RESTRICTED  WORLD TRADE  
ORGANIZATION  S/C/M/101 
12 January 2011 
 (11-0208) 
Council for Trade in Services  
  
 
REPORT OF THE MEETING HELD ON 18 NOVEMBER 2010 
 
Note by the Secretariat
1 
  
1. On 18 November 2010, the Council for Trade in Services held a meeting under the 
Chairmanship of Ambassador Elin Johansen (N orway).  The agenda was contained in document 
WTO/AIR/3662. 
2. The representative of Australia
 said that her delegation wished to add an item of Other 
Business concerning the delayed entry into force of the certified EC-25 schedule.  
3. The agenda was adopted , as modified. 
A. ANNUAL REPORTS OF THE SUBSIDIARY BODIES TO THE COUNCIL FOR TRADE IN SERVICES  
4. The Chairperson  recalled that, in accordance with WTO reporting procedures, the Council for 
Trade in Services was to consider the annual reports of its subsidiary bodies.  Accordingly, she drew 
Members' attention to the Annual Report of the Co mmittee on Trade in Financia l Services (S/FIN/24), 
the Annual Report of the Committee on Specific Co mmitments (S/CSC/16), the Annual Report of the 
Working Party on Domestic Regulation (S/WPDR/ 13) and the Annual Report of the Working Party 
on GATS Rules (S/WPGR/20), which had been adopted by the respective bodies. 
5. She indicated that the Reports were purely fact ual and self-explanatory.  She suggested that 
the Council take note of the four Reports, on the understanding that they would be annexed to the 
Annual Report of the Council for Trade in Services and form an integral part of it. 
6. It was so agreed . 
B. ADOPTION OF THE ANNUAL REPORT OF THE COUNCIL FOR TRADE IN SERVICES TO THE 
GENERAL COUNCIL  
7. The Chairperson  indicated that, in accordance with WTO reporting procedures, the Council 
for Trade in Services should report each year to the General Council on the activities in the Council as 
well as in the subsidiary bodies.  She drew delega tions' attention to the draft Annual Report of the 
Council for Trade in Services on its activities in 2010, contained in document S/C/W/327.  The 
Report was factual and self-explanatory.  As she ha d mentioned under the previous agenda item, the 
Annual Reports of the subsidiary bodies would be  annexed to the Council's Report for submission to 
the General Council. 
8. She then reminded Members of the Ministerial Decision of 2 December 2009 contained in 
document WT/L/782, which instructed the Gene ral Council to review the progress on the Work 
Programme on Electronic Commerce.  She indicated  that, as no Member had raised any issue for 
                                                      
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/C/M/101 
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  discussion under the Work Programme during the reporting period, it was not mentioned in the 
Council's Annual Report.  
9. As concerned the Work Programme on Electr onic Commerce, the representative of Pakistan
 
drew Members' attention to the work of the Co mmittee on Trade in Financial Services which, as 
reflected in paragraph 7 of the Committee's Annua l Report, included discussion of a proposal by 
Pakistan on the "Impact of technological develo pments on regulatory and compliance aspects of 
banking and other financial services under the GATS" .  He believed that this discussion was very 
much in line with the e-commerce Work Programme and asked that a reference be included in the 
Annual Report of the Council. 
10. The Chairperson  said that Members had indeed t ouched upon e-commerce-related issues 
when discussing e-finance in the Committee on Trade in Financial Services (CTFS), as well as in the 
Council when addressing the Background Notes on services sectors and modes of supply (for 
instance, on computer and related services, modes 1 and 2, etc.).  The electronic delivery of services was an activity that cut across many, if not all, services sectors and modes.  However, the issue at 
hand was not whether e-commerce in general had b een discussed, but rather whether any issues for 
discussion had been raised with respect to th e Work Programme on Electronic Commerce as an 
agenda item during the reporting period covered by  the Annual Report, and the answer was in the 
negative. 
11. A representative of the Secretariat
 added that the General Council mandate was to review 
progress with regard to the Work Programme per se .  The submission by Pakistan as well as the 
reports on the dedicated discussion on e-banking were indeed referred to in the Annual Report of the 
CTFS, and that Report formed an integral part of the Council's Annual Report itself. 
12. With regard to the Annual Report of  the CTFS, the representative of China  noted that 
paragraph 8 read "in addition, the Committee has be en considering a proposal by China to discuss the 
relationship between trade in financial services and development".  She said that the discussion on the 
topic proposed by China had been conducted in  the CTFS in June, September and November.  
Delegations had expressed support for China's proposal and had raised concerns at the June and 
September meetings, but a consensus had been reach ed in November on a future timetable to move 
forward on the discussion of this topic.  She hoped th at the consensus could be reflected in the CTFS 
Annual Report. 
13. A representative of the Secretariat  indicated that the CTFS Annual Report contained the 
activities of the Committee up until September 2010.  The outcome of the Comm ittee meeting held in 
November 2010 would be reflected in the followi ng Annual Report.  He added that none of the 
services Annual Reports included the m eetings held in November 2010. 
14. The representative of China  suggested that the number of the Job document submitted by her 
delegation be added to the CTFS Re port, to facilitate Member's iden tification of the Job document in 
question. 
15. The Chairperson  proposed that China's statement to that effect be reflected in the record of the 
Council's meeting.  The representative of China  concurred.  
16. The Chairperson  proposed that the Council for Trade in Services adopt the draft 2010 Annual 
Report to the General Council c ontained in document S/C/W/327. 
17. It was so decided .  S/C/M/101 
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  C. NOTIFICATIONS PURSUANT TO ARTICLES III:3  AND V:7 OF THE GATS 
18. Starting with the notifications made pursuant to Article III:3 of the GATS, the Chairperson  
drew delegations' attention to the notificati ons received from the United States (document 
S/C/N/569), Japan (document S/C/N/571) and Colombia (documents S/C/N/572 to 576) 
19. The Council took note  of the notifications made.  
20. The Chairperson  subsequently pointed to the notifications pursuant to GATS Article V:7 
received from Colombia and Mexico (document S/C/N/563) and India (S/C/N/570). 
21. The Council took note  of the notifications, and referred  the agreements notified to the 
Committee on Regional Trade Agreements for consideration. 
D. COMPLIANCE WITH GATS NOT IFICATION REQUIREMENTS  
22. The Chairperson  opened the floor for delegations' comments.  
23. The representative of Switzerland  recalled that, at the previous meeting of the Council, his 
delegation had announced its intenti on of creating an open, informal group to exchange experiences 
with notifications.  He was pleased to report that the group had met on 17 November.  A dozen 
Members had participated and exchanged information about their internal procedures with regard to 
notifications.  His own delegation had profited from the meeting, and he hoped that others had also 
found it beneficial.  That had been the sole purpose of the meeting, and Members had attended independently of their position with regard to notif ications.  He indicated that his delegation would 
reflect on what follow-up the meeting might have, and would also welcome suggestions from other 
delegations. 
24. The representative of China
 thanked the Swiss delegation for th e initiative.  She stressed that 
transparency was a core principle underpinni ng the multilateral trading system, and was also 
important for trade in services.  She then shared some informati on on China's experience with the 
notification obligations.  The Ministry of Commer ce of China, which was instructed by the State 
Council, took the lead for the technical training and coordination in fulfilling China's notification 
obligations and placed notifications as a regular issue on the agenda of its inter-ministerial meetings.  
To ensure the smooth operation of the system, a division dealing with notifications had been 
established in the WTO Affairs Department of the sa me Ministry.  Sufficient staff had been allocated 
to this division to perform its tasks.  With such an institutional set up, China had done a lot concerning 
services notification.  Up to mid-June 2010, Chin a had notified 55 of its relevant services laws, 
regulations, administrative measures to the WTO,  ranking second amongst all notifying Members.  
She hoped that other WTO Members would do the sa me since transparency would enable service 
providers to engage more significantly in services trade. 
25. The representative of the United States  wondered if the Secretariat could provide some 
information with regard to the question his delega tion had asked at the previous meeting about the 
reminders sent by the Central Registry of Notifications (CRN). 
26. A representative of the Secretariat  explained that the Secretariat had held internal 
consultations with CRN colleagues following the question raised by the United States at the 
September meeting.  At present, the CRN notification reminders contained an "X" to indicate that no notification had been received from the Member in ques tion.  This could give the impression that the 
obligation to notify had not been fulfilled.  Howeve r, the representative explained that the notification 
obligations in the GATS were contingent upon the ex istence of something to notify.  The Agreement S/C/M/101 
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  did not contain any automatic obligation to notify and,  therefore, the absence of a notification did not 
automatically imply a breach of the relevant obligations.   
27. The CRN colleagues would therefore change th e language in question.  In the "Call for 
notifications", a sentence would be added to indi cate that all GATS notification obligations were 
contingent upon the existence of a measure to be not ified.  Moreover, a change in wording would be 
introduced to specify that an "X" indicated a po ssible notification.  The same concepts would be 
introduced in the "Reminder reports".  The change in language would imply no  judgement with regard 
to Members' compliance with their notification ob ligations.  It would just be a more accurate 
reflection of the actual situation. 
28. The representative of Switzerland
 stressed that, as reflected in paragraph 15 of the minutes of 
the previous meeting contained in document S/C/ M/100, his delegation had suggested that Members 
consider all proposals relating to notifications in a comprehensive manner.  There was no urgency to 
change the current CRN language, also in view of the fact that it had been used for years.  On 
substance, it was possible to argue that, in some case s, the absence of notifications was due to the fact 
that there was nothing to notify, but it was ju st as possible that there might be cases where no 
notification had been made for 10 or 12 years b ecause of non-compliance with a GATS notification 
obligation.  Before any changes were made to the CRN forms, Members needed to have a more 
specific idea of all viewpoints that existed within the Council. 
29. A representative of the Secretariat  said that there was a problem with the language currently 
used by the CRN and recalled that the Secretariat ha d been asked to look at ways to clarify it.  If 
Members could not reach an agreement, the current  language would not be ch anged until such time as 
a collective decision had been taken.  He furthe r stressed that the current CRN language had never 
been agreed by Members. 
30. The representative of China  said that Article III:3 contained a regular obligation to notify 
laws, regulations or administrative guidelines as l ong as the Member concerned considered that these 
"significantly" affected trade in services covered by a specific commitment.  The fundamental issue 
was whether the measures at hand had a "significant" effect on trade in services.  She tentatively 
proposed that Members discuss which measures might imply a "significant" impact on services trade, 
so as to arrive at a mutual, clear understanding of whether a notification should be supplied.  
Article III:3 was part of the WTO transparency di sciplines.  Members could decide whether laws, 
regulations, or administrative guidelines impacted on their obligations or commitments only if a clear 
understanding of the exact nature of thei r obligation under Article III:3 was reached. 
31. The representative of Switzerland  explained that his delegation did not oppose the proposal to 
change the CRN language in substance, and agreed  that the current wording was misleading.  His 
delegation nevertheless objected to the proposed proce dure.  At the previous meeting of the Council, 
Switzerland had indicated its interest in exploring the thinking behind the wording of the notification 
reminders, so that, before introducing any changes to  current practice, the issue could be considered 
alongside similar questions in a holistic manner.  He  was therefore surprised that the language in the 
CRN reminders had already been changed.  He asked  that delegations be given the time to consider 
the issue in a comprehensive manner. 
32. The Chairperson  summarised that concerns had been ra ised at the previous Council meeting 
with regard to the CRN reminders.  To address th ese concerns, a proposal had been put forward to 
change the CRN language.  But the delegation of Switzerland had indicated that it needed time to 
consider the proposed change in wording.  The de legation of China had also suggested that Members 
discuss the notion of "significantly affect trade in services" in Article III:3.    S/C/M/101 
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  33. She indicated that, by the time the Council met in 2011, the CRN reminders would have 
already been sent to delegations.  Hence, for any changes to be introduced, action had to be taken 
before the end of the year.  She therefore suggested  that the Secretariat circulate the proposed changes 
to the CRN language, with a deadline for comments. 
34. The representative of Chinese Taipei  thanked the US delegation for raising the issue of the 
CRN reminders.  He agreed with the Chairperson' s proposal to circulate suggested changes to the 
CRN language and offer de legations an opportunity to give feedback.  He also sought further 
clarification on the timeframe for the CRN notification reports. 
35. A representative of the Secretariat  indicated that the CRN sent out a call for notifications at 
the beginning of the year, a reminder of notification requirements in the middle of the year and 
another reminder at the end of the year.  He said that the Secretariat would circulate a fax by the end 
of that week containing the proposed amendments to  the language in the CRN notification reports and 
explaining the relevant timeframe.  A one-week de adline would be set for any comments delegations 
might have. 
36. The Chairperson  concluded that a way forward had been found.  The Secretariat would 
circulate rapidly a fax containing the proposed drafting changes as well as information on the timing 
of the CRN notification reports. 
E. SECTORAL AND MODAL DISCUSSIONS  
37. The Chairperson  recalled that, at the meeting held in September 2010, the Council had 
addressed two new Background Notes produced by the Secretariat on postal and courier services and environmental services.  As indicated in the airgra m, delegations would have an opportunity to revert 
to those sectors at the end of the discussion of that agenda item.   
38. For the current meeting, the subjects up for discussion were road freight transport services 
and distribution services.  In line with the practice a dopted at previous meetings, the substantive part 
of the debate under that agenda item would be he ld in informal mode.  The presentations by the 
Secretariat and by international organisations, and the statements of any delegations wishing to place 
their interventions on record would be incorporated in the minutes of the meeting.  For the substantive 
part of Members' informal debate, instead , the Chairperson would produce, under her own 
responsibility, a non-attributable summary.  The su mmary would be circulated shortly after the 
meeting, and subsequently recorded in the minutes of the meeting.   
39. The Chairperson also recalled that the Council ha d agreed that, for the current meeting, the 
Secretariat would invite, on an ad hoc basis, the OECD and the UN Economic Commission for 
Europe (UNECE), which were not observers to th e Council, to share any relevant work they had 
produced in the sectors under discussion. 
40. In line with the practice adopted at previous meetings, she would request these international 
organisations to briefly introduce their contributi ons immediately after the Secretariat had presented 
its own papers, and befo re opening the floor for general discussion.   
1. Road freight transport services (Backgro und Note by the Secretariat, S/C/W/324 and 
Corrigendum 1) 
41. A representative of the Secretariat
 introduced the Note.  He explained that road freight 
transport made up on average over one-third of to tal inland freight transport, though significant 
variations existed across countries.  Statistical in formation on trade in the sector was deficient.  
Available data were focused on "international ro ad freight transport services", with very little S/C/M/101 
Page 6  
 
  attention paid to cabotage services.  In terms of regulatory regime, there was a striking discrepancy 
between the internal and the international regi me.  Domestic trucking had been significantly 
liberalised and was now in most instances free of  market entry barriers.  By comparison, the 
international trucking regime appeared extremely rest ricted and totally bilateral in nature.  The Note 
described the complex interplay of bilateral ag reements, including transit quotas and "triangular" 
quotas.  It also provided information on those inst ances in which international traffic was basically 
prohibited and transhipment of cargo compulsory.  The Note further considered other regulatory 
barriers encountered in the sector.  Finally, it discussed the relatively low number of GATS commitments undertaken and high number of MFN exemptions listed in the sector.    
42. The representative of the OCED
 expressed appreciation for the opportunity to address the 
Council and for the Notes prepared by the WTO Secr etariat for that agenda item.  His intervention 
would focus both on road freight transport services and on distribution services.   
43. He said that the Note on road freight transpor t services provided a very detailed description of 
the system of bilateral agreements that shaped the pattern of international road freight transport.  The 
Note on distribution services explained well one of the key issues of the sector, namely the horizontal 
concentration and vertical in tegration of retailers.   
44. The Trade and Agriculture Directorate of the OECD had organised a services expert meeting 
earlier that same week on trade in transport services and on distribution services.  The meeting had been held in the context of the Services Trad e Restrictiveness Index (STRI) project of the OECD, 
which aimed at quantifying regulatory barriers to trad e in services to a restrictiveness index, the STRI.  
While the OECD Secretariat had already undertak en significant work sectors such as computer 
services, telecommunications, professional services and construction services, it had only just started 
work on three additional sectors, namely transport,  distribution and audiovisual services.  The expert 
meeting just held was a "kick-off" meeting of  the Secretariat to its work on these sectors. 
45. The representative explained that the objective of  the meeting was to bring together experts 
from the private sector, governments, internationa l organisations and acad emia to understand the 
characteristics of the relevant sectors, to discuss the drivers of trade in these sectors and in particular 
to identify and discuss regulatory barriers.  The m eeting had helped the OECD Secretariat to get an 
understanding on how to approach these sectors when  constructing the STRI and which restrictions 
needed be included. 
46. The first two days of the meeting had been dedicat ed to transport services.  In particular, air, 
maritime and land transport were discussed by separ ate panels of experts and in break-out groups.  
Furthermore, a final panel covere d multimodal transport, to underline the importance of supply chains 
and the linkages between transport modes. 
47. The third day of the meeting had been dedi cated to distribution services.  Two panels 
discussed issues specific to food distri bution and to non-food distribution. 
48. Specifically with regard to road freight trans port services, he indicated that the system of 
bilateral agreements was perceived by business to be burdensome and constitute a major impediment 
to trade.  The meeting had also highlighted that rail and road transport should not only be seen as 
substitutes.  These two transport modes were highly complementary in the sen se that efficient rail 
transport required well-functioning road transport sector. 
49. As concerned distribution services, the representative noted that, given the range of 
regulations affecting the sector (e.g. competition, environmental or urban planning re gulations) a 
challenge for the OECD work would be to address regulations that had a conflicting policy interest 
and to identify regulations that were indeed trade-restricting.  S/C/M/101 
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  50. In terms of next steps, sector studies would be  produced, to help decide which restrictions 
should be considered in the STRI.  In this re gard, he highlighted that the WTO Background Notes 
were a very helpful source to get an understanding of the relevant sectors, especially from a trade 
perspective and in relation to the GATS. 
51. The representative of Turkey  thanked the Secretariat for the very comprehensive Background 
Note on road freight transport.  As stated in th e Note, the sector, as all transport services, played a 
fundamental role in terms of trade in goods.  
52. According to research carried out by the Ec onomic and Policy Research Institute in 2007, 
each day of delay reduced trade by at least 1 per cent and corresponded to 85 kilometres of distancing from trade partners.  Poor trade facilitation also affected the composition of trade:  it prevented 
countries from exporting time-sensitive goods and a da y’s delay reduced a country’s relative exports 
of time-sensitive goods on average by 7 per cent.  Similarly, according to a paper published in the 
World Bank Economic Review, a 10 per cent increase in transport costs caused 20 per cent decrease 
in trade volumes.   
53. Almost half of Turkish exports, from Siberia to Portugal, were carried by road transport.  The 
Turkish road transport sector had one of the most  modern fleets in the world, employed 400'000 
people, had investments over EUR 5 billion and had an added-value contribution of EUR 4 billion to 
the Turkish economy.  Aside from this, access to the Turkish transportation market was being aligned 
to the EU legislation and EU criteria formed the basi s of revised Turkish legislation on road transport.  
As stated in Turkey’s progress report 2010, legislativ e alignment had reached an advanced level in the 
sector. 
54. As reflected in paragraph 5 of the Bac kground Note, GATT Article V established rules 
concerning the freedom of transit.  The representativ e stressed that Turkey's intervention was without 
prejudice to the fact that freedom of transit wa s a part of the mandate of the Negotiating Group on 
Trade Facilitation in accordance with Annex D of  the Hong Kong Ministerial Declaration (Modalities 
for Negotiations on Trade Facilitation).  Neverthel ess, when discussing free trade in goods, one had to 
take into consideration first of all whether tr ansportation services could be freely provided or not. 
55. This crucially important sector was heavily  regulated and numerous restrictions still 
remained, as evidenced by the level of GATS commitments undertaken.  Paragraph 50 of the 
Background Note classified and listed major restricti ons in the road transport sector.  The Turkish 
economy had been seriously affected by the permit system, which was mentioned as one of the restrictions in paragraph 50.  Transport permit quotas had been unfairly imposed by certain Members 
on Turkish operators.  According to the Internati onal Transporters Associa tion in Turkey, the total 
cost of transport quotas for the Turkish economy was around US$6 billion in 2008.  
56. Turkey believed that each transport permit quota represented a measure having equivalent 
effect to quantitative restrictions actually imposed on trade in goods.  Furthermore, the limitation of 
permit quotas did not only restrict international trad e but also contributed to global warming due to 
longer and less efficient routes and waiting times at th e border gates.  Any additional cost arising from 
longer distances travelled or delays in deliveries were  ultimately paid by Turkish exporters.  In this 
regard, especially taking into account of the fact that today’s harsh global competition took place on 
the basis of quality/cost/time parameters, it was obvi ous that Turkish exporters had been subject to 
unfair competition via the restrictions imposed on Turkish road freight transport operators. 
57. Concerning transport quotas, the basic policy of Turkey was in favour of mutual liberalisation 
of international road freight transportation.  In th is regard, it was of the utmost importance that the 
quota based systems be removed.  S/C/M/101 
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  58. Other than the restrictions mentioned in para graph 50, there were also some common methods 
that needed to be mentioned, like high transit ch arges as well as the complex, time-consuming, heavy 
and discouraging visa and visa renewal procedures im posed on Turkish lorry drivers.  Her delegation 
would have expected the Note to point out bur densome visa requirements among the restrictions 
mentioned in paragraph 50.  
59. Turkey invited Members to take commitments unde r road freight transport services, to refrain 
from imposing barriers to trade via restrictions to ro ad freight transportation and finally to consider 
issuing long-term multi-entry visa for lorry drivers. 
60. A representative of the Secretariat
 explained that paragraph 50 of the Note listed the 
restrictions that were found in Members' schedules of commitments. 
61. The representative of China  expressed appreciation for the Secretariat’s informative and 
comprehensive Background Note on road freight trans port services.  This Note provided very useful 
updates of the economic and regulatory development patterns of this sector.  China believed that it 
helped obtain a better understanding of the characteristics and trends of  road freight transport services 
and facilitated further discussions in the future.   
62. The representative then provided a number of specific comments, which were related to 
figures or descriptions of China’s road transport services sector. 
63. In paragraph 12 on page 7, the percentage of fre ight transport in total inland freight transport 
for China in 2007 should be 29 per cent instead of  22 per cent.  Correspondingly, the total inland 
freight of China in Annex 2, on page 51, should be  3,870,481, and road freight as a percentage of the 
total should be 29.33 per cent. 
64. Paragraph 46 on page 18 indicated that Chin a was one of the four countries which used 
criteria other than financial fitness and compliance with road safety requirements for issuing permits.  Actually, China’s conditions for the issuance of li censes for road transport were mainly based on the 
consideration of the quality of the vehicle, the comp etence of the driver and the availability of safety 
management rules, which were set up to ensure the safety of road transport, and there were no 
quantitative restrictions.  Therefore, China did not  consider that the description in paragraph 48 
accurately reflected the actual situation and suggest ed that the Secretariat remove China from the 
bracket.   
65. Paragraph 48 on page 18 read “Retail prices of ro ad freight services are still regulated in only 
two countries (Turkey and China) out of the OECD sample, and only four countries (Korea, Greece, 
Chile, and China) issue pricing guidelines”.  The reality was that the Chinese government had not set 
up any guideline for the retail prices of road freight  services, as confirmed also by Annex 4 of the 
Protocol on the Accession of China.  In this Annex, China listed all service sectors subject to 
government guideline pricing and clearly road transport was not amongst them.  The retail prices of road freight transport were determined by the mark et itself and the carriers and consigners were free 
to negotiate the services price.  Based on that clar ification, China asked that the Secretariat kindly 
eliminate China from the two brackets.   
66. Finally, the information about the state of border traffic of China-Kyrgyz Republic, China-
Pakistan, China-Kazakhstan in table 8 on page 39 was not correct.  In fact, China had signed a 
Trucking Agreement with the Kyrgyz Republic on 4 June 1994.  Since then, the two countries had had 
very good cooperation in the transport service field,  and the border transportation between Kashgar in 
China and Bishkek and Osh in the Kyrgyz Republic w as open.  Similar agreements with Pakistan and 
Kazakhstan had been signed as well.  Furthermore,  China, the Kyrgyz Republic, Kazakhstan and 
Pakistan had signed a cross-border transport ag reement amongst them.  The representative would  S/C/M/101 
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  therefore appreciate if relevant revisions could be ma de to the text of the Note to reflect the accurate 
situation. 
67. The representative of Switzerland  said that his delegation would be interested in having more 
information on what had been granted in bilatera l road transport agreements.  He suggested the 
possibility that an additional Note be prepared, fo cused on the systemic implications of bilateral 
agreements. 
68. A representative of the Secretariat  indicated that the Secretariat was helping the World Bank 
develop a QUASAR-type database on road freight tr ansport agreements.  Information had already 
been gathered on over 600 bilateral road transport agreements in the LiBRA database, which could be 
accessed from http://www.wto.org/english/tratop_e/ser v_e/transport_e/transport_land_e.htm .  The 
Secretariat stood ready to continue to inform the Council on progress in this regard. 
69. The representative of Chinese Taipei  noted that, once again, recently acceded Members 
(RAMs) had made a higher contribution to the libera lization of the road freight transport sector.  The 
commitments of the 17 RAMs covered all of the 7 ro ad freight transport sub-sectors.  Chinese Taipei 
would encourage other Members to do their utmost to make commitments under the sector.  He also 
welcomed the OECD’s work on a “trade restrictiv eness index” in the sector, and looked forward to 
the results.  Moreover, and given that the Services  Council had just started its third review of MFN 
exemptions, he underscored the high incidence of MFN exemptions in the road freight transport 
sector.   
70. With regard to Annex 2 on page 52, he indicat ed that in 2009, Chinese Taipei's road freight 
surface transport had reached 29,0 71 million tonne-kilometres, accounting for 97.4 per cent of total 
inland freight transport (i.e. 29,847 million tonne- ki lometres).  As concerned Annex 3 on page 53, he 
noted that in 2007 Chinese Taipei had registered a total of 1,028,078 motor vehicles.  Amongst them, 
975,650 were classified as “vans and lorries.” 
71. The Council  conducted the rest of the discussion in informal mode.  The Chairperson  
produced the following summary of the main points raised (also contained in JOB/SERV/35). 
72. All delegations who intervened expressed appreci ation for the Secretariat's Background Note.  
They also all underscored the importance of the sect or, both in its own right and as a key component 
of an efficient logistics chain.  Several represen tatives noted that road transport was the dominant 
mode in their country's internal freight trade and in trades with neighbouring countries.  It was also 
observed that developing countries without extens ive rail networks were facing a huge demand for 
road freight transport services.  Liberalisation of the sector could thus be very beneficial.  Two 
delegations highlighted the predominance of sm all and medium-sized enterprises in the sector. 
73. Several representatives noted the liberal nature of their countries' respective road transport 
regimes.  One delegation explained that all internal  quantitative restrictions in the sector had been 
removed and replaced by qualitative criteria, and that  the same principle was promoted in relations 
with third countries. 
74. Several delegations highlighted the restrictive, complex and wasteful nature of the bilateral 
agreements that characterised the international tr ucking regime.  One Member noted that bilateral 
agreements could either be liberalising, as th e one it had recently conc luded with a neighbouring 
Member, regulatory (dealing with safety, technical rules, etc.), or protectionist in nature.  The 
representative further highlighted how the many MFN exemptions that had been listed in the sector 
were not justified on historical or cultural grounds , but solely aimed at perpetuating a protectionist 
system. S/C/M/101 
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  75. One delegation pointed to the Background Note's pertinent description of regional 
agreements, and stressed the obstacles faced at the regional level.  Another delegation observed that 
the regional agreements it had entered into ha d reduced its need for bilateral agreements. 
76. One representative noted the usefulness of the Note's description of the classification of the 
sector in the CPC Rev.2. 
77. The Secretariat's analysis of existing market access regulations in the sector, undertaken on 
the basis of OECD and World Bank data, was commended by one representative.  The same representative noted that the OECD data indicated a more open regime than the World Bank data, and 
sought further clarifications on this discrepancy.  The representative then point ed to an inaccuracy in 
paragraph 47 on page 18 of the Note, where one Memb er State had erroneously been listed, as per the 
OECD data set, as among those countries that used criteria other that financial fitness and compliance 
with road safety requirements for issuing permits and whose authorities were empowered to regulate 
capacity through licences or otherwise. 
78. One delegation observed that, as pointed out in  paragraphs 147-149 of the Note, greenhouse 
gas emissions generated by the sector were included in the reduction targets of the Kyoto Protocol.  
The same representative explained that it was promoting intelligent transport systems and advanced 
energy efficient technologies in order to achieve  a balance between the reduction of environmental 
burdens and an efficient road freight transport netw ork.  Another delegation noted that there were no 
universal standards for emissions in the sector, but th at national standards had been regularly lowered;  
they were being adopted by devel oping countries with short time lags.  
79. One Member recalled that in 2005 it had offere d to expand its commitments on road freight 
transport, subject to an acceptable overall servi ces package, and encouraged other Members to 
consider making commitments in the sector as well.   
80. By way of general comment, a representative of  the Secretariat indicated that certain 
informational discrepancies originated with the various sources used in the Background Note (e.g. 
IRU, ITF, IRF, etc.).  Furthermore, these data we re not always comparable.  As for the divergence 
between the World Bank and the OECD data, this was due to differences in methodology and scope 
of the analysis.  In this regard, any additional information and clarification Members could provide was useful and welcome.  While no corrigenda w ould be issued for the Background Notes, comments 
would be incorporated in a publication compili ng all the Notes that the Secretariat envisaged 
producing in due course.   
2. Distribution services (Background Note  by the Secretariat, S/C/W/326) 
81. By way of introduction, a representative of the Secretariat
 said that distribution services 
provided the necessary link between millions of produ cers of goods and billions of consumers within 
and across borders.  As such, the sector was key to the proper functioning of a market economy.  Distribution accounted for a significant part of co mmercial activity.  In many economies, it was only 
second to manufacturing in its economic weight, a nd ahead of such other sectors as agriculture, 
mining, or financial services.  Dist ributors interacted closely with va rious other service suppliers, be it 
in transport, logistics, financial services, or advertising sectors.  Distribution services were also closely linked to international trade in goods.   
82. In terms of GATS commitments, distribution services had attracted a relatively low level of 
commitments: 57 WTO Members (counting EC-12 as one ).  However, all 25 Members that had gone 
through the accession process had taken commitments  on distribution services.  When committed, the 
sector was subject to relatively few limitations.  Im portant liberalization had also taken place over the 
years, although significant barriers remained in various markets.    S/C/M/101 
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  83. The representative of Korea  underscored that paragraph 77 and related footnote of the Note, 
which mentioned certain recent measures, containe d factual errors.  The delegation would provide 
wording at a later stage. 
84. The Council  conducted the rest of the discussion in informal mode.  The Chairperson  
produced the following summary of the main points raised (also contained in JOB/SERV/35). 
85. Several delegations underscored that the Note provided useful information on the sector, in 
particular on recent trends, and that it cons tituted a good basis for future discussion.   
86. Various delegations highlighted the sector's  economic importance and the benefits of 
liberalization, including for growth and productivity,  as well as in terms of consumer welfare.  A 
delegation highlighted that trade liberalization in g oods offered little value in terms of greater choice 
and lower prices if efficient distribution services were absent.  Further, several delegations 
emphasized that distribution services were a critical link in logistics and supply chains, interacting 
with agricultural producers and manufacturers on the one hand, and consumers on the other. 
87. Various delegations regretted that the sect or had attracted only a limited number of 
commitments, and they hoped this  would change as a result of the DDA.  One delegation noted that 
recipients of the plurilateral request in this area had only made limited offers.  While distribution was 
often perceived as a sensitive sector in view of its high share in employment, the Note made the point 
that restrictive policies had adverse effects on bot h productivity growth and employment levels.  The 
number of jobs in the sector was growing overall despite increasing replacement of traditional small shops by modern retail formats.  Another dele gation observed that many commitments contained 
ENTs without criteria, and called on Members to follow recommendations in the Scheduling 
Guidelines.  It was also pointed out that all acc eding Members had undertaken some commitments in 
the sector.  
88. As regards classification, a delegation said that the incongruence between the CPC and 
W/120, mentioned in paragraph 11 of the Note, w ould have to be addressed.  Another delegation 
encouraged Members to take advantage of the possibilities provided by the GATS and to think of 
creative ways to make commercially meaningful commitments beyond the current constraints of the 
CPC.  Given their highly integrated nature, trans port, logistics, and wholesale trade services could be 
considered together.  
89. Some delegations emphasized the important role  played by franchising.  One delegation said 
that franchising in relation to convenience stor es greatly contributed to the modernization and 
competitiveness of local "mom and pop" stores th rough the transfer of management know-how, and 
also minimized risks.  About 40,000 convenience st ores were operating in the country, which not only 
performed commodity sales, but also provided doo r-to-door delivery services, ticketing services for 
concerts, and banking services.  These stores thus pl ayed a social function.  Another delegation said 
that franchising generated employment for around 400,000 nationals.  The government had recently 
introduced a number of reforms to assist both franchisors and franchisees, including increased 
disclosure so as to promote informed assessmen t of commercial risks and assist with mediation 
through a government-funded office.   
90. Various delegations highlighted the importance of an adequate regulatory framework, for 
example to prevent anti-competitive practices or pr otect consumer rights.  At the same time, one 
delegation noted that restrictions in many countries had been tightened over recent years, mainly in 
the form of new domestic regulations, for exam ple on zoning.  The dele gation hoped these would not 
turn out to be hidden protectionist measures.   S/C/M/101 
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  91. Another delegation had a number of specifi c comments.  First, regarding horizontal 
concentration, the Note analyzed the reduction in th e market share of traditio nal types of operators, 
without mentioning the social and economic impact s.  The delegation looked forward to further 
discussion of this phenomenon.  Second, in paragr aph 73, the Note mentioned that a number of 
countries had developed codes of good practice for re lations between retailers  and suppliers.  More 
detailed information in this regard  might be shared.  Third, as regards paragraph 48, online sales in the 
country had increased to 263 billion RMB (about US$39 billion) in 2009, a 32-fold increase from 2004, which put it just behind the United States.  Fourth, regarding Table 2, China had made 
commitments in all five sub-sectors of distribution ser vices, not in four.  Fifth,  paragraph 16 should be 
qualified by the fact that the country had made hi gh-level commitments as part of its accession, and 
foreign equity restrictions had been phased out fi ve years after accession.  The only exceptions were 
retail chain stores with more than 30 outlets which so ld products of different types and brands from 
multiple suppliers.  These had to form a joint ve nture with Chinese partners.  Since WTO accession, 
both foreign and domestic suppliers had benefited from the liberalization of distribution services.  At 
the same time, domestic suppliers also had begun to expand overseas.  For example, on average, 
overseas direct investment (ODI) in distribution services in recent years amounted to nearly US$6.5 billion annually, accounting for about 14 per cent of to tal ODI in the service sector.  Sixth, as regards 
statistics, paragraph 21 mentioned that, except for the US, the value of sales comprised both the 
commercial margin of the distributor and the value of the traded good.  The delegation looked forward 
to further discussion in order to get a more accurate estimation of sales values.  Finally, the delegation 
asked how the level of restrictiveness for "Europe a nd Central Asia" in Figure 1 could be set at 0.  
Mention was also made of the figure for inward and outward FDI stock of the European Union in 
Table A-2, which seemed abnormally high.  
92. A delegation pointed out that distribution was an  important employment generator, but that 
information on different economies seemed limited.   As regards small and medium enterprises 
(SMEs), it was easier for individuals to launch a new business in this sector than in many others.  The 
Note concentrated mostly on large enterprises in the sector, but this seemed to give a distorted image.  
In the country, an overwhelming majority of jobs in this sector was linked to SMEs.   
93. A delegation commented on an ongoing debate in the country about opening the retailing 
sector to FDI.  The sector was the second largest employer after agriculture.  In 2007-08, it provided 
jobs to 33.1 million persons.  With around 12 to 15 million retail outlets, the country had the highest 
density in the world.  Most of these outlets were family-run stores, therefore liberalization of retailing 
was very sensitive.  Potential benefits included in creased efficiency and consumer welfare, greater 
investments in the supply chain, access to technol ogy, capital and management know-how.  However, 
liberalization could result in unfair competition and, ultimately, in the large scale exit of domestic retailers, with important employment effects.   Since domestic organized retail was still 
underdeveloped, it was important that it be allowe d to grow and consolidate before opening up to 
foreign investors.  Other concerns included the po ssibility of predatory pricing and the disintegration 
of established supply chains.  While the debate w as ongoing, some of these concerns were not totally 
unfounded, as suggested also by experiences of some other countries.  The effects of liberalization in 
this sector were yet to be fully understood.  Tr ading partners had noted the importance of mode 3 
liberalization, but mode 4 was also key.  Negotiati ons in the sector would not be balanced until broad 
commitments were taken on mode 4 in categories of interest to developing countries.  The delegation 
enquired why Table 3 did not provide details on leve ls of commitments in mode 4, and hoped this 
could be addressed.   
94. A delegation appreciated the emphasis placed on mode 3, both in discussing FATS data as 
well as barriers to trade in paragraph 57.  Retailers also played a significant role in upgrading supply 
chains and the quality of producers' goods.  The de legation felt that paragraph 59 overemphasized 
restrictions on the movement of natural persons , as most employees of foreign-owned retail firms 
were host-country nationals.  Anot her delegation said that Table A- 1 should be corrected so that  S/C/M/101 
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  Chinese Taipei's exclusion for firearms and military  equipment be listed not only for wholesale trade, 
but also retailing services.   
95. A delegation considered that obstacles to unde rtaking further commitmen ts remained.  There 
was a constant innovation of distribution-related technology, and it was very difficult to reflect 
properly in commitments the vast scope of the mark et and its regulation.  A major deterrent was the 
possible impact on traditional markets and small "mom and pop" stores.  From a social point of view, 
these were justifiable concerns.  Proper adjust ment measures and domestic regulations should be 
considered.  As mentioned in paragraph 77, th e country had undertaken autonomous liberalization 
since the Uruguay Round, which had prompted the emer gence of large competitive retail distributors.  
The positive impact included fiercer price competition,  consumer benefits, a nd enhanced productivity 
in the sector.  However, on the negative side was the concentration of distribution channels and the 
resulting market power.  In paragraph 77, certain recent measures were mentioned;  comments on some factual errors would be provided at a later stage.   
96. A representative of the Secretariat noted th at franchising had a peculiar nature when 
compared to other sub-sectors of distribution in the W/120.  This had been highlighted in the 
presentation on CPC revisions at the last mee ting of the Committee on Specific Commitments.  
Regarding the point raised on Figure 1, the info rmation was from the World Bank.  Countries from 
"Europe and Central Asia" in this Figure were likely a small group since OECD countries were 
excluded;  this helped explain the results.  With respect to Table 3, the re presentative noted that mode 
4 commitments were scheduled in a particular manner,  typically in the horizontal section.  Therefore, 
such commitments did not lend themselves to the usual statistical count at the sector level.  Still, 
footnote 12 provided information on mode 4 commitments by highlighting those schedules where 
commitments in the sector differed from what was sp ecified in the horizontal section.  On this last 
point, a delegation wondered whether it was possi ble to provide additional statistics on mode 4 
commitments in distribution.  The representative from the Secretariat remarked that the Background 
Note on mode 4 would provide a more comprehensive view.  The virtual absence of sectoral 
specificities made it difficult to go further in this  regard, but delegations were free to formulate 
suggestions.   
3. Sectors discussed at the meeting held on 30 September 2010 (postal and courier services 
and environmental services) 
97. No interventions
 were made on the sectors that had been discussed at the Council meeting 
held on 30 September 2010.   
4. Further comments 
98. A representative of the Secretariat  indicated that delegations should send any factual 
corrections to the Secretariat.  At the following C ouncil meeting, the Secretariat would circulate a list 
of the authors of the various Background Notes, to whom corrections and comments should be sent. 
99. The Chairperson  thanked Members for their contributions.  She recalled that, as agreed, she 
would be producing a summary, under her own res ponsibility, of the main issues raised.  This 
summary (document JOB/SERV/35) would be circulat ed rapidly and subsequently recorded in the 
minutes of the meeting.  The minutes would also cont ain the presentations of the various papers and 
the statements made by representatives of intern ational organisations, as well as interventions that 
delegations had asked to be placed on record.   
100. She said that the Council would revert to this ite m at its next meeting in 2011.  She recalled 
that two Secretariat Background Notes were outst anding, one on engineering services and another S/C/M/101 
Page 14  
 
  updating the information contained in document S/ C/W/27/Add.2, entitled "A Review of Statistics on 
Trade Flows in Services".   
101. Concerning the sectors for discussion at the follo wing meeting, the OECD, which was not an 
observer to the Council, had produced relevant and in teresting work that it could helpfully share with 
Members.  In line with previously adopted pr actice, she would be inviting the OECD, on an ad hoc  
basis, to the next meeting of the Council to offer its contribution.  Delegations would then also be able 
to revert to the sectors discussed at the current meeting. 
F. O
THER BUSINESS  
102. The representative of Australia  said that she had hoped she w ould not need to intervene yet 
again under this agenda item to express her delega tion's on-going concern about the lengthy delay in 
the entry into force of the certified EC-25 schedule.   She recalled that it had been more than three 
years since the EU had notified the certification of the amended schedule of commitments.  Australia was one of a number of affected Members with whom compensation arrangements had been agreed, 
but there was still no defined date for entry into fo rce of these arrangements.  This posed on-going 
systemic and commercial concerns for Australia.  At the previous Council meeting, the EU had 
indicated that 16 Member States had completed their national ratification process.  She urged once 
again the European Union and its Member States to  expedite the entry into force of the amended 
schedule of commitments, and sought an  update on progress to that end. 
103. The representatives of Brazil
, India , Hong Kong, China  and Canada  echoed the statement 
made by Australia.  
104. The representative of the European Union  indicated that his delegation had taken careful note 
of Members' concerns.  He stressed that the EU would ensure that its certified EC-25 schedule of 
commitments would enter into force as soon as na tional ratifications had been completed.  He 
informed the Council that he had no news to re port relative to the update he had provided at the 
September meeting of the Council, but would k eep Members informed of any development.  
105. The Council took note  of the statements made. 
__________