RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/S/M/21 
29 June 2006 
 
 (06-3149) 
Council for Trade in Services 
Special Session  
 
 
REPORT OF THE MEETING HELD ON 23 JUNE 2006 
 
Note by the Secretariat1 
  
1. The Special Session of the Council for Trade in Services held a formal meeting on 
23 June 2006, chaired by Ambassa dor Fernando de Mateo of Mexico .  The agenda for the meeting 
was contained in document WTO/AIR/2844. 
2. The Chair
 stated that under "Other Business", he w ould invite the Chairs of the Subsidiary 
bodies that had met during this week to  make report on any progress in th e work of their bodies. He 
suggested that the Council adopt the agenda with the addition of the point just raised.  
3. It was so agreed . 
A. I MPLEMENTATION OF THE MODALITIES FOR THE SPECIAL TREATMENT FOR LEAST -
DEVELOPED COUNTRY MEMBERS IN THE TRADE IN SERVICES NEGOTIATIONS  
4. The Chair  noted that the Council had agreed at its la st meeting that the focus of this meeting 
was to discuss the implementation of the LDC Moda lities.  He recalled that the Council's mandate on 
this topic was set out in paragraph 3 of Annex C of Hong Kong Declaration, which required Members 
to pursue full and effective implementation of the LDC Modalities with a view to the beneficial and 
meaningful integration of LDCs into the multilatera l trade system.  Paragraph 9 of Annex C specified 
the methods to be developed for the impl ementation of the LDC Modalities, including, inter alia , 
mechanisms for according special priority to modes and sectors of interest to LDCs in accordance 
with GATS Article IV:3 and paragraph 7 of the LD C Modalities.  In accordance with Annex C, such 
mechanisms were to be developed and completed befo re 31 July of this year.  He stressed that if 
Members were to meet the deadline, they would need  to agree on a text as soon as possible.  He noted 
that since last April, three Members (Canada, the United Stat es and Japan) had presented written 
responses (Job(06)/76, Job(06)/77 and Job(06)/139) to key questions for discussion raised by LDCs 
regarding the implementation of the LDC Modalities.  Some other Members had said that they would 
present written responses to these questions as well.  He  also recalled that at the Council's meeting in 
April, the delegation of Zambia on behalf of  the LDC Group had submitted a paper proposing a 
mechanism to operationalize the special priority accorded to LDCs under GATS IV:3.  This paper 
was contained in document TN/S/W/59.  On 8 May,  the Council had held an informal meeting to 
discuss the LDCs' proposal.  During the discussion, a number of Members had raised specific 
questions or concerns regarding the LDCs' proposal, such as the mandate of Article IV:3, the meaning 
of "special priority" under this article, the issue of consistency with the MFN principle,  the linkage to 
Article XXI, and options to pursue the LDC Modaliti es outside the framework of the GATS.  At the 
Council's meeting held on 24 May, the delegati on of Zambia on behalf of the LDC Group had 
presented the Group's collective request on Mode 4.  The Chair drew Members' attention to a 
                                                      
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/21 
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  communication, contained in Job(06)/208, submitted to this meeting by the delegation of Norway 
with regard to the implementation of the LDC Modalities. 
5. In introducing his delegation's communication, the representative of Norway
 reiterated that 
his delegation attached importance to the issue of  LDC Modalities in the services negotiations with a 
view to contributing to the process of achieving e ffective implementation of the LDC Modalities.  His 
delegation was of the view that according special priori ty to the LDCs to facilitate their participation 
in international services trade had three elements.  The first related to the need to strengthen their 
domestic services capacity and their access to distribu tion and information network.  This element 
concerned the shaping and implementation of me asures and contributions which would supplement 
LDCs' own efforts in developing an efficient and dynamic services sector.  Access to technology and 
effective technical assistance measures were important  in this respect.  Developing appropriate tools 
for improving legal, regulatory and institutional fra mework was essential in or der to achieve a well 
working services sector.  A second element related to  the importance of facilitating effective access of 
LDCs' services and services suppliers to foreign markets in sectors and modes of supply of export 
interest to them.  Referring to the LDC Group's communication (TN/S/W/59), he noted that important 
questions had been raised with respect to deve loping appropriate mechanisms with a view to 
achieving increased participation of LDCs in services trade.  His delegation supported further work to 
explore the feasibility of appropriate mechanisms with  due regard to domestic law and regulation.  In 
its initial and revised offers, Norway had made s ubstantial commitments on Mode 4 in the following 
categories: intra-corporate transferees, business visitors and independent  professionals.  While 
considering extending and clarifying its Mode 4 offe r in a manner which was of particular interest to 
LDCs, Norway would maintain all its requirements in  terms of entry, stay, wages, working conditions 
and social security benefits.  Norway's offer on Mode 1 included extensive commitments in several 
sectors, including but not limited to: business servi ces, telecommunication services, construction and 
related engineering services, financial services, and maritime services.  These commitments provided a wide range of commercial opportunities.  In partic ular, the combination of commitments in business 
and communication services would provide ample and predictable opportunities for outsourcing 
activities.   The third element under "special priority " could be the consideration of possible measures 
in order for LDCs to draw maximum advantage of GATS flexibilities.  Referring to paragraph 26 of 
the Hong Kong Ministerial Declaration which stated that LDCs were not expected to undertake new 
commitments, he noted that his delegation had form ally withdrawn all its requests to LDCs in the 
services negotiations.  Nevertheless, his delegation s till looked forward to an active participation of 
LDCs in negotiations.   
6. Referring to his delegation's co mmunication, the representative of Norway stressed that his 
country had a strong focus on capacity building and trade-related technical assistance to LDCs.  According to the 2005 Joint WTO/OECD Repor t on Trade-Related Technical Assistance and 
Capacity Building, Norway was the largest donor to the multilateral trust funds in 2004 with a 
donation of $6.8 million.  The contributions to these funds were of a general nature and normally not 
linked to particular areas like services.  But through support to UNCTAD and ITC, the services area 
had been addressed.  Norway was a major contributor  to the Doha Development Agenda Global Trust 
Fund.  With the contribution of 10 million NOK in 2006, Norway' total contribution to this fund had 
reached 42 million NOK.  For Norway, the Integr ated Framework for Trade-Related Technical 
Assistance for Least Developed Countries (IF) stood out as a very valuable instrument which involved 
40 LDCs at the beginning of 2006.  Twenty of these LDCs had undertaken an analysis with a view to 
integrating trade in their national strategies.  Norw ay had participated in the task force which had 
proposed a considerable enhancement of the IF  from 2007.  The intension was to increase 
contributions considerably in line with decisions on th e enhancement of the IF.  Finally, he referred to 
Annex C of the Hong Kong Declaration which st ated the objective of the work on the LDC 
Modalities: "the beneficial and meaningful integra tion of LDCs into the multilateral trading system."  TN/S/M/21 
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  7. The representative of Uganda,  as the LDC focal point on services, made a powerpoint 
presentation on behalf of the LDC Group with resp ect to the Group's proposal: the Understanding on 
Special Priority.  She intended to answer 5 key questions the Group had received during 
consultations: (1) What was the objective of an Understanding on Special Priority? (2) What was 
Special Priority? (3) Why was Special Priority important? (4) What was the mandate for giving 
Special Priority? (5) What legal form would it be?   On the first question, she stated that the objective 
of an Understanding on Special Priority was to facilitate the growth and strengthening of LDCs' 
participation in services trade.  This objective w as commensurate with LDCs' economic development.  
Such Understanding aimed to provide Members w ith a legal mechanism to operationalise special 
priority for LDCs in services trade in a way that was consistent with the GATS.  In answering the 
second question, she explained that special priority  was treatment more favourable than what was 
given to other Members.  Examples in this re gard could include: commitments in new sectors 
specifically for LDCs; enhanced market access for LDCs  in a sub-sector or mode of interest to LDCs; 
fast-tracking treatment for LDCs in domestic regulation; removal of specific barriers faced by LDCs, like economic needs tests (ENTs).  LDCs could not benefit from such practic al measures without the 
first step, i.e. to have a legal mechanism. 
8. On the third question, the importance of special priority, she pointed out that the low level of 
development of services industries within LDCs cons trained their competitive participation in world 
services trade.  The mandate provided by GATS Artic le IV:3 was reaffirmed in the LDC Modalities 
and the Hong Kong Declaration.  The latter went furt her by setting a deadline of  31 July 2006.  All of 
these recognized the special situation of LDCs and th e need to increase LDCs' effective participation 
in services trade and to secure a share in the gr owth of world services trade commensurate with their 
economic development.  The mandate also recognized  the important role that enhanced market access 
could play.  Currently, however, there was no lega l mechanism through which special priority could 
be accorded to LDCs.  Even if a Member granted tr eatment in favour of LDCs, it would not be to the 
benefit of LDCs as it would be provided to all other Members, in which case LDCs could not 
compete.   
9. Regarding the fourth question on the mandate, she noted that GATS Article IV:3 provided 
special priority for LDCs and that paragraphs 6 and 7 of the LDC Modalities required Members to 
provide effective market access and to develop appr opriate mechanisms with a view to achieving full 
implementation of GATS Article IV:3 and facilitating effective access of LDC services and services 
suppliers.  She further noted that paragraph 47 of the Hong Kong Declaration called on Members to 
implement the LDC Modalities and give priority to sectors and modes of interest to LDCs.  In 
particular, paragraph 9 (a) of Annex C required Members to deve lop appropriate mechanisms for 
according special priority in sectors and modes of interest in accordance with Article IV:3 and 
paragraph 7 of the LDC Modalities by 31 July. 
10. On the last question, she stated that special pr iority could be in the form of an understanding 
of which there were several examples in th e WTO.  The Understanding was a mechanism for 
implementing Article IV:3 without amending the GA TS.  It built on Article IV:3 by providing a 
means to implement an existing provision.  In conclu sion, she stressed that th ere was a clear need for 
such a legal mechanism and that  there was a mandate supporting the rationale. This mechanism was 
legally possible and did not require any change of the GATS.  Noting that Members had agreed to the 
deadline of 31 July and that political will had b een provided in Hong Kong, she urged Members to 
follow through on their commitment to implement the LDC Modalities.  
11. The representative of Zambia
 on behalf of the LDC Group addressed some specific issues 
Members had raised, hoping that this could enhan ce Members' understanding of the rationale and 
approach of the Group's proposal.  He noted that th e need for full and effective implementation of the 
LDC Modalities was critical, particularly in light  of the deadline set out in the Hong Kong 
Declaration, 31 July, a time soon approaching.  As  LDCs were the weakest and most vulnerable TN/S/M/21 
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  Members of the WTO, effective market access LDCs  needed could help them benefit from the ever-
increasing opportunities in international services trade.   On the issue of MFN inconsistency, while 
appreciating the importance of the MFN principle, the LDC Group believed that its proposal was of a 
special nature in the sense that it built on GATS Ar ticle IV:3 which already authorized "special 
priority" for LDCs.  The proposed Understanding simply implemented an already existing GATS 
provision.  Article IV:3 was incomplete as it c ould not be implemented.  LDCs hoped that the 
outcome of the negotiations would result in security , stability and predictability.  As Article IV:3 
already existed in the GATS, the Group viewed its implementation as one that would take on a predictable nature within the WTO.  Any othe r approaches, such as bilateral arrangements or 
reporting mechanisms, were complementary to and not substitutes for the implementation of the LDC 
Modalities.  The Group would continue to engage positively and constructiv ely on this matter.  
12. The representative of Uganda
 stated that her delegation supported the statement made by 
Zambia on behalf of the LDC Group.  Stressing the need to develop the mechanism to implement the 
LDC Modalities within the timefram e set out in the Hong Kong Declaration, she said that the LDC 
Group looked forward to a positive outcome on this matter.  
13. The representative of Lesotho  thanked Norway for its communication and supported the 
statement made by Zambia. 
14. The representative of the European Communities  stated that the implementation of the LDC 
Modalities was at the centre of the Council's work.  Referring to paragraphs 9 and 11 of Annex C of 
the Hong Kong Declaration, he noted that discussions  on this topic were particularly timely. His 
delegation was strongly committed to this issue. Since the adoption of the LDC Modalities in 2003, 
his delegation had made particular efforts to impl ement various elements of the Modalities.  Such 
efforts were widespread, ranging from financin g of technical assistance and capacity building 
activities to self-restraint of requ esting commitments from LDCs and to the careful selection of 
sectors and modes of supply of particular interest to LDCs in offers.  The overall objective was to 
increase LDCs' integration in services trade.  In th is context, his delegati on believed that stronger 
regulatory capacity, better identification of LDCs' n eeds as well as their areas of offensive interest 
were essential prerequisite and constituted the focus of  his delegation's technical assistance efforts.  In 
addition, his delegation proposed mechanisms that  would allow having a full picture in terms of 
technical assistance and capacity building and be tter coordinating efforts undertaken by different 
Members.  Referring to his delegation's communi cation on the ways it was implementing the LDC 
Modalities, he stated that his delegation was rea dy to go further in its implementation efforts.  
However, his delegation noted the fact that th e LDC Modalities were time-limited and had been 
adopted only for the purpose of this round.  His delega tion also had to take into account the limits of 
the structure of the GATS.  This was why his delegation had certain doubts about the mechanism proposed by the LDC Group, which aimed at cha nging the structure of the GATS and introducing a 
permanent preferential mechanism which went beyond the scope of the present exercise. 
15. In the view of his delegation, one possible idea of implementation could be a mechanism 
whereby the CTSS would review revised offers subm itted in July 2006 to collectively identify sectors 
and modes of supply of interest to LDCs and assess whether special priority had been given to them.  Such review mechanism could be usefully extended to different elements of the LDC Modalities and 
thus could allow for a common scoreboard.  His dele gation would further reflec t on this idea with a 
view to producing shortly a document.  In finaliz ing its second revised offer, his delegation would 
contact the LDC Group to better unders tand certain aspects of the new version of the LDCs' collective 
request on Mode 4 and get additiona l indications on their priorities. 
16. The representative of Morocco
 on behalf of the African Group supported the statements made 
by the LDC Group as well as their communication.  Thanking Norway and those delegations that had 
presented communications on how they were implem enting the LDC Modalities, he encouraged other  TN/S/M/21 
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  Members to follow the same track and expeditiously  implement the LDC Modalities.  He noted that 
Article IV:3 had established a mandate in this regard. 
17. The representative of Tanzania  supported the statement made by Zambia and urged Members 
to think positively about the LDCs' request, noting that  the deadline of 31 July was approaching.  She 
stated that the request for special priority  would not make any amendment to the GATS. 
18. The representative of Canada  reaffirmed his delegation's commitment to looking at ways to 
advance the implementation of the LDC Modalities and LDC interest in the services negotiations. 
Noting that the implementation of the LDC Modalities was an important and complex subject, he thought that Members needed to be realistic in or der to achieve practical results for the negotiating 
process.  The LDC Modalities required that special pr iority be given to prov iding effective market 
access in sectors and modes of interest to LDCs an d that appropriate mechanisms be developed to 
achieve implementation of Article IV:3.  His dele gation had already made reasonable progress in a 
number of areas.  For example, as its communicati on Job(06)/76 had indicat ed, Canada had responded 
to special priority in its offer in sectors and m odes of interest to LDCs.  Canada had proposed 
commitments on Mode 4 in categories de-linked from commercial presence such as contract service 
suppliers, including independent professionals.  Canada had also  broadened its commitments for 
certain categories, had added others, and had lowered the mi nimum education and experience 
requirements for ICT professionals.  Canada's Mode  4 commitments did not include wage parity 
requirements.  Canada had also taken steps to ensu re that information pertaining to all aspects of 
services regulation, including Mode 4, was readily  and easily available to LDCs.  The Hong Kong 
Ministerial Declaration affirmed that LDCs were not expected to make commitments during the Doha 
Round.  Canada had respected this in the ma rket access negotiations.  Noting that LDCs had 
submitted a proposal that the requirement to undert ake domestic regulation disciplines not apply to 
them, Canada would take up this in the context of domestic regulation ne gotiations.  Canada had 
provided a number of programmes on trade-related technical assistance and capacity building to LDCs over the past few years. 
19. The representative of Canada reminded Members of the deadline with respect to the LDC 
Modalities.  In accordance with the Hong Kong Decl aration, Members were to develop a reporting 
mechanism by the end of July to facilitate the revi ew noted in paragraph 13 of the LDC Modalities.  
This needed to be relatively straightforward to agree and might be accomplished through certain form 
of review at the Special Session of the CTS on the LDC Modalities after the submission of revised offers.  Canada looked forward to discussing this  and hopefully agreeing on something along these 
lines at the meeting in July.  On the LDCs' propo sal seeking to formalize a market access preference 
in favour of LDCs, while prepared to continue a di alogue on this issue, Canada recognized that there 
were significant and complex conceptual issues in the idea of preferential services market access.  
However, Canada also noted that to the extent th at any country found ways to offer such preference, 
existing GATS and WTO provisions already pointed the way to possible implementation.  In some 
senses there might be both more and less that met the eye with respect to the proposal.  What was 
important was that the proposal was outside of the confines of the LDC Modalities discussion and beyond the scope of the July timeline that was the imme diate priority.  The work at this stage was not 
to be overburdened and Members needed to focus on delivering the mechanism and review the LDC 
Modalities called for.  Members could come back to other proposals at an appropriate time, if 
necessary.  Canada believed that the review it co ntemplated would reveal that LDCs' needs were 
being taken into serious consideration.  
20. The representative of the United States
 reiterated her delegation's commitment to effectively 
and meaningfully integrating LDCs into the GATS ne gotiations with special priority given to sectors 
and modes of supply of particular interest to them .  Her delegation had held talks with the LDC Group 
on the Group's proposal for a preferential mechanis m and its collective request on Mode 4.  Her 
delegation could not accept such preferential mechanis m.  The type of mechanism her delegation was TN/S/M/21 
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  contemplating was what the delegation of the Eur opean Communities was suggesting.  Her delegation 
supported a consultative type of mechanism which c ould include an effective means of addressing the 
issue of LDC Modalities via the CTSS, which would allow Members to report on what they had done in the preparation of their offers to provide special  priority to LDCs.  She suggested that the Chair 
hold consultations in this regard .  Reiterating that the implementation of the LDC Modalities was an 
obligation of all Members, not developed Members' exclusive obligation, she said that her delegation 
looked forward to responses on this issue from Me mbers other than developed Members from the 
perspective of negotiations.  Referring to the stat ement made by Canada, she recognized that if a 
Member was in a position to go further to provide  non-MFN based commitments in favour of LDCs, 
Annex on Article II of the GATS would enable the Member to do so. 
21. The representative of Japan
 stated that his delegation attached importance to the 
implementation of the LDC Modalities and was studyi ng carefully the Group's proposal.  Noting that 
the LDC Modalities were established for the current round of negotiations, he said that the proposal 
might not be compatible with this nature of the LDC Modalities.  One of the possible mechanisms for 
implementing the LDC Modalities was a reporting a nd consultative mechanism which could be 
established at the CTSS.  His delegation would conti nue its consultations with  LDCs with a view to 
reaching an agreement.  
22. Supporting the statement made by Zambia, the representative of Cuba  called for effective 
mechanisms to implement the LDC Modalities, particul arly with regard to Article IV:3 as suggested 
in communication TN/S/W/59.  He stressed that Me mbers were to show flexibility in their requests 
for market access and to take into considera tion the LDCs' development priorities. Noting the 
importance of the issue of LDC Modalities dealt with at the CTSS, he thought that Members' 
contributions in this regard could also im prove LDCs' access to distribution channels.   
23. The representative of South Africa  supported the LDC Group's proposal for a legal 
framework.  His delegation did not think that this proposal was amending the GATS in any way.  Noting the importance of fulfilling the mandate re garding the LDC Modalities, his delegation urged 
Members to move towards achieving success in this matter.  
24. The representative of Switzerland
 commended the LDC Group on their commitment to the 
negotiating process as well as Norway on its communication which demonstrated how the LDC Modalities had been implemented so far.  His de legation respected the obligation under GATS Article 
IV and had made efforts to contribute to a bette r integration of LDCs and developing countries in 
international trade on a bilateral basis or through cer tain international institutions, such as ITC.  In 
addition, his delegation had not made any requests to LDCs from the beginning of the negotiations.  
On the issue of compatibility of the LDCs' proposal w ith the GATS, in particular the term of "special 
priority", he noted that GATS contained both clear rules and areas with certain flexibilities.  Response 
to this issue might lie in those fl exible areas where it was possible for certain actions to be taken with 
some Members as targets.  For example, the tr aining programmes his country had undertaken for 
specific partners were compatible with the GATS.   He, however, noted that there might be cases 
where the problem of compatibility did exist.  Echoing the statement by Canada, he stated that Members needed to be wary of overburdening work at  the late stage of negotiations and that Article 
IV:3 was not intended to create a general preferenti al mechanism.  Referring to the statement by the 
United States, he said that his delegation also wi shed to know how all Members would implement 
Article IV:3 as it applied to the entire membership.   
25. The representative of Brazil
 noted that, as the LDC Group had indicated, the mandate of the 
implementation of the LDC Modalities was clear with  a specific deadline.  On the debate as to 
whether the LDCs' proposal would change the structur e of the GATS, he thought that Article IV:3 at 
least constituted a good basis for one to argue that this provision could allow for a special mechanism 
in favour of LDCs.  Referring to Annex F of the Hong Kong Declaration, which contained a decision  TN/S/M/21 
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  on TRIMS, he believed that the issue of LDC Moda lities in the GATS was not insurmountable if there 
was a political will to address it. He also noted th at the LDCs' proposal (TN/S/W/59) had indicated 
the differentiated responsibilities be tween developed and developing Members on this issue.  He 
suggested that the Chair intensify consultations in or der to make progress expeditiously on this issue. 
26. The representative of China  stated that his delegation fully supported paragraph 9 of Annex C 
of the Hong Kong Declaration. Believing that LDCs could get real benefits  from the DDA if the 
objective set out in their proposal was achieved, hi s delegation urged Members to actively participate 
in the discussion on the mechanism proposed by the LDC Group.  In bilateral consultations with 
LDCs, his delegation had indicated that it would gi ve special consideration to sectors and modes of 
particular interest to LDCs.  His country actually had tried to provide aid and assistance to LDCs in 
various ways, such as reducing LDCs' debts, car rying out training programmes for LDCs.  His 
country would continue to do so in order to pr omote social and economic development in LDCs. 
27. Noting the importance of the issue of LDC M odalities in negotiations, the representative of 
India  stated that something of real value, i.e. integr ating LDCs into world trad e, was to be done within 
the timeline set out in Hong Kong.  Referring to th e statement made by Brazil, he affirmed that 
developed and developing Member s had differentiated responsibilities in this regard.  He further 
noted that Article XIX provided for appropriate fl exibility for individual developing country Members 
in making commitments.  He also recognized that  developing Members did have responsibilities in 
sectors and modes of particular interest to LDCs, par ticularly in Mode 4.  India had made one of the 
best offers in Mode 4, including all categories de-linked from commercial presence, which certainly 
was of interest to LDCs. 
28. The representative of the United States  stated that her delegation shared the comment made 
by Canada concerning the idea of preferential market  access in services.  She thought that such idea 
was beyond the scope of the preamble of GATS Article IV and paragraph 6 of the LDC Modalities 
whereby effective market access to LDCs was to be provided through negotiated specific 
commitments.  Therefore, a permanent mechanism to provide preferential treatment would be 
inconsistent with Article IV and the LDC Modalities. While recognizing differential responsibilities 
with respect to  LDCs, she stressed that this no tion did not mean that Members could do nothing, but 
only implied that Members had flexibility in doing something of interest to LDCs.  
29. The representative of the Philippines  stated that his delegation was fully conscious of the 
instructions given by ministers in paragraph 9 of the Hong Kong Declaration as well as the timeline 
set out in paragraph 11.  His delegation noted all th e contributions to the issue of LDC Modalities, in 
particular TN/S/W/59.  The presentation made by the LDC Group at the meeting helped his 
delegation achieve a better understandi ng of LDCs' interpretation of Article IV:3.  While recognizing 
differentiated responsibilities on this issue, he reite rated that his delegation had sympathy with the 
needs and interest of LDCs, and was actively exam ining whether it would be in a position to provide 
special consideration to LDCs, particularly in sectors and modes of interest to them.  In addition, this 
issue was vital to his delegation also because there were a number of LDCs in ASEAN which 
represented an important aspect of his country 's relations with the outside world.    
30. The representative of Mexico  reiterated that developed and developing Members had 
differentiated responsibilities on the issue of LDC Modalities, which did not mean that developing 
Members would do nothing.  In order to implemen t the LDC Modalities, all Members had to be pro-
active through making commitments and facilitating mark et access in the interest of LDCs.  This did 
not mean that all Members had to do the same.  Otherw ise, it would be inconsistent with the spirit of 
the GATS and inappropriate for developing Members.   Reiterating his delegation's commitment to the 
LDC Modalities, he noted that the deadline of 31 July  was approaching and that some sort of decision 
had to be taken.  He stressed that his country ha d provided technical assistance to LDCs, particularly TN/S/M/21 
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  to those in its region. In preparing its revised o ffer, his delegation had also taken into account the 
particular interest of LDCs. 
31. Supporting the statement made by Zambia, the representative of Venezuela
 thought that the 
LDCs' proposal was a good way to implement Article IV:3.  
32. The representative of Colombia stated that his capital was examining the LDCs' proposal for 
preferential treatment, which, his delegation be lieved, would have impact on other developing 
Members.  Therefore, his delegation was inter ested in continuing discussions on this matter and 
wished to be included in the consulta tions to be held by the Chair.   
33. In responding to the statement by Mexico , the representative of the United States  confirmed 
that developed and developing Members had di fferential responsibilities on the issue of LDC 
Modalities and did not have to do the same.  
34. The representative of Zambia  requested that the item be kept on the agenda until its full 
endorsement.  He stated that the LDC Group looke d forward to a positive outcome on this matter by 
31 July.  He disagreed with the view that the LDC Modalities were time-limited.  Referring to Article 
IV:3 and the Hong Kong Declaration, he stressed that the LDC Modalities were meant to achieve an 
outcome without time limit and that the mechan ism LDCs hoped to establish would go beyond this 
round.       
35. The Chair  stated that he would continue consultati ons and that the item would be kept on the 
agenda.  He suggested that the Council take note of the statements made.  
36. It was so agreed .   
B. CONSIDERATION OF PROPOSALS ON S&D  TREATMENT PROVISIONS  
37. The Chair  reminded Members that the considerati on of proposals on S&D treatment was one 
of the important tasks of the Council this year. In accordance with the Hong Kong Declaration, the 
Council was to expeditiously complete such consideration with a view to making clear 
recommendations for a decision to be  adopted at the General Council by December 2006.  He recalled 
that at the Council's informal meeting of 8 May,  the African Group had informed the Council that 
they were undertaking consultations and would tabl e a document in this regard for this cluster .  
38. The representative of Morocco  on behalf of the African Group stated that for technical reason, 
the Group was not able to submit their proposal to this meeting.  The Group would submit it shortly and would continue to hold consultations  with other Members on this issue. 
39. The Chair
 suggested that the Council revert to this item at its next meeting. 
40. It was so agreed .   
C. OTHER BUSINESS  
41. The Chair  invited the Chairmen of the Subsidiary B odies to report on the work in their bodies. 
42. The Chair of the Working Party on Domestic Regulation  (WPDR) stated that since the last 
meeting of the Special Sessions of the Council for Trade in Services, the WPDR had held one formal 
meeting on 19 and 20 June 2006 as well as two informal  meetings on 2 May 2006 and on 1 and 2 June 
2006.  At these meetings Members had engaged in informal discussions on the proposals on 
regulatory disciplines under GATS Article VI:4 a nd had addressed organizational issues relating to  TN/S/M/21 
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  the fulfilment of the Hong Kong ministerial manda te.  Discussions had been reflected in the 
Chairman's summaries and had been circulated under his responsibility.  Members had submitted 
several new or revised proposals, which had conve rted proposed elements into legal texts on 
disciplines.  While the submission of proposed texts on disciplines was generating considerable 
momentum in the negotiations, the Working Party was still facing an arduous task of bridging 
important gaps among delegati ons on the content of the disciplines.  At the meeting held on 19 and 20 
June 2006, after another round of thematic discussi ons on proposals, the Working Party had asked the 
Chairman to prepare the first consolidated paper based on the texts proposed so far by Members.  
However, he understood that Members still held diffe rent views about the format and the content of 
the draft he was to prepare. Therefore, to a ddress these differences, he would undertake further 
consultations with all interested parties before presenting the draft. 
43. The Chair of the Working Party on GATS Rules  (WPGR) stated that his Working Party had 
held a formal meeting on 21 June, where the three usual items were on the agenda.  On emergency 
safeguard measures, Members had engaged in discussi ons on the basis of a Note by the Secretariat 
that had summarized main issues raised since the l ast extension of the negotiations in March 2004, as 
well as a room document on the definition of domestic industry from ASEAN Members less 
Singapore.  Well-known divergences of views persisted on this topic.  On subsidies, some views had 
been exchanged regarding a possible working defin ition of subsidy. Further, as suggested by the 
Working Party, in preparation for the next meeti ng, he would conduct cons ultations on reasons why 
Members had not shared information on their subsidi es as provided by Article XV, as well as on ways 
to encourage a thematic discussion on elements of a working definition of subsidy.  On government 
procurement, the European Communities had presen ted a new communication in which they had put 
forward detailed legal text on an annex to the GA TS for procurement in services.  Various delegations 
had reiterated their views that the negotiating mandate did not encompass market access issues.  A number of questions had also been raised, such as the relationship to the plurilateral Government 
Procurement Agreement and MFN application, a nd a number of delegati ons had undertaken to 
comment further at the next meeting give n the recent circulation of the document. 
44. The Chair of the Committe e on Specific Commitments
 reported that the Committee had held 
a formal meeting on 22 June 2006, where it had addr essed its regular agenda items of scheduling and 
classification issues, and had addressed the relatio nship between old and new commitments.  The 
Committee had taken note of the Chairman's sugg estion on the editorial conventions for the 
submission of the second round of revised offers, c ontained in JOB (06)/181.  On the relationship 
between old and new commitments, Members had enga ged in an informal discussion and had agreed 
that changes to commitments emanating from ne gotiations under Article XI X could only amount to 
improvements, or technical rectifications.  Modifica tions or withdrawal of commitments were subject 
to procedures under Article XXI.  Members had discu ssed a number of questions on how to deal with 
the relationship between old and new commitments as well as the issue of MFN exemptions in the 
legal instrument incorporating the results of negotiations.  Under the standing agenda item of 
scheduling issues,  the Committee had continued to examine in informal mode the question of whether 
and under what circumstances residency requirements would need to be scheduled.  Upon request by 
the Committee, the Secretariat had provided a Note (JOB (06)/159) containing an overview of the discussions concerning residency requirements in the context of the development of the Accountancy 
Disciplines and the Scheduling Guidelines.  Under the agenda item of classification issues, the 
delegation of Indonesia had intro duced its revised proposal on the classification of energy services 
(S/CSC/W/42/Rev.2).  The Committee would discuss the solution for a technical error in the Maritime 
Model Schedule at its next meeting. TN/S/M/21 
Page 10  
 
  45. The Chair
 suggested that the Council take note of all the statements made before he adjourned 
the meeting. 
46. It was so agreed . 
 
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