RESTRICTED  WORLD TRADE  
ORGANIZATION  S/CSC/M/35 
27 January 2005 
 
 (05-0313) 
Committee on Specific Commitments  
  
 
REPORT OF THE MEETING HELD ON 25 NOVEMBER 2004 
 
Note by the Secretariat
1 
  
1. The Committee on Specific Commitments (CSC) held a meeting on 25 November 2004.  The 
agenda for the meeting is contained in WTO/AI R/2446.  As no points were raised under Other 
Business, the agenda was adopted
 as proposed in the airgram. 
A. ADOPTION OF THE ANNUAL REPORT TO THE COUNCIL FOR TRADE IN SERVICES  
2. The Chairman introduced the draft annual report of the Committee to the Council for Trade in 
Services (CTS), contained in document S/CSC/W/43.  Following the format that the Committee had 
used for previous annual reports, it was factual a nd summarized the main areas of activity during the 
reporting period. 
3. The Committee adopted  the report.2 
B. CLASSIFICATION ISSUES  
4. The Chairman  recalled that the International Bar A ssociation (IBA) had been invited to 
provide background information to its Resolution in Support of a System of Terminology for Legal 
Services  (JOB (04)/17).  As the IBA was not an inter governmental organization, he suggested that the 
Committee switch to informal mode for the durati on of the IBA's presentation and any subsequent 
deliberations. 
5. It was so agreed.  
6. The Chairman  then turned to the issue of classificati on of energy services, and noted that the 
delegation of Japan had circulated its statem ent made at the September meeting as document 
JOB (04)/165.  In addition, the delegation of In donesia had circulated its revised proposal on the 
classification of energy services, contained in documents S/CSC/W/42/Rev.1 and S/CSC/W/42/Rev.1/Corr.1.   
7. The representative of Indonesia
 stated that the revised classi fication proposal was based on 
comments and suggestions by Members during ear lier meetings and bilateral discussions.  The 
proposal aimed at enhancing transparency and prom oting a better understanding of the complexity of 
energy-related services.  She was hopeful that the revised proposal would contribute to the discussion of the classification of energy services and help Memb ers to progressively liberalize trade in services 
in line with national policy objectives and the le vel of their development, both overall and in 
individual sectors, including those relevant to  the supply of energy-related services.  
                                                     
 
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. 
2 The report was circulated as document S/CSC/10. S/CSC/M/35 
Page 2  
 
 8. In the revised classification, Indonesia maintained  its initial grouping into five main activities, 
namely upstream activities, downstream activities, energy commercialisation activities, professional 
services activities, and other energy services activities, thus covering the full scope of energy services.  
The revision of the Indonesian proposal was meant to  reflect the common commercial reality.  Several 
items had been rearranged based on activity seque nces, as indicated in bold text.  For upstream 
activities, these items included geological explora tion, drilling and completion of wells, design, 
construction and installation of production equipment, energy re sources production and on-land-site 
preparation, as well as coal development services.  For downstream activities, rearrangements related 
to handling and treatment of energy products, a nd maintenance of energy  equipment and facilities 
including networks.  As for professional services,  rearrangements were made in human resources 
training and development services.  Other energy se rvices, health, safety and environmental-related 
services for the energy industry, energy efficien cy services, and standardization consulting services 
had been rearranged.    
9. The revision further included several new activitie s which were indicated in italic text.  New 
upstream activities had been added to geological expl oration, drilling and completion of wells, design, 
construction and installation of pr oduction equipment, and energy r esources production.  With regard 
to downstream activities, additions had been made to  design and construction of facilities to produce, 
transform and supply energy, to handling and treatme nt of energy products, and to analysis and 
technical testing services.  As for professional servi ces, additions had been made in human resources 
training and development services.  Finally, in othe r energy services, more detail had been added to 
research and development of energy services and some  text had been added to manufacturing services 
of energy facilities. 
10. The revision also included the application of more appropriate CPC numbers to some 
activities, as indicated in italics.  For example, on upstream activities, adjustments had been made for 
geo-technical services.  Concerning downstream ac tivities, adjustments related to liquefaction and 
gasification services, processing and purification ser vices, and operation and management of energy 
networks.  On energy commercialisation activities,  the entry on retail supply of energy had been 
modified, and in the area of professional services,  the entry on expertise supply services had been 
adjusted. 
11. Turning to recent questions by Japan, th e representative of Indonesia replied that 
transportation via pipeline of crude or refined pe troleum and petroleum products and natural gas was 
placed under the CPC codes for transport, storage, and communication services, e.g. in 
CPC 7131, 72122, 7222).  In Indonesia's revised pr oposal, liquefaction and gasification services (item 
2.2.2) were included under CPC 884, namely services incidental to manufacturing since the liquefaction and gasification services were themse lves manufacturing activities.  In the revised 
proposal item 2.7.3, transportation and distribution of coal was placed under transportation of other 
freight (CPC 72129 – by seagoing vessels;  and CPC 72229, by non-sea-going vessels.)  Item 3.1.2., 
wholesale trade services of electricity, town gas was placed under CPC 622[**] as CPC 62271 related 
to wholesale trade services of solid, liquid and g aseous fuels and related products.  Similarly, 
item 3.2.2., retailing services of electricity and town  gas, fell under CPC 6329 (other specialized retail 
sales of non-food products), as CPC 63297 covered retail sale of fuel oil, bottled gas, coal and wood.  Turning to Japan's question relating to CPC 887, he stated that this entry included transmission and 
distribution services on a fee or contract basis of electricity, gaseous fuels, steam and hot water to 
households, industrial, commercial a nd other users.  The commercial reality in Indonesia was that 
electricity was transmitted and distributed on a fee or a contract basis. 
12. The representative of Japan
 considered that Indonesia's revised proposal contained a little too 
much detail and was rather complicated compared to  other proposals.  He considered whether such a 
detailed classification was useful for scheduling of commitments.  It appeared that Indonesia was 
using in some categories CPC Version 1.1 rather th an CPC provisional.  The use of two different CPC  S/CSC/M/35 
 Page 3 
 
 
 versions could lead to confusion.  He noted th at  Indonesia's revised proposal now listed the items 
under 2.2.2. (liquefaction and gasification services)  as services incidental to manufacturing, which 
was closer to Japan's view that these were goods pro ducing activities.  Section 2.7., dealing with the 
transportation of fuels and energy transmission and distribution services, should focus more on the 
fact that petroleum and natural gas were often tr ansported by pipeline.  Concerning other modes of 
transport, he considered that sea and land trans port should generally be treated equally.  Wholesale 
trade and retail trade in energy should be distin guished from general wholesale and retail trade.  He 
took note of Indonesia's classification of section 2.7. 4, (transmission and distribution of electricity), 
which fell under CPC 887 in Indonesia, but on whic h other countries might hold a different view.  
13. The representative of the United States  recalled that she had requested Indonesia in previous 
discussions to clarify the rationale of including a separate section on professional services in its 
energy services classification.  That section appeared to apply primarily to ad ult education and other 
education services, and did not appear in the guidelines  that the US had tabled jointly with a few other 
delegations.  It was her understanding that Indonesia had included this section in its proposal due to a 
number of government-sponsored training programm es that were in demand throughout the region, 
such as programmes to train petroleum-electrical engineer s.  In that light, the US was of the view that 
inclusion of such energy-specific training prog rammes was perhaps appropriate for Indonesia.  
Moreover, the fact that, unlike other Members, Indonesia had included professional services in this 
proposed classification, indicated that the parameters  for an energy services classification could cater 
for individual differences.  Most classification proposals on energy services contained certain commonalities, for example on the notion that energy  services did not extend to ownership of natural 
resources.  Like others, Indonesia's proposal applied to  a range of energy sources, including oil, gas, 
electricity and renewable resources.  While there we re several structural similarities, the proposals 
tabled in this sector differed with regard to the in clusion or exclusion of certain sub-sectors, or the 
level of detail of the classification.  Such differences would not prevent Members from tabling 
requests and offers, which could build on the commonalities. 
14. She agreed with Japan that mining, the extr action or harvesting of resources beneath the 
earth's surface did not constitute services.  They were thus distinct from activities leading to the 
extraction of a resource, such as surveying, testin g and drilling, or transport services that followed the 
extraction of resources from underground.  Transpor tation and distribution of coal should not be 
included as a service incidental to energy distribution, but was more appropriately addressed as a transportation service.  Wholesale and retail marketi ng of energy services was not part of CPC 622 or 
632.  Unlike Japan, her delegation's considered ener gy distribution, including the transmission and 
distribution of electricity, to be a service, albeit not yet included in W/120.  Since in most instances, 
including in the United States, the transmission and distribution of electricity was a natural monopoly, she expected that few Members would make offers or requests for this service.  Unlike Japan, her 
delegation considered energy distribution to be a ser vice in the context of some other areas.  Japan 
had raised the question of wholesale and retail mark eting of electricity, which also involved activities 
the energy friends considered not to be include d in W/120.  She suggested to hold a workshop to 
further explore these issues.  With the exception of certain activities involving electricity, the energy friends held the view that most activities classified as energy services were agreed and that differences 
could be worked out in the request/offer process.   
15. The representative of Venezuela
 supported the general assessment of energy services by 
Indonesia, as set out in paragraphs 4 and 5 of the introduction to the proposal.  Energy services were 
very important for the Venezuelan economy.  In  the multilateral framework there was no doubt that 
national policy objectives and the right of Members to  regulate had to be accepted.  He supported the 
notion that the development of a detailed classificati on of energy services was important to ensure that 
Members could negotiate detailed specific commitments. His delegation's proposal did not contradict 
the Indonesian proposal. More concretely, he requested  clarification as to why sections 3.1. and 3.2. 
were not included under the heading of energy commercialization services. S/CSC/M/35 
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 16. The representative of Norway
 stated that his delegation attached great importance to energy 
services and a classification that accounted for the whole spectrum of energy-related services.  In 
contrast to Japan and the United States, he thought that transport services, especially in the petroleum 
offshore sector, were a fully integrated part of energy services.   
17. The representative of the Republic of Korea  expressed concern, albeit her country had no 
specific commercial interest in the sector, about an overlap of energy services and certain other 
services which were part of other sectors, e.g. research and experimental development services in natural sciences and engineering, environmental ser vices, transportation services, and hotel and other 
lodging services. 
18. The representative of China
 noted that some points mentioned by his delegation in previous 
meetings were reflected in the revised propo sal, which was currently under examination.  
19. The representatives of Canada  and of the Philippines , speaking on behalf of ASEAN, 
indicated that Indonesia's revised proposal was cu rrently being reviewed and would be commented 
upon at the next meeting. 
20. The representative of South Africa  concurred with Venezuela on the developmental aspects of 
energy services and their strategic nature.  She hoped that the disaggregation of the sector reflected 
those aspects.    
21. The representative of Colombia  considered that the level of detail in the Indonesian proposal 
was important for many developing countries, whic h might have comparative advantages with regard 
to certain specific activities within a broad sector, but  might not necessarily be exporters in the sector 
as a whole.  The proposal enabled Members to make commitments at a specific level of detail in view 
of their export capacity or import needs.  While ther e might be an overlap between some sectors, use 
of the CPC references would enable Members to understand the full scope of the commitments which 
were being undertaken.   
22. The representative of Indonesia  took note of the comments made and hoped that her 
delegation elaborating on some of the issues with the friends of energy services.  She reiterated that 
electricity distribution took place on a fee and contract  basis.  In reply to the question by Venezuela, 
she stated that the denominations and CPC codes we re indicated under the sub-classification of 3.1.1. 
and 3.1.2, and 3.2.1. and 3.2.2, respectively.  As the CPC did not have a code for energy distribution, 
there was a need to include transport services in th e energy area in the classification.  There was no 
overlap between R&D and technical analysis testing when these entries were studied in more detail.  
With regard to liquefaction and classification of en ergy, she agreed that the production of a good was 
not a service, but the serving of, or supply of a good to customers was a service.   
23. The Chairman  thanked the delegation of Indonesia for its revised proposal and suggested that 
Members take note of the statements made and revert  to the issue at the next meeting.  He then 
suggested that the Committee switch to informal m ode for a discussion of classification issues in the 
area of Postal and Courier Services.  As was the case at the previous meeting, he intended to prepare a 
concise, non-attributable summary of the discu ssion, which would be circulated under his own 
responsibility as a working document without any document reference.    
24. It was so agreed . 
C. SCHEDULING ISSUES  
25. The Chairman  recalled that the discussion on scheduli ng issues in the Committee had evolved 
around two principal approaches: one approach w as to address scheduling questions of general  S/CSC/M/35 
 Page 5 
 
 
 importance, and the other to pose specific questi ons to certain Members who had submitted initial 
offers. As for the more general approach, a discu ssion had been triggered by sample questions 
presented by the delegation of Hong Kong, China (JOB (04)/81).  The delegation of Chinese Taipei, in 
JOB(04)/82, had provided its thoughts on these issu es, while other delegations had addressed the 
questions orally.  At the last meeting, the delegation of Hong Kong, China submitted further 
observations on these issues, contained in JOB(04)/133.  Just in time for this meeting, Chinese Taipei 
had taken the opportunity to refine its thoughts on these issues in JOB(04)/172.  Moreover, the 
delegation of Hong Kong, China had submitted a paper on Economic Needs Tests (ENT's), JOB 
(04)/171.   
26. The representative of Chinese Taipei  stated that the main purpose of her delegation's paper 
was to keep the momentum of the ongoing discussion of ways to improve transparency and clarity in 
scheduling of commitments.  This exercise was part icularly timely and useful for the preparation of 
revised offers by May 2005.  She invited other de legations to comment on he r delegation's replies, 
particularly on questions number one and five. 
27. The representative of Hong Kong, China  invited other delegations to express their views on 
the questions, which he believed c oncerned all Members.  He agreed that questions number one and 
five were particularly relevant, as well as questio n number two. He suggested to revert to those 
questions in more detail at the next meeting.   
28. His delegation's paper on economic needs tests had been prepared on the basis of the 
Secretariat background note S/CSS/W/118 of November 2001.  It was clear that economic needs tests were only a means of applying the various quantitati ve limitations in Article XVI:2(a) through (d), 
and not in themselves an Article XVI limitation.  Th is distinction was important, as there were many 
instances where schedules only referred to an ENT w ithout specifically identifying the exact type of 
quantitative limitation that was being applied th rough the test.  He noted that the scheduling 
guidelines provided specific guidance on how economic needs tests should be scheduled.  However, 
the guidance was in most cases not reflected in Memb ers' schedules.  There was hence no intention to 
reopen the scheduling guidelines, but to promote a dherence.  He considered that the scheduling 
Member should inscribe ENTs with sufficient clarity  and specificity to enable other Members to 
identify the specific elements of an Article XVI li mitation which was implemented through the test.  
He proposed that Members undertake a focused discu ssion as to what elements were required for the 
specification of an ENT, and the necessary degree of specificity.  Ultimately, it would be desirable to arrive at an understanding as to the implementa tion of the current scheduling guidelines.   
29. The representative of the European Communities
 had several questions, some of which were 
a horizontal nature, and some of which were more sp ecific on certain offers.  On the issues raised by 
Hong Kong, China, he considered that the most important challenge was to put into practice the 
negotiating guidelines.  This would be done by a pplying the framework of the request/offers process.  
As for addressing scheduling issues in  the Committee, he considered that  his delegation was willing 
to respond to general questions in an informal de bate.  He could also reply to the earlier specific 
questions by Brazil, but not in the context of th e Committee.  The EC was interested in hearing 
responses from other Members, and would also wish to  ask its own questions on the offers of certain 
Members.  He saw no problem if Members wished to hold a multilateral debate as long as the discussions were pursued in a similar mode as the bilateral negotiations.  This could be done by 
suspending the Committee temporarily, or after th e meeting was adjourned, by holding a session on 
the questions without any record, observers, or me mbers of the Secretariat.  The more general 
questions could be considered within the Committ ee in informal mode, possibly with an informal 
summary. S/CSC/M/35 
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 30. The representative of Switzerland
 stated that Hong Kong, China's paper on economic needs 
tests would help delegations in preparing new offers, and could also be used in bilateral discussions to 
help clarify economic needs tests.   
31. The representative of Thailand  stated that the discussions on scheduling questions contributed 
to the bilateral negotiating process and the prepar ation of revised offers.  Economic needs tests 
covered a vast terrain, with 253 tests overall in Member s schedules.  A lack of specificity of many of 
these tests greatly undermined the value of commitmen ts.  Her delegation was of the view that there 
were many ENTs were non- discriminatory and theref ore not subject to scheduling.  She considered 
that the questions in paragraph four of Hong Kong, China's paper were pertinent, and hoped that 
members could identify common denominators that c ould be used as future guidelines for scheduling 
ENTs.  A good basis for further reflection on the three questions could be found in paragraph 13, 
particularly element (c).  Members had to be clear as to the type of limitation they were referring to at 
the time they scheduled their specific commitmen ts, and whether these ENTs had the effect of 
quantitative restrictions according to subparagra ph (a), (b), (c), (d) or a combination.  
32. The representative of the United States  noted that some of the documents under the agenda 
item had been submitted in accordance with the ten-day rule, while others had just come in during the 
last days.  While she welcomed all submissions, sh e was concerned that sufficient time was allocated 
to documents that had been circulated in a timely  fashion, as these had been reviewed in capitals.  
Concerning the questions from Brazil, she indicated her delegation's flexibility to have a discussion 
about technical questions of initial offer in a multilate ral format, but in informal mode without record.  
She welcomed the ideas put forward by the Europ ean Communities on how to address these as well as 
the more general questions.   
33. The representative of Canada  supported further discussions of economic needs tests, and 
considered it important to improve the scheduling of ENTs by Members.  Article XVI:2 prescribed 
that ENTs should be scheduled and the scheduling guidelines provided clear guidance on how to do it 
properly.  However, it was clear that this guidance had not been consistently used or implemented by 
Members.  His delegation had particular interest in  economic needs tests with respect to mode 4, and 
considered that further discussions on how to incr ease the transparency of ENTs or labour market 
tests would improve predictability of the releva nt mode 4 commitments.  He took note of the 
comment by Thailand, that several ENTs needed  not to be scheduled because they were non-
discriminatory. 
34. The representative of Guatemala  stated that economic needs tests were limitations on market 
access in the different modes of supply, and as such should be scheduled in a very clear and specific 
way.  He fully endorsed the considerations put  forward by Hong Kong, China in its paper. 
35. The representative of Mexico  also supported the content of Hong Kong, China's paper, which 
stressed the importance of clarity and transparency in scheduling of limitations.   
36. The representative of Korea  supported the suggestion to begin addressing scheduling issues 
based on questions one and two regarding the re lationship between horizontal commitments and 
sector-specific commitments.  She supported work on  clarifying criteria for ENTs, which would prove 
very helpful in the process of making revised offe rs; reducing ENTs was a matter of negotiations.  
She urged Members to revisit their own schedules and to examine what kind of criteria were the basis 
for their own ENTs.  She disagreed with Thailand in  that only discriminatory ENTs were subject to 
scheduling, and supported the discussi on of ENTs related to mode 4.  
37. The representative of Chinese Taipei  supported the paper put forward by Hong Kong, China, 
which was very timely, given the preparations for the revision of offers.  The discussion should also include ways to arrive at specific criter ia and procedures for scheduling ENTs.    S/CSC/M/35 
 Page 7 
 
 
 38. The representative of Singapore  agreed on the gist of Hong Kong, China's document and 
other delegations' comments on the need for greater clar ity in the use of ENTs in Members' schedules.  
Like Switzerland, he highlighted the scheduling gu idelines relevance.  He considered Hong Kong, 
China's suggestion useful that Members deliber ate on the degree of specification and precision 
required in the context of an ENT. 
39. The representative of the Philippines  noted that Hong Kong, China's presentation on ENTs 
had revealed a disproportion of such tests in mode  4, given the relatively limited level of current 
commitments.  He shares the con cern for clear specifications for economic needs test.  In contract 
law, unclear and ambiguous provisions were often held to be without value, which, if translated into a 
GATS context, would amount practically to "Unbound".  Yet this might not have been the intention of 
the scheduling Member.  The scheduling guidelines obviously suffered from a lack of 
implementation.   
40. The representative of Brazil  registered his satisfaction with the approaches taken by the EC 
and the US with regard to his delegation's questi ons  While the best option remained to address the 
issues in formal session, with records of the discussions, he r ecognized the sensitivities of some 
delegations with this appr oach.  In any case, one needed to c onsider certain organizational questions, 
such as who should chair such a meeting, record-k eeping and translation for the benefit of countries 
absent from the meetings, etc.   
41. The representative of Australia  supported the need for greater clarity and precision in 
scheduled commitments.  The issues identified in para graphs 14 and 15 pointed to an useful area for 
further discussions, and would help in th e request-offer and accessions negotiations. 
42. The representative of Norway   stated that his delegation attached great importance to the need 
for greater clarification in relation to the offers.  He encouraged Members to dispose of conditions and 
limitations which were not relevant market access and national treatment limitations.  His delegation 
was of the opinion that national treatment and ma rket access conditions should not be scheduled under 
Article XVIII as was pointed out in Switzerland's communication (TN/S/W/21).  
43. The representative of Hong Kong, China  reiterated that the purpose of the papers on ENTs 
and scheduling was to further the discussion in these ar eas.  The questions raised were relevant to the 
ongoing market access negotiations.  Both processes were  complementary insofar as any yields of the 
technical discussions in the Committee woul d cross-fertilize the bilateral negotiations. 
44. The Chairman  regretted that due to time constraints, several papers had not been examined.  
He suggested to consult on how to address schedulin g questions in light of the comments made by the 
EC and the United States.  He suggested that th e Committee take note of the statements made and 
refer to the issue at the next meeting.   
45. It was so agreed . 
D. OTHER BUSINESS  
46. As no issues had been raised under Other Business, the Chairman  suggested that, in 
accordance with the practice of grouping meetings of  subsidiary bodies close to meetings of the 
Council, the next formal meeting be held in conjunction with the next services cluster.   
47. It was so agreed . 
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