RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/S/M/26 
11 September 2007 
 (07-3820) 
Council for Trade in Services 
Special Session  
 
 
  
REPORT OF THE MEETING HELD ON 13 JULY 2007 
 
Note by the Secretariat
1 
  
1. The Special Session of the Council for Trade in Services held a formal meeting on 
13 July 2007, chaired by Ambassador Fernando de Mateo of Mexico.  The agenda for the meeting, 
contained in document WTO/AIR/3044, was adopted. 
A. R EVIEW OF PROGRESS IN NEGOTIATIONS , INCLUDING PURSUANT TO PARAGRAPH 15 OF THE 
GUIDELINES FOR NEGOTIATIONS AND ORGANIZATION OF FUTURE WORK   
2. The Chair  recalled that since the Council's last meeting in early June, further progress had 
been made in the services negotiations.  Although no meetings of plurilateral request/offer groups had 
occurred during this cluster, bilateral market acce ss discussions had taken place, and consultations in 
capitals continued with the overall objective of preparing improved offers.  There was mounting 
concern with respect to unresolved issues in other areas of the Doha negotiati ons, and the effect that 
they had on the services negotiating process.  However,  despite these constraints, the objective was to 
make as much progress as possible.   
3. The Chair then switched the meeting to info rmal mode, to inform Members of recent 
consultations he had held at ambassadorial level. 
4. Reverting to formal mode, he invited Member s to assess the current state of the services 
negotiations, and the best way to organize work in  the coming months.   The representative of Japan  
noted that Members were making certain progress in the services negotiations in bilateral, plurilateral and multilateral meetings.  Through these negotiatio ns, Members' understanding of the significance of 
services in overall trade had been gr eatly deepened.  Trade in services was no longer perceived simply 
as an issue of developed versus developing coun try Members.  Japan fully understood the concern 
that some service suppliers in the developing worl d were infant industries and needed protection, as 
Japan had come along such path as well.  Japan al so understood the concern that requesting Members 
in plurilateral negotiations were not totally open th emselves.  Japan would try to respond to such 
concerns as much as possible.  But it was also true that a sufficient level of liberalization in services 
was one of the best ways to attract foreign direct  investment needed for development.  Moreover, it 
was more and more appreciated that the libera lization of services markets was conducive to the 
economic reforms necessary to meet the challe nges of globalization.  Many developing Members 
were joining the list of requestors in plurilate ral negotiations.  Thus, through the plurilateral 
request/offer exercise, the services negotiations were  entering a new phase.  The importance of filling 
the gap between commitments and current market liberalization, and to create new trade 
opportunities, was recognized more widely.  The n eed to formulate disciplines on domestic regulation 
                                                     
 
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/26 
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  and to address development concerns was understood as well.  In short, the services negotiations were 
on the right track, but not making sufficiently spee dy progress, because they were destined to follow 
agriculture and NAMA.   Noting that the Chairs' pa pers were coming out the following week and that 
Members would engage in intense negotiations for a last try in agriculture and NAMA, he suggested 
that Members intensify the services negotiations as well.  A tangible result in services was needed 
when an agreement was reached on agriculture and NAMA modalities.  He further suggested that the 
services meetings be convened from early September so as not to lag behind other key sectors.  
5. The representative of Vietnam
, speaking on behalf of Brunei Darussalam, Cambodia, 
Indonesia, Malaysia, Myanmar, the Philippines, Thai land and Vietnam, noted that the recent setback 
in  Potsdam negated a quick breakthrough in the Doha  Round, but that not all was lost.  This group of 
Members were pleased that the negotiations had return ed to centre stage in Geneva.  It was now up to 
Members to win or lose the potential benefits that could be derived from the Round.  Unlike the G4 
process falling back on the Geneva process, there was no fall back after Geneva.   
6. He noted that, while affected, the services negotiations had not ground to a halt.  During the 
previous two weeks, heads of delegations had been  engaged in the Enchilada talks; incremental but 
important progress had been made in drafting po ssible disciplines on domestic regulation; a new 
plurilateral request on tourism had been tabled  by a group of developing Members, including 
Thailand; and delegations had met bila terally to discuss the way forward. 
7. The challenge was to get a grip on the situa tion, determine next steps and ensure that 
preparations had been made for the advancement of  negotiations and a possible Ministers' Meeting in 
September.  Agreement on the numbers in agricultu re and NAMA would constitu te the first phase of 
what was hopefully the concluding months of the DDA negotiations.  Once the agriculture and 
NAMA modalities were agreed upon, there would be sufficient maturity in most other negotiating 
areas to form the basis for an ove rall package.  For the moment, a Chair's text in services was not 
needed.  Annex C outlined the contours of a services package, although many elements remained to 
be fulfilled.   
8. On the way forward in services, Members could continue to focus on what could be 
realistically achieved in terms of market opening , while being fully faithful to the principle of 
progressive liberalization.  Rules on domestic re gulation and emergency safeguard measures would 
also be desirable in order to strike  the right balance within services.   
9. The group of Members on behalf of whom he  was speaking remained engaged fully and 
constructively in a multilateral setti ng in Geneva and each was ready to play its role.  But at this 
juncture of the negotiations they thought the o nus was on the major players to show the necessary 
leadership in agriculture and NAMA. 
10. The representative of the United States  stated that a strong, ambitious market-opening result 
in services was essential for a successful Doha ag reement.  As Members were working toward 
modalities for agriculture and NAMA, it was important  to remain engaged on services.  He noted that 
Members had made progress over the past several m onths toward ensuring that services were on an 
equal footing with the other market access ne gotiating groups, and in pursuing their respective 
interests through both bilateral and plurilateral mee tings.  Members needed to preserve and build upon 
this hard work.   
11. This meant, in the first instance, that Member s had to continue to hold productive meetings 
and lay plans for the steps to be taken when ag reement was reached in agriculture and NAMA.   
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  12. Regarding such meetings, his delegation suppor ted holding a services cluster toward the end 
of September.  In addition to pr oviding an opportunity for needed bilateral meetings, this cluster 
would enable Members to take a fr esh look at the issues addressed in  the plurilateral negotiations and 
Enchilada meetings, and to take stock overall of the progress made to date.  
13. The aim of such work was to ensure a level of ambition for services that was comparable to 
that contained in the modalities for agriculture and NAMA.  That meant setting the stage for the final 
offers and associated nego tiations that would: respond to bilatera l and plurilateral requests, taking into 
account Annex C of the Hong Kong Ministerial Declar ation; cover the broadest possible range of 
sectors; reduce the gap between bindings and actual practice for both market access and national treatment, with a view to capturing the current leve ls of openness; and significantly improve existing 
commitments, and undertake new market access and national treatment commitments in key sectors, 
and modes of supply, particularly in key infrastructure service sectors, such as financial services, telecommunications, distribution, express delivery, en ergy services, and environmental services, and 
in other areas of interest to developing countries.  Members also had to continue their work to develop 
new disciplines on domestic regulation and work expe ditiously to develop a mechanism to implement 
the LDC Modalities. 
14. The representative of Chinese Taipei
 noted that at the TNC meeting held after G-4 
breakdown, his delegation and other Members had immediately voiced their strong support for the 
multilateral proceedings.  This was very encouraging.  With so much at stake in this Round for every 
Member, there was no choice but to keep marching on, no matter how difficult the road was.   
15. He further noted that at the 21-member As ia Pacific Economic Cooperation (APEC) forum 
held in Australia last week, th e Ministers responsible for trade had issued a stand-alone joint 
statement, mainly re-affirming their strong support for the multilateral trading system.  The Ministers 
had emphasized that "a successful Doha outcome must deliver meaningful new market opportunities 
in order to significantly expand trade, promote gl obal economic growth and foster development."  
They had also agreed to "engage actively and constr uctively in the negotiations in Geneva."  It was 
high time for WTO Members to contemplate how they could best move forward on the negotiations in 
general, and on services in particular.  
16. While keeping a close watch on development in the other two market access negotiating 
groups, and with the Chairs' draft texts due to come out on 16 July, his delegation wished to encourage Members to continue their hard work on domestic consultations in order to be ready with 
something substantial to offer when the time came.  Above all, the level of ambition in services was to 
be kept up at the equivalent level of the other two major negotiating areas.  In this context, his 
delegation remained open and willi ng to demonstrate its flexibility in discussion with other Members 
on the best way forward for the services negotiations.   
17. On the next services cluster, he suggested that  Members take into consideration progress in 
agriculture and NAMA and the timing of the mini-minis terial meeting.  He also suggested that the 
meeting of the WPDR be held during the cluster or s hortly before or after the cluster so as to allow 
capital experts to arrange their trips more efficiently. 
18. Welcoming progress made in the negotiation on domestic regulation, his delegation 
encouraged Members to continue with th eir efforts to make further progress.  
19. He stressed that the "Enchilada" meetings were  very important to keep up the momentum in 
services at this crucial time.  Wishing to see more of this kind of involvement, his delegation was 
committed to continuing to work closely with the Chair and other Members to help bring about a 
successful conclusion on services in this round.   TN/S/M/26 
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  20. The representative of Switzerland
 noted that at the present stage of negotiations, despite 
adverse circumstances, services negotiators were trying to work hard and continue to engage 
constructively.  He saw this as a positive signal sent to  the outside world to show that negotiators were 
still taking services very seriously.  It was important  to keep this signal in the hope that ambition 
would be realized.  He tried to assess the state of play of the services negotiations based on the 
responses to his delegation's requests with respect to  its priority sectors or issues, which included asset 
management, securities services, serv ices auxiliary to all modes of transport, installers, duration of 
stay of intra-corporate transferees.  He noticed th at what was contained in offers was below the level 
of long-standing liberalization on the ground.  This f act was not satisfactory.    Such situation might 
exist with regard to other sectors or issues.  He hoped that this situation could be addressed.  
21. On the way forward, he thought that most of the work would have to be done by experts and 
ministries in capitals with respect to schedules of commitments.  First, requests received from Members had to be assumed to be known by people in charge.  Second, the quality of schedules had 
to be assured, which was beneficial to the schedu ling Member itself, its partners, and the business 
community.  This was to ensure clarity, legal certa inty, and coherence of commitments.  He suggested 
that the issue of quality of schedules be addressed at the next meeting if time available.  In an 
optimistic scenario where there was movement in ot her areas, Members had to agree on the next steps 
in the services negotiations.  While Annex C remain ed the basis for future negotiations, addressing 
both bilateral and plurilateral request s received had to be the focus of the next steps.   His delegation 
expected offers to reflect as much as possible the le vel of current liberalization, and beyond that level 
wherever possible.   Switzerland had made offers th at went beyond the level of its law and wished to 
see other Members do the same.  He reaffirmed that no sector was a priori  excluded from the 
negotiations.   
22. The representative of Norway
 recalled that the Council's meeting of 27 April had been held at 
the end of the first fully-fledged cluster since the su spension of negotiations last summer.   At that 
time his delegation had been able to make the following observations: that cluster had provided a 
clear picture of market access situation, but a lot of  work remained to be done; the Enchilada meetings 
would play an important role in getting a better picture of a possible deal on services; the convergence process among the major players, the G-4, would hopefully provide some clarity on how to treat services leading to a breakthrough in the overall negotia tions.  The last approach so far had not been 
successful.  While the Enchilada process was useful in  itself, it had not brought much progress with 
respect to substance.  The question was how best to prepare for the work in services in September 
when intensive negotiations would ta ke place in agriculture and NAMA.  Some elements were needed 
for a platform for the final services negotiations, wh ich would be a basis for the end game, including 
all sectors and all issues of essential interest to a ll parties.  In his delegation's view, these elements 
were the following.  First, a reference to objectiv es and ambition was needed to ensure that services 
were treated on a par with agriculture and NAMA.   The end result would be a single, multilateral 
undertaking which helped contribute to economic grow th and welfare of all tr ading partners.  There 
was already a useful basis in Annex C, and the obj ectives would fit therein.   Second, a process was 
needed to ensure a leap forward in clarifyi ng market access commitments.  The plurilateral 
mechanism and a summing-up in the Enchilada pro cess might be useful post-summer work.  But more 
important, these avenues had to be transformed and f it into the multilateral process.  Third, there was 
a need for a ministerial meeting at the appropriate time.  Fourth, a timeline had to be set to ensure 
high quality of final offers, consiste nt with Annex C.   Fifth, satisfactory treatment was needed with 
respect to domestic regulation rules, S&D and LDC M odalities as part of the end game.  It would be a 
real pity if Members missed an opportunity to ha rvest the potential for increasing the level of bindings 
under the GATS.  The work so far had demonstrated  that it was feasible to realize such an 
opportunity.  
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  23. The representative of Korea  noted that the Doha negotiation had entered a new stage with a 
focus on the multilateral process.  New momentum ha d to be injected in services so that progress 
could be made to be commensurate with develo pments in agriculture and NAMA.   For many 
Members, a substantial outcome in services was as important as that in agriculture and NAMA for 
other Members.  In this regard, assuring a proper balance in terms of levels of ambition was an 
important element to facilitate progress in all three areas.  Such a balance could be achieved by 
pursuing a greater level of ambition in services.  Th e gap between the current level of liberalization 
and commitments had to be closed and new mark et access opportunities be created in key enabling 
sectors such as infrastructure service s.  Members had held useful discussions on their priorities and 
constraints in bilateral and plur ilateral negotiations.  These discussi ons needed to be more result-
oriented to build upon progress made including pos itive indications for impr oved offers.  While the 
Enchilada meetings had completed one  round of review of all sectors listed in plurilateral requests, the 
outcome of this substantive discussion needed to be  translated into high qua lity offers.  Progress in 
other areas including domestic regulation was also  needed.  Good regulations were not about 
imposing multilateral obligations but rather creat ing marketing conditions conducive to greater 
efficiency in services.  In this regard, Memb ers needed to be more ambitious in establishing 
disciplines on domestic regulation.  As substan tive progress was being made towards establishing 
modalities in agriculture and NAMA, more concrete measures needed to be taken in services.  Clear 
ideas were needed in terms of timing and format of th e next cluster.  This would enable more focused, 
appropriate work in capitals.  It was sensible to ha ve the cluster including a plurilateral component at 
the end of September.  The exact dates might be subject to change, depending on developments in 
agriculture and NAMA.  His delegation remained e ngaged in any further discussions to bring the 
services negotiations forward.  
24. The representative of the European Communities  stated that there was a need for a level of 
ambition in services comparable to that in agri culture and NAMA.  The current level of openness had 
to be reflected by closing the gap between bindi ngs and actual practice for both market access and 
national treatment in services.  This could be a st epping stone for urgently needed improvement in 
market access.  The next few weeks would allow fo r further discussions on substance in agriculture 
and NAMA,  but substance in services also needed  to be addressed. A balanced package across all 
negotiating areas was needed at a time of a breakth rough in agriculture and NAMA.  Therefore, clear 
indications were needed in parallel on the level of ambition in services, and language had to be 
developed for the services elements of the breakth rough.  Although not every Member was expected 
to contribute in the same manner in services, it wa s important to do this work multilaterally.  The 
weeks ahead had to be used to adva nce work in this direction.  An assessment of the state of play in 
services would prepare the ground for such work.  More than a year and half had passed since 
plurilateral requests had been tabled in accord ance with the Hong Kong mandate.  It was now 
important to take stock of the results so that Mini sters could have clear indications of what remained 
to be done as negotiations in other areas moved fo rward.  Enchilada meetings had provided a very 
useful opportunity for getting a better picture at am bassadorial level.  His delegation supported the 
initiative to hold more Enchilada meetings to take  stock.  A cluster during the second half of 
September would provide an opportunity to further enga ge in such discussions at negotiator level.  It 
would make possible a clearer picture of the overa ll services negotiations.   He hoped all this would 
provide the Chair with additional elements to steer  the services negotiations and to ensure a successful 
completion.   He suggested that Members cons ider the best modalities and timing for holding the 
signalling meeting in which those Ministers most i nvolved in the services negotiations would take a 
look and discuss the intended content of their re vised offers.  Members were still far away from 
achieving a meaningful outcome on services.  The vast majority of offers currently on the table did 
not reflect actual conditions under which services suppliers operated.  Nor did they provide new 
liberalization.  His delegation did not see any new ma rket access in the sectors that were important to 
it.  His delegation wished to see progress in market opening in financial services, telecommunications, 
computer and related services, maritime transport,  distribution services, postal and courier services, 
construction services, environmental services, energy services and legal services.  To reach an overall TN/S/M/26 
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  balanced package, the EU and other Members need ed to get a significant result in services as one of 
the three market access pillars in the DDA.  
25. The representative of South Africa
 stated that his delegation was active in the negotiations.  It 
had made a significant contribution in th e Uruguay Round.  Its GATS Schedule included 
commitments in 91 out of 156 services sub-sectors.  Its initial offer had also contained significant 
improvements in a number of sectors, including e nvironmental services, financial services, legal 
services, telecommunications, and transport.  Th ese commitments had added 34 lines to its Schedule 
and increased the overall commitments to 125 out of 156 sub-sectors, namely over 80 % of the total 
sectors.  South Africa was willing to improve commitm ents in its revised offer as well.  Although in 
July 2006 it had to abandon its revised offer, Sout h Africa was still ready to make commitments in a 
number of sectors of interest to all, including financial services, telecommunication, business services, 
computer and related services.   
26. Having participated in some plurilateral meeti ngs, South Africa wished to make a few points 
worth considering.  First, the demandeurs had to  make as many commitments as they demanded of 
others in their requests.  At this stage, many demandeurs had only made limi ted offers, while others 
had significant limitations in their existing schedul es.   While these demandeurs had indicated that 
they were willing to improve, these indications had to  be turned into concrete commitments to match 
their own requests.  This was a principle, important  for the credibility of the plurilateral process.  
27. Second, South Africa had participated in the negotiations on Annex C in Hong Kong.  The 
result had been an important breakthrough for th e services negotiations.  Annex C reaffirmed and 
underlined the development objectives of the services negotiations, particularly in Article XIX and 
Article IV.  Annex C emphasized the importance of a ll modes of interest to Members.  Annex C also 
struck a balance between market access and rules ne gotiations, including domestic regulation.  It also 
committed all Members to working towards the provisions on LDC Modalities.   
28. Since Doha there had not been any significant progress on the modes and sectors of interest to 
developing countries.  Modes 1, 2 and 4 were of spec ial interest to developing countries.  Sectors that 
were of special interest to developing countries included tourism, professional services, agriculture-
related services, and maritime transport.  The plur ilateral process had also revealed that there were 
significant anomalies in the current commitments of  Members, particularly major developed Members 
which held a great share of the MFN exemptions.  Th is needed to be addressed in this round, as MFN 
was one of the most important principles of the GATS and the WTO.   
29. As progress was being made in market access ne gotiations, a balance needed to be struck 
between market access and rules negotiations.  Thus  far some progress had been made on ESM, but 
not much progress in government procurement and subsidies.  South Africa was pleased to see 
enormous efforts made in the dom estic regulation negotiations.  In its view, the current draft was a 
good basis for Members to try to reach agreement.  It urged Members to work on the basis of the 
current draft.   
30. Annex C had set the level of ambition for the services negotiations on market access.  It had 
provided for appropriate balance between market ac cess and rules negotiations.  Therefore, Members 
should use Annex C as a basis to ensure that commitments were made in line with the overall 
ambition, as the services negotiations were part of  the single undertaking.   He cautioned Members 
against making too strong a link between services an d agriculture, because the current numbers on the 
table on overall trade-distorting support, for example,  were still too high.  South Africa had still yet to 
decipher what new market access it could gain from proposals on market access.  He suggested that 
Members continue to make progress on the basis of Annex C, ensuring that the prescriptions and mandates for the development objectives were resp ected, that sectors and modes of interest to  TN/S/M/26 
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  developing countries were given the priority they d eserved, and that appropria te balance was achieved 
in a parallel manner on rules, domes tic regulation and LDC Modalities.  
31. The representative of Canada  underlined the importance it placed on an ambitious outcome in 
services.   Despite the situation in the Round as a w hole requiring Members to adapt for this cluster,  
her delegation still had had a productive week of bilateral and sma ll group meetings.   Moving into an 
active couple of weeks in other areas of negotiation and the summer break, Members needed to reflect 
on the distance they had come on services since Hong Kong.  On the market access negotiations, 
Members had had countless bilateral meetings a nd three very productive rounds of plurilateral 
negotiations.  This had been augmented by mini sterial and ambassadorial engagement on market 
access in a variety of format.  Work on domestic re gulation had advanced to the stage where Members 
were discussing concrete proposals for a negotiati ng text.  Members continued to work hard 
addressing the very challenging issues of LDC Modalities and S&D treatment.  Progress had been made and Members began to see the contours of the services outcomes.  While the services process was dependent on developments elsewhere in the DDA, it was clear that what had been revealed 
today did not provide yet the basis for the ambition her delegation had emphasized at the outset.  
There was a lot of work to be done in the servi ces negotiations, whether it was in terms of making 
commitments close to the current level of market access or narrowing the difference between the level 
of GATS commitments and FTA commitments, or offering new market opening in key services 
sectors.  Looking to September, her delegation was confident in the Chair's ability to help guide Members.  Her delegation suggested that Members continue to plan for the best outcome.  It was important to ensure that there would be sufficien t time at the end of September to re-engage all 
negotiating machinery, bilateral, pl urilateral and multilateral, to ensure  that the various strengths of 
market access work could be brought together so  that the other important elements of the DDA 
services agenda could be finished.   
32. The representative of Singapore
 stated that for a successful conclusion of the DDA, there 
needed to be a good and balanced outcome across all three market access pillars – agriculture, NAMA 
and services.  With respect to services, there had to be a value-added outcome that would build on the 
status quo and provide effective market access for all services suppliers.  Members all had to contribute to such a value-added outcome.  Work ing towards such a outcome, Members needed to 
respect the spirit and letter of Annex C, which provi ded the parameters set out by Ministers for the 
services negotiations.  Among other things, Anne x C was also clear on the sequencing between 
agriculture, NAMA and services.  In this connecti on, a good outcome in agriculture and NAMA could 
help to contribute towards a commensurate outcome in  services.  He encouraged Members to facilitate 
the progress in agriculture and NAMA by engaging c onstructively on the texts the two Chairs were 
about to circulate.  Recognizing the need for greater  clarity and specificity with regard to offers 
Members would be making, his delegation was open to the idea of having a signalling exercise at the appropriate time, as long as it was held within th e framework of Annex C.  His delegation had 
received many bilateral requests and nine plurilate ral requests, and had responded positively to many 
of them in its offers.  Singapore was looking into  further improvements of offers currently on the 
table.  However, how far it could go would depend on the levels of ambition realized in services and 
other areas such as NAMA. 
33. The representative of India
 noted that various meetings in cluding Enchilada, bilateral and 
plurilateral had taken place in services.  India re mained committed to an ambitious outcome in 
services, which meant market opening in sectors and modes of interest to developing countries, 
particularly Modes 1 and 4.  India would respond positively to the requests.  Disciplines on domestic 
regulation as mandated in Hong Kong were equally  important, which would complement market 
access negotiations.  Without such disciplines, effec tive market access would remain an illusive goal.  
India had placed ambitious offers on the table with maximum improvements, including improved 
commitments and new commitments in many sub-sect ors.  On the way forward, a cluster in the 
second half of September would be useful, as by th at time the general direction in agriculture and TN/S/M/26 
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  NAMA would be clearer.  Possibly Members could then think of the date for the next revised offers.  
As to what the next revised offers were to contai n, Annex C was a useful basis to work on.  Members 
needed to consider operationalizing Annex C.  He  underlined that Annex C had clear guidance for 
making commitments under four modes of supply and established the mandate for developing 
disciplines on domestic regulation before the end of the round.  On the suggestion of signalling 
objectives at senior official or higher level, he not ed that such signals had already been given at 
bilateral and plurilateral levels.  He suggested that  Members intensify their work in capitals so that 
there would be positive responses to requests, par ticularly requests from developing countries on 
Modes 1, 2 and 4.  Negotiation meant "give-and-ta ke".  If there was no positive response to India's 
requests, it would be a constraining factor on India to respond as well.  
34. The representative of Pakistan
 stated that his delegation wished to see some forward 
movement from its trading partners in line with Annex C, for example, removing horizontal residency 
requirements and sectoral ENTs as conditions on ma rket access; removing MFN exemptions; and   
increasing clarity and certainty of scheduling.  High level of ambition had to be applied to all sectors 
and modes, particularly Mode 4 and sectors of inter est to developing countries.  Pakistan was in the 
final stages of consultations for its revised offer,  hoping that the offer would substantially meet its 
trading partners' requests.  Pakistan expected reci procity from its trading partners.  It was looking 
forward to the next phase beginning in  September under the Chair's guidance. 
35. The representative of Egypt  stated that a substantial out come in services was an essential 
component of the overall negotiations.  It was import ant to continue to make efforts in services in 
order to adequately contribute to a hopefully su ccessful outcome of the Doha Round.  The extensive 
commitments in Egypt's initial and revised offe rs had clearly shown that it took the services 
negotiations very seriously at bilateral, plurilate ral and multilateral levels.  Egypt was committed to a 
sustaining and constructive engagement towards ach ieving a level of ambition in services comparable 
to that in agriculture and NAMA.  If negotiati ons in agriculture and NAMA progressed satisfactorily 
in the coming weeks or months, any similar progress in services had to be a genuine progress for all 
Members.  If it was not a balanced and inclusive progress that clearly and adequately addressed the 
interests of developing and least-developed countries , that would only be considered as a setback for 
these Members.  Egypt stood ready for heavier enga gement in services after the summer break if the 
overall atmosphere and state of play  of negotiations allowed for that.  However, the objective of such 
engagement was conform to the existing mandate for the services negotiations.  Egypt strongly believed that the implementation of this mandate would lead to a m eaningful outcome if it was done 
in a faithful, constructive and inclusive manner.  He thanked the Chair for organizing Enchilada talks 
which were a useful component in the efforts to  build a necessary political momentum that would 
coherently advance the services negotiations in th e direction Members were all hoping for.    
36. The representative of New Zealand
 stated the period ahead was a very critical one.  His 
delegation was committed to ensuring that this negotia tion group contributed rather than subtracted to 
the continuation of the process.  It continued to  support an ambitious and balanced outcome.  It 
suggested that Members take necessar y steps to ensure that there were comparable levels of ambition 
across all three market access p illars.  New Zealand had made a genuine effort to improve its 
substantive commitments made in the Uruguay R ound to meet requests and would continue to 
improve in its next offer.  It looked to other Memb ers to also improve their offers to close the gap 
between existing commitments and actual levels of  liberalization.  Members needed to undertake 
necessary work in services in both Geneva and capitals so that they could move quickly in step with 
other key areas of negotiations once modalities were agreed upon.  New Zealand thought that the 
Enchilada process was valuable, hoping  that it could move into the next phase.  In respect of work 
ahead, September was a focus.  On the cluster that  would hopefully take place in the second half of 
September, New Zealand wished to see sufficient tim e for bilateral and plurila teral engagement.  The 
comparable ambition had to be define d.  Domestic regulation was also important to New Zealand.   It 
looked forward to a good outcome.  New Zealand was ready to submit further offers once it had a  TN/S/M/26 
 Page 9 
 
 
  deadline to do so.  New Zealand had looked carefully at those areas listed as priority in the requests it 
had received, hoping other Members to do the same.   
37. The representative of Australia  admitted that it was difficult to decide how to approach this 
meeting.  Australia was disappointed that dele gations found themselves once more waiting to see 
whether momentum could be generated across the R ound.  At the same time they were both hopeful 
and expectant, in particular, that other Chairs w ould lead them to a high ambition outcome.  This was 
the only possibility for bringing the Doha Round to a close – low ambition would not deliver.  In this context it was important to remember that deliver ing on ambition was not limited to agriculture and 
NAMA.  An ambitious services outcome was essential both to delivering on the development promise of Doha and to ensuring that all members would wa lk away from Doha with a sense of both gain and 
pain.  A balanced Doha outcome required real contributions from all parties on services market 
access.  Ambition included market opening in sectors of interest to developing countries – but it was 
not limited to this.  Thanks to a more intensive pro cess of bilateral, plurilateral, and Chair’s meetings, 
Members now had a good indication of where each other stood.  The Chair’s process had been 
important in achieving this.  It had shone a spotlig ht onto progress to date, a nd allowed people to see 
clearly into the previously murky world of bila teral and plurilateral discussions.  The Chair was no 
longer dependent on interpreting the tea leaves of the interventions made at the Special Session of the 
CTS.  The Chair was now in a strong position to ass ess the state of play – and should not be hesitant 
in doing so.  The tone of the Agriculture and NAMA  Chairs engagement in the Round was shifting.  
Members were now more reliant on the Chairs' as sertiveness in dragging them to an ambitious 
outcome.  Members would need to rely on the Ch air's strong leadership, following the lead of the 
Chair's agriculture and NAMA colleagues, in moving forward in September.  Australia was ready to 
contribute.  It had indicated significant improvements ready to be incorporated into a second revised offer.  It had also heard concerns about where it ne eded to move further.  Australia was not alone in 
its willingness to contribute.  Credit was to be gi ven where it was due and Australia had not shied 
away from doing this.  But there was still a large ga p between expectations of an ambitious outcome 
and what was currently on the table.  The gap betw een commitments and existing liberalisation had to 
be closed and new market access be delivered.  On next steps, Australia looked forward to continuing 
the Chair’s process and believed that a further ser vices cluster should occur in late September.  
Services might not initiate momentum in September,  but it would be crucial to maintaining that 
momentum.  Australia expected that a September cluster would include full engagements on market 
access using all the tools at disposal. 
38. The representative of Brazil
 stated that his delegation's asse ssment remained the same that the 
services negotiations had been evolving well, respect ing all the mandates and timelines.  As soon as 
Members reached an agreement on modalities in ag riculture and NAMA and set a date for initial 
offers in these areas, they would be able to m ove on quickly to the next phase in services with  
submission of another round of revised offers.   The level of ambition in services was to be contingent 
on the level of ambition achieved in those other area s.  Brazil continued to work on the preparation of 
its revised offers, examining the scope of movement that it would be able to implement in accordance 
with the overall evolution of the Round.  Brazil was open to constructively considering ideas and 
contributions to move the process forward.  In th is context, it was to be stressed the need for 
respecting the mandates of the Round and the stru cture of the GATS, particularly the flexibility 
granted to developing countries in undertaking commi tments.  Brazil was pleased that negotiations on 
domestic regulation were also progressing well with in-depth discussions and active participation by 
Members.  Likewise, Brazil attached great impor tance to the implementation of LDC Modalities as 
well as work in other subsidiary bodies.  On future  work, Brazil trusted that the Chair would find the 
most appropriate dates for the next cluster in the li ght of development in othe r main negotiating areas.  
Brazil thanked the Chair for organizing Enchilada m eetings which had been contributing to a useful 
exchange of views at ambassadorial level.   TN/S/M/26 
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  39. The representative of China
 stated that since negotiations  in agriculture and NAMA had 
significant influence on the services negotiations, it might  be appropriate to have the next cluster in 
late September.  Regarding the ag enda of the next cluster, since the services negotiations had been 
undertaken under the guidance of the Hong Kong D eclaration for one year and half, it might be 
needed to take stock and decide the way forw ard correspondingly.  Presuming that modalities of 
agriculture and NAMA would be established in September as expected, it might also be necessary to 
set the timelines for submission of the next revised of fers and draft schedules during the next cluster.  
On the issue of comparability between services on the one hand, and agriculture and NAMA on the 
other hand, she suggested that the fundamental di fference between norm and letter be born in mind.  
In agriculture and NAMA, MFN was a norm while in services MFN exemptions seemed to have 
become a norm.  Members also needed to bear in mind the difference between sectors and modes of 
interest to some Members on the one hand, and sector s and modes of interest to other Members, on 
the other hand.  In particular, the results of th e services negotiations needed to be conducive to the 
participation of developing countries in the interna tional trading system as foreseen in GATS Article 
IV. 
40. The representative of Hong Kong, China  noted that Members all wished to see a solid, 
ambitious outcome at the end of the Round, an ou tcome balanced across the three areas.  For Hong 
Kong China, the balance was somewhat tilted toward s services given the nature of economic activities 
in its economy.  The balance also had to be struck  within services between market access and rules.  
In the regard, Hong Kong China attached great importance to disciplines on domestic regulation, 
which were important to bring out the true value of market access commitments.  Thankful to the 
Chair of the WPDR for his guidance and hard wo rk, her delegation was co mmitted to working with 
him on all the drafting work. It still saw some gaps between the levels of ambition.  On the work 
ahead, her delegation stood ready to come back afte r the summer break to work intensively.  As 
coordinator of two plurilateral requests on logisti cs and MFN exemptions, her delegation wished to 
build on the solid ground of pluirlateral meetings in late April to take stock of progress achieved so 
far and focus on issues more important to both requ esting and recipient Members.  While believing 
that Annex C provided a good basis for further wo rk, her delegation supported some ministerial 
involvement in the whole process of reaching an outcome on services.  It stood ready to work on the format and best timing of such involvement.   With regard to the specific timing of the next cluster, 
her delegation deferred to the Chair's able leadership.  
41. The representative of Morocco
, speaking on behalf the African Group, stated that this Group 
appreciated that the negotiation had come back to the multilateral process, though services was not 
part of the G-4 talks or not yet.  This Group than ked the Chair for his efforts in bringing closer 
different positions between Members.  It welcomed the call for progress in all sectors and was ready to work with all trading partner to create balance that was beneficial to all Members and to promote 
the development objective which was the aim of this Round.  This Group was open to holding 
meetings and engaging in negotia tions.  However, this Group was concerned about the content of 
negotiations and the level it wanted to achieve in both market access and rules pillars.  Many 
Members of this Group had made efforts to liberalize most of their sectors, following their desire to attract foreign investment to participate in gl obal economy, but most importantly, following the 
requests of other Members.  Most of them had not reaped the benefits of liberalization. This Group 
was committed to engaging in the multilateral ser vices negotiations, hoping its partners to address 
their concerns and respond positively to their request s to open market in sectors and modes of supple 
of interest to this Group, particularly in Mode 4,  but not limited to it.  Some Members of this Group 
had made requests in other sectors of interest to them.  In addition to market access, the services 
negotiations also covered other issues.  Members all believed that S&D treatment was an important 
pillar of the services negotiations.  This Group also  wished to see LDC modalities addressed in the 
future negotiations in an appropriate way.  It e xpected that negotiations on domestic regulation would 
progress at the same pace as other pillars.  This Group was open as to the next cluster when there 
would be a better picture of the expected pr ogress in other areas of negotiations and clearer  TN/S/M/26 
 Page 11 
 
 
  indications from demandeurs about levels of amb ition and offers on those sectors and modes of 
interest to developing countries.  Late Septembe r was an appropriate time in this regard.  There 
already existed in the services negotiations strong frameworks and parameters. The GATS, 
Negotiating Guidelines, and Annex C constitute d a solid basis for future negotiations. 
42. The representative of Argentina  stated that his delegation remained committed to the services 
negotiations, believing that it was im portant to achieve a balanced out come in this round.  This was 
why his delegation had been engaging actively in bilate ral, plurilateral and Ench ilada meetings.  It had 
put its cards on the table, showing its flexibilities and red lines.  Commenting on proposals by other 
Members such as more Enchilada meetings, or signalling exercise, he suggested that Members be more cautious.  On Enchilada meetings, he recalled th at the original idea was to have them in parallel 
with Fireside talks in agriculture and that delega tions could have a frank exchange of views at these 
meetings.  Therefore, a summary record of these me etings could affect their good operation.  On the 
issue of levels of ambition in the services negotiations , he noted that it was difficult to have balance in 
services given the fact that 10 Members accounted  for 80 % of the global services trade.  Those 
Members who wanted an ambitious outcome in servic es knew what they needed to do to achieve such 
outcome in services as in other areas of negotiations, including both market access and  rules.  It was 
not acceptable if this round of negotiations became  a consolidation round for some Members with 
other Members paying real market access in sectors of interest to them.  The outcome was to be ambitious to the extent that the ambition was balanced with clear demonstration of ambition 
expressed by these ambitious Members in other areas of negotiations. 
43. The Chair
 noted that the services negotiations were not taking place in vacuum.  They were 
part of the broader negotiation, closely linked to other areas, such as agriculture and NAMA.  
Progress in the services negotiations was somewhat de pendent to progress made in other areas.  He 
also noted that while delegations were all comm itted to making progress in the services negotiations,  
there were divergent views on the services component in a breakthrough.  He suggested that Members 
continue discussions in this regard.   On future work, he noted that Members had agreed to have a 
cluster after the summer break.  He suggested that the next cluster take place from 17-28 September 
or 1-12 October.   
44. It was so agreed .  
B. PROPOSALS RELATING TO THE NEGOTIATIONS UNDER ARTICLE XIX  OF THE GATS 
45. The Chair  noted that no new proposal had been s ubmitted under this agenda item since the 
last meeting in late April.  He suggested that th e Council revert to this item at its next meeting. 
46. It was so agreed .  
C. I MPLEMENTATION OF THE MODALITIES FOR THE SPECIAL TREATMENT FOR LDC S IN THE 
TRADE IN SERVICES NEGOTIATIONS  
47. The Chair  stated that Annex C of the Hong Kong Declaration required Members to pursue 
full and effective implementation of the LDC Modaliti es.  At the last meeting, the LDC Group had 
reported that it had held bilatera l consultations with both the European Communities and the United 
States, with a view to furthering this objective.   The LDC Group had concluded, however, that they 
were still not satisfied with the proposal tabled by  the European Communities and others, and that the 
issue of priority market access remained unaddressed.   
48. The representative of th e European Communities  reiterated that his delegation took this issue 
very seriously.  It was important that every Memb er took into consideration the sectors and modes of 
supply of interest to LDCs when drafting future offers.  In addition, hi s delegation welcomed the TN/S/M/26 
Page 12  
 
  recent Secretariat note on market access issues of LDCs in trade in services, which highlighted the 
difficulties arising from the lack of reliable data and touched upon some areas where further work 
could assist LDCs in identifying market access issues of interest to them.  His delegation believed that 
the proposed collection of information for each LDC was a good starting point for LDCs in identifying their individual interest.  This was also complementary to the proposal for a reporting 
mechanism.  Having been engaged in discussing LD C Modalities and put forward concrete proposals,  
his delegation was willing to continue the di alogue with the LDC Group in this respect. 
49. The representative of Lesotho
, speaking on behalf of the LDC Group, noted that this Group 
could not overemphasize the importance of this issue to them and reiterated its previous interventions 
under this agenda item while awaiti ng constructive and positive engagement in the issue of special 
priority.   Special priority was of vital importan ce if LDCs were to increase their participation and 
become competitive in global trade ar ena.  In this regard, this Group was looking to engage bilaterally 
with Members and hoped that Members would respond positively to requests for bilateral 
engagement.  This Group also hoped that the delibera tions in those bilaterals would bear palatable 
fruit.  
50. While supporting the intervention by the coordi nator of the LDC Group, the representative of 
Bangladesh  noted the sense of frustration in the inte rvention and shared such frustration.  His 
delegation would continue to rema in actively engaged in the negotia ting field.  The LDCs' share in 
world services trade was less than 0.5 %, though thei r share of the world population was more than 10 
%.  LDCs needed market access.  In order to in tegrate into the multilateral trading system, LDCs 
needed special priority because they could not  compete with other Members without any extra 
support.  It was not needed to reinvent special priority as mentioned in GATS Article IV:3.  GATS 
founding fathers had invented it for LDCs in view  of their special economic situation, their 
development, trade and financial needs, knowing full y well Article II MFN.  Special priority had been 
mandated not only in Article IV:3, but also in Ar ticle XIX: 3, the LDC Modalities and the Hong Kong 
Ministerial Declaration.  What LDCs were asking was to implement the commitment Members had 
already made.  By special priority, they meant special preferential treatment as mentioned in, inter 
alia, Article IV:1 (c) relating to liberalization of  market access in sectors and modes of supply of 
export interest to LDCs that had also been cross-refe renced to in Article IV:3.  If special priority did 
not mean special preferential treatment in market access, LDCs would not have needed it, because in 
that case, it might not be meaningful to LDCs.  In  view of the specific deadline mentioned in Hong 
Kong Declaration for developing a special priority  mechanism, LDCs had volunteered to submit an 
Understanding on 28 March 2006, more than 15 mont hs ago.  LDCs had repeatedly requested 
Members to come up with textual suggestions, non co me up with any language.  With respect to the 
counter-proposal, it unfortunately did not deal w ith LDCs main concern, the special priority 
mechanism.  LDCs had expressed their feelings with  proponents in bilateral meetings many times and 
did not see any added value in further engagement in  the counter proposal.  LDCs were serious on the 
issue of special priority.  Without it as contained in the LDC Modalities, there could not be any 
progress in the services negotiations under the DDA.  Special priority was in fact the development 
dimension of LDCs.  Members could not afford to ignore it.  Confident in the Chair's leadership, 
LDCs needed the Chair's intervention as quick ly as possible before it was too late.   
51. The representative of Uganda  supported the statements made by Lesotho and Bangladesh 
requesting for the Chair's intervention in this issu e.  She reiterated that LDCs had not received any 
constructive or positive feedback that addressed this  issues in a way that the LDC Group thought it 
was meaningful.   
52. The Chair  suggested that the Council take note of the statements made and revert to this item 
at its next meeting.   
53. It was so agreed .  TN/S/M/26 
 Page 13 
 
 
  D. C ONSIDERATION OF PROPOSALS ON S&D  TREATMENT PROVISIONS  
54. The Chair  said that, in accordance with the H ong Kong Declaration, the Council was to 
complete expeditiously a consideration of propo sals on S&D treatment provisions, with a view to 
making clear recommendations for a decision to be ad opted by the General Council.  He recalled that 
at the last meeting, the African Group had expressed  the hope that consultations on this issue would 
continue, and that there would be some resulting positive movement. 
55. The representative of the African Group  informed the Council that the Group would submit a 
proposal under this item at the Council's next meeting. 
56. The Chair  suggested that the Council take note of the statement made and revert to this item 
at its next meeting.   
57. It was so agreed .   
E. ASSESSMENT OF TRADE IN SERVICES  
58. Noting that no delegation was seeking the floor under this item, the Chair  suggested that the 
Council revert to this item at its next meeting. 
59. It was so agreed.  
F. WORK OF THE SUBSIDIARY BODIES – REPORTS BY THE CHAIRPERSONS  
60. The Chair of the Working Party on Domestic Regulation reported that since the last meeting 
of the Special Session, the Working Party had held  two informal meetings, on 14-15 June and on 2-3 
July 2007.  At these meetings Members had taken a second, more detailed reading at the draft text of 
possible regulatory disciplines circul ated in April.  Useful drafting suggestions had been made in 
order to bridge gaps.  Members had continued to engage in the discussion in a very positive and 
constructive manner, especially de veloping Members.  The Chair of the Working Party intended to 
hold a further round of consultations on the text af ter the August break, which should enable Members 
to complete the second sweep of the provisions.  Me mbers were encouraged to continue discussions 
among themselves and consider whether the progress achieved would allow the Chair of the Working 
Party to table a revised draft text. 
61.   The Chair of the Working Party on GATS Rules reported on the formal meeting held on 4 
July.  On emergency safeguard measures, the group  of proponents had informed the Working Party 
that they would introduce a revised version of their latest proposal at the next meeting of the Working 
Party.  On government procurement, the proponents ha d reiterated the benefits they saw in elaborating 
rules in the GATS on government procurement in  services. The proponents had also invited 
delegations to refer to undertaking of commi tments on Government Pr ocurement in Economic 
Integration Agreements.  The discussions otherwise had been limited.  On subsidies, the Working 
Party had focused on a list of questions relating to  the concept of non-actionable subsidies that was 
contained in the recent communication from H ong Kong China and Mexico, "Non-Actionable 
Subsidies in Trade in Services".  Inter alia twelve  questions had been posed to assess the relevance of 
the notions of non-actionable subsidies or “green bo x” to subsidies in trade in services.  Discussions 
had been focused on the first six questions.  Member s had referred to issues such as trade distortion, 
public services, developmental aspects, and export subsidies. TN/S/M/26 
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  H. OTHER BUSINESS  
62. The Chair  suggested that the Council take note of all the statements made before he adjourned 
the meeting. 
63. It was so agreed . 
 
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