RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/S/W/28 
11 February 2005 
 (05-0581) 
Council for Trade in Services 
Special Session Original:   English 
 
 
 
COMMUNICATION FROM AUSTRALIA, THE EUROPEAN COMMUNITIES, JAPAN, 
NEW ZEALAND, THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, 
KINMEN AND MATSU AND THE UNITED STATES 
 
Joint report on informal discussion on envir onmental services in the context of the DDA  
 
 
 The following communication, dated 9 February 2005, from the delegations of Australia, the 
European Communities, Japan, New Zealand, the Separate Customs Territo ry of Taiwan, Penghu, 
Kinmen and Matsu and the United States is being ci rculated to the Members of the Council for Trade 
in Services.  
 
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  1. In Doha, Ministers agreed to negotiations on the liberalisation of international trade in 
environmental services.  This recognises the cont ribution which increased trade in environmental 
services can make to support policies aiming at improving the global and local environment, by 
facilitating investment and transfers of environmental technologies and knowledge.  
2. Since 1999, WTO Members have discussed ques tions related to the classification of 
environmental services in the CSC, and a number of Members made proposals for a revised classification of environmental services.  Over recent months, the above group of Members has met 
several times to discuss issues related to th e classification as well as the liberalisation of 
environmental services pursuant to the Mandate of Ar ticle XIX, and recalling paragraph 31(iii) of the 
Doha Declaration. 
3. With this communication, the group of Members intends to inform the wider membership of 
the issues they discussed and invites Memb ers to consider, in the appropriate fora, some of the 
questions which arise from the discussion.  
4. Discussions centred around three broad groups of questions: cross-border provision of 
environmental services, the classification of enviro nmental services, and questions related to the 
scheduling of commitments in environmental infrastructure services. 
1. Cross border provision of environmental services 
5. During the Uruguay Round, 48 Members took commitments on environmental services.  
However, a number of these Members left mode 1 'unbound', for lack of feasibility.  The group 
discussed extensively the question of feasibility of cross-border provision of environmental services, 
and in particular the scope of commitments unde r mode 1.  The following issues emerged from the 
discussions: 
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 (a) Full commitments for mode 1 should, in prin ciple, not create problems in most areas 
of environmental services. 
(b) The provision of infrastructure services such as waste management, or waste water 
management, usually requires the physical pr esence of the services supplier in the 
market.  However, consultancy related to such services (e.g. the design and 
development of a waste management plan , consulting on environmentally friendly 
solutions for waste water disposal) can be supplied on a cross-border basis.  Therefore, it would seem that, e.g., consultancy in these subsectors  can be committed 
for mode 1. 
(c) However, since most environmental cons ultancy services are closely linked with 
services supplied under mode 4, commitments  for such consultancy services supplied 
under mode 1 should be accompanied by a clear definition of environmental consultancy services. 
(d) It would also be logical that commitments  should be 'technology-neutral', i.e., if 
future technological developments allow fo r services to be provided on a cross-border 
basis, scheduling language should not prejudge this.  
6. The group is developing an illustrative list of those services which it believes could be 
provided under Mode 1 and will continue work in this area. 
2. Issues related to classification 
7. The group discussed in some depth the proposals for a revision of the classification of 
environmental services. The EC proposal (Job 7612 of 28 November 2000) served as a basis.  Some 
revisions of this classification proposal were consid ered to improve the clarity and consistency.  
8. The definition of 'consulting services' was an ar ea which required some in-depth discussion.  
It would be logical that consultancy services in an area of environmental services (e.g. waste management solutions) may form part of that par ticular environmental services subsector.  If not, it 
would be unclear where such services would be classi fied.  However, as underlined in paragraph 5(c), 
a clear definition of consulting services involved might  be required in order to include such services 
in certain subsectors of environmental services.  
9. Another question related to classification c oncerns potential overlaps of environmental 
services with services such as R&D, technical anal ysis services, engineering, etc., which remain 
classified elsewhere in GATS.  Even though such services can have an environmental "end-use", the 
group would not consider it necessary to create a sp ecific sub-category for these services in a revised 
classification of environmental services.  What is  important is that any commitments cover the 
environment-related activity in the relevant servi ce sectors in addition to 'core' environmental 
services, and that commitments are consistent across these sectors. 
3. Scheduling commitments for environmental infrastructure services 
10. Environmental infrastructure services (e.g. waste management, waste water management) 
may be provided either by the public sector direc tly, under 'exclusive rights' granted by governments 
to one or several operators (including private sector  providers), through other forms of Private Public 
Partnerships (PPPs), or directly from a provider to  industrial or commercial customers.  The group 
fully respects that such infrastructure services are key components of economic development, and that WTO Members have the right to regulate access to natural resources, and to safeguard public policy 
objectives such as universal service provision and the quality of service provided.  We also recognize  TN/S/W/28 
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 that liberalization of environmental services can be supportive of sustainable development.  With 
these principles in mind, discussions in the group  are focusing on  the following questions : 
(a) In which subsectors of environmental services are these forms particularly relevant? 
A more thorough examination of the subsectors that utilise PPPs and the various types of these partnerships would be u seful in order to gain a more thorough 
understanding of the environmental services sectors. 
(b) For those countries wishing to make co mmitments in services provided through 
various forms of public-private partners hips, what should such commitments look 
like?  How can Members clearly indicate th e existence of exclusive rights contracts 
while also indicating that foreign service providers can be gran ted national treatment 
for such contracts?  
(c) Which types of activities or public-private partnerships are to be considered as 
government procurement under GATS Article XIII ?  
4. Conclusion 
11. The group believes that the above issues can be of  interest to all Members.  In order to 
contribute to the objectives of the DDA in the area of environmental services, a focused debate among 
all Members in the appropriate fora (CSC, CTS Special Session, ...) should lead to a better 
understanding among Members, and facilitate their negotiations and make progress on environmental 
services. 
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