RESTRICTED  WORLD TRADE  
ORGANIZATION  S/CSC/M/40 
10 May 2006 
 (06-2272) 
Committee on Specific Commitments  
  
 
 
REPORT OF THE MEETING HELD ON 10 APRIL 2006 
 
Note by the Secretariat
1 
 
 
1. The Committee on Specific Comm itments (CSC) held a meeting on 10 April 2006.  The 
agenda for the meeting is contained in WTO/AIR/2795.   
2. The representative of Canada  wished to raise the issue of the incorporation of changes to 
Members schedules of commitments under Other Business. 
3. The Committee adopted  the agenda with the addition of the item raised under Other Business. 
A. A PPOINTMENT OF THE CHAIRPERSON  
4. The outgoing Chairman, Mr Nicholas Niggli (Swit zerland), stated that according to the rules 
of procedure for meetings of the Committee, the ha nd-over of the chairmanship should have taken 
place at the end of the last meeting.  However, since the consultations on the chairmanships of the 
subsidiary bodies to the Council for Trade in Serv ices had not been finalized at the time, it was 
decided that the hand-over would take place at the be ginning of the current meeting.  Accordingly, he 
proposed that the Committee elect Mr Hisanori Y aegashi from Japan as the Chairman of the 
Committee on Specific Commitments.  
5. The Committee elected  Mr Yaegashi by acclamation. 
B. SCHEDULING ISSUES  
6. No delegation intervened on Member-specifi c scheduling questions and Economic Needs 
Tests (ENTs); all interventions on general scheduli ng questions were made in informal mode.  The 
Chairman  suggested that the Committee revert to the item at the next meeting.   
7. It was so agreed . 
C. CLASSIFICATION ISSUES  
8. The Chairman  noted that the delegation of Indone sia was in the process of submitting a 
second revision of its classification proposal on energy  services.  An advance copy of the document 
which was to be finalized had been made availabl e by e-mail and with the set of documents for the 
meeting.  
 
                                                      
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. S/CSC/M/40 
Page 2  
 
  9. The representative of Indonesia
 first replied to comments made by the European 
Communities at the last meeting on 8 February 2006 .  Concerning the comment about the distinction 
between core and non-core energy services, Indonesi a perceived that energy services had considerable 
coverage from upstream to downstream and include d support activities both for fossil and renewable 
energy sources.  Her delegation had included the comment related to construction work for long-
distance pipelines, communication and power lines ca bles, and construction work for local pipelines 
and cable and ancillary works in the second revision  of the proposal under the sub-classification 2.1, 
"Design and Construction of Facilities to Produce, Tran sform, and Supply Energy".  With regard to 
"Handling and Treatment of Energy Products,"  her delegation had placed these activities under 
services incidental to manufacturing in sub-division 2.4.  Concerning the comment on professional 
services and other energy services, the proposed classifi cation covered all activities related to energy 
activity, both directly or indirectly, in accordance with commercial reality.  
10. Indonesia's proposal for an energy classificati on was based on the principles of commercial 
reality, comprehensive coverage, transparency, and neutrality.  She hoped that the proposal would 
facilitate the negotiations, both for energy producin g and energy using countries.  The second revision 
reflected comments received in multilateral and bilate ral discussions held in the course of last year 
and early this year with interested Members as well as the result of domestic consultations among 
stakeholders.  The changes in the proposal resulted from re-organization of some activities, changes in 
certain CPC references, omission of duplication, a nd creation of some additional items.  The proposal 
had been submitted without prejudice to Indonesia's position on any sector in the negotiations or any 
future offer in any sector.  Indonesia reserved the right to modify the proposal at any time.   
11. The representative of the European Communities  stated that his delegation would study the 
proposal and would contact the Indonesian delegation thereafter. 
12. The representative of Norway , in preliminary comments, stated  that the Indonesian proposal 
was neutral in terms of energy sources and servi ces.  His delegation had provided detailed comments 
on previous versions of the proposal.  Generally , Indonesia's extensive and comprehensive list of 
energy-related services was of great help in the ne gotiations, even if it was not a pre-requisite for 
improved commitments on energy services.  As for th e revised proposal itself, he reiterated that the 
entire chain of activities should be taken into acc ount when scheduling commitments, regardless of 
whether the services were supplied on-shore or off-shore.   In that regard, Indonesia's classification put 
together all relevant commercial services rendered in the energy sector.  However, comparing the second revision with the earlier version of the propo sal, a couple of items appeared to have gone 
missing, e.g., sub-category 1A.2.1. "Rig Positioni ng and Preparation" and sub-category 1A.2.1.1 
"Vessel Transportation and Supply Services".  He requested Indonesia to include these items in the 
revised list, to ensure that the current commerc ial reality both for on-shore and off-shore activities 
was fully reflected. 
13. The Chairman
 suggested that the Committee take note of the statements made and revert to 
the issue at the next meeting. 
14. It was so agreed.  
15. The Chairman  reported on the informal discussions on classification issues in the Committee, 
which had drawn Members' attention to the fact th at the French version of the "Services Sectoral 
Classification List", MTN.GNS/W/120 ("W/120") had err oneously inverted parts of the headings of 
the sub-sectors corresponding to CPC 9401 and CPC 9403.  
  S/CSC/M/40 
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  16. The correct correspondence in W/120 (French version) for environmental services is 
produced below: 
6. SERVICES CONCERNANT L'ENVIRONNEMENT  
 A.   Services d'assainissement
 9401 
 
B. Services d'enlèvement des ordures  9402 
 C. Services de voirie et services analogues
 9403 
 
D. Autres services  
 
 
17. The Chairman  indicated that a corrigendum to this effect would be issued.  The other four 
issues under consideration would require further discussion.   
18. It was so agreed . 
D. ORGANIZATION OF FUTURE WORK 
19. The Chairman  stated that he had kept the item on the agenda to provide further opportunity 
for delegations to express their views on the cove rage and organization of future work.  The 
interventions at the last meeting had indicated a difference in views as to what topics deserved 
prioritization; however, in his opinion most issu es could be accommodated under the regular agenda 
items of "Classification Issues" and "Scheduling I ssues."  The question of the relationship between 
old and new commitments, which had attracted some interest at the last meeting, would be discussed 
in future meetings under a separate agenda item.   
20. The representative of China  recalled the Hong K ong mandate concerning scheduling issues, 
and stated that his delegation regarded the CSC to be  an important forum to discuss such issues.  This 
would facilitate the scheduling process for all Memb ers and might ensure greater comparability of 
offers.  He also voiced interest in a discussion of the relationship between new commitments and old 
commitments, especially in light of the new classification that was being developed in certain sectors.  
21. The representative of Hong Kong, China  noted that many of the informal summaries or 
annotated agendas provided by the previous Chair we re useful references, but were difficult to track 
as they had been issued without document symbols.  He hoped that it would be agreed in broader 
consultations that such documents could be distributed as JOB documents.  As a full cycle of 
discussions on classification had been completed, he requested whether the Secretariat could package 
the notes, and send them to all delegations by elect ronic means so that everyone had a full set.   
22. The Chairman  confirmed that the Secretariat would do as requested.  He suggested that the 
Committee take note of the statements made. 
23. It was so agreed . 
E. OTHER BUSINESS  
24. The representative of Canada  stated that at the conclusion of the current round of 
negotiations, Members would need to establish a Protocol or some other legal instrument 
incorporating changes to schedul es of commitments on services.  This instrument would play an S/CSC/M/40 
Page 4  
 
  important role in defining the relationship between the existing schedules and the final schedules 
submitted by Members at the conclusion of the Rou nd.  Members had held preliminary discussions on 
this subject, due in part to a Ma y 2002 Note from the Secretariat (S/CSC/W/33).  During the course of 
these discussions many Members had expressed that it would be desirable to have recourse to pre-existing schedules in the event of a potential cont roversy or misunderstanding regarding a Member's 
commitments in the future.  In order to facilita te discussions on this issue, her delegation had 
circulated an informal document entitled:  "Rela tionship between old and new commitments using a 
consolidated approach: ensuring recourse to existi ng commitments."  The paper's primary aim was to 
solicit Members' views with respect to whether the legal instrument incorporating Members' 
consolidated schedules at the end of the Round sh ould explicitly recognize that previous schedules 
constituted a proper source of interpreting commi tments in new consolidated schedules.   
25. Delegations had previously agreed that at th e end of the current negotiations, each Member 
would have one legally binding c onsolidated schedule which would effectively replace all previous 
schedules.  This was often referred to as "repla cement method" or "consolidated method".  The 
Secretariat had reminded Members that when using such a method, existing schedules of 
commitments currently in force could still constitute  a proper source for interpreting commitments in 
new consolidated schedules.  She noted that in th e early years of the GATT, the Working Party on 
Schedules had recommended that the Contracting Party concerned was expected to accept the understanding that earlier schedules and negotia ting records constituted a proper source for 
interpreting concessions contained in consolidated schedules.   
26. As the end of negotiations neared, Members were , of course, responsible for verifying their 
own consolidated schedule and thos e of other Members with a view  to detecting any errors or 
problems that could potentially undermine existi ng commitments.  Nevertheless, due to the 
complexity of revising services schedules, which in  some cases might involve re-classification, 
Members might wish to ensure that old schedules sti ll be used as a point of reference.  Her delegation 
proposed to consider whether it was desirable to in clude specific text within the legal instrument 
incorporating Members' consolidated schedules at th e end of the Round.  It would thus be explicitly 
recognized that previous schedules constituted a proper source for interpreting commitments 
contained in new consolidated schedules.  Such an approach would confirm, in accordance with 
Article 32 of the Vienna Convention on the Law of Treaties, that recourse can be had to previous 
schedules as supplementary means of interpretation.  The inclusion of this kind of language would 
not, however, mean that Members' existing schedules of  commitments would continue to be in force.  
Of course, the only legally binding schedules of commi tments in future would be the consolidated 
schedules which were agreed to at the end of the current Round.  Canada simply proposed that 
Members recognize that previous schedules constitu ted a proper source for interpreting commitments 
in the new consolidated schedules in the future.   
27. Specifically, her delegation was proposing that  Members consider including language that, 
firstly, recognized that previous schedules would s till constitute an appropriate  and relevant source for 
interpreting commitments in the new consolidated schedules;  and, secondly, emphasized that unless 
the procedures of Article XXI had been duly followed, a Member's commitment in its new 
consolidated schedule might not accord or be constr ued to accord treatment less favourable than that 
provided under that Member's previous schedule.  The ability of Members to reduce the level of a 
commitment pursuant to the procedures of Article XXI should be clearly de-linked from the 6
th 
Protocol which was intended to incorporate the re sults of the current negotiations taking place under 
Article XIX.  A reduction in the level of a commi tment was only permitted through the clear, specific 
and explicit application of the procedures of Article  XXI.  
  S/CSC/M/40 
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  28. The representative of Switzerland  supported Canada's proposal.  It was his understanding that 
the Membership widely recognized that one major advantage of the GATS was the legal certainty it 
provided.  Therefore, there needed to be a waterp roof approach to the relationship between old and 
new commitments.   
29. The representative of Hong Kong, China  wished come back to the item at the next meeting 
under a formal agenda item, and preferably in info rmal mode so as to allow for proper debate.  He 
underscored three issues, first, the key question aris ing from Canada's paper was whether there was an 
understanding among Members that the results of  the ongoing Article XIX negotiations had to 
represent exclusively further liberalization of curre nt commitments, and that any withdrawal or 
modification of commitments had to be dealt with  exclusively through Article XXI.  If such an 
understanding existed, the second question was how to address backtracking, numerous cases of 
which could be found in offers.  Another related issues was the fact that changes in certain Members' 
offers pertained not only to changes arising fro m Article XIX negotiations but also changes which 
were purportedly proposed under an ongoing Article XXI  process.  Thirdly, Members also needed to 
reflect upon the relationship between ol d and new lists of MFN exemptions. 
30. The representative of Korea  shared the views of the previous speakers about the relationship 
between the ongoing Article XXI negotiations and the so-called 6th Protocol.  He was interested in 
Canada's view on the relationship between  old and new lists of MFN Exemptions. 
31. The representative of Mexico  agreed with the representativ e of Hong Kong, China on the 
points raised regarding MFN Exemptions and Article  XXI.  In preliminary comments, he noted that 
according to Article 32 of the Vienna Convention, Members' existing schedules could already be an 
element of interpretation independently of what any Protocol would state.  
32. The representative of the European Communities , in preliminary comments, noted that Article 
32 of the Vienna Convention would apply in any case, and would not need to be specifically 
mentioned.  Generally, his delega tion's view was that the new schedules would replace the old ones, 
and he agreed with Canada that the only bindin g commitments would be those of the consolidated 
schedule.  He supported Hong Kong, China's view that there should be no backtracking through the 
Article XIX procedures, and that Article XXI provided the only acceptable path for downward modifications of commitments.  
33. The representative of China
 stated that he would revert to the issue at the next meeting.  
34. The representative of the United States  noted that her delegation was concerned not only with 
backtracking in the framework of Article XIX nego tiations, but also illegitimate backtracking within 
Article XXI procedures and situations where ther e might be mingling between the procedures under 
Article XXI and Article XIX.  The issue was far more complex than a simple distinction between 
these two Articles. 
35. The Chairman  requested Members to take note of the statements made and suggested that the 
Committee revert to the issue of the relationshi p between old and new commitments under a separate 
agenda item at the next meeting.  He further s uggested that, in accordance with the practice of 
grouping meetings of subsidiary bodies close to meet ings of the Council, the next formal meeting be 
held in conjunction with the next services cluster.   
36. It was so agreed . 
__________