  He also urged the Chairman to 
consider developing a services package for the Hong Kong Ministerial, including ideas on process post-Hong Kong.  Specifically, he said that his delega tion would want Ministers to give instructions 
on effective approaches that would be conducive to th e intensification of the services negotiations in 
the new year.  He reiterated that this intensificati on referred to both market a ccess and rule-making in 
parallel.  He said that Hong Kong, China bore in mind the development perspective and hoped that 
any work plan the Chairman might develop would em brace all these elements so as to provide a basis 
that all Members could endorse.   
215. The representative of Argentina
 said that the state-of-play presented by the Chairman earlier 
under this item, in his view, could lead Members to erroneous conclusions.  The statement that 
Members were facing a crisis or possible crisis and that the negotiations were behind schedule, was an 
assessment that one found among some Members and in the press, and which Argentina felt was not 
in line with reality.  The pertinent question revol ved around the point of reference for determining 
whether the negotiations were behind schedule, for example, in terms of the limited objectives of the 
services negotiations or other negotiations or the r ound as a whole.  He said that services could not be 
analysed as an isolated phenomenon.  The service s negotiations represented an element that would 
form part of the necessary balan ce in the results of the round.  An isolated examination of any 
element, he said, could lead to an imbalance in th e process and hence in the final results.  While some 
delegations believed there was a crisis or lack of progress, Argentina had a somewhat different view.  
Firstly, it had limited interests in services and had ma de very specific requests in areas which were not 
perhaps of central interest to all delegations.  Fo r that reason, the request and offer approach was 
essential in order to ensure that negotiations re lated to commitments in sectors and supply modes  TN/S/M/15 
 Page 55 
 
 
 which were of interest to Argentina.  In evalua ting the offers on the basi s of requests, Argentina 
concentrated on mode 4 commitments in a series of sector, such as computer and related services, 
services related to agriculture, distribution services and sporting services.  He said that in a few cases 
the offers of the countries to which Argentina had addressed a request corresponded to its interests.  
However, the offers of the developed countries seem ed to respond exclusively to requests emanating 
from other developed countries.  As a result, th e proposed commitments were of interest to the 
developed countries, such as for services related to  information technology and not in other sectors 
and modes of interest to developing countries.  Ar gentina viewed with some concern the changes in 
the classification for some sectors which could lead to  a situation where, in some cases, commitments 
entered into in the Uruguay Round might be withdrawn.  Argentina was still studying this aspect of 
the revised offers which it had r ecently received.  He said that one example was a major improvement 
through the addition of a CPC for accountancy servi ces.  However, he wondered whether this would 
result in clear and precise specific commitments that  would prove useful for other Members.  With 
regard to legal services, a change had been intr oduced into the initial offer that required previous 
residence.  In the case where an Argentine supplier sought to carry out a study in another country, it 
would not be able to do so because of th e requirement for previous residence.  
216. The representative of Argentina said that some delegations had suggested the introduction of 
other elements into the Negotiating Guidelines. They had called them benchmarks or common 
baselines.  He said that in some cases, these s uggestions seemed contrary to the objective of the 
development aspect of the round and the flexibilit y of the GATS.  Argentina believed that these 
apparent solutions were not appropr iate and did not address the real problem.  Rather, they reflected 
the particular interests of a few Members.  Arge ntina could not accept in any way the modification of 
the Guidelines and the creation of an artificial level of ambitions.  He said that changing the 
Guidelines was comparable to breaking the thermomete r in the case of a high fever instead of trying 
to find the cause of the illness.  On benchmarks, he said that some countries had indicated they had 
achieved a high level of commitments.  He asked wh ether these countries would be able to attain the 
benchmark of the recently acceded Members, wh ich had been obliged to include 130 or 140 sub-
sectors in their lists.  He thought this was worth noting and, in this regard, welcomed the offer 
submitted by Croatia and saw in it a very high level of commitment.  He said that the problem in the 
negotiation from Argentina's perspective, revolved around a number of elements.  Firstly, there was 
the characteristic of trade in services which was es sentially trade between developed countries.  The 
exports of these countries represented some 76 per cent of total service exports and their imports 
represented a similar percentage.  Moreover, 80 pe r cent of service exports was comprised of trade 
between OECD countries.  Latin America had not made any progress in its participation in world 
trade in services over the preceding ten years.  By th is he did not mean to say that Argentina would 
remain passive, but rather that Argentina needed to  remain cognisant of the situation and seek ways to 
change it.  Secondly, there was the lack of commitm ent by certain Members, especially the developed 
countries in relation to Articles IV and XIX and pa ragraphs 2, 3, 4, 5 and 12 of the Negotiating 
Guidelines.  Thirdly, there was the lack of progress in  other areas, and in particular in agriculture.   
Referring to the Chairman's observation that initial o ffers were to have been submitted over two years 
earlier, he observed that the same deadline applied in the agriculture negotiations.  He said that 
Argentina had not submitted its revised offer because it felt that there had not been any real progress 
made in the overall negotiations and in particular in the area of agriculture.  Hence, there had been no 
progress that could justify an improvement in the in itial offer.  He urged a number of Members to 
examine Argentina's initial offer since it had been one of the first countries to make substantial 
improvements as regards mode 4 and sectoral coverage.   
217. The representative of Argentina said these we re the three problems his delegation had 
identified and were the principle causes of the current situation. The solution implied the 
implementation in good faith of the Negotiating Guid elines and in particular the paying of special 
attention to the sectors and modes of supply which we re of interest to the exporters of developing 
countries and provided flexibility so that the devel oping countries could open fe wer sectors, liberalise TN/S/M/15 
Page 56  
 
 fewer types of transactions and progressively op en their markets in line with their level of 
development.  When developing countries granted ac cess to their market they should have the ability 
to link to these commitments the conditions which w ould result in attaining the objectives of Article 
IV.  Argentina was ready to work in the different groups, but did not want to  sacrifice quality in the 
interest of time pressures.  The difficulties to which he had referred needed to be addressed in order to 
ensure that the GATS provided value-added for all Memb ers in the form of clear rules.  He said the 
situation was a complex one for which a solution could be found.  
218. The representative of Peru
 thanked the Chairman for his detailed assessment on the progress 
in the negotiations, which he said was under study in capital.  He recalled that Peru believed that it 
was important to achieve ambitious results in all areas of negotiation.  Peru was concerned that the 
negotiations in services were progressing slowly.  This  was reflected in the low level of ambition of 
most of the offers and specifically their complianc e with Article IV, as well as in the absence of a 
number of developing country initial offers.  He recognised that efforts had been made to present 
offers in recent weeks and expressed concerned with  the delays in achieving disciplines in domestic 
regulation and subsidies.  In this  regard, he expressed his delegation's support for the APEC ministers' 
declaration.  He hoped that Members would fulfil the objectives they had set out for ourselves in 
Doha.  With regard to market access, he said Peru  had made 16 revised requests and hoped that they 
would be taken in to account when preparing their o ffers, particularly with respect to mode 4 as set 
out in Article IV.  He said that a preliminary examination of the horizontal commitments of the 
revised offers had led him to the conclusion that there had not been significant improvements in commitments on mode 4, which was a source of deep concern for Peru.  Notwithstanding these 
concerns, he said that Peru had demonstrated its  commitment to the negotiations through the recent 
submission of its revised offer.  It included signi ficant improvements to both horizontal and specific 
commitments.  It addressed the requests received fro m other Members.  The horizontal commitments 
contained broadened mode 4 commitments in all th e categories contained in document TN/S/W/31.  
Sector specific commitments included new commitm ents in professional services, computer and 
related services, research and development services, real estate services, rental and leasing services, 
other business services, distribution services, education services, environmental services, tourism services rail transport, etc. 
219. Turning to the issue of benchmarks, the represen tative of Peru said that it was his delegation's 
understanding that this proposal sought to improve th e offers in services.  As far as he had understood, 
this issue was to be addressed at a forthcoming mini-M inisterial meeting.  He noted that a number of 
delegations had proposed new modalities.  He said that this raised a number of concerns for Peru.  On 
the one hand, Peru was concerned about the sy stemic consequences that a negotiation based on 
benchmarks could have.  Benchm arks could imply changing the Negotiating Guidelines which had 
been agreed to some four years earlier and which included the principles of flexibility under Article 
XIX, as well as a commitment to liberalise trade in ser vices in sectors and modes of supply of interest 
to developing countries as set out under Article IV.  Transparency in the negotiation process was also 
an element that needed to be borne in mind, especi ally in the context of suggested minimum standards 
or parameters.  His delegation w as concerned with repeating the events after the Uruguay Round in 
which four sectors had been chosen for further ne gotiation and deeper liberalization, only to see 
advances in financial and telecommunications ser vices to the detriment of mode 4 and maritime 
transport.  He said that any approach could no t imply the accentuating of existing asymmetries but 
rather needed to achieve a balan ce.  The approach needed to include sectors and modes of supply of 
interest to developing countries and fully respect  the flexibilities that were included in Articles XIX 
and IV.  He said that it was appropriate to recall that Members had reached a key moment in the negotiation and that all delegations would need to make efforts to move the process forward.  He 
expressed his delegation's confidence in the Chairman 's leadership in assisting delegations to work 
intensively on technical issues and to achieve balanced and tangible outcomes in disciplines and 
market access.  TN/S/M/15 
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 220. The representative of Jamaica  recalled that when introducing his country's initial conditional 
offer, he had emphasised the importance Jamai ca attached to the principle of progressive 
liberalization.  He had further emphasised that a ll participation in the negotiations would need to 
reflect fully this principle.  He had also indicat ed Jamaica's willingness to engage constructively, as 
witnessed in Jamaica's offer, which focused main ly on the telecommunications sector and proposed 
the removal of an MFN exemption.  He added that the offer included a technical clarification which 
served to make clear the scope and coverage of  existing commitments with emphasis on education 
and health services.  Referring to the informati on provided by Singapore on  the number of requests 
made by Singapore and the number of requests re ceived, he said that Jamaica thought that the 
imbalance in requests was perhaps as important as the imbalance in offers, because it reflected the 
difficulty developing countries we re having in identifying pr ecisely how to proceed in the 
negotiations and pursue their interests.  He said he  would have liked to have seen as much attention 
focused on ensuring that that developing countri es were able to make requests as had been 
consistently given on ensuring that they made offers.  
221. Turning to a few comments on Jamaica's objectiv es in the negotiations, the representative of 
Jamaica said that these were to obtain improved acc ess to external markets for its services suppliers, 
to ensure the right to regulate the services sector  in accordance with national policy objectives, to 
conclude the negotiations on GATS rules and GA TS regulations which were equally critical 
components of the negotiations, and to find effe ctive ways to address the special needs and 
circumstances of small service suppliers.  He said  that, to this end, Jamaica was interested in 
improved market access for its services suppliers in sect ors and modes of supply of interest, namely in 
professional services such as legal, accounting, audi ting and book-keeping, engineering, integrated 
engineering and architectural services, computer and related services and other business services such as advertising and management consulting.  Other services that had also been identified included tourism and health-related services, which he said s hould include the portability of health insurance. 
Jamaica expressed a strong interested in mode 1, cross-border supply, and mode 4, the presence of 
natural persons.  The advent of the internet a nd the emergence of information communications 
technology had enabled services suppliers to provide  their services worldwide.  Mode 4, the presence 
of natural persons, was of particular interest to Jamaica, as many of its professionals found it difficult 
to access the markets of developed countries, especia lly because of the restrictions faced at the sub-
federal and provincial levels.  Jamaica was intere sted in this mode of supply as it facilitated the 
movement of the service suppliers without the requi rement that he or she be associated with a 
company.  This was especially important for Jamaica since, apart fro m the remittances, all 
professionals benefited from intern ational experience and improved training overseas which created 
positive externalities for the economy upon their re turn through knowledge transfer and the 
development of networks.  It was therefore importa nt that they be able to access developed country 
markets as individual service providers.  Increased market access commitments on mode 4 was an 
important means by which to facilitate implementati on of Article IV of the GATS.  Jamaica was thus 
interested in seeing mode 4 de-linked from mode 3 (commercial presence) for providers of services in 
the categories of interest to which he had earlier re ferred.  He emphasised that his delegation sought 
more liberal, temporary entry provisions, includi ng increased quotas, wher e these existed, for low 
skilled workers.  In order to facilitate export growth , it was critical that a number of restrictions be 
removed in the negotiations.  Some of these were requi rements for citizenship or residency in order to 
be licensed or provide a service, requirements for commercial presence in order to provide a service, 
requirements for prior local experience, non-rec ognition of professional cr edentials, delays in 
obtaining entry visas and discriminatory licensing fees.   
222. The representative of Jamaica said that it had been against this backdrop that Jamaica had 
assessed the extent to which the re vised offers corresponded to its interest in the negotiations.  The 
factors it had considered included whether commitments had been made in the sectors or modes of 
interest, the extent to which improvements had been  made in relation to mode 4, the balance in 
improvements in commitments in mode 4 vis-à- vis mode 1, whether the offer went beyond the TN/S/M/15 
Page 58  
 
 existing  level of liberalization, the extent to which development issues had been taken into account, 
and what new additional commitments were being proposed and their likely impact (such as whether 
they imposed additional administrative or instituti onal burdens), and the type of classification being 
used and its impact on coverage.  An examination of the revised offe rs of some of Jamaica's major 
export partners indicated that there certainly rema ined scope for improved commitments, particularly 
in the services sectors of interest  to Jamaica.  His delegation ha d noted some positive developments, 
such as in one instance, the inclusion of two new categories of service suppliers and the creation of a new sub-group of intra-corporate transferees whic h would allow the entry of persons for career 
development purposes.  However, limitations of th e kind he had noted earlier had been attached to 
these two new categories.  He had also noted in anot her offer some helpful modifications in respect of 
mode 4 restrictions with regard to sub-sector s, namely accounting, auditing, book-keeping and 
integrated engineering services.  However, taken as a whole, the revised offers of Jamaica's partners 
did not reflect the scope of liberalization it had anticipated and that developing countries had sought. 
It was clear, in his view, that the negotiations had much progress to make were Members to see the implementation of GATS Article IV, which called for developed countries to liberalise in those 
sectors and modes of supply of interest to devel oping countries.  He sought to underline two further 
points.  Firstly, he underscored Jamaica's attachme nt to the principle and practice of progressive 
liberalization.  In this regard, his delegation was deeply concerned by initiatives which could erode or 
eliminate this flexibility and negotiating stances both in terms of the nature and scope of requests and 
the content of offers, which for the most part did not take account of the needs and circumstances of 
developing countries.  Secondly, he emphasised the critical importance of tech nical capacity building. 
This question was one which influenced significantly  the ability of developing countries to participate 
effectively in the negotiations.  He said that it w as crucial to sift, analyse and digest the voluminous 
amount of material being generate d by the Council, which was a process necessary to respond to the 
large number of varied requests received by sma ll developing countries and to develop offers.  He 
said that technical assistance become even mo re critical as governments sought to engage 
stakeholders, particularly in the private sector.  It needed be recognised that without, clarity regarding 
the costs and benefits of proposed measures, proven negotiators would opt for caution.  He hoped that 
this point would be emphasised in the Chairman's report to the TNC. 
223. The representative of India
 remarked that Members had reached  a critical stage in the services 
negotiations with the filing of revised offers in line with the benchmark set by the General Council.  
India had repeatedly emphasised the parallelism in the three market access areas of agriculture, 
NAMA and services for a balanced outcome.  This requi red balance in the levels of ambition, in the 
expectations for Hong Kong and the equivalent le vel of specificity in the mandates at Hong Kong, 
while recognising the different structure of these services negotiations.  His delegation had conducted 
an initial analysis of the revised offers and the resu lts were not at all encouraging, particularly in 
specific areas of export interest to his delegati on, including mode 4 and cross-border supply.  Two 
rounds of offers had failed to deliver results in these  areas despite a clear articulation of interest.  In 
mode 4, some important trading partners continue d to maintain the status quo as compared to their 
Uruguay Round commitments.  While he acknowledged the attempt by other trading partners to 
include categories of personnel not linked to co mmercial presence, such as contractual service 
suppliers and indepe ndent professionals, he emphasised that ma ny gaps remained in terms of:  the 
coverage of such categories; inadequate sectoral cove rage; the lack of a specified duration of stay or 
mention of very short periods of stay that were not in tune with business realities; the presence of 
unspecified and non-transparent economic needs test s; labour market conditions like absolute wage 
parity; and other restrictive conditions.  There ha d been hardly any improvement with respect to 
binding commitments for enhancing transparency in  mode 4 commitments for each of the specified 
categories.  On cross-border supply, there persiste d large gaps in commitments in a number of sectors 
of commercial importance, despite the fact that cross-border trade was increasing a dynamic factor.  
Further, new technological devel opments had made possible such trade in a number of hitherto 
unknown areas which needed to be captured in commit ments of Members.  Little progress in terms of 
improved commitments in the revised offers had been noted in such areas.  TN/S/M/15 
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 224. The representative of India informed the Counc il that India intended to submit its revised 
offer in the near future.  The o ffer was likely to be substantial in  nature, even though India had not 
received satisfaction from its trading partners.  He said that Members needed to make a clear assessment of where the negotiations stood subsequent to the submission of revised offers in terms of 
their expectations and the various requests made of trading partners.  India believed that the 
Chairman's report to the TNC could clearly reflect th is situation.  From its perspective, the report 
could emphasise a number of deliverables for Hong Kong and a clear roadmap on how to deliver.  These deliverables included, firstly in mode 4, th at Members should seek the specific inclusion of 
categories of personnel not linked to commercial pre sence, such as contractual service suppliers and 
independent professionals, in Members' schedules.  There should be adequate sectoral coverage of 
such categories and clear specification of the market  access conditions relevant to each.  The duration 
of stay should be clearly specified and should not be  too short.  Further, there should be possibilities 
for renewal and the provisions should be less onerous compared to the original application.  To the 
extent applicable, all economic needs tests for such  categories should be removed since they severely 
impeded market access.  In the case that they needed to be mainta ined, the definitions and criteria 
used, the duration of such ENTs etc., should be cl early specified.  Use of labour market conditions, 
like absolute wage parity as a pre-condition for en try, he said, significantl y eroded the comparative 
advantage enjoyed by many developing countries.   India also sought the abolition of numerical 
quotas.  In cases where they had to be applied, th e criteria for determining of such quotas should be 
specified.  Secondly, transparency of mode 4 co mmitments with respect to each of the scheduled 
categories, including the clear specification of th e application procedures,  documentation and other 
relevant factors, he said would greatly add to the predictability of commitments.  The possibility of 
some form of binding commitments in this regard should be explored.  Further, the possibility of a 
single-stop window for information on all such elemen ts should be considered.  Thirdly, in cross-
border supply, Members should lock in the current  liberal regimes in sectors or sub-sectors of 
commercial importance in order to prevent any prot ectionist backlash, which would create uncertainty 
for all service suppliers.  In this regard, some  of these important sectors included business services 
like professional services, computers and related services, R&D services, other business services like 
management consulting services, placement and supply services to personnel, telephone answering 
services, miscellaneous services related to environmen tal services, provision and transfer of financial 
information and financial data-processing and rela ted software.  In certain sectors, Members 
continued to schedule "unbound*" even though trade w as feasible, or maintained  restrictions such as 
the establishment of a commercial presence.  Indi a sought the removal of such restrictions.   
225. Fourthly, the representative of India said his de legation attached immense importance to the 
development of disciplines in domes tic regulations since they directly  impinged on market access.  He 
was pleased that some momentum had been achieve d in the WPDR, but there needed to be clear 
deliverables at Hong Kong.  India expected that th e elements would be delineated with respect to 
licensing and qualification procedures and requirement s and transparency elements which could be 
worked upon in detail post-Hong Kong.  He said that  there were existing proposals on the table on 
these elements and that the WPDR should work towa rds their development.  He recognised the need 
to maintain a careful balance between the right to regu late and the need to ensure that such regulations 
did not impair or nullify specific commitments undertaken by Members.  Fifthly, in other rule-making areas, Members needed to do a rea lity check based on merits and achievable progress in each of them. 
While there was need for an overall balance betw een market access and rules within the services 
negotiations, Members would need to assess the ch ances of success for each one of them separately 
given the wide divergences of views and levels of ambition.  Sixthly, he recalled that development 
had to take centre stage in the negotiations in a development round.  In the services negotiations, he 
said that this ambition could only be fulfilled through s ubstantial progress in market access, in sectors 
and modes of export interest to  developing countries such as, inter alia , mode 4, tourism and business 
process outsourcing, since this was the best way of integrating developing countries into the system. 
Further, the flexibility provided by GATS to developing countries had to be preserved and special 
attention would need to be devoted to the prac tical implementation of the LDC Modalities and the TN/S/M/15 
Page 60  
 
 S&D treatment proposals.  Members needed to set in  motion a clear road map for the lead-up to Hong 
Kong to provide equivalent levels of specificity for the Ministers at Hong Kong.  They needed to 
explore innovative ways of achieving this throu gh a combination of bilateral, plurilateral and 
multilateral approaches as laid out in the negotiating guidelines and principles.  Clear specification of 
the expectations of Members by individual and interested groups of Members, he said, would 
facilitate this process.  He recalled that it had been  in this spirit that a group of developing countries 
had presented a proposal on mode 4 assessment earlier in the meeting.  He hoped that Members had found his delegation's articulation of these specific ob jectives useful.  He stated that all Members had 
a significant stake in the success of the negotiations a nd needed to collectively strive for appropriate 
results at Hong Kong while bearing the final outcomes in mind.  
226. The representative of Norway
 situated the general context of its assessment as including the 
various presentations made by UNCTAD, OECD and others that had made clear the large economic 
benefits that would accrue to all participants th rough the opening of their services markets and making 
commitments under the GATS.  He said that the case for liberalization was particularly strong with respect to services which provided the infrastruct ure for business and economic activity.  The end 
result of the negotiations, in Norway's opinion, needed to ensure high-quality commitments on 
infrastructural services such as telecommunications , computer, transport, energy and financial 
services.  He said that in the preceding months, ther e had been a number of initial and revised offers, 
some of which included high-quality commitments in certain sectors.  He expressed appreciation for 
Pakistan's and Jamaica's improvements in the telecommunications sector.  These offers were commendable and encouraging, but were not typi cal.  Norway's contribution to the assessment 
touched upon four areas of priority for Norway, namely, maritime transport, telecommunications, 
financial and energy-related services.  With regard  to maritime, Norway supported the statement by 
Japan on maritime transport servic es and its emphasis on high-quality and meaningful offers.  It was 
encouraging that two-thirds of the offers included maritime transport;  however much work remained.  
The markets for international maritime transpor t services were generally open, but the level of 
commitments and offers remained low.  Narrowing this gap was a challenge.  On telecommunications, 
Norway had seen promising offers, but was noneth eless disappointed with the number of missing 
offers and those with severe restrictions on mode 3, such as limits on foreign ownership which made 
them less attractive for FDI.  In  this regard, Norway supported th e European Communities' statement 
on the importance of mode 3 commitments.  On financial services, he noted some modest improvements since the last cluster, but noted th at the low level of ambition would need to be 
improved for all modes of supply and most sub-sect ors.  Norway sought full liberalization of cross-
border supply of non-life insurance in internationa l transport.  Regarding energy-related services, 
while few improvements were indicated in initial of fers, he noted that Members which had presented 
revised offers seemed more inclin ed to include commitments for th ese services thus resulting in some 
level of improvement.  For example, some 39 Memb ers had offered a commitment at some level of 
services incidental to mining and 37 Members had some commitments for related scientific and 
technical consulting services.  He noted that much work remained.  Overall, Norway's assessment of 
the offers was that the general level of ambition was disappointing.  Major economies, including large 
emerging economies, had largely failed to table subs tantial improvements to their commitments and, 
in order to reach an acceptable level of offe rs, substantial improvements in the offers on 
infrastructural services would be needed.  The assess ment of offers implied an assessment of the 
effectiveness of the bilateral re quest-offer process.  He noted that the present method of negotiation 
had not provided the expected results.  His dele gation was open to exploring supplementary methods 
of harvesting results while staying within the ex isting Negotiating Guidelines and Procedures.  He 
said that making substantial progress in the services ne gotiations needed to be seen in the context of 
successfully concluding the Doha Round as a whole.  He noted that Members were quickly reaching a 
critical stage because time was running out.  Norw ay supported the concept of a work program 
leading to the Hong Kong Ministerial.   TN/S/M/15 
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 227. The representative of Bolivia  thanked the Chairman for his note contained in Job(05)/99 in 
which he had asked Members for their assessment of the negotiations.  She noted that Ministers in 
Doha had approved negotia tions on the liberalization of trade in services through a request-offer 
framework.  This approach was re-iterated in Annex C of the July Package.  She observed that in the 
past few months, a number of new initial offers ha d been submitted.  The critical mass that existed 
allowed Members to complete and broaden the analys is of the offers in the services negotiations.  
Since the July Package, Members had worked with  a reference date of May 2005 for the introduction 
of their revised offers.  Based on the quantitative re port by the Chairman, Bolivia noted that some 50 
per cent of the improvements in the offers had been  provided by developing countries.  This reflected 
the effort that they had made.  He noted that some  developed countries in recent days had shared the 
scope of their revised offers, which Bolivia had fou nd useful and hoped would continue in the future.  
Once a Member had been able to analyse the re vised offers, an opportunity for questions and 
comments should be provided in a multilateral setti ng.  Referring to Bolivia's assessment, she said 
that the improvements were quite modest as no new real market access was perceivable for developing countries in the short-run.  The new offe rs appeared to focus on  specialised sectors and 
sub-sectors which the developing countries could not easily access.  With respect to mode 4, which 
was of special interest to Boliv ia and was included in some revised offers, she urged developed 
countries to make a further effort in order to fu rther increase the possibiliti es and space for immediate 
access to the benefit of developing countries' ser vices providers, who in many cases, did not have a 
high level of specialization.  She sought to see new commitments in this mode in the horizontal and 
sectoral commitments that went hand in hand with effective transparency and were complemented by 
corresponding domestic regulations.  Bolivia had not ed in its preliminary assessment that some 
Members had included the categories contained in document TN/S/W/31.  Bolivia was a co-sponsor of this document and believed that such work would help lead Members to a common understanding 
on mode 4.   She said that the modes of delivery th at Bolivia would have liked to have seen in other 
Members' offers, included, for example, professiona l, computer and related, business, construction 
and engineering, distribution, educational, hea lth, tourism and travel, recreational and transport 
services, including internal waterways, pipelines and re lated services.  She said that trade in the areas 
of interest to Bolivia were often impeded by natio nal regulations and restrictions due to different 
qualification standards, national treatment discrimin ation, the difficulty in obtaining licences, ENTs, 
requirements for intra-corporate transferees, etc.  Bearing in mind the negotiating mandate, Bolivia was carrying out consultations with different sectors in order to finalise its revised offer, which it 
hoped to provide as soon as possible.  On future work , Bolivia believed that the provisions of Articles 
IV and XIX, the Negotiating Guidelines, the DDA a nd the July Package contained the basic elements 
to guide Members in the negotiations.  She also ack nowledged that greater efforts were required, since 
liberalization should not only increase the number of specific commitments, but also involve progress 
in the rules negotiations, which would bolster the certainty of commitments.  She said that the 
liberalization process needed to remain informed  by national policy objectives, the level of 
development of various Members, the necessary de gree of flexibility, the progressive nature of 
developing countries' commitments, and the ge neral progress of the Doha negotiations.   
228. The representative of Chinese Taipei
 expressed her delegation's gratitude to the Chairman for 
his contribution in compiling the "Factual Assessment on the State of Play of Initial and Revised Offers" presented earlier in the meeting.  From the presentation Chinese Taipei had noted that some 
positive developments had taken place since the last meeting.  Four more Members had tabled their 
initial offers and 21 Members had subm itted their revised offers by the Ma y deadline.  In this context, 
she commended the Chairman for hi s continuous efforts to maintain the momentum in negotiations.  
Despite these positive signs, her delegation shared  the concerns expressed on a number of occasions 
by other Members about the pace and progress of the negotiations.  She said that if the other two 
market access issues were able to find, by the end of July, "first approximations" of the possible 
outcomes in the negotiations for the Hong Kong Minist erial Meeting in December , then this prospect 
alone should be enough to inject an greater sense of urgency and more political guidance into the services negotiations.  TN/S/M/15 
Page 62  
 
 229. Turning to Chinese Taipei's revi sed offer, the representative of Chinese Taipei said that it had 
been submitted by the end of May, and she empha sized that, even though Chinese Taipei's existing 
commitments were quite comprehensive (in terms of both sectors and of modes of supply), her 
delegation had tried to find new wa ys of extending them in certain sectors, in both the initial and 
revised offers.  She said that there were two main ty pes of change in the revised offer. The first was 
greater liberalization in sectors like financial and transport services that reduced transaction costs and 
supported trade, as well as environmental services that  was one of the essential elements of the Doha 
Development Round.  The other main type of chan ge involved classification issues in areas such as 
computer services, postal and courier services, and environmental services, all of which, through 
technological improvement, reflected the current co mmercial realities.  She affirmed that Chinese 
Taipei's revised offer constituted a significant effort to further liberalize trade in services and that, in 
general, the combined scope of Chinese Taipei 's existing and potential commitments clearly 
demonstrated the high degree of openness of its se rvices regime, which covered all 12 main sectors 
identified in the W/120 list, and 113 of a possible 155 sub-sectors in which Chinese Taipei had made 
a high level of commitment in market access or national treatment.  Regarding the market access 
negotiations, Chinese Taipei's fundamental position remained that it did not want an a priori 
exclusion of any modes of supply or sectors.  However, given the fact that certain services were "intermediary" in nature, further liberalization in  these sectors would help reduce costs in the goods 
industries that they served.  In this context, the list of priority sectors for Chinese Taipei's private 
services suppliers included computer and related ser vices, maritime services, logistics, financial 
services, audio-visual services, distribution services, environmental services and telecommunications 
services. 
230. The representative of Chinese Taipei  said that, in response to the Chairman's recent note on 
the review of progress in the negotiations, Chinese Taipei had carried out a preliminary numerical 
evaluation of the initial and revised offers of its  main trading partners, which numbered about 40 
Members and represented some 88 per cent of tota l services revenues worldwide.  She was fully 
aware that, because of the particular complexity of  the services sector, a full review of the initial and 
revised offers was a particularly complex process re quiring systematic and careful analysis.  Given the 
time constraints, Chinese Taipei's preliminary eval uation was only intended to provide an initial 
quantitative view of the level of commitments in ser vices liberalization offered by other Members.  
She said that Chinese Taipei's numerical analysis alone  could not give a full, in-depth evaluation, but 
it could show the general tendency of Members' co mmitments.  The simple numerical analysis that 
had been applied awarded one point for any sector  based on W/120 with the entry "full commitment", 
no points for "no commitment", while "partial commitments" received a score of 0.5 point. As Chinese Taipei was still considering how to measure co mmitments in mode 4, its analysis focused on 
modes 1, 2 and 3.  As to the question of whethe r "meaningful commitments" (in terms of commercial 
value) had been made by Members in key areas of in terest to Chinese Taipei, she said that table 1 of 
the room document demonstrated that, for busin ess services as a whole, the average values for 
developing countries and for devel oped countries were 0.21 and 0.69 r espectively; in communications 
services, the average values were 0.16 and 0.37; in  construction and related engineering services they 
were 0.21 and 0.71 respectively; in  distribution services, 0.13 and 0.65;  in education services, 0.16 for 
the developing countries and 0.34 for the developed countries; in  environmental services,  the average 
values were 0.13 and 0.71; in financial services, 0.22 and 0.44; in tourism and travel-related services, 
0.43 and 0.65, and in transport services, the averag e values were 0.06 for the developing countries and 
0.23 for the developed countries.  She said that th ese figures indicated that there was still a lot of room 
for developing and developed count ry Members to make more commitments in most of the sectors of 
greatest interest to Chinese Taipei and according to their various levels of development.  
 
231. Turning to specific sectors and referring to ta ble 2 of the room document, and specifically 
computer and related services, the representative of Chinese Taipei said that it demonstrated that, in 
comparison to other sectors, Members had made higher levels of commitments in all sub-sectors and in all 3 modes. The overall commitment level in this sector was about 60 per cent, and was  TN/S/M/15 
 Page 63 
 
 
 particularly high in the sub-sector "consultancy services related to the installation of computer 
hardware".  As for telecommunications services, in table 3, the analysis (focusing on the first 3 
modes) showed that, out of the 40 schedules, the ma jority of commitments were subject to limitations 
in all modes.  Full commitments in all 3 modes were rare.  In terms of "voice telephone services", only 11 market access entries (out of 40) were fu ll commitments, and only 12 had included a full 
commitment in mode 3 supply of packet-switched data transmission services.  It was worth noting 
that, in terms of value-added services, out of the 40 Members that had made commitments, only 16 
had fully committed in mode 1 and 15 Members in m ode 3.  With respect to audiovisual services, 
table 4, she said that generally, the regime offered appeared extremely restrictive.  The sub-sectors, 
"motion picture and video tape pr oduction and distribution services" had a total of 9 full commitments 
(out of 40) in both modes 1 and 3.  In terms of "motion picture projection services", full commitments 
were found in only 6 schedules for mode 1, 7 for m ode 2, and 5 for mode 3.  It was also worth 
pointing out that, of the 40 schedules examined, th e majority of commitments were subject to "no 
commitment" in all modes.  To illustrate the point further, in the sub-sector "motion picture projection 
services", no commitment had been made in over 30 schedules, for all modes.   In the financial 
services sector, table 5, Members made more commitments in mode 3, while in mode 1 the regime 
appeared extremely restrictive.  As far as non-lif e insurance services was c oncerned, full market 
access in mode 1 had been granted in only 1 case out of 40, 6 cases in mode 2 and 8 cases in mode 3, while partial restrictions were scheduled in 17 cases in mode 1, 13 cases in mode 2 and 22 cases in 
mode 3.  Regarding logistics services, a number of sectors were of particular interest.  For distribution services, table 6-1, the highest level of market access was in mode 2 supply of wholesale trade 
services, with 40 per cent offering a full commitment.  However, out of the 40 schedules, the majority 
of entries were subject to no commitment in all m odes.  For example, in the sub-sector "franchising 
services", no commitment could be found in 25 schedul es for all modes.  She said that the pattern was 
very similar with respect to maritime transport services, table 6-2.  Looking at the market access 
commitments of the 40 countries in this sector, only 10 percent of Members had made full 
commitments in the "supporting services for maritime transport services" in mode 1, and only 20 
percent in mode 3.  The same pattern could be observed in rail transport services and road transport 
services, tables 6-3 and 6-4 respectively.  Under "supporting services for rail transport services", for instance, full market access in mode 1 had been granted in only 1 case out of 40 (2.5 per cent), 4 cases 
in mode 2 (10 per cent) and 3 cases in mode 3 (7.5  per cent).  When it came to courier services, 
approximately 27 per cent of the sampled Memb ers had already scheduled full commitments in 
mode 1, 35 per cent in mode 2 and 22 per cent in mode 3.  
232. The representative of Chinese Taipei thanked the Chairman for encouraging Members to 
carry out an initial analysis and evaluation of the offers.  Although there we re certain shortcomings 
with this type of numerical exercise, it neverthel ess had proven extremely valuable in arriving at an 
initial assessment.  Based on its anal ysis, Chinese Taipei's preliminary evaluation of Members' initial 
and revised offers revealed a l ess than corresponding effort on their part.  Chinese Taipei was 
disappointed with Members' offers, which generally  failed to redress the current low level of GATS 
commitments, and in some areas did not even reflect current levels of liberalization.  Having acceded after the Uruguay Round and having made extensiv e commitments in the process, Chinese Taipei was 
compelled to say that it was not satisfied with the qual ity of offers made to date in the services sector. 
It was also concerned that they were  not in the best interests of its services trade.   She said that, in 
order to meet the goal of the current negotiati ons, Chinese Taipei would carry out an in-depth 
evaluation in the near future to identify the main barriers or regulatory issues contained in Members' 
market access and national treatment commitments.  Chinese Taipei respected the traditional request 
and offer approach, but said that if Members were  to achieve something in the current round and 
sought to demonstrate to the private sector what the negotiations could yield for them, then the 
Members needed to have a concrete and common base line that at least reflected existing levels of 
openness.  At that point Members would be in a be tter position to forecast the likely outcome of the 
services negotiations.  Chinese Taipei sought occasi ons to discuss this issue further with fellow 
Members.  TN/S/M/15 
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 233. Turning to the issue of the rules negotiations , the representative of Chinese Taipei recalled 
that any progress would be helpful and would comp lement the market access negotiations.  Indeed, 
Chinese Taipei believed that discriminatory rules measures could act as a deterrent to trade in 
services.  The items on the agenda included the following elements.  Firstly, the development of 
horizontal transparency disciplines on domestic regula tion applied to all sectors and to all measures 
relating to qualification requirements and procedures,  technical standards and licensing requirements. 
After several years of discussions, there seemed to be  some light at the end of the tunnel.  Chinese 
Taipei thanked the proponents and the Secretariat for th eir work on this issue.  However, she said that, 
were something to be accomplished in the current r ound on this score, things needed to accelerate.  
Secondly, improved transparency in the application of ENTs inscribed in Members' schedules would 
enhance market access for foreign service suppliers.  Therefore, she said that Chinese Taipei would 
want to see Members clearly inscribe the main criteri a on which the tests were based.  In conclusion, 
she said that, given the time pressures, it was critical that Members use the various forthcoming 
gatherings to produce a "roadmap" for the negotia tions leading to the Hong Kong Ministerial in 
December. The inclusiveness of the whole membership  would, of course, be a key element.  She 
again expressed her delegation's appreciation for th e Chairman's guidance in setting Members in the 
right direction and pledged that Chinese Taipei was prep ared to work closely with him in the future.   
234. The representative of Chile
 indicated that she would be making a first statement on behalf of 
a group of Members and a second on behalf of Chile.  The first related to a computer and related 
services (CRS).  As Members were aware, at the February meeting, a joint statement on the negotiations on computer and related services had been  tabled by a group of Members.  The statement 
made reference to the benefits of liberalization of computer and related services and recognised its 
role as a sector fundamental to economic activity.  In this context, it called upon Members to make 
full market access and national treatment commitments for the sector as a whole (CPC 84).  The 
group was pleased to inform Members that a prelim inary assessment of the initial and revised offers 
showed that at least 10 Members had newly committed in CRS and 28 others had offered 
improvements to their existing commitments or made commitments on new services and sub-sectors.  In addition, nine Members had scheduled commitments on a 2-digit level (CPC 84).  Another piece of good news was that there were no MFN exemptions re lated to this sector in the existing schedules of 
Members.  On the negative side, the group noted that there were still an important number of 
Members, 11 at the latest count, which had offered no commitments on CRS in their initial or revised 
offers and an even greater number that still did no t have an offer on the table.  Furthermore, among 
those which had offered commitments, foreign equity  limitations or residency requirements were still 
in place.  She referred to a room document containing  a statistical analysis of CRS offers.  The group 
believed that this assessment demonstrated that there remained much work.  While a number of 
Members had yet to make commitments in this sector, there were others that had not made any or many improvements on their existing ones.  The group encouraged all Members, developed and developing, to consider the inclusion of full commi tments on this vital economic sector in their initial 
and revised offers.  Finally, she informed Member s that a group was planning to hold a half-day 
seminar during the next cluster of meeting and welcomed suggestions. 
235. The representative of Chile
, speaking on behalf of his own delegation, said that his 
intervention would refer to Chile's revised offer, would provide an analysis of the offers and the 
negotiations, and touch upon future steps.  He reca lled that Chile had presented its conditional revised 
offer in accordance with the DD A and the July Package.  Through the changes and improvements 
Chile was proposing, it aimed to adjust its multilate ral commitments in tune with the policy it had 
consistently pursued in its bilateral trade agreemen ts.  With respect to the horizontal section, Chile 
proposed to add new commitments in mode 3.  On sector specific commitments, Chile had made commitments in foreign legal, arbitration and c onciliation, consulting in engineering, veterinary, 
computer, research and development (in life and so cial sciences and humanities), advertising, market 
research, photographic, convention and consulting a nd public relations services.  Chile maintained 
exemptions in accordance with the MFN principle, but was constantly revising these exemptions with  TN/S/M/15 
 Page 65 
 
 
 the aim of eliminating them progressively.  He urged all Members to continue to revise their MFN 
exemptions with the aim of achieving their eliminat ion.  On the absence of mode 4 commitments in 
the revised offer, he said that over the coming week s Chile would submit an addendum to its offer that 
would reflect it commitment to move forward liberali zation in this mode.  The revised offer reiterated 
Chile's commitment to achieve a higher level of  liberalization in the multilateral area.   
236. Turning to his comments on the assessment of th e offers and negotiations, the representative 
of Chile reaffirmed Chile's interest in advanci ng liberalization in telecommunications, energy, air 
transport, computer, logistical and business services.  Chile supported the work that was being carried 
out in these sectors and said it would continue to par ticipate actively in the proposals.  On mode 4, 
Chile expressed its commitment and interest in movi ng forward and consolidati ng this mode of supply 
of services, and could co-sponsor and support the pape r presented by India.  He thanked Australia and 
Canada for their initiatives to improve transparency in  this area.  He said that Chile would refer to 
mode 1 in a later statement.  On revised offers  which had been received, Chile had carried out a 
comparative analysis of them in light of its sectoral interests.  He said that, on mode 4, Members had indicated their interest to commit market access and supply of services in this mode.  Chile was 
concerned with obstacles dealing with national re gulations which affected effective access and the 
flow of professionals.  He urged Members to pursu e work in domestic regulations with the aim of 
sufficiently developing these disciplines and ensu ring effective access to markets for services 
providers.  His delegation was also concerned about the lack of interest shown by different Members 
in sectors such as legal, architectural, engineering, mining and computer and related services.  Further 
problematic was the lack of initial and revised offe rs from key Members for Chile, and in particular 
those in its hemisphere, though he thanked them for their efforts to date.  The numbers were also of 
concern, as was substantive quality, and the co mmitments were far from consolidating existing 
liberalization or effective liberalization.  He also urged Members to make their procedures more transparent for the effective supply of services at the horizontal and sectoral levels.  He was concerned 
with the maintenance of ENTs that were not transp arent.  He called for the concerned schedules to be 
revised so that they provided more clarity.  
237. Turning to future steps, the representative of Chile said that Members needed to ask 
themselves what they sought to achieve at the Hong Kong Ministerial and how they proposed to achieve it.  It was clear that instructions were  needed from ministers in order to complete the 
negotiations.  The content of the package and the guidelines did not amount to this.  For Chile, in 
Hong Kong it would be key to have clarity about the level of ambition Members sought with respect 
to market access globally or with reference to specif ic sectors or modes.  He stressed the elements 
dealing with development in the DDA and the July P ackage.  Secondly, he said it would be paramount 
to agree on the elements to be included in the di sciplines on domestic regulation.  On subsidies, his 
delegation sought a provisional definition that wo uld allow Members to exchange information on 
government support programmes and to discern whether th ere was a need for disciplines.  He said that 
these goals could be achieved by pursuing all options, including bilateral, plurila teral or multilateral in 
order to achieve Members' ambitions.  He urged th e Chairman to engage in an intense series of 
bilaterals and the Chairpersons of the subsidiary bodies in order to define a programme of work.  He 
called on all Members to be creative, participatory,  ambitious and realistic in the coming months.  
238. The representative of Korea
 thanked the Chairman for his dedication in guiding the 
negotiations.  He said that he sought to introdu ce Korea's revised offer, give his delegation's 
assessment of the offers, and make a few points on non-market access issues.  Firstly, he said that 
Korea's revised offer had been submitted on 31 May and that it focused on making improvements in 
the horizontal section on mode 4.  Korea had expanded the scope of intra-corporate transferees (ICTs) 
and made commitments on contractual services s uppliers (CSSs) in areas such as consultancy 
services, architectural services and computer engineers.   He said that, given the sensitivity of this 
mode in Korea, the proposed commitments were a bi g step forward and had be en the result of a time-
consuming and painful domestic consultation process.  Korea had focused on enhancing the TN/S/M/15 
Page 66  
 
 comparability, certainty and clarity of its schedule.  One important example was the inclusion of the 
main criteria for ENTs.  Throug h its initial and revised offers, Ko rea had offered to commit roughly 
20 new sub-sectors, which brought totals to 10 of 12  sectors and 104 and 156 sub-sectors.  In total, 
two-thirds of Korea's services, and most of th e commitments in major infrastructure services, had 
been improved in order to reflect its efforts to bi nd at the level of autonomous liberalization.  Korea 
had sought to make a high-quality a nd substantial offer and he urge d others to do likewise.   
239. Turning to Korea's assessment of the offers ma de by others, the representative of Korea said 
that his delegation had included its assessment of the offers in a room document.  The paper focused 
on the offers made by major trading partners in  five infrastructure services of interest, namely, 
telecommunications, construction, distribution, fi nancial and maritime transport services.  The 
assessment was based on three questions:  was th e private business sector protected from legal 
uncertainties through the binding of commitments?;  was there discrimination based on nationality?; 
and was the private business sector unduly restrained with respect to the establishment or operation of 
a business?  He said that unfortunately, restrictions on market access and national treatment remained prevalent, and on average, some 60 of Korea's re quests had not been properly responded to.  This 
raised a serious concern for his delegation, which had continually emphasised the need for a balanced 
outcome in all of the DDA negotiations.  Korea expect ed that the restrictions listed in the tables of 
Korea's assessment would be eliminated in the curre nt round of negotiations.  He agreed with many 
others that the request-offer process had certain wea kness.  Korea, despite resource constraints, had 
conducted some 70 bilateral mee tings with major trading partners; however, progress remained 
limited.  For efficiency's sake, other negotiating approaches, such as utilising friends' groups or the 
Special Session to set a general benchmark, should be introduced to compleme nt the existing request-
offer negotiations.   
240. Turning to non-market access i ssues, the representative of Korea emphasised that the 
elimination of MFN exemption lists was an important  part of the services negotiations and should be a 
benchmark for the assessment of the negotiations.  Korea had eliminated the only MFN exemption 
measure contained in its list a nd urged others to eliminate or reduce such measures from their 
schedules.  Korea had also introduced the main criteri a for ENTs in its revised offer and urged others 
to insert the same criteria in order to enhance clarity, comparability and certainty of schedules.  
Thirdly, Korea saw the need to  advance the rules negotiations, especially with respect to the 
negotiations on domestic regulations.  Korea was of  the view that, while the negotiations on domestic 
regulations should not intervene with the right  of Members to pursue their legitimate policy 
objectives, they should be established as a means to further facilitate trade in services.  Finally, he 
urged the Chairman to continue his consultations  to find ways to improve the current negotiating 
approach so that negotiations would intensify in  the period before the Hong Kong Ministerial. 
241. The representative of Switzerland
 thanked those Members that had announced the submission 
of revised or initial offers.  It was important news  and showed that the process was moving forward.  
Noting that numerous previous speakers had reite rated their commitment to the negotiating process 
and the results they hoped to achieve, he said that these various points of view should be taken into 
account.  He said that Switzerland was a small la ndlocked country with no natural resources, a 
workforce composed of about 25 per cent foreigne rs, 200 foreign establishments in the main sectors 
of its economy, no specific rules or policies preventing outsourcing, and hence had an open economy.  He said that the results of this policy had been positive, since Switzerland's services exports totalled 
some 25 billion francs, which was roughly the same as fo r the EC-15.  He said that he had noted the 
entries that many Members had made on the cover pag es of their offers and which they had reiterated 
in their oral statements.  He said that the cover page  of Switzerland's offer noted that, "With this offer 
Switzerland wishes to reflect its stable and predic table legal order that grants to foreign service 
providers and investors legal security and attr active conditions of competition in line with 
Switzerland's location and policy to consolidate its  position as an international business place and to 
promote a dynamic investment environment".  He said that the benefits of liberalization in the  TN/S/M/15 
 Page 67 
 
 
 services sector were proven, given its diversity infr astructural aspect and wider economic linkages.  
He thanked the Chairman for his commitment in s eeing this process forward and he hoped that his 
work would help Members reach a balance in th e overall outcome of these negotiations, because a 
successful result would promote economic benefits  that would accrue from large-scale worldwide 
liberalization of services.   
242. Turning to his country's assessment of the nego tiations, the representative of Switzerland said 
that, while there had been some positive results, ther e was also cause for dissatisfaction.  He said that 
a number of excellent offers from developed countries and from devel oping countries had been tabled. 
He underlined the excellent sche dules from recently acceded  members.  He thought that very good 
offers and schedules could be used by Members as examples, which might be referred to as a 
benchmark.  He said that Members could discuss th e content, depth and level of commitments in 
various offers;  however, he did not accept the argum ent that there existed a structural imbalance or 
injustice between the offers of developed countri es and developing countries.  In Switzerland's view, 
the main imbalance that existed was that of free riders, of which there were a number and which he 
stressed, was a concern for his country.  While this  approach might stem from the negotiating method, 
he urged caution in maintaining this approach at this  stage of the negotiation.  He said that there had 
been free riders and hence imba lance resulting from the Uruguay Round, which was not an outcome 
which could repeat itself.  In terms of overall asse ssment, he said that the most telling conclusion of 
his delegation's evaluation was that the offers provided no new business opportunities, which made 
the negotiations very different from most of the previous trade negotiations.  He said that it was extremely important to have a legal certainty in  commitments and transparency on the measures 
applied or absence of measures in a given sector because this was good for bu siness.  However, he 
could not recall of many cases in previous GATS nego tiations where, in order to ratify or implement 
the negotiating results, legislation had had to have been formulated.  Though there were a few such 
cases (one even concerned Switzerland), this were no t the rule.  As such, he concluded that existing 
schedules reflected at best, with the exception of  the addition of the results of the extended 
negotiations, legislation in force in Members in 1993 or 1994.  The approach taken by most Members 
to date in their offers did not appear to seek to ma ke up the ground that had been covered domestically 
in the previous ten years.  He hoped that at least this ground would be made up before the end of the 
Doha Round, as there was no certainty about the date of  a future round.  He recalled that the results of 
the Doha Round would constitute th e international legal framework for trade in services for quite a 
long period of time.  Given the assessment to date , Members were only working on what could only 
be called obsolete in comparison to the state-of-play in the market.  He said that this sent a negative 
message to the business community and that Memb ers ran the risk that over time business would 
conclude that the work Members were undertaking was irrelevant to their needs.  He said that there 
were many ways to devise an international framework covering trade in services.  He believed that it 
would be regrettable if people were to turn thei r backs on the GATS given the number of sectors and 
coverage it offered.  He also wondered whether this scenario woul d have consequences for the WTO 
at large. 
243. Responding to the Chairman's request for the de tailed elements of Members' assessments of 
the state-of-play, the representative of Switzerland said that his delegation had examined the number 
of limitations that had been eliminated in schedul es.  This was an important , concrete and practical 
approach.  Another yardstick was to determine the cl arity of the commitments offered.  He said that it 
would be helpful if Members attempted to render thei r offers more easy to evaluate.  In this regard, 
Switzerland had engaged in a transparency exerci se consisting of a graphs based on Switzerland's 
revised offer.  These diagrams sought to summarise in a simple and transparent manner the contents 
of its offer.  He said that the graphs were b ased on a simple formula which involved elevating the 
coefficient of 0.5 to the power equivalent to th e number of limitations inscribed while a commitment 
with no limitations was given the figure 1.  For every commitment in every sub-sector and every 
mode this exercise had been done, yielding eight fi gures per sub-sector.  This information had been 
translated into the graphs.  He said the appro ach was simple and involved little value judgement TN/S/M/15 
Page 68  
 
 because it involved counting the number of limitatio ns.  The figures rendered were between zero and 
one, making them easy to present in percentage format .  His delegation had also devised an approach 
to take into account of the scope of the commitments;   however, in the interests of time, he would not 
elaborate on this, but sought to highlight that it included mode 4.  
244. On some other elements that his delegati on was using to perform its assessment, the 
representative of Switzerland subscribed to the stat ement made by Hong Kong, China regarding MFN 
exemptions and recalled that in principle they were to have been eliminated within 10 years of the 
entry into force of the GATS which was a benchmark that should be considered.  On the quality of 
offers, both in terms of substance and scheduling, he recalled that these were important topics for his 
delegation.  He said that some progress had been made  in this regard and he alluded to Korea's earlier 
comments in the meeting as well as the inclusion by Me mbers of CPC figures in a systematic fashion.  
However, more work needed to be done since it woul d ensure legal certainty.  He gave the example of 
scheduling a limitation for an activity not cove red by the sub-sector or CPC under which it was 
scheduled, or in other words, a mis-scheduled limita tion.  While the removal of this limitation, in 
negotiating terms, might appear as an improvement, in legal terms, the question could be raised as to 
whether the removal of the limitation also implied that the activity to which it referred was no longer 
covered.  Such scheduling scenarios existed and it was important to find solutions to them.  On rules, 
he reiterated his delegation's commitment to these ne gotiations and especially on domestic regulation.  
On the question of an ESM, he recalled that Switzerland had communicated on several occasions its 
concerns regarding this work.  On government proc urement, he said it was important to build on the 
valuable submissions in order to get results.  On subsidies, he echoed the remarks by Chile and urged 
Members to engage in an exchange of inform ation and to work on disciplines while taking due 
account of the right to regulate in order to meet  national policy objectives.  Regarding the overall 
process, he said it would be necessary to have a co mprehensive assessment of the state-of-play and to 
have a work programme on how to move forward.  Finally, he reiterated the Negotiating Guidelines' 
basic principle that no sector should be excluded a priori  in the request and offer process.  He 
regretted that this principle was not bein g implemented in practice by everybody.   
245. The representative of New Zealand
 sought to say a few words about New Zealand's revised 
offer.  New Zealand's revised offer built on its substantial Uruguay Round commitments and 
extensive initial offer.  New Zeal and was confident that this overa ll package, of which its revised 
offer formed an important addition, represented a high quality contribution to the services component 
of the Doha Round.  He hoped that  others would match this contribu tion.  In addition to a high level 
of transparency, New Zealand's package of Ur uguay Round commitments and initial and revised 
offers covered all modes and sectors of particular  interest to developing countries, including among 
others, professional services, computing services and construction services. New Zealand's revised offer responded directly to its developing country partners' calls to de-link mode 4 commitments from 
the requirement of commercial presence.  In particul ar, the revised offer had created a new category, 
namely independent services suppliers.  This cate gory allowed self-employed services suppliers who 
had advanced professional or technical skills to m eet the appropriate qualification requirement to 
enter up to 12 months without any requirement for commercial presence.  Moreover, New Zealand's 
offer on independent service suppliers was a horizontal  one.  He said that, rather than listing specific 
sectors to which the commitments applied, the offer on independent service suppliers applied to all of 
the many sectors in respect of which New Zealan d had made commitments.  This meant that the 
category would be accessible to those with advanced  professional or technical qualifications beyond 
just those in the traditional business services sectors.  So long as the person met a broad definition of a professional, it would not matter in which sector he or she supplied the services.  For example, in New Zealand's case, the application of this cate gory to environmental services would mean that 
environmental consultants who had the appropriate qualifications c ould enter.  Making two further 
brief points about New Zealand's revised offer, he said that improvements to its legal services offer 
reflected New Zealand's complete openness in this field and that New Zealand's adjustment to its 
comprehensive postal offer had been scheduled in  accordance with the proposals developed by the  TN/S/M/15 
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 respective friends groups.  New Zealand believed that  this approach advanced the cause of improved 
clarity and transparency. Secondly, New Zeala nd was offering improvements across a number of 
sectors to reflect legislative changes since its Uruguay Round commitments.  A key effect of these 
improvements would be that services relating to the vast majority of New Zealand's meat and wool 
exports, which were its most impor tant export items, would be substa ntially open to foreign service 
suppliers.   
246. Referring to the Chairman's note dated 10 June  in which he had requested that Members 
supplement the Chairman's report to the TNC with  specific and details evaluations in sectors and 
modes of supply of interest to them, the represen tative of New Zealand expressed appreciation for the 
opportunity to give his delegation's views.  Howe ver, he said that until recently New Zealand's 
resources had been concentrated on producing its revi sed offer which meant that at the current stage, 
his delegation could only offer a broad oral assessm ent.  It was, nonetheless, working on a more 
detailed assessment which it would submit to the Chairm an in written form as soon as possible.  He 
said that, in the written assessment, New Zealand woul d look for added value in sectors that were of 
particular interest to it, as these were not necessarily  of particular interest to all players in the 
negotiation.  New Zealand had submitted over 25  requests to other WTO Members in 2002 which 
represented its key trading partners .  The geographic coverage of th e request was broad and included 
the Asia Pacific region, the Americas, Europe and Africa.  No requests had been addressed to LDCs.  
Twenty-three of the 25 Members to whom reque sts had been made had submitted initial and/or 
revised offers.  Of these, thirteen (or over half) we re revised offers.  New Zealand's requests focussed 
on sectors in which its services exporters were alread y active, or ones in which they had a potential 
export interest.   
247. The representative of New Zealand sought to repo rt on the content briefly of its trading 
partners' offers in the following areas:  horizontal improvements to modes 3 and 4, business services, communication services and education services.  Broa dly summarising the content of offers in these 
sectors and modes, he said that very few substantive improvements had been made to the mode 3 
restrictions scheduled in the Uruguay Round.  For the most part, commercial presence commitments 
remained conditioned by restrictions on purchase a nd some cases, lease of land.  Differential tax 
measures, limitations on mandatory business forms and carve-outs relating to public utilities and sub-
federal entities remained.  In mode 4, some effort s had been made by most developed countries and 
by some developing countries to meet New Zealand's re quests in either their initial or revised offers or 
both.  In particular, commitments de-linked from commercial presence were becoming more common.  
He was encouraged by these cha nges because they suited New Zealand's small and medium enterprise 
exporters that relied on a combination of mode 1 and mode 4 provision.  However, few such 
commitments were genuinely horizontal in scope and remained limited to a much narrower list of 
sectors than that covered in requests.  The be nefit to New Zealand of such commitments was 
accordingly less than it appeared at first glance.  New Zealand had also found that some Members that 
were leading proponents in this area had offered little movement themselves in respect of mode 4.  He 
said that the greatest number of responses to New Zealand's requests had been made in business services.  One sector that New Zealand tentatively considered as a success, on the basis of a very 
hurried assessment, was computer and related services where most of its trading partners that had made an offer had made a commitment and, in mo st cases and for most sub-sectors, with very few 
reservations.  Some had scheduled at a two-digit level which as also encouraging.  Access for New 
Zealand exporters of professional services had im proved, but nationality a nd residency requirements 
at national or regional level, as well as limitations on market access and national treatment attached to 
qualification requirements and scheduled in the addi tional commitments column, remained irritants.  
New Zealand's focus on communications had been larg ely in the postal and courier sector and he had 
discerned some positive signals in this sub-sector.  The numbers of commitments on postal services 
remained low but he said that some Members were prepared to commit to liberalization in the sector 
as the monopoly supply of postal services narrowed.  He said that courier services commitments had 
increased, albeit from a low base, and that the positi on that express delivery was part of the sector TN/S/M/15 
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 seemed more broadly accepted.  Overall however, co mmitments were low in number.  The situation 
in respect of education commitments was of con cern to New Zealand.  The commitments were few 
and far between and were limited in scope.  Ne w Zealand had seen some signs from developing 
countries that they could see benefits of exchangi ng commitments as they positioned themselves as 
regional education hubs.  He noted, however, the continued absence from the discussion of education 
services from some of the world's most significant education exporters and said that this situation 
seemed anomalous to New Zealand. 
248. The representative of New Zealand said that the written assessment that his delegation would 
provide shortly would cover its key trading partners' offers both in key sectors of interest and in terms 
of their horizontal commitments.  Rather than c ounting commitments offered in terms of "full", 
"partial" or "none", New Zealand's sectoral assess ment would aim to produce a more accurate picture 
of the true extent of the market access offered.  To do this, New Zealand intended to weight the modes 
by their importance in the sector concerned and also weight the types of limitations in terms of the 
degree to which they were a barrier to trade.  On horizontal commitments, New Zealand wished to 
focus on mode 4 for two reasons.  Firstly, he said that the value of offers on mode 4 was a good 
barometer for measuring progress in the wider ne gotiations, not least because it had clearly and 
consistently been identified as a key area in whic h both developed and devel oping countries needed to 
be accommodated in order for the negotiations as a whole to progress.  Secondly, as an economy supplying many niche and highly skilled services, but  often on a very small-scale basis and therefore 
often without a commercial presence, New Zealand had a strong interest in improved mode 4 offers in 
order to facilitate meaningful market access in the priority sectors it had identified.  As with its 
sectoral assessment, its horizontal assessment would be weighted in terms of the types of limitations, 
but also in terms of the degree of sectoral coverage the mode 4 offer.   
249. The representative of New Zealand emphasised th at his country was committed to working 
with other Members to build increased momentum  in the services component of the Doha Round 
negotiations.  The various components of the Round we re interlinked and there had to be a balanced 
outcome.  In respect of the negotiations on rule -making, specifically on domestic regulation, New 
Zealand sought a greater degree of convergence of the cross-cutting themes underlying effective disciplines on domestic regulation including, but not limited to, transparency.  For New Zealand, qualification requirements and procedures were of pa rticular interest, but it recognised the importance 
of each of the Article VI:4 elements.  In the market access component of the negotiations, the submission recently of a number of new initial offers  and also of a number of revised offers was a 
positive sign.  The focus of Members' attention needed  to be on the quality of the offers.  In this 
context, he associated his delegation with those that  had said that they were open to the proposal that 
Members might seek something to supplement the request-offer appr oach.  New Zealand recognised 
that whatever form that 'something' might take, the key consideration was that it had to be useful and 
effective.  He said that some constructive proposals to  that end had been made.  Finally, his delegation 
hoped that the Chairman would have a mandate at the end of the meeting to explore the full extent to 
which the Negotiating Guidelines and Procedures coul d be used to formulate a work programme to 
accelerate work. 
250. The representative of Mexico
, referring to his country's initial offer, said that it added a lot to 
Mexico's Uruguay Round commitments and covered a ll sectors of the W/120 classification list.  He 
said that telecommunications had not been included for reasons which his dele gation had given at the 
relevant meeting.  Mexico had sought  to improve its offer.  He reca lled that Mexico's initial offer was 
an excellent one and that Mexico was substantially  improving it.  He expre ssed his gratitude to the 
authorities in his country and other government agencies for their collaboration in improving the offer.  He said that this thanks was in order becau se one of the major problems that some had faced in 
the negotiations was a lack of links between Geneva  and capitals and between capitals and the various 
relevant authorities for services.   He wished to hi ghlight the main improvements that had been made 
in Mexico's revised offer.  Firstly, in horizont al commitments, Mexico had introduced improvements  TN/S/M/15 
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 in mode 3 in response to the observations and comme nts that had been made in bilateral meetings 
with other Members.  Mexico hoped that these ch anges responded to the concerns that had been 
expressed and reiterated that it was willing to contin ue to discuss these issues further with Members.  
On mode 4, Mexico had increased the number of cat egories subject to commitments in order to allow 
for the movement of persons.  It added to its in itial offer business visitors  with broad coverage, 
including investors (as defined in the offer) and corporate transferees.  As regarded sectoral 
commitments, he said that, since implementing a solution on the issue of telecommunications, which 
had been an obstacle in the preparation of the initia l offer in this sector, Mexico was including a broad 
coverage of commitments on telecommunications.  Mexico hoped that similar commitments would be 
made by other Members, in addition to other sectors of interest to his country.  Mexico had made 
substantial progress in telecommunications over the preced ing ten years.   In financial services, which 
was of great importance, Mexico had included subs tantial improvements based on various requests for 
clarification in bilateral meetings since it had firs t presented the initial offer.  He said that experts 
from capital were available to provide clarifications in this regard.  He said that Mexico had also 
made major additions in various sectors, which, in the interests of time, he would not address.  He 
recalled that Mexico, together with Chile, India a nd other developing countries, had contributed to 
organising a symposium on cross-border trade.  This  seminar had noted the large scale of this trade 
and had made clear that more commitments in mode 1 needed to be complemented with commitments in mode 2 given their interdependent nature in or der to have a real impact on the liberalization of 
trade in services.  He said that Mexico had borne in  mind the seminar in its revised offer.  He said that 
consultations with various government agencies were  underway in his country.  As well, Mexico had 
held bilateral meetings with a number of trading partners in order to carry out technical changes 
which provided precision and greater transparency in  its commitments in various sectors.  This was 
the case for tourism and telecommunications services.   
251. Turning to his country's assessment of the st ate of the negotiations, the representative of 
Mexico echoed frank comments by various Members that , although there had been some efforts, more 
were needed in order to attain a services ne gotiation which was broad and provided opportunities 
based on existing openness and new openness.  Busi nesses needed to have the security that 
commitments would be respected.  He thanked th e Members who had submitted initial and revised 
offers during the cluster.  In Mexico's view, the services negotiations and negotiations in other sectors 
were not behind schedule, but nonetheless, greater speed was needed.  Outlining a number of elements to help the negotiations move forward, he said that, firstly, more clarity in Members' 
commitments in the various modes of supply, particul arly mode 4, was necessary.  He reiterated that 
for Mexico this was a very important mode and greater bindings in mode 4 with regard to the 
categories of persons not linked to commercial presen ce, and particularly for persons that were not 
highly qualified, was required.  Greater transpar ency in Members' commitments was also needed, 
particularly with respect to the proof of economic  need.  Also necessary was consolidation of real 
liberalization in sectors which were important for deve loping countries in modes 1 and 2.  With regard 
to MFN, he said that Mexico had offered to elimin ate one of its two MFN exemptions and hoped that 
Members with a large number of exemptions would al so eliminate MFN exemptions.  He said that the 
development of disciplines for the five elements  included Article VI:4 was important.  On GATS 
Rules, realistic and specific goals for subsidi es, public procurement a nd emergency safeguard 
measures needed to be identified.  He said that Members needed to be ambitious and that Mexico 
believed that that developed Members should not limit themselves to consolidating actual opening in 
all sectors, but should open further sectors to comp etition and particularly those for which developing 
countries had an interest.  He said that consideration needed to be given to th e specific needs of these 
countries, and particularly those of LDCs.  As far as possible, Members should consolidate the 
openness that existed.  More attention needed to be paid to services at informal ministerial meetings, 
at which not enough had been done in the past despit e the Chairman's consider able efforts.  Members 
needed to continue to work in sectors of inter est for all Members and a sectoral focus was not 
appropriate.  The work carried out  in the various friends groups was key to these negotiations.  He 
agreed that the assessments carried out by these groups were important with regard to offers, said that TN/S/M/15 
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 this had been done by a group interested in mode 4 and thought that this could helpful in the Council's 
work.  He said that the resources Members had in Gene va were substantial and that they should take 
advantage of these in order to move forward in the technical negotiations on hor izontal rules.  He said 
that much progress could be made and that it was cr itically important that Members continue to hold 
informal meetings in the subsidiary bodies betwee n clusters.  Finally, he said a roadmap was needed 
in order to lay out the steps to achieving the desi red results and to reach success at the Ministerial 
Conference in Hong Kong.   
252. The representative of Egypt
 said that he was pleased to announce the submission of Egypt's 
revised offer to the Secretariat for circulation.  He said that in comparison to Egypt's initial offer, the 
revised offer contained several substantial and t echnical modifications, including new commitments 
in all services sectors in which Egypt had prior commi tments.  In addition, the revised offer included 
new commitments in newly introduced sub-sectors su ch as air transport services.  The submission of 
Egypt's revised offer demonstrated Egypt's re newed commitment to progressively achieve higher 
levels of liberalization in trade in services.  It  also responded to the many requests received from a 
large number of Members for specific modificatio ns and additions to Egypt's initial offer.  He 
reaffirmed the crucial importance Egypt attached to a positive outcome in the services negotiations 
which it considered a major and integral pillar of the on-going round of negotiations.  Services was of 
vital importance to the Egyptian economy, which, he noted, was undergoing a series of ambitious and 
comprehensive economic reforms.  Egypt stood ready to cooperate and to seek effective and equitable 
solutions to overcome the slowdown in the services ne gotiations, owing particul arly to the delay in 
the submission of offers by a large number of Members and the relatively moderate quality of offers 
received.  Egypt believed that the challenges faced  were largely a question of the political willingness 
of the developed country Members to provide sign ificant meaningful market access opportunities in 
areas of interest to services supp liers from the developing world rath er than a matter of shortcomings 
in the negotiation tools and methods.  Finally, he  stated that Egypt's revised offer remained 
conditional on other WTO Members making substantive a nd satisfactory offers in areas of interest to 
Egypt in the framework of the Doha work program , as well as to granting credits for liberalizing 
measures undertaken autonomously by Egypt. 
253. The representative of Croatia , speaking on behalf of six recently acceded Members (namely 
Albania, Croatia, Georgia, Jordan, Moldova and Om an) thanked the Members that had submitted their 
initial offers and revised offers in  recent months.  The group believed that active participation in the 
present negotiations was essential in order to fulfil th e Doha mandate in the area of trade in services.  
He noted that the offers presented to date, including the revised offe rs, lacked the ambition and sense 
of direction that were required for a high-qualit y outcome to the negotiations.  He said that 
delegations could only arrive at th is conclusion in light of the Chairman's presentation.  He said that, 
despite the a considerable number of new offers th at had recently been submitted, the quality of the 
offers presented showed little impr ovement.  This was a position held by many, and yet, he said that 
there remained no prospect of meaningful progress.   He recalled that the group of Members on whose 
behalf he was speaking had liberalized their mark ets extensively in the process of their accessions.  
Those commitments had been made in a positive spir it and had contributed a domestic reforms.  At 
the same time, however, their adoption and implem entation had been very painful for the group's 
respective industries.  The group's experience dem onstrated that the reform process could bring 
considerable benefits and contribute to sustaina ble growth.  Commitments made by recently acceded 
Members in the services area were far more advan ced than those of the original WTO Members, 
especially taking into account their level of devel opment.  He said the Members of the group had 
made commitments in terms of the very large num ber of sub-sectors included in their schedules.  
Moreover, these commitments were generally deeper  and subject to fewer limitations than the 
commitments that had been undertaken Members at a comparable level of development.  In terms of 
quality of commitments, he said that the recently acceded Members made twice the number of full 
commitments than the original WTO developed Me mbers in mode 1, and four times more than 
developed countries in mode 4.  He said that th ese arguments could be used as examples for other  TN/S/M/15 
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 Members and, in the group's view, would help to achieve the goals Members had set for themselves in 
the negotiations.  He had been pleased to hear  that some Members, such as Argentina and 
Switzerland, had recognised the specificities of the group's position and the need to address it in the 
negotiations.  The countries of the group believed that  the key objective in the negotiations should be 
quality of offers and the value added overall to trad e in services.  The group believed that momentum 
and incentive to participate coul d be added to the negotiations were more countries to present 
substantial and meaningful improvements to offers.  Finally, the group encouraged other Members to 
consider presenting revised offers that would res pond to the needs of the recent acceded Members and 
which would significantly contribute to the successful  outcome of the negotiations as a part of single 
undertaking. 
254. The representative of Canada  said that his intervention was based on a room document that 
highlighted Canada's objectives in the negotiations a nd identified the main criteria that Canada would 
use to measure progress.  It provided Canada's asse ssment of how effectively its objectives were being 
made and some thoughts on the way forward.  He regr etted that Canada's view  was that there had not 
been sufficient progress in the negotiations.  This  could be demonstrated both in quantitative and 
qualitative terms.  In moving forward, all Members needed to increase their collective commitment to 
a successful outcome and augment their methods of work on the basis of a work program that should 
be developed.  Canada believed that this c ould be accomplished within the existing negotiating 
framework. Canada's participation in the market access portion of the negotiations was guided by two 
overall objectives, namely to increase the quantity of  services liberalization and its quality.  With 
respect to quantity, he said that the negotiations represented an opportunity to address two broad gaps 
in the coverage of GATS commitments.  The firs t gap was the divergence with respect to market 
access commitments across Members following the Uruguay Round negotiations .  A review of the 
information available on the WTO website gave an  idea of this range.  Developed countries as a 
whole had taken roughly similar numbers of comm itments (generally over 100 sub-sectors, Canada 
was reported as having 104 sub-sectors committed).  Developing countries were reported as having 
taken, on average, commitments in fewer than 40 sub- sectors, and LDCs an average of less than 20.  
In this regard, Canada joined with other Members that recognised the contribution of recently acceded 
Members to this calculation.  The second quantitativ e gap and probably the more significant one, he 
said, was between GATS offers and the current state of market liberalization in Members' economies.  
Developments since the Uruguay Round had seen many  Members participate in two general economic 
phenomena.  Firstly, significant unilateral regulator y reform and liberalization, and secondly, the 
development of an increasingly wide network of bila teral and regional free trade agreements many of 
which contained service liberalization commitm ents.  In reality, WTO services commitments 
significantly lagged behind even the current regulator y and trade frameworks in many Members.  He 
acknowledged that there would always be some di vergence between bindings and reality given the 
flexibility afforded by the GATS, the commitment to progressive liberalization, and the development 
friendly focus of the GATS.  Nonetheless, Members needed to signal that they would be expecting 
more commitments, particularly from key emerging markets, to be one of the outcomes of the 
negotiation.  As a starting point in this regard, Ca nada expected other Members to come forward with 
as many commitments as possible and, at least, at the level of the current regulatory status quo.  In addition to increasing the number of commitments in  the GATS, Canada was focusing on key sectors 
where it should improved quality of commitments.  Quality of service commitments was a subject 
about which it was difficult to generalise, since ser vice sectors were unique and they differed in terms 
of the nature of the firms which participated in the sector, the regulatory environment applied and the 
nature of the barriers that were con fronted in international markets.   
255. The representative of Canada said that Canada's specific objectives at a sectoral level were 
described in a room document and included sectors such as financial services, telecommunications 
services, transportation services, computer and related services, environmental services, professional 
services and energy services.  The nature of co mmitments that Canada was seeking had been 
identified in its requests and in the course of many bilateral meetings.  Canada had also identified its TN/S/M/15 
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 objectives in a number of other contributions that it had sponsored or co-sponsored  and specified in a 
more precise fashion of what a quality outcome woul d consist in these sectors.  He said that as the 
negotiations moved forward Canada would be seek ing ways to broaden the consensus in these 
sectoral areas and move from common understanding s among groups of Members to a more formal 
negotiating process.  He said that be it on a bilateral basis in the request-offer discussions, on a 
plurilateral basis or multilaterally in various fora, th is work needed to be given a higher profile.  He 
noted that in whatever format this would take  place, the efforts would be informed by the 
informational tools that it was proposed could be pr epared by the Secretariat.  Canada also had 
objectives in a modal context and he had noted th at discussion of modal issues had tended to be 
expressed in a polarised fashion, which was a faulty approach in Canada's view.  For example, mode 4 
had tended to be seen as a developing Member inte rest where commitments were required only from 
developed Members.  This had allo wed many to avoid the reality that  mode 4 access, particularly to 
developing Member markets where the current leve l of commitments was of poor quality, was also 
important to developed countries.  Mode 4 had been identified as one of Canada's principal requests in 
this round on the basis of consultations it had c onducted domestically.  He sai d that Canada had good 
existing mode 4 commitments and had added significantly to them in its two offers.  He regretted that 
he had not seen the same level of commitments or engagement from other countries, particularly the 
demandeurs  on this issue.  He said that the paper outlined  the criteria that Canada was using in this 
area.   
256. The representative of Canada said that, in a si milar fashion, mode 3 had been viewed as a 
developed Member interest.  While it was true th at mode 3 was important  for developed Member 
economies, it was equally true that mode 3 acce ss was important for developing Members' service 
suppliers including between developing country market s.  He recalled some of the findings presented 
by UNCTAD with respect to levels of investment in this mode, and said that even a cursory review of 
offers suggested that liberalization already afforded  had not been fully reflect ed in new commitments.  
He said that reducing the gap between GATS commitm ents and domestic realities in mode 3 would be 
an important objective for Canada.  Finally, in the area of mode 1, Members had began to recognise 
the increasing importance of this area.  Canada had pa rticipated with great interest in the recent WTO 
symposium and had made a number of requests in m ode 1 and looked forward to determining how to 
proceed in a concerted way on mode 1 with other Members.  He said that the negotiations, to be 
successful, would require efforts by all.  Canada  had come forward on time with its market access 
requests and two market access offers.  It believed that it had responded to requests for market access 
from a broad range of the WTO membership including developing countries.  It had not seen a similar 
level of engagement from some of its trading pa rtners.  Members had generally not responded to 
Canada's request for additional market access, whic h was outlined in detail in the room document.  
Needless to say, his delegation would expect much  more to be on the table before the negotiation 
could be completed.  
257. The representative of Canada said that Members ne eded to find ways to advance the market 
access negotiations and many other delegations Canada had spoken with  shared this perspective.  
Canada had a number of suggestions the Chairman might consider.  First of all, Members needed to 
proceed with the services negotiations in a manner independent of the other negotiating areas.  He 
recalled previous occasions when the Council had m oved forward on the basis of conditional trust.  
All Members needed to put their most ambitious offe rs on the table so that there could be an honest 
assessment made on progress.  Negotiating linkages s hould be the furthest element from delegations' 
minds and not the closest.  Canada also believed th at new approaches to the negotiations were needed 
and he emphasised that he was not suggesting in  any way new modalities.  The modalities for the 
services negotiations were flexible enough to acco mmodate the Council's work.  The request-offer 
process needed to remain the basi s of work; however Members also needed to recognise that this 
process had not produced significant results.  Wher e progress on building consensus had occurred, it 
had taken place outside the Special Session in sm aller plurilateral groups.  The experience in these 
informal groups had been encouraging and in some cases they had been able  to come forward with  TN/S/M/15 
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 detailed proposals, which tended to focus work in  sectors such as financial services, mode 4 and 
mode 1.  While the bilateral approach rema ined valid, Members were increasingly seeing the 
development of plurilateral requests and approaches.   The negotiating process needed to find a way to 
make these proposals more precise and to facilitate real engagement between demandeurs  and other 
Members.  The current organization of work, which called for only one full services cluster before the 
Hong Kong Ministerial, was not sufficient to ensure that the negotiations would be at a comparable 
level of specificity as the other negotiating ar eas in time for Hong Kong.  Canada believed that 
Members needed a clear work plan that would provide additional opportunities to build on work, 
particularly from informal groups. 
258. The representative of Canada sought to make a number of suggestions that he hoped the 
Chairman might find useful.  Firstly, the Chairm an might challenge Members involved in informal 
groups to build on their various statements in th e Special Session and develop specific negotiating 
proposals on which to engage other Members.  Second, the Chairman could urge Members involved in informal groups to keep meeting between cl usters and to open delib erations to the entire 
membership so that real engagement could begin in  areas where there were negotiating proposals.  He 
also urged that these groups involve Secretariat officials in informal discussions as important 
resource.  Fourthly, he urged the Chairman to c onvene a series of informal meetings in September 
focusing on particular sectors or modes with a vi ew to allowing the Chairman to maintain an 
overview of the developments in sectoral and moda l discussions.  While the focus of his intervention 
had been on market access, he said that work on ru les, like market access, al so needed to advance on 
the basis of an integrated work plan.  Canada agr eed on the need to establish a work plan that would 
allow Members to narrow the focus in rules on what  could realistically be achieved both at Hong 
Kong and in the negotiations.  Canada saw real potential in work on regulatory transparency, but 
believed that the focus would need to be narro wed if Members were to know the rules areas and 
possible results for which they would need to e ngage domestic stakeholde rs in consultations.  
259. The representative of Singapore
, speaking on behalf of Australia, Canada, the European 
Communities, Hong Kong China, Japan, Korea, Norw ay, Singapore, Switzerland, Chinese Taipei and 
the United States, wished to make a few comment s on the quality of telecommunication offers.  He 
recalled that at the previous formal meeting,  a joint statement on the liberalization of 
telecommunication services had been circulated by  number of delegations.  The joint statement 
encouraged Members to achieve liberalization in this sector by proposing four points, which were:  
(1) to take commitments with full sectoral coverage  of telecommunication services, (2) to eliminate 
market access and national treatment limitations, (3 ) to fully adopt the reference paper, and (4) to 
eliminate MFN exemptions.  Building upon the four point s of this joint statement, he sought to make 
an evaluation, on behalf of the group, of the qualit y of telecommunications offers made up to 24 June 
2005.  He said that the evaluation was expressed in terms of the total membership and counted the EC 
as one.  Firstly, on the sectoral coverage, only one-third of the membership had made 
telecommunications offers based on the full sectoral coverage of these services.  Secondly, on market 
access and national treatment limitations, there remained  many restrictions in mode 1, FDI and forms 
of establishment, quotas, exclusive licences and economic  needs tests.  To give an example, less than 
one-third of the membership had no FDI limitations  in telecommunication services.  Thirdly, on the 
reference paper, less than 30 per cent of the membership had adopted  the reference paper in full.  
Fourthly, on MFN exemptions, about 10 per cen t of the WTO membersh ip maintained MFN 
exemptions.  He said more details on these figur es were available in a room document entitled 
"Statistical analysis of telecoms offers tabled by WTO Members".  There were a number of conclusions that could be drawn fro m this preliminary evaluation.  It was clear that there was room 
for improvement in telecom offers.  A majority of Members had yet to make telecom offers that were 
based on full sectoral coverage, that eliminated ma rket access and national treatment limitations, that 
included the reference paper or that eliminated MFN exemptions.  He said that the group would 
continue to work on improving ways to better evalua te telecom offers and also to consider possible 
benchmarks in this sector.  They invited all Members to participate in this exercise.  Finally, given the TN/S/M/15 
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 critical role that telecommunications played in  the advancement and gr owth of all economies, 
developed and developing, the group urged Members to table and impr ove offers in telecoms.  He 
hoped that the group's statement would assist the Chairman in the preparation of his report to the TNC.  He informed Members that the group intended to hold a seminar on telecoms during the September cluster. 
260. The representative of Japan
 said that, in line with the timeframe  that had been decided in July 
2004, more than 20 Members, including Japan, had submitted their revised offers.  Some additional 
initial offers had also been tabled, which Japan welcomed.  Japan had submitted its revised offer, 
which contained a number of substa ntial and high level improvements.  In doing so, Japan sought to 
contribute to substantial progress in services negotiations .  It had paid particular attention to sectors 
and modes of interest to developing countries.  Indeed, the improvements made included horizontal 
commitments in mode 4, mode 1, and key sector s including a number business services, such as 
accounting, bookkeeping services, legal services and e ngineering services.  Japan attached importance 
to the liberalization of trade in services from two perspectives:  (1) the export interest of services 
suppliers, and (2) the interest of consumers, including manufacturing industries that sought to 
maintain and enhance their competitiveness at home and abroad.  Liberalization of trade in services 
enhanced the quality and reduced the cost of servi ces inputs and contributed to a more competitive 
manufacturing sector.  Hence, for investors who sought the most appropriate place for future investments, the condition of services liberalization was one of the most important elements in their 
decision.  By contrast, he said that an evaluation of  the offers showed they were far from satisfactory 
both in terms of number and services.  Although Japan's  interests included a wide range of sectors and 
sub-sectors, it was particularly interested in th e following sectors:  maritime transport services, 
computer and related services, telecommunication services, construction and related engineering 
services, financial services, distribution services and audiovisual services.  It was not surprising that most improvements were from those Members whose economies were already liberalized and for        which the level of the existing GATS commitments  was already relatively high.  Japan looked 
forward to the forthcoming offers of other key Members and in particular those of emerging 
economies.  
261. Turning to the details of Japan's evaluation of the offers, the representative of Japan said that, 
with respect to computer and related services, Japa n was encouraged that there had been some new 
commitments in this area, but was dissatisfied that the commitments did not cover all sub-sectors in many cases.  He expressed support for the statemen t by Chile in this regard.  With respect to 
telecommunication services, Japan supported the statem ent made by Singapore.  His delegation was 
not satisfied with the offer in telecommunications, in particular with the existence of restrictions on 
foreign equity participation (specifically cases wher e a majority ownership was not allowed) and the 
lack of commitments on the reference paper.  With  respect to construction and related engineering 
services, Japan was not satisfied with the maintenance of restrictions on foreign equity participation, 
(particularly where majority ownership was not  allowed) and discriminatory procedures or 
requirements for foreign services suppliers, incl uding discriminatory licensing and registration 
procedures and joint venture requirements.  Jap an intended to make a proposal on construction 
services together with a number of interested Memb ers in the future.  With respect to financial 
services, Japan was not satisfied with existing lim itations on mode 3, in cluding limitations on the 
form of required legal entity, on direct foreign e quity participation and discriminatory licensing 
requirements.  With respect to distribution ser vices, Japan was disappointed with the lack of 
commitments in this sector in general, exclusi ons of sub-sectors or products and limitations on 
mode 3, particularly foreign equity participation.  With respect to audiovisual services, Japan noted 
with dissatisfaction the lack of commitments in motion picture and videotape production and distribution services and motion picture projection ser vices.  He recalled Japan's view on maritime 
transport as expressed in a joint statement with a num ber of other interested Members.  The reduction 
and eventual elimination of MFN exemptions were al so an important part of new undertakings and, in 
this regard, he expressed support for the comments made by the delegations of Hong Kong China,  TN/S/M/15 
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 Korea and Mexico.  Japan considered that substan tive improvements by major trading partners in the 
areas he had mentioned, were essential for a su ccessful conclusion of the negotiations.   
262. The representative of Japan said that the negotiatio ns would need to change gear quickly and 
more serious attention needed to be paid to cr eating a package based on the interests and concerns 
expressed by Members.  Given the nature of the nego tiations, he recalled, a package would have to be 
agreed to by all Members.   Past experience could be used in the negotiations  on services as a guide to 
determine the most appropriate method for progress.  There was no need to change the basic structure 
of the GATS nor the existing Negotiating Guidelines.   He recalled that the Negotiating Guidelines 
that had been adopted by the Council referred to thr ee methods of negotiations:  bilateral, plurilateral 
and multilateral.  Although the bila teral negotiations would continue to be the main method, he said 
there was the possibility of activating the othe r two and that these should be explored as 
complementary tools.  He said that if it was difficult to make an offer, owing to a lack of certainty over the concessions of others, then the solution w as to make a package before making offers.  He 
said that the level of ambition of the negotiations  was such that Members were having difficulties 
making offers in the absence of knowing what others  would do.  Given the lack of progress, Members 
needed to seriously explore plurilateral and mu ltilateral approaches as a complementary tool to 
achieve shared objectives.  In addition to market a ccess, he said that the rules negotiations constituted 
an important area of the negotiations and that Japan  attached importance to domestic regulations in 
particular.  In order to achieve market access, disciplines on domestic regulations were necessary.  He said that a good number of proposals had been presented and Members needed to now move to a negotiating mode.  He agreed with other Members that more work would be necessary, including 
various consultations by the Chairperson of the WPDR.  As was known, services would be part of a 
single undertaking and was a critical element of an overall outcome of the DDA negotiations. The 
Ministerial meeting in Hong Kong would be an o ccasion for the membership to review the entire 
package including services.  Members should not mi ss the opportunity to make substantive progress 
in services by obtaining political guidance from Minist ers and to achieve a comfortable level of 
specificity.  Japan had confidence in  the Chairman's leadership in th is regard.  Japan said that it 
believed that it would be useful to have a road  map that Members could follow to address their 
interests and concerns.  Japan looked forward to participating in any consultations the Chairman 
might organise. 
263. The representative of Australia
 expressed his appreciation for the initial and revised offers 
that had been submitted in recent days.  He recalle d that Australia had submitted a revised offer on 26 
May in which it proposed new commitments on m ode 4, legal services, c onstruction and related 
engineering, freight logistics, air transport, te lecommunications, private health and other business 
services.  The changes in environmental servic es commitments clarified Australia's GATS initial 
offer, including by making it explicit that the proposed commitments did not cover water for human use.  He said that the tabling of Australia's re vised offer had followed the consideration of market 
access requests from other Members.  It also refl ected Australia's interests in securing improved 
access for Australian exporters, including through temporary entry.  It served as a model for 
encouraging offers from others in areas of interest  to Australian services exporters, particularly in the 
areas of freight logistics, legal and environmenta l services.  The mode 4 offer had been made in 
categories not linked to commercial presence, was to tally horizontal and offered to bind Australia's 
abolition of labour market testing.  In terms of th e response to Australia's re quests, he joined those 
Members that had expressed profound disappointment with the outcomes.  He surmised that about 5 
per cent of Australia's requests had been fully met and 35 per cent had been met somewhat partially.  
He said that the package of offers on the table was a very long way from constituting what Australia 
would need.  In specific terms, Australia was disa ppointed with the quality and sectoral coverage of 
offers in the a number of sectors (which largely reflected the sectors in which Australia had made 
requests of other Members), namely education services, professional services, telecommunication 
services, construction and related engineering services, financial services, maritime transport services, freight logistics services and mining and energy related services.  While some Members had TN/S/M/15 
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 responded substantively to Australia's requests in one or more of the above sec tors, in general terms, 
most offers failed to address his delegation's key interests and ha d insufficient coverage across a 
broad range of sub-sectors or limited one or more  modes of supply.  For example, in education 
services and professional services, where partic ular sub-sectors were committed, mode 1 was 
typically scheduled as "unbound".  In telecommunica tions services, financial services, and education 
services, a range of mode 3 restrictions were ty pically maintained, including equity limitations, 
economic needs tests and the imposition of licensing quotas.  He said that the lack of commitments 
and limitations of this nature seriously impacted Aust ralia's interests.  The picture was not all gloom, 
however, and in this regard he underlined that  two developing country Members had recently made 
very high quality offers on telecommunications.  In telecommunications generally, Australia would 
ask that more Members commit to the reference paper.   
264. The representative of Australia said that his delegation used model schedules, scheduling 
guidelines, checklists and negotiating proposals, where su ch tools were available, to help it evaluate 
the quality of offers from other Members.  For exam ple, the freight logistics negotiating proposal in 
TN/S/W/20, included a logistics scheduling checklist,  which had been develope d and promoted within 
the Special Session by Australia and other co-s ponsors and set out detailed scheduling proposals 
which Australia believed should assist in the evaluation of offers.  He agreed with Canada that there 
was a very great scope for sectoral groups of Members to play a important role in the phase of the negotiations that lied ahead.  However, irrespec tive of whether such scheduling guidelines and 
checklists were available, Australia had assessed, from a strategic and commercial perspective, the 
extent to which other Members' offers had addressed  its requests.  The resulting picture formed the 
basis of Australia's overall analysis of the progr ess of services negotiations in the round.  Australia 
supported the idea of an ambitious, specific numerica l target for the increase of sectoral coverage and 
improvement in the quality of offers being endo rsed by Ministers at the December Ministerial 
Conference in Hong Kong.  His delegation was open  to new ways to complement and enhance the 
request-offer process.  It believed there was a need to map out how to move the negotiations along in 
preparation for the Hong Kong Ministerial Confer ence.  Any such map should identify ways to 
supplement the request-offer process, should outline a potential package that could be agreed on 
domestic regulation and should provide a statem ent of expectations on progress on rules in 
accordance with the mandates under Articles X, XIII and XV.  Australia thought it was high time to 
try to move beyond the impasse on emergency safegua rd measures in the GATS.  He recognised the 
importance attached to this issue by a number of trad ing partners, including in the Asia-Pacific region, 
and said Australia would be hosting a three-day workshop in Indonesia in the coming weeks to 
explore new ways in which movement might be possible in order to resolve this issue.  He pledged his 
delegation's support in the Chairman's efforts to bring the negotiations to a successful conclusion. 
265. The representative of China
 sought to share his delegation's assessment of the state-of-play of 
services negotiations to date and ideas on how to move forward.  On market access, he was glad to see 
that more initial and offers had been submitted, as well as revised offers only one month after the 
indicative deadline for their tabling.  The total number of offers sent a positive signal that Members 
were increasing their level of e ngagement in the market access negotiations.  He did not mean to 
imply that those Members that had not tabled offers  did not wish to engage in the negotiations, but 
rather, understood that they faced difficulties in prep aring their offers, in part owing to the capacity 
constraints they faced.  He hoped that they would receive the technical assistance they required.  He 
informed Members that China was finalizing its revi sed offer and would submit it in the near future. 
He underscored that, as a newly acceded member, China was in the process of implementing the 
commitments made to its major services trading partners in its accession negotiations, which he 
recalled, relative to the development level of Chin a's services industry, were extensive in terms of 
sectoral coverage and substantial in terms of the level of commitments. Implementing these 
commitments had posed unprecedented challenges to  both domestic regulatory authorities and 
industries.    TN/S/M/15 
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 266. With regard to the revised offers tabled to da te, the representative of China said that, owing to 
time constraints, his delegation had been unable to complete a full assessment of the offers for the 
meeting.  Nonetheless, it had produced a brief and pr eliminary analysis of the revised offers based on 
the offers of some of China's major services tradi ng partners.  He said that China's services providers 
would not be happy with the results of this prelim inary analysis.  Firstly, while he appreciated that 
some of these revised offers contained improvement s in some areas of interest to China, such as 
movement of natural persons and ma ritime transport, in general Chin a's limited requests has not been 
adequately taken into account.  Specifically, the re vised offers of China's major services trading 
partners failed to bind their existing levels of lib eralization and instead committed to end-points for 
further liberalization.  In this regard, he supporte d the statement by India on behalf of a group of 
Members concerning mode 4 negotiations, the statement made by Japan on behalf of a group of 
Members concerning maritime transport services and the statement made by Cuba on construction 
services.  Therefore, much remained to be done both in terms of level and sectoral coverage of 
improvements offered.  He hoped that developed Member trading partners would demonstrate the 
necessary political will and translate their calls for further services liberalization into real 
commitments in their own offers, which he believe d would give impetus to the services negotiations. 
He also stressed that the development dimension of  the services negotiations should be fully reflected 
in future revised offers.  Secondly, a significantl y large number of MFN exemptions remain listed in 
the revised offers.  He recalled that in total th ere were over 400 MFN exemptions in schedules and he 
was not optimistic about the prospects in this area gi ven the lack of sufficient attention paid to it by 
Members.  This lack of progress on MFN exemptions  was a serious concern to China.  He recalled 
that MFN was the fundamental principle of the WT O and had attracted economic entities to join it in 
spite of the high cost they had paid for membersh ip.  He said that should there remain many MFN 
exemptions at the end of the round, it would not be able to be said that Members had achieved further 
liberalization of trade in services.  Members shoul d explore ways to reduce substantially the number 
of existing MFN exemptions.  In this regard, a group of Members, including China, had submitted a 
joint statement which contained action proposal s on the MFN exemption negotiations.  He hoped 
Members would give positive consideration to this join t statement.  Thirdly, with regard to ENTs in 
general, the number of ENTs in the revised offers remained very large and their criteria unclear in 
spite of the relevant provision contained in the Ne gotiating Guidelines.  He shared the often expressed 
view that ENTs had an effect similar to a safeguard measures.  Members without ENTs in a particular sector were thus put at a disadvantage unless they resorted to the safeguard mechanism.  He said 
future work should seek ways  to address this issue. 
267. On rule-making, which the representative of Chin a said was as an integral part of the services 
negotiations, he noted that momentum had been building in the Working Party on Domestic Regulation.  A good number of proposals had been  submitted by both deve loped and developing 
Members.  However, there remained divergent views on a number of key issues and he encouraged 
Members to continue to discuss the various elemen ts and issues involved so as to maintain this 
momentum.  China attached great importance to  the development of multilateral disciplines on 
domestic regulation and had been conducting consultations with a wi de range of domestic regulatory 
authorities to seek their views on those elements as well as the form and content of disciplines they 
would like to see.  This process was on-going and he hoped to share with the WPDR the results of its 
domestic consultations.  He said that little progress ha d been made with respect to the development of 
an emergency safeguard mechanism, urged all Member s to be actively engaged in this endeavour, and 
called upon Members to show necessary political will to  move the negotiations on ESM forward.  On 
subsidies, he encouraged Members, and particularly  those with the capacity to do so, to provide as 
much information as possible to the negotiating group.   
268. The representative of Venezuela  said that his country was one that had not submitted an initial 
offer.  He said that Venezuela had doubts about participating in the deba te on the assessment of the 
negotiations.  Given the level of advancement in the negotiations on services, he sought to share some 
of the reasons why this was the case.  He said that there were technical difficulties that, in Venezuela, TN/S/M/15 
Page 80  
 
 were linked to political changes and changes in le gislation and regulations over the preceding five 
years.  It was difficult to participate in trade negotiations when national policies were under debate 
and national legislation undergoing a series of very  profound natures.  The process he described was 
work in process and included changes to institutions a nd not only legislation.  This did not mean that 
Venezuela had been left behind in terms of liberalizat ion.  In terms of real market access in the Latin 
American region, he said that few economies had op ened market access as much as Venezuela.  He 
said that some trading partners had done opened in  many sectors, such as telecommunications, 
electricity and energy services which were key sectors for their economies. There was thus broad participation at a private and inte rnational level.  However, his co mments related more specifically to 
national policy space and the concerns Venezuela had w ith regard to the direction of the negotiations.  
Venezuela believed that there were systemic concerns in the negotiations beyond services that 
revolved around the lack of progress in all other ar eas.  Some Members had seemingly forgotten that 
the negotiations had development as their aim.  He said that development was the main benchmark for 
the development round.  It was difficult for Ven ezuelan authorities to see the progress made in 
negotiations particularly in terms of  Articles XIX and IV.   He said that the Doha mandate needed to 
be borne in mind when discussing how to proceed in the negotiations and how to address market 
access issues.  Stock needed to be continually take n of the Doha mandate and the provisions of the 
GATS regarding market access for developing countries.   This was what was n eeded in order to lay 
out a path for the negotiations, and Venezuela had a concern in this regard on how progress had been 
achieved to date.  He said that various options on m ode 4 had been put forward that linked mode 4 to 
mode 3 and that it was difficult for developing econo mies to achieve investment opportunities in other 
regions of the world.  His delegation had concer ns about how the issue of development was being 
dealt with in the negotiations and believed that the highest political level needed to deal with these 
issues.  It was essential that these concerns, shared by many, be dealt with appropriately at the current 
stage of the negotiations.  He said that these concer ns arose, not from imagination, but rather were 
laid out in the mandate.  The way to deal with  the problem was not to change the negotiating 
mechanisms, and he said that his delegation was formally opposed to introducing new modalities of 
negotiation either through a new negotiating mech anism or linking to it other modalities of 
negotiation.  Discussion needed to occur at the high est political level and thought needed to be given 
to these issues by all Members and not only 30 Members making decisions among themselves.  He 
said that the concerns he had expressed were those fr om capital, which sought to have these concerns 
taken into account.  He reiterated that, in princi ple, Venezuela continued to be interested in 
participating in the negotiations.  The concerns he had expressed he believe d explained to a large 
extent why a large number of Members had difficulties presenting their offers. 
269. The representative of the Dominican Republic
 said that her delegation believed that there had 
been substantial progress in the negotiations, alth ough there remained much work ahead.  The 
Dominican Republic believed that progress had been made in market access in particular and it was 
important that progress also be made in other aspects of the services negotiations.  Her delegation 
believed that a quantitative assessment of the eff ect of the liberalization of services markets was 
difficult given the number of sectors included in an offer.  Her delegation, in its assessment, had 
found that some sectors which appeared to be open  had barriers linked to domestic regulation.  She 
said that the services sector was more complex than that of goods and hence required more time to 
undertake national consultations.  She recalled that  for many, services represented more than 50 per 
cent of GDP and hence the results of the services negotiations could have a major impact.  She said 
that it was understandable that Members would seek  a balance in the commitments for modes of 
supply and also with regard to other issues included in the DDA and the July Package.  Her delegation 
felt that the negotiations should continue based on th e Negotiating Guidelines that had been agreed in 
2001, including the focus on requests and offers.  In summary, her delegation believed that an effort 
on the part of all Members on the basis of the Nego tiating Guidelines would lead the negotiations to a 
successful outcome.  Finally, she thanked Australia for its contribution on tran sparency and mode 4 in 
its revised offer.  TN/S/M/15 
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 270. The representative of Guatemala  referred to the situation in the negotiations and the progress 
made under the Doha Development Agenda framework and said that 2005 was the year in which 
Members should send clear signals to advance the ne gotiations.  She said that progress had been made 
at an acceptable pace, although perhaps not as quickly  as all would have liked, given the complexity 
of the issues.  Although some Members considered  the services negotiations to have not advanced, 
Guatemala saw the situation in a more positive li ght.  An increasing number of initial offers and 
revised offers had been made.  She said that ten years after the Uruguay Round, the implementation of 
acquired commitments had not become a reality and th e increase in market access in areas of interest 
to developing countries had not materialised.  Guat emala had a great interest in the negotiations and 
was deeply committed to achieving progress in all th e areas.  She hoped that all Members, and in 
particular the LDCs, would derive benefits fro m the round's results. Guatemala, she said, sought 
tangible opportunities for Guatemala's exports in goods  and services.  In order to help the Chairman 
with his report to the TNC, she thought she might make a few observations highlighting the areas of 
greater importance for her delegation.  Firstly, she said that it was necessary for Members to make commitments.  Guatemala would take into account the discussions at the meeting in preparing its 
revised offer, although, as a small country, it had en countered difficulties in elaborating it.  Secondly, 
she said that it was important to reiterate the areas c ontained in Annex C and in the July Package.  The 
Annex reflected the necessary balance needed in the negotiations since it laid out important 
guidelines.  There would need to be quality offers in terms of the areas of interest to developing 
countries.  She said that the basic elements contained in Annex C should guide the negotiations. Regarding the request-offer approach, although not the fastest method, it was the most transparent 
manner in which to exchange information about possible national areas of commitment.  This 
approach also guarded the flexibility established in the GATS.   
271. The representative of Guatemala said that in relation to the revised offers and on a 
preliminary basis, Guatemala considered that the resu lts in the areas of greatest interest for developing 
countries were not acceptable, particularly with rega rd to mode 4.  The para meters for assessing the 
revised offers in terms of mode 4 were included in a joint statement and stated that improvements 
should be made particularly by developed countries.   Guatemala believed that parameters such as the 
coverage of measures at all le vels of government were importa nt.  Countries with centralised 
governments such as Guatemala adopted  commitments and applied them at every level automatically.  
However, in federal states, it was much more difficu lt.   The commitments adopted in the negotiations 
had to be guaranteed at all government levels.  She hoped that by the next ministerial meeting, 
Members would have a clearer picture of progress in  the areas under negotiation.  Members needed to 
avoid entering into a crisis zone.  On rules she said that disciplines were very important for her 
delegation.  Members could not focus exclusively on market access issues.  Rules were a part of the 
Council's mandate and a complement to market access co mmitments.  This was particularly true to in 
the case of Article VI.  Improvement in rules al ong with improvement in market access should be 
among the positive and tangible results of the negot iations. She underscored that using a numerical 
quantitative analysis could delay and upset the delic ate balance in the negotiations.  She hoped that 
the comments she had made would be  useful to the Chairman in his report and pledged her country's 
active and willing participa tion in this process.  
272. The representative of Moldova
 confirmed her delegation's support of the statement by 
Croatia, which had spoke on behalf  of a number of recently acceded Members.  She recalled that 
Moldova, like other new Members, had undertaken a very high level of commitments, and even 
higher in a number of particular sectors.  For exam ple, Moldova had already liberalised the financial 
sector and others sectors, the liberalization of which were only being dealt with by others in the Doha 
negotiations.  Moldova's commitments were recent a nd very vast in scope and Moldova was required 
to make very substantial efforts and major investme nts in order to provide the necessary adjustments.  
In this context, she said that it was important to  recognise the special situation of the Republic of 
Moldova which, as a recently acceded Member and in accordance with the provisions of paragraphs 9 
and 49 of the Doha Ministerial Declaration, need ed to be taken into consideration within the TN/S/M/15 
Page 82  
 
 framework of the on-going negotiations in order to en sure advantages and benef its for all participants 
and an overall balance in the results of the negot iations.  She sought to indicate her delegation's 
special interest in the opening of developed countr ies' trade through mode 4.  She said this was a 
matter of particular importance to small countri es within the framework of the negotiations.  
Moreover, mode 4 was an important instrument for the continuation of the objectives of Article IV 
and the Doha Development Agenda.  Finally, she th anked those delegations that had submitted initial 
offers.  Moldova shared the concerns of other Members about the quality of offers and hoped that 
there would be improvements that would see greater  levels of liberalization and improved market 
access for service suppliers and providers.   
273. The representative of Uruguay
 expressed her thanks for the initia l and revised offers that had 
been submitted recently.  Uruguay informed the Counc il that it had submitted its revised offer to the 
Secretariat which would be circulating the documen t in the coming days.  Seeking to highlight the 
improvements contained in Uruguay's revised offer, she said that these included mode 4 ameliorations 
that covered the main elements contained in  the proposal on categories of natural persons 
(TN/S/W/31).  She said that Uruguay had made great efforts in the presentation of its revised offer 
within the deadlines as a sign of its constructive co mmitment to the negotiations.  She reiterated the 
importance Uruguay attributed to the principle of the single undertaking and in particular the need to ensure that there was an overall balance in the re sults of all the negotiations which were taking place 
within the framework of the Doha Round.  She said that a central issue was progress in the process 
and the possible levels of ambition.  In this c onnection, she said that the specific criteria which 
Uruguay had taken into consideration in evaluating the critical mass of offers were the following:  the 
requests that had been submitted, the guidelines cont ained in the Doha Declaration, Articles IV and 
XIX of the GATS, the Negotiating Guidelines of Ma rch 2001, and the various elements contained the 
July Package and in particular Annex C.  Ur uguay believed that these standards and guidelines 
contained very important elements which were suffi cient in order to make it possible for Members to 
make substantial progress in the negotiations in such  as way as to obtain results beneficial to all, 
particularly in light of the objectives of Article IV of the GATS.  As such, Uruguay did not believe 
that Members needed to arrive at new modalities or parameters for the evaluation of the process, 
which might change the rules of the game of the negotiations without giving the guarantee that they 
would help Members achieve their objectives.  Fina lly, she reiterated that Uruguay would continue to 
work constructively.  
274. The representative of South Africa
 commended the countries that had submitted their initial 
and revised offers over the preceding days, especi ally the small developing countries, for the 
tremendous work they had undertaken in preparing and presenting their offers.  She also thanked the  
Chairman for his note on the review of progress, J ob(05)/99 and said her delegation wished to respond 
to the invitation for Members to indicate in a sp ecific and substantial manner their market access 
interests and ambitions for the rules negotiations.  Firstly, she indicated that South Africa was still 
undertaking the challenging and complex task of prep aring its initial offer, which she hoped to present 
very soon.  As a clear demonstration of its comm itment to the negotiations, South Africa hoped to 
table an offer which would add to its already ve ry open services market and liberal schedule of 
commitments.  She sought to reiterate this latte r point because it was taken for granted that some 
Members entered the negotiations with an already a high level of opening.  For instance, South Africa 
was already fully committed in courier services, was 100 per cent open for computer and related 
services, had undertaken full commitments in construction services, and fully committed for 
consultancy services and environmental services.  So uth Africa's financial services commitments were 
also very wide and significant.  Thirty-nine out of  the some 160 sub-sectors were fully bound, or some 
25 per cent of its commitments; 54 per cent of th e 160 sectors were subject to a commitment.  She 
underlined this partly in response to the interest that some Members had indicated in some of these 
sectors and partly to indicate that South Africa, in preparing its offer, was deepening an already liberal 
schedule of commitments.  She hoped that South Africa 's efforts would be reciprocated by its trading 
partners, that it would be noted that South Africa negotiated with genuine commitment to the process,  TN/S/M/15 
 Page 83 
 
 
 and that the more developed pa rtners would fully respond to South Africa's requests with 
demonstrable genuineness and integrity. 
275. Turning to her delegation's initial assessment of the offers from more developed trading 
partners and noting that it hoped to undertake a more  substantial analysis of other revised offers as 
they were submitted, the representative of So uth Africa said that the assessment was not an 
encouraging one.  She said there were some positive signs with regard to mode 4 commitments.  For 
instance, some Members had begun to schedule m ode 4 commitments which were de-linked from  
commercial presence, while others had expanded the categories inscribed in their schedules and these 
developments were welcomed.  However, overall th e initial offers which South Africa had seen were 
not attractive.   In other words, these offers were  essentially non-offers because they did not offer 
fresh commercial opportunities for modes and sectors of interest to developing countries and to LDCs, 
such as in construction and tourism services.  South Africa believed that this lack of leadership from 
the main demandeurs  in these negotiations through a presen tation of non-offers essentially 
engendered cynicism and pessimism about the value of  participating actively in  the negotiations.  This 
was regrettable because South Africa believed that the services sector was one of the most essential 
and commercially important sectors of its economy .  Most importantly, this sector was key for 
economic development and for enhancing delivery and access to essential services.  Because of the 
lack of high quality offers, several delegations had ask ed if the current format of negotiations, namely 
the bilateral request-offer process, was adequate  and whether it needed to be reviewed or 
supplemented with another format.  She stated that a consideration of any complementary or 
supplementary formats to the current bilateral reque st-offer process should be more inclusive.  Any 
supplementary format should also enhance the participation of LDCs and other under-developed 
countries.  Furthermore, any complementary form ats should not exclude any modes or sectors of 
interest to the developing countries and LDCs.  Finally, any complementary formats should not 
restrict the flexibility of the GATS and should no t lessen the policy space or discretion Members had 
in choosing which sectors to schedule.  She emph asised that the Negotiating Guidelines, which had 
bee negotiated by the membership and especially th e developing countries, remained the basis for the 
negotiations.  The guidelines had been negotiated in or der to respond to the interests of developing 
countries and to take into account their limited negotiating capabilities and regulatory capacity.  Most 
importantly, the guidelines helped Members to assess th e impact of liberalization.  Turning to very 
specific questions on rules and domestic regulation, she stated that South Africa was interested in 
regulations which would facilitate the movement of natural persons and increase the transparency of 
mode 4 commitments.  Further, the technical st andards and licensing procedures that would be 
elaborated should not be burdensome for economies  with limited capabilities to comply with them 
and should not be difficult to comply with.  It w as also necessary to identify and develop an effective 
mechanism for recognising foreign qualifications.  As  far as the rules mandate was concerned, South 
Africa believed that the Article XIII mandate on gover nment procurement needed to be clarified.  Her 
delegation believed that the mandate did not in clude market access.  Thus, until there was an 
agreement about the mandate of the Article, Memb ers would not achieve any substantial progress.  
Finally, she stated that the round had been brande d the development round, and as such she hoped that 
whatever initiatives Members embarked upon, they w ould bear fully in mind the importance of this 
objective and ideal.  She said that a good start would be to find more innovative ways of 
operationalising GATS Article IV and the LDC Modaliti es.  South Africa reiterated its willingness to 
work with the Chairman in the future in trying to advance the negotiations. 
276. The representative of Thailand  responding to the Chairman's note, Job(05)/99, wished to 
reiterate that a positive outcome in the services negotia tions was very important to her delegation.  In 
order to achieve this, flexibility was a decisive  factor. She also said that transparency and 
inclusiveness should be enhanced to ensure that  all Members, including LDCs, were on board and 
equally informed.  She said that only a month afte r the May indicative deadline, a good number or 
some 22 revised offers had been tabled.  She info rmed the Council that Thailand intended to table its 
revised offer very soon and hopefully before th e summer break.  Referring to the Chairman's TN/S/M/15 
Page 84  
 
 invitation to prepare an individual assessment, she said that her delegation had yet to conduct a 
thorough assessment of the offers.  Nonetheless, she wished to share with Members Thailand's 
thinking on some aspects or challenges in the negotia tions.  The approach Thailand took was a simple 
and reasonable one, which kept in mind the emphasis in Annex C of the July Package on quality offers (particularly in the sectors and modes of s upply of interest to developing countries) and the 
intensification of negotiating efforts in rules.  Thailand divided its measurement into two levels.  
Firstly, at a broad and systemic level, Thailand had made it clear that rules and market access needed 
to move forward in tandem.  He r delegation believed that rules underpinned the intrinsic value of 
market access.  One of the most valuable asset s of the multilateral trading system was having 
multilateral rules to govern trade among Members.  Thailand's expectation was that tangible progress 
would be made in the areas of ESM and subsidies not  only to fulfil the objective of paragraph 7 of the 
negotiating guidelines per se , but more importantly with a view to ensuring that the objectives of 
Article IV:1(a), which was also codified in pa ragraph 15 of the Negotiating Guidelines with an 
emphasis on small services providers  from developing countries, was captured.  Much to Thailand's 
dismay, the level of engagement in rule-making ha d not changed except for domestic regulation.  All 
the five elements under VI:4 had been discussed at length and in depth.  Cross-cutting issues had also 
emerged, namely the different levels of government , S&D and transparency.  In this connection, she 
underlined that possible VI:4 disciplines on qualifi cation requirements and procedures could to a large 
extent secure meaningful market access under mode 4, as witnessed by  the fact that some Members 
specifically used the term "qualified" in their comm itments under mode 4.  This highlighted the need 
to reinforce the relationship between Artic les XVI, VI:4 and VII (recognition).   
277. The representative of Thailand said that her de legation's second level of measurement was 
based on narrower and more specific market access interest s.  It used simple counting at face value of 
the number of sectors and sub-sectors in which the scope of commitment was widened and all the levels of commitment was deepened.  The asse ssment would be based on the extent to which 
negotiating proposals Thailand had co-sponsored and its  initial requests had been responded to in the 
relevant revised offers.  In terms of sectors of interest, she said that requests had been based on 
Thailand's current limited but real export potentials.  Sectors it was examining in this regard were:  
professional services (including legal, architectur al, engineering, urban planning and landscape 
architectural services; services provided by mid-wi ves, nurses, physiotherapists and paramedical 
personnel); other business services; construction and related engineering services; educational 
services; health-related and social services; tourism and travel related services; recreational, cultural 
and sporting services; and other services not included elsewhere.  To date she said that less than one 
fifth of Thailand's requests in those areas had b een responded to.  Her delegation's preliminary 
assessment of revised offers was that there was ample room for further improvement, especially in mode 4, both at the horizontal and sectoral leve ls.  Thailand's position on this issue was largely 
reflected in the joint statement by a group of Me mbers (including Thailand) that had been presented 
by India earlier in the meeting.  Other determinants  Thailand used included whether or not the market 
access offered was segmented by different levels of  government.  Since Thailand was a unitary state, 
its market was not fragmented.  If its trading part ner was a federation, she said that Thailand sought 
the reduction or elimination of market restric tions across the multiple jurisdictions.  Another 
determinant was the possible elimination of ENTs, mo st of which were scheduled in modes 3 and 4, 
or at a minimum more transparent and clearly specified criteria on how those ENTs were 
administered.  She said that, in light of the con cerns expressed by Members, it was obvious that the 
gap was wide between what had been requested and what had been offered and that this gap varied 
from sector to sector, mode to mode, and rule to  rule. The situation was not unexpected and was a 
natural phenomenon of multilateral tr ade negotiations.  It was not the methodology of negotiations 
that was the culprit, but rather depended on r eaching for a critical mass of political will and co-
ordinated and sustained efforts on the part of governments and industries. 
278. 
The representative of Barbados  congratulated those delegations that had recently tabled initial 
offers, particularly those from the CARICOM regi on and thanked those that had submitted revised  TN/S/M/15 
 Page 85 
 
 
 offers.  Barbados sought to highlight several issues in the context of the Chairman's note, Job(05)/99.  
Firstly, as a small vulnerable developing economy with a narrow resource and industrial export base, 
Barbados had embarked on a deliberate strategy of  developing its services sector as the main avenue 
of economic growth and development.  The success of services in the negotiations was of paramount 
importance in fulfilling Barbados's development goals.  It was this perspective that had shaped the 
development of requests that his delegation had made , as well as its review or evaluation of the initial 
and revised offers from targeted trade partners.  Barbados was particularly interested in securing 
market access opportunities in the areas of profess ional services including dental, architectural and 
engineering services.  Other sectors of interest included some of the entertainment services and 
research and development services, among others.  W ith Barbados's limited resource base, its primary 
instrument of development had been through inv estment in its human capital.  He reiterated his 
delegation's interest in securing commitments in mode 4 access, including the sectors he had highlighted.  The cross-border supply of services also represented an important opportunity for Barbados to mitigate against sma ll economic and market size.  He thanked the Chairman for his 
factual assessment of the state-of-play of initial and revised offers which his delegation had noted 
with interest.  Based on Barbados's initial evaluation of the extent to which its requests had been met, 
he said that in several instances he had noted some movement using mode 4 through changes which replaced citizenship requirements with residency re quirements.  He had noted the creation of new 
categories of natural persons such as contractual services suppliers and independent professionals and 
the expansion in some cases of specialist occupa tion categories.  However, at an overall level, 
Barbados had not seen the liberalization of sectors or  modes of supply of major interest to it that 
Barbados believed necessary to render opportunities of commercial significance for its small services 
suppliers.  He sought to recalled the objective of the Doha agenda which explicitly placed 
development at the centre of the negotiations.  Ba rbados called on Members, particularly developed 
partners, to reflect more carefully and concre tely on the terms of GATS Articles IV and XIX 
regarding the participation of deve loping countries.  These terms included:   liberalization of market 
access in sectors and modes of supply of export inter est to developing countries; recognition that the 
process of liberalization should take place with due respect for national policy objectives and the level 
of development of individual Members both overa ll and in individual sectors;  provision of appropriate 
flexibility for individual developing country Memb ers for opening fewer sectors, liberalization of 
fewer types of transactions, progressively extending market access in line with their development 
situation; and when making access to their markets available to forei gn suppliers, attaching to such 
access conditions aimed at achieving the objectives referre d to in Article IV.  To this end, Barbados 
considered that the point of depa rture for advancing the process in the forthcoming weeks and months 
should be taken from the Negotiating Guidelines agreed  in 2001 and from Annex C of the July 2004 
Package, specifically in relation to items (c) through  (g) of that Annex.  Given the current state-of-
play, namely that a number of initial offers re mained outstanding, Barbados believed that these 
elements, particularly in relation to targeted tec hnical assistance, would be instrumental in facilitating 
developing country participa tion in the negotiations.   
279. Turning to a second substantive issue in the re view, the representative of Barbados said that 
his delegation noted with deep concern the initiativ es which suggested a significant deviation from the 
approach set out in the Negotiating Guidelines.  In his delegation's view, the suggestion for 
benchmarks and common baseline approaches ran the risk of undermining the flexible positive list 
approach which had traditionally guided the GA TS negotiations.  More specifically, Barbados 
believed that an approach which favoured a pr ioritisation of sectors and modes of supply also 
undermined, rather than complemented, the pro cess that Members had embarked upon through the 
submission of requests.  Thirdly, in terms of the rules negotiations, his delegation supported the need 
for a multilaterally agreed set of rules on safeguard s, subsidies and domestic regulation as a basis for 
the platform of market access commitments.  Barba dos therefore wished to see the development of 
rules in these areas expedited in the general cont ext of their negotiating mandates.  Some of the 
provisions which Barbados wished to see develope d included rules on safeguards that would provide 
a level of comfort and policy space for developing countries, rules on subsidies that recognised the TN/S/M/15 
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 need of developing countries to assist critical services sectors, and disciplines in domestic regulations 
that recognised the right of Members to regulate a nd took into account the capacity constraints faced 
by developing countries.  In conclusion, Barbados wished to reiterate that it remained committed to 
the services trade negotiations and looked forward to  further constructive engagement with Members 
in the forthcoming weeks and months in or der to build momentum in these negotiations. 
280. The representative of the United States
 thanked Members that had submitted initial offers 
during the cluster and Egypt for the submission of it s revised offer.  She appreciated the opportunity 
to provide the United States' assessment overall on ma rket access and other issues that were key to 
progress in the negotiations.  She sought first to highlight a few points about the US revised offer 
which had been submitted on 31 May 2005.  The revised offer added to the United States' initial offer, 
which itself included the removal of an  MFN exemption.  The revised offer responded to a wide 
range of Member requests and captured both auto nomous liberalization as well as significant new 
commitments in areas not previously covered in the US schedule. Combined with existing 
commitments, the US offer provided extensive sect oral coverage encompassing 110 of 156 possible 
sub-sectors.  She highlighted a number of new elements  in the revised offer.  Firstly, the United States 
had included definitions according to the CPC codes at the highest levels in all sectors where it was 
feasible.  Secondly, the United States had included a new commitment on express delivery and logistics covering express delivery, conventional delivery, cargo handling, storage and warehousing 
and freight transport services.  It  had also included new commitments on higher education as well as 
new commitments on energy services, new audio visual commitments, new commitments on business services and new commitments on foreign legal c onsultancy.  Fourthly, the United States had 
provided improvements in its offer with respect to  the US financial services commitments in banking, 
securities and insurance.  The Unite d States had eliminated nationality requirements with respect to its 
patent law and for engineering, as well as resi dency requirements for accounting and book-keeping 
services.  A number of clarifications had been made in its telecommunications commitments and audiovisual services.  Making a number of general comments with respect to US mode 4 
commitments, she said that the US's existing schedule and offers had been lost in the discussion.  She 
said that it was worth recalling that the United States' existing commitments on services supplied 
through mode 4 were among the best of all WTO Me mbers.  US mode 4 commitments applied to all 
110 sub-sectors in which it had commitments and they  covered services sales people, intra-corporate 
transferees, professionals and specialists in numbers  up to 65,000 per year.  This included a category 
de-linked from commercial presence as well as pe rsons engaged in an establishment with no 
numerical limitations.  In contrast to commitments by some other Members, US mode 4 commitments 
had no local hire requirements, nor were they c onditioned on a minimum level of investment.  They 
also provided for an initial period of stay of up to three years.  As she had previously announced, the 
United States was developing an internet-based res ource that would bring together in one place all 
relevant information on laws, regulations, policies and procedures affecting services supplied through 
mode 4. In addition, the United States believed th at its horizontal transparency proposal would 
enhance the transparency with respect  to related laws and regulations.  
281. Turning to her delegation's specific market access  assessment with regard to the offers that 
have been submitted to date, the representative of  the United States said that, with respect to 
professional services, these were areas of key interest to the United States, and particularly accounting, architectural, engineering, and legal serv ices (particularly with respect to foreign legal 
consultancy services).  The initial and revised offers  received to date reflected some improvements.  
For some Members the improvements were significant, whereas for others the changes were more incremental.  In general, the United States felt th at the overall level of commitments offered was well 
below the critical mass necessary to fulfil reasonable expectations for progress in this round.  In 
particular, too many Members had yet to schedul e any commitments, and too many Members retained 
citizenship requirements.  The United States believed  that key benchmarks for Members to consider 
when scheduling commitments included broad sect oral coverage for accounting, architectural, 
engineering and legal services.  For legal services, the sectoral coverage should at a minimum include  TN/S/M/15 
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 legal consultancy services and commitments should pr ovide for freedom of association among foreign 
and domestic lawyers.  The United States belie ved commitments should contain no significant 
limitations on modes 1 to 3, and most particularly , citizenship requirements should be eliminated to 
the greatest extent possible. 
282. On express delivery services, the representative of the United States said she was encouraged 
that a number of Members offered commitments that provided meaningful  coverage of express 
delivery services.  In particular, the United States was pleased to see that Members provided clarifications in their schedules that addressed th e uncertainty created by the CPC descriptions.  
However, the overall level of commitments offered was well below the critical mass necessary to fulfil reasonable expectations for progress in th is round.  Key progress criteria on express delivery 
included:  a sector description that provided a clear definition of express delivery services or that 
encompassed the full CPC category of "courier servi ces" and thereby covered the expedited delivery 
of documents, parcels, packages, goods and other ite ms; scheduling of no significant limitations to 
market access and national treatment through m odes 1 through 3; and a clear indication that, 
notwithstanding the sector descriptions for CPC 7511 (postal) and 7512 (courier), commitments being 
offered would apply to all competitive service suppliers of express delivery services.  On computer 
and related services, she said that in general th e offers were good, although there were some notable 
exceptions where Members had offered unbound m ode 1 commitments.  Some offers lacked 
comprehensiveness and only committed partial coverage .  Three offers had a foreign equity limitation 
for mode 3 and one had a joint ope ration requirement.  Overall, offe rs had been good for this sector 
but more work was needed.  Key progress criteri a in computer and related services included full 
sectoral coverage at the highest level (e.g., two-digi t  CPC) and no limitations on any mode of supply. 
283. On telecommunications, the representative of the United States said that very few 
improvements had been made to date, and while ther e were some exceptions, for the most part equity 
limits remained and only limited coverage was offere d.  Simply deleting those elements that were no 
longer applicable (because, for example, they had expired in 1999) from a schedule was not enough.  
This was a sector where restrictions on FDI shoul d be removed and operators  should be allowed to 
expand not only domestically but globally.  Thus, re ducing foreign ownership restrictions and creating 
an effective and transparent regulatory environment,  through adoption of the reference paper, were 
key factors in attracting FDI.  Key progress criteria in telecom included:  full sectoral coverage for basic and value-added telecommunications; full mode  1 commitments; removal of equity limitations 
in mode 3; removal of restrictive legal form of establishment requirements (i.e. joint venture 
requirements); removal of exclusive rights for certa in providers (for example Jamaica's revised offer 
removed exclusivity a full eight years before it ha d scheduled); removal of references to economic 
needs tests; and full adoption of the reference paper.   
284. On audiovisual services, the representative of the United States said that while overall the 
level of offers in this important sector remained w eak, she was somewhat heartened by the fact that a 
number of recent offers included audiovisual comm itments.  However, the overall number of quality 
of offers would need to be significantly improved.   Key progress criteria included  commitments that 
reflected the current levels of market opening with respect to modes 1, 2, and 3.  Such commitments 
would foster a transparent, open and predictable environment for trade in audiovisual services that 
would contribute to the co ntinued growth of the audi ovisual sector for Members. 
285. On distribution and logistics services, the representative of the United States said that 
commitments to date had shown incremental but not  inspiring improvements.  More comprehensive 
coverage would be needed to achieve the objectives of the round.  Key progress criteria included:   
commitments that covered all four distribution ser vices; narrowed the scope of any product-specific 
limitations;  and eliminated significant limitations on modes 1 through 3.  In addition, related logistics 
services should be scheduled, including storage and warehousing, freight forwarding, express delivery 
and ground transportation, as well as management consulting and computer and related services. TN/S/M/15 
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 286. On financial services, the representative of the United States said that there were already 
some countries with a relatively high level of co mmitments and some of those countries had provided 
additional improvements in their initial and revised offers.  However, some other countries did not 
currently have a high level of commitments and, by and large, these same countries either did not 
provide an offer or had not produced an offer that was meaningful with a view to achieving 
substantial liberalization in this key sector.  In fact, many offers did not even reflect liberalization that 
had been achieved in reality.  Key progress criteria fo r meaningful offers included:  the use of agreed 
definitions in the GATS Annex on Financial Services; for all sectors, the provision of commercial 
presence commitments, including for wholly-owned s ubsidiaries, joint ventures and branching; for 
cross-border, the provision of appropriate commitm ents depending on the particular sub-sector; the 
removal of national treatment and non-discrimin atory limitations such as quotas and ENTs; and 
transparency of regulation and other regulatory issues.   
287. On higher education, adult education and othe r education services, the representative of the 
United States said that commitments offered overa ll had shown only modest improvements in both 
scope and coverage, with some Members offering substantially more than others.   Key progress 
criteria in this sector included:  broad coverage of higher education, a dult education and other 
education services that, she emphasised, were provided by private institutions; and commitments that extended across modes 1 through 3 with few limitati ons.  She stressed that such commitments could 
be qualified as appropriate to addr ess any concerns regarding public funding of education services.   
288. On energy services, the representative of the United States said that a meaningful 
commitment in energy services included a range of different services drawn from throughout the 
CPC, including exploration and development, transport and marke ting of the resources.  The offers 
received to date tended to fall into  two general groups.  Some offers  reflected significant improvement 
in the scope of energy services commitments while others included no, or almost no sectors related to energy services.    In a few cases, weak offers c ould be significantly improved with the addition of a 
few critical sectors.   Key progress criteria included:  the inclusion of the full range of sectors that the 
United States had indicated in its requests as comprising the energy services sector, and that 
commitments should be made for all four modes of  delivery with a minimum number of restrictions. 
289. Overall, and taking into account the United States' assessment of the sectors of key interest to 
it, she said it was important to look at how Memb ers would set the level of ambition for market 
access.  In setting the level of ambition on market access the exercise needed  always start and end 
with each individual country's individual assessment  of the value of the market access offers 
submitted.  Nonetheless, the United States shared th e disappointment and frustration of Members with 
the poor quality of offers to date.  The United Stat es agreed that Members needed to explore avenues 
available within the Negotiating Gu idelines to see how the situation could be improved.  The United 
States did not believe that this implied the any ab andonment of the request-offer process or alteration 
of the bottom-up structure of the GATS.  Instead, it believed it would urge broader support for the 
very effective work being done at the plurilatera l level in various voluntary friends groups.  The 
United States further believed that the work of fri ends groups in identifying common areas of market 
access interest and sector benchmarks were critical and had made a major contribution to help to 
guide the negotiations.  Members also needed to wo rk together on a multilateral basis to take into 
account both existing commitments and offers and begin to discuss what sort of overall market access 
outcome they sought.   
290. In the area of domestic regulation and rules, the representative of the United States said that 
her delegation believed that disciplines on domestic regulation, in accordance with the GATS Article 
VI:4 negotiations, were a critical element for ser vices.  The United States proposal on horizontal 
transparency disciplines was a high priority for the US in the negotiations.  There was strong 
momentum in the WPDR and many proposals had b een tabled by Members.  The US was committed 
to engaging on all proposals and negotiating a final package for domestic regulations negotiations that  TN/S/M/15 
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 addressed Members' goals.  However, at the present juncture, the United States felt that it was too 
early to take a decision about whether the various elements of a final package could be adopted on a 
horizontal or sectoral basis.  The best way to move forward to Hong Kong was to formulate a thematic outline based on proposals tabled and to organize discussion of them without prejudging the 
final outcome of the package. 
291. In terms of the status of work on GATS Rules,  the representative of the United States said 
that work on rules reflected the fact that Member s had varying views on the issues of procurement, 
subsidies and an emergency safeguard.  With resp ect to procurement, there appeared to be a 
reasonable degree of support for further work relati ng to transparency in government procurement 
policies and procedures.  Regarding subsidies, the past several meetings had resulted in some 
meaningful contributions on information exchange .  Further work leading to progress in the GATS 
Article XV mandate should conti nue.  Concerning safeguards, the United States continued to have 
significant concerns with the feasibility of developi ng and implementing an effective mechanism.  In 
addition, it continued to question whether ex isting GATS mechanisms might already provide 
sufficient flexibility to achieve th e objectives of a safeguard mechan ism.  Nevertheless, the United 
States recognized the importance of this issue to a number of Members and supported continued 
discussions in accordance with the existing GATS Ar ticle X framework.  Such discussions could be 
particularly helpful to the extent that they prov ided concrete examples of actual situations where 
existing flexibilities in the GATS were not sufficient. 
292. On development, the representative of the Un ited States said that, pursuant to GATS Article 
IV, the United States continued to engage with de veloping countries with capacity constraints and 
LDCs in sectors and modes of supply of interest to them.  The United States was also continuing to 
provide technical assistance through multilateral, re gional and bilateral programs, especially through 
the International Trade Centre in Geneva.  The Un ited States was also continuing its dialogue with 
LDCs on their requests and implementation of th e LDC Modalities and the African Group on its S&D 
proposals.  She stressed the importance of infra structure services in promoting development as 
demonstrated by numerous studies such as from UNCTAD, the World Bank, OECD and others. 
293. The representative of the United States said that, in  light of the urgent situation in the services 
negotiations and in particular th e overall poor quality of offers, and in order to ensure that the 
negotiations did not fall behind the work on mo dalities in agriculture and non-agriculture goods 
market access negotiations and other aspects of the Doha Round, the United States was suggesting 
that the Chairman of the Special Session present a work plan in his report to the TNC that provided a 
map for negotiations in the run-up to the Hong K ong Ministerial Conference.  The United States 
believed that at Hong Kong, ministers would need to  set a date for another set of improved offers.  
The work plan should address the following elements .  (1) Formulation of the level of ambition for 
the negotiations through approach es consistent with the GATS Article XIX,  the services Negotiating 
Guidelines and Procedures and the July 2004 Package;   (2) the development by the Working Party on 
Domestic Regulations of an outline of a potential p ackage to be negotiated on domestic regulations in 
accordance with the GATS Article VI:4 negotiations;  (3) a statement of progress in the discussions 
on rules pursuant to the mandates set out in accordan ce with Articles X, XIII and XV;  (4) an outline 
of  elements that could address requirements of GA TS Article IV and  ensure implementation of the 
LDC Modalities;  and (5) on the assumption that m odalities in agriculture and NAMA were agreed, a 
suggested schedule for proceeding with services negotia tions with an equivalent level of specificity 
keeping in view the different structure of the GATS.  In terms of setting a schedule for work 
subsequent to the Hong Kong Ministerial Conference,  the United States believed that it would be 
important that a proposed schedule be developed for work in the services negotiations after Hong 
Kong.  The United States did not want to find Me mbers in a situation where other areas of the 
negotiations, such as agriculture and NAMA, had agreed modalities on which to proceed and set 
levels of ambition, but the services negotiations did not have a schedule for working toward a 
successful outcome at the conclusion of the negotiations. TN/S/M/15 
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 294. The representative of Colombia
 recalled that his delegation had recently presented its revised 
offer on specific commitments and market access and national treatment in the sphere of services.  The offer contained improvements in comparison to  its initial offer as a result of adjustments of 
commitments in the horizontal and sectoral areas as we ll as classifications in different sub-sectors of 
the services.  Colombia was thus offering new comm itments in market access.  For mode 4, Colombia 
had adjusted its broad commitments in conform ity with document TN/S/W/31. With a view to 
broadening the scope of existing commitments and giving them greater legal basis, clarity and 
comparability, Colombia had reclassified sub-sectors which appeared in the list of the initial offer 
within the services of hydrocarbons and mining ser vices.  Colombia recognised the important role 
played by telecommunications as a platform that st imulated economic developm ent and, as a result, 
the offer included considerable improvements to mark et access in this sector, such as the elimination 
of economic needs tests, limits on foreign capital, sp ecific legal requirements and, in order to ensure 
greater clarity of commitments, reclassification.  With a view to promoting liberalization of trade in services, the revised offer from Colombia offere d market access in sectors such as professional 
services, R&D, rental and leasing without an operator, other business services, telecommunications, 
construction and related engineering services, educati on, tourism and related services such as travel, 
and air transport.  Colombia hoped that the negotia tions would continue with a view to raising the 
level of liberalization of trade in services and would result in effective market access.  For this reason, 
Colombia believed that it was essential that Members receive reciprocal offers which would be in line 
with each Member's comparative advantage.  Th is was a common objective of the negotiations.  
Referring to a number of the revised offers, and pa rticularly those from developed Members, he said 
that attaining this objective was perfectly compatible  with the provision of services thanks to sectoral 
or seasonal movement of persons.   Members needed to  ensure that safety and public health were duly 
protected, which Colombia felt should be taken this into consideration in their offers.  Colombia 
believed that Members should eliminate MFN excep tions and economic needs tests.  Colombia 
believed it was premature to assess whether sufficient progress had been made, but nevertheless felt 
that the Members should try to ensure that th e Negotiating Guidelines were respected and that 
substantial market access was achieved.  Finally, he said that the negotiations on market access should 
go hand in hand with work in other areas and partic ularly under Articles III, VI and XV.  He said that 
more proposals would help Members achieve their collective objectives. 
295. The representative of Cuba
 thanked the Chairman for his note in which he had made an 
evaluation of the negotiations from his point of view.  She said that Cuba's assessment of the 
negotiating process was contained in document TN/S /W/44.  Referring to the various interventions 
that had been made on the process and substance of  the negotiations, she said that Cuba wished to 
echo the comments made by Brazil and Argentina among others.  She said that since the Uruguay Round there had not been any substantial change in  the participation of Members in international 
trade in services.  As indicated in its proposal, the pa rticipation in international trade of the countries 
of Latin America, Africa, Asia and the developi ng countries together, had represented some 20 per 
cent in 1994.  In the case of Latin America, its shar e was only 4 per cent in 1994 and had fallen to 3.4 
per cent in 2003 whereas the proportion for Africa had remained unchanged at 2.2 per cent in the 
same time period.  She regretted that these nu mbers had not shown an increase following the Uruguay 
Round.  Nonetheless, Cuba believed that a balance need ed to be achieved in the negotiations so that a 
real benefits accrued in line with the Negotiati ng Guidelines and the GATS.  Members needed to 
ensure that the central issue of the round of negotiati ons be development.  She said that it was agreed 
that the necessary progress in services had not been achi eved to date and that the main cause was that 
the various sectors and modes of supply of interest to many developing countries had not been taken 
into consideration in the offers of the majority of developed countries.  She said that this situation had, 
nonetheless, not discouraged the submission of initial offers of many of the developing countries over 
the previous fortnight, including Cuba's, and that this should be seen as a major effort to contribute to 
the negotiations and to progress.  She said that fo r others, such as Venezuela, Cuba could understand 
that it was difficult to submit an offer because of the numerous technical requirements and technical difficulties to which that delegation had referred, the various aspects of which were linked to the  TN/S/M/15 
 Page 91 
 
 
 entire process taking place in that country.  She sai d that Members should not sacrifice the quality of 
such a result by trying to hasten matters, as they might  later regret their haste.  Cuba did not agree that 
Members should introduce new focuses or modalities,  as these would lead to negative repercussions 
in the negotiations.  On the contrary, Members s hould respect the mandate contained in Annex C of 
the July Package and the Negotiating Guidelines and procedures adopted in 2001, including the focus 
on offers.  This was the only way to achieve success. 
296. The representative of Indonesia  expressed his appreciation, esp ecially to the small developing 
economies, to Members that had made a tremendous e ffort to present their offers and revised offers, 
and to the Chairman for his note contained in Job(05 )/99.  His delegation sought to underline that the 
review of progress in the negotiations on trade in services should be based on the Negotiating 
Guidelines adopted on 28 March 2001, the Doha manda te and the Decision of the General Council of 
1 August 2004.  With regard to the review of progress in the negotiations, Indonesia shared the 
Chairman's concern that services negotiations, in their sixth year, had not progressed in a satisfactory 
manner both in the rule-making and market access ar eas.  He said that to overcome the difficulties 
faced, the services negotiations needed further wo rk in Geneva and among Members' respective 
constituents in order to build meaningful progress in all areas.  In rule-making, he recalled that item 
(e) under Annex C of the General Council Decision of 1 August 2004 stressed that Members needed 
to intensify their effort to conclude the negotiations  on rule-making with respect to Articles VI:4, X, 
XIII and XV in accordance with thei r respective mandates and deadlines.   However, he said that to 
date Members had not seen significant progress in the rules areas.  Indonesia was somewhat 
disappointed with the progress in the negotiations.  Progress in rules was imperative to achieve an 
equitable result and the issue of the establishment of  an emergency safeguard mechanism he said was 
key for a balanced package in services.   
297. On progress in market access, the representativ e of Indonesia said that his delegation shared 
the view that it was necessary to identify and ap preciate the underlying difficulties faced at the 
country and group-of-countries levels.  He said that  it would be misleading and unfair to only assess 
the overall numbers of offers and sectors on the tabl e and take development realities for granted.  He 
recognised that services played and would continue to play and an increasingly important role in 
economic growth and development; however, the chang es needed to take place at a pace which would 
allow developing countries to take an active role in  and benefit fully from services liberalization.  It 
was also important to ensure that modes of suppl y of export interest to developing countries were 
given special attention in the services negotiati ons.  These premises, he recalled, had all been 
provided for in the GATS, the DDA, the July Package and the Negotiati ng Guidelines.  In this regard, 
while all were aware of the need to enhance the co llective effort to meet a meaningful and equitable 
outcome in the negotiations, his delegation was concerned with the ideas of some on new or complementary approaches which could undermine th e solid basis of Members' agreement, namely 
reciprocity.  While his delegation appreciated th e 68 initial and 23 revised offers, he nevertheless 
encouraged further improvement to the commitments  by the developed country Members, especially 
with regard to mode 4 and those by all Members with  regard to education, tourism, health and energy 
services.  With this in mind, his delegation expr essed its initial support as a co-sponsor of the paper 
submitted by a group of developing country Members that contained an assessment of the mode 4 
offers.  Indonesia hoped that this contribution would initiate a discussion in the Special Session on 
how the objectives established in Article IV of th e GATS could be effectively implemented in the 
negotiations.  Indonesia shared the concerns of de veloping country Members that a thorough review, 
within the framework of the negotiations, on mark et access conditions for developing countries that 
were offered by developed countries, was necessary.  He said that to date, the revised offers presented 
by developed country Members had not fully responde d to the interests of the developing counties. 
The Government of Indonesia had been continu ously conducting extensiv e domestic consultations 
with the relevant stakeholders in an effort to examine the areas for possible improvement in its initial 
offer.  The primary consideration of such this exercise was the need to improve the climate for 
investment and enhance the capacity of the domestic  industries.  Indonesia hoped to conclude the TN/S/M/15 
Page 92  
 
 process in due course and to share its outcomes with  all Members.  Finally, his delegation sought to 
reiterate that the conclusion of the services nego tiations required an overall balanced outcome not 
only within the services negotiating areas (rule-making and market access) but in the overall DDA negotiations.   
298. The representative of the Philippines
 thanked the Chairman for his note and stated that the 
Philippines had submitted its conditional initial offer on 31 May 2005, which had been circulated on 
15 June 2005 as document TN/S/O/PHL.  He said that  the offer related to six sectors, namely, new 
commitments in computer and computer-related services, construction services, distribution services, energy services and environmental services, as well as improved commitments in tourism services.  The Philippines had had the opportunity to discuss its offer with a few Members in a bilateral context 
and welcomed any other requests for clarification.  Turning to the assessment  of the negotiations, his 
delegation had a number of points it sought to make.  Firstly, he drew the Council's attention to the 
Philippines's consistent position that the outcome of the Doha Round should be a balanced package 
that all could remit to capitals and constituencies.   He hoped, however, that in the run up to Hong 
Kong, Members would avoid unqualifie d characterisations of the pace of negotiations by broad claims 
that some sectors were moving faster than others.  Secondly, on the basis of a preliminary analysis of 
the revised offers and some of the initial offers of interest to his delegation, he said that he shared 
some of the disappointment expressed by delega tions, particularly on the breadth and depth of 
existing offers.  He also shared some of the comme nts made earlier that trading partners with strong 
interests in specific sectors should lead by exampl e in terms of the level of market access bound in 
their offers vis-à-vis the expectations from other trad ing partners.  He appreciated the efforts by some 
delegations to gather extensive statis tical data and analysis in order to demonstrate that the offers were 
neither substantial nor significant.  However, he reiterated the developmental and flexibility 
dimensions of the objectives and principles underlyi ng the negotiations and wondered to what extent 
the conclusions generated from these statistics were in formed by this dimension.  Thirdly, for recent 
trading partners that were offering a number of  new sectors or sub-sectors, he wondered how 
significant most of these areas were for developing c ountries, particularly given developing countries' 
supply capabilities, competitiveness in supplying a service and/or the lack of complementary mode 4 commitments.  Fourthly, he asked if Members sought to identify any particular sectors.  Finally, he 
said that the glowing terms that delegations had u sed to describe their initial or revised offers 
continued to cause his delegation some concern, par ticularly in view of the many complaints from 
industry and other trading partners to the effect th at access was effectively negated by high licensing, 
qualification and registration requirements as well as technical standards.  The issue of visas and other 
entry requirements was altogether a different and more sensitive issue in this rega rd.  In this context, 
his delegation reiterated its view that market access and rules needed to move forward together as had 
been reaffirmed by the APEC ministers responsible  for trade in the recent ministerial statement in 
Korea. 
299. The representative of the Philippines said that, as the Chairman reflected on his report to the 
TNC, he hoped that his delegation had been explicitly  clear that the rules aspects of the negotiations 
was of fundamental political importance to his Gove rnment.  The Philippines believed that the report 
by the Chairpersons of the Working Parti es on GATS Rules and Domestic Regulation had 
approximated the state-of-play.  The Philippines was committed to flexibility and constructive 
engagement as Members tried to bridge the divergen ces, but it also expected openness by others.  On 
mode 4, in the interests of time, he limited hi mself to associating his delegation with the earlier 
statement by India on behalf of a group of Members concerning mode 4.  He believed that it broadly 
reflected the thinking of many Members on how thei r critical interests in mode 4 commitments had 
not been addressed in the offers on the table to date.  His delegation stood ready to work towards 
drafting an acceptable road map for future wo rk; however, it was concerned by the discussion by 
some on benchmarks, which had been the subject of extensive discussions at the previous meeting.  
While he reserved the right to return to this issu e, the specific proposals that had been made did not 
address the core position of his delegation.  In this regard, he said that the request-offer approach was  TN/S/M/15 
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 the main method of negotiation as articulated in the Negotiating Guidelines. The question as to 
whether this approach had failed or needed to be  complemented with other approaches had to be 
answered satisfactorily by all Members and not an swered on the basis of an assessment by some 
imposed on many.  In this connection, he said that his delegation had conducted a preliminary 
analysis of the revised offers but not a thorough revi ew of all the initial offers.  As such, it was not in 
a position to discard the existing approach, much less  to conclude that the services negotiations were 
in a crisis.   The Philippines was seriously concerne d about the talk of a formula-based approach to 
benchmarking for a variety of reasons both systemic and practical.  He reserved the right to address 
this issue at the appropriate time.  
300. The representative of Malaysia  recognised the benefits of services liberalization.  At the same 
time Malaysia recognised the challenges faced by developing countries in relation to the lack of 
capacity in the services sector which was dominate d by the developed countries.  The services sector 
was largely an issue of trade between developed c ountries.  Malaysia's assessment of the current 
situation was that the provisions and flexibilities pr ovided by GATS for devel oping countries needed 
to be preserved.  The principle of progressive lib eralization and lasting and full reciprocity in the 
sense of Article XIX needed to be upheld in light of  Members' different levels of development.  She 
said that her delegation was not among the main demandeurs , but it was cognisant of its obligation, 
had tabled its initial offer and was preparing its revised offer.  In  Malaysia's view, market access 
negotiation on services had made progress in compar ison to other areas of importance to developing 
countries.  She reiterated that Malaysia's mark et access opening was based on its own standards 
within the context of its policy space with a view to meeting its national obj ectives.  Malaysia would 
identify which sector to commit and to what extent w ithout prejudice.  She said that Malaysia's initial 
offer on computer and computer-related services co ntained a considerable improvement.  Malaysia 
was engaged in domestic consultati ons to determine how best it c ould further improve upon its initial 
offer.  She recognised that this sector was an important enabling sector for economic growth both in 
terms of manufacturing and service activities.  She noted that committing to a higher level of 
liberalization in a sector was a natural progression  from the existing situa tion through substantive 
autonomous liberalization.  Full commitments, sh e said, was made on the basis of Malaysia's 
readiness in a sector at a pace it determined and in gradual stages.  This formula had proven successful for her country, while at the same time  it worked to strengthen the domestic regulatory 
framework.  The issues had been learned well during the Asian financial crisis. 
301. On the call for new benchmarking, the represen tative of Malaysia echoed the statement by 
Brazil that the abstract question of levels of ambition was pointless if used as a parameter for the 
negotiations, since the debate could be aimless a nd endless.  There was no one solution that would 
satisfy everyone.  She recalled that developing countries' offensive inte rests were hard to pursue given 
handicaps such as supply and capacity constraints.  It  was thus far better to concentrate efforts on 
various technical issues within the mandate and to  ensure a balanced package to which Malaysia 
attached great importance in both market access a nd rules, since these would provide a level playing 
field for all Members.  In reviewing the progress in  the negotiations, she said that her delegation had 
yet to see any meaningful outcome in the assessment of trade in services, treatment of autonomous liberalization and rule-making.  As a country transitioning from manufacturing activities to the 
services sector, Malaysia sought to ensure that any liberalization undertaken would not have an 
adverse effect on its domestic i ndustry.  Malaysia was a proponent for establishing trade remedy 
measures for services or a safety valve in the form of  an ESM.  She appreciated the efforts that had 
been expended by the Chairman in this regard.  Her delegation was open to  approaches that would 
provide comfort to developing countries as they yielded regulatory autonomy through multilateral 
commitments.  Malaysia was ready to engage in technical discussion in dom estic regulations and on 
government procurement, and was of the view that  coverage on the latter did not extend to market 
access.  She said her delegation would continue to be  constructively engaged in the run up to the Sixth 
Ministerial Conference in the negotiations  and, she hoped, in consultations. TN/S/M/15 
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 302. The representative of Panama
 said that considerable efforts had been made by her country to 
present its initial offer, though it seemed that these we re not sufficient.  She urged countries that had 
not submitted their offer to do so as quickly as possi ble.  Panama was committed to this process as 
demonstrated by the fact that it had been one of th e first developing countries to submit its initial offer 
and was in the process of submitting its revised offe r.  She said that, in some cases, requests of a 
standardised nature had been submitted in virt ually all services sectors without taking into account 
whether liberalization was feasible or whether there was a real or potential interest.  Panama had focused its requests on specific sectors in which it had real interests. These included financial 
services, tourism, logistical services and maritime transport services.  She said these were sectors with major potential for trade and development worldw ide and that not enough commitments had been 
undertaken in them.  For this reason, Panama had supported many joint statements including the 
statement on maritime transport by Japan earlier in the meeting.  Panama had made considerable efforts to produce improvements in its revised offe r in areas such as the environment, transport, 
education, computer services etc.  The revised o ffer that Panama was preparing was the result of 
requests from many different countries and domestic  discussions.  She hoped that Members would 
make qualitative and progressive progress prior to Hong Kong that would help achieve results on 
disciplines and market access that would be accepta ble for all delegations and would provide better 
opportunities for the producers of goods and services in Panama. 
303. The representative of Pakistan
 thanked the Chairman for his note.  Although he had not 
intended to elaborate on Pakistan's initial offer,  in light of the various concerns expressed by 
developed countries, he thought it might be reassuring to highlight a few points about it.  In the 
horizontal section of Pakistan's initial offer, Pakistan  offered to raise the equity limit from 51 per cent 
to 60 per cent unless specified otherwise.  The offer removed restrictions on the acquisition of real estate by non-Pakistani entities.  It introduced cat egories for intra-corporate transferees and business 
visitors reflecting Pakistan's co-sponsorship of  an earlier proposal from a number of developing 
countries.  The related periods of stay were qu ite generous.  With respect to sector-specific 
commitments, Pakistan introduced improveme nts to existing commitments which included 
telecommunication services, construction and rela ted engineering services, and financial services inter 
alia.  He said that existing foreign banks as well as ne w ones would be allowed to open up to twenty 
five branches and ATMs would not be treated as a separate branch.  The integrated engineering equity 
limit had been raised to 51 per cent and equity and joint partnership restrictions removed for 
companies registered with the Securities and Excha nge Commission of Pakistan.  In a word, national 
treatment would be provided for firms that regist ered with the Securities and Exchange Commission.  
In computer and related services and tourism services, market access would be improved in modes 1 and 2.  For hotels, restaurants, travel agencies a nd tour operated services additional restrictions would 
be lifted.  The new commitments offered covered most of the 12 ma in sectors of the W/120 list.  
There were 17 new activities in which new comm itments had been proposed which ranged from 
distribution services, educational services, envi ronmental services and included legal services, 
accounting, auditing, book-keeping, architectural, veterinary, physiotherapists, paramedics etc.  
Speaking frankly on mode 4, he said that, like many other developing countries, Pakistan had an offensive interest in the movement of low-skille d workers as well as highly-skilled professionals.  
Pakistan's concerns on this issue were recorded in the joint statement that had been delivered by India 
on behalf of a number of Members regarding the assessment of mode 4 offers.  He expressed his 
appreciation for the countries that had included cate gories of natural persons in their mode 4 revised 
schedules and had suggested practical ideas on increasing transparency.  This was a positive beginning and augured well for further improvement  by other Members, whom he urged to follow 
suit.  On MFN exemptions, he said that Pakistan co-sponsored a statement by China and others and 
reiterated that his delegation was keen to see these withdrawn as soon as possible.  
304. Turning to the assessment of the quality of revi sed offers the representative of Pakistan said 
there had been a variety of opinions.  From Pa kistan's view, quality woul d depend on concrete 
opportunities for Pakistani businesses.  He said that Pa kistan had tabled its initial offer and wanted to  TN/S/M/15 
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 see a response from developed and developing countri es, so as to provide his Government with the 
necessary stimulus to prepare an improved revised o ffer.  Many delegations had indicating the criteria 
they had used to assess offers, and his delegation sou ght to indicate a few factors it felt explained the 
inhibitions in making substantive offers.  Firstly, in most developing countries statistics on trade in 
services were not gathered as was the case for goods.  Hence, it was hard to convince stakeholders 
and decision-makers of the efficacy of making an offer.  Secondly, the classification system and 
scheduling techniques needed to be further re fined since some initial offers withheld new 
commitments in cases where classification lacked cl arity.  Thirdly, deviati on from the intended path 
of negotiations as laid out in the GATS had led to a low level of ambition in offers.  There was a need 
to follow the Negotiating Guidelines (S/L/93) and seek a balanced approach  in rules and market 
access in order to ensure a level playing field.  Fo urthly, in consultations st akeholders had indicated 
that in order to attract investment, foreign investor s preferred destinations th at were predictable and 
transparent.  In this regard, commitments bound at  the WTO ensured that, come what might, liberal 
policies would stay locked in.  Fifthly, developing countries were largely friendly to investment and did not seeks rules that would in any way jeopardise th eir interests.  Investors needed their investment 
to generate employment and growth.  However, for countries like Pakistan there were two other 
questions that it considered when locking in autono mous liberalization.  The first was how to protect 
small and medium-sized enterprises which provided employment to often 100 persons, and on which 
the livelihood of 8 to 10 family members depended.   These SMEs might not be able to compete with 
bigger and stronger foreign enterprises.  He said that  in goods rules existed for unfair trade practices 
such as dumping and subsidies, and for ensuring fair tr ade, such as safeguard rules.  Stakeholders had 
agreed to commitments based on the rationale th at a rules-based system buttressed commitments; 
however, in services there were no rules.  Therefore,  there was a need for proper agreements on rules 
as mandated in Article VI:4 and elsewhere.  He sai d that to claim that existing provisions were 
sufficient was not satisfactory.  Indeed, paragraph 7 of the Negotiating Guidelines clearly stated that 
Members would aim to complete rules negotiations on domestic regulation, subsidies, safeguards and 
government procurement prior to the conclusion of negotiations on specific commitments.  He 
highlighted this lack of progress to suggest that th ere were perhaps other ar eas where new approaches 
were needed.  He reiter ated that Pakistan was a strong sup porter of the WTO and was an active 
participant in the Doha Round of trade liberalizat ion.  He encouraged other countries to engage 
constructively in the negotiations. 
305. The representative of Canada
 drew Members' attention to a room document from a group of 
Members, including Australia, Canada, the Europe an Communities, Japan, Norway, Chinese Taipei 
and the United States on the liberalization of energy services.  Making a few brief remarks, he said that the group believed that energy was essentia l to economic growth and development as been 
highlighted by a number of international organisa tions including UNCTAD.  In its consideration of 
this sector, the group had concluded an analysis th at indicated that providing improved market access 
for energy services could have many beneficial a nd closely related effects for most developed and 
developing countries.  These included, for example,   increased investment, increased reliability of 
supply and greater efficiencies in energy prod uction through access to pr oduction of conventional 
energy sources such as oil and gas and reduction of environmental impacts through more widespread 
access to environmentally friendly technology in en ergy services.   In many countries governments 
were vested with the ownership of natural resources in trust for their citizens.  In this connection, 
while liberalization in market access for the provi sion of energy services could be pursued in the 
GATS, it was important to stress that ownership of natural resources was outside the scope of the negotiations.  The group also believed that the GATS provided the framework under which countries 
could undertake services liberalization while enabli ng regulators to continue to ensure access to 
energy, reliability of supply, consumer protecti on and quality of the environment.  Finally, he 
affirmed that taking commitments in this sector  was possible.  Although there was no specific 
category for energy services in the W/120 classificat ion list, the GATS provided a framework under 
which countries could undertake commitments for en ergy services.  The Scheduling Guidelines under 
the GATS provided Members with the flexibility to achie ve progress in this sector.  For instance, 39 TN/S/M/15 
Page 96  
 
 Members had taken some commitments incidental to mining and 37 Members had some commitments 
for related scientific and technical consulting servi ces.  While few improvements had been included in 
initial offers, Members that had presented a revi sed offer had included co mmitments for energy 
services, which resulted in some level of improvement.  To promote further liberalization of the sector, the group encouraged Members to include en ergy services commitments in their offers and 
engage in negotiations in this regard. 
306. The representative of El Salvador
, referring to future work, said that her country considered 
that the negotiations on trade in services should c ontinue to develop in accordance with the Doha 
Ministerial Declaration, namely, the promoti on of economic development and trade between 
developing countries and developing  and developed countries.  She recalled that Article XIX and the 
Negotiating Guidelines stipulated that the process of  liberalization should be carried out with due 
respect for national objectives and principles and in light of the economic system of each individual country.  El Salvador believed it was important to re call that, in accordance with the Ministerial Doha 
Declaration, negotiations should take into account fully the principle of special and differential 
treatment for developing countries.  Her delegation therefore considered that this subject should be 
dealt with in parallel with the negotiations.  On th e issue of complementary initiatives, she said that 
the Negotiating Guidelines had been adopted and that  El Salvador would not be in agreement with 
any suggestion to eliminate the flexibilities contai ned in the GATS or in the Negotiating Guidelines 
and principles to she had just referred.  Referring to paragraph 29 of the Doha Ministerial Declaration 
and paragraph 9 of the Negotiating Guidelines, she said that Members needed make every effort to 
ensure that the negotiations took place in a participa tive and transparent manner.  It was important for 
El Salvador that the negotiations make a positive contribution to the equilibrium of the results 
obtained from the overall negotiation. 
307. The representative of Rwanda
, speaking on behalf of the African Group and the LDC Group, 
welcomed the revised offers that had been tabled , as well as recent initial offers.  Regarding overall 
progress of negotiations in services, she said that Me mbers needed to bear in  mind the linkages that 
existed in other areas of the nego tiations where the African Group and the LDCs had a great interest.  
She said that Members should bear in mind that even within the services negotiations there were 
linkages among various elements.  She said that th e groups sought real progress in work on special 
and differential treatment and the implementation of the LDC Modalities, particularly in light of the 
fact that it was a development round.  The ne gotiation was a very complex process and Members 
needed to seek ways towards progress, particularly in the areas of interest to LDCs and African 
countries.  This was envisaged, inter alia , in the July Package, the LDC Modalities and Article IV, 
which required that priority should be given to de veloping countries and particularly least-developed 
countries.  In market access, Me mbers needed to understand that most countries in the African Group 
and LDCs had a narrow range of sectors and modes of  supply of export interest.  Unfortunately, these 
were the areas that continued to lag behind in the revised offers, initial offers and previous schedules 
of commitments.  For instance, in the case of m ode 4, for which both groups had expressed a major 
interest, there had been limited progress.  She ac knowledged that some improvements had been made 
in this regard in revised offers, for example, by incorporating new categories of service suppliers such 
as contract and independent service suppliers, remo ving of ENTs, and eliminating citizenship and 
residency requirements.  Nonetheless, she noted that sector-specific commitments had been left 
unbound and therefore compromised the quality of offers .  In addition, various restrictions continued 
to be maintained, for instance in  the case where an ENTs was removed but was replaced with other 
restrictions such as undefined numerical ceilings or sponsorship requirements.  The Groups sought, 
therefore, additional horizontal and sector-specific commitments in this regard as well as removal of all restrictions.  
308. The representative of Rwanda had also noted that some Members had used certain 
classifications not necessarily as contained in the CPC and the W/120 list.  While this did not 
necessarily pose a problem, she said that these two classification lists might not cover the interests of  TN/S/M/15 
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 all Members and that therefore, there was merit in c onsidering others.  In the area of rules, the Groups 
sought progress in the domestic regulation, subsidie s and ESM in order to ensure that credibility of 
commitments in market access were not compromi sed by regulatory environments.  They also 
recognized the right of Members to regulate so as to meet national policy objectives.  While 
acknowledging the need for more progress, Members n eeded to realize that this progress should be 
matched with progress in other areas.  The African Group and the LDCs sought to avoid a situation in 
which Members tried to create a crisis in the servi ces negotiations to justify certain approaches that 
would be inconsistent with the GATS framework a nd its objectives, particularly that of progressive 
liberalization in line with national policy objectiv es and levels of development.  The Groups also 
noted that little attention was being given to areas of  their interest and sought to see this situation 
improved.  If crisis there was, the Groups believed that it was in those areas that the African Group 
and LDC Group had indicated on previous occasions.  All groups should benefit from the negotiations 
and not only a few. 
309. Speaking on behalf of Hong Kong China, Jap an, Mexico, United States and Chinese Taipei 
and introducing a joint statement on the negotiatio ns on audiovisual services contained in document 
TN/S/W/49, the representative of Chinese Taipei  said that audiovisual services, like all service 
sectors, played a valuable role in supporting nationa l economies and international trade, especially in 
developing countries.  She said that more transparency would be needed in trade in audiovisual services at both the regional and global levels.  Th e co-sponsors were extremely concerned that some 
participants in the negotiations sought to create an a priori  exclusion of this important sector.  She 
stated that this was surely inconsistent w ith the services Negotiating Guidelines as well as the 
principle of full and open dialogue upon which the WTO was based.  The co-sponsors sought to 
highlight that many Members recognized the spill-over  effects of liberalising the audiovisual sector.  
For example, Members interested in promoting to urism or attracting foreign students to develop 
educational services could benefit from becoming a successful provider of audiovisual services.  The flexibility existed under the GATS for Members to make commitments in audiovisual services.  
Indeed, 26 offers included audiovisual sectors, ma inly in the motion pictures, video tape production, 
distribution services and motion picture projection ser vices.  Six initial or revised offers contained 
new offers in this sector.  The co-sponsors asked  all Members to consid er carefully the broad 
economic benefits and promotion of the cultural diversity that could be gained by including 
audiovisual service commitments in offers. 
310. The representative of the United States
 stated her delegation's strong support for the statement 
on audiovisual services presented by Chinese Taipei.  On  behalf of the European Communities, Japan, 
New Zealand, Switzerland and the United States, sh e wished to make a joint statement concerning 
postal and courier services including express delivery.   Recognizing that postal and courier services 
including express delivery were essential elements of a reliable and efficient communication and delivery system, the co-sponsors encouraged Memb ers to undertake meaningful commitments for 
these services to the extent possible.  She said that  meaningful commitments to the extent possible 
should reflect the fact that many activities in th ese sectors were open to competition in most WTO 
Member economies and should provide a level play ing field among all competitive service suppliers. 
311. The Chairman
 acknowledged and thanked Members for the efforts they had made in the 
preceding weeks to table their initial offers as well as  those that had presented revised offers.  He said 
this was helpful.  He echoed the question asked by  others as to whether the negotiations were in a 
crisis.  In considering an answer, he could only re fer to the facts that Members had provided.  The 
number of initial and revised o ffers had improved and a number of Members said that these had 
moved in the right direction in terms of covera ge of sectors, sub-sectors and modes of supply.  
However, they had also observed that these offers re mained insufficient and unsatisfactory.  In some 
areas, there were indications that Members were starting to move into real negotiating mode, but most 
indicated that more efforts would be required.  Some Members had asked if it was appropriate to 
inquire whether any actual liberalization was being offered, while others wondered about the creation TN/S/M/15 
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 of new business opportunities.  Still others asked if the offers approached capturing existing 
liberalization.   While it was too early to answer these questions definitively, based on what he had 
heard, he thought it fair to say that Members were still some ways from achieving actual liberalization 
or even capturing existing liberalization to a fuller extent.  Most felt that the negotiations were not 
progressing as was needed, while a few said they we re comfortable with the current pace.  Some 
delegations had reaffirmed the importance of service s as one of the three pillars of the market-access 
negotiations under the single undertaking and had reca lled the need to have a balance overall in the 
negotiations, which would be sought at the le vel of the Trade Negotiations Committee.   
312. The Chairman recalled that many had reaffirmed the bases of the negotiations, namely GATS 
provisions, the Doha Declaration, the July Package,  the Negotiating Guidelines, etc.  If Members were 
not satisfied, then the question as to how to rectify th is situation logically followed.  In this regard, 
two factors, time and process, needed to be taken into account.  At least one delegation had stated 
that, in order to prepare and improve services offers , much time and work in capitals was needed.  
Indeed, the Chairman thought that as the process move d forward, more time might be needed because 
each effort to improve an offer became more difficu lt.  With respect to pro cess, the question had been 
posed whether a next step based on the present meth od of negotiations would lead to improvement.  
He observed that there was no new deadline for a sec ond set of revised offers, from which he inferred 
that offers would remain in their current form unless Members decided to improve them.  He noted 
that a few delegations had indicated that they might  supplement or complement their revised offers.  
The next opportunity to address this issue was lik ely Hong Kong where one of the main features of a 
decision on services would possibly include the es tablishment of a new date for improved, and 
perhaps, final offers.  This new deadline woul d perhaps offer an opportunity to satisfy the 
expectations that Members had expressed.  The pr ocess was long and resource- and time-intensive, 
and in the views of some, Members needed to find ways to reinforce the request-offer process; others 
had said that this was perhaps not enough and that  Members needed to se ek complementary or 
supplementary approaches.  All Members had alluded in some way to the need to fully exploit the 
main approach to negotiations, namely the requ est-offer approach and some had indicated their 
willingness to explore other methods available under the Negotiating Guidelines.  In this regard, a 
number had asked him to conduct cons ultations to explore whether the method of negotiation could be 
improved.  Some suggestions had been made, a nd although there had not been an opportunity to 
discuss these in depth in formal session, some Me mbers had expressed concern, some serious, that 
these attempts could undermine the flexibility, struct ure of the GATS, the Negotiating Guidelines, etc.  
Some had expressed that these approaches could preserve what they perceive as imbalances.  These 
were some of the broad parameters he had noted.   
313. The Chairman said that many delegations had provided very detailed, specific individual 
assessments in response to his No te.  These assessments detailed sectors and modes of particular 
interest, specific barriers faced, market access gaps  identified, and included a number of groups of 
Members that had made statements on their assessment of sectors and modes.  He presumed that these 
were reflections, for the most part, of the work unde rtaken in so-called friends groups in computer and 
related, telecoms, recent acceded Members, mode  4, mode 3, energy, audiovisual, postal/courier 
including express delivery, among others.  He said this information would be helpful to him in 
making his report to the TNC on the state of play of the negotiations.   
314. The Chairman said that there had been some indication that there had been good progress on 
domestic regulations and there were indications that Members should aim to give at least an indication 
of the elements that would comprise an agreemen t on domestic regulations by Hong Kong.  On GATS 
Rules, many Members had underlined the central im portance they attached to obtaining results on 
safeguards, while others spoke of a very realistic approach to determine what was feasible or not in 
terms of an ESM, as well as subsidies and government procurement.  He expected that the subsidiary 
bodies would be required to undertake intensified e fforts in the autumn in order to accelerate work 
and draw the appropriate conclu sions in good time.  He acknowledge d the announcement by Australia  TN/S/M/15 
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 about an initiative with regard to a ESM.  Ass essments had also been provided by LDCs and the 
African Group and there had been many indications about the importance of technical assistance and 
capacity building. 
315. In terms of the way forward, the Chairman said that Members had asked him to undertake 
consultations and develop a work programme or ro ad map.  He thought that Members needed to 
engage in a profound and in-depth discussion about what could be done to improve a situation which 
was unsatisfactory to all, but which would be balanced , meet the interests of all Members, adhere to a 
deadline, remain within the rul es of the game, and neither change the structure nor diminish the 
flexibility of the GATS.  The pro cess needed to be inclusive and tr ansparent as no Member could be 
expected at the end of the day to agree to a result the implications of which that Member did not fully 
understand.  In essence, he believed that the C ouncil was called to collectively begin work on a 
package for Hong Kong.  He had taken from the di scussion that he had a mandate to begin intense 
consultations.  He said he would seek to organise wo rk in such a way as to take maximum advantage 
of time and remain fully transparent.  He stated that the work ahead would require a considerable 
investment of time and effort for Hong Kong and th at only one formal meeting remained scheduled.  
He said that in September he hoped that the Council would have possible elements for a package that 
would be presented in Hong Kong.  
316. The Chairman proposed that the Council take note of the statements made.  
317. It was so agreed . 
J. OUTLINE OF THE CHAIRMAN 'S REPORT TO THE TRADE NEGOTIATIONS COMMITTEE  
318. The Chairman  said that, with respect to the review of progress, he would report that Members 
overwhelmingly reiterated that the se rvices negotiations form one of the three pillars of market access 
in the single undertaking and said that balance among th ese three pillars would need to be found at the 
TNC.  They also re-affirmed the main negotia ting bases – GATS provisions, the Doha Development 
Agenda, the Negotiating Guidelines, and the July Package – as essential for preserving the flexibility 
of the GATS and preventing the creation of imbalances in the negotiations.  
319. On the number of offers since the formal mee ting in February, 17 new initial offers had been 
tabled, and since May, 24 revised offers.  Th e total number of initial offers presented was 68, 
representing 92 Members.5  Not including least-developed country Members, some 24 offers 
remained outstanding, and including LDCs, 55 initial offers remain outstanding.     
320. He would report that he had updated the factual assessment given at the February cluster on 
the state-of-play of offers submitted to date.  Ov erall, although the numbers had improved, the quality 
remained poor.  For most sector categories, a majority  of the offers did not propose any improvement.  
If the current offers were to en ter into force, the average number of sub-sectors committed by 
Members would increase only from 51 to 57.  Likewise, less than half of the schedules contained commitments of any kind in sectors such as distribution,  postal-courier, or road transport.  There was 
thus no significant change to the pre-existing patterns of sectoral bindings.  As well, less than half of 
the offers envisaged improvements to horizontal co mmitments on mode 4.  With respect to MFN 
exemptions, only 15 offers proposed improvements;  some 400 exemptions remained.  These figures 
did not give information about the quality of wh at was offered nor the economic importance of the 
sectors covered.  Ultimately, this could only be assessed by the Members concerned. 
                                                     
 
5  The European Communities' offer is counted as representing 25 Member States. TN/S/M/15 
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 321. Notwithstanding the fact that the number of o ffers had improved since his last report, it was 
widely acknowledged that the overall quality of initial and revised offers was unsatisfactory.  Few, if 
any, new commercial opportunities would ensue for ser vice suppliers.  Most Members felt that the 
negotiations were not progressing as they should.  It was clear that much more work would be necessary in order to bring the quality of the pack age to a level that would allow for a deal.   
322. A considerable number of Members recognised that the request-offer method alone was not 
producing the desired results. The resource-intensiv e and time-consuming nature of this method of 
negotiation had been stressed.  Many delegations st ated that, in order to hasten progress, Members 
should explore all negotiating methods available with in the parameters of Article XIX of the GATS 
and the Negotiating Guidelines, i.e. bilateral, plur ilateral and multilateral approaches.  The role of 
possible indicators to measure and promote progress in the negotiations had been raised by some 
Members, while others had expressed concern that  these would undermine the negotiating flexibility 
granted by the GATS and create or maintain imbalances.  
323. On rules, progress had been reported on disci plines on Domestic Regulation and he believed 
that the Working Party on Domestic Regulation (WPD R) should be able to provide some elements for 
disciplines before Hong Kong.  With respect to work on GATS Rules, a number of Members 
underlined the central importance they attached to a successful outcome on Emergency Safeguard 
Measures (ESMs).  Others said that a candid evaluation of what could be achieved at this stage would be necessary.  A few Members recalled their sugges tions to facilitate the information exchange on 
subsidies.  Views remain divergent with r espect to work on government procurement.   
324. A lot of attention had been given to identifyi ng Members' expectations in the round and their 
assessments of the state-of-play.  In  response to a Note by the Chairman
6, delegations had outlined 
their expectations on market access and rules negotiations, and provided detailed individual 
assessments on:  the specific barriers their services suppliers face, the d earth of offers in sectors and 
modes of particular interest, the need for improved clarity of commitments in terms of scheduling and 
classification, and achievements or lack thereof in the rules negotiations.  Several groups of Members 
provided their assessments of various sectors, modes and MFN exemptions.  A group of recently 
acceded Members expressed their views on the extensiv e nature of their existing commitments.   
325. He would indicate that this exercise had b een very helpful in identifying Members' 
expectations for these negotiations, including specific information on the levels of bindings sought in 
each sector and mode.  Given the particular na ture of the request-offer method, the negotiating 
process needed to be informed by a more general vi ew of Members' ambitions in specific sectors and 
modes of supply in order to promote a satisfactor y and balanced outcome.  While the information 
participants provided would need to be further refined in the coming months, at this stage, it 
nonetheless gave general profile of the package of results Members seek.  A summary of the specific 
information given by delegations w ould be contained in an annex to  the report and would be made 
solely on his own responsibility.   
326. Delegations had reiterated the importance of the Modalities for the Special Treatment for 
LDCs and for increased LDC participation in the ne gotiations.  In this regard, LDCs recalled the 
crucial role of targeted technical assistance.  
327. On Consideration of Proposals on Special a nd Differential Treatment Provisions, continued 
interest had been expressed by the demandeurs  and it had been proposed that he pursue consultations.  
In line with the relevant portions of paragraph 1(d) of the July Package, he wo uld draft a report to the 
General Council prepared on behalf of the Special Session.  
                                                      
6 JOB(05)/99.  TN/S/M/15 
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 328. Referring to a number of Other Items, he woul d report that under the Assessment of Trade in 
Services, a substantive discussion had been held on the basis of a submission from Cuba, contained in 
document TN/S/W/44 relating to services lib eralization in under-developed economies. A 
presentation from UNCTAD on a recent publication entitled "Trade in Services and Development 
Implications" referred, inter alia , to UNCTAD's "development benchmarks", and its assessment of 
trade in services, as well as the role of infrastruct ure services, liberalization in modes 1 and 4, and 
increased investment and technology tran sfer for developing countries.   
329. Under the agenda item Implementation of the Modalities for the Special Treatment of LDC 
Members in the Negotiations on Trade in Services, a substantive discussion had been held on the basis 
of a recent submission by the LDC Group (Job(05)/1 14).  The paper outlined a four-step process for 
the implementation of the Modalities, and focused on  the first step, namely information gathering on 
the programs and initiatives of Members in promoting the objectives in the Modalities.  LDC expectations included:  realisi ng LDC export opportunities in mode 4, appropriate mechanisms for 
effective access for LDC exports, and measures aime d at increasing LDC participation in trade in 
services.  Delegations responded favourably to this pa per and a few requested more time to study it.  
330. Under the item Proposals Relating to the Ne gotiations under Article  XIX, discussion was 
based on new submissions or room documents related to financial services, mode 4 commitments and economic needs tests, transparency of horizontal  mode 4 commitments, construction and related 
engineering services, telecommunications services and cross-border supply of services.   
331. Under a separate item, the Council had agreed to task the Secretariat with preparing a series 
of notes as an information tool meant to assist dele gations in their consideration of sector and mode-
specific issues raised in the negotiations.     
332. The OECD had made a presentation on a recen t study entitled "Managing Request-Offer 
Negotiations under the GATS:  the case of enviro nmental services".  The presentation touched upon 
the changing characteristics, regulatory frameworks, classifications and public policy issues related to 
environmental services.     
333. In general, Members were dissatisfied with the lack of progress in the negotiations.  They had 
pointed out that the offers presented virtually no new business opportunities and, in most cases, did 
not even capture existing levels of liberalization.  In this regard, it was to be recalled that Article 
XIX:1 mandated that "Members shall enter into successi ve rounds of negotiations [...] with a view to 
achieving progressively higher level of liberaliza tion."  The same was echoed in the Negotiating 
Guidelines.  
334. Members recognised that a tremendous amount of work remained to be accomplished, both in 
Geneva and capitals, in the short period of time prior to the Sixth Ministerial Conference.  He would 
also recall that the Special Session was required, purs uant to the July Package,  to provide a full report 
to the TNC with possible recommendations for the purpose of the Sixth Ministerial Conference.  
Therefore, part of the effort after the summer br eak needed to be directed towards developing the 
recommendations that the Special Session could make, with a view to facilitating substantial 
improvement in coverage and quality of offe rs and progress in the rule-making areas.   
335. A number of ideas and proposals had been put fo rward to address the current situation.  He 
therefore intended to engage in intensive consulta tions on a broad range of issues including, but not 
limited to, (i) further identification of expectations  by Members in all areas of negotiations, (ii) means 
of intensifying the request-offer process, (iii) use of complementary approaches as proposed by 
Members within the parameters of the GATS and th e Negotiating Guidelines, (iv) implementation of 
the Modalities for the Special Treatment for LDCs in  the Negotiations, (v) consideration of category 
II proposals on S&D treatment provisions, a nd (vi) targeted technical assistance.  TN/S/M/15 
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 336. The Chairpersons of the relevant subsidiary bodi es would wish to engage in consultations to 
intensify work in their r espective areas, with a view, inter alia , to providing inputs for the review of 
progress by the Special Session as foreseen  in Annex C of the July Package. 
337. With respect to the review of progress, he woul d inform the TNC of his intention at the next 
formal meeting to again organize the review of  progress on the basis of in-depth discussions by 
Members.  This would give dele gations the opportunity to supplemen t and refine their expectations 
and individual assessments.  In the light of this discussion he would update, as appropriate, the 
summary contained in annex 1 in future reports to the TNC. 
338. The next cluster of services meetings, including a meeting of the Special Session, would be 
held from 19-30 September 2005.  It was foreseen, in accordance with the July Package Decision, that 
the Special Session would review progress for the purpose of the Sixth Ministerial meeting.  An 
appropriate date would be decided for such a review.   
L.  O
THER BUSINESS  
339. As there were no delegations wishing to make comments under this item, the Chairman  
proposed that, before he adjourned the meeting, th e Council take note of all the statements that had 
been made.  
340. It was so agreed . 
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 Annex 1  
1. The representative of Zambia , speaking on 1 June at an info rmal meeting on behalf of the 
LDC Group, said that the informal meeting had been  timely on the road to the July meeting of the 
TNC and beyond to Hong Kong, and had provided Members an opportunity to identify what could be achieved for LDCs in the current round of the negotiations.  LDCs faced profound imbalances in 
negotiating strength which had prevented them fro m participating in and benefiting from the 
negotiations.  In this regard, th e adoption of the LDC Modalities had been a welcome step.  Two years 
after their adoption, Members needed  to ask (i) whether the LDCs were  realising the special priority 
granted to them in Article IV:3 and the LDC Moda lities; (ii) whether their share of world trade had 
increased, and if so, how the Modalities had contributed  to this;  (iii) whether the Modalities had been 
implemented by Members, and if so, how, and if not , why not; and (iv) how could LDCs ensure that 
they maximised their benefits from the Modalities.   He sought to share recent statistics on 
performance in services trade in LDCs.  Whereas in 2003 global trade had increased at a rate of 6.7 
per cent for exports and 6.5 per cent for imports (w hich was higher than for goods alone at 5.3 per 
cent and 5.0 per cent respectively), the picture for LD Cs was the reverse.  Indeed, the growth in goods 
exports in LDCs stood at 7.2 per cent while that of services stood at 3.5 per cent.  Growth in imports 
of services stood at 5.2 per cent, which was below that of goods which stood at 8.8 per cent.  It was worth pointing out that LDCs had significantly increased their imports of services while their exports stagnated.  This demonstrated that LDC services suppliers were incapacitated and he called for the 
urgent implementation of the LDC Modalities so that  the LDCs could be assisted to become more 
competitive.  LDCs required special priority at the sectoral level where sector-specific measures could 
be agreed upon by all Members in terms of their development, trade and financial needs which would 
aim at ensuring their increasing participation in the multilateral trading system.   
2. The representative of Zambia emphasised the importance of mode 4 and particularly the 
movement of less skilled persons.  LDCs were lik ely to gain the most in the negotiations if 
meaningful liberalization of market access for the temporary movement of na tural persons providing 
services under the GATS could be achieved.  Desp ite being recognised as the key area for LDCs, 
mode 4 for less skilled persons, under which benefits accr ued directly to individuals, had not featured 
prominently in the initial offers made.  Effectiv e market access in mode 4 would depend on the 
recognition of qualifications, equivalence in experience and progress in addressing how visas and 
permit systems could be made less restrictive for trade.  The Group called for enhanced market access 
in mode 4 in all skills and occupations where LDCs had a comparative advantage.  He reiterated that 
the Group was emphasising its interest in the moveme nt of less skilled persons .  LDCs were in the 
process of finalising a joint request and they calle d upon Members to respond to this request and 
provide market access in this mode.  The Gr oup also called upon Members to provide effective 
technical assistance aimed at increasing the efficien cy and competitiveness of LDC services suppliers 
as well as building real capacity in these countries.  Technical assistance and capacity building should 
go beyond workshops and reports by foreign consultants, but rather should aim at effectively building 
human, institutional and regulatory capacities thr ough, among others, adequate training, effective 
exports and investment promotion tools, transfer of technology, et cetera .  Speaking at the 1 June 
informal meeting, he said that in line with para graph 13 of the LDC Modalities he was requesting that 
the implementation of the Modalities become a standing agenda item under the Review of Progress.  At the meeting, Members would continue to report on their progress on the implementation of the 
Modalities.  LDCs could use this opportunity to sh are their experiences in the implementation of the 
Modalities.  He requested that, as the Chairman pr epared his report in July and prior to the Hong 
Kong Ministerial, he include a section on the progress made on the implementation of the LDC 
Modalities.    
3. Speaking at an informal meeting on 1 June, the representative of the United States
 said that 
her delegation was studying Job(05)/114.  She applaude d the level of detail and analysis it contained.  
Making some selected remarks at this stage, on th e question how offers provided any additional and TN/S/M/15 
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 commercially meaningful commitments for LDCs, particularly in modes 1 and 4, she said that the 
United States commitments on mode 4 from the Ur uguay Round were among the best in the WTO, 
had been undertaken on a horizontal basis and underp inned the broad sectoral coverage in the United 
States schedule.  The categories included in its mode 4 commitments were available to all Members, including services suppliers from LDCs.  Mode 4 commi tments were important in international trade 
in services, but mode 4 commitments without broa der liberalization and complementarity on the host 
country side did not create new commercial opportunities that led to sustained development.  In this 
regard, she noted parallel work in other institutions  such as the World Health Organization, at which 
LDCs had submitted to assemblies proposals and agreed to resolutions to monitor the effect of mode 4 
liberalization and commitments in the WTO on the loss of resources within their own countries.  
Hence, balance in each institution and the development needs of c ountries needed to be borne in 
mind.  She indicated that many developing countries conducted the bulk of their trade on a regional basis and with other developing countries.  A more development oriented strategy for LDCs could be 
to emphasise the value of mode 4 commitments th at reinforced their existing trade in services on a 
regional basis and would build on greater market  access across sectors and modes of supply.  In 
addition, she announced that the United States w ould be making a future presentation on how the 
United States implemented mode 4 that would explain its regulations  and requirements for temporary 
entry.  The United States sought to use this occasi on to explore in further detail what was found in 
existing Uruguay Round commitments.  On the questi on about how the categories of natural persons 
supplying non-professional services were reflect ed in the offers and whether the ILO-ISCO 
classification could be used, she said that th ere was no consensus that the GATS covered non-
professional and/or semi- or unskilled labour.  Members were not in agreement as to whether such 
categories belonged in trade agreements as opposed to  mutually negotiated bila teral or regional labour 
agreements.  The United States was interested in h earing from other delegations that had undertaken 
specific commitments covering a category of this  kind as well as specific information from LDCs.  
The United States looked forward to further consultati ons with LDCs in the July cluster and looked 
forward to the generic request that had been refe rred to by Zambia.  In the area of disciplines for 
domestic regulation in the working party, she said that the United States had tabled a proposal for horizontal transparency disciplines which applied to  all sectors and modes of supply.  Her delegation 
believed that such disciplines for transparency  addressed many areas that affected mode 4 
commitments, such as licensing and qualification procedures and requirements.  She looked forward 
to more discussion of this paper.  
 
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