RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/S/M/16 
28 October 2005 
 (05-5027) 
Council for Trade in Services 
Special Session  
 
 
 
REPORT OF THE MEETING HELD ON 26, 29 AND 30 SEPTEMBER 2005 
 
Note by the Secretariat1 
 
A. ASSESSMENT OF TRADE IN SERVICES .........................................................................................2  
B. IMPLEMENTATION OF THE MODALITIES FOR THE SPECIAL TREATMENT FOR LEAST -
DEVELOPED COUNTRY MEMBERS IN THE TRADE IN SERVICES NEGOTIATIONS ......................15  
C. CONSIDERATION OF PROPOSALS ON S&D  TREATMENT PROVISIONS .......................................20  
D. PROPOSALS RELATING TO THE NEGOTIATIONS UNDER ARTICLE XIX  OF THE GATS..............21  
E. WORK OF THE SUBSIDIARY BODIES – REPORTS BY CHAIRPERSONS ........................................31  
F. REVIEW OF PROGRESS , INCLUDING PURSUANT TO PARAGRAPH 15 OF THE 
GUIDELINES FOR NEGOTIATIONS ..............................................................................................35  
G. ORGANIZATION OF FUTURE WORK...........................................................................................35  
H. OUTLINE OF THE CHAIRMAN 'S REPORT TO THE TNC ...............................................................79  
I. OTHER BUSINESS ......................................................................................................................81  
J. APPOINTMENT OF A NEW CHAIRPERSON OF THE SPECIAL SESSION OF THE COUNCIL 
FOR TRADE IN SERVICES ...........................................................................................................81  
 
 1. The Special Session of the Council for Trade in Services held a formal meeting on 26, 29 and 
30 September 2005.  The agenda for the meeting, ch aired by Ambassador Alejandro Jara of Chile, is 
contained in document WTO/AIR/2660. 
2. The Chairman
 drew the Council's attention to the report of the last meeting contained in 
document TN/S/M/15 and TN/S/M/15/Corr.1.   
3. Referring to the agenda for the meeting, the Chairman proposed that the Council adopt the 
agenda with the addition of item J, "Appointment of  a New Chairperson of the Special Session of the 
Council for Trade in Services."  He also suggested  that the Council take up items F and G together. 
4. It was so agreed . 
5. Providing an update on the state-of-play, the Chairman  said that since the last meeting, one 
initial offer had been received, bringing the total nu mber of initial offers tabled to 69 (representing 93 
Members).  If one excluded LDCs, the number of of fers outstanding was 23; if LDCs were included, 
54 offers remained outstanding.  Since the July meet ing, four new revised offers had been received, 
bringing the total to 28 revised offers received (re presenting 52 Members).  Excluding LDCs, some 63 
                                                      
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/16 
Page 2  
 
 revised offers remained to be subm itted.  The Chairman recalled that at the two previous meetings he 
had made presentations on the factual assessment of th e state-of-play in the negotiations.  As only one 
new initial offer and four new revised offers had b een submitted since the last meeting, he said he 
would not update this presentation.  However, he re gretted that he could not make such a presentation 
because so few new offers  had been submitted. 
A. A
SSESSMENT OF TRADE IN SERVICES  
6. The Chairman  said that he was pleased to welcome to the meeting Ms. Michele Klein 
Solomon, Deputy Director, Migration Policy, R esearch and Communications of the International 
Organization for Migration and Mr. Carlos Prima Braga, Senior Advisor, International Trade 
Department of the World Bank Office in Geneva.  He recalled that at the Council's meeting on 
27 September 2004, Ms. Klein Solomon, Mr. Braga a nd Julia Neilson had presented the report of the 
first trade and migration seminar, which had been held on 12-14 November 2003.  A follow-up 
seminar had been held on 4-5 November 2004, co -sponsored by the IOM, the World Bank and the 
WTO.    
7. A representative of the Secretariat  recalled the history of the organisation of the November 
2004 trade and migration seminar.  He said that it had been a follow-up seminar to one that had been 
held in 2003 in order for immigration and trade of ficials to exchange views.  The second seminar 
sought to look into the approaches taken in regi onal and bilateral agreements with respect to 
temporary stay of labour from various countries as well as the arrangements between the home and host country and how cooperation could lead to f acilitation in the cross-border movement of natural 
persons.  He said that the purpose of the seminar was essentially to learn lessons from these 
approaches and see if any benefits could be gained for the mode 4 negotiations.  He said that these 
agreements normally went far beyond what was considered as mode 4 movement under the GATS.  
An important introduction to the seminar had been to clarify what was meant by mode 4 under the GATS so as to help focus on the relevant parts of these arrangements.   
8. The representative of the International Organization for Migration
 (IOM) reported on the 
jointly organized IOM, World Ba nk and WTO seminar that took place in October 2004.  The event 
had brought together, for the second time, trade and mi gration officials to discuss what could be learnt 
of relevance to mode 4 from existing approaches to  managing the movement of people.  An earlier 
workshop, organised by the OECD, the World Bank  and the IOM, had taken place in 2003, and had 
been the first gathering attempting to bridge the ga p between trade and migration officials.  The 2004 
seminar had focused on specific examples of managi ng the movement of temporary migrants, at the 
unilateral, bilateral and regional le vels.  It had looked at actual practical experiences of governments 
in managing the movement of people, trying to draw sp ecific lessons relevant for the mode 4 context.   
9. She recalled the five key elements of the seminar.   First, the setting of the trade and migration 
context, which was particularly important give n that the GATS was not a migration agreement;  
second, the examination of unilateral, bilateral a nd regional approaches, including under regional free 
trade agreements;  third, the analysis of the nati onal implementation of international trade obligations, 
focusing specifically on how trade commitments were  implemented in national regulatory frameworks 
relating to the movement of people;  fourth, the pe rspective of employers and trade unions;  fifth, the 
implications of all these element for mode 4. 
10. As for the trade and migration context, she noted that the mode 4 context excluded 
consideration of migration-related issues such as the granting of citizenship, visa policies and 
practices.  Migration agreements, regulations and experience were nonetheless relevant, because 
mode 4 movement was a subset within a subset within  a subset of migratory movements.  In the world 
there were 185 million migrants.  Of those, the International Labour Organization estimated that  TN/S/M/16 
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 85 million were people who migrated for work.  Within those 85 million there was a further, 
unmeasured subset of people who migrated for work temporarily, and within that subset there was yet 
a further subset which qualified as mode 4 m ovement.  The actual numbers were unknown and 
probably not nearly as significant as the 185 million worldwide, but the value and potential economic contribution of that movement  was quite substantial.   
11. The purpose of the seminar was to look at th e regulatory framework, and specifically at 
national migration policies and pr ocedures, as well as cooperative measures adopted, within which 
mode 4 took place.  Because, while mode 4 was not a migration agreement, the relevant regulatory 
framework were the national-level migration schem es adopted by governments.  National migration 
legislation had developed apart from the mode 4 system, which meant that national migration 
legislation did not use the same terms, concepts , and definitions as mode 4.  A temporary service 
provider was not a concept that appeared in mo st national domestic legislation implementing the 
movement of persons.  In fact, in many cases it was qu ite difficult to identify the mode 4 component 
in national legislation.  For that reason, the se minar had brought the trade and migration communities 
together, to try to identify more precisely where th e overlap fell so that existing mode 4 commitments 
could be implemented more effectively, and to clar ify what could be done outside the mode 4 context 
in the migration world, which might help in terms of future commitments under mode 4.   
12. As for the perspectives of employers and trade unions, their views were well known.  
Employers were looking primarily for more liberalized and predictable rules for the admission of foreign workers.  At the seminar they had expressed  the view that, for the purposes of their needs and 
interests, the distinction between services and manufacturing sectors was artificial, as was the 
distinction between temporary and permanent moveme nt.  In contrast, trade unions were focused on 
protecting the interests and the rights of migrant workers, and particularly those of lower skilled 
workers. There were currently very few mode 4 commitments related to lower skilled workers;  
nonetheless, possible further expansion of the co mmitments might cover a broader range of both 
sectors or levels of skill. 
13. In terms of the lessons learned, the most important one that came out of the seminar was that 
looking at the ways in which governments manage d temporary labour migra tion was of substantial 
relevance for mode 4, whether in the context of th e mode 4 negotiations or in terms of managing the 
movement of people more generally.  Specifically, the need to continue the dialogue between trade 
and migration officials was identified as essential for the understanding of the concepts and the 
priorities involved, and for working together more effectively, dispelling the stereotype that trade 
negotiators were interested in breaking down barri ers and migration regulators in putting them up.  
This dialogue was critical so that mode 4 could find  its echo in national legislation, with its concepts 
and definitions better integrated a nd existing mode 4 commitments eff ectively implemented.  In this 
regard, the need was also iden tified for transparency of information about national migration 
procedures that were relevant to trade in servi ces and the movement of service suppliers.  The IOM 
was in the process of creating a database, a website with publicly available information about national 
migration policies, regulations and pr ocedures relevant to mode 4.   
14. Specific lessons could also be learnt from the examples presented at the seminar.  Discussions 
had focused on unilateral approaches, such as th e United Kingdom's and the Philippines' temporary 
schemes;  bilateral approaches, such as the agreement that Cana da had for seasonal agricultural 
workers with much of the Caribbean;  and on  regional agreements, such as NAFTA and APEC 
business visitor card.  The key lessons that could be  drawn concerned, first, the pre-entry screenings 
of the potential movers' skills and qualifications, as well as the security checks, that existed under a 
number of these schemes, and which could be useful in  the mode 4 context even if they were to be 
addressed outside the scope of the mode 4 negotiations themselves.   Second, under some of the 
bilateral labour migration agreements specific me chanisms were put in place to link access to the 
labour market to indicators, such as the unemploymen t rate or its geographical distribution, to take TN/S/M/16 
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 account of the potential implications for the domestic labour markets of providing greater access.  
Third, on methods to ensure that temporary move ment actually remained temporary, interesting 
examples had emerged from the discussion, includi ng the posting of bonds or keying the ability of a 
particular employer to have continued access to a market to whether or not it had a perfect success ratio in terms of returns of people.   
15. To draw on the lessons learnt in managing tempor ary labour migration, Julia Nielson, then of 
the OECD, and currently of the World Bank, had sugg ested that templates could be developed.  These 
could look, firstly, at the question of transparen cy of entry requirements, ensuring that entry 
requirements and procedures be known and availa ble to potential service suppliers and that 
information was exchanged between the trade and migration officials.  Second, templates could 
include flexible access commitments, linking the level of access to unemployment ratios in the 
domestic market, either by sectors or with adjustable quotas.  Thirdly, templates could comprise a model schedule or GATS visa, to improve predic tability;  without suggesting that all countries 
develop and adopt the same migration legislation to  address mode 4, some common elements could be 
found that would apply across the board and effectiv ely serve as benchmarks.  Fourthly, the question 
of enforcement and return guarantees could be addressed  by such templates, to ensure that temporary 
stay remained temporary, possibly drawing from elements contained in bilateral and regional 
agreements.  Finally, the templates would cover the coordination between trade and migration policy 
officials to keep the dialogue going.  It was suggested  that such templates could be of relevance in the 
mode 4 context so that market access would be granted to all Members that met the criteria identified therein.   In the IOM context, templates were view ed as something that could be developed outside the 
mode 4 context to promote better management of migration, which ultimately might also benefit 
WTO discussions. 
16. In terms of follow-up to the seminar, the IOM representative said that the World Bank had 
been funding further IOM research looking into some of the schemes discussed at the seminar, as well 
as some others, to see what more could be learnt in  terms of managing temporary labour migration.  
Specifically, a questionnaire had been developed and distributed to migration regulators dealing with 
temporary movement to assess various bilateral appr oaches on a whole host of issues.  The results of 
this research would be ready in a few months.  The IOM was also hoping to develop the template idea 
to look at how temporary labour migrat ion might be made more effective. 
17. In concluding, the IOM representative acknow ledged that the WTO was working under a 
different timetable than her organization, as the IOM's migration-related work continued in an 
informal setting and without the negotiating round as its  principle impetus.  However, she noted that 
the IOM envisaged continuing working on this issue as something where she hoped progress could be achieved.  
18. The representative of the World Bank
 said that the seminar had been a learning experience.  
Whereas the cliché was that trade negotiators we re eager to dismantle barriers while migration 
officials were bent on creating new ones, the exchanges between the two communities during the 
2003 and 2004 seminars had shown that the migration community actually moved faster than the trade one.  He said that the World Bank was undertaking a lot of work in the area of migration;  the new "Global Economic Prospect", to be launched on 15 November, woul d be on that topic.  As for 
comments about indicators of the significance of migra tion, he pointed to the fact that the stock of 
international migrants had doubled, as a share of industry or country population, between 1970 and 
2000 and that remittances were around $160 billion, roughly twice official development assistance.  
Whereas mode 4 was only a small portion of migration, it was obviously interconnected with it.  He noted that the concerns most frequently raised by  the migration community with respect to mode 4 
concerned the question of return, the impact of m ode 4 movement on domestic labour markets, issues 
of abuse and the lack of flexibility and binding natu re of multilateral obligations.  For that reason, he 
felt that some of the suggestions raised in the presentations and in the seminar report represented  TN/S/M/16 
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 innovative thinking on how to address some of th e concerns expressed and thought that they might 
provide movement in the negotiations.   
19. The representative of India  stressed the importance of the interaction between the trade and 
migrations communities, which was born out by the presence of many migration officials in the Special Session and in bilateral meetings.  As for the suggesti ons about pre-screening and more 
generally about imposing obligations on the sending Members, he noted that, if there were a better 
separation between mode 4 movements and migration, this would not be necessary.  In the absence of 
such separation, these suggestion might need to be considered, by looking at what had been done at 
the bilateral and regional levels.  In a GATS context, however, su ch suggestions posed challenges 
both in terms of MFN treatment and in terms on imposing obligations on sending countries.  
Nevertheless, he felt that the key message was that guaranteeing the temporariness of the mode 4 
movement, either on the part of the host country or  the sending country, was what was truly essential. 
20. The representative of Guatemala
 said that the seminar had highlighted the importance of 
mode 4 trade.  She stressed the importance of dr awing upon many of the seminar's conclusions, and, 
in particular, noted that the bilateral schemes pr esented at the seminar were making use of very 
successful mechanisms that shoul d enable Members to advance in their mode 4 discussions.  She 
asked for further information regarding the diffe rent types of incentives that were in place to 
guarantee the return of temporary migrants. 
21. The representative of Mexico  expressed satisfaction with the seminar, saying that it had been 
a positive experience and that useful lessons had been  learnt from it.  He noted that, while 85 million 
people were migrating for work purposes, there w as no breakdown of how many were migrating on a 
temporary basis and how many were going to provide  services.  More information would be needed 
on this, as well as on the origin and destination of mi grants.  He called for caution in linking migration 
to mode 4 trade.  As for the relationship between unemployment and temporary migratory 
movements, again he expressed concern with focusing discussions on this issue, as, with or without an 
influx of foreign workers, unemployment would always  exist.  Instead, he said that the debate should 
focus on the economic and social, as well as cultural,  benefits that immigrants brought to the host 
country, as highlighted in the work by the World Bank.  In this way it would be easier to deal with the 
regulatory framework and to adopt a different m odel when working on regulatory measures in the 
area of immigration.  
22. The representative of Pakistan  stressed that there was a key difference between migration and 
mode 4, as people moving under mode 4 knew that  they had to return, whereas migration was 
undertaken as a permanent movement.  In this rega rd, she sought clarifications on how one of the 
seminar conclusions, i.e. that there was an artificial distinction between mode 4 and permanent migration, had been reached.  The representative of Argentina
 wondered if the seminar had addressed 
the issue of irregular migration. 
23. The representative of the United States  stressed the importance of the seminar in keeping the 
dialogue going between trade and migration officials.   She underlined the distinction between mode 4 
and migration agreements, and recalled that the GA TS was not a migration agreement and that mode 
4 dealt with a narrow subset of temporary labour migr ation.  She had appreciated that the seminar had 
made the distinction between mode  4 commitments and requirements re lated to visa applications.  She 
further recalled that, while immigration-relate d policies might have an impact on mode 4 
commitments, they extended far beyond trade agre ements, to address the long-term management of 
migration, which included issues of security and protec tion of rights.  These factors had to be borne in 
mind when seeking greater liberalization in mode 4. 
24. Another representative of the United States said that the seminar had illustrated the 
complexity of the social and economic issues that  needed to be taken into consideration when TN/S/M/16 
Page 6  
 
 discussing mode 4, and that one of its conclusions was that further discussion was necessary between 
migration and trade officials.  His delegation c oncurred with this conclusion, as a number of the 
questions involved were very complex and were  sometimes over-simplified when the debate was 
restricted to mode 4 commitments.  The seminar high lighted that the regulation of the flow of labour 
was distinct from the temporary entry of service supp liers.  This appeared to be most effective in the 
context of bilateral and regional agreements, wher e all parties accepted certain responsibilities for 
insuring that migration was temporary.  However,  in a GATS context this created difficulties with 
regard to the MFN obligation and the security and pr edictability of commitments.  Hence, while many 
of the lessons learnt might be crucially important for the overall picture of migration, it remained to be seen how they could be integrated into the GATS structure.  For example, along with the pre-
screening issues, the idea of having more flexib le access commitments or adjustable quotas could 
prove to be problematic.  Still, he had found th e discussions to be very fruitful and the ongoing 
contact between migration and trade officials to be very useful.   
25. He then went on to provide a factual comment about the materials circulated after the 2003 
seminar.  He said that the diffe rential treatment under the NAFTA w ith respect to visa requirements 
for Mexicans and Canadians had been eliminated on 1 January 2004 pursuant to the terms of the 
NAFTA.  He noted that the management of econo mic migration was a challenge that was being 
addressed on a global basis;  attempts were underway in North America, in South America, and in almost all cases solutions were only beginning to em erge, pointing to the complexity of the issues 
involved and to how they affected both developing  and developed countries.  As for comments made 
about the importance of remittances in indicating th e potential of the value of mode 4 commitments, 
he stressed that these statistics provided no indi cation of the share attributable to temporary 
movement, services activities or illegal migrants, and were hence not useful in gauging the potential 
of commitments under mode 4.   
26. The representative of Senegal
 had a suggestion with regard to the follow-up work to the 
seminar.  He had noted that one of the problems highlighted was that of identifying mode 4 in the 
migratory movement.  He wondered if this was not  an area where the IOM, the World Bank and the 
WTO could collaborate, to establish tools, including sta tistical ones, to help countries deal with mode 
4 in their management of migration.  Such tools could help to arrive at a better understanding of the 
phenomenon and to consider the different aspects that  needed to be implemented from a national and 
multinational level. 
27. The representative of the European Communities  welcomed the regular contact between the 
migration and trade communities.  He said that the context for the discussion was usefully set by the 
notion that mode 4 was a subset of a subset of a subset of migration.  He felt that bilateral and 
regional approaches might present some attractive feat ures, compared to the GATS, in dealing with 
mode 4 for both sending and receiving countries.  On remittances, while he acknowledged that there 
was uncertainty as to the size of the phenomenon which was attributable to mode 4, he said that the 
GATS negotiations might be relevant regardless, in the sense that the liberalization of other services 
sectors, such as financial services, could facilitate the flow of remittances. 
28. Commenting on the role of the IOM and the World Bank, the representative of the United 
States  said that it had usefully encouraged dialogu e and had provided Members with a forum for 
exchanging views outside the WTO context.  Howeve r, while the points raised by the IOM and the 
World Bank were useful, she expressed concern w ith other institutions playing a mediating role 
between trade officials and regulators, as it was up to  each individual Member to evaluate the issues 
raised and to discuss them with its regulators.  Ho wever, she thought that, with regard to Senegal's 
intervention, cooperation could still be fostered on a bilateral basis, in workshops and through the 
presentations that were made to the Special Session.  TN/S/M/16 
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 29. The representative of Djibouti  reiterated what the representative of Senegal had said 
regarding areas where the IOM, the World Bank and th e WTO could usefully cooperate.  He stressed 
the importance of developing a spirit of research a nd support within the orga nizations dealing with 
mode 4 issues and called for the establis hment of mechanisms for cooperation. 
30. Responding to the remark made by the United States, the representative of Senegal  explained 
that his comment was not that other international organizations should interfe re in the negotiations;  
he had just wanted to express his appreciation fo r the quality of the work and discussions at the 
seminar and to highlight one of the problems that his delegation had encountered, namely that of 
identifying the contribution of mode 4 to migratory flows and to remittances.  His comment was in the 
sense of encouraging cooperation between the IOM, the World Bank and the WTO to find solutions to 
issues of such a technical nature, so that Members' discussions could take place on a well informed 
basis.   
31. The representative of the IOM  responded to some of the points raised.  With regard to the 
question from the delegation of Guatemala about the kinds of incentives that could be put in place to 
ensure return, she provided th e example of Canada, where employers lost the ability to send 
temporary, seasonal agricultural workers if the worker s that they had sent previously did not return, 
and of other countries or companies that required the posting of bonds until a person had returned to 
the country of origin.  The delegation of Mexico, amongst others, had raised the question of how to 
identify the number of temporary service suppliers as well as the particular economic gains associated 
with mode 4 movements.  In this regard, she sai d that quantifying the number of temporary service 
supplier was problematic because they did not fit into  the categories that were measured.  However, a 
working group had been created by the UN and a number of other international organizations 
precisely for this purpose.  With respect to th e question from Pakistan, she explained that the 
comment about the distinction between permanent a nd temporary movement be ing artificial had been 
made by the employers' representative, and did not represent a conclusion reached by WTO Members.  The delegation of Argentina had raised a question abou t irregular migration, to which she replied that, 
whilst not an issue of direct concern to mode 4, addressing irregular migration outside the WTO 
context might increase Members' willingness to undertake mode 4 commitments and have a positive impact on the negotiations.  The IOM was looking specifically into the issue as part of the further research commissioned by the World Bank.  Responding to the point raised by the delegation of Senegal about technical work that could be undertaken  by international organizations, she replied that 
the IOM role was to help countries develop legisl ation, regulations, and the capacity to manage 
migration, particularly in a cooperative way, both at the national and regiona l levels, and that her 
organization would be happy to work more closel y with Members outside the mode 4 context to 
develop more effective capacity in this area.   
32. Addressing some of the comments made, the representative of the World Bank
 stressed the 
importance of the dialogue between the trade and migr ation communities to help dispel the cliché that 
there was nothing more permanent than temporar y movement.  As for the comments made about 
statistics, he acknowledged the lack of precise da ta, but added that data available nonetheless 
provided an indication of the potential of mode 4 trade.  He also pointed out that 60 per cent of migrants were moving from developing countries to ot her developing countries and that 45 per cent of 
the remittances were south/south.  Finally, he agr eed that there was a tension between looking at 
instances of pre-screening and bond-postings in bilateral agreements a nd a negotiation under the 
WTO, where MFN was the point of departure;  howev er, he felt that these were issues that needed to 
be addressed because the way they were perceive d by the migration community would inevitably 
influence the debate on the trade side. 
33. A representative of the Secretariat
 stressed that a clear unders tanding existed as to what was 
mode 4, based on the stay being temporary, for th e purpose of supplying a service, the natural person 
being either a service supplier or an employee of a service supplier and, in the latter case, the service TN/S/M/16 
Page 8  
 
 supplier being a service supplier of another Member, not of national origin.  All those distinctions 
were highlighted during the seminar and were clear.  The problem seemed to lie in reflecting such 
definitions, on the basis of which commitments we re negotiated, in the domestic regulatory systems 
that implemented them, and that was where the ga p between the trade and the migration community 
needed to be bridged.  That gap also resulted in a nother gap with respect to statistical information.  
National systems did not contain distinctions based  on GATS definitions and therefore the collection 
of statistical information was not guided by tho se definitions.  When numbers about remittances and 
migratory movements were discussed, there was no separate distinction made for mode 4.  Finally, the seminar had held a very useful discussion with r espect to possible cooperative arrangements between 
source and host countries and the possibility of the ho st country applying certa in conditions on source 
governments.  One of the suggestions made was th at governments could impose such conditions in an 
MFN-consistent way.  A faster-track access to the host country could then be  granted only to persons 
coming from those source jurisdictions that fulfilled the conditions. 
34. The Chairman
 concluded that the seminar had been an important contribution and that its 
follow-up in terms of additional research should help  Members move forward with their discussions.  
He acknowledged that mode 4 could be a sensitive issue and understood Members' prudence in this 
regard, but he felt that progress needed to be achieve d as there were real benefits that could be reaped 
from further liberalization in this mode of supply.   He also noted the usefulness of involving all 
stakeholders in the debate.  He added that the Council would take note of  the statements made.  
35. The representative of Rwanda  introduced the room document on the "Assessment of Trade in 
Services in LDCs: The Case of Rwanda".  Rwanda thought it important to highlight the challenges the 
LDCs faced in the services negotiation by sharing pr eliminary results of an assessments of trade in 
services that Rwanda had conducted with the assist ance of UNCTAD.  Rwanda’s economy was still 
largely an agrarian one, in which the agricultu ral sector generated around 50 per cent of GDP and 
employed 87.3 per cent of the total active population, mainly in subsistence agriculture.  However, the 
long-term view of the national development strate gy, as contained in the Rwanda Vision 2020, was to 
turn the national economy from an agrarian one  into a services economy.  For example, the 
Government of Rwanda had identified the Inform ation and Communications Technology sector (ICT) 
as a pivotal sector for this undertaking.  It was th erefore important for Rwanda to elucidate how the 
services negotiations could contribute to this nationa l policy objective.  The document was structured 
as follows:  it started with an assessment of th e domestic services economy, including employment in 
services sectors, followed by a section on trade in ser vices, one on Rwanda's regulatory situation, and 
concluded with a section cont aining key observations.   
36. Starting with the domestic economy, and alth ough it proved difficult to get accurate data 
given that the national statistics office was only being established, the paper found that services, 
including non-market activities, represented 47 per ce nt of Rwanda's GDP in 2003, the year when the 
most recent available data could be found.  Non-ma rket activities that were usually included in what 
was calculated as services contribution to GDP represented almost 18 per cent of GDP.  These 
included ownership of dwelli ngs, representing imputed value for home ownership, public 
administration and defence, and the activities of Non-Governmental Organizations.  Therefore, 
market services contributed only around 29 per cen t of GDP, and this contribution had remained 
almost steady since 1990 when it represented 26.7 per cent of GDP.  Having identified services as a key growth sector, it was the Government of Rw anda’s intention to increase the composition of 
services in the national GDP, by, inter alia , developing the domestic capacity to supply services.  This 
was also in line with the various reforms being undertaken through the Vision 2020, which contained 
development targets in Education, Health, ICT the Private Sector Development and other sectors.   
37. Turning to the findings on employment in servi ces, in Rwanda the services sector, including 
non-market activities, only employed 10.8 per cen t of the economically active population.  
Employment in the service sector was concentrated in only a few service sectors.  The categories of  TN/S/M/16 
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 commerce and repair work, other services, construc tion, and transport services constituted 92 per cent 
of total market services employment.  The private sector in other service sectors was not well developed to employ a significant percentage of  the economically active population in Rwanda.  The 
national development priority for Rwanda was to  increase national employment in services through 
the development of the services sector by building capacity and improving Rwanda’s competitiveness 
in trade in services, including through infrastruct ure development.  The capital city of Kigali, 
however, presented a different structure of employment than the economy as a whole, as services in the country were highly concentrated in this urba n area.  In this case, public administration accounted 
for 11 per cent of total employment, while market services represented 66 per cent of total urban employment in Kigali.  Increasing national employment in the services sector required the 
government to develop and implement rural deve lopment policies and programs.  The Rwandan 
government was still in the early stages of developi ng such policies and programs.  It was necessary 
to note that in the Kigali area the informal sector  employed a significant number of the economically 
active population.  To illustrate, 42.3 per cent of the economically active population was self-
employed, mainly in the informal sector, and an add itional 2.2 per cent were unpaid family workers.  
This gave a clear picture of the low degree of de velopment of formal services activities in Rwanda 
where the informal sector seemed to dominate.  The ICT sector had been identified as a priority 
service sector in the national development strategy;  it was therefore envisioned that these services would lead to higher employment in the formal sect or.  However, implementation of the strategy was 
still at an early stage given that it was a long-term plan. 
38. As for trade in services, Rwanda suffered from a high deficit.  Currently, services trade took 
place in a South-South form.  Rwanda was a net importer of services, sustaining a trade deficit which 
had remained almost constant since 1998 until 2003, the year of the latest data available.  In almost 
every year since 1998, the deficit generated by priv ate services trade had practically absorbed the 
value of total Rwandan exports of  goods.  During the period 1998 -2003, the accumulated deficit on 
services trade had been 87.5 per cent of the accumula ted total goods exports.  The main services 
imports were freight and insurance and other transport services closely related to trade in goods.  The 
main services export of Rwanda was travel, represe nting tourism-generated income.  However, the 
tourism balance had not been consistently favorab le to Rwanda, as travelers from Rwanda had spent 
more abroad than tourists in Rwa nda during four of the six years cove red by the data.  Data on foreign 
direct investment in services activities allowed for an  evaluation of trade in services through mode 3.  
Total investment in the Rwandan economy, measu red by registered investments, amounted to 
61 million US dollars in 2003 and 216 million US dolla rs in 2004.  According to this source, FDI 
represented only 20 per cent of all investment in th is period.  According to data provided in the 
UNCTAD World Investment Report 2004, the inward stock of FDI in Rwanda in 2003 amounted to 
268 million US dollars, up from 213 million in 1990.  Out of the 47 Sub-Saharan African countries, 
with the 268 million US dollars, Rwanda had the 12
th lowest FDI inward stock in 2003.  FDI inflow to 
Rwanda had not been very dynamic in recent years.   From a yearly average of 3 million during the 
period 1992-1997, FDI inflows had grown to a yearly  average of around 5 million US dollars during 
the period 1998-2003.  The information provided by Rwanda Investment and Export Promotion 
Agency on registered investment projects showed a total 52 FDI projects up to 2004.  Of the total projects, 18, or 34.6 per cent, corresponded to servi ces sectors, of which 11 were operational.  From 
these FDI operational projects in services, 10 were from other developing countries and one from a 
developed country.  Investment in services from de veloping countries represented over 90 per cent of 
all services FDI projects.  Even though the Rw andan Government had established the Rwanda 
Investment and Export Promotion Agency, that ha d established aggressive policies as well as offered 
substantial incentives to attract investment, and also undertaken privatization processes in several 
sectors, there had been, notably, minimum participati on from developed countries.  This was also true 
in the sectors that Rwanda had made commitments on in the Uruguay Round, where increases in FDI 
were not realized as a result of the bound commitments. TN/S/M/16 
Page 10  
 
 39. Moving on to Rwanda's regulatory base, she said that the overall regulatory capacity of 
Rwanda deserved special attention.  Although steps had been taken to enhance the regulatory 
capabilities with the establishment of the Rwanda Utilities Regulatory Agency (RURA), there was 
still a lot to be done.  The agency was created by Law in 2001, and it had beco me operational in 2003.  
The RURA is empowered both to regulate public ut ilities and to enforce regulation, and it was also 
entrusted with addressing competition issues in the sectors under its purview.  According to the Law, 
"public utilities" meant natural persons, enterprise s or organizations which provided the following 
services: (a) telecommunications networks and/or telecommunication services; (b) electricity; (c) water; (d) the removal of waste products from reside ntial or business premises; (e) the extraction and 
distribution of gas; and, (f) persons and goods transp ort.  RURA had to enforce regulation and address 
competition in all these activities.  Currently, RU RA was being operationalised both in terms of 
physical assets and staff.  At that moment, it employed in total only about 35 persons (including administrative staff), that were responsible for unde rtaking all the tasks entrusted to the institution.  
However, until then, only the Law regulating teleco mmunication was in effect and had only recently 
been developed.  All other legal instruments regul ating the other public utilities were being developed 
or were under consideration by the decision-maki ng levels of Government .  The Government of 
Rwanda had initiated a law reform exercise where most laws, including in services such as banking, 
insurance, and tourism were largely still in the dr afting process.  In addition, the Government of 
Rwanda had only recently established the Insurance Commission, to regulate the insurance sub sector, 
that was yet to be functional.  The National Bank of Rwanda, which was the central bank, regulating 
the banking sub-sector, was also still undergoing a refo rm process to upgrade its capacity to carry out 
this task, including through the use of international standards.  Sim ilarly, the professional associations 
in Rwanda were very informal and absent in many professions.  Many of the existing professional 
associations were in the process of developing  operating policies and procedures as well as 
professional standards.  Rwanda n eeded to undergo furthe r development and refo rm of its regulatory 
framework in various sectors before it was able to confidently undertake binding commitments in the 
GATS.  The above issues had also be linked to th e rule-making negotiations, particularly domestic 
regulation, where Rwanda and other LDCs would find it difficult to enforce disciplines that were 
beyond their weak regulatory capacities.   
40. Finally, she turned to the key observations  drawn from the assessment undertaken.  She 
started by noting that Rwanda's long-term national development st rategy was to turn the economy 
from an agrarian to a services economy.  However,  although the contribution of the services sector 
was slowly increasing, market services currently cont ributed only a small percentage of total GDP.  
Therefore, the services sector did not yet play a si gnificant role in the economy.  As a result, the 
services sector employed a very small percentage  of the economically active population with the 
concentration mainly in the informal sector.  Em ployment was normally concentrated in the sector 
that did not require very high skills and it was the go vernment's strategy to change that.  The Uruguay 
Round commitments undertaken by Rwanda under the GATS had not yet produced expected benefits 
to Rwanda, particularly in mode 3.  Although an in-depth analysis of the Rwandan services economy 
was still being undertaken, the very low capacity of Rwandan institutions and the absence of a sound 
regulatory framework and national services development plans at the time of the Uruguay Round made the current commitments not necessarily rele vant to the national development objectives in 
services.  This lesson had to be taken into account so  that Rwanda's future commitments were in line 
with its development strategies.  This include d the need to precede commitments with a sound 
regulatory framework.  Rwanda's regulatory and legal base was still very weak and the legal 
framework was still only being developed.  In additi on, Rwanda experienced supply-side constraints.  
Even with the current capacity to supply services su ch as in tourism, it was still difficult for Rwanda 
to enter foreign markets and access to distribution ch annels had been very minimal.  National services 
policies were only now being devel oped or implemented, particularly  to implement services capacity 
and employment.  Rwanda's Nati onal Office of Statistics was onl y being developed and as such 
collection of data was still difficult.  Rwanda needed adequate services assessment, policy space, 
flexibilities and institutional capacity building to ach ieve development objectives as recognised in the  TN/S/M/16 
 Page 11 
 
 
 special modalities for LDCs, so as to more meaningful ly participate in international trade in services 
under the GATS.  Therefore, there was an important  need for technical assistance, for Rwanda to 
improve capacity to supply services as well as to regulate services at the national level.  Finally, 
Rwanda needed meaningful market access to foreign markets in the few sectors that it was currently 
able to supply services in order to correct the trad e deficit as well as to fulfil its national development 
strategy.  Given all of the above, the requests received from other Members had to take into 
consideration the level of development of the servi ces sector in Rwanda and the various reforms being 
undertaken to prepare Rwanda to more effectivel y participate in the request/offer process of the 
negotiations.    
41. The representative of Cuba  said that international trade in services had not only grown in 
volume terms but also when it came to its incr easing importance for a number of countries in the 
world.  Therefore, the assessment had to be carri ed out looking at the great technological, economic 
and social disparities between different Members.   It was understandable that in the on-going 
negotiations there were many Members that were  considering very cautiously the proposals for 
additional measures for the acceleration of the li beralization of trade in services, the various 
agreements these could arrive at, and also the impa ct of the various disciplines negotiated under the 
GATS.  Free services trade would have to be est ablished very progressively, and Members needed to 
work very carefully and not simply allow countries to  apply the rules of Adam Smith.   When it came 
to the various activities of interest to developing co untries, he had noted that there was resistance on 
the part of developed countries.  For instance, in agriculture, the United States and the European 
Communities did not want to end to their subsidy schem es.  In addition, there were many restrictions 
in the markets of industrialized countries.  Some 1.2 million Latin American and Caribbean 
professionals were working in the United States and the United Kingdom and their training costs amounted to some 36 billion dollars.  The phasing-in of free trade in services had therefore been very 
gradual.  The concentration of world trade in ser vices with a number of developed countries and very 
powerful international companies did not provide Cuba  with the certainty that its benefits would be 
shared in a fair way.  It would be good if there c ould be fair trade in services, as should be the case in 
goods trade. 
42. The various processes engaged in by WTO Members had to make it possible to solve the 
major problems facing humanity, which were problems that developing countries were facing in particular.  He hoped that the WTO negotiations  would make it possible to eliminate illiteracy, 
suffered by millions of people around the world, hunge r, suffered by some 900 million citizens of the 
world, and also to close the technological gap.  He noted that the United Nations had been plunged 
into discredit, that rich countries did not wish to meet the Millennium development goals.  The credibility of the WTO could be damaged if ther e was no true multilateralism, if development as a 
theme was not given a high priority, if Members di d not focus on special and differential treatment 
and they did not bring an end to the selective embar gos brought to bear against a number of countries.  
Furthermore, the information that had been provi ded until then was not enough to make it possible to 
have a clear understanding of the impact of liber alizing services trade.  There were some positive 
sides to it, but the situation for developing countries was not so bright.  There was not sufficient information to state very clearly that the liberali zation of trade in services was positive for developing 
countries.  A number of Members had asked Cuba to open up its services sector.  However, the 
unilateral action of the United States, which called for liberalization but at the same time applied 
financial and trade embargos, affected Cuba's  economic activities, including in services and 
irrespective of the region of the world.  The negotia tions had to comply with the spirit of Resolution 
3201 adopted by the United Nations in May of 1974 to provide for a new economic order based on inter-dependence, common interest, shared inte rest, and also the communication between all 
sovereign states to put an end to the injustice wage d against developing countries.  Justice and social 
development also had to be accelerated, as was mentioned at the United Nations Summit, where 
President Hugo Chavez of Venezuela had made a nu mber of statements in this regard.  The 
agreements between Venezuela and Cuba on a number of programmes were an example of the co-TN/S/M/16 
Page 12  
 
 operation between these two countries, with an interc hange of goods, technological assistance, all to 
the benefit of both parties and ending unnecessary wast e.  In virtue of the agreement signed in Havana 
with Venezuela, more than 400,000 people had recei ved proper medical care but some 6 million Latin 
Americans and Caribbean people would also be able  to benefit from this, as confirmed by Cuba's 
president, Fidel Castro.  A number of efforts had b een undertaken in order to help the people who had 
suffered from hurricane Katrina in the United States and positive responses had been provided.  Some 
17,000 young people were living abroad, young people from abroad had studied in Cuban universities, 37,000 Cubans, 24,000 of whom in the health sector, were working in some 105 different 
countries, very often in very remote areas and in  difficult conditions as well.  The WTO agreement 
stated that living standards of people around the world should be raised, and the concerns of 
developing countries had to be taken into account.  While it was not yet possible to make a major 
contribution to the upcoming minist erial meeting in Hong Kong, the WT O would have to work for the 
economic advancement of the under-pri vileged people of the world, and its Members had to ensure 
that priorities were balanced differently, so as to en sure that developing countries' concerns could be 
properly addressed. 
43. The representative of Uganda
 noted the concerns expressed by Rwanda, which were shared 
by many LDCs who were also in the process of ca rrying out similar assessments.  He underlined how, 
to carry out its study, Rwanda had not used local e xpertise because it did not have any;  Uganda and 
many LDCs were in similar situations.  When LDCs  put the case for technical assistance in the WTO, 
Members should listen with a sympathetic ear.  Like  Rwanda, Uganda had carri ed out very extensive 
unilateral liberalization.  The only sector not libera lized yet was the water sector, whereas all other 
service sectors had been liberalized.  This liberalizat ion had been carried out in anticipation of a flow 
in foreign direct investment, which, however, had not come in the volumes that had been expected, 
except in very few sectors such as banking and insuran ce, telecoms and a bit in tourism.  Uganda was 
still hopeful for foreign direct investment;  it ha d done all it could to attract FDI, by offering 
incentives and a good climate for any investor.  He hoped that foreign investors were not waiting for 
GATS bindings, because Uganda was unlikely to make  bindings unless it had carried out the sort of 
assessment that Rwanda had been working on.  He sa id that Uganda had to see where the benefits lay 
before it could bind any liberalization in the WTO.  He concluded by saying that his delegation was, 
and would be, carrying out several studies in all th e services sectors which had been liberalized and 
the information obtained would guide it in its next steps. 
44. Commenting on the room document by Rwa nda, the representative of the European 
Communities  noted that the need for technical assist ance had been mentioned as one of the key 
observations.  He informed Members that the EC , through its ACP mechanisms, had an ongoing 
project with Rwanda in order to assist them in carrying out their assessment,  which covered issues 
like a better determination of their export interests and the regulatory framework most appropriate for 
undertaking commitments.  His understanding was that these studies were reaching their conclusion 
and he hoped that they would be useful to Rwanda  in finalizing its assessment.  With regard to 
Uganda, the EC was also financing activities through the ITTC in order to assist them in the trade 
assessment and more particularly in terms of follow- up to assessments carried out in the past.  In this 
perspective, the issue just raised by Uganda about the impact of the liberalization undertaken could be 
examined more in detail.  As a final point, he stressed that, when discussing the possible binding of liberalization unilaterally undertaken, one important element to be taken into account was the legal 
certainty that the binding introduced, which could provide a major contribution towards attracting 
foreign direct investment. 
45. The representative of Djibouti
 recalled that the points raised by Rwanda and Uganda had also 
been previously stated by his delegation.  He sai d that when a formal request for technical assistance 
was made to the Secretariat, this had to be take n seriously and that the Secretariat should respond as 
quickly as possible.  If there were no funds, his dele gation would be grateful for the generosity of 
donors, and Members needed to make these requests of the donors who supported technical  TN/S/M/16 
 Page 13 
 
 
 assistance.  The requests of all developing country Me mbers, and in particular of those who had the 
greatest needs in relation to others, had to be take n into account.  The technical assistance programme 
had to be looked at in its entiret y.  In order to understand the WTO system, two or three day seminars, 
whether at the national or regional level, would not lead to the expected outcome.  There was perhaps 
a need to agree on the way in which the duration of seminars, whether in Geneva or in the field, was 
decided.  He called for a speedy response to be given to requests for technical assistance and called 
for an arrangement to be arrived at between the Secretariat and the organizing countries.   
46. The representative of Brazil  had a question and two comments on the contribution by 
Rwanda.  The question related to pa ragraph 13 of the room document.  Their assessment in relation to 
FDI in services had revealed that a number of FDI projects had been undertaken by other developing 
countries;  he wondered whether th ese were developing countries of the region, or whether they were 
from other areas.  As for the two comments, he not ed first that paragraph 15 contained the Rwandan 
Law definition of "public utilities" and that that definition referred to a broad list of sectors and 
entities, which was in contrast to how a lot of other Members had used the concept of "public 
utilities", without providing further clarification.  Second, he said that Rwanda had underlined the 
importance of development and having appropr iate regulatory frameworks in place before 
undertaking binding commitments in the GATS.  His de legation shared this view, and added that this 
was an important issue to bear in mind in th e development of disciplines on domestic regulation, 
which had to take into account these types of constraints, as well as the fact that some Members could not comply with obligations that went beyond thei r regulatory capabilities.  Brazil also shared the 
view that it was not even sufficient that regulat ory disciplines be simply in place before taking 
commitments, as these regulations to be tested out fi rst, over some time, so that they could be changed 
if necessary;  only then could commitments be undertaken, as Members would then be in a better 
position to strike a good balance between  nationa l developments objectives and trade objectives. 
47. The representative of Nigeria
 welcomed the contribution by Rwanda and seized the 
opportunity to report that, as part of his delegation' s commitment to present its initial offer within the 
shortest possible time, from 7 to 9 September 2005 Nigeria had organized a national workshop on 
services with the technical support by UNCTAD, to review and consider present and future commitments in the light of the ongoing comprehens ive domestic reform process which cut across all 
spheres of its economy.  As a follow-up to the ba ckground study prepared for the workshop, further 
detailed technical analysis of each sector would have to be carried out to define Nigeria's services potential and capabilities.  His delegation was th erefore working with technical assistance and 
capacity-building programmes to enable it to fast-track  the process.  Finally, he reported that Nigeria's 
policy reforms were generators of liberalization in trade in services and noted that the Nigerian 
schedule of commitments under the GATS did not full y reflect the liberalization already achieved.  
The process of national consultations with various st akeholders had been structured so as to ensure 
that their commitments were not different from th e regulatory and institutional realities on ground.  
He would try to share Nigeria's key conc lusions from the study at a later stage. 
48. The representative of the United States
 stressed the importance of the Rwandan contribution 
to illustrate the experience of an LDC country with  services trade.  She said that she had a few initial 
comments and questions on the document.  With resp ect to the data in Table 1, she noted that the 
services share of GDP had been generally increasing since 1990.  In 2003, services accounted 47.2 per cent of GDP, and she observed the distinction between  that figure and the figure of 10.8 per cent 
mentioned in paragraph 6.  In th at paragraph there was also a reference to the categories of commerce 
and repair work, other services, construction and transportation services accounting for 92 per cent of 
the total market services employment;  she w ondered if that also included services in the 
manufacturing sector, as there was also services activity associated with manufacturing.  In Table 1 she noticed the separation of market services from non-market activities.  There clearly seemed to be 
a distinction whereby the 47.2 per cent did not incl ude non-market activities, further exaggerating the 
discrepancy already in the data.  Nevertheless, he r delegation recognized the difficulty of collecting TN/S/M/16 
Page 14  
 
 such data, especially for an LDC having established their national statistical office only recently.   She 
hoped that the assessment work by UNCTAD would be  an initial activity helping Rwanda to identify 
its export and import potential.   
49. The United States had contributed funds for a fe w Members, including Rwanda, to participate 
in the ITC pilot scheme for services, which should fu rther contribute to the assessment exercise;  she 
wondered what Rwanda's experience had been with  the scheme, as the United States was looking to 
add a few more countries to the scheme and was inter ested in hearing from current beneficiaries.  She 
added that once the budgetary funds for these progr ammes had been provided, the United States did 
not get involved in the substance at all.  From wh at she understood, the ITC tried to identify a local 
analyst to work with the international analyst who had designed the programme for the ITC in the first 
place.  She knew that the ITC programme was not  designed to do a thorough in-depth long-term 
study.  She hoped that other institutions, such as the World Bank, could get involved to help LDCs 
and other developing countries with capacity constr aints to do intensive assessments, and applauded 
any assistance that UNCTAD had provided.  She looked forward to seeing updates of the assessment 
that Rwanda had provided, thanked them again for tabling the document, and hoped that other 
Members would be able to share their experiences.   The United States hoped to continue to act as a 
support for assessments and to aid in the technical assistance needs of developing countries.  She 
thanked Nigeria for the announcement that they were about to submit their initial offer.  The United 
States planned on including Nigeria among the next tr anche of countries in the ITC programme.  They 
has also pencilled in Uganda, but, listening to the EC  intervention, she said that they would have to 
investigate the situation further to see that no un necessary overlaps were created and that more 
countries were participating in what ever projects were available.   
50. The representative of Ecuador
 said that the presentation by Rwanda was a very interesting 
contribution to help understand the situation of developing countries.  Ecuador was also engaged in an 
assessment exercise with the back ing of the European Communities,  which had been underway for 
more than 8 months.  Her delegati on would be submitting an initial o ffer soon, and she remarked that 
technical assistance was very important to help deve loping countries realize their potential.  In their 
intervention, the European Commun ities had stated that GATS bindings were a very important factor 
for investment.  In this regard, she pointed out th at a number of international organizations, including 
UNCTAD, the World Bank and the WTO, had indicat ed that the link between liberalization and 
economic growth, or the one between liberalizatio n and investment, was not clear.  She said that 
existing bound commitments were the starting point fo r the negotiations, but noted that if previously 
bound commitments of major trading partners were then later modified without compensation, as in 
the case of the EU enlargement, which had affected ar eas of interest to her delegation, including mode 
4, this did not provide developing countries with any legal certainty.  Developing countries could not 
be asked to undertake binding commitments until so me sort of compensation had been offered.  
51. The representative of Norway  said that his delegation understood the concerns of LDCs.  It 
was a major challenge for all WTO Members to en sure that LDCs harves ted benefits and were 
integrated into the multilateral trading system.  Even  though Norway did not expect LDCs to take on 
additional commitments in the current Round, he  strongly welcomed their involvement in the 
negotiations to build their negotiating capacity a nd their efforts to become integrated in the 
multilateral trading system.  This was precisely how he had viewed the intervention by Rwanda.  On 
technical assistance, he agreed with its importanc e and with its focus being LDCs.  As market access 
for LDCs improved, trade-related technical assi stance and capacity-building were necessary to 
improve infrastructure, develop marketing knowledg e, and so on.  In Norway, budget allocations for 
such bilateral and multilateral support had been cons iderably strengthened during the last years;  
Norway's main focus had indeed been on LDCs, by allocating substantial funding to the joint 
integrated technical assistance programmes for LDCs and the Integrated Framework.  He also 
mentioned that the Norwegian Development Ag ency had recently undertaken a project called 
"Strategy for Support for Private Sector Developm ent in Developing Countries", which had identified  TN/S/M/16 
 Page 15 
 
 
 opportunities for trade and development in several LDCs .  It was intended to be an important tool in 
enabling the private sector to develop trade and business.  Finally, Norway was looking at ways to make operational a sleeping rule of UNCTAD wher eby 40 per cent of all its technical assistance 
should go to LDCs. 
52. Responding to the comment about the need for LD Cs to participate in the negotiations, the 
representative of Rwanda
 said that that was her delegation's a pproach and that they believed that 
engaging in the negotiations would br ing benefits rather than harm.  When Members discussed certain 
elements of the services negotiations they had to keep in mind the specific challenges that LDCs 
faced, and Rwanda thought that its own experience would be helpful in this regard.  She believed that 
exclusion was not the solution, and that participatin g in the negotiations was important, provided that 
it was done on realistic terms.  She was grateful for all comments, but particularly thanked other 
LDCs who had indicated that they shared simi lar challenges to the ones faced by Rwanda.  
Responding to the question from Brazil, she said that FDI had come mainly from the African region, but also from a few non-African countries like India.  In answer to questions from the United States 
about Table 1, she explained that 47.2 per cent was the total of both market and non-market services 
activities, and that services accounted for 10.8 per cent of employment and 47.2 per cent of GDP, 
which was why Rwanda saw services as a potential gr owth area for its economy.  With such a small 
share of employment, investing more resources in the services sector might actually bring potential benefits to Rwanda.  Responding to the Eur opean Communities and United States on technical 
assistance, she said that footnote 1 of the document mentioned that Rwanda was carrying more out in-
depth assessments of trade in services, with funding from both of these Members, and was yet to see 
the results of those assessments, but expected them  to be available by the beginning of 2006.   
53. The Chairman
 concluded that the discussion had show n how much liberalization had taken 
place all over the world over the previous 15 to 20 years and how important it was to be have 
appropriate regulatory frameworks in place to und erpin and protect the competitive functioning of 
markets, without which liberalization might yield undesi rable results.  In this context, it was important 
for developing countries to have  appropriate capacity and technical assistance to set up sound 
regulatory frameworks and reap the benefits of lib eralization.  The question of how much of the 
liberalization undertaken would be committed to  under the GATS, or indeed whether Members 
wanted to go beyond just capturing existing liberali zation, was a matter of a different nature.  The 
Chairman invited the Council to ta ke note of the statements made. 
54. The Council so took note . 
B. IMPLEMENTATION OF THE MODALITIES FOR THE SPECIAL TREATMENT FOR LEAST -
DEVELOPED COUNTRY MEMBERS IN THE TRADE IN SERVICES NEGOTIATIONS  
55. The Chairman  recalled that at the last meeting Rwanda, on behalf of the LDCs, had 
introduced an informal document contained in JO B(05)/114.  Some delegations said that this 
document would be a basis on which to continue discussion and reserved the right to revert to it.  He 
further recalled that, as had been agreed, he had convened an open-ended informal meeting on 
5 September in order to discuss this issue.  The LDCs had presented a room document on that 
occasion, which had been the subject of limited disc ussion.  He said that work for the Hong Kong 
Ministerial Conference would likely include langua ge on the implementation of the LDC Modalities, 
and he urged that this issue be treated expeditiously.   
56. The representative of Rwanda  said that a very limited response had been received from 
Members to an earlier LDC proposal.  Referring to her intervention at an informal meeting on 
5 September, she said that the LDC Group had expressed disappointment with this lack of a response.  The Group had identified three ways in which Member s could move forward.  The first requested that TN/S/M/16 
Page 16  
 
 Members respond to the questions contained in JO B(05)/114 in writing at the September meeting.  
The second had highlighted the importance of providing commercially meaningful market access for LDCs, particularly in mode 4, and called for Memb ers to begin exploring the ways in which market 
access could be guaranteed to the LDC Group.  The Group was still in the process of exploring such 
mechanisms and would share some ideas with Member s in bilaterals scheduled over the forthcoming 
days.  The LDC Group hoped that these consultations would result in common views on a possible 
mechanism that would provide LDCs with market  access.  Third, the Group also believed it was 
important to explore elements or guidelines that could increase LDC participation in international 
trade in services as well as establish a framework for these in the preparation before Hong Kong.  The 
representative said the LDC Group would welcome responses from Members on these issues.  She 
requested that this agenda item remain open in order for Members to report on any discussions that 
would take place in bilateral meeti ngs over the course of the week. 
57. The United States
, referring to the minutes contained in document TN/S/M/15, recalled that at 
the last meeting her delegation had requested that its comments made at the informal meeting be reflected in the record.  Paragraph 3 of Annex 1 co ntained this statement, which reflected in writing 
her delegation's reaction to the request made by Rw anda on behalf of the LDCs.  She said that the 
United States would meet bilaterally with the LDC Group the next day, and looked forward to 
exchanging ideas and questions and discussing any LDC reactions to the responses reflected the 
record to which she had referred. 
58. The representative of the European Communities
 said that, subsequent to the consultations 
referred to by the Chairman, her delegation had pr epared some responses to the LDC questions.  She 
said these would be presented in a bilateral meeti ng with the LDC Group the next day.  She also 
requested that the item remain open should any Member  wish to revert to this item subsequent to 
bilateral consultations.   
59. The representative of Canada  noted that his delegation would also be meeting with the LDC 
Group the next day in order to provide some responses to some of the issues raised.   
60. The representative of Chile , referring to paragraph 17 of the document and the fourth bullet of 
the introduction, noted that these referred to domestic regulations.  She was aware that some LDCs, as 
well as many of the developing countries, had some concerns about the development of the disciplines 
that were being negotiated under Article VI:4.  She encouraged Members to provide input, as the 
negotiations were gathering momentum and the ai m was to reflect all Members' interests.   
61. The Chairman  proposed that the Council take note of  the statements ma de, leave the item 
open and revert to it later in the meeting. 
62. It was so agreed . 
63. Speaking on 30 September, the Chairman  recalled that this item had been kept open earlier in 
the meeting to allow for any further comments.  He drew attention to a recent communication from 
the European Communities contained in TN/S/W/54. 
64. The representative of Zambia , speaking on behalf of the LDC Group , thanked the European 
Communities for its recent submission on the implem entation of Modalities for Special Treatment for 
LDCs.  She also sought, on behalf of the LDC Gr oup, to introduce a room document entitled "Special 
Priorities in Market Access for LDCs in GATS" dated 30 September 2005.  She said that the paper 
resulted from exploratory work undertaken by LDCs in  order to give effect to LDCs market access 
interests within the GATS framework.  Given the ve ry low share of the LDCs in global trade in 
services, the Group reaffirmed the general commitm ents enshrined in the Doha Declaration to 
promote the development interests of LDCs.  The Declaration recognized that doing so required the  TN/S/M/16 
 Page 17 
 
 
 integration of LDCs into the multilateral trading sy stem through meaningful market access as well as 
efforts by Members to further commit to considering additional measures for progressive improvements in market access for LDCs.  Furthermor e, there was a need to ensure the fulfilment of 
Article IV which gave special priority to LDCs w ith a view to increasing their participation in the 
world trade.  In particular, GATS Article IV calle d on Members to provide special priority to LDCs 
when implementing the objectives in that article .  Paragraph 6 of the Modalities on the Special 
Treatment for LDCs in the Negotiations on Trade in Services called for special priorities in providing 
effective market access in sectors and modes of suppl y of export interest to LDCs.  In particular, 
paragraph 7 of the LDCs Modalities called on Member s to work to develop appropriate mechanisms 
with a view to achieving full implementation of GA TS Article IV:3.  She re-affirmed this mandate 
and the need to develop an effective mechanis m to implement specific commitments for special 
treatment for LDCs under the GATS in a stable an d predictable manner.  The LDC paper proposed 
three elements through which Members could accord special priority to LDCs within the framework 
of GATS and LDC Modalities.  In this regard, she cl arified that the elements  were non-exhaustive and 
could be further developed.  One element was provi sions on market access on a non-reciprocal basis 
through specific commitments in sectors and modes of supply identified by the LDCs as being of 
export interest.  The second was the elimination of limitations applied to LDC Members in the sectors 
and modes of export interest through inscriptions in the relevant horizontal section or specific sectors.  
The third was the undertaking, in cases where full co mmitments had been made in the sectors and 
modes of supply of export interest identified by LDCs, of further commitments in favour of LDCs 
only by assigning priorities to imports from LDCs.  She said that the LDCs wished to continue 
exploring with other Members this non-exhaustive list of elements.  The Group encouraged other 
Members' additions or suggestions.  The Group r eserved the right to supplement or modify these 
elements.  She hoped that the Members could develop these elements in time for adoption at the Hong 
Kong Ministerial Conference. 
65. The representative of the European Communities
 said his delegation had held useful 
consultations with the LDC Group that had addr essed the questions that the LDC Members had 
circulated in JOB(05)/114.  Referring to TN/S /W/54, he said the communication contained the 
answers his delegation had provided to the LDCs in a summary form.  They ha d also been discussed 
in consultations with the LDCs at which additional explanations and cl arifications had been offered.  
The European Communities welcomed the communication from the LDC Group and sought to highlight the main elements of his delegation's answers to the LDC questions.  Referring to the 
different ways in which the EC offer addressed LD C requests, particularly regarding mode 4 and 
mode 1, he recalled the extensive commitments that  his delegation had undert aken both in mode 4 and 
in mode 1.  In his view, these commitments w ould provide additional business opportunities for LDCs 
service providers.  The focus in mode 1 was on tho se categories of service providers that were de-
linked from commercial presence and on those sectors that might be of more direct interest to LDC 
service providers.  He made particular mention of the offer made on graduate trainees.  In mode 1, the 
European Communities had undertaken extensive co mmitments, and he said that those could also 
provide numerous business opportunities to LDC service providers.  In particular, the combination of 
commitments in computer and related services,  telecommunications services and management 
consulting services could provide integrated oppor tunities for the development of outsourcing 
activities from which LDC service providers might be nefit.  Communication TN/S/W/54 and bilateral 
discussions addressed certain other issues, including th at of the extension of mode 4 commitments to 
non-professionals or lower skilled service suppliers.  He  explained that this category was not covered 
in the EC offer, and that lower skilled workers ge nerally provided their services by direct recruitment 
on the employment market and not in accordance with  the Annex on the movement of natural persons 
supplying services under the Agreement.  The Euro pean Communities considered that the GATS did 
not apply to measures affecting natural persons seeking access to the employment market.  Referring 
to the point raised about whether there could be pr eferential treatment for LDCs, notably in mode 4, 
he said that, in his delegation's view, GATS provision s did not allow such a preferential treatment.  
There were many questions for which his delega tion had given very deta iled answers on technical TN/S/M/16 
Page 18  
 
 assistance provided to LDCs by the EC and its individual Member States.  He had been pleased to 
report information on these technical assistance activ ities, and said that his delegation was willing to 
have an information gathering and monitoring me chanism related to technical assistance activities.  
He said that a possible monitoring mechanism u nder the auspices of this Council could prove a 
helpful transparency instrument and an incentive for developing countries.  He said that it would be 
useful to report on these activities and arrangements,  the objectives of which were to facilitate the 
integration of the LDCs into the world tradi ng system and particularly trade in services. 
66. The representative of Djibouti
, noting he was from an LDC delegation, said that LDCs' 
understanding of the importance of the services area had been deepened thanks to the Chairman's and 
the Secretariat's efforts.  He said that the way forw ard was starting to become clearer in terms of the 
Hong Kong Ministerial.  He noted that Members' in terests were divergent.  For Hong Kong, he said it 
would be best to take a few key areas in order to prepare the Ministerial Declaration.  He said that if Members sought a declaration that touched upon all services sectors, he was not sure that the work could be done.  On previous occasions when prepar ing for a Ministerial Conference, and not only in 
services, Members had sought to address a totality, wh ich explained why there had been difficulties.  
It was for this reason that certain areas in the DDA had to be a focus.  He thanked the Chairman for 
his efforts and wished him success in his new functions.  Referring to the intervention by the 
European Communities, he said that this delegati on had done much to help LDCs through technical 
assistance in specific areas.  He said that LDCs  required more technical assistance from the WTO as 
well, since obligations were complex, and help was needed to fully understand and implement the 
instruments of the WTO agreements.  He said th at, without this assistance, it was difficult to 
implement obligations the juridical bases of  which were not fully understood.    
67. The representative of Nepal
 associated his delegation with the statement by Zambia 
introducing the LDC Group room document.  He thanke d the EC for its contribution and presentation.  
He said that there had been much discussion on LDC Modalities, and Nepal appreciated that Members 
were taking initiatives to provide LDC access to serv ices.  He reiterated the importance of market 
access for LDCs.  Noting the approach of the Mini sterial Conference, he hoped that Members would 
give due consideration to LDC concerns, a respon se to which would help integrate their economies 
into the multilateral trading system.   
68. The representative of South Africa  thanked the European Communities for its communication 
and answers to the LDC questions, which she said was important.  Seeking a clarification from the Secretariat, she referred to pa ragraph 10 of the EC document and the understanding it contained of the 
coverage of mode 4.  She asked whether the Secret ariat could clarify the scope  of mode 4 and perhaps 
offer some background about releva nt discussions during the Uruguay Ro und.  She recalled that this 
issue had been touched upon at the February m eeting when the Council had held a dedicated session 
on mode 4.   Seeking a clarification from the EC and quoting paragraph 28, she enquired as to whether the European Communities considered that the ACP countries were the equivalent to LDC 
countries.  She sought this clarification because she understood the LDCs' question as seeking to 
obtain information on specific targeted assistance pr ovided to LDCs and with respect to the LDC 
Modalities.  While the EC's efforts with the ACP were helpful, she was not certain that they 
responded to the LDC Modalities and targeted LDCs specifically. 
69. A representative of the Secretariat
 referring to the question from South Africa said that it 
seemed to him that the EC had provided their interpre tation of GATS coverage in  relation to mode 4.  
As he had mentioned under item A of the agenda w ith regard to a jointly organised seminar, the 
Secretariat had provided a factual description of th e relevant GATS provisions, namely Article I, the 
relevant definitions in Article XXVIII and elements  in the Annex on movement of natural persons.  
He said that these were the provisions that determin ed the scope of natural persons covered by the 
GATS.  The EC had provided its views with respect to certain categories of personnel, for which the 
Secretariat was not in a position to provide an authoritative answer.  He invited any Member to  TN/S/M/16 
 Page 19 
 
 
 approach the Secretariat for the detailed description of the provisions of the GATS it used in technical 
assistance activities. 
70. The representative of the European Communities , referring to the question raised about 
paragraph 10 of the EC paper, said that he ha d expressed his delegation' s interpretation of the 
provisions of the GATS and its Annex, and did no t expect an authoritative interpretation from the 
Secretariat.  On the second question regarding para graph 28, he said that the EC had endeavoured to 
provide as much information as possible on programs of  the EC and of individual Member States that 
could be of benefit to LDCs.  Some of these programmes or mechanisms operated in the context of agreements with ACP partners.  As a number of ACP partners were also members of the LDC Group, 
he said that these programs benefited those countries.  The European Communities had sought to be 
as exhaustive as possible in providing information on inst ruments that were of benefit to them, even if 
not always specifically designed for LDCs.   
71. The representative of Rwanda
 associated her delegation with the statement made by Zambia 
that introduced a room document on behalf of LDCs .  She welcomed the example set by the EC in 
answering the questions that the LDCs had put fo rward to the membership.  The Group thought that 
information of this sort was a good basis for analysis and recommendations on how the LDCs 
Modalities could be best implemented.  Responding to a first issue raised in the EC paper and 
intervention, she affirmed that giving special treatme nt or special priority in terms of market access 
for LDCs would be in line with the MFN obligation.  She recognized the fundamental MFN obligation enshrined in GATS Article II:1 as a core principle not only in the GATS but in WTO agreements.  She further recognized that GATS Artic le IV:3 provided for special treatment to be 
given to LDCs Members in implementing the provisions  of that Article.  She said that Article IV:1 
called for the liberalization of market access in sectors and modes of interest to LDCs, and that Article 
IV:3 stated that special priority should be give n to LDCs in implementi ng paragraphs 1 and 2 of 
Article IV.  Her understanding of a reading of both Article II:1 on the MFN obligation, and 
Article IV:3 that granted special  treatment LDCs, was that the GA TS recognized that there could be 
more favourable treatment given to LDCs in provid ing for special priorities for them.  She said that 
the term "priority" connoted a different level of treat ment inherently and its use in Article IV connoted 
more favourable treatment for LDCs .  Rwanda believed that Article IV:3 gave a mandate for special 
treatment that was a little more favour able to LDCs.  She reaffirmed he r delegation's view that special 
treatment in terms of providing market access for LDCs was in line with the GATS framework as she 
had outlined.  Responding to a second issue raised by the European Communities as to whether non-
professional service suppliers were covered under th e GATS, while recognizing that persons seeking 
employment were addressed in pa ragraph 2 of the Annex and not covered under the GATS, she said 
that it was faulty reasoning to conclude that a ll non-professional service providers were always 
directly recruited in an employment market.  Ind eed, there were many examples of organized seasonal 
and contractual non-professional service suppliers pr oviding services without them seeking access to 
the employment market.  She said that if the inco rrect assumption was rectified, it became clear that 
this category of persons was covere d under the GATS, a conclusion that would be further elucidated if 
one thought in terms of these services suppliers prov iding services of a contractual nature.  Finally, 
she requested that the Chairman indicate in his report to the TNC how LDCs sought the implementation of the LDC Modalities, and in particul ar by referring to the elements suggested in the 
LDC room document.   
72. The representative of Uganda
 associated her delegation with the statement by Zambia on 
behalf of the LDC Group.  Seeking clarifica tion on a point raised in paragraph 5 of the 
communication from the EC, she said her enquiry rela ted to a connotation that  all qualified personnel 
covered in the EC revised offer would be able to move to the EU.  Knowing that relevant companies 
in Uganda would likely be subsidiaries, a nd on the assumption that movement from the EC 
perspective was from parent company to subsidiary and not vice versa , she enquired as to whether this TN/S/M/16 
Page 20  
 
 meant that movement of qualified personnel would only be from the EU, where the parent companies 
were located, to subsidiaries.  
73. The representative of Cuba
 expressed his gratitude to Zambia for its statement.  Referring to 
the priorities she had outlined within the framework of the LDC Modalities, he had noted that this list 
was not exhaustive.  Cuba supported efforts to ela borate a ministerial text at Hong Kong which would 
reflect as closely as possible the interests of the LDC Group.  He also thanked the EC for its paper 
concerning the implementation of these modalities that  provided responses to questions posed by the 
LDCs.  He shared the concern that had been expressed  with regard to mode 4 and said that this issue 
should be considered in order to find a clearer definition. 
74. The representative of the European Communities , referring to the question from Uganda, said 
that paragraph 5 of the communication dealt with mode 4 commitments that were not linked to any 
commercial presence, such as for contractual service  suppliers and independe nt professionals.  This 
case concerned the possibility for service suppliers in Ug anda that had a contract with a client in the 
EU to have the possibility to travel to the EU in order to provide that servi ce either as an employee of 
a company or as an independent professional without  any link to a commercial presence.  Referring to 
remarks on paragraph 10, he reiterate d that this paragraph made it clear that the EC offer did not 
extend to non-professional service suppliers, that most  lower skilled service providers did not provide 
services under contract or on a fee basis in the way intended by mode 4, and that lower skilled workers generally provided services by direct recruitmen t.  In this regard, the paragraph did not state 
that this was the case in all cases, but occurred in the majority of cases.   
75. The Chairman
 invited the Council to take note of the st atements made and revert to this item 
at the Council's first meeting in 2006.  
76. It was so agreed . 
C. CONSIDERATION OF PROPOSALS ON S&D  TREATMENT PROVISIONS  
77. The Chairman  recalled that it had been agreed at  the last meeting that, pursuant to 
paragraph 1(d) of the July Decision, he would re port on behalf of the Special Session to the General 
Council on the Council's work on this item.  He sa id that this report was contained in document 
TN/S/21.  It had been further agreed that the Council would continue its work as foreseen by the 
General Council after its 27 July meeting.  He reca lled that, at the 27 July meeting of the General 
Council, there had been some discussion as to wh ether further consideration of all Category II 
proposals should be grouped within the CTD - Speci al Session, and the Chair of the General Council 
had indicated that she would engage in consultations  on this matter.  In the interim, it was understood 
that the CTD - Special Session would continue to monitor work on the proposals referred to the 
various bodies, including the Special Session.  He further recalled that he had convened an open-
ended informal meeting on 5 September at which some  delegations had shared some of their views on 
proposals 79 and 80.  A number of delegations i ndicated that they were consulting with the 
proponents bilaterally and that they sought more time  to pursue these consultations.  Finally, he drew 
the Council's attention to communication from Rwanda  on behalf of the African Group contained in 
document JOB(05)/151. 
78. The representative of Rwanda , speaking on behalf of the African Group , said that the 
communication was a compilation of the African Gr oup's responses to the various questions that 
Members had asked about the proposal.  Questions and responses had been complied so that Members 
could refer to this document and a void repetition.  Also circulated that day was a room document that 
showed the different suggestions on the proposals by Members.  Subsequent to the informal meeting 
on 5 September, some Members had asked that the Gr oup share the results to date of consultations.    TN/S/M/16 
 Page 21 
 
 
 The room document used square brackets to indi cate lack of convergence in terms of language.  
Recalling her comments at the 5 September informal meeting, she said that proposal 79(a) and (b) appeared to have led to more movement than 79(c) and (d).  On that occasion, she had indicated that 
she would consult with the African Group in order to  get instructions on how to  move forward in light 
of the lethargy on proposals 79(c) and (d).  The African Group sought to continue working on 
proposals 79(c) and (d), and suggested to begin work on 79(a) and (b) and then continue with the 
other proposals.  She suggested that the Chairman  hold further consultations to work on proposals 
79(a) and (b) in order to see what could be ach ieved before moving on to the other proposals, 
including 80 and 81. 
79. The Chairman
 had taken note of the request for cons ultations and proposed that the Council 
take note of the statements made and that it revert  to this item at the first meeting of 2006.   
80. It was so agreed . 
D. PROPOSALS RELATING TO THE NEGOTIATIONS UNDER ARTICLE XIX  OF THE GATS 
81. The Chairman  recalled the seven communications listed in the agenda under this item.  He 
noted that all of these had been intr oduced at the last formal meeting, although they had not appeared 
on the agenda of the July meeting as they had been ci rculated subsequent to it.  He drew the attention 
of Members to a communication from Switzerland contained in document TN/SW/51 on a method to assess the schedules of specific commitments.  He also  referred to the room document dated 29 June 
on cross-border supply from Chile, Hong Kong China, India and Mexico.  
82. The representative of Switzerland
 introduced their paper as contained in document 
TN/S/W/51.  In his introduction, he  referred to the various previous occasions at which the paper had 
been presented and discussed with Member s.  In this connection, he recalled that at the last cluster of 
the Services Council, Switzerland had described orally the formula used in the methodology.  He also 
noted that the methodology has been very useful to  Switzerland.  His delegation's decision to share 
the methodology had been prompted by the interest  expressed by a number of Members.  In this 
regard, he recalled that earlier that month, Switzerland had organised an open-ended detailed 
presentation of the methodology to all interested delegations and sought presently to distribute this 
paper to the entire membership.  He described the c ontents of the paper highlighting the results of the 
methodology based on calculations of Switzerland's  existing commitments, and initial and revised 
offers.  Annex 1 of the paper contai ned the results for Switzerland's  revised offer.  Annex 2 contained 
aggregated indexes for Switzerland for all sectors.  The proposal by his delegation on how to use this 
methodology was contained in Chapter 5 of the pape r.  He noted that since the conclusion of the 
Uruguay Round, a number of methodologies had been developed in order to assess GATS 
commitments in a consistent a nd detailed manner.  He referred to past work on methodologies for 
assessing commitments by the secretariats of international organizations, including the WTO, the OECD and UNCTAD.  The purpose of such methodologies, like Switzerland's, was to enhance transparency in the negotiations by providing a bette r overview of all the commitments that were on 
the table.  He noted that such methodologies could also be a very useful tool for comparing schedules 
of commitments.  He stressed that the methodology presented in document TN/S/W/51 was very simple.  Firstly, the formula gave one figure/inde x either for the whole schedule or for each sector 
separately.  Secondly, the simple formula fixed a co efficient C raised to the power of N, where N was 
equal to the number of limitations scheduled.  He stressed that the methodology's primary aim was to 
provide a tool that could be applied mechanica lly to enhance the level of precision in assessing 
commitments and reduce value judgements and bias.  The other aim was to have a methodology that 
would be flexible both in terms of the instrume nts used and its outcome.  As the methodology was 
quantitative, it allowed data or results to be a ggregated and averages to be calculated thereby 
facilitating comparisons across sectors, schedules, and initial and revised offers.  He highlighted that TN/S/M/16 
Page 22  
 
 in terms of the level of detail, the methodology captu red the exact density of restrictions scheduled to 
be measured, including minute changes or improvement s in schedules.  The fo rmula sought to ensure 
that it followed GATS  provisions, including by reflec ting restrictions outlined in Article XX.  He 
noted that there were a number of elements in th e methodology that had not been completed to date.  
One important aspect was a way to calculate co mmitments made in the horizontal section of a 
schedule.  While work was in progress, a number of  technical difficulties had been encountered.  He 
noted that the tables and graphs contained in the a nnexes to the paper had been made on the basis of a 
slightly extended version of the methodology.  He reiterated that Switzerland was tabling its 
methodology formally in order to provide an  opportunity for discussion of its merits and 
shortcomings.   He stressed that the methodology was not devised for the purpose of creating targets.  
83. The representative of Pakistan
 thanked Switzerland for its paper.  She noted that a 
methodology which could not address the horizontal sec tion of schedules would be biased in favour of 
those Members that had inscribed a greater number limitations in the horizontal section.  She said that expressing sectoral coverage limitations that could not be translated into CPC references through a 
fixed value of 50 was arbitrary as actual c overage could be greater or smaller.  
84. The representative of India
 congratulated Switzerland for the ingenuity of its formula.  He had 
noted the comment that the formula sought only to  assess schedules and not benchmarking.  He also 
noted that the formula treated all sectors with an equal weighting.  The question of weighting he said 
might need to be looked at a little more carefully  as equal weighting would suggest that minor 
coaching services would be treated equally to banking services.  He stressed that it would be important to find a way to treat mode 4.  
85. The representative of Malaysia
 asked how would the Swiss methodology take account of 
horizontal commitments.  She stressed that there should be a better method for assigning coverage 
values in the cases where the CPC ha d not been used.   Concerning the methodology, she pointed out 
that it did not take into account the nature of the limi tations themselves.  For instance, if the restriction 
was in the form of a limitation on the number of licences, whether this number was two or ten, the 
index would not not capture the severity of these rest rictions.  In other words, the methodology would 
not measure the depth or distinguish between the scale of these restrictions.  She raised several 
questions concerning the interpretati on to be given to the scores.  In  this connection, she highlighted 
that as commitments were made on the basis of progressive liberalization, the scores themselves 
would not suggest very much because the final sco res would be based on each Member's ability to 
liberalize, thus making comparison across schedules difficult.   
86. The representative of Brazil  recalled that it had had an opportunity to present some initial 
reactions to Switzerland's ideas on assessment at th e discussions on complementary approaches.  He 
recalled that, in general, his delegation was quite  sceptical about these types of instruments.  
Nevertheless, he noted that Brazil remained ope n to exploring how some of these ideas could be 
refined.  He stressed that his intention today was to focus strictly on the technical elements presented.  
He would leave the more political considerations related to the consequences of such methodologies 
for the negotiations to Wednesday.  On the techni cal approach used, he invited the representative of 
Switzerland to elaborate on their proposal through some  situations or circumstances.  For example, if 
the CPC was used for all sectors with the exception of  financial, maritime and air transport services.  
He also wondered how the methodology would d eal with a situation in which a Member's 
commitments on telecommunications from the Uruguay Round were based on the CPC but 
subsequently adopted a new and completely different  type of classification in its initial and revised 
offers.  He pointed out that this was one of the ga ps that Brazil saw in the model.  He also stressed 
that his delegation did not believe that limiting cl assification to one parameter helped the Round or 
flexibility in the GATS.  He agreed with others  about the issues raised on horizontal limitations.  
Horizontal limintations had been the subject of activ ity in many initial and revi sed offers and he noted 
that the methodology could not capture this activity .  He asked if the methodology could capture MFN  TN/S/M/16 
 Page 23 
 
 
 exemptions or had been designed to factor any resu lt in additional commitments.  In this regard, he 
highlighted that Brazil in its revised offer on the maritime transport sector had included an enhanced 
list of additional commitmen ts under Article XVIII.   
87. The representative of Mexico  recalled that in a number of formal and informal meetings it had 
resisted considering the theme of benchmarking.  He  queried whether such efforts were truly in the 
interests of all Members.  He noted that, while the proposal from Switzerland responded to its interest, 
it has nevertheless endeavoured to come up with a neutral formula for assessing commitments.  He 
said that while it was good to have this proposal  on paper, it nonetheless had some negative aspects 
which arose from its reference to the results of the Ur uguay Round.  He stressed that in the view of his 
delegation the results of the Uruguay Round was sepa rate and should be the subject of a separate 
assessment.  He noted that contrary to other proposals that had been made, the proposal by 
Switzerland was straightforward and transparent.  He said that although Mexico was not predisposed 
to the methodology it could take part in discussions on its technical aspects.  He pointed out that there were different variables at play.  In this connec tion, mode 4 was very important for Mexico in the 
negotiations.  He did not believe that the same value could be given to concessions in different 
sectors.  Assessments depended on the interest that e ach country attributed to the various sectors.  He 
noted that his delegation had other questions concer ning various aspects of the formula that might be 
raised in other informal discussions.  Concering the issue of neutrality, he said this would depend on 
the view point of each country and the way services were rendered and received.  Given the infinite 
number of variations possible, the discussion might prove somewhat sterile.  Nevertheless, Mexico 
remained open to discussing the technical validity of the methodology and whether or not the scores 
could provide a useful conclusion for everyone.   
88. The representative  of Guatemala
 sought clarification on the footnote on page 3.  
89. The representative of Brazil , noting a component that allowed for fine-tuning so that 
limitations and sub-federal entities at  sub-federal level could be inte grated into the formula enquired 
how the final scoring would take into account a lim itation that took into account only a portion of the 
territory included.  Citing an example based on the European Communities to illustrate, he asked 
whether the limitation in one sub-sector that applied to Malta would be scored the same as a limitation 
applied to Germany.  In other words, he asked wh ether the final scoring was the same or was there a 
possibility to accommodate the score in accordance with the level of the area being excluded from the 
offer. 
90. The representative of Switzerland , responding to the various queries and comments, noted 
that three types of questions or comments that ha d been raised.  The first related to comments or 
questions regarding challenges that were commonly faced by  methodologies of this type.  The second 
related to questions on very specific features of th e methodology or specific shortcomings.  The third 
set of questions related to the implementation of th e methodology.   With regard to questions related 
to the formula itself and the way it could be ex tended, he noted that there were two possible 
elaborations that could be made to the basic formula.  As indicated in Brazil's example, one was to 
take account of limitations that did not apply to the whole territory of a country or Member.  The 
other were cases where a limitation scheduled in a sub- sector applied only to parts of that sub-sector.  
He said that in the basic formula 'C to the power  of N' such a limitation would be counted as one.  
Should the limitation be applied locally to a quantifia ble part of the territory in question, then account 
could be taken of this limitation by fine-tuning th e formula.  In Switzerland for example, where the 
limitation might be counted as 1/26th, if it applied only in the case of one canton, or 25/26th of the 
territory if all cantons except one applied the limita tions.  He noted that it was possible for a federal 
state to combine territorial limitations with limita tions that applied only to parts of the scope of a 
commitment. Illustrating his point, he said that if one Swiss canton had one limitation but that only on 
parts of the sub-sectors committed, two aspects coul d be discounted.  The first was the territorial 
limitation (1/26th), and the other the limitation of the scope to  one-third or one-fifth of the sector.  He TN/S/M/16 
Page 24  
 
 said that Switzerland had used both elaborations to the formula.  He pointed out that the table in the 
document's annex included scores that were very cl ose to one (0.994).  This was because Switzerland 
had had one case like the one that had been referre d to by Brazil.  Turning to the second group of 
questions concerning the scope of commitments, he  said that these addressed the link between W/120 
and the CPC, and changes in classification during th e negotiations.  He said that in order to have 
consistent results, any methodology needed to have a basis which w as common for each computation.  
In the case of the Swiss methodology, a choice had been  made to use the W/120 as a yardstick.  The 
CPC was used for the purpose of fine-tuning.  He noted that if one schedule did not use the CPC or the W/120 at all in a given sector it would not be di scounted 50 per cent.  Rather, in such situations 
efforts would be made to transpose the classification used in the schedule with the W/120 structure.  
Only after this analysis was the conclusion r eached that only parts of a given W/120 entry was 
covered and the steps described in paragraph 15 of the paper followed.  Only when all other 
possibilities had been exhausted and it was not possibl e to go any further was the so-called 'best guess' 
value of 50 per cent assigned.  He noted that 50 per cent had been used because it was between 0 and 
100 and because possible discrepancies were likely to neutralize each other, given that the 
methodology would be applied to the complete sc hedule of over 146 sectors or sub-sectors.  He 
reiterated his main point that 50 per cent was not au tomatically given in the absence of a W/120 entry 
or CPC reference.  Turning to the question from Br azil, he noted that changes in classification could 
go both ways.  A country might start with the CP C and subsequently use another classification or vice 
versa .  There were also Members that did not use th e CPC or W/120 initially but reverted to it in a 
revised offer.  He said that in that case, the pr ocedure would be exactly the same.  He gave the 
example of Switzerland which had initially used the W/120 classification for environmental services 
but had a different classification in its initial offer.  In this case, it had been  necessary to transpose the 
new classification in terms of the W/120 list.  Rega rding the horizontal section, he regretted that the 
methodology did not account for horizontal commitments, but he hoped that with time and more in-depth examination it would be possible to overcome the technical challenges faced.  He noted that a 
methodology for the horizontal section would provide an index for horizontal commitments which 
could be considered separately or combined with  sector specific commitments.  He hoped that by 
working with other Members it would be possible to find a solution to assessing horizontal commitments. 
91. Turning to question concerning the different types of limitations in the schedules, the 
representative of Switzerland said that, as mentioned by Malaysia, some limitations were more  
restrictive than others.  He fully agreed and sai d this was recognized in paragraph 14 (iii) of the 
communication.  One way to deal with differences in the limitations was to apply a different 'C' value 
for limitations according to their level of restrictiven ess.  This was a method that was used in various 
methodologies that sought to measure the restrictiveness of domestic law on services.  In other words, the type of weighting depended on the type of me asure.  While this was technically possible, he 
thought that weightings were best left to Member s to judge.  Regarding the questions raised by the 
delegations of India and Guatemala concerning m ode 4 commitments, he reiterated that horizontal 
commitments were not taken into account at this st age.  He said one possible method used for scoring 
mode 4 commitments was to give unbound a score of 1.  The reason was that the aim was to measure 
the limitations in the sectoral part of the schedules on the assumption that the horizontal part should be computed separately.  He noted that in the ho rizontal parts, entries for modes 1, 2 and 3 were 
normally based on a negative list while mode 4 co mmitments were listed in a positive manner.  
However, he said that were mode 4 commitments to be translated into a negative list style, like for 
modes 1,2 and 3, the entry "unbound except as specified in the horizontal part" would become "none".  Various examples were given to illustrate this point.  If there were restrictions applied in addition to 
horizontally scheduled commitments and limitations, th en these could be counted and inserted into the 
formula.   He then gave the example illustrating that a score of zero for "unbound except as indicated 
in part 1" would not work.  He noted that the pr oblem was that any positive listing for mode 4 in the 
horizontal part would not be captured.  He also  noted a technical problem when the entry was 
"unbound except as indicated in Part 1" with no limitations because these could not be counted as it  TN/S/M/16 
 Page 25 
 
 
 was not possible to go below zero.  The consequen ce would be that, since these limitations could not 
be counted, their removal would also not show up as an improvement.  This would not give a good 
signal.  In response to Brazil's question, he said that MFN exemptions were not taken into account.  
He noted that part of the reason was that they considered MFN exemptions to be based on another 
legal provision of the GATS namely Article II, while  the present exercise was basically based on 
Article XVI and XVII.  Additional commitments were al so not taken into account.  He noted that this 
was a relevant question given the Reference Paper in the Telecommunications Sector.  However, his 
delegation had thought it would be  more advantageous to have a methodology which was always 
normalized between 0 and 100.  Turning to India's question, he agreed that the methodology did not make a distinction in the economic importance of sectors for individual Members.  This was 
recognized in paragraph 22 of the paper.  He noted  that the methodology had been developed for the 
request-offer process.  He reiterated that the ai m was to know how many limitations were being 
eliminated, in what sectors and by which Member s.  Sectors of importance to one country would 
probably not be sectors of high pr iority for another Member and vice versa .  He stressed, nevertheless, 
that it would not be difficult to add weightings to sector s should this be required.   He clarified that the 
scores were a measure of the density of limitations. The methodology served as an analytical tool.  He 
stressed that it could be used for a variety of purposes depending on the needs of the user.  He noted 
that the Swiss delegation had found the methodology to be helpful.   He also noted that there were 
various aspects of the methodology that could be fine-tuned but it was nevertheless robust and had 
been thoroughly checked.  He underscored that the methodology was flexible and could be adapted to 
suit different situations.   The indexes produced  by the methodology served an important purpose by 
helping to give political leaders and the public a clearer indication of how the negotiations were 
progressing.  
92. The representative of the United States
 pointed out that her delegation had given a lot of 
consideration to how to develop a neutral scoring mechanism.  Sh e said that her delegation had shared 
ideas informally with others and that the Swi ss methodology, which contained the core elements, 
improved upon some of their earlier concepts.  She not ed that in order to undertake this type of 
assessment it was necessary to consider the sector, how much of it was included, the modes and how 
good the commitments were.  She did not think that  the horizontal challenges were  insurmountable.  
She recalled that they had looked specifically at mode 4 since most mode 4 commitments were on a 
horizontal basis.  They had thought that it would be  feasible to develop a score allocation for mode 4 
which could be applied to all of the sectors that were listed in the schedule.  The scores could be 
modified on a sector-specific basi s in accordance with a separate sco re that was developed for the 
horizontal measure.  While concerns expressed about precision and the use of the CPC were valid, she 
felt that it was important to keep in mind that any kind of methodology would only provide a rough approximation of where things stood.  She stressed that did not mean that the results would not be 
meaningful.  The point about communicating to the political leadership and to the public was 
important.  If it was not possible to come up with  a rough approximation of what percentage of 
services sectors were being covered, it was difficult to develop a political message on what progress 
was being made in services.  She felt that no matte r which methodology was used, the results would 
be the same in terms of the general trends and overall picture.  She gave as an example that construction services, in Switzerland's case, would still be at the top of the list for level of 
commitments and education will be at the bottom.  There might be a margin of error but the final 
result would still be the same.   She believed that  this kind of an assessment mechanism was quite 
useful.  On the other hand, since it provided a  rough approximation, it was probably best used and most appropriate when looking at the commitments of a Member or the membership as a whole.  She 
felt that this type of methodology was not well suited to analysing individual sectors or modes.  What 
this meant was that it was necessary to use an  aggregate assessment tool such as the Swiss 
methodology and, at the same time, pursue comple mentary approaches that would get down to the 
specific priorities of Members for specific sectors and modes of supply. TN/S/M/16 
Page 26  
 
 93. The Chairman
 drew Members' attention to a comm unication from Pakistan contained in 
Job(05)/210. 
94. The representative of Pakistan  introduced her delegation's paper contained in Job(05)/210 on 
mode 4 related issues.  She reiterated that the pur pose of the paper was to clarify a few fears or 
misconceptions about mode 4, which Pakistan felt were proving to be a major hindrance in 
encouraging Members to take mode 4 commitments.   She noted that these fears frequently arose in 
Pakistan's consultations with its trading partners and its stake-holders.  The first was a non-trade or 
security-related concern.  She pointed out that  there was nothing in the GATS which prevented 
Members from protecting their essential security interests.  A Member had the right to depart from GATS specific commitments and other obligations as security exceptions if there were valid concerns, 
without going through the waiver or Article XXI procedures.  The second concern was the return of 
temporary service providers to their home country.  The paper provided some ideas and solutions.  
She noted that these were not new and that she ha d consulted with others when formulating these 
ideas.  One of the possible solutions was for tem porary mode 4 workers to move on the basis of a 
GATS visa.  The idea was that the home country could keep a database of this particular kind of visa 
which would be issued to workers around the globe.   When such temporary workers moved out they 
would report their departure and, when they return ed, they would report their arrival back home.  
Another such measure could be that visa holders  might report to the home country and the host 
country at regular intervals.  To avoid an overly onerous procedure, they could report by telephone or 
mail or some other similar means.  Such measures would permit the embassy to tell migrant workers, for example, that two or three weeks remained before  the end of their visa and they needed to prepare 
to leave.  A similar but less intrusive measure could be that the employer of the mode 4 worker would 
inform his regulatory agency of the arrival and the departure of the mode 4 worker.  As not all Members might have the presence of all embassies, the option of revalidating the visa at regular intervals could be considered, if considered neces sary by the host countries.  She underlined that she 
hoped the paper would generate deba te and help inform all Members that there were solutions to 
mode 4 related concerns.  She also noted that all these measures were within the scope of the GATS.  
She highlighted that paragraph 4 of the Annex on th e Movement of Natural Persons did not prevent a 
Member from applying measures to regulate the entr y of natural persons provided that such measures 
were not applied in a manner which nullified or im paired the benefits accruing to any Member.  She 
noted that some stake-holders had said that they thought a definition of temporary was needed.  She 
stressed that many Members in their schedules have  already indicated periods of stay. These varied 
from a few weeks to five years.  In  such a case, there was no need to define temporary.  Each Member 
could define temporary as it wished.   Moreover, if  there was agreement on some specific instrument, 
such as the GATS visa, there would not be any need for the definition of temporary.  She reiterated 
that mode 4 movement did not mean migrating on  a permanent basis or seeking permanent entry to 
the labour market of the host country.  She hoped th at she had cleared some of the misconceptions and 
invited Members to add any ideas they had on these three issues. 
95. The representative of China
 thanked Pakistan for the paper which they felt provided quite a 
few thought-provoking proposals which merited an in-depth discussion.  He noted that the offers on the table regarding mode 4 were very disappointing give n the fact that this was the mode of particular 
interest to China and other developing country Memb ers.  He underscored that mode 4 offers seemed 
to be lagging behind other modes of supply and he strongly urged Members, in particular developed 
country Members, to demonstrate their political will.  In this regard, he encouraged them to submit 
substantive mode 4 offers which c ould match their ambitions on other modes of supply.  He noted that 
it was in this context that he found the Pakistan  paper highly relevant a nd important.  He thanked 
Pakistan for its timely and practical communication. 
96. The representative of Colombia
 noted that the paper from Pakistan touched upon an area that 
had been discussed previously in other working groups.  Visas could constitute a mechanism by 
which there could be impairment of the schedules of commitments and these visas could also be   TN/S/M/16 
 Page 27 
 
 
 technical barriers to trade in services.  She noted  that the paper from Pakistan provided some new 
thinking regarding the way in which the difficult qu estion of visas could be dealt with.  She believed 
that the concepts put forward were very in teresting and were worthy of discussion.   
97. The representative of Guatemala  thanked the delegation of Pakistan for its paper.  She 
reiterated the need to make progress on mode 4 in the negotiations.  She underscored that one of the 
greatest benefits for developing countries in these ne gotiations would come from mode 4.  She agreed 
with Pakistan that a visa mechanism could facilita te a balance between supply and demand of work 
and the concerns voiced by a number of Members.   The paper provided new ideas to nurture the 
negotiation.  She stressed that Guatemala sought great er access in mode 4.  The paper provided some 
solutions to the concerns voiced by a number of Members with regard to greater openness under 
mode 4.  She underlined that most of the time workers sought to work on a temporary basis and the 
ideas in the paper could ease their travel to the host country and their return home.  She believed the 
definition of a "temporary period" was an important element and looked forward to discussions regarding mode 4. 
98. The representative of  Thailand
 thanked Pakistan for its paper.  She believed it was a positive 
contribution to the discussions on mode 4.  She not ed that Thailand's preliminary observations were 
that the paper reinforced the need to distinguish between temporary and permanent entry.  The paper 
suggested possible means to ensure return to  the home country.  The ideas deserved careful 
examination.  She recalled that, as noted by the IO M in its presentation, the concept of temporariness 
and guaranteed return were releva nt to any undertaking to better integrate mode 4 concepts and 
definitions into national regulatory schemes.  She t hought that a visa category for mode 4 could in the 
long-term facilitate the collection of statistical data  on this small sub-sector of migratory movement. 
This could subsequently be used to measure the contribution of services provided under this mode to 
world services trade.   
99. The representative of India  thanked Pakistan for its paper.  He said that these were issues 
which had been debated in the morning.  He also noted the presentation by the IOM.  He pointed to 
the need to maintain the distin ction between temporary and perman ent movement.  Various ways of 
doing so had been suggested in the paper includi ng the use of visas which India and others had 
previously raised.  He stressed that the basic point  was the extent to which it could be ensured that 
temporary movement did not become permanent.  There were various ways.  He felt that, although 
there had been some discussion of this in the past, it remained the key issue for a number of Members.   He noted his and other delegation's support for Pakistan's paper.   
100. The representative of  Peru
 thanked Pakistan for its paper.  His delegation agreed with the 
comments by the delegations of China, Colombia , Guatemala, Thailand and India regarding the 
importance of the discussion on mode 4.  He said th at the proposal from Pakistan was simple but at 
the same time embraced very im portant issues that had been looked at earlier by a group of Members 
including Peru.  The concept of what was tempor ary or permanent needed to be deepened.  He 
believed that Pakistan had submitted a very g ood proposal that was a good basis for work.  
101. The representative of Kenya  thanked Pakistan for its pape r and expressed his delegation's 
support for it.  Kenya believed that it contained many positive elements and that it was an important 
contribution to work on mode 4.   He looked forward to a further deliberation on these issues.   
102. The representative of Indonesia  shared the views and concerns that had been expressed by 
Pakistan regarding the specific actions or kinds of instruments that needed to be agreed by Members 
in order to move forward on mode 4 issues.   
103. The representative of Mexico  thanked  Pakistan for its paper and said that it raised interesting 
ideas.  He hoped that the paper would be the basi s for more work.  He said that the contents of TN/S/M/16 
Page 28  
 
 paragraph 7 identified the crux of the issue and his de legation agreed with it.  He also said that his 
delegation would have qu estions on the proposal at a later stage.   
104. The representative of Chile
 thanked Pakistan for its paper and echoed the comments that had 
been made by other delegations.   She highlighted a number of ideas contained in the paper.  She 
noted that the ideas  in paragraphs 5 and 6 had been raised recently, notably in a recent paper 
submitted by a group of developing countries containe d in Job(05)/131.  These ideas, among others, 
merit in-depth consideration.  She said that  a GATS visa, the APEC business card and other 
mechanisms could facilitate the return of tempor ary services providers to their home country.  She 
sought to learn more about the obligations for the sending and host countries, as well as the hosts of 
the service providers.  
105. The representative of Bolivia  thanked  Pakistan for its paper and said it contained a number of 
interesting ideas.  She noted that these had been  discussed by developing country Members in the 
past.  She thanked Pakistan for carrying the discu ssion forward and for clarifying various concepts 
related to the definition of temporary.   
106. The representative of Dominican Republic  thanked Pakistan for its  paper.  She said it 
contained some innovative ideas including those that had been dealt with in the seminar in 2004 on 
trade and migration.  She noted that the paper c ontained all the elements that would help Members 
take substantive commitments in mode 4.    
107. The representative of Philippines  thanked the delegations of Switzerland and Pakistan for 
their contributions.  Pakistan's paper was of pa rticular importance to his delegation since the 
Philippines had over 8 million migrants overseas, althoug h not all of them were mode 4 migrants.  In 
the light of the earlier IOM presentation, the paper was another concrete example of how there was a 
need to take into consideration the sensitivities of c ountries and to strike the appropriate balance in the 
trade and migration discussion.  He noted that the pa per also highlighted national security issues.  On 
the issue of non-trade and security related concerns , he agreed that any Member had the right to 
depart from its specific commitments under the GA TS for valid security-related concerns.  He looked 
forward to hearing the reactions of Members who had concerns on this particular issue.  His 
delegation sought to focus more particularly on the issue of temporary service providers who became permanent migrants in host countries.  He noted that  there were interesting suggestions from Pakistan 
in this regard.  He believed that there were good practices around the world in terms of trying to 
discourage temporary service providers from staying on permanently in their host countries.  He 
looked forward to examining these good practices.  He noted that these might be compiled by 
international agencies and individual Members.  He  urged Members to engage in this discussion and 
possibly share some of their good practices that we re not that well publicised.  He stressed that 
Members that had concerns needed to recognize that  in certain instances, foreign corporations and 
employers in host countries were encouraging temporary service providers to stay on and become permanent.  He cited one example.  He noted th at certain countries had visas that were not supposed 
to be converted into permanent migration visas, or into another visa category, unless there was a 
waiver.  However, these host countries were the first to grant these waivers when  they could refuse.   
He said there was a need to explore the extent to  which illegal entry or overstay was encouraged by 
the fact that potential migrants or potential servi ce providers found it difficult to access the market of 
other Members.  He believed that there might be so me studies which showed that regular migrants or 
regular service providers had the tendency to return ra ther than to stay on pe rmanently.  He stressed 
the need for information exchange.  Pakistan had raised very important issues affecting all Members 
in its paper and he urged delegations to engage in this discussi on.  He reassured Pakistan that his 
delegation intended to revert to this paper in the future with  positive contributions, particularly in 
terms of good practices on the issues raised.    TN/S/M/16 
 Page 29 
 
 
 108. The representative of the United States  thanked Pakistan for its paper. Given its recent 
circulation, she said her delegation would come b ack to it to offer some of its observations and 
thoughts in the future.  She took note of the fact that Pakistan intended to address some concerns 
related to temporariness.  This was an issu e on which her delegation had many views.   
109. The representative of Pakistan  thanked those delegations that had offered comments and 
looked forward to further discussion of the communica tion.  She said that, in Pakistan's experience, 
tourist visas could at times be misused. 
110. The Chairman  noted the interest that had been expressed  in the paper.  He invited delegations 
to make any comments on any previous proposals.  As there were none, he proposed that the Council take note of the statements made, keep this item open and revert to it later in the meeting for any 
subsequent discussion.   
111. It was so agreed
.   
112. Speaking on 29 September, the Chairman  recalled that Item C of the agenda had been kept 
open earlier in the week.  He drew Me mbers' attention to JOB(05)/214.   
113. The representative of India , introducing JOB(05)/214 on the cross-border supply of services 
recalled that the paper had been made available on a previous occasion as a room document.  He 
recalled that at the last Special Session of Council for Trade in Services, Ch ile; Hong Kong, China;  
India and Mexico had submitted th is room document based on discussions in  the symposium on 
cross-border supply of services and had linked it with  the negotiations.  He said that it was no secret 
that cross-border supply of services was an area in which the co-sponsors believed there was much 
scope for improvement.  The basic purpose of this communication was to draw Members' attention to 
how this improvement might be possible and to co me up with certain questi ons and certain possible 
solutions.  He underscored that a number of seminar s, including a recent seminar on computer related 
services, had concluded cross-border supply was becoming increasingly important across a large range of sectors.  He stressed that this was a ke y point given that this reality was not captured in 
existing commitments or in the two rounds of revise d offers.  His delegation felt that it was necessary 
to move in line with this new business reality.  He hi ghlighted two issues in this regard.  Firstly, cross-
border supply was becoming particularly important in certain key sectors and activities some of which were listed in the paper.  He clarified that this listing did not imply that other services might not be as 
important, for example in particular professional services, the whole range of business services, other business services, computer-related services, research  and development, posta l, health, education, 
tourism, and others.  From India's perspective, this  was an area where the request-offer process, while 
important, might not be able to fulfil India's interests.   He explained that it was for this reason that in 
this area as others, there might be a need to supp lement the request-offer approach with multilateral 
and plurilateral approaches.  Secondly, he noted th at a number of trends had emerged in the area of 
computer related services as reflected in revised o ffers.  He said that a number of Members had been 
able to take commitments at the two-digit CPC le vel and he wondered whether two-digit CPC level 
commitments might be considered for other key areas.  Referring to problems of classification, he said 
that this involved the extent to which activities or s ub-sectors could be clearly described.  He said that 
problems could arise as some of the key areas were not described or not clearly treated in the CPC 
since it pre-dated some of these services.  The defin itions or the descriptions of the services might not 
correspond to the way in which actual trade in ser vices took place.  He noted, for example, that 
telephone call centres was one major area of cross-borde r supply  that was not specifically listed in the 
CPC.  There was the item "telephone answering services" but it did not specifically mention telephone 
call centres.  Did Members agree that telephone ca ll centres were covered within telephone answering 
services?  The co-sponsors sought the views of Member s on these issues.  Referring to the issue of the 
distinction between mode 1 and mode 2, he said th at this distinction from a business perspective often 
did not make sense.  While it was possible to co ntinue discussion as to which mode was electronic TN/S/M/16 
Page 30  
 
 delivery from a conceptual and technical point of view, and without prejudice to any such technical 
discussions, he said it was possible to have similar le vels of commitments in modes 1 and 2.  He said 
that this approach offered a practical way of overcoming the problem and from a business perspective 
it would provide much greater predictability and certa inty than was currently the case.  He stressed 
that this was key.  His delegation also hoped that  any complementary approach to the request-offer 
process would address the concept of cross-border supply.   
114. The representative Canada
 expressed his delegation's support fo r the paper and strong interest 
in this issue.  He welcomed India's focus on a prac tical approach to these questions.  He noted that in 
order to make progress in the short-term on market access it might be advisable to leave more complex issues to the future.   
115. The representative of Chile
 reiterated her delegation's full s upport for the paper and stressed 
that the three topics covered by the document deser ved greater discussion.  She noted that in the 
seminar on computer related services there had been much discussion on commitments on modes 1 and 2.  She suggested that as the limited time availa ble in the Special Session did not allow for an in-
depth discussion, she requested that the Chairman ho ld consultations with all Members in order to 
allow them to explore answers to the three topics raised in the paper.  
116. The representative of the European Communities
 welcomed India's paper. It important issues 
and they welcomed the possibility to discuss these further.  The European Communities shared the 
view that business reality and technological deve lopment had enhanced the importance of cross-
border trade in services.  In this context, he encour aged more in-depth examination of the issues.  He 
also flagged the on-going issue of do mestic regulation in cross-border trade in services.  He had taken 
note of the suggestion to make commitments at th e two-digit level for computer-related services and 
business services, but said that the different categori es and differences or similarities that might exist 
needed to be examined before trea ting them in the same fashion.   
117. The representative of Pakistan  thanked India and the co-sponsor s of the paper and recalled her 
delegations' earlier expression of support for it.  She had also found the cross-border supply 
symposium held in April 2005 to be useful as it had addressed many of the issues that she hoped 
would be considered further.   
118. The representative of Switzerland  welcomed the paper, which he felt contained innovative 
ideas, and expressed his delegation's interest in furthe r discussions.  He agreed that in sectors where 
cross-border trade is very intense, for practical reasons, the same commitme nts should be taken for 
mode 1 and mode 2.   He believed the sectors liste d in paragraph 3 of the paper were illustrative as 
there were other important sectors where trade under modes 1 and 2 predate the present internet 
revolution.  He said that the proposal for  a multila teral request-offer process must be discussed . He 
believed that a model schedule was a very good idea as there are some sectors where existing 
measures are often much more liberal than what is suggested by the schedule. He believed that this 
issue should be discussed in the context of discussions on complementary approaches as it was 
something that had to be solved in this round give n the speed of technological development. He noted 
that although Switzerland is a strong supporter of m odes 1 and 2, it recognized that in some very 
specific cases the legitimacy of regulatory intervention. 
119. The representative of Japan  welcomed the Indian paper.  He noted that they generally 
supported the trend of trying to make more commitment s in this area.  Nevertheless, he believed that 
in certain cases it may still be necessary to make a distinction between mode 1 and mode 2 . He 
expressed the readiness of his delegation to look at these issues and to engage in a detailed discussion 
as to what is the business reality, and the techni cally feasibility and appropriateness of undertaking 
similar commitments for modes 1 and 2.  He also  expressed their support for the proposal made by  TN/S/M/16 
 Page 31 
 
 
 Chile for consultations but thought it would be be tter to conduct such consultations together with 
other relevant issues.  
120. The representative of the United States  thanked  Chile, India, Mexico and Hong Kong, China,  
for their paper.  She noted that they shared similar views concerning commitments at CPC 84 and 
have responded to that in their revised offer.  Sh e also noted that they continued to engage with 
Members on the topic in informal groupings and looked forward to coming back at some point in the 
future to some of the questions raised. She indicated  that while she would need to consult further they 
were not opposed to the idea of consultation but sh e would like to get a better idea from Chile on what 
is intended.  
121. The representative of India  thanked Members for their support and interest in the paper.  
Concerning the proposal by Chile for consultations, he  noted that from their point of view the Special 
Session already had a large number of items to c onsider and there was not enough time to discuss the 
issues raised in the paper in a fo cused manner.  Without wishing to pre-empt the response from Chile 
to the question from the US, his delegation woul d like to have more focused discussions on the 
elements identified in the paper as well as on any othe r issues that other Members might want to raise.  
He noted the suggestion from Japan but while this mi ght be possible  it would be necessary to ensure 
that any consultations on cross-border trade are unde rtaken in a focused manner.  He concurred with 
the observation made by the representative of Switzerland on the large discrepancy between actual measures and scheduled commitments.      
122. The Chairman
 noted that some Members had shown inte rest in the paper introduced by India 
and that most delegations who t ook the floor have requested consultations.  He noted that the key 
elements and questions contained in the paper coul d help structure such consultations.  He asked 
Members to pass any additional points or questions that  they would wish to consider in a consultation 
on cross-border trade to the Chairman and the Secret ariat, so that others could be aware in good time 
of the various concerns or ideas on this subject.  He asked the Special Session of the Council to take 
note of statements made. 
123. It was so agreed . 
E. WORK OF THE SUBSIDIARY BODIES – REPORTS BY CHAIRPERSONS  
124. The Chairperson of the Committee on Trade in Financial Services  reported that the 
Committee had met on Monday, 19 September 2005.   He  had no news to report with regard to the 
outstanding ratifications of the Fifth Protocol to the GATS embodying the results of the 1997 negotiations.   He recalled that the Protocol w as still to be accepted by Brazil, Jamaica and the 
Philippines.  Under the agenda item on Techni cal Issues, the Committee had continued its 
consideration of the Brazilian communication on "electronic commerce and financial services" 
(JOB(05)/103).  On the question of an invitation of international standard  setting organizations, the 
Committee had agreed that he would endeavour to have bilateral consulta tions with interested 
Members.  He said that if a consensus seemed possi ble, he would consider a broader consultation with 
a view to bringing this issue again into the Co mmittee.  With regard to recent developments on 
financial services trade, the Committee heard a presentation by a senior official from the China Banking Regulatory Commission (CBRC) on the regul ation and supervision of China's banking 
sector.  The Committee's next meeting would be held  during the next cluster of services meetings.  
125. The Chairperson of the Working Party on Domestic Regulation
 reported that, since July, the 
WPDR had held a formal meeting, on 20 Septem ber 2005, and an  informal meeting on 6 and 
7 September 2005.  At its formal meeting, the WP DR had adopted its Annual Report to the Council 
for Trade in Services.   Members had also addres sed an informal note by the Secretariat, entitled TN/S/M/16 
Page 32  
 
 Overview of Regulatory Provisions in Services Econ omic Integration Agreement (JOB(05)/175, dated 
14 September 2005). On the main item relating to the development of regulatory disciplines under 
GATS Article VI:4, Members discussed the recent submissions from Australia ("Development of Disciplines on Domestic Regulation for the Legal and Engineering Sectors", S/WPDR/W/34, dated 6 September 2005); and Chinese Taipei ("Transparen cy Disciplines on Domestic Regulation in the 
Telecommunications Sector", which was a r oom document later circulated in document 
S/WPDR/W/36, dated 14 September 2005).  Follow ing this, Members discussed all the negotiating 
proposals according to the themes highlighted in his note JOB(05)/179.  This thematic discussion built 
on the first round of discussions that the Working Pa rty had held at its informal meeting on 6 and 7 
September 2005.  In both meetings, various issues, concepts and questions had been raised on the 
various themes.  It was good that Members were increasingly focussing their comments on the 
specific elements of the negotiating proposals.  It was also notable that Members had begun to engage 
each other on these proposals.  With a view to m oving the process forward, he said that he had 
encouraged Members to frame the issues and concepts that they had raised in the thematic discussions 
in more concrete language.  This  would help to facilitate domest ic consultations and focus the 
WPDR's work.  
126. Regarding the dates of future meetings, the Ch airperson of the WPDR said that, in order to 
advance the  Working Party's work before the Hong Kong Ministerial Conference, he had proposed 
that the WPDR continue to meet in informal mode  in October and possibly November 2005.  For this 
purpose, he had circulated a tentative schedule of meetings in document JOB(05)/169.  In addition to 
these dates, Members had agreed that the Working Party maintain the possibility of convening a 
formal meeting of the WPDR in late October in  order to consider its input to the Hong Kong 
Ministerial Conference.  In his consultations with Members, including developing countries, 
Members had indicated that they would like to ha ve disciplines that could help their exporters. 
However, they had also stressed that the eventual  disciplines should not overly impinge on regulatory 
autonomy and were in keeping with the GATS.  Looking forward, there was an expectation among 
Members for some sort of an outcome on domes tic regulation at the forthcoming Ministerial 
Conference.  In keeping with this, there was good momentum in the WPDR's work.  Numerous 
proposals and communications had been tabled. He understood that other Members, including 
developing countries, were planning to table thei r proposals shortly.  All these submissions provided 
useful resource for the Working Party's work and Members should keep up the momentum.  He 
encouraged more active participation from all Members, including developing countries, in the 
WPDR.  He said that it would also be useful if there was engagement and interaction between 
Members between meetings of the WPDR.  More generally, he had impressed upon the WPDR that 
the Working Party should avoid abstract, circuitous discussions and that its work should be characterised by clarity, precision and realism. 
127. The representative of New Zealand said that, given the absence of the Chairperson of the 
Working Party on GATS Rules , on the date of the last meeting, she had been selected by the Working 
Party to chair the meeting that had taken place on 21 September and wished to report on this meeting.  
The three usual items were on the agenda, in add ition to the adoption of the Annual Report, which 
was contained in document S/WPGR/15.  On em ergency safeguard measures, the delegation of 
Australia reported on the workshop on ESM that ha d been organized with Indonesia for capital-based 
officials from ASEAN countries.  This initiative and type of a pproach had been welcomed by 
delegations.  In addition, Brazil had made a detailed intervention on entries in schedules of some 
Members that, in its view, had eff ects equivalent to that of safe guard measures, and a number of 
questions were put forward regarding such entries.   Different views were expressed about the utility 
of undertaking such type of an exercise in the Working Party.  Some de legations reiterated the 
fundamental importance that they attached to progr ess on this issue and made suggestions on ways to 
organize further discussions.  Vari ous delegations showed openness to  exploring alternative ideas or 
approaches.  It was pointed out that, while propo nents had a responsibility in driving this process, 
openness and engagement from all sides were needed .  The Chairperson was called upon to undertake  TN/S/M/16 
 Page 33 
 
 
 consultations and appropriate steps to facilitate info rmal exchanges between Me mbers.  On subsidies, 
delegations pursued their discussion in the contex t of the informal communication from a group of 
delegations which proposed a provisional definition of subsidy and suggested next steps, including 
timelines, regarding the information exchange.  A nu mber of delegations expressed concerns that the 
mandate on the exchange of information foreseen in paragraph 1 of Article XV  remained unfulfilled, 
despite various efforts to energize this process.  Some Members were in favour of seeking guidance 
from the Special Session in regard to that mandate, while others had opposing views.  On government 
procurement, there had been relatively br ief discussions touching upon the more recent 
communication from the European Communities on an Annex to the GATS on Government Procurement.  The scope of the negotiating mandate , the relationship to the Government Procurement 
Agreement, and MFN issues were raised.   Overa ll, a number of delegations expressed dissatisfaction 
over the lack of progress in different areas of wo rk.  In addition to ESM, the Chairperson would 
undertake appropriate consultations on issues relati ng to subsidies and government procurement. 
128. The Chairperson of the Committee on Specific Commitments
 said that, since his last report in 
June, the Committee had held one informal meeti ng on classification on 19 July 2005, as well as one 
formal meeting, on 22 September 2005, at which it addressed its regular agenda items of scheduling 
and classification issues, and adopted the annua l report to the Council for Trade in Services 
(circulated as document S/CSC/11).   Under the fi rst standing item of its agenda, scheduling issues , 
the Committee examined in informal mode a set of  general scheduling questions on the basis of a 
room document by Hong Kong, China.  Even tho ugh at the June meeting several delegations had 
requested an in-depth informal discussion, only a ha ndful of Members participated in the exchange.  
There continued to be a gap between the strong in terest expressed in substantive discussions and the 
level of participation by the demandeurs  in these discussions.  He observed that generally only a 
limited number of delegations were engaging on substance and as a consequence, the Committee's 
technical work was hardly representative of the views of the whole Membership, and hence was not supporting the negotiations in the best possible way.  As for specific questions with regard to certain 
Members' offers, the fault lines between Members ha d remained largely unchanged for almost a year, 
with proponents stressing efficiency and multilat eral interest in those questions, while most 
addressees found it difficult to engage in the ques tions in the context of the CSC, since they 
considered them to be negotiati ng or otherwise confidential issues .  His continuous consultations on 
this question had not produced any breakthrough.  At  the meeting of 22 September, the delegation of 
Hong Kong, China had proposed a new focus of work  for the Committee and suggested a systematic 
examination of offers with a view to iden tifying and improving sche duling and classification 
ambiguities.  He had undertaken to consult on th is proposal in the coming weeks.  The Committee 
continued its discussion on technical matters related to economic needs tests (ENTs) on the basis of a 
communication from Canada on mode 4 and ENTs (S/CSC/W/47), as well as a room document from 
Korea.  While several delegations had expressed su pport for an information exchange on the criteria 
and operation of existing ENTs, no further submission was tabled.  Under the agenda item 
classification issues, Indonesia's revised propo sal on the classification of energy services 
(S/CSC/W/42/Rev.1 and Corr.1) continued to attract technical queries.  Due to time constraints, it was 
agreed that informal discussions on new classification issues would be taken up at the next dedicated informal meeting, which was tentatively schedul ed for 20 October 2005.  The meeting would address 
classification issues in tourism and travel-related services; recreational, cultural, and sporting services; 
as well as transport and logistics services.  It w as his personal observation that initial and revised 
offers on the whole were not technically clearer, unambiguous, and more easily comparable than the 
existing schedules.  Given the limited time that might be available, he said that Members might wish to reconsider whether the Committee could be used more effectively with a view to improving the 
clarity, certainty, comparability, and coherence of  commitments in support of the on-going market 
access negotiations.  The question of focus of work, he said, would be part of his consultations.  
129. The representative of Colombia
 requested that written copies of the reports be made available 
to delegations.  TN/S/M/16 
Page 34  
 
 130. The representative of Hong Kong, China
 wished to highlight a few points which the Council 
might wish to revisit when it would review progress at a later stage.  Referring firstly to a request from Chile at the last meeting for consultations on status of documents produced by the Chairpersons 
of the subsidiary bodies, she said that her delegati on would wish to participate in these consultations.  
Secondly, regarding classification and scheduling, sh e reiterated that her de legation had underscored 
on numerous occasions the importance of the "four  Cs" in classification and scheduling, namely 
clarity, certainty, comparability and coherence of schedules of specific commitments.  This was an 
objective for ensuring quality of offers, which her de legation had also informally suggested might be 
a possible qualitative target for the services negotiations .  She recognized the role that the CSC could 
play in furthering this objective, both with resp ect to existing and future commitments, and in 
operationalizing the "four Cs" as a target for the ne gotiations.  She was pleased to hear that the 
Chairperson would take up the proposal by Hong K ong, China in the CSC in  the coming weeks.  
Thirdly, with regard to informa tion exchange on subsidies in the WPGR, she said that Members had 
expressed concerns of varying degrees about the lack of progress in rule-making areas in the WPGR.  For subsidies, her delegation reiterated that, besi des the mandate for negotiations with a view to 
developing disciplines, there was also the mandate for information exchange.  Citing paragraph 1 of 
Article XV, she said that "for the purpose of such  negotiations, Members shall exchange information 
concerning all subsidies related to trade in servi ces that they provide to their domestic service 
suppliers".  The mandate was clear;  however it rema ined a fact that even this simple mandate for 
information exchange, which was a prerequisite for effective negotiation, remained unfulfilled despite 
great efforts.  As had been reflected in the discu ssion of the WPGR, this was a matter of great concern 
to at least a number of delegations and she l ooked forward to guidance from the Special Session on 
this particular aspect of the rule-making work.  Sh e reserved the right to revert to these issues at an 
appropriate juncture under the age nda item of review of progress. 
131. The representative of the United States
 thanked Hong Kong, China for its comments and said 
that clarification needed to be sought with respect  to the "four Cs", because there had been no specific 
agreement by Members on the concept expressed in that way.  She said that some discussions had 
taken place in the CSC and she recalled that her dele gation had indicated that it needed to refer the 
proposal by Hong Kong, China to capital for instru ctions.  If she understood that Hong Kong, China's 
request was that the Chairman include their ideas in  his consultations, she said that the US would be 
happy to participate in those consultations and w ould convey its reactions as it had done in the CSC.  
132. The representative of Chile  expressed her support for the comments by Hong Kong, China.  
Regarding the "four Cs", as far as she had unders tood, Hong Kong, China had put forward a proposal 
that Members could discuss further in the Special Sess ion in order to have the four Cs as a qualitative 
target.  If this was the case, her delegation believed that any such idea would merit more discussion in the Special Session.  
133. The representative of Hong Kong, China
 thanked the representative of Chile for having 
clarified the point.  She said that she had understood  that the Chairman of the CSC had indicated his 
intention to allow for further discussion of Hong Kong, China's proposal, and that no suggestion had been made that a consensus had been reached on he r delegation's proposal or for further action in the 
Special Session.   
134. The Chairman
 thanked the Chairpersons and Members fo r their hard work and said that they 
would intensify work as appropriate and focus in  each of the areas on their contributions to the 
Ministerial Declaration for which approval would be sought.  He said engage ment would be required 
and expected there would be much work in the comi ng weeks.  He invited th e Council to take note of 
the reports and the statements made. 
135. The Council so took note .  TN/S/M/16 
 Page 35 
 
 
 F. REVIEW OF PROGRESS , INCLUDING PURSUANT TO PARAGRAPH 15 OF THE GUIDELINES FOR 
NEGOTIATIONS  
G. ORGANIZATION OF FUTURE WORK 
136. Speaking on 26 September, the Chairman  indicated that he would open items F and G in order 
for the Secretariat to introduce the information tool s that Members had tasked it with preparing at the 
last formal meeting.  The item would be kept open for delegations' usual comments under these items 
when the Special Session reconvened later in the we ek.  He recalled that the Special Session had met 
in informal mode on 5 July in order to discuss a revise d draft outline of the information tools.  On this 
occasion, Members had discussed the sectors and modes that could be the subject of the Secretariat's 
notes.  He recalled that additions had been made to this list and that it would continue to remain open 
should the Council agree at a later point in time that a note on another subject would be helpful.  The 
meeting had provided an occasion to consult wi th Members on the relevance of negotiating, 
scheduling and classification proposals that had been ci rculated in a biography by facsimile.  He drew 
Members attention to a number of these notes. 
137. A representative of the Secretariat  said that on 5 July the Council had terminated 
consultations on the structure and content of the notes that Members had requested the Secretariat 
produce.  He recalled that it had been agreed that  the Secretariat would prepare 17 notes, twelve of 
which had already been circulated.  Those outstanding notes dealt with:  computer and related services,  postal-courier services, construction and re lated engineering services, tourism, and transport 
services.  He recalled his comments in July that the Secretariat would likely not be able to produce all 17 notes for the present cluster of meetings, but would endeavour to prepare as many as possible as 
quickly as possible.  In the interest of time he  refrained from presenting the notes individually and 
recalled that each of the notes had followed the st ructure that had been ag reed before the summer 
break.  Namely, each contained the six agreed upon sec tions.  Each section was not equally relevant to 
every sector or mode of supply, and hence, the notes varied in terms of the contents of each of these 
sections.  The sources used were those that had been  approved in the revised draft outline.  The notes 
also included a standard disclaimer contained in the first footnote regarding the nature of the 
information contained and its n on-usability for dispute settlement purposes.  He said he would 
welcome any questions of comments.   
138. The representative of Canada
 announced that the delegations of Australia, Canada, Chile, the 
European Communities, Hong Kong China, Japan, Ko rea, Norway, Singapore, Switzerland, Chinese 
Taipei and the United States would organize a seminar on telecommunications services development 
under the GATS. 
139. The representative of Chile  announced a forthcoming seminar on computer and related 
services. 
140. The Chairman  requested that delegations prepare their comments under the present agenda 
items later in the week with a view to providing possible elements for a Ministerial Declaration.  In 
particular, it would be important to address the political guidelines that Members would seek from 
Ministers.  On timing, he recalled that the Special Session was due to meet at the beginning of November, which he presumed would be about the time that the Chairpersons of the negotiating 
bodies would be expected to report to the TNC.  As there were no further comments, the Chairman 
suggested that before he adjourned the meeting for the day, the Council take note of these statements 
made and agree to revert to these age nda items later in the meeting.   
141. It was so agreed
. TN/S/M/16 
Page 36  
 
 142. Speaking on 29 September, the Chairman
 invited any Members wishing to introduce recently 
submitted offers to take the floor. 
143. The representative of Turkey  announced that his delegation ha d submitted its revised offer to 
the Secretariat in recent days and hoped that it would be circulated shortly.  He thanked the Secretariat 
for its assistance in his delegation's preparations to submit its offer.  He said that this preparation had 
involved consideration of what could be offered within the framework of legislation and national 
policy objectives in close consultation with the re levant public and private parties and NGOs.  
Turkey's revised offer included significant mark et access improvements in important services sectors 
such as financial and telecommunications services.  He said that Turkey's financial services commitments from the Uruguay Round were very good,  but nonetheless, the revised offer introduced 
new and deeper commitments.  In telecommunicati ons, Turkey introduced new commitments that did 
not exist in the Uruguay Round.  Turkey had also introduced improvements to the horizontal commitments in mode 3 and in line with his country 's autonomous liberalization efforts, for example, 
in terms of foreign investment legi slation.  Turkey had also introduced some technical corrections that 
made its schedule easier to read and understand.  Turkey was committed to meaningful services trade 
liberalization as one of the engines of global growth.  To this end, Turkey believed that there was an 
urgent need to make progress in the services negotia tions.  Principles of Turkey's understanding in the 
future process included constructivism, pragmatism a nd realism.  He said that Members would need 
to bear in mind what could be achieved realistically  in the short period of time prior to the Hong Kong 
Ministerial Conference.   
144. The Chairman
, making a few comments of a general nature, recalled that the Director-
General, in his capacity of Chairman of the TNC,  had said at the TNC meeting on 14 September that 
two-thirds of the work for Hong Kong needed to be complete and that there would be a need for 
governments to consider in good time a draft Minister ial Declaration, which meant that there should 
be a draft Ministerial Declaration by the middle of  November.  He had also underlined that by mid-
October it would be helpful to have a clear picture of the ambitions or objectives of Members.  This 
meant that the Council should have all of its work in this regard completed by the very beginning of 
November.   
145. The Chairman further recalled that in his repor t to the TNC in July, paragraph 18, he had 
indicated a number of issues on which he would hold  consultations and he wished to report to the 
Council on these issues.  Firstly, on further identificati on of expectations by Members in all areas of 
the negotiations, he said that, depending on the input that would be provided by  delegations, he might 
update the Annex contained in this last report to  the TNC which outlined, on a sectoral and modal 
basis, Members' expectations in the negotiations.  He sought to give dele gations, under this agenda 
item, the opportunity to provide new information or upda te or refine earlier assessments.  He said that 
more information from groups of Members would also be helpful.  He stressed that this was an important exercise in transparency, as it gave a cl earer picture as to the individual and collective 
expectations of Members.  He sa id that his report to the TNC woul d take into account any added input 
appropriately.  Secondly, on the intensification of the request-offer process, he said that an informal 
meeting had been held on 28 September.  Severa l contributions had been made, including one from 
Canada on how to create a plurilateral request-offer approach and a joint proposal from China, Hong 
Kong China, Pakistan and Chinese Taipei on systemic elements on quality of offers.  In light of the 
discussion, he had retained that Members were still  exploring all the possibilities and that further 
work was necessary.  He also thought that the discussion showed that Members had begun to think 
about the elements for the Ministerial Declaration of Hong Kong.  Thirdly, on the use of complementary approaches within the parameters of the GATS and the Negotiating Guidelines, he 
recalled that the Council had held two informal meetings on this topic on 13 and 22 September.  
Discussion had been held on the basis of seven non- paper proposals.  The meeting was dedicated to 
questions and clarification of the content of the pr oposals.  Once delegati ons had had an opportunity 
to refer these to capital, the Council had held a second meeting focused on positions.  There had been  TN/S/M/16 
 Page 37 
 
 
 a variety of views.  Some Members felt clearly that  there was a need to better define and specify the 
level of ambition or objectives and to transform these into language that could be used in the Ministerial Declaration.  Others had reservati ons about any type of complementary approach, 
including questions about the compatibility with the GATS framework and the Negotiating 
Guidelines.  He thought some useful exchanges of views had occurred in a very transparent forum in 
which delegations had sought  to fully understand the proposals.  In his view, this discussion needed to 
continue.  The question remained as to how far Memb ers wished to take this issue and he welcomed 
any comments Members might have in this regard.  Fourthly, on subsidiary bodies, he said some 
useful reports had been made by the Chairpersons with respect to consider able work done since the 
last meeting, which was an indication of the importa nce Members attached to this work.  He said that 
the Council would need to arrive at a report for the TNC in each of these areas.  Fifthly, on the 
implementation of LDC Modalities, he said that more  information had been made available under that 
item at the present meeting.  Sixthly, on S&D propo sals he said that the Council had been informed 
that some bilateral and plurilate ral consultations had entered into a text-based discussion and that 
there were further indications of progress made on so me of these that could be a focus prior to Hong 
Kong.  He thanked the African Group for its transpar ency in sharing with the wider Membership the 
state-of-play on these consultations.  He said that , when deemed appropriate by Members, the 
Chairman would be prepared to enga ge in consultations in this matt er.  Finally, on targeted technical 
assistance he said that efforts should continue to make this assistance more targeted and efficient.  The 
type of assistance that Members would require from the Secretariat's technical assistance would be helpful to organize work.  
146. The Chairman drew Members' attention to an  informal document contained in JOB(05)/131 
on the assessment of mode 4 offers by Members.  Th is document had originally been discussed at the 
last formal meeting and again at the previous even ing's informal meeting.  He said that a number of 
documents that had been presented informally had b een circulated formally, and in this regard he 
drew Members' attention to communications fro m Korea (TN/S/W/52); China, Hong Kong, China, 
Pakistan and Chinese Taipei (JOB(05)/215); Chinese Ta ipei (JOB(05)/217) and Japan (JOB(05)/218).   
147. The representative of Hong Kong, China
 requested that her delegation's comments made at 
the informal meeting held on 28 September be in corporated into the record of the meeting.2  Referring 
to JOB(05)/115, she said that the quality of offe rs was central to work  in the market access 
negotiations.  She noted that there had been discu ssions on intensifying the request-offer approach and 
complementary approaches to lift the level of ma rket access commitments.  There had been group 
assessments in overall terms or in specific sectors and modes. The Council had also been receiving 
various negotiating proposals, statements, targets,  objectives and model schedules that individual or 
groups of Members had put forward for specific sect ors or modes.  There was also no doubt in her 
mind that the quality of offers woul d and should continue to be Memb ers' focus in trying to set a 
political and substantive objective for the services negotiations by the Hong Kong Ministerial 
Conference.  Secondly, she said that Members shoul d strive for substantial improvements in market 
access commitments in individual sectors and modes of  supplies in the run up to the final offers.  
Thirdly, Members should seek a sufficiently ambitious package of targets in overall terms to form the 
basis for concluding the services negotiations as an inte gral part of the whole DDA.  She said that it 
was timely that Members express in more precise te rms what they sought in terms of quality and how 
to operationalise their objectives.  Many proposals by  individuals or groups of Members had touched 
upon the substantive issue of quality and the level of commitment.   
148. The representative of Hong Kong, China said that the co-sponsors of JOB(05)/215 (China; 
Hong Kong, China; Pakistan; and Chinese Taipei) wi shed to share their thoughts on certain systemic 
elements which they believed were equally, if not more  important to the quality of offers.  In terms of 
scheduling and classification, she said that discussion in the CSC over the past years on both of these 
                                                      
2 See Annex.  TN/S/M/16 
Page 38  
 
 issues had demonstrated that the way in which commitm ents were scheduled left much to be desired.  
The co-sponsors believed that the "four Cs" (cla rity, certainty, comparability and coherence) of 
schedules were of equal importance as the level of commitments themselves in determining the 
overall quality of offers.  Her dele gation had made a specific proposal in the CSC on how to set the 
four C's as objectives for the negotiations and how  to operationalise this through the CSC.  She said 
that the specifics were reflected in the record of the CSC; however, sh e reiterated that such an element 
needed to be reflected in the Sp ecial Session in order to provide guidance to work in the CSC.  
Secondly, on economic needs tests (ENTs), she said  that a large number of Members had already 
pointed out that ENTs could be restrictive, uncl ear and uncertain and that many ENTs remained 
unspecified in the latest offers.  Given the objectiv e of Members to improve the quality of their offers 
and the importance attached to ENTs by many , the co-sponsors expected  that Members would 
demonstrate political will to set elimination and specification of ENTs as an objective for the negotiation and to operationalise this objective with ta rgets.  With regard to MFN exemptions, the co-
sponsors were disappointed that, after two MFN ex emption reviews and the repeated assertion by 
many Members that the negotiations were the time to  deal with the exemptions, only a handful of the 
some 400 MFN exemptions had been removed.  She hesitated to compare this with progress in the 
market access negotiations; however, she said that Members were doing poorly in redressing these continued derogations to a fundamental principle of  the WTO and in restoring the full MFN principle 
as the cornerstone of the multilateral framework for services trade.  The co-sponsors saw the 
elimination and clarification of MFN exemptions as an important element in the objectives for the 
negotiations and had proposed some ideas in the pa per to operationalise it.  These were issues with 
systemic implications for every WTO Member and were best taken up  through a multilateral 
approach.  The co-sponsors had floated some ideas in the paper on an approach, and were also open to 
other ideas.  She stressed that these elements were not mutually exclusive with other attempts to 
enhance the quality of offers.  Rather, incorpora ting these systemic elements would ensure a more 
complete reflection of such quality.   
149. The representative of Cuba
 said that his delegation wished to speak to JOB(05)/131, 
submitted by Bolivia, Chile, Colombia, Dominican Republic, Guatemala, India, Indonesia, Mexico, 
Pakistan, Peru, the Philippines and Thailand.  He thanked delegations for this paper on progress to 
date on mode 4.  Referring to para graph 3 of the paper, he said that each of the issues reflected in a 
matter-of-fact manner a group of requests made by many  developing countries.  As said at the end of 
the document, Cuba agreed with the assessment that  the revised offers contained aspects which did 
not respond to these requirements.  He suggested  that, in the course of this assessment, the 
relationship between mode 4, development policies and national development st rategies be taken into 
account.  He said that the export and transfer of services under mode 4 should be examined in relation 
to national regulations.  Cuba be lieved that a greater emphasis should be placed on the policies that 
allowed developing countries to carry out these activ ities.  Cuba sought to share its assessment with 
other developing countries.  He joined in thei r assessments, which relate d to flexibility and new 
commitments undertaken by an important group of developing countries in the area of mode 4.  These commitments were reflected in initial schedules a nd demonstrated qualitative progress in comparison 
to earlier offers.  This demonstrated the interest and progress made on the part of the delegations of 
many developing countries.  He believed that other Members should make the same intensive 
progress that many developing countries  had shown.  He reiterated that many of the concerns of the 
developing world related to "brain drain", and Cuba believed that an analysis of the obligations on the 
recipient countries should be carried out.  He insist ed that the mode 4 negotiations should not be seen 
in isolation, but rather within the overall framework  agreed to by Ministers at Doha, namely, at the 
centre of the negotiations.  Mode 4 could be an effective manner of ensuring development through the 
transfer of know-how, new technologies and financia l resources which were essential in order to have 
an impact on developing economies, including th e movement of persons.  He attached great 
importance to the fact that these activities s hould complement national development.    TN/S/M/16 
 Page 39 
 
 
 150. The representative of Brazil  thanked the delegation of Hong Kong, China for presenting 
document JOB(05)/215 as well as other delegations  that had presented other documents on 
complementary approaches during recent informal di scussions.  He sought to register formally the 
preliminary reactions and concerns that his delega tion had expressed in those informal consultations 
with regard to some of these documents as a way to  contribute and to help ot her delegations to take 
such views into account as Members moved forward in  this debate and refined their ideas.  Brazil 
believed that these proposals had provided useful input s into the discussion.  At the same time, he 
noted that some of the proposals did not take duly into account the need to r espect the architecture and 
the flexibilities built into the GATS.  The discussi ons in this area were guided by the Doha 
Declaration, the Negotiating Guidelines (S/L/93), th e Scheduling Guidelines (S/L/92) and the General 
Council Decision dated 1 August 2004 or the July Packag e.  He said that to depart from the mandate 
and the parameters of the negotia tion would be counterproductive a nd could lead to opposite results 
than those intended, for instead of energising th e services negotiation, it would derail them in the 
short time before Hong Kong.   
151. The representative of Brazil said that it was in th is context, and in the light of a careful 
examination of the proposals circulated by the Eu ropean Communities, Japan , Australia, Switzerland, 
Chinese Taipei, Korea and New Zealand in the inform al consultations of the Special Session of the 
Council for Trade in Services that had been held on 13, 21 and 28 September, that Brazil wished to 
present a number of considerations at the form al meeting.  With respect to compatibility 
considerations, most of the proposals that had b een presented relied on the in troduction of quantitative 
and qualitative parameters for Me mbers to schedule commitments.  Brazil was not convinced that 
these would be compatible with the flexibilities pr ovided for in the Negotiating Guidelines and the 
GATS.  Article XIX:2 of the GATS provided that "t he process of liberalization shall take place with 
due respect for national policy objectives and the le vel of development of individual Members, both 
overall and in individual sectors.  There shall be appropriate flexibility fo r individual developing 
country Members for opening fewer sectors, libera lising fewer types of transactions, progressively 
extending market access in line with their develo pment situation and, when making access to their 
market available to foreign servi ces suppliers, attaching to such access conditions aimed at achieving 
the objectives in Article IV".  He said that it was hard to reconcile quantitative or qualitative 
parameters that would apply equa lly to all Members, or at least to sets of Members, with the 
flexibilities granted to individual Members.  Paragr aphs 4, 11 and 12 of the Negotiating Guidelines, 
provided additional guidance.  He cited paragraph 4 that "the  negotiations shall take place within and 
shall respect the existing structure and principles of  the GATS, including the right to specify sectors in 
which commitments will be undertaken and the four modes of supply".  Paragraph 11 established that 
"liberalization shall be advanced through bilateral, plurilateral or multilateral negotiations", but left no 
doubt that "the main method of negotiation sha ll be the request-offer approach".  Brazil was 
concerned that the benchmarks as proposed would invert the clear prio rity stated in the Guidelines.  
Paragraph 12 reiterated the same el ements contained in GATS paragr aph XIX:2.  Furthermore, it 
remained unclear how such mandatory benchmarks on a minimum number of sectors or sub-sectors, as well as formulae for market access and reductions on limitations scheduled in the four modes of 
supply, could be made compatible with the built-i n flexibilities of the GATS.  Until such time as this 
matter could be satisfactorily clarified, he said that  the request-offer approach would have to remain 
the main modality of negotiation and Members needed to take care not to undermine it.   
152. Turning to feasibility considerations, the represen tative of Brazil stated that one aspect that 
would have to be addressed in futu re consultations was the need for an assessment as to the extent to 
which it might be feasible to delineate and agre e on parameters that could properly capture the 
inherent complexity and diversity of individual schedules and individual Members, without departing 
from the built-in flexibilities of the GATS.  On hi s delegation's concern about a possible "round for 
free", he said that it was of great concern to Brazil that some of the complementary approaches relied 
on the notion that the level of commitments taken in the Uruguay Round should be factored into the 
current negotiations.  He said that the Uruguay Round commitments represented the balance of TN/S/M/16 
Page 40  
 
 concessions achieved in those negotiations, where serv ices concessions were offset by very important 
concessions in other areas.  The concept of "cred its" to be granted in the Doha Round, based on the 
schedules of the Uruguay Round subverted the letter a nd the spirit of the GATS.  The implementation 
of these approaches could lead to a round for free for developed countries in services and turn the developing countries into the main, and perhap s the only, contributors to the present services 
negotiations.  Such an outcome would not be compa tible with the provisions of Articles IV and XIX 
of the GATS in which flexibility was established in  favour if developing countries and not against 
them.  It would also lead to a significant re duction in the level of ambition for the services 
negotiations.   
153. On classification, the representative of Brazil agr eed with the importance of enhanced clarity 
and comparability that would accrue from a recourse to common classification.  However, efforts 
aimed at harmonising Members' classification needed to be approached in a manner that was consistent with the flexibilities of the GATS.  To  do otherwise would run counter to paragraphs 23 
and 24 of the Scheduling Guidelines.  Secondly, on  flexibilities for developing countries, he said that 
the complementary approach needed to distingui sh between developing countries and developed 
countries in terms of commitments.  Members needed  to abide by the basic premise of Article XIX:2 
of the GATS, namely, that all developing countries  enjoyed additional benefits in comparison to 
developed countries.  There was no legal basis for treating developed countries and developing 
countries alike under the GATS.  In the same way th ere was no legal basis for differentiation between 
non-LDC developing countries.  Thirdly, on incomp atibilities with the LDC Modalities, he said that 
very few of the proposed complementary approa ches proposed seemed to adequately take into 
account the LDC Modalities (TN/S/13).  He said that  paragraphs 4 and 5 of these Modalities required 
Members to exercise restraint in seeking access to LDCs' markets and to avoid requesting LDCs to 
undertake additional commitments under Article XVIII of the GATS on regulatory issues which might go beyond their institutional, regulatory and administrative capacities.  Fourthly, he said that, in respect of some of the concepts presented, he hope d that in future consultations, additional ideas and 
further refinement regarding concepts such as "critical mass" and "assessment of improvements" 
would allow a more comprehensive assessment of the proposals themselves.   
154. The representative of Brazil, referring to mode 4, said that Brazil believed that one of the 
main elements to be corrected in the course of the negotiations was the imbalance in the level of 
commitments by modes of supply.  Mode 4 was unde r-committed in comparison to modes 1, 2 and 3.  
He said that this anomaly should be a core concer n in the negotiations since the movement of natural 
persons had been highlighted by developing countries as their main export interest as contained in 
items (c) and (d) of Annex C of the July Package.  In this regard, the categories of contractual service suppliers and independent professiona ls merited further consideration.   A good reference for further 
discussion of complementary approaches could be  found in JOB(05)/131, which presented an 
assessment of mode 4 commitments in recently ci rculated revised offers.  All of these critical 
elements could be properly addressed without depa rting from the architecture of the GATS.  In 
conclusion, he said that the perception that th e current bilateral request-offer method was not 
producing satisfactory results, which was a percep tion common to many negotiating areas, did not 
imply that Members needed to deviate from the arch itecture of the GATS.  As much as Brazil wished 
to advance, the conceptual difficulties could not be brushed aside.  Members needed to pursue the 
intensive discussion they had held over the pr evious two weeks in order to understand the 
implications of the new approaches.  Brazil re mained committed to the services negotiations and 
would examine in a constructive spirit each and ever y proposal aimed at defining a substantive and 
balanced services package for Hong Kong.  He i ndicated that his delegation would provide the 
Secretariat with copy of this statement so that  it could be circulated as a job document for ease of 
reference of other delegations as the Council m oved forward in refining these proposals.   
155. The representative of the Philippines
, speaking on behalf of Brunei Darussalam , Indonesia , 
Malaysia , the Philippines , and Thailand , thanked those delegations that  had recently tabled proposals  TN/S/M/16 
 Page 41 
 
 
 to facilitate the discussions on possible complementar y approaches.  He said that according to the 
Negotiating Guidelines, the request-offer method s hould be the main method of negotiations. After 
considerable reflection on the papers, he was still not  clear how they would not, in effect, replace the 
bilateral request-offer or reduce the request-offer pr ocess to a mere monitoring process.  Those papers 
were also at times too straightforward and neutra l in that their methodologies did not adequately 
capture the developmental dimension of flexibilit y for developing countries and LDCs whose services 
sectors were in the early stage of development, as we ll as some of the issues and concerns raised by a 
number of delegations, such as proper treatment of m ode 4, horizontal commitments and classification 
issues.  He reaffirmed that room for policy manoeuvring was crucial since a well-functioning and 
well-diversified services sector meant sustained growth, especially to developing Members.  The 
GATS framework did not provide for post-commitmen t remedies, apart from recourse to Article XXI 
or the waiver process, which would involve, as a su re consequence, some form of obligation to 
compensate which could be highly punitive to small developing countries.  He said that, ironically, much had been made of the manoeuvrability and flexibility provided by the GATS in order to call into question the need for a proposed emergency safeguard  mechanism in the services sector.  He said that 
each Member had scheduled its  own limitations in one sector or s ub-sector or another.  Developing 
countries were allowed under the Agreement and the Guidelines to gradually liberalise their markets 
at their own pace.  He said that this opening up usually took place where and when it corresponded to 
domestic priorities.  
156. The representative of Philippines said that the gr oup of Members on behalf of which he was 
speaking sought to underscore the belief that ser vices liberalization should be accompanied by sound 
macroeconomic management and appropriate regulation and supe rvision.  While they fully 
recognized the benefits of an open market, their au thorities continued to carefully consider the pace 
and sequencing of further liberalization in sectors of  mutual interest, together with a comprehensive 
review of existing regulatory regimes in order to ensure the sustained soundness of the services 
sectors, particularly those relating to sensitive syst ems such as financial services and telecoms.  They 
were concerned that these approaches could undermin e such flexibility.  A Member might be caught 
in situations where it had no choice but to undertake commitments prematurely to  fulfil the targets.  
This might undermine the principle of progressive liberalization.  On the other hand, the scoring approach could send a wrong message.  It did no t help increase the comparability of schedules but 
generalised Members' commitments into a simplifie d value.  The scoring approach would transgress 
negotiations into viewing services negotiations as ak in to goods negotiations where one plus one was 
equal to two.  A fair and accurate method to tran slate commitments into indices was lacking and in his 
view non-existent.  Further, none of the propo sals demonstrated a reasonable method of assessing 
horizontal commitments where most mode 4 commitm ents were scheduled.  He thought that it was 
dangerous to request an outright agreement on th e desirability of compleme ntary approaches before 
the design was fully fleshed out.  It was comparable to asking for a blank cheque, and was 
disconcerting if viewed in the context of its bei ng possibly extended to encompass future rounds of 
negotiations.  He affirmed that the undefined va riables would matter at the end of the day.  
157. Turning to comments on the possibilities for intens ifying the request and offer approach in the 
services negotiations, the representative of the Ph ilippines said that the group of Members believed 
that there might not have been enough engageme nt to date between and among Members at the 
experts-level, particularly since many developing Members were not ab le to regularly send officials to 
Geneva for the cluster of services meetings.  Wh ile written requests from trading partners provided a 
general sense of their sectoral priorities, these di d not truly allow Members a deep appreciation of 
trade interests of these Members and prevented pr oductive dialogue on how to accommodate requests 
for commitments while taking into consideration the developmental or ec onomic concerns of the 
requested party.  This was one area that the group on behalf of which he was speaking considered as 
having great potential for the process of intensifying  the request-offer approach.  He suggested that 
the demandeurs , many of whom had the required financ ial and human resources, could raise the 
present level of experts-to-experts di alogue and engagement in a number of ways.  Firstly,  they could TN/S/M/16 
Page 42  
 
 exploit to its fullest extent e-mail or other electr onic means of contact with experts around the world, 
particularly in those countries of specific trad e interest to them.  Secondly, they could send 
delegations to the capitals of trade partner Members,  particularly those of specific trade interest to 
them.  Alternatively, for those with enough fina ncial resources, regional or sub-regional meetings 
dedicated to discussing requests and offers in the se rvices negotiations could be organised.  Thirdly, 
experience had shown that many of the embassy officials of demandeurs  were competent to meet with 
capital experts and engage in serious and more focu sed discussions of requests.  He urged Members to 
devise methods and approaches that would result in  more focused and intense discussions of some 
technical issues, which were usually not possible in  Geneva during the cluster, because of the absence 
of appropriate experts, as well as owing to the limite d time available for bilaterals and the many other 
issues and concerns that competed for attention dur ing a cluster.  In the minds of the group, these 
were the complementary approaches that might truly be consistent with the GATS and the 
Negotiating Guidelines. 
158. The representative of the Philippines said that, at  the end of the day, Members with strong 
interests in specific sectors should lead by example in  the level of market access that they provided in 
their offers vis-à-vis their expectations from other Members.  In the words of ASEAN Economic 
Ministers, which had issued in Vientiane a Joint Statement the previous day on the DDA 
Negotiations, "we should be mindful of each other's concerns and with the developed countries being 
more conscious of the needs of the developing countries."  
159. Speaking on behalf of his own delegation, th e representative of the Philippines sought to 
express its full support for the statement delivered by Br azil.  He said that th e July package continued 
to contain the way forward to allow the services nego tiations to move expeditio usly.  Any attempt to 
explore complementary approaches to the request-offe r approach needed to be  consistent with the 
GATS and the Negotiating Guidelines.  He agreed th at the negotiations should be intensified and said 
that the Philippines expected the demandeurs in the market access services negotiations to provide 
leadership by giving genuine market access to de veloping countries in sectors and modes of their  
interest, such as in mode 4.  He reiterated his de legation's view that market access and rules had to 
move ahead together as re-affirmed by the APEC Mi nisters responsible for trade in their ministerial 
statement in Jeju, Korea.  In GATS Rules partic ularly, it was imperative that Members shape the 
safety nets similar to those available in the goods sector and which were required to build and 
facilitate the confidence of domestic constituencies.  He said that these were just broad and general 
themes by which his delegation was constantly gui ded in the negotiations, and that his delegation 
would remain actively engaged.  In conclusion, he  reiterated the need to re-double efforts in the 
autumn so as to build on work to date and addr ess the fundamental concerns of Members in order to 
achieve significant breakthroughs for meaningful results in the negotiations, namely, achieving a 
developmental and povert y alleviating economic impact from the round. 
160. The representative of Thailand
 welcomed the submission of a revised offer from Turkey and 
the communication contained in JOB(05)/215.  She said that the merit of the proposal lied in the fact 
that it was not only driven by market access interests, but by larger systemic interests which 
concerned many Members that sought to promote th e core value of the multilateral trading system, 
such as MFN, and sought to sustain the system by  preventing potential credibility gaps, such as the 
difference between what was promised and what w ould happen through clearer scope and coverage of 
commitments undertaken.  Thailand believed that the proposal could be used as parameters that would 
help Members better assess the meaningfulness of negotiated market access and national treatment 
commitments.  The three elements were releva nt across sectors and modes of supply.  As for 
scheduling ENTs, even at the lowest level of ambi tion, greater clarity would be helpful and was a 
point that Thailand sought to pursue and for which it hoped to see wider enga gement.  Her delegation 
shared the view of the co-sponsors that the CSC ha d a critical role to play and it looked forward to 
discussing this proposal in greater detail in the near future.    TN/S/M/16 
 Page 43 
 
 
 161. On the topic of complementary approaches, the representative of Thailand said that she 
agreed with the points raised by Brazil to a large extent and added that, if the underlying goal was to 
rush to a standstill level of commitments or great er, then the complementary approaches might serve 
this purpose.  However, the social and economic  realities of Members were not so simple and 
services, diverse as they were, and the levels of deve lopment by sector and by country were disparate.  
It was perhaps for this reason that the drafters of Article XIX recognised the necessity of allowing 
each and every Member to liberalise where and when it corresponded to domestic priorities.  Moreover, because the undefined variables of any appr oach mattered, the basis for any plurilateral or 
multilateral formula that would manipulate the final outcome also mattered.  Members needed to be prudent and ensure that they fully understood the im plications before signing on to any approach.  She 
said that Thailand did not believe in going to th e negotiating table empty handed, and even less so 
leaving it that way.  She said that her delegation had made requests to key tr ading partners and would 
table revised requests in the near future.  Thaila nd's initial stance on a plurilateral approach was that 
Thailand would have no difficulties if Members used informal friends groups as a vehicle to obtain a 
mass of voluntary market opening among like-minde d Members that shared  the same level of 
ambition.  However, plurilateral approaches as s uggested in Korea's or Canada's proposal was 
contingent on the concept of critical mass of market opening, which was a different matter.  A 
plausible argument put forward in the Canadian pa per was the key concept to realistically extract 
terms on a Member-by-Member basis according to wo rld share of services exports and imports in 
relevant sectors with built-in flexibilities, incl uding special flexibilities for developing countries.  
Nevertheless, she said that the pr oponent had indicated there were sta tistical constraints in identifying 
who would form part of the plurilateral group.  More  importantly, the concept of a plurilateral request 
led to the question as to who would determine the level of development and who was in the best 
position to make this determination if not the reci pients of plurilateral requests themselves.  In 
addition, the demandeurs  might have different views on which Me mbers constituted a market priority.  
The sectoral approach foreshadowed by Japan's and Chinese Taipei's proposals in some part 
overlapped with a plurilateral approach and could be  less than compatible with paragraph 4 of the 
Negotiating Guidelines if the processe s they proposed would lead to de facto exclusion of certain 
sectors from the negotiations.   Her delegation shar ed the concerns of the Mexico and the United 
States in this regard.  She wondered what flexibilit y would be available to Members if multilateral 
approaches were coupled with plurilateral approaches.   
The representative of Thailand said that the complementary approaches did not appear clear when 
they addressed the issue of mode 4.  A proponent of the complementary approaches had stated the 
need for a basis for assessment of improvements, ot herwise, any targets that might be reached might 
not be commercially meaningful.  She said that, with or without any agreement on complementary approaches, some guidance that Members could use to assess improvements would be needed.  In this 
regard, she drew Members' attention to JOB( 05)/131 in which a group of Members, including 
Thailand, proposed parameters for assessment of mode 4 commitments.  Quantitative indicators 
obtained by counting of categories included in th e horizontal section of schedules (where mode 4 
commitments were traditionally scheduled) and the nu mber of sectors covered by both sectoral and 
horizontal commitments, she said, would not say mu ch about the intrinsic value of commitments.  
Thailand believed that qualitative indicators, if followe d, would help to achieve the real value of mode 
4 commitments and was consistent with paragraphs (c) and (d) of Annex C of the July Package and 
Article IV of the GATS.  A few of these indicators were included, for example, the inclusion of 
categories of natural persons de-linked from commer cial presence (i.e. contractual service suppliers 
and independent professionals); sectoral  coverage of mode 4, particularly in sectors of keen interest to 
developing Members; removal of market access lim itations that took on various forms, such as 
quotas, wage parity considerations, and clear speci fication of minimum duration of stay; the way in 
which labour market tests (LMTs) were applied a nd administered; and additional commitments in the 
sense of Article XVIII, such as recognition of qualification and transparency as elaborated in 
JOB(04)/142.    TN/S/M/16 
Page 44  
 
 162. The representative of Chinese Taipei
 asked that his delegation's introductory statement on 
JOB(05)/217 made at an informal meeting on 13 September be reflected in the record.3  On review of 
progress, his delegation welcomed the initial and revi sed offers submitted since the July meeting.  
However, he urged those Members not having do ne so to submit outstanding offers as soon as 
possible.  He said that only the submission of offers, including through improvement in their scope 
and quality, could maintain momentum in the negotiations.  He said th at over the summer his 
delegation had looked at the real substance of servi ces commitments made to date.  It had analysed 
the state-of-play for 64 offers across the W/120 sect ors.  Although some contained improvements, 
particularly in the areas of special interest to  developing countries, there remained room for 
improvement in nearly all of the sectors in devel oped and developing country Member offers.  This 
exercise had confirmed his delegation's view that the services negotiations had not made satisfactory 
progress and that the request-offer process alone was not producing the results for the round and was 
in urgent need of strengthening.  In this context,  his delegation had recently put forth a proposal to 
supplement the request-offer process.  Having liste ned to Members' comments about these proposals, 
including whether the suggestions were compat ible with the GATS framework, he remained 
convinced that there was nothing in the GATS th at would prevent Members from exploring these 
approaches.  He believed the Members should expl ore all of the negotiating methods available to 
them within the scope of Article XIX of th e GATS and the Negotiating Guidelines because the 
current package on services was out of balance w ith results for other negotiating issues, especially 
with those that concerned the ma rket access pillar.  Chinese Taipei  proposed a combined multilateral 
and plurilateral approach to widen and deepen commi tments in infrastructure sectors.  It had always 
been his delegation's view that liberalization gains could be made in the current round by focussing on 
intermediary services.  Further liberalization of  services in the infrastructure sector had spill-over 
effects and helped to reduce costs in goods industri es that they served.  He recognised that the paper 
might have some shortcomings.  Ho wever, an ambitious outcome in se rvices was a pre-requisite to a 
successful conclusion to the Doha Round.  He dele gation had been pleased to see that some of the 
friends groups in some sectors had sought to use a scheduling model to improve Members' 
commitments.  He said that if Members could discuss the proposals and reach agreement quickly, there was a good chance of improving the quality and quantity of Members' commitments.  Turning to 
rules, he said that his delegation sought to deal with elements such as developing disciplines in 
domestic regulation in a horizontal framework and increasing transparency with regard to the inscription of ENTs in schedules.  He firmly belie ved that agreement on these elements would further 
strengthen the legal clarity and certainty of co mmitments and hence raise the overall level of 
confidence in the negotiations.  He said that only tw o months remained before the next meeting of 
ministers and that some clear political direction on services was required for the Hong Kong meeting.  
He said that it would not be sufficient to set a targ et date for the improvement of offers.  Rather, a 
multilaterally agreed target was necessary to increase the level of ambition and to ensure real 
improvement in the level and quality of comm itments.  He commended the Chairman for his 
tremendous contribution to the ser vices negotiation during his tenure. 
163. The representative of Mexico
 thanked India and Hong Kong, China for their presentations of 
their working documents.  He reiterated that Mexi co was co-sponsor of JOB(05)/131 and endorsed the 
contents of JOB(05)/215.  The re quest-offer approach for Mexico wa s the fundamental pillar of the 
services negotiations.  Although Article XIX of the GATS provided the possibility of using other 
mechanisms, the structure of th e Agreement was founded on the traditional request-offer approach.  
For this reason any other approaches should be cons idered as complementary to the original request-
offer approach.  The use of such mechanisms ne eded to respect the GATS and the articles that 
provided the basis for commitments.  In this regard, he  referred specifically to market access, national 
treatment and, in some cases, additional commitmen ts.  From Mexico's point of view the assessment 
of the offers relied on evaluating their orientation, co ntent and, in the final analysis, the result of the 
negotiation, both in a quantitative and quantitative sense.  Therefore,  the commitments negotiated in 
                                                      
3 See Annex.  TN/S/M/16 
 Page 45 
 
 
 the past round should not be part of these mechanis ms or approaches.  Based on the architecture of the 
Agreement, the starting-point for evaluations w as existing commitments and national legislation, 
which were the basis that supported the commitments at the end of the round.  He said that this was 
made clear in some offers.  However, in most ca ses the offers were far from being transparent and 
clear.  Based on the exercise over the preceding months  regarding the relevance of restrictions and 
limitations in modes 1 and 2 (notably the symposium held earlier in the year), he said that for many 
sectors the restrictions in these modes could not be ju stified.  Except in cases that were fully justified 
on the basis of national legislation and clear nati onal policy objectives, Mexico believed that these 
restrictions should disappear.  He said that at present, few WTO Member economies, in particular the developing countries that sought to attract more productive foreign investment, maintained important 
restrictions on foreign investment.  For this same  reason, the ability and desire by these Members to 
undertake more and better commitments in this mode of supply would be related to the commitments 
they gained in other modes of supply in which they  had an advantage and interest, which was the case 
for both mode 1 and mode 4. 
164. Turning more specifically to mode 4, the represen tative of Mexico said that the assessment of 
the results through these approaches needed to ta ke into account the four horizontal categories 
mentioned in many of the offers as well as commitmen ts at the sectoral level.  This assessment was 
necessary given the importance that these commitme nts represented for many developing countries as 
well as the fact that they were to be taken in line  with various provisions, pa rticularly Article IV, the 
Negotiating Guidelines and paragraph 15 of the DDA.   The complementary approaches needed to 
include the elimination of labour market tests (LMTs) and economic needs tests (ENTs) maintained 
by many Members in mode 4 and other modes.  He said that in cases where these limitations could 
not be eliminated, they should be based on nationa l legislation and domestic policy.  As well, the 
criteria on which they were based needed to be ma de clear, including administration and application 
of these restrictions and the relevant deadlines.  For both aspects, Mexico sought, at a minimum, the 
freezing of these restrictions and their subsequent elim ination in the current or future rounds.  Finally, 
he said that in order to foster transparency a nd credibility of any complementary approaches, the 
Council should be able to act as a multilateral m onitoring body through which Members could analyse 
individual schedules and group model schedules.  He sai d that any approach need ed also to take into 
account the principles and obligations of flexibilit y for developing countries and LDCs in the GATS 
and other provisions adopted by the Council. 
165. The representative of Turkey
 sought to make a few comments on complementary approaches.  
He said that Turkey was a demandeur in the services negotiations a nd had expectations from the 
services agenda.  Turkey was disappointed that th e request-offer process had not yielded the desired 
results.  The basis of the process was goodwill and th e belief that services liberalization was good for 
economic and overall development.  He noted the c oncerns on the part of some developing countries 
and the LDCs in this regard, and he said that addressing the situation would require time.  He 
reiterated the need to be realistic and pragmatic.  From his delegation's point of view, the Council did 
not have the time to address this major issue be fore the Hong Kong Ministerial Conference.  In 
introducing complementary approaches,  Members needed to be careful  not to weaken the flexibilities 
built into the GATS and the main method of liberali zation, namely the request-offer process.  This 
process had problems and weakness. However, his delegation had understood that various 
complementary approaches could bring about problem s for the membership, su ch as diminishing the 
manoeuvring space available to partic ipants in the process, which in turn could limit the ambition of 
some parties once they had reached a certain percen tage level of bound liberalization.  Another major 
problem could be a domestic one.  He said that Turkey  had not been able to table its revised offer at 
the July cluster because of a long debate on on e important sector that it was proposed could be 
committed at the end of the round.  For Turkey, it was not realistic to think that Members could 
achieve for services in ten years what had been achi eved for goods in fifty years.  This said, his 
delegation was prepared to work with the membersh ip on all aspects of the services negotiations with 
a view to helping the services negotiations catch up with the rest of the DDA negotiations.   TN/S/M/16 
Page 46  
 
 166. Turning to his delegation's expectations from the Hong Kong Ministerial Conference, the 
representative of Turkey enumerated that these cons isted of:  intensification of the request-offer 
process in a realistic manner keeping in mind the human capacity problems of developing countries; 
additional guidance on the focus of rules negotiati ons; clear identification and clarification of 
elements that would guide work on domestic re gulation; further encouragement on information 
exchange on export subsidies in services;  and a call for the intensification of the work on the 
definition of subsidy in services.  Although Turkey  was not convinced whether ESMs were desirable 
or feasible, there could be a call for further work on  this issue without prejudicing the outcome of the 
work to be done.  He said that he had found th e discussion on MFN exemptions to be odd.  While 
some Members might not see them as complementary w ith the GATS, Turkey's views in this regard 
differed.  In the case of Turkey, its MFN exempti ons stemmed from its international agreements and 
commitments that existed before the WTO's crea tion.  While it might be surprising that such 
agreements were still in force and functioning, he said that they re mained and that as long as they 
were valid and needed; Turkey's MFN exemption list  could not be altered owing to legal, political, 
economic and commercial reasons.  Members in a situation such as Turkey's could not be expected to 
do what was not possible for them, particularly in a geographical location where the vast majority of 
immediate and regional neighbours were not WTO Me mbers.  Such agreements constituted the legal 
basis to conduct business and regulate relations.  Howe ver, for example, were there interest from far 
east on a railway line between Turkey, Georgia and Azerbaijan with the provision of related services, Turkey would welcome such an interest.  Turkey sought to make its GATS offer easy to read and 
understand, and in this context, Turkey supported the clarification of offers in the classification 
negotiations.  His delegati on could also support the appropriate reflection of other aspects of the 
services agenda in the Hong Kong Ministerial Declara tion.  Turkey was of the view that all Members 
needed to contribute to carry the services negotia tions further.  However, for the LDCs, it was 
Members' duty to recommend that they undertake some  commitments that were in their interests.  
Taking into consideration the human capacity problems of some Members, a strong message from 
ministers on technical assistance was required that addressed the assistance to be provided by the 
Secretariat.  He said that his delegation was prepar ed to work on various complementary approaches 
so as to better clarify some of their aspects such as critical mass, plurilateralism and multilateralism.  
However, his delegation would be guided by th e issues he had outlined on previous occasions.  
167. The representative of Zambia
, speaking on behalf of the LDC Group , thanked the Members 
that had tabled complementary approach proposals.  She said that they raised fundamental issues that 
could overturn the architecture of the GATS.  Fo r this reason, the LDC Group sought to reserve the 
right to study and revert to many of the issues raised in the proposals.  Making some preliminary 
remarks, she said that it appeared clear that the intent of the proposed complementary approaches was 
to see all Members make a second level of co mmitments in this round of negotiations.  The 
requirement to meet such targets in all sectors by  all Members, including LDCs as suggested by some, 
countered, in the LDCs' view, the spirit in which th e GATS had been negotiated.  Such requirements 
on the part of LDCs would erode the flexibilities i nherent in the GATS and would place the LDCs in a 
worse off situation.  It would also be count er to the LDC Modalities adopted by the Council 
(TN/S/13).  Citing paragraph 5 of the LDC Modalities,  she recalled that, "[t]here should be flexibility 
for LDCs for opening fewer sectors, liberalisi ng fewer types of transac tions and progressively 
extending market access in line with their development situation.  In response to requests, LDCs may 
make commitments compatible with their develo pment, trade and financial needs and which are 
limited in terms of sectors, modes of supply and scope."  The principles regarding the commitments and concessions that LDCs could undertake were also enshrined in the ministerial decisions on 
measures in favour of LDCs adopted in Marrakesh.  She also pointed out the significance of the services sector to LDC economies beyond economic cons iderations.  As contained in paragraph 2 of 
the LDC Modalities, "[t]he importance of trade in services for LDCs goes beyond pure economic 
significance due to the major role services play fo r achieving social and development objectives and 
as a means of addressing poverty, upgrading welfare, improving universal availability and access to basic services, and in ensuring sustainable develo pment, including its social dimension."  While the  TN/S/M/16 
 Page 47 
 
 
 importance of developing the services sector had b een widely recognised, many of the LDCs were 
faced with structural weaknesses that could be co mpounded by any attempt to liberalise the services 
sector without addressing existing deficiencies.  Libe ralization came with costs that needed to be 
properly quantified and appropria te mitigation applied.   
168. The representative of Zambia said that it was fo r this reason that the LDCs had repeatedly 
indicated the need for capacity building and supp ort to undertake comprehensive assessments in  
services in order to ensure that decisions to liberali se were taken on an informed basis.  She said that 
few had undertaken comprehensive assessments that c ould enable them to engage constructively in 
these negotiations.  For this reason, she called upon Members to exercise restraint in seeking 
commitments from LDCs that did not take into  account the serious difficulties they faced in 
undertaking negotiated specific commitments.  This request was in line with paragraph 4 of the LDC 
Modalities.  Nothing in the proposals, except that by Canada, seemed to point in the direction of assisting LDCs to undertake assessme nts prior to undertaking commitments.  This was a key and 
fundamental issue that could not be ignored.  In th is regard, her delegation we lcomed the approach by 
Canada as outlined in paragraph 6(g)(v) that calle d for recommendations rather than requests and for 
technical assistance to be associated to recommendations  for LDCs.  It was also clear that the issue of 
capacity building was important to LDCs, as many of the proposals suggested a priority list of sectors, 
particularly those related to infrastructure services,  which needed the highest level of preparedness in 
terms of the appropriate regulat ory, legal and institutional fram ework as well as the requisite 
experience.  She stressed, in line with paragra ph 5 of the LDC Modalities, that LDCs were to 
liberalize sectors in accordance with their developm ent situation and needs.  It was therefore the 
LDCs' view that requiring LDCs to meet certa in quantitative and qualitative targets ignored this 
flexibility.  This approach would also assume that  the targets were in line with their development 
situation, which was an assumption without a basi s.  Similarly, the proposals would go beyond GATS 
Articles IV and XIX as well as paragraph 2, 3, 4, 11  and 12 of the Negotiating Guidelines.  The LDCs 
were in favour of respecting and maintaining the request-offer approach which allowed Members to 
take into account the flexibilities granted to LDCs and other developing countries in the services 
negotiations.  Moreover, the mode 4 categories that  some Members suggested should be the basis for 
targets had not been accepted by the entire membership .  In particular, the LDCs had time and again 
expressed their concern that these categories were lim ited to highly qualified categories, contrary to 
LDCs' comparative advantages.  These categories c ould not be used as a basis for negotiations unless 
agreed upon by the entire membership.  The LDCs lo oked forward to a more developmental approach 
in the negotiations.  In this context, the LDC Group sought to clearly state what the Group's 
expectations were at Hong Kong and for the DDA.  Sh e requested that this expectation be reflected in 
the Chairman's report to the TNC.  The LDCs  sought to see full implementation of the LDC 
Modalities.  Doing so hinged on two core issues:  developing elements for giving special priority to LDCs in providing market access to their rather limited exports as e nvisaged in Article IV:3 of the 
GATS and paragraph 7 of the LDC Modalities; and the development of guidelines or elements for 
effective technical assistance and capacity building to  be developed by the Special Session.  The LDC 
Group looked forward to working with  all Members to achieve these.   
169. The representative of Uganda
 associated her delegation with the statement by Zambia on 
behalf of the LDC Group.  She sought to share a few observations about the negotiations and some 
thoughts on the way forward.  She recalled that th e quality of offers did not deliver commercially 
meaningful market access opportunities, particularly  for LDCs.  Uganda had always been committed 
to the negotiations in services and had expressed th is through caucus groups such as the African 
Group, the LDC Group and individually.  Her dele gation had met with several Members in the 
context of bilateral consultations and continued to hope that these efforts would produce meaningful 
market access for her delegation.  Uganda stress ed that, although there was great disappointment in 
the outcome of the negotiations to date, this w as not a justification to shake and distort the 
fundamental architecture of the services agreement.  She referred specifically, in this regard, to 
benchmarks or complementary approaches.  For Uga nda it was clear that the negotiations on trade in TN/S/M/16 
Page 48  
 
 services was to take the request-offer approach as the basis of the negotiating agenda as set out in the 
Negotiating Guidelines, LDC Modalities and other asp ects of the GATS.  All of these instruments 
were instructive, in that they spelled out what  should guide ambition in the services negotiations as 
well as the parameters of those negotiations.  Ugan da did not view the situation as one warranting 
new approaches that did not take into account the reasoning behind the character of the GATS.  It was 
clear from the GATS that national policy objectiv es and the level of development of individual 
Members both overall and in individual sectors should gui de decisions on liberalization, its extent and 
timing.  Uganda cherished the positive list appro ach of the GATS wherein Members from a national 
development perspective listed thei r liberalization commitments.  She was not convinced that the 
alternatives proposed would work in her country's inte rest and in favour of its development.  Rather, 
she called upon Members to demonstrate actual commitment by delivering on the development 
dimension of the GATS negotiations, which was spe lled out in Article IV:3 and XIX of the GATS 
and in paragraphs 2, 3, 4, 11 and 12 of the Ne gotiating Guidelines, and the LDC Modalities.  This 
would entailed opening markets in sectors and mode s that had been identified as carrying commercial 
meaning to LDCs.  She called upon th e membership to look at this issue constructively and deal with 
the crux of the matter, as opposed to finding alte rnative solutions that claimed to correct existing 
solutions which had not in fact failed.   
170. The representative of Kenya
, referring to the two informal meetings on complementary 
approaches, said that his delegation had carefully  considered the proposals discussed and that it had 
serious reservations as to the compatibility of the proposals on complementary approaches with the 
GATS framework and flexibility for developing countri es.  Kenya supported the statement by Brazil 
and the Philippines on behalf of a group of Members.  His delegation was not opposed to 
complementary approaches and was willing to ente r into discussion on this issue. However, he 
emphasised that any complementary approach needed  to be within the framework of the GATS and 
consistent with the Negotiating Guidelines.  Notin g one such inconsistent element and referring to 
paragraph 4 of the Negotiating Guidelines, he sai d that these guidelines gave Members the right to 
specify sectors in which commitments would be undert aken in the modes of supply.  However, some 
of the proposals prescribed specifi c sectors within which Members should make commitments and he 
believed that this was contrary to the Negotiating Guidelines.   Article XIX provided for developing 
country flexibilities on an individual Member basis in recognition of the diversities in the services sectors among developing countries.  This indi vidual flexibility was not provided for in the 
complementary approaches that had been propos ed.  His delegation had hoped to see in the 
negotiation the need to address the existing asymme tries in commitments.  He had hoped that the 
initial and revised offers would address this issue, but such redress had not occurred, as demonstrated 
by the fact that sectors and modes of supply of deve loping country interest lagged behind in terms of 
commitments.  For example, mode 4 was the least liberalised.  If developmental issues were to be integrated into the negotiations, as had been menti oned by the Director-General, he said that mode 4 
was an area that could address development concerns.  He stated that his delegation was willing to 
engage in complementary approaches and was refl ecting on how the request-offer process could be 
intensified.  He was concerned that, as discussions  intensified, Members w ould adopt a wait-and-see 
approach such as through a slow rate of submission of  revised offers, which would not be productive.    
171. The representative of Egypt
, speaking on behalf of the African Group  and referring to 
complementary approaches, thanked those delegati ons that had submitted proposals.  The African 
Group shared the views expressed by Brazil on this subject.  The African Group had studied the 
proposals and sought to share its views which it hoped the membership woul d bear in mind in the 
discussions on complementary approaches.  The main  concern that the African Group had with most 
of the proposals that sought to establish quantitative and qualification targets was the extent to which 
they were compatible with the flexibilities enshri ned in the GATS.  The LDC Modalities, Article IV 
and Article XIX:2 of the GATS recognised the differe nt level of developmen t of different Members 
and provided flexibility to that effect.  He cited Artic le XIX:2 that "[t]he process of liberalization shall 
take place with due respect for national policy objec tives and the level of development of individual  TN/S/M/16 
 Page 49 
 
 
 Members, both overall and in  individual sectors.  There shall be appropriate flexibility for individual 
developing country Members for opening fewer sect ors, liberalizing fewer types of transactions, 
progressively extending market access in line with their development situa tion and, when making 
access to their markets available to foreign servi ces suppliers, attaching to  such access conditions 
aimed at achieving the objectives referred to in Article IV."  It was the group's view that pre-
establishing any quantitative and qualitative target w ould go beyond and reduce the flexibility in this 
GATS provision.  Such targets, by establishing  a common benchmark, would tend to harmonize a 
development situation of individual developing c ountries.  This was an inaccurate measure given the 
development objectives held by each Member.  Th ese objectives should be determined by individual 
Members regarding their GATS commitments.  Alth ough the proposals claimed to be complementary 
to the request-offer process, which was identified as the main method of negotiation in paragraph 11 
of the Negotiating Guidelines, they in fact sought to replace the request-offer process and leave it with 
an insignificant role.  This was clearly inconsistent  with the Negotiating Guidelines.  Moreover, most 
proposals referred to infrastructure-based sectors and ignored the weak re gulatory frameworks in 
these sectors.  This disregarded the flexibility provide d for in the GATS.  In addition, the debate on 
complementary approaches was too ambitious  co mpared with most of the proposals for which 
decisions at Hong Kong were sought.  The proposal s came very late and left little time for ample 
examination, and also failed to demonstrate how they would fulfil the main objectives of the GATS.  
For example, the preamble aimed at promoting economic growth and deve lopment of developing 
countries.  The proposals were contrary to the principles set out in the DDA which placed 
development at its centre.  The African Group's asse ssment was that it was not a binding formula that 
was lacking in the services negotiations, but rather the requisite political will to make commitments.  
This was particularly true of the sectors and mode s of interest of developing countries, especially 
mode 4.  He was of the view that the proposals diverted attention from these important issues to 
developing countries.  Finally, the African Group reite rated that their main objective was to achieve 
the development dimension of the DDA in services a nd sought to focus on priority issues, especially 
the S&D treatment provisions and mode 4 liberali zation.  The Group could not accept any deviation 
from these goals.   
172. The representative of the Dominican Republic  said that her delegation believed that the 
negotiations should be pu rsued under the Negotiating Guidelines,  the DDA and the July Package, 
including provisions related to the request-offer pr ocess, which she considered essential.  She agreed 
with other delegations that the request-offer process could be inte nsified.  However, it would be 
complicated to find quantitative parameters for th e liberalization of services, particularly when it 
would not be represented in mode 4, which was of im portance to many Members.  It was essential to 
move ahead and seek balance in the modes of suppl y.  The Dominican Republic was one of the co-
sponsors of the evaluation of mode 4 offers, c ontained in JOB(05)/131.  Regarding quantitative 
parameters, her delegation believed that these did not take into account flexibilities that the GATS 
provided for.  On other proposals, her delegation believed that the multilateral aspect of the services 
negotiations should be privileged.  Any agreemen t on how to accelerate the negotiations should be 
based on this principle.  It was important that the negotiations continue to in clude all the sectors, and 
especially those that represented the interests of developing countries.   
173. The representative of Cuba  agreed with the thrust of Brazil's statement.  He recalled his 
delegation's comments at the last meeting and at recent informal meetings regarding complementary 
approaches.  He reiterated that his delegation could not accept these approaches as they would have 
negative consequences for the negotia ting process.  He said that due respect needed to be given to 
request-offer approach agreed to in the Negotiating Guidelines (S/L/93) and Annex C of the July 
Package.  He said that new proposals had been submitted in recent days.  He found that it was 
disquieting to see such offensiveness, especially gi ven that this had occurred in one month, whereas 
the time needed to decide on the Negotiating Guidel ines took considerably longer.  Most of the new 
proposals called into question the flexibility afford ed by the GATS and the Negotiating Guidelines, 
which foresaw that the liberalization process w ould demonstrate due respect for national policy TN/S/M/16 
Page 50  
 
 objectives and the individual level of development of Members, both generally and in specific sectors, 
so that the developing countries could take part in  the process with a lower level of opening in certain 
sectors and modes of supply in line with their devel opmental and Article IV re lated interests.  Cuba 
considered that moving away from the Negotiating Guidelines, which enshrined request-offer as the 
main method of negotiation, endangered the prin ciples and structure of the GATS.  The new 
approaches made the process more complex and l ess flexible, and would make the request-offer 
process a means to implement the complementary appr oaches.  He said that not identifying the true 
causes of the lack of progress could entail the creation of  solutions that were ineffectual.  They would 
also deny flexibility for developing countries as we ll as access to markets in developed countries in 
sectors and modes of supply of their interest.  On the contrary, the proposals would require that 
markets be opened without the necessary guarante es for the appropriate protection of developing 
country economies.  They did not take into account the fact that many developing countries could not 
properly assess the costs and benefits of the liberali zation process.  He said that little had been said 
about the complementarity of the work of the subsidiary bodies where little progress had been 
achieved owing to well-known reticence on specif ic commitments and national standards and 
regulations.  He asked why, if market access was indeed so important to the negotiations, more 
attention was not paid to the work of subsidiary bo dies which were of vital importance in this process.  
Cuba was opposed to the concept of a "free round" which was captured by some of the 
complementary approaches.  Cuba did not see th ese approaches as being consistent with GATS 
Article IV.  He recalled that the round was focu sed on development, and that the objectives of the 
GATS in this regard could not be altered, nor could the commitments undertaken in the Uruguay 
Round.  The request-offer method should remain the ma in approach for the negotiations.  Most of the 
complementary approaches were complex and ethica lly questionable as they deliberately ignored 
development issues, such as flexibility, sovereign rights to regulate, and special and differential 
treatment.  Cuba viewed with great concern th e plurilateral approaches which might not be 
sufficiently inclusive and which moved away from the multilateral spirit that had prevailed to date in 
the Council's work.  Finally, Cuba was concerned by  the fact that for many developing delegations 
there were many meetings which they could not prope rly attended.  The solutio n to this problem was 
not for sub-groups of the membership to meet which did not fully represent the interests of all. 
174. The representative of El Salvador
 requested that her comments from the earlier informal be 
included in the record of the meeting.4  She sought reiterate a few comments made by her delegation 
at the previous formal meeting to the effect that  El Salvador was not in favour of inclusion of 
complementary approaches which reduced the flex ibilities included in the GATS and the Negotiating 
Guidelines.    
175. The representative of Korea  thanked Turkey for the information on the submission of its 
revised offer.  On complementary approaches, he sa id that his delegation's proposal had been floated 
in the spring and that it wished to share its propo sal with the membership and public.  He said that, 
since his delegation had discussed the main contents of  its proposal at the earlier informal meeting, he 
would respond to some concerns that had been expressed about the proposal.  He said that the 
proposal focused on the reasons why a complementary method was required.  In  his delegation's view, 
the main problem of the bilateral request-offer process was the absence of a collective level of 
ambition which in turn resulted in a lack of political  impetus to come forward with high quality offers.  
In Korea's view, the complementary approaches were  similar to setting a platform composed of a 
collective level of ambition upon which various a pplications of bilatera l negotiations could be 
supported.  Without such a platform of the coll ective level of ambition, the bilateral negotiating 
process would require repeated exchanges in offers in  order to bring about an outcome satisfactory to 
all Members.  His delegation's proposal sought to shor ten this process.  It did not seek to solve all of 
the problems with a single instrument, but rather so ught to deal with certain aspects of the problem 
while leaving others to the existing bilateral requ est-offer process.  In addition, he said that Korea 
                                                      
4 See Annex.  TN/S/M/16 
 Page 51 
 
 
 sought to address the problem of asymmetry in th e negotiation dynamic by asking both developed 
countries and developing countries to share the responsibility of making new commitments.   
176. Turning to some of the specific concerns so me Members had raised, the representative of 
Korea acknowledged that it was difficult to reach ag reement on a quantitative target multilaterally.  At 
the same time, Korea had not been able to find a mo re effective way to widen the scope of coverage 
and increase specificity than by setting a quantitative goa l.  The level of specificity in respect of the 
scope would depend on whether there was a quantita tive gauge.  Given this dilemma, Korea did not 
envisage a hard number, but a soft tool that would help negotiators engage in  trade-off negotiations.  
With regard to concerns about the lack of flexib ility, Korea had tried to incorporate those flexibilities 
provided in the GATS structure.  Members had the right to choose which sub-sectors could be 
committed depending on the degree of market development for each sub-sector.  Developing 
Members had the flexibility provided by Article XIX:2.   Special priority should be granted to LDCs 
as envisaged in Article IV:3.  The only flexibility to  be affected was with respect to the level of 
ambition.  In this regard, his de legation believed that there was a tr ade-off between flexibility and the 
degree of progress in the negotiations.  However, he said that the flexibility depended on the 
magnitude or rigidity of the specific tools in achieving their level of ambition.  By adjusting those 
specific tools to a realistic level, Korea believed that Members could accelerate the progress in the negotiations while addressing concerns over flexibility.   He clarified that Korea's approach would not 
make it mandatory for Members to open markets that  were not liberalised.  Korea fully respected 
Members' right to liberalize at their own pace.  On the issue of raising the quality of commitments in 
committed sub-sectors, including mode 4, he said th at his delegation would welcome any suggestions 
in this regard.  Korea's idea had been to leave th is issue to the current bilateral request-offer process 
and possibly use the level of ambition for each sector or mode identified by informal groups.  He said that he fully respected the voluntary nature and fl exibility of each informal group with respect to 
various aspects including the concept of critical ma ss.  He said that time was running out, and he 
urged Members to give complementary approaches a chance as the situation was not likely to improve 
without them.   
177. The representative of Guatemala
 said that his delegation be lieved in the benefits of 
liberalising trade in services as foreseen by the provisions of the GATS, namely progressive liberalization.  He also believed that the requ est-offer approach was a fundamental pillar of the 
services negotiations and needed to be preserved.   Taking this into account, Guatemala sought to 
reserve its position with regard to complementary a pproaches.  He endorsed the views of a number of 
developing countries about the compatibility of complementary approaches with the flexibility 
provided for in the GATS, the notion of credit given for previous commitments, and ambiguous 
elements of some of the proposals.  He agreed  on the need for greater commitments on mode 4 which 
was not a view reflected in the proposals.  He said  that implementation con cerns existed arising from 
the complex nature of the proposals and that these had not been addressed in the proposals.  Some 
proposals envisaged giving the same weight to all commitments without taking into account the 
importance of certain sectors in the economies of  developing countries, particularly smaller 
economies.  He shared the view th at there was a need to create me chanisms that could strengthen the 
request-offer approach and he agreed with the situ ation alluded to by Argentina and Brazil at an 
earlier informal meeting, particularly with respect to the quality of the requests and offers made.  He 
said that his delegation had put forward some cons iderations about the complementary approaches at 
an earlier informal meeting and requested that these be included in the minutes of the meeting.
5  He 
said that the observations made by Peru on that  same occasion had been useful and persuasive. 
178. The representative of Malaysia  thanked the delegation of the Philippines for the joint 
statement it had made on behalf of a number of ASEAN and associated her delegation with it.  She 
said that her delegation attached importance to the is sues raised in the statement by Brazil and shared 
                                                      
5 See Annex. TN/S/M/16 
Page 52  
 
 many of the concerns it had outlined.  In seeking to find appropriate complementary approaches to 
improve the quality of offers, she underscored that the inherent flexibility under GATS, especially 
Article XIX, and said that this flexibility should not  be compromised by any supplementary approach.  
The bilateral request-offer approach  needed to remain the main method of negotiations as stipulated 
under the Negotiating Guidelines.  As Brazil had poin ted out, compatibility considerations of current 
complementary proposals had not been addressed a nd instead raised concerns that such proposals 
would create benchmarks or targets inconsiste nt with GATS flexibilities.  She said that 
complementary approaches needed  not necessarily be equated with quantitative targets.  Her 
delegation was of the view that it was not suitabl e for the services liberalization negotiations to set 
quantitative targets where qualitative criteria would ser ve equally well.  The services industries in 
developing countries were at various stages of devel opment and incompatible targets of liberalization 
could complicate situations where the regulatory environment and competition policy regimes were 
still to be fully developed.  She said that trade remedies available in the goods sector such as anti-
dumping, countervailing and safeguards were not curren tly available under GATS.  She said that there 
had been a number of quantitative proposals in th e preceding weeks and that such proposals mirrored 
modalities in other areas of the Doha negotiations.  Sh e said that it would not be reasonable to expect 
such proposals to gain currency in the short time before the Hong Kong Ministerial when counterparts 
in agriculture and NAMA had not able to agree to formulae or targets in  four years.  Malaysia was of 
the view that in seeking to improve the quality of offers, Members should not be distracted from this 
goal by setting unrealistic targets that could not be met in the future.  Ther e was sufficient experience 
in WTO history that could help avoid a repetition of such a situation.  She re cognised that there was a 
tremendous need to improve offers and Members could consider elements such as looking at 
horizontal commitments, modes of supply and MFN ex emptions.  She said that the paper presented by 
India and Hong Kong, China contributed to this process. However, she stressed that if such 
flexibilities were available in scheduling commitme nts these should be recognized.  Referring to the 
statement by the Philippines, she agreed that Me mbers should focus their attention on intensifying 
efforts in the request-offer approach.  She urged that  the requests made take into account the situation 
of each country and each sub-sector, so that such requests could be met in a realistic manner. Secondly, Members should reiterate their individual commitment to submit revi sed offers as soon as 
possible. Thirdly, she recognised that some qualitati ve criteria to better assess the quality of offers 
would be useful.  In this connection, she said that cr iteria could include a series of questions, such as:  
whether the offer contained sectors of interest to  developing countries and LDCs; whether the offer 
covered a sufficient number of services sectors and sub-sectors; whether the offer covered 
commitments in the various modes of delivery,  and; whether the offer included progressive 
liberalization in comparison to Uruguay Round commi tments.  Malaysia remained committed to the 
services negotiations and would work with Member s to seek realistic approaches in improving the 
quality of offers.  In addition, Malaysia wanted to  see work in other areas of the GATS negotiations, 
including on GATS Rules such as ESM, approached in a balanced manner together with work in 
improving the quality of offers. 
179. The representative of Argentina
 said that his delegation did not believe that the lack of offers 
and their low quality was a problem inherent to the request-offer approach, but rather linked to three 
elements.  The first was a lack of progress in key objectives for the negotiations, such as agriculture.  
The second was the characteristics of services which granted developed countries the greatest 
responsibility in liberalising.  The third was a lack of commitment by some Members, inter alia , those 
that had an important role to play in GATS Artic les IV and XIX:2 and the Negotiating Guidelines.  
He thanked Members for some of the proposals made and reiterated his delegati on's concerns with the 
compatibility of several of their elements with the GATS and the Negotiating Guidelines.  Argentina 
believed that it was difficult to square quantitative fi xed parameters with the concept of flexibility as 
outlined in GATS Article XIX:2 and paragraph 12 of the Negotiating Guidelines.  He said that some 
of the qualitative parameters posed  the same problem.  Both types of parameters could limit the 
prerogative of developing countries in liberalising fewer transactions, increasing progressively market 
access, attaching conditions to their market acce ss commitments, and achieving the objectives in  TN/S/M/16 
 Page 53 
 
 
 Article IV.  JOB(05)/215 had an approach which a ppeared more rational, although he was not clear 
how S&D would apply, especially for the last two el ements indicated in the proposal.  In addition to 
this fundamental difficulty, Argentina believed that  the discussion could be counter-productive for the 
process.  Assuming that the causes of slow progress were the ones that he had enumerated, none of 
the complementary approaches addressed the real  problems of the negotiations.  Hence, wrong 
solutions would not alleviate the problems and might worsen them. As well, discussion on 
complementary approaches was a distraction from the main work that should occupy Members, 
namely, revised offers and the technical work necessary for possible new revisions.  The assessment 
of the effects of the different proposals in each Member's schedule would take more time than was 
available before Hong Kong.  He said that Argen tina's position did not mean that his delegation was 
not prepared to fulfil the mandate of progressive liberalization or the services mandate of the DDA.  
However, he said that the level of liberalization w ould be part of a whole and should comply with the 
requirements found in the agreement and the main development objectives of the round.   
180. The representative of New Zealand , referring to his delegation's aspirations for the Hong 
Kong Ministerial Conference, said that New Zealan d believed that the meeting in Hong Kong would 
need to give clear direction to the services negotia tion.  Members needed ministerial direction about 
how to achieve the objective of progressively higher le vels of liberalization.  This needed to be the 
Council's focus in the few weeks that it had conduct its work.  New Zealand considered a 
multilaterally-agreed indication of ambition for th e services negotiations as the means by which 
ministers could provide the necessary political direction.  Such an indication of ambition needed to go hand-in-hand with further work on the request-offer process, which New Zealand considered to be a 
process critical to achieving Members' specific amb itions.  A plurilateral approach was a means to 
intensify the request-offer process.  New Zealand was a demandeur  on agriculture in the DDA and 
recognised the unblocking effect that movement in agriculture would have in the services 
negotiations.  However, given the importance of services in New Zealand's economy, it also had 
offensive interests in the services negotiations.  Accordingly, New Zealand saw services-specific 
ambition as a necessary part of the Hong Kong outcom e.  If Members were to secure services offers 
that were a substantive improvement over current  offers, then a ambitious outcome on services was 
needed in Hong Kong.  Without the reassurance that a multilaterally-agreed outcome on ambition at 
Hong Kong would deliver for Members' domestic constituencies, it would be difficult to secure 
substantive improvements in offers.   
181. On complementary approaches, the representativ e of New Zealand said that a package at 
Hong Kong could include three parts.  Firstly,  multilateral quantitative and qualitative targets.  
Secondly, an intensification of the request-offer proc ess facilitated by plurilaterals.  Thirdly, direction 
on work on rules primarily in respect of domestic regul ation.  He said that a simple multilateral target 
was needed in order to provide broad political di rection.  New Zealand was open-minded about that 
forms that such an approach might take and did not  see any of the ideas that had been tabled as being 
mutually exclusive.  The high-level political messag e could, for example, take the form of numerical 
targets supported by a meaningful quality-focused ass essment process.  Such a process would need to 
take account of horizontal and sectoral commitments including mode 4.  Referring to a paper from a 
group of Members dated 30 June on the Assessment of  Mode 4 Offers, he said it contained elements 
which merited consideration in the context of the Hong Kong outcome.  There was a further need to 
take account of other negotiating objectives highlight ed by Members.  The communication by China, 
Hong Kong China, Pakistan and Chinese Taipei provi ded some particularly useful ideas as to how 
Members might proceed in this respect.  Finally, on complementary approaches, he said that any 
target would need to take into account Members diff ering levels of development.  In line with New 
Zealand's approach to the request-offer process, he saw a target applying to LDCs on a best endeavour 
basis.   
182. On intensification of the request-offer appro ach, the representative of New Zealand said that 
his delegation agreed with the need to revitalise this  process.  It seemed to New Zealand that the view TN/S/M/16 
Page 54  
 
 was widely held that the request-offer process had failed to deliver the results Members had hoped to 
have at the current stage in the negotiation.  New Zealand was open to any ideas on ways to revitalise 
the process.  Some Members had suggested that  sectoral or plurilateral approaches might be 
considered.  Canada's paper contained some useful  ideas on the forms such an approach might take.  
New Zealand could see a plurilateral approach as one  way to intensify the request-offer process.  A 
plurilateral approach could preserve  flexibility, while giving concrete guidance, particularly when 
Members requests were aggregated into model schedules.  Ideally, such model schedules would 
promote clearer and more precise scheduling by  specifying various options for high-quality 
commitments and by identifying the mass critical fo r a final package.  New Zealand was thinking 
about how a plurilateral approach might help  advance New Zealand's specific market access 
ambitions in sectors of interest to New Zealand, such as education and professional services.  An 
important aspect of plurilateral approaches would be  that these would need to evolve organically, 
reflecting the importance attached to sectors by pr oponents.  Like many developing countries, New 
Zealand's key export sectors were somewhat different  from most developed countries.  He would be 
concerned, therefore, if an artificial order of priorities was imposed in a sectoral approach.  He said 
that clear views and concerns had been expressed in  the meeting that the request-offer process should 
not be undermined.  New Zealand shared this c oncern and agreed that many of them were valid. 
However, his delegation was confident that they c ould be overcome through active engagement by all 
interested parties.   
183. On outcomes for Hong Kong in respect of domestic regulation and GATS Rules, the 
representative of the New Zealand said that the rules component of the negotiation needed to be a key 
part of any Hong Kong outcome.  However, it was im portant not to be confused about what Members 
should be aiming for at Hong Kong.  New Zealand saw an outcome on domestic regulation, i.e. 
disciplines, as a task that would be completed post-Hong Kong.  On domestic regulation, New 
Zealand sought a framework for disciplines that built on the subject matters currently under 
discussion in the WPDR, fleshed out to the extent possible in the short time before the ministerial 
meeting with those details on which there would be clear agreement.  This did not imply an early 
harvest of some of the Article VI:4 elements, as  negotiations on these disciplines would ideally be 
negotiated as a package.  As for the rest of th e rules agenda, New Zealand would be open to any 
proposals made by proponents as to how ministeria l guidance could be sought.  In saying this, New 
Zealand saw a need for realism and practicality in an y such proposals, which would need to reflect the 
minimal progress made on the three issues of the WPGR agenda over the preceding years.  He 
extended to the Chairman best wi shes in his future functions.  
184. The representative of Indonesia
 sought to share her delegation' s views and assessment on the 
proposed complementary approaches recently tabled  by some Members and looked forward to a 
fruitful outcome in the Council's deliberations on this issue.  With regard to the statement that had 
been delivered by Brazil which contained compre hensive responses, she expressed her delegation's 
full support for the points put forth by Brazil on co mplementary approaches.  In addition to the 
substance of the statement by Brazil and the view s expressed by certain ASEAN member countries at 
that meeting, she reiterated that some of the s ubstance of the proposed complementary approaches did 
not seem to take duly into account the urgent need  to fully respect the ar chitecture of the GATS, 
especially the specific provisions that granted flexib ilities to developing countries such as Indonesia.  
In responding to the views of some Members on the n eed to have a complementary approach to tackle 
the services negotiations, she said that the existing method for conducting negotiation in services, 
namely the bilateral request-offer approach, was still valid and relevant.  Indonesia was of the opinion 
that the elements stipulated in the Negotiating Gu idelines were the most appropriate means to conduct 
the negotiations.  It was difficult for her delegation to consider any other approach that would erode 
the flexibility for developing countries.  With rega rd to the seven proposals tabled, her delegation 
shared the arguments put forth by Brazil and the Phi lippines.  In this regard, Indonesia reiterated that 
it needed a more in-depth analys is of those proposals.  Indonesia sought to determine the positive link 
between those proposals and the flexibilities granted to developing countries in the round.  She  TN/S/M/16 
 Page 55 
 
 
 underlined that the services negotiations should be undertaken within the re quest-offer framework, as 
has been stipulated in paragraph 11 of the Nego tiating Guidelines.  She reiterated the importance of 
maintaining the request-offer method as the main met hod of negotiations.  In addition to the issue of 
the development of market access, Indonesia sought  balance with the rule-making negotiations, and 
notably on an emergency safeguard mechanism.  She drew Members' attention that GATS Article XIX:2, and paragraph 12 of the Negotiating Guidelin es which were the tools of the negotiations best 
suited to the developing countries.  Indonesia believ ed that this approach would take care of the 
concerns and the interests of developing countries in the services round.  Finally, she requested that the statements made by Indonesia at the informal meetings on 22 and 28 Septem ber be reflected in the 
minutes of the meeting.
6 
185. The representative of Peru  requested that his delegation's statement at the informal meeting on 
28 September be included in the record of the meeting.7  He did not seek to comment on the legal 
aspects of the complementary approaches, but rather would make comments on the five proposals 
presented.  The first proposed that a quantitative go al be established that would allow Members to 
measure the scope of the negotiations in services.  Another proposed how to assess the progress made 
in achieving these goals.  One sought to improve the quality of the requests.  A forth proposal 
suggested a plurilateral approach.  A final propo sal sought to improve the bilateral request-offer 
process.  He thanked the delegations that had ma de contributions.  The exercise of establishing a 
framework to express ambition seemed easy, but gave rise to a number of questions.  The first was 
whether the level of ambition could be measured in  terms of the number of sectors included in the 
liberalization process.  The topic not only referred to scope, but also to the depth of the commitments.  
The formulae hence supposed the need to measure th e depth of commitments.  For Peru, this depth 
depended on the sectors of commercial importance to it.  Flexibilities also need ed to be incorporated 
and depended on the special situati on of each country.  Taking these factors into account, expressing 
the level of ambition became complicated as the levels  were variable.  In the end, the definition of 
ambition was determined by the request-offer proces s.  The technical and political aspects of these 
issues were complex and required important decisions , particularly with regard to the depth of 
commitments and progress on mode 4.  He wondere d whether the approaches proposed were truly 
complementary or would replace the request-offer process.  He said that more serious proposals that 
ensured a critical mass were required, rather than a process which might fail.  Those that related to a 
level of ambition required that one  could determine that level of ambition.  Referring to the New 
Zealand proposal on assessment of responses to request s, he said that any assessment in this regard 
would conclude that the response were unsatisfactory.   
186. The representative of Peru said that compleme ntary approaches were linked to improving the 
quality of offers.  In this regard, the proposal fro m Hong Kong, China was significant, as it could lead 
to commitments that would be broader in scope .  He said that proposals that related to an 
improvement in the existing bilateral approach woul d be welcome.  A mechanism was needed to carry 
out a comparison, determine how the process could be accelerated, and achieve better outcomes from the request-offer approach.  In Peru 's case, the level of ambition was measured in terms of work in 
mode 4.  It seemed that work to date in mode 4 left much to be desired.  The communication 
contained in JOB(05)/131, which was dynamic but no t exhaustive, included a series of criteria which 
would need to be reflected.  He expressed his gr atitude to Pakistan for its proposal, JOB(05)/211, 
which went in the same direction.  He said that Members could not tackle mode 4, as had been done 
to up to that point, and that any level of ambition needed to take into account mode 4.  It was not 
acceptable that business travellers needed to wait six m onths to obtain a visa in which time they could 
not contribute to the negotiations.  Those that had business to carry out were required to pay a $300 
for a visa, possess a pre-paid ticket, and accept the po ssibility that the visa request might be rejected.  
The person thus could lose the fee, the air ticke t and the business opportunity.  This was an issue 
                                                     
 
6 See Annex. 
7 See Annex. TN/S/M/16 
Page 56  
 
 which was directly related to a regulatory framewo rks on migration and labour.  He said that much 
greater efforts needed to be made in order to r each transparency.  He underlined that he was not 
referring to facilitation but to the lib eralization of trade in services.  All were aware, and respected, 
that the events of 11 September had modified how these issues were viewed and that security measures against terrorism were necessary, but these i ssues should not be a barrier to liberalization in 
mode 4.  There were efforts underway, such as da tabases and computer readable technologies, that 
could make movement easier.  However, there needed first to be liberalization of mode 4.  This would 
allow Peru to measure its level of ambition in servi ces.  He wished the Chairman all success in his 
new responsibilities.   
187. The representative of Egypt
 said that, as a developing country with a strong interest in the 
progressive liberalization of international trade in services, Egypt had embraced the services 
negotiations in a positive and constructive spirit.  Through its revised offer, submitted in June, Egypt 
had clearly exhibited such a spirit, as it included a wide range of new extensive commitments in a 
number of sectors, particularly computer and rela ted services, courier services, construction services, 
and air transport services, in addition to the elim ination of substantial horizontal and sectoral 
restrictions.  The offer had not only responded positiv ely to a large number of elements in the requests 
that Egypt had received from its trading partners, but had also emanated from its firm commitment toward developing a more friendly and predictabl e business environment.  On the other hand, the 
initial and revised offers submitted by developed trading partners, he  regretted, failed to address the 
majority of its interests in sectors of export priority for Egypt, particularly professional services and mode 4.  On the issue of using complementary ap proaches, he encouraging Members to explore ways 
by which they could assist the process of negotiations  to achieve their ambitions.  In this respect, 
Egypt believed that the intensive open-ended inform al consultations and the relevant discussions had 
been an important step in exchanging views among the membership on how the negotiations could be 
advanced in a more meaningful manner.  On the other hand, Egypt was not in a position to accept proposed complementary approaches that reversed or contradicted the concepts and the logic of the 
GATS, including the principle of progressive liberali zation.  Any erosion of the existing flexibilities 
provided to the developing countries in this Agre ement would seriously undermine the prospects of 
achieving a tangible outcome in the negotiation.  He said that if Members were to adequately address 
the imbalances of the negotiations, and not further increase them, developed trading partners needed 
to take a leading role in addressing these imba lances by committing themselves to work more 
effectively in favour of the export interests devel oping countries and LDCs.  He also reiterated the 
utmost importance of maintaining a transparen t and consensual approach, especially during 
preparations for Hong Kong.  This was essential for the success of the forthcoming Ministerial 
Conference.  He expressed his delegation's gratitude for the Chairman's work and wished him the best 
success in the future.  He congratulated those de legations that had submitted revised offers.   
188. The representative of Australia
 sought to respond to the key message that had been heard in a 
number of interventions; that in the services ne gotiations only a limited number of commitments 
could be expected from a significant part of the memb ership.  She said that this was a critical issue to 
clarify prior to Hong Kong and went to the heart of  the role services played in the DDA.  Article XIX 
clearly recognised that the levels of developmen t of individual Members were different and that 
negotiations needed to allow for flexibility for individual developing country Members in opening 
market sectors.  Article XIX also  stated that this occurred in th e context of successive rounds of 
negotiations, such as the DDA, with a view to achievi ng a progressively higher level of liberalization.  
She said that it was important to recall this part of the Article XIX obligations fell on all Members, 
namely, that it was the process of liberalization th at allowed for flexibility in the negotiations by, inter 
alia, allowing developing countries to liberalization fewer types of transactions or progressively 
extend market access.  This flexibility existed in  the context of a negotiating round whose purpose 
was liberalization.  The obligations on all Memb ers, and the commitments  undertaken through WTO 
membership, were for liberalization.  If Members were to move away from this obligation, then 
services would clearly be put on a much lower f ooting than agriculture and NAMA.  This would  TN/S/M/16 
 Page 57 
 
 
 signal that there was no commitment to liberalize ser vices in step with agriculture and NAMA.  In 
Australia's view this would have the effect of limiting the scope for a balanced package on market 
access across the three pillars of th e round.  This was an approach  which Australia could not support 
and she urged Members to have a close look at the implications of signalling strongly that the 
expectations for services were minimalist.  On the ro ad to Hong Kong, Australia could see the need to 
supplement the request-offer process.  Some of the pr oposals went in this direction and her delegation 
was pleased to examine them.  She also agreed with  those delegations that said that at Hong Kong and 
at the end of the round, there would need to be  improvements on both a qua ntitative and qualitative 
levels.  Australia agreed that there should be negotiating flexibility for Members whose capacities 
were less than others and differe ntiated consideration taken into account on any targets or objectives 
set in the negotiations.  She said that all of this occurred in the context of a negotiating round whose 
purpose was liberalization.  In line with this, Au stralia strongly supported a political message on the 
level of ambition being set by ministers at Hong Kong  -- one that would identify clearly the way 
ahead, that would be able to measure the objective set  by ministers at the end of the round, and that 
clearly took into account negotiating flexibility on the path to further liberalization.   
189. The representative of Japan  thanked those delegations that  had expressed their views on his 
delegation's proposal.  He said that this was a st arting-point for the immediate goal of the Hong Kong 
ministerial meeting.  The important goal was to ach ieve a collective level of ambition.  He agreed 
with Korea that, when offers were made, it would be he lpful if there were an agreed level of ambition.  
All negotiators faced the difficulties of intern al consultations with various regulators and 
constituencies.  He said that they raised the ques tion as to the improvement that liberalization would 
achieve.  He hoped that Members would share a high er level of ambition as demonstrated through a 
collective goal.  The request-offer process had great importance.  However, it needed to be asked 
whether it alone could achieve collective objectives.   He said that it was difficult to propose an 
ambitious offer in the absence of information about what others were prepared  to offer.  In this 
context, it was important to have a shared level of  ambition, particularly at the political level.  
Although some criticisms had been made of the co mplementary approaches, many Members remained 
willing to discuss the issue further.  He had ta ken from the discussion that many Members' view 
appeared to be that there were elements of the pr oposals that might be difficult to accept, but that the 
need for complementary approaches remained open fo r discussion.  He confirmed that his delegation 
had no intention of altering the f undamental architecture of the GATS, including its flexibilities.  He 
quoted GATS Article XIX:2 that the "process of libera lization shall take place with due respect for 
national policy objectives and the level of developm ent of individual Members, both overall and in 
individual sectors.  There shall be appropriate fl exibility for individual de veloping country Members 
for opening fewer sectors, liberalizing fewer typ es of transactions, progressively extending market 
access in line with their development situation".  He said that there was greater flexibility for the LDC 
Member.  He said that Japan had sought to incorpor ate these elements into its proposal, by including 
flexibility through choosing the sectors in whic h Members could undertake commitments and 
reducing the number of commitments undertaken.  The objective remained a collective level of 
ambition.  Japan would continue to listen to concerns with a view to coming to a realistic solution.  He 
said that he wished to address a number of specifi c points that had been raised.  LDCs had expressed 
some concerns, including in a bilateral meeting held between Japan and the LDC Group.  Japan's 
intention was to give greater flexibility to LDCs and to encourage them to be part of the package of 
the round.  He said his delegation would welcome any further consultations.  He said that there were 
also interests raised by developing countries and others with respect to qualitative parameters.  He 
said that the level of ambition could also be specifi ed through expressions of interests in sectors and 
modes of supply.  His delegation was willing to incl ude such interests in di scussions on the level of 
ambition, including on mode 4, EN Ts, scheduling issues and MFN exem ptions.  He looked forward to 
further consultations.  
190. The representative of Trinidad and Tobago  thanked those Members that had put forth 
proposals.  He said that Trinidad and Tobago sought  to participate in the round in the knowledge that TN/S/M/16 
Page 58  
 
 at its end his delegation would have fulfilled its national policy objectives as was provided for in the 
GATS.  He believed that much of the basis for its  participation could be taken from Article XIX in 
terms of its effective contribu tion to Hong Kong Ministerial Conference and the round.  On the 
various suggestions that had been discussed, he said that his delegation was committed to a higher 
level of liberalization, which was an objective a nd target that all were committed to under Article 
XIX:1.  However, the magnitude of the target wa s under discussion and for his delegation there were 
different projections as to what this magnitude  might be.  The demands placed upon his delegation 
included sectoral, modal and plurila teral arrangements.  His delegation was committed to a simple, 
multilateral target that was reasonable and that ma de it possible to make improvements to market 
access in line with his country's policy, situa tion and objectives.  He said that in assessing the 
improvements made by Members, one concern was to avoid a round for free.  In this regard, mode 4 
remained the mode of supply which was subject to the lowest level of commitments, and it was 
important to focus on the reduction and eliminati on of the adverse effects on trade in services of 
mode-four-related measures, so as to ensure market access.  Referring to Article IV:1(c), he recalled 
that provision was made to increase the particip ation of developing countries in world trade through 
liberalization in sectors and modes of supply of interest  to developing countries.  Thirdly, he said that 
there was the apparent conclusion that the requ est-offer process would not deliver without other 
approaches.  His delegation's preliminary assessment  of the complementary approaches was that it 
was yet to be convinced.  He believed that not enoug h effort had been made in all areas, including the 
bilateral request-offer process.  The approach on quantitative aspects did not pay due cognisance to 
meaningful access to markets that would serve to pr omote the interests of all Members on a mutually 
advantageous basis, especially for small and vulne rable economies such as Trinidad and Tobago.  The 
feasibility and application of the proposed approaches needed to be further considered to ensure an 
overall balance of rights and obligations.  He recogni sed that the models being considered contained 
assumptions that needed to be tested in different scen arios if one were to fully appreciate their impact.  
He said that two assumptions underlay the models.  The first was that the sa me level of increased 
progressive liberalization was desired by all Memb ers, which merited further examination.  The 
second related to the resource endowments and th eir relative importance to Members.  If one 
considered the interest in modes, the differenc es in resource endowments were clear, which would 
explain why some Members would have a preference  for mode 1 and mode 2 and other Members for 
other modes, depending on their endowments.  As Members considered what contribution the Council 
would make to Hong Kong, he suggested that a number of principles guide work.  The first was the 
need for a single, reasonable and achievable multila teral target, bearing in mind that there were 
countries with different levels of development, su ch as Trinidad and Tobago, which were small and 
vulnerable.  Secondly, he said that the request-off er approach should remain the main approach.  
Thirdly, given the importance of mode 4 to a numbe r of countries, the incremental increase for mode 
4 commitments should match the increment increase in other modes.   
191. The representative of Pakistan
 wished to make four points.  The first related to the 
introduction of written submissions on complement ary approaches either proposing methods for 
assessing offers, or ways to expedite and improve  the request-offer process for meaningful market 
access.  Pakistan had been considering the various  proposals with the objective of gauging whether 
the papers in their present form were instruments that could indicate the true latent potential of 
various offers for comparison, and fulfil the re quirements of the GATS, the Negotiating Guidelines, 
and the flexibilities for developing countries and LDCs which were enshrined in Articles IV and XIX.  
She said that the approaches, on preliminary analysis , had been found to be wanting on one or more of 
these counts.  The quantifying methods were unable to address the task of coming up with a truly fair way of assessing offers and contained elements that were arbitrary and were bound to bias the 
assessment and related benchmarking in favour of those whose limitations were not included in the 
exercise due to lacunae in methodology.  Secondl y, she said a point raised in the Committee on 
Specific Commitments at its last meeting had a direct bearing on complementary approaches.  This was the issue of scheduling of commitments in a manner that aimed at genuinely predictable and 
transparent schedules, which was an important issue for Pakistan.   Her delegation was sincere in its  TN/S/M/16 
 Page 59 
 
 
 efforts to make correct and meaningful offers, but also expected others to do the same in return.  
Pakistan was ready to rectify any omissions or e rrors in the scheduling of its commitments at the 
present stage and expected others to do the same.  For this reason, Pakistan had co-sponsored 
JOB(05)/215.  This paper defined the elements that  needed to be present in any approach to assess the 
quality of offers or to seek further ambitious market  access to complement the request-offer approach.   
192. Turning to her third point, the representative of Pa kistan reiterated her de legation's interest in 
mode 4 liberalization.  Some issues had been raised  in which some Members had stated that they were 
inhibited from making offers.  He r delegation had sought possible so lutions in JOB(05)/211.  She 
reiterated that mode 4 could be seen as a mechanis m to match world labour demand with supply.  For 
mode 4 commitments to effectively allow developi ng countries to realize their export potential, free 
movement of temporary workers was required across th e globe.  She said that it was possible to fulfil 
demand for a mode 4 service provider, with ease, for the duration of the employment, and with the assurance that he would return home.  She said that some migration experts had indicated that effective mode 4 movement had the capacity to keep  in check illegal migration.  Fourthly, in the 
context of what could be done to facilitate the re quest-offer process, she drew Members' attention to 
some statistics that had been prepared by Hong Kong, China for the friends of computer related 
services.  This table included all Members that ha d made commitments at the three-digit level for 
these services.  She said that if such an exercise could be carried out for all 156 sub-sectors at the 
three digit level, it would facilitate assessment and would allow all to determine the commitments 
they sought.  It would also facilitate the request-o ffer process bilaterally or plurilaterally for capital- 
and Geneva-based officials.  Pakistan said that ba lanced movement was required in rules and market 
access.  A rough estimate showed that 30 or 40 meeti ngs had been held in these areas over the past 
decade, which did not allow for them to fall off the agenda. 
193. The representative of Jamaica
, speaking on behalf of Antigua and Barbuda , Dominica , 
Grenada , St. Kitts and Nevis , St. Vincent and the Grenadines , Barbados  and Jamaica, said that the 
group's review of progress at this junction in th e services negotiations required that they place on 
record their growing concern with the complement ary approaches proposed.  He requested that the 
statement made by Antigua and Barbuda on behalf of a number of Caribbean countries at an earlier 
informal meeting be reflected in the record.8  Further to that statement and in the light of some of the 
comments that had been made, the group sought to u nderscore that any approach to achieving a higher 
level of liberalization as mandated by the GATS need ed to explicitly provide for recognition that the 
process of liberalization should take place with due  respect for national political objectives and the 
level of development of individual Members, both in overall and individual sectors.  He said other 
elements also needed to be recognised, for instan ce the liberalization of market access in sectors and 
modes of supply of export interest to developing co untries; and the provision of appropriate flexibility 
for individual developing country Members to  open fewer sectors, liberalize fewer types of 
transactions, progressively extend market access in lin e with their development situation and, when 
making access to their markets available to foreign services suppliers, attach to such access conditions 
aimed at achieving the objectives referred to in Ar ticle IV.  These were fundamental principles that 
needed to apply to any approach.  He said that  flexibility was a key component of the level of 
liberalization that the group sought to achieve through the identification of their priorities and 
objectives in successive rounds of negotiations.  He recalled that few of these flexibilities were 
reflected in the approaches, but rather appeared to undermine the flexibility, individuality and policy 
space provided for in the other provisions of Artic les XIX and IV.  The approaches appeared to 
mandate developing countries, particularly sma ll and vulnerable economies, to adopt a pace of 
liberalization as defined by targets that would be in imical to their interests.  The proposals did not 
account for the diversity of countries and size of economies, nor did they consider that small and vulnerable economies were unable to undertake the same pace of liberalization as other Members.  
The principle of special and differential treatment and the individuality of the GATS was ignored.   
                                                     
 
8 See Annex. TN/S/M/16 
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 194. The representative of Jamaica said that the de legations on behalf of which he was speaking 
believed that political will was required en route to Hong Kong in order to increase market access 
opportunities in sectors and modes of export interest to developing countries, especially in mode 4.  
He strongly urged that any complementary approaches needed to reflect the features he had referred to 
and be in line with the DDA, the Negotiating Guidelines and Annex C of the General Council 
Decision of 1 August 2004.  These issues were of si gnificance to the countries on behalf of which he 
was speaking, particularly in light of the fact th at services represented the largest portion of their 
economies, and in some cases more than 80 per cent of GDP and employment, and 85 per cent of 
trade.  He said that sight could not be lost of this  fact, particularly given that a number of the region's 
countries had lost so much in agriculture.  In the area of rules, he underscored the importance of 
making progress, especially in light of the desire by  many to advance rapidly in market access.  The 
co-sponsors of his statement were unable to endor se the proposed complementary approaches as being 
a basis for modalities agreed at th e Ministerial Conference or thereafter.  The framework for Hong 
Kong and thereafter was laid out in the existing manda te and should be the focus of Members, instead 
of creating additional approaches that would not enhance the pace of operationalisation, but would 
distract Members from the important issues.  In the time available, he said that Members should focus 
on the existing modalities and especially on enhanced responses to the export interests of developing 
countries.  He reiterated the group's position that, at  a minimum, more attention should be paid to 
ensuring that the developing countries were the ma jor beneficiaries of the services negotiations and 
not the developed countries who accounted for some  80 per cent of global services exports.  It was 
obvious that the proposals made sought to reinterpret the GATS in a manner that would roll back the 
gains negotiated by the developing countries while  seeking to increase market access for developed 
countries.  The group was committed to the success of the services negotiations and looked forward to 
working toward a mutually beneficial result.  
195. The representative of China
 said that, despite the unpreceden ted challenges China faced in 
implementing its accession commitments, China had done  its utmost by tabling its revised offer in 
July. New sub-sectors had been added to the revised offer and improvements had been made in 
sectors contained in its initial offer, which demo nstrated China's commitment to the multilateral 
trading system.  It also confirmed that China would make commitments in the current service 
negotiations as long as it was able to do so.  She said that China's schedule contained more than 100 sub-sectors.  She noted that China had significantl y fewer ENTs, only two MFNs exemptions and no 
safeguard equivalent measures that could be found in other schedules.  China regretted that major 
services exporters that sought deeper liberalization in services had failed to bind existing levels of 
services liberalization, as well as their failure to commit to end-points for further liberalization in the 
sectors and modes of great interest to China.  She hoped that Members would demonstrate the necessary political will and translate their call for furt her liberalization into real commitments in their 
own offers which China believed w ould give impetus to the negotiati ons.  She shared the view that 
the lack of political will was the main reason for the current situation in the services negotiations.  
While stressing the development dimension of th e services negotiation, which China believed should 
be adequately reflected in future revised offers, she also highlighted the importance of considering 
MFN exemptions in assessing the quality of offers.  She did not need to remind Members that MFN 
was the fundamental principle of the WTO and GATS.  She wondered whether, if at the end of the 
negotiation there remained a high level of MFN exem ptions, Members would be able to claim that 
they achieved a higher level of liberalization in tr ade in services.  She said that the comparability of 
schedules was another important systemic issue for the negotiations.  There were no fewer than two 
aspects in this regard.  The first was the prevalence of ENTs in schedules, which had effects similar to 
safeguard measures.  A second was that some Memb ers had inscribed safeguard equivalent measures 
in the schedules.  Members without ENTs or safeguard equivalent measures were put in a 
disadvantaged position unless they could resort to th e safeguard mechanism.  China therefore believed 
that this issue should be addressed effectively in th e negotiations.  In this regard, she invited Members 
to give positive consideration to the proposal cont ained in document JOB(05)/215.  China also sought 
language in the services part of the Ministerial Declaration that would address these systemic issues.    TN/S/M/16 
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 196. On domestic regulation, the representative of China had the impression that Members needed 
to deepen their understanding on some of the elements to be subject to possible multilateral 
disciplines.  Some Members, including China, were  continuing their domestic consultations and she 
suggested that Members continue further thematic discussions in the WPDR.  With regard to other 
elements of the rules negotiations, China would c ontinue to discuss the issues, in particular the 
safeguard mechanism.  Her delegation believed that the examples and questions raised by Brazil were 
relevant to the discussion on a safeguard mechanism and she said that responses would help to clarify 
the various issues.  In terms of the Ministerial D eclaration, she said that ministers could encourage 
Members who had not submitted an initial offer to do so as quickly as possible and fix a date for 
submitting the next round of revised offers.  Finally , she expressed her delegation's gratitude for the 
Chairman's hard work and wished him all success in his new functions.   
197. The representative of Venezuela  supported the comments made by Cuba and others that some 
Members were not in a position to agree with th e introduction of complementary approaches to the 
process of request-offer approach as these would underm ine the principles of the GATS.  He said that 
Members needed to move forward on the basis of  the Negotiating Guidelines, the DDA and the July 
Package.  Complementary approaches risked underm ining what had been agreed by Members.   
198. The representative of Panama  thanked those delegations that ha d put forth proposals recently.  
He agreed that the negotiating process required an in centive that would help achieve ambitious levels 
of liberalization.  This process needed to be c onducted in accordance with the principles of the GATS, 
and in particular Article XIX, the Negotiating Guidelines, the DDA and th e July Package which 
granted developing countries greater flexibility.  Pa nama was in favour of the bilateral request-offer 
process through which to achieve greater commitments  in market access and national treatment.  He 
said that a balance should be struck that included the sectors and modes of particular interest to 
developing countries, including with respect to barrier s to market access in de veloped countries.  He 
said that an effort should be made to include sectors of real commercial importance to developing 
countries.  He thanked delegations for their pr oposals on complementary approaches and he urged 
caution in order to ensure that the bilateral request-offer process would not be undermined.  
Ultimately, it would fall to each delegation to guara ntee a balance of their interests and the round 
overall through the request-offer process.  He said that  all of these elements ne eded to be taken into 
account before Hong Kong.  He recognised the valu e of the elements contained in the proposal on 
systemic issues, such as ENTs and MFN exemptions, which he said would need to be covered in order 
to ensure higher quality offers.  Given the prevalen ce of these elements, he said that it would be 
reasonable to assess the effect of setting an objec tive for these elements in the negotiations.   
199. The representative of Bolivia  wished to highlight the efforts that were underway with a view 
to ensuring that the negotiating process in services achieved ambitious results in market access.  In 
this regard, she said that some delegations ha d tabled some proposals relating to possible new 
complementary approaches for the services negotiati ons.  Bolivia believed th at any new approach 
should be complementary to the principal requ est-offer negotiating method as established in the 
Negotiating Guidelines and relevant mandates.  She said that it was premature to characterise the on-going request-offer process as negative.  A number of ot her external factors had been referred to by 
others.  While her delegation would welcome new proposals, Bolivia was concerned that 
complementary approaches could undermine the multila teral process and the flexibilities set out in the 
GATS.  Bolivia was also concerned about some of  the proposals which would impose new obligations 
that did not take into account the ability of Member s to respond and their level of development.  The 
complexity of some of these suggestions made it di fficult to perceive their true scope.  Many would 
require more detailed considerati on of their content.  Nonetheless, she reiterated that whichever 
complementary approaches might be considered, they  would need to respect the structure of the 
GATS, including Articles IV and XIX, the Negotiati ng Guidelines, the DDA and the July Package.  
These stipulated that effective market access would accrue to all Members particularly in the sectors 
and modes of supply of interest to developing countries.  It was of paramount importance that any TN/S/M/16 
Page 62  
 
 new initiative remained rooted in Article XIX wh ich provided for essential flexibilities automatically.  
Finally, on the process until Hong Kong, she hoped that  work would be characterised by transparency 
and inclusiveness.  She also hoped that the leve l of commitments would take into account the 
aspirations of the developing countries as regarded mode 4 as well as the contents of JOB(05)/131 in 
such a way as not to compromise the horizontal commitments already scheduled.  She thanked the 
Chairman for his dedication and wished him every success in his new responsibilities.    
200. The representative of Uruguay
 thanked those delegations that had made recent proposals, 
which had given rise to a constructive discussion.  He also thanked the Chairman for ensuring 
transparency through open-ended discussions and hoped th at this would continue in the future.  As for 
complementary approaches, he shared the concerns raised by Brazil and others with respect to how 
the proposals squared with the architecture of th e Negotiating Guidelines.  Uruguay believed that 
request-offer, which was one of the central pilla rs of the modalities, was a framework in which 
Members could work constructively and achieve pos itive results.  This was where efforts should be 
concentrated.  Uruguay had participated and co mplied with the various phases of the negotiation 
through the submission of its requests and offers.  He hoped that Members would continue to work in 
a constructive manner over the coming phases.   
201. The representative of Singapore  said that, like other areas of the DDA, services was integral 
to the success of the DDA negotia tions.  Members should therefore work hard to have a good 
outcome on both the market access and rules aspects of the services negotiations.  It was in Members' collective interest to facilitate an early and su ccessful conclusion of the DDA negotiations.  While it 
was obvious that the request-offer approach was not working as well as his delegation would have 
liked, the solution was not do away with it, but rather  to build on it.  Singapore believed that it was 
important to maintain the pressure and momentum on Members to submit their outstanding initial and 
revised offers.  In this connection, he welcomed th e latest revised offer from Turkey.  With a view to 
facilitating progress in the services negotiations, he ur ged others to submit their outstanding offers 
expeditiously.  In moving forward, Members shoul d focus on the objectives for services as outlined in 
the GATS, the Negotiating Guidelines, the DDA and the July 2004 Decision.  The objective was the 
progressive liberalization of trade in services.  Any complementary approach that Members might agree upon should bring them closer to this goal of pr ogressive liberalization.  In this regard, he was 
open to complementary approaches which he said we re necessary.  However, for complementary 
approaches to work, the elements in the GATS, the Negotiating Guidelines, the DDA and the July 
2004 Decision could not be ignored.  For instance, he said that there should be no a priori  exclusion 
of any sector or mode of supply.  Members should also strive to ensure high quality offers, 
particularly in sectors or modes of supply of export interest to developing countries, with special attention given to LDCs.  More generally, th e complementary approaches should respect the 
flexibilities that were contained in the GATS, the Negotiating Guidelines, the DDA and the July 2004 
Decision for the developing countries and LDCs.  He stressed that the starting-point was progressive 
liberalization of trade in services.  Within the framework of progressive liberalization, Members 
should be prepared to look at flexibilities.  Si ngapore was not fixated on the form that the  
complementary approach would take, and was open to any approach that could deliver good results, 
namely, the submission of quality and comparable offe rs.  For any complementary approach to deliver 
a meaningful outcome, it would have to have bot h quantitative and qualitative elements.  In this 
regard, for example, Members could seek to make offe rs in at least a majority of the areas requested 
of them.  Members should also strive to remove pe rnicious market access li mitations (such as ENTs) 
and national treatment imitations (s uch as restrictions on foreign equi ty participation) that hindered 
the supply of services.   
202. The representative of Singapore said that, as Me mbers reflected on the outcome that they 
wanted in services, it would be useful to recall the comprehensive report that the Chairman had  made 
to TNC in July (TN/S/20).  He said that this repor t showed Members' negotiating expectations and the 
extent to which the offers fell short of these expect ations.  He noted that the various friends groups  TN/S/M/16 
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 had done a lot of good work on the various sectors.  For example, they had prepared tools such as 
classification approaches, model schedules and checklists.  He said that this work could be useful for 
the negotiations as they might, for instance, assist in comparing offers.  He said that Members should 
nonetheless recognise that this work was the product of friends' groups, which consisted of groups of 
like-minded Members.  Members which were not part of the friends' groups, in particular developing 
countries, needed to be apprised of the friends' work.  The onus should be on the friends groups' to 
reach out and explain their work to the wider membersh ip.  In this connection, he noted that some of 
the friends' groups had sought to share their ideas through various seminars.  More generally, the 
friends' work could serve as guides for Members in preparing their offers.  While Members continued 
their technical discussions on possible elements fo r complementary approaches, they needed to 
continue to look forward.  Firstly, Members should be thinking about the type of message that they 
wanted ministers to convey on services in Hong Kong.   He said that this me ssage, which needed to 
reflect both ambition and balance, should be si mple enough for stakeholders and businesses 
understand.  It should also provide a clear direc tion for work in 2006.  Secondly, Members should 
also be looking at how to organize work in the coming year.  Among other issues, Members might 
need to discuss the number of services clusters and other meetings that would be needed to facilitate 
progress in the market access and rules negotiations.  He  said that Members might also need to reflect 
upon the timing of the submission of the next round (perhaps the final round) of revised offers.  To conclude, he stressed that all Members, developed and developing alike, should contribute to the 
success of the services negotiations by tabling their initial, revised, and perhaps final round of offers, 
while keeping in mind the GATS architecture.  As a final remark, he said that the round should have 
neither free-riders nor be a round for free for anyone. 
203. The representative of South Africa
 commended Turkey and others  that had submitted their 
revised offers recently.  South Africa also supported th e statements that had been made by Brazil, the 
African Group and many other developing countries, including the Philippines on behalf of a number of ASEAN countries.  She also thanked the various  delegations that had recently submitted proposals 
on complementary approaches and the co-sponsors of  JOB(05)/215.  She said that her delegation 
wished to make some preliminary comments in the li ght of its examination of the proposals, some of 
which were detailed and technical.  In  this regard, she reserved her dele gation's right to revert to these 
issues.  She highlighted that her delegation was so mewhat alarmed by the recent flurry of technical 
and highly complex proposals at a late stage in th e negotiations and shortly prior to the Hong Kong 
Ministerial Conference.  While South Africa was co mmitted to a positive and balanced outcome in the 
negotiations, she stressed that her delegation w as concerned with the majority of the proposals 
submitted for two key reasons, namely, flexibility to  pursue national policy objectives and meaningful 
market access for developing countries.  She said that several of the proposals urged the general 
membership to undertake commitments in a certain  number of sectors and sub-sectors.  In addition 
they were urged to take on concrete targets a nd a set of commitments.  These targets would be 
attained through, for instance, model schedules and ot her similar mechanisms.  It was said that these 
would reflect a collective level of ambition or co mmon baselines.  South Africa saw a fundamental 
conflict between, on the one hand, concrete targets and, on the other, the flexibility and policy space 
painstakingly negotiating by developing countries during the Uruguay Round and duly inscribed in the GATS and Negotiating Guidelines.   She recalle d that the preamble of the GATS clearly stated 
that the Membership desired that progressively higher levels of liberalization of trade in services be 
achieved through successive rounds of multilatera l negotiations, promote the interests of all 
participants on a mutually advantageous basis, a nd aim at securing an overall balance of rights and 
obligations while giving due respect to national policy objectives.  She wondered how the benchmark 
approaches would ensure that the right of Members to liberalize as they chose and taking into account 
their national policy objectives and development cha llenges would not be eroded.  In this regard, 
South Africa was concerned that the complementar y approaches were challenging the integrity of 
multilaterally agreed-rules inscribed in the GATS.  South Africa believed that these complementary 
approaches attempted to change the Negotiating Gu idelines which had been agreed as the rules TN/S/M/16 
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 governing the round.  In addition, the complement ary approaches disregarded earlier decisions, such 
as the July Decision.  She said that the proposals effectively sought to renegotiate the GATS.   
204. On the issue of market access, the representativ e of South Africa was concerned that there 
were no guarantees that many of the proposals tabl ed would result in market access in sectors and 
modes of interest to developing countries.  Although there was yet to be a proper multilateral 
assessment in the sense of Article XIX of the overall costs and benefits of commitments undertaken in 
the Uruguay Round, there had nonetheless been pressu re from certain countries for wider and deeper 
commitments without the benefit of global statistics on trade flows.  Furthermore, the majority of the 
proposals did not seem to acknowledge the supply side constraints that many services suppliers faced.  
Many of the proposals did not recognise the asymmetry in supply capacity among the WTO 
membership.  The benchmarks did not suggest the best way to address these challenges, which South 
Africa believed was the real issue.   
205. The representative of South Africa noted that the Southern African Development Community 
(SADC) Ministers had met in Cape Town on 23 Sept ember to prepare for the Hong Kong Ministerial 
Conference.  She said that they had made certain recommendations that she sought to reiterate.  She 
recalled that SADC represented thirteen WTO Memb ers, namely, Angola, Botswana, the Democratic 
Republic of Congo, Lesotho, Malawi, Mauritius, Mo zambique, Namibia, Seychelles, South Africa, 
Swaziland, Tanzania, Zambia and Zimbabwe.  High lighting some of the recommendations ministers 
had made, she said that they had requested that substantial improvements in market access in modes 
and sectors of export interest to African countries be  highlighted.  Under mode 4, developed countries 
should make commitments aimed at ensuring a commercially meaningful outcome for African 
countries in sectors of export interest, including tourism, professional services and construction 
services.  Ministers had also underscored that th e Special Session should aim to restore balance 
between the market access and rule-making negotia ting tracks.  The ministers also emphasised that 
African countries required technical assistance in order to carry out overall national and sectoral 
assessments, to establish and strengt hen their institutional capacities, and to regulate supply to meet 
national policy objectives.  Such assistance should be extended to ensure that SADC member states 
would be able to participate more effectively in the request-offer phase of the negotiations.  The 
ministers had also urged that special attention be accorded to the needs and interests of small service 
suppliers of African countries.  They also re iterated that negotiations on services should proceed 
through the request-offer approach as agreed in th e Negotiating Guidelines.  They mentioned that 
recent proposals on benchmarking would entail a fundamental departure from the GATS architecture 
and objectives as well as from the Negotiating Gu idelines and from the Modalities for Special 
Treatment for LDCs.  Furthermore, the SADC minist ers highlighted that the Special Session should 
ensure that the Negotiating Guidelines would continue  to remain the basis for the negotiations and for 
the Council to support the efforts of the LDCs aime d at the implementation of the LDC Modalities.  
She recognised and commended the work that the Ch airman had undertaken in this regard.  South 
Africa highlighted that all Members needed to re new efforts to ensure that the DDA would be a 
genuine development round.  Members needed to co llectively ask which development goals had been 
achieved and what development gains had accrue d from liberalization since the Uruguay Round in 
line with the spirit and political ambition of the GATS, the Negotiating Guidelines and the DDA.  She 
reiterated that this was the main task at hand.  Sh e thanked the Chairman for his work in leading the 
Special Session and wished him success in the future.   
206. The representative of Nicaragua
 welcomed the opportunity to comment on the issues 
regarding how to ensure progressive liberalization of  trade in services.  He thanked those delegations 
that had proposed and made comments on the comp lementary approaches for the negotiations, which 
had contributed to a good discussion.  Nonetheless, Nicaragua believed that this type of approach 
would in fact divert attention from what should be the main focus of the negotiation as set out in the 
Doha Declaration and the Negotiati ng Guidelines.  He said that it would make establishing goals and 
achieving those set out in the July Package more di fficult.  He shared the general comments expressed  TN/S/M/16 
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 by Argentina to the effect that some countries had seen an erosion of their commitments in the 
Uruguay Round and that developing countries were re quired to make even greater improvements in 
their offers.  Nicaragua preferred the request-offe r approach because it took into consideration the 
architecture of the GATS, national legislation, the level of development of the developing countries 
and least-developed countries, as well as capacity buil ding and technical assistance.  Furthermore, his 
delegation affirmed that the services negotiations fo rmed part of the single undertaking and that any 
complementary approach should take into c onsideration the aspects he had mentioned. 
207. The representative of Norway  noted that after several years of work, sufficient progress in the 
services negotiations had not been achieved. Trad e in services was increasingly important for all 
Members.  Many important developments were  taking place in many services sectors, and many 
Members were liberalizing their trade regimes at the national level.  There was an increasing gap 
between the actual level of liberalization and the co mmitments and offers of Members, which needed 
to be bridged.  He said that the current request-o ffer process had not brought about the desired result 
and the overall level of ambition in the offers submitte d appeared to be low.  The process needed to be 
complemented and Norway supported exploring co mplementary approaches to the negotiations and 
thanked those delegations that had ta bled very useful proposals.  He said that all of them contained 
interesting elements and he drew attention to a number of elements which his delegation believed 
should be part of complementary approaches.  Norway remained open-minded with respect to 
whether to negotiate multilaterally or plurilaterally .  The main objective was to obtain results that 
were ambitious and provided high quality comm itments with broad sectoral coverage.  The 
commitments Norway sought were market access commitments char acterized by broad sectoral 
coverage and the provision of meaningful business and investment opportunities for service providers.  
He said that the Canadian proposal on a plurilateral request-offer process was interesting.  However, as Canada had pointed out, any negotiations should be open to all Members and result in multilateral 
commitments, and he agreed that commitments on an MFN basis remained the fundamental objective 
of the multilateral trading system.  He emphasized that complementary approaches were simply a way 
to improve the quality of offers and should not re place the request-offer process.  He said that the 
negotiations should not exclude any sectors a priori  and should include all modes of supply.  He 
indicated that his delegation woul d have serious reservations with viewing plurilateral or sectoral 
agreements as the desirable result.  Indeed, terms such as "critical mass" might bring about confusion 
as to the desirable result of the negotiations.  He agr eed that a level of flexibility needed to be ensured 
that corresponded to the level of development and the size of the relevant economy.  Finally, that 
LDCs should not be expected to make commitments in the current round; however, he encouraged the 
LDCs to stay engaged in the nego tiations in order to gain valuab le experience and improve their 
ability to participate in the multilateral trading system.   
208. Regarding the quality of commitments, the representative of Norway said that he supported 
work between interested parties on model schedules or other ways of setting standards or targets for 
the various sectors on the condition that sufficient flexibility was provided for developing countries 
and in particular for the least-developed countries.  Such standards, he said, could be useful to 
bilateral, plurilateral or multilateral approaches to  the negotiations.  He said that the quality of 
commitments should be particularly high in sector s that had been identified as key sectors for the 
economic development of developing countries.   Increasing competition in these sectors was 
particularly important to economic  development and trade.  Norway also welcomed JOB(05)/215, 
which called for improved scheduling and classificati on, removal or specification of ENTs, and the 
reduction of MFN exemptions.  These were issues wh ich should be addressed in order to avoid the 
undermining of the value of market access commitments. 
209. Turning to his delegation's views on the Hong Kong Ministerial Meeting, the representative 
of Norway said that he believed that the Hong Kong Ministerial Declaration should be the platform 
for taking the negotiating process through 2006 to a success ful conclusion.  In order to provide such a 
platform, the Ministerial Declaration should contain a number of elements.  Firstly, it should set the TN/S/M/16 
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 path for improving upon the request-offer process by identifying complementary and target-oriented 
approaches.  Secondly, it should lay out the issues in domestic regulations a nd other horizontal issues 
where agreement needed to be reached.  Thirdly,  it should provide targets for the development aspects 
of the negotiations and address the LDC Modalities.  Fourthly, it should set a deadline for submitting 
fine-tuned and more focused requests where rele vant, a deadline for final offers and a work-
programme with timelines for the completion of the negotiations.  He expressed his delegation's 
gratitude for the Chairman's work over the y ears and said his presence at the podium would be 
missed. 
210. The representative of the European Communities
 said that Members were at a very critical 
stage of the WTO services negotiations under the Do ha Development Agenda, less than three months 
away from the Ministerial Conference in Hong Kong, and nearing the end of the last formal cluster 
before Hong Kong.  He recalled that at the end of June, the European Communities had given the 
Chairman a detailed assessment of his delegation's view s on the state of play for the preparation of his 
report to the TNC.  On this occasion his delega tion had expressed its strong disappointment with the 
lack of progress and a vast majority of WTO Memb ers had shared this view.  The few initial or 
revised offers that had been tabled since then di d not change this overall picture and, hence, his 
delegation continued to be unsatisfi ed and concerned.  Referring to the Chairman's June report, he 
said that the Chairman had conducted intensive cons ultations since the last cluster on a number of 
issues that were critical to the conduct of these nego tiations.  For the sake of clarity, he sought to 
recall the overall objectives for the DDA services ne gotiations.  He said that these could be 
summarized in two points.  The first was to achieve  substantial further liberalization of trade in 
services in a way which ensured greater legal certainty and created new business opportunities.  The 
European Communities had elaborated in June on the actual meaning of this objective in the different 
sectors and modes.  He said that further libera lization should be done while respecting Members' 
national policy objectives and the right to regulate.  The second element relate d to the overall balance 
which was essential for a successful conclusion of  the round.  This overall balance implied 
maintaining a similar level of specificity and am bition in the services negotiations compared to 
agriculture and NAMA negotiations, as well as being ab le to measure the specificity and ambition in 
the services negotiations.  Having noted that these objectives had not been met after more than five years of negotiations and two rounds of exchange d requests and offers, th e European Communities 
had undertaken a reflection of how best to in ject additional ambition and specificity in the 
negotiations, the results of which were containe d in its room document on the desirable use of 
complementary methods of negotiations at the multilate ral and plurilateral level.  In contrast to the 
request-offer process, these complementary appro aches allowed Members to fix common targets and 
to collectively specify the level of ambition for th e negotiations.  Several other Members had engaged 
in similar reflections and these documents containe d many commonalities, not the first of which was 
the willingness to raise the profile of the services negotiations.   
211. The representative of the European Comm unities said that on the occasion of these 
discussions, other Members had expressed certain concerns and questions about the complementary approaches' compatibility with the principle of flexib ility inscribed in the GATS.  While the European 
Communities remained convinced that  its ideas were fully in line with  the flexibility of the GATS, it 
would carefully consider the views expressed when refining and finalizing its document.  He wished 
to share some comments on some of the issues that had been raised in recent informal consultations 
and earlier in the meeting.  Firstly, on the flex ibility that Members had in undertaking commitments, 
his delegation thought that it could be reflected in the complementary approaches through the possibility for each Member to choose the sector s and sub-sectors in which it took commitments and 
in which it would have to take commitments if a multilateral approach were adopted.  The flexibility 
for developing countries had also been mentioned as  a concern.  He said that there were different 
ways to take account of this flexibility for de veloping countries.  The European Communities' 
proposal reflected this concern through the lo wer number of sub-sectors in which developing 
countries would be expected to undertake commitment s in comparison to developed countries, as well  TN/S/M/16 
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 as through the mention of specific transition periods  for the benefit of developing countries.  The 
specific situation of LDCs had also been menti oned as a source of concern and he said that the 
European Communities had fully taken into account this specific situation in the proposals it had 
made.  The proposal clearly mentioned that LDCs were welcome to make commitments in line with 
their capacity.  Referring to the concerns about a rou nd for free, his delegation was firmly of the view 
that each Member (with the exception of the LDCs as he had mentioned) should participate toward a 
common effort.  This view related to developed an d developing countries alike and the EC was ready 
to play its full part in this common effort.  He  said there was no concept of a round for free through 
any such complementary approaches.  Finally, the concern of taking into account Uruguay Round commitments had been expressed.  He said that Members were not negotiating in a vacuum and that, 
by definition, the current commitments were bot h starting-points and reference points in the 
negotiations.  He highlighted the fact that several Members had indicated that they were not satisfied with the mode 4 commitments resulting from Uruguay Round.  He said that if Members were to 
follow the logic of disregarding the Uruguay Round commitments, he did not see how the imbalance perceived by these Members could be addressed.  He recalled that the raison d'être  of the GATS was 
to achieve a progressively high level of liberalization in trade in services.  He could not see how a 
higher level of liberalization could be achieved in  the absence of more bound commitments.  He said 
that this was ultimately the purpose of a negotiation.   
212. Turning to the services elements of the Hong K ong Ministerial Declaration, the representative 
of the European Communities said that his delega tion believed that that the adoption of commonly-
agreed market access targets should be the central part of the package Members would seek to achieve 
at Hong Kong.  He said that those targets should, in  his delegation's view, be expressed in the form of 
a multilateral formula that would specify the intensity  of the effort that each Member, except LDCs, 
would undertake to make in both quantitative and qu alitative terms in order to achieve the progress 
toward high-level liberalization.  He recalled so me of the examples of quality indicators in the 
European Communities' paper.  He said that othe r useful quality indicators could be found in the 
documents related to mode 4 and to cross-border supply of services that had recently been discussed, 
as well as in the communication that the EC and nine co-sponsors had formally introduced on the 
importance of mode 3.  He said that he woul d also examine the elements in the communication 
submitted by Hong Kong, China and other co-sponsors in finalizing its approach toward quality 
indicators.  He said that Members should design a formula which was simp le, effective and fully 
integrated the flexibility needed for developing count ries, which was an important point that could be 
easily reflected after Hong Kong in Members' offe rs.  In addition to an element on a multilateral 
effort, he said that the Hong Kong text should also  acknowledge that a higher level of market access 
and national treatment commitments could be obta ined in individual sectors through negotiations 
conducted by interested Members at a plurilatera l level.  The Hong Kong Ministerial Declaration 
could encourage Members to do so.  He said that Members should seek to obtain ministerial guidance 
that was as detailed as possible on the conduct of ru les and domestic regulation negotiations.  The 
development aspect of the negotiations should appr opriately be reflected in the language of the 
Ministerial Declaration.  Finally, ministers shoul d, in the EC's view, agree on a timeline for the 
implementation of a services package after the mee ting, including on a date for the submission of 
further revised offers.  He said that much concep tual work had been done over the preceding months 
on the definition of the level of ambition for the ne gotiations, and his delegation believed that the time 
had come to move ahead and to enter the critical  phase of the finalisation of a package for Hong 
Kong, given the small window of time that remained before ministers would meet.  This implied that 
Members should engage shortly in a drafting exerci se.  He said that, given the pressure added by the 
deadline, Members should be wary not to make the mistake of lowering the ambition on the false 
assumption that it would facilitate the adoption of the package.  He indicated that the EC would not 
accept such a situation.  He thanked the Chairman fo r his efforts and wished him the best in his new 
responsibilities.   TN/S/M/16 
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 213. The representative of Canada
 said that, like many other Members, Canada was of the view 
that the bilateral request-offer method was not produc ing the desired result.  He thanked delegations 
that had come forward with papers for their va luable contributions that sought to address this 
problem.  He said that the creative thinking exhibite d in the proposals represented the kind of brain-
storming exercise that was necessary at the current st age of the negotiations.  Canada agreed with the 
central tenet of these proposals, namely, that th e services negotiations were badly in need of an 
effective and meaningful political commitment in orde r to achieve an ambitious outcome.  Indeed, the 
absence of such a commitment drew into question the status of the entire round.  Furthermore, Canada 
shared the view that the establishment of benchm arks or targets represented a fundamentally sound 
means of expressing this political ambition.  He sai d that Members had a number of proposals before 
them regarding a multilateral target-setting exercise.  He noted that all Members sought to ensure that, 
in pursuing complementary approaches, the flexib ilities embedded in the GATS would continue to 
guide work.  He agreed that a close look at the proposals revealed that they offered a number of 
flexibilities in this regard.  He found many of the c oncepts in the proposals to be attractive, and he 
agreed with Brazil that Members needed to co ntinue the intensive discussion to clarify the 
establishment of a multilaterally-agreed target  as proposed, among others, by the European 
Communities and Japan.  He looked forward to co ntinuing discussion on a plurilateral approach, 
which his delegation had highlighted in an earlier  informal meeting as an important companion 
element to any multilateral approach.   
214. The representative of Rwanda  recalled the statements by Egypt and Zambia made on behalf 
of the African and LDC Group respectively and wished  to underscore a number of issues of great 
interest to her delegation with regard to the complementary approaches discussion.  She said that 
many Members had indicated that an increased level of ambition was necessary in the services 
negotiations.  She wondered what this level of ambition should be and from whose perspective and 
context it should be considered.  She said that Rwanda's ambition, as an LDC, was development 
related and should be part of the negotiations.  She recalled that Zambia had effectively outlined the 
structural weaknesses faced by LDCs and how these undermined the benefits that LDCs should reap 
from liberalization.  In this regard, she referred to the paper she had presented under Item A of the 
agenda, which had demonstrated the weaknesses faced by Rwanda that made it difficult to determine 
the level of commitments it could comfortably und ertake.  Her delegation sought to maintain the 
flexibility that the LDC Modalities provided, and we lcomed the views by many Members that they 
did not expect LDCs to be subjected to quantifia ble benchmarks that had been proposed under some 
complementary approaches.  Referring to the co mments made by some that maximum flexibility 
should be given to LDCs, she said that it was importa nt to better define this flexibility and with whom 
LDCs were being compared.  For example, she said that if it was argued that developed, developing 
and LDC Members should liberalize 60, 40 and 20 s ub-sectors respectively, it would be argued that 
this constituted maximum flexibility in comparison to other Members.  However, she said that it was 
difficult to see how any quantifiable targets for LDCs  would be adapted to all LDCs.  Her view was 
that, given the difficulties faced by LDCs, any targ ets for LDCs should be eliminated.  Referring to 
comments by some Members that the targets did not consist of new liberalization but rather related to binding existing liberalization, she recalled that WT O obligations were of a more permanent nature 
and reduced flexibility.  She welcomed the appro ach suggested by Canada in terms of recommending 
commitments from LDCs and tying these to technical  assistance and capacity building in order for 
LDCs to undertake them.  She said that this was a need that went beyond the discussion on 
complementary approaches.  She said that her dele gation remained committed to and engaged in the 
services negotiations.  Her delegation had often revisited the question of assessment, as it was 
important to identify the extent to which her count ry could participate in the negotiations without 
referring to specific targets.  Finally, she wished  to underscore a number of elements that she said 
should be developed in the preparations for Hong Kong.  Firstly, she wished to see full 
implementation of the LDC Modalities as a priority for Rwanda.  Rwanda wanted to see the elements of special priority as envisaged in Article IV :3 and provided for in paragraph 7 of the LDC 
Modalities, in which Members had agreed that they  would work towards appropriate mechanisms to  TN/S/M/16 
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 give effective market access for LDCs.  She said that  this special priority s hould be developed prior to 
Hong Kong.  Secondly, Rwanda s ought the development of elements  or guidelines in the Special 
Session for effective technical assistance and capac ity building.  Lastly, Rwanda sought progress in 
the S&D treatment proposal s from the African Group. 
215. The representative of Hong Kong, China  sought to focus his remarks on the services package 
for the Hong Kong Ministerial Conference.  Making a few key general points, he said that the Special 
Session had only five weeks to deliver its services p ackage as a contribution to the draft Ministerial 
Declaration for Hong Kong.  Secondly, he said that  a balanced package was needed in terms of 
interests, both overall and within specific areas.  Thirdly, he stated that Members would need a clear, simple and readily understandable specification of the objectives of the services negotiations for them 
to carry political weight.  This specification needed also be sufficiently concrete in order to bring 
about substantive and ambitious outcomes in the services negotiations that would match the overall 
level of ambition Members had for the round.  
216. With regard to the latter point, the representa tive of Hong Kong, China said it would be useful 
to ask what were Members' objectives.  He said that one clear objective for many was high quality 
offers that provided market access.  He recalled that that some three months earlier a wide range of 
Members, both developed and deve loping, had expressed dissatisfacti on with the quality of offers, 
which had led the Council to explore ways to rectif y the situation.  The difficulty was in how to 
specify the objective of high quality offers in suffici ently clear and concrete terms.  Various informal 
consultations had sought to bring Members closer to  doing so.  The different proposals that had been 
discussed in informal consultations and at the mee ting contained a number of ideas.  Notwithstanding 
the many different views voiced, he could see some  convergence in three aspects referred to by 
Members, namely, multilateral target-setting, plur ilateral approaches, and intensification of the 
request-offer process.  On multilateral targets, he r ecalled that it was the collective responsibility of all 
Members to achieve a progressively higher level of liberalization in services negotiations under Article XIX.  He said that setting targets was simply  a way to reflect this collective responsibility.  
These targets could be quantitative or qualitative or bot h, and Members needed to continue to thrash 
out their ideas, including the systemic elements that he had introduced earlier.  From the various 
statements that had been made, it appeared clear to him that, while there should be flexibility on the 
manner in which individual Members achieved or contributed to the overall objective of Article XIX 
on the progressive liberalization of services trade, setting the objective for the services negotiations was itself a collective exercise to which each and ev ery Member needed to contribute.  He noted that 
no provision on flexibility waived this responsibilit y of Members.  Likewise, he failed to see any 
reason why some Members who might have done be tter in the Uruguay Round should contribute any 
less in the Doha Round.  He said that only a Me mber that had scheduled full commitments in all 
sectors could possibly not be expected to make a ny further commitments.  Indeed, in his view, all 
schedules had a lot of room for substantive improvements.   
217. Turning to plurilateral approaches, the represen tative of Hong Kong, Ch ina said that the idea 
of supplementing the bilateral request-offer process w ith a plurilateral approach provided a viable way 
to address some of the problems with the request-o ffer process that Members had identified in June.  
In particular, the question of efficiency and e ffectiveness in dealing with negotiation issues in 
individual sectors and modes could not be easily a ddressed by proposing simply to have more or 
better organized bilateral meetings.  This was esp ecially the case for smaller delegations that had 
capacity problems in dealing with a large number of  bilaterals simultaneously, including his own.  
Apart from the question of how such a plurilateral a pproach could be organized, Members needed to 
identify more clearly the objectives, targets and exp ectations of Members in individual sectors and 
modes.  He hoped that more groups of Members woul d come forth at the meeting with expressions of 
specific interests in particular sectors or modes a nd share their views on their possible objectives, as 
well as suggestions for effective processes to supplem ent the bilateral request-o ffer process to achieve 
those objectives.  He expected that there would be further refinement of ideas on both the objectives TN/S/M/16 
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 and processes, as well as transparency vis-à-vis  the rest of the membership on these ideas.  On 
intensifying the bilateral request-offer approach, d espite the efficiency and effectiveness issues that 
had been raised with regard to it, he said that  it would remain a key component of the negotiation 
process.  Nothing could substitute for the bila teral request-offer process in addressing individual 
interests in specific markets.  Hong Kong, Chin a therefore welcomed suggestions to make the 
bilateral request-offer process more effective and effici ent, and in particular ways to better organize 
bilaterals in order to facilitate participation by relevant capital officials and experts, and especially 
those from smaller delegations.  He said that, even  under a plurilateral negotiation scenario, a helpful 
logistical arrangement would be to organize bilatera ls with sectoral or modal focus in parallel with 
any plurilateral gatherings for specific sectors and modes.   
218. Referring to his second general key point about a balanced package, the representative of 
Hong Kong, China said that rule-making was an equa lly important element in achieving balance along 
with market access and development issues.  He sough t to highlight some of the points his delegation 
felt were important in rule-making.  On domes tic regulation, he said that many Members saw 
disciplines on domestic regulations as the most pr omising rule-making area and sought guidance from 
ministers in Hong Kong.  Notwithstanding the technical  differences and difficulties, it was clear in his 
view that there was a balance within the Article VI:4 disciplines in terms of the interests among 
Members.  As such, any results and any guidance sought  would need to reflect that balance.  He said 
that failure to achieve that balance could lead to a missed opportunity for achieving any results in this 
important area of rule-making to which a wide range of Members attached importance.  On an Emergency Safeguard Measure, H ong Kong, China recognized the importance attached by some 
Members to this question, especially in political term s.  However, he also recognized the intellectual 
and technical challenges in justifying an ESM as well as finding ways to operationalise it.  He said 
that this was a problem that all had to address and, in this regard, he had we lcomed the consultations 
undertaken by the Chairman of the Special Session in June, and looked forwar d to the consultations 
that the Chairperson of the WPGR would undertake with a view to exploring alternative means to 
addressing the problem, including interim ones.  On  subsidies, Hong Kong, China recognized that 
rule-making in subsidies might not have progressed as much as other rule-making areas.  Nonetheless, Hong Kong, China, in addition to a number of other delegations, continued to attach great importance 
to this area.  Leaving aside the issue of the progress and the substance of the negotiation, his delegation found it appalling that ma ny Members did not have the political will to fulfil the mandate 
for information exchange which was intended to pr ovide an information base for the purpose of the 
negotiations.  He quoted the clear mandate in Article XV:1 that, "For the purpose of such 
negotiations, Members shall exchange information con cerning all subsidies related to trade in services 
that they provide to their domestic service suppliers".   He said that it was rare to have such a clear 
mandate, and yet some other Members continued to di sagree with this interpretation of the mandate or 
maintained that they had already fully discharged th eir obligation.  He said that information had not 
been exchanged, except for a handful of responses that some Members had provided in response to a 
questionnaire.  Without seeking to suggest any linkage, he said that he found it ironic that Members did not have the political will to fulfil a simple re quirement for information exchange, but expected 
that there would be political will to fulfil objectives or targets in the market access negotiations.    
Rather, it had been said on many an occasion by many a Member that subsidies could significantly undermine the level playing field that all sought to secure through further liberalization commitments.  
Thus, it was illogical to ask Members to make fu rther liberalization commitments without having 
information on subsidies.  One important element for Hong Kong, China in this area, apart from the negotiations on disciplines, was to seek guidance on how to reinvigorate the process and to fulfil this 
mandate on information exchange.  Hong Kong, Chin a sought to see this element reflected in the 
services package.   
219. Sharing a few thoughts on the way forward to th e Ministerial Conference,  the representative 
of Hong Kong, China said that further consultati ons on complementary approaches in different forms 
should be carried out in order to thrash out th e various ideas including those on intensifying the  TN/S/M/16 
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 bilateral request-offer process.  In doing so, he  said that Members should focus on convergence or 
crystallising common elements with a view to arriving at a package or certain options of a package on 
which ministers would be able to give guidance.  He  said that it would be useful for the Chairman to 
provide a summary note on the various approaches s uggested and their elements in order to focus 
discussions.  Secondly, he said a substantial amount of  time would need to be devoted in October to 
further identifying and refining the objectives, targ ets and expectations of Members in individual 
sectors and modes.  He agreed with the approach suggested by the Chairman in his note JOB(05)/164 
that foresaw consultations organized by sectors and modes with a clear timetable so that Members and 
their relevant experts could prepare.  He said th at the Chairman's report to the TNC contained in 
TN/S/20 provided a good framework for these discus sions, although more refined and specific inputs 
would be needed.  In this regard, the information tool provided by the Secretariat would be a useful 
reference for Members in preparing for these discu ssions.  He expected that the discussions would 
provide the input needed for the stocktaking that he presumed the Special Session would be 
undertaking in late October.  Thirdly, he su ggested that the Chairman keep, under his own 
responsibility, a list of elements for the services pack age and share it with Members.  This list would 
remind Members of the work that needed to be accomplished within the limited time remaining before 
the Ministerial Conference.  It would help Members arrive at an acceptable services package and clearly define collective objectives for the services nego tiations.  He said that it would also be useful 
if the Chairman would pose key questions to help  Members focus and reflect on these elements.   
220. The representative of the United States
 agreed with the statements made by a number of other 
delegations noting the short time period until the Ministerial Conferen ce.  This was important because 
the United States sought a successful ministerial meeti ng that would bring new energy to the services 
negotiations for a robust outcome in 2006.  Sh e hoped that Members would turn quickly to 
consideration of draft language for the ministeria l text that would give guidance to the services 
negotiations.  The United States delegation was committed to engage in this exercise.  Referring to the 
Chairman's request for Members to indicate the elem ents that might be included in the services text, 
she said that it was important to continue to emph asise services as a core aspect of the overall market 
access negotiations in the DDA.  She said that it was important that the key elements of a 'work plan 
for services' be addressed as fully as possible.  The firs t element of the work plan was a statement that 
would set a level of ambition on market access.  The United States believed that this was very important, both in terms of substance and at a political  level, to signal the importance of the services 
negotiations and to give directi on on substance.  Her delegation al so believed that it was important 
that the Ministerial Declaration set out a clear  and substantive outline for a package on domestic 
regulation because the United States recognised that th is was an important element.  She recalled the 
importance the United States attached to horizontal disciplines on transparency in this regard.  She 
recognised that there were other elements of importa nce to other Members in the context of domestic 
regulation that needed to be addressed.  Her delega tion would work with others to come up with a 
good and clear outline of a package on domestic regulati on.  She recognised that there needed to be a 
clear statement on where Members stood on rules, a nd that this element needed to be included in a 
draft text.  In addition, the United States believed th at it was very important to have a strong statement 
on development objectives, particularly with r espect to the LDCs and what was needed to 
operationalise and implement the LDC Modalities.  Finally, the United States felt that it was important to have a clear statement on the road  after Hong Kong on how to move forward in the 
negotiations, so as to arrive at a balanced pack age that would address the market access issue, 
domestic regulation, discussions on ru les and development.  She said that these elements were the 
rough outline of what the United States felt needed to be addressed in ministerial language and that 
the process of arriving at that language needed to begin as quickly as possible.   
221. Turning to market access and how a level of ambition in market access would be expressed, 
the representative of the United States said that he r delegation was committed to working on language 
that would be in keeping with what all Members ha d agreed to in Article XIX:1, namely, that all 
Members were seeking to achieve higher levels of liberalization.  The United States agreed with TN/S/M/16 
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 others that developed countries and developing countries shared the responsibility of making real and 
new contributions in the negotiations.  She sought to elaborate on why her delegation believed that a 
statement on a level of ambition on market access was so important.  Firstly, in terms of the complexity of the negotiations, she said that some challenges were faced in services that might not be 
present in other negotiations in terms of the complexi ty and variety of sectors, the variety of issues in 
market access, domestic regulation and other areas.  If Members were to achieve a truly balanced 
package on market access, in the interests of achieving coherence, Members would require a general 
statement on what Members' level of ambition was on market access.  Recognising that many Members faced many requests, she said that Members needed to be able to bring them together in a more coherent fashion and find a way forward to ac hieve goals.  Secondly, the United States agreed 
that a statement on level of ambition would ensure th at all Members would participate in line with the 
flexibilities expressed in Article XIX.  She agreed with  others that it was important to give different 
treatment to LDCs, such as in terms of prov iding greater guidance and support in conducting 
assessments on how LDC economies could benefit most or  in making commitments or in other areas.  
The United States was committed to ensuring that all Members, taking into account the level of 
development, participated in the market access nego tiations.  Thirdly, the United States also thought 
that this was the best way to ensu re that the goal of progressive liberalization was being achieved.  If 
there was not a more coherent target set out in a Ministerial Declaration, the goal would remain elusive and ambiguous, and hence the need for a conc rete statement to help move forward.  Her 
delegation had noted a wide variety of suggestions  and concerns from Members in this regard.   
222. In this light, the representative of the United States sought to offer some thoughts about the 
kinds of guidelines that her delegation had discerne d as common to many of the comments that had 
been raised.  She echoed the co mments by Japan and others that had expressed the notion of 
flexibility, and reiterated the need for all to exerci se and display flexibility in coming to agreement on 
this complex issue.  She said that, firstly, an im portant guideline would be to preserve the existing 
structure of the GATS which was a paramount concern that her delegation shared and supported.  The 
notion of preserving Members' right to select comm itments, exercise flexibility and take into account 
their level of development and their resources wa s important, and the United States endorsed this 
notion.  At the same time, the United States did not think that it was inconsistent for all Members to 
take on a commitment to undertake new improvements.   In doing so, this did not deny Members the 
opportunity to decide where and how to make these commitments.  Consistent with Article XIX and 
the GATS, it was possible to come up with a way to move forward on market access.  Secondly, 
another important guideline was to require all Members to participate in this exercise.  At the same 
time she agreed with the comments by Zambia, Uga nda and others that GATS Article IV:3 and the 
structure of the GATS recognised the special situ ation of the LDCs.  She said that encouraging 
participation might not mean, with respect to th e LDCs, that Members would necessarily expect a 
contribution in the same form.  Thirdly, the Unite d States believed that it was important that any 
approach reached collectively build on existing co mmitments.  She agreed that the exercise was a 
progressive one that looked to improvements and new commitments that would create new commercial opportunities so that Members were  expected to offer new commitments or 
improvements to achieve progressive liberalization.   Fourthly, the United States believed that the 
number and quality of commitments needed to be addressed taking into account the desires of Members with respect to sectors and sub-sectors of interest, as well as modes of supply.  Fifthly, the 
United States felt that it was important to accommodate the concerns to include those areas of interest 
to developing country Members in setting a mark et access target.  She said that these general 
principles seemed to have been reflected in some form by most Members.  
223. The representative of the United States said that  her delegation had been working on and 
discussing a number of ideas with a number of other Members.  The United States believed that it was 
important to focus and develop some type of mu ltilateral target, that would apply to the whole 
membership and in a manner consistent with Article  XIX and that sought to achieve a progressive and 
higher level of liberalization, but allowed for flexib ility in terms of level of development and did not  TN/S/M/16 
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 prejudge or force Members to make commitments in  specific sectors and was consistent with their 
national policy objectives.  The United States t hought that a general multilateral guideline on the 
quality of commitments as identified by Members w as also an important element in establishing this 
multilateral target.  She agreed that no sector shoul d be excluded from this target, but that the focus 
should be on those sub-sectors identified by Members in their requests, by the Friends groups and in 
the Special Session.  The United States was also of the view that the LDCs would not be expected to 
make a contribution as developed c ountries and developing countries woul d be under this exercise.  In 
addition, the United States thought that it would be useful to encourage all Members to engage in self-
reporting on the progress that would be made in achiev ing this multilateral target.  This idea had much 
appeal and would leave a good deal of discretion as to how they would go about this reporting and 
self-judging exercise.  In terms of plurilateral target s, she agreed that this was a very important 
element to be included in any statement on level of ambition, and she recognised the work that had been done in friends groups and the effort to achie ve a critical mass of sectors of interest to all 
Members.  The US thought that it was important that quality measures of various sorts be introduced and that there be flexibility with respect to a c ountry's level of development.  Finally, the United 
States also believed that the process and level of ambition needed to include a continuation of the 
bilateral request-offer process and that this process remain active.  The United States thought that, 
with these other two elements, it would be possible to make the bilateral request-offer more efficient.  
She had heard, particularly from developing countries, the difficulties in engaging in the bilateral request-offer process, and she hoped that multilateral a nd plurilateral targets would make the bilateral 
request-offer process more feasible and easier for Members to engage in.   
224. Turning to issues on process that might effec tively implement these ideas, the representative 
of the United States referred to the constructiv e suggestions by the Philippines on how Members 
conduct the negotiations.  She also believed that self-re porting might be usefully incorporated into the 
process.  The United States also believed that ministers had a very important role in giving Members guidance by setting a schedule and deadlines, and by vetting a process that the Members would have 
the flexibility to develop.  She said that the Un ited States was committed to working to a successful 
result in the coming weeks and through to the end of  the negotiations and she hoped that others would 
do the same to reach a positive result.  She thanked th e Chairman for his hard work and leadership of 
the Special Session and wished him best wishes for the future.    
225. The representative of Chile
, noting her delegation was a co -sponsor of the document on  
issues related to cross-border supply, thanked Indi a for its presentation of that document and looked 
forward to future consultations on this issue.  Sh e also welcomed JOB(05)/215 on systematic elements 
on quality of offers, and agreed fully that scheduling and classification, ENTs and MFN exemptions 
were elements that needed be taken into account wh en measuring the quality of the offers.  Chile was 
grateful to the Secretariat for the information not es which she assured had already proven useful over 
the course of the week.  She thanked Brazil for its detailed statement on complementary approaches 
and thought that it raised issues that required further discussion.  Referring to JOB(05)/131 on the 
assessment of mode 4 commitments in offers, she agr eed that it was key to include its ideas in any 
further discussion on complementary approaches.  She further agreed with Brazil that the negotiations 
should not lead to a round for free, and also belie ved that there should be no free riders. Chile had a 
clear view that each Member was required to particip ate in the process to the extent possible, seek to 
reflect the existing levels of openness in their offers and try to achieve high levels of liberalization.   
226. With respect to the services package in the Mini sterial Declaration, the representative of Chile 
said that a strong and clear political statement reaffirming the key role that services played in Members' economies as well as in the negotiations was required.  Members needed to restate the 
objectives of the negotiations which was to achieve a progressively higher level of liberalization, and 
in this context, flexibility for developing countries needed to be reaffirmed.  She said that mention 
would need to be made of the intensification of  the request-offer process, which remained the main 
method for negotiation, but at the same time needed to  be injected with renewed energy by ways that TN/S/M/16 
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 might be agreed to by Members, including the Cana dian plurilateral one.  Mode 4 needed to have a 
place in the declaration.  There would need to be  some elements on future disciplines for domestic 
regulation, as well as some political guidance regarding the rules negotiations.  She said that reaffirmation of the LDCs Modalities and a dead line for revised and final offers also seemed 
appropriate.  There would need to be an expression of ambition and an assurance of balance in terms 
of interest among sectors, modes, rules and market  access.  Chile believed that this kind of balance 
and ambition in the Ministerial Declaration woul d be key to achieving the same in the round as a 
whole.  On process, she recalled and endorsed three suggestions presented by Hong Kong, China 
earlier in the meeting regarding process.  Chile ag reed that further consultation on complementary 
approaches with a view to reaching convergence w ould be helpful, as would a summary note by the 
Chairman that compared the different approaches.  Sh e further agreed that consultations to refine the 
objectives, targets and expectations of Members in sectors and modes would contribute to the process.  
Finally, she supported the idea for the new Chairman  to maintain a running list of elements for the 
services package.   
227. The representative of India
 reiterated that services for India was an essential ingredient that 
was necessary to achieve a balanced and ambitious outco me for the round.  He agreed with others that 
at the crux of the situation in services was that a ll were disappointed by the quality of offers, and 
hence the need for all to aim to improve the quality of  their offers so as to reach a balanced outcome.  
Secondly, he echoed comments by a large number of  other Members about how to provide a greater 
incentive for the broader membership to participat e in the negotiations and address the issue of 
quantity.  The issue of creating incentives, he said, could be seen from at least two angles.  The first 
was from the point of view of the interests identif ied by a Member and a positive outcome in terms of 
these interests.  The second was re lated to capacity and the ability to take on commitments given the 
different capacities held and flexibilities required by Members.  Given the large number of interventions made related to mode 4, he reiterated that this mode was a key mode for the negotiations 
and recalled that many delegations  had referred to the existing asymmetry in mode 4 commitments.  
Moreover, a broad spectrum of the membership atta ched importance to mode 4, which was a point 
that at least partially responded to the question of  incentives to participate,  because a positive outcome 
in mode 4 would likely provide this incentive. 
228. Turning to some recent debate on how to a ddress improved quality of offers and incentives to 
participate, the representative of India noted that  there had been extensive discussion about whether 
the request-offer approach alone could fulfil objec tives.  He recalled that there had been many 
suggestions and concerns expressed, and agreed th at these discussions should continue.  Nonetheless, 
he said it was important not to lose sight of the central purpose of the Special Session's work by 
getting lost in the approaches themselves.   With re gard to the complementary approaches, he said that 
certain key elements needed to be clarified so that  comfort and ambition levels  could be reached.  A 
first point to make in this regard was that, while  the request-offer process had not delivered the results 
expected, any complementary approach should in no way substitute for it.  Suggestions had been 
made on how to intensify the request-offer process, and Members needed to look positively at these 
issues, as well as other approaches put forth deali ng with operationalisation.  A second point was that 
any complementary approaches (multilateral, plurilatera l, etc.) would need to be based on the existing 
commitments.  He echoed the comments made earlie r in the meeting by Hong Kong, China that all 
Members were in a position to make improvements.  Hence, the focus of any approach needed to be 
improvements to existing offers, which could be arrived at by a number of means, such as the 
inclusion of additional sectors and improvements to existing sectors.  A third key point related to 
flexibility, which had been repeated by many Memb ers.  He took from these statements the message 
that Members needed comfort that  flexibility would be maintained in terms of any parameter that 
Members might develop, including the ability of countries to undertake commitments in accordance 
with their development priorities and  the capacities.  Also key, he said, was the issue of LDCs and a 
clear recognition of the problems they faced.  He sai d that LDCs should attempt to participate to the 
extent that they were in a position to do so, gi ven their individual capacities and their perception of  TN/S/M/16 
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 their development priorities and needs.  Certainl y, India believed that any prescriptive elements 
should not apply to LDCs.  He said that clarificati on on the points he had just enumerated could help 
reassure delegations and avoid mis understandings.  Moreover, he said that clarification would help 
better focus work and ways forward.  He reiterate d India's view that qualitative parameters appeared 
to be key and needed to be the central p ackage for market access in Hong Kong, because all 
recognised that the problem lied in a lack of speci ficity.  While all maintained the purpose of the 
Negotiating Guidelines and the July Package, he said that what was needed was a better 
understanding and an enunciation of specific qualita tive parameters.  This was the key message he 
believed Members should bear in mind.   
229. Turning to his delegation's expectations for Hong Kong, the representative of India said that, 
from his delegation's point of view, a clear elemen t on mode 4 would be re quired and he expressed 
appreciation for the many delegations, co-sponsors a nd others, that had supported the proposal in 
JOB(05)/131.  For India, this was a key element that  would have to be considered in any package at 
Hong Kong.  He said that domestic regulation was al so an important element, referred to by a large 
number of Members, in terms of achieving a balance between market access and rules, but also in 
ensuring effective market access.  For this reason,  his delegation believed that domestic regulation 
would need to be part of the package at Hong K ong.  On scheduling and classification, India shared 
the objective of clarity of schedules.  On classificati on, while he shared some of the points raised, he 
also saw reason for caution, because while classifica tion in schedules should be clear in terms of 
scope and coverage, Members needed to retain flex ibility in the kind of classification they used.  One 
single classification might not be achievable or desirabl e.  On process, he agreed that consultations on 
all the issues he had referred to would have to continue, including on cross-border supply as noted by 
Chile, which was of great importance to Indi a, and on the elements of the package. 
230. The representative of Switzerland  thanked Turkey for the announcement of the submission of 
its revised offer.  He said that the request-offer pr ocess was a key element and the driving force of the 
negotiations.  He agreed that there was a problem with a lack of engagement, which his delegation 
hoped would be addressed through the political impetu s that would be provide d in Hong Kong.  He 
hoped that the work that Members would do until the ministerial meeting would aim to redress the situation in the services negotiations.  Switzerland expected that before Hong Kong those Members 
that had not tabled an initial or revised offer would do so, and that these offers would show a 
substantial improvement in the quality of the offers .  He said that it would be an important signal 
before Hong Kong to have fulfilled these two aims set by ministers.  Regarding the Ministerial 
Declaration, he said that it would need to be a str ong declaration.  While simplicity was attractive, he 
said substance remained more important.  The declar ation needed to clearly recall the importance of 
the request-offer process and set clear  deadlines or benchmarks for the next round of revised offers.  
Switzerland believed that tabling updated request s in early 2006 would improve efficiency in 
preparing future revised offers, a nd a reference in the declaration to  updated requests would also be a 
plus.  These updated requests would assist the author s of those requests, as they would provide an 
opportunity to gather the results of bilateral discussions and work in the Special Session.  It would also assist the addressees who woul d approach the relevant ministries with a fresh request dated 2006 
instead of one dated 2002.  He affirmed that  the request-offer process should not exclude a priori any 
sector or mode of delivery and that no Member s hould seek such an exclusion.  Noting the importance 
of mode 4, he said that Switzerland was open to mode 4, had interests in mode 4, had made 
substantial improvements to its mode 4 offer, a nd could consider further improvements were other 
Members to deliver on his delegation's requests, including inter alia  on some categories which dealt 
installers and maintenance.  He said that mode 4 could not be likened to a one-way street.  Switzerland hoped that strong wording on the modes of delivery in an inclusive manner would be 
reflected in the Ministerial Declaration.  He agreed with many Members that the round was an 
opportunity for all Members to participate and that th e collective aim was the lib eralization of trade in 
services.  It was up to each Member to contribute its share to further liberalization.  He said that the TN/S/M/16 
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 particular situation of the developing countries ha d to be taken into account, and particularly the 
situation of LDCs, which would need to be reflected in the Declaration.   
231. Turning to the rules negotiations, the representa tive of Switzerland said that a substantial 
element on domestic regulation would be key for th e success of these negotiations and of the Hong 
Kong process.  Members had a mandate that covere d three issues and he said that the Ministerial 
Declaration would need to cover all these issues and any associated elements.  He said it would be 
even better if an element such as transparency w ould be included.  On the other rules negotiations, 
which was comprised of three negotiating mandates, he said that it would be necessary to receive guidance on the continuation of these.  He said that it would be useful for ministers to recall the obligation to share information on s ubsidies.  He also recalled the importance of legal certainty in 
ensuring the quality of commitments.  He furthe r recalled the communication from Switzerland in 
document TN/S/W/21 and reitera ted his delegation's support fo r JOB(05)/215 as well as on-going 
work in the Committee on Specific Commitments.  He  said that much time had been devoted to 
interesting discussions on complementary approaches.  He agreed that the core of the negotiation was 
the request-offer process which was essentially bila teral.  Complementary approaches needed to 
remain complementary, which meant that they need ed to support and foster the request-offer process 
by assisting the undertaking of more commitments than  would be made otherwise.  He hoped that this 
would be a criteria that would be used in gu iding Members when selecting any complementary 
elements.  He said that there were proposals that contained flexibility in line with the structure and 
Article XIX of the GATS.   
232. The representative of Singapore
 wished to make a statement on telecommunications services 
on behalf of Australia , Canada , the EC , Hong Kong China , Japan , Korea , Norway , Singapore , 
Switzerland , Chinese Taipei  and the United States .  He said that the supporters of this statement 
agreed that telecommunications services were not only important economic drivers in their own right 
but were also key enablers of trade and developmen t.  Therefore, the co-sponsors believed that active 
participation of all WTO Members in the tel ecommunication services negotiations would strengthen 
each Member's development, efficiency, compe titiveness and improve their access to information 
networks.  In this regard they  believed that it would be helpful to supplement the request-offer 
approach in the telecommunication sector with other means of negotiations.  They were exploring all 
negotiating methods available within the parame ters of GATS Article XIX and the Negotiating 
Guidelines, namely, bilateral, plurila teral and multilateral approaches.   
233. The representative of Singapore said that di scussion had begun on supplementing the request-
offer process.  Recalling the level of ambition as re flected in the statement on the liberalization of 
telecommunications services in document TN/S/W/50, he said that the group had started an exercise 
to translate the contents of this proposal into specific targets, prio rity elements or model schedules for 
telecommunication offers, while taking into account  progressive liberalization and flexibilities in 
GATS Article XIX and IV, as well as the Negotiating Guidelines.  He referred to five of these 
elements:  significant commitments for all modes of  supply; the removal of key limitations such as 
exclusive service suppliers, econom ic needs test, types of legal entities and FDI limitations; 
commitments to all provisions of the Reference Paper developed in the Negotiating Group on Basic 
Telecommunications; the removal of MFN exempti ons;  and wide sectoral coverage of the 
telecommunication sector, including commercially meaningful commitments in this sector.  The group hoped that the flexibility incorporated into th is exercise would enable the broadest possible 
participation in the negotiations on this sector .  The group had begun an exercise to examine how 
Members could make commitments that would contribut e to the elements that had been developed.   
234. The representative of Singapore said that, in k eeping with the broader discussions, the Group 
was considering identifying telecommunication offers that would be vital to the successful conclusion 
of the services negotiations.  These telecommunications  offers should comprise, at a minimum, high 
quality offers representing a high percentage of th e combined telecommunications revenues of all  TN/S/M/16 
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 Members.  The group was also considering other ways of encouraging new or improved 
telecommunications offers by all Members.  Members could work, for example, with LDCs  and with other developing country Members that had an in terest to better understa nd development-related 
objectives and market access elements important to developing countries in this sector.  They could 
also help find technical assistance to support those interested in further liberalization by taking the 
necessary steps domestically and at the WTO.  He  said that, in the lead-up to the Hong Kong 
Ministerial Conference and beyond, the group would c ontinue to work on developing more precise 
targets and means of supplementing the request-o ffer process.  They invited all WTO Members to 
participate in this exercise and to express their interest. 
235. The representative of Switzerland
 wished to make a short statement in his delegation's 
capacity as a coordinator of an open group with a shared interest in logistics services.  He informed 
the Council that the group was in the process of prep aring an input similar to the one that had just 
been given by Singapore on behalf of a group inte rested in telecommunications.  He hoped that the 
group would be in a position to share with the Coun cil the result of its work in the near future. 
236. The representative of Chile  sought to make a statement on behalf of a group of Members 
interested in computer and related services (CRS).   She said that earlier in the week the group had 
hosted a seminar on the merits of making commitme nts and maintaining a liberal environment in 
computer and related services.  She reported that there had been nine presentations from government 
and business representatives from a diverse set of count ries including Egypt, Japan, the United States, 
Kenya, Pakistan, India, Mexico, Hong Kong China and the European Communities.  Many 
delegations particularly from devel oping countries had participated.  She further reported that most of 
the presentations had highlighted similar points, fo r example, the tremendous potential for growth in 
the information technologies (IT) sector, the synerg ies between CRS and other services sectors, the 
relationship between the liberalization of goods an d services, and the important role that public-
private partnerships could play in moving forward IT policies.  The synergies between the four modes 
and the need to make commitments on all of them ha d also been noted.  She thanked all participants 
for their presence and the Japanese mission for its hard work in organising the seminar.  She also drew 
attention to a joint statement regarding the fundament al role that computer and related services had in 
an economy, and which had called on all Members to  undertake market access and national treatment 
commitments for the sector as a whole at the hi ghest level.  She assured Members that the CRS 
friends would continue to work on the developmen t of tools that could help Members and that she 
hoped the group would be able to share this  with the whole membership the future. 
237. The representative of Japan  wished to make a brief statement on behalf of a group of 
Members interested in construction services.  He re called that the group had distributed at the last 
meeting a joint statement on to the liberalization of construction and rela ted engineering services 
contained in JOB(05)/130.  The group recognised th at construction and rela ted engineering services 
played an important role in growth in various services.  He said that the scheduling of improved 
revised commitments in this sector would help fost er foreign investment in construction and the group 
invited all Members to eliminate all discriminator y measures applied against foreign suppliers in 
mode 3.  He reported that a group of Member s was working on negotiating objectives to help 
contribute to the process, which was at a critical phase. 
238. The representative of Japan wished also to make a statement on behalf of a group of maritime 
friends.  The group believed that the quality of th e offers was far from satisfactory.  Given the 
approach of the Hong Kong ministerial meeting a nd with the view to facilitating commitments and 
advancing the negotiations in the maritime sector , the maritime friends were examining negotiating 
objectives, including those based on the maritime model schedule.   
239. Finally, the representative of Japan indicated his delegation's strong support for the statement 
made by Singapore on telecommunication ser vices and by Switzerland on logistics. TN/S/M/16 
Page 78  
 
 240. The Chairman
 said that he was grateful to Turkey and Honduras for their revised offers, as 
well as to those delegations that had brought written and verbal contributions on how to move forward 
to Hong Kong.  He said that the Council had held intensive consultations on complementary 
approaches and ways for governments to assess offers.  There had b een other approaches, such as 
plurilateral ones and others that referred to qua lity, such as in the CSC, on ENTs, commitments, 
MFN, etc.  It seemed to him that all Members could agree that request-offer remained the main 
method.  While some suggestions had raised concer ns in the minds of many, all had stated their 
willingness to explore other approaches which would complement but not substitute for the current 
method.  A basic rule was that any approach woul d be within the GATS, the Negotiating Guidelines 
and other relevant elements.  Ma ny had underlined the flexibility accorded to developing countries 
under the GATS.  Some delegations, such as Singapor e, Peru, Chile (among others) had underlined 
that the main point at stake was progressive liberal ization.  He said that, in taking commitments, it 
was possible to make many commitments without  actually liberalising.  Liberalization meant 
improving conditions of market access and eliminating restrictions.  Committing to existing levels of 
liberalization provided certainty, but did not pr ovide new opportunities.  He wondered what the 
situation would be if, at the time the Negotiating Guidelines had been prepar ed, it had been agreed 
that a non-binding paper would indicate how much liberalization was proposed in offers.     
241. On flexibility, the Chairman said that it was important and noted that even ambitious FTAs 
included an annex with carve-outs.  He said that delegations  would be engaging in  consultations in the 
coming weeks in this regard.  He said that flex ibility could be better understood in the context of 
numbers.  Flexibility was a question of degree.  If one  ventured to say that developing countries were 
to make commitments in two sectors and developed countries in six, many would say that this was too 
flexible; if one hypothesised 80 and 100, some woul d say this was inflexible.  The question was a 
relative one.  He encouraged the demandeurs  to begin to consider numbers  and decide if they were 
flexible or not.  Numbers alone said nothing about quality, and many had addressed this issue.  He 
said that the Council was on the right track to rece ive guidance.  Sectoral approaches and Friends 
groups related to mode 4, cr oss-border supply, mode 3, et cetera  could be used as a platform on which 
to continue the negotiations.  Very clear policy guid ance needed to be made with respect to the rules 
negotiations.  It was not productive to negotiate for the sake of nego tiating, and Members had to come 
to terms and give appropriate political guidance on ho w to proceed.  He took note and underlined the 
importance of domestic regulations , and hoped that work on an outline would be ready in time for 
Hong Kong so that a text-based exercise c ould be engaged in after Hong Kong.   
242. On identification of objectives, the Chairman said  that many had referred to his Annex.  He 
thought it had given a rough idea as to what was in the interest of some Members with regard to each sector or mode of supply.  It was perhaps a basis on which to gauge the level of ambition from Members.  Given the modest input for refining the Annex, he did not think that it would be appropriate to update it.  Howeve r, the Annex appeared useful in providing a picture of objectives, 
and he thought that some delegations might want to refine this picture, perhaps informally.  
Delegations might wish to take advantage of the sect oral approaches in order to refine the photograph, 
taking as a base the information tool prepared by the Secretariat.  He encouraged Members to proceed 
along these lines.  He recalled that two suggestions had been made.  The first that a summary of the 
approaches could be made.  This appeared useful and might be made availa ble for delegations.  The 
second was that the Chairman conduct consultations  to further explore approaches and begin a 
discussion on the contribution that the Council would ma ke to the draft Ministerial Declaration.  In 
this latter respect, he thought it would be useful for the Chairman to provide bullet points of the 
elements that delegations had indicated in the discu ssion.  This would allow Members to discuss this 
in a structured way and consider drafting.   
243. 
On organization of future work, the Chai rman said that his successor would no doubt 
welcome and seek delegations' views on how the Council wished to organize its work in the new year.  
He asked that delegations to reflect on the format and number of meetings they would wish to hold.   TN/S/M/16 
 Page 79 
 
 
 The situation would become urgent in light of the chronic scarcity of meeting rooms.  As on previous 
occasions, he suggested that the future Chairman a nd the Secretariat look into this issue, without 
prejudice to the Council's decision in this regard.  Fina lly, he recalled that in line with Annex C of the 
July Package, the Special Session would hold another formal meeting on the dates indicated in JOB(05)/164.  He said that many other points had been  raised.  He invited the Council to take note of 
the statements made and proceed as he had outlined. 
The Council so agreed
.  
H. OUTLINE OF THE CHAIRMAN 'S REPORT TO THE TNC 
244. Outlining his report to the TNC, the Chairman  said that his report would be made solely under 
his own responsibility.  He would report that, s ubsequent to a communication from the Chair of the 
General Council contained in WT/GC/96, the Speci al Session of the Council for Trade in Services 
had confirmed, on 30 September, the appointment of H.E. Fernando de Mateo of Mexico as its new 
Chairman.   
245. Under Review of Progress, he would report that  Members of the Council were aware of their 
collective responsibility to produce a draft services text for the Hong Kong Ministerial Conference 
within the next few weeks that would provide guid ance for the concluding months of the negotiations. 
The services negotiations needed to better specify the objectives which would translate the repeatedly 
expressed desire of Members to attain a high leve l of ambition.  From his point of view, it was 
imperative to produce clear and specific objectives for services at Hong Kong.  The lack of offers, he 
believed, resulted from this sense of a lack of direct ion.  Since the last formal meeting, only one new 
initial offer and four new revised offers had been tabled.  The total number of initial offers submitted 
was 69 (representing 93 Members); including LDCs, 54 initial offers remain outstanding.  He would 
recall that this was the state-of-play some 2 ½ years beyond the date by which submission of initial offers was to have taken place, and only 15 months  away from the anticipated end of negotiations.  
The total number of revised offers submitted wa s 28 (representing 52 Members); 63 revised offers 
were outstanding if LDCs were set aside.  He was co mpelled to reiterate that the services negotiations 
were qualitatively different from the other two pillars  of the DDA's market access negotiations.  The 
request-offer process involved a myriad of time - and resource-consuming bilateral meetings.  
Proposed GATS commitments in offers required th at governments consult with a complex web of 
consumer, industry, regulatory and ministry re presentatives.  Moreover, because the process was 
reiterative, there would be no time to spare in 2006 in  arriving at final offers that would fulfil a 
collective objective.  In addition to delegati ons' views on progress in general, a number of 
communications had been the subject of discussion.  A formal communication from 11 Members on 
the importance of mode 3 commitments had been presented.  A number of the non-papers on the intensification of the request-offer process and complementary approaches discussed in informal 
meetings had been re-introduced for the Council's consideration.  In this regard, Members echoed 
their comments made at informal meetings.  All Members agreed that any complementary approach 
would remain within the negotiating structure set  out in the GATS and the Negotiating Guidelines 
(S/L/93).  They reaffirmed that the main method of negotiation is the request-offer approach. 
246. The Chairman said he would recall that a number of Members had reiterated the flexibility 
accorded to developing country Members in undertak ing commitments.  A number of other Members 
stressed the fact that GATS Article XIX placed th is flexibility within the context of achieving a 
progressively higher level of liberalization.  In this way, the GATS provided a framework through 
which Members could liberalize their services trade.  The special situation of LDCs in the negotiation 
was recognised by all Members.  He would also recall that his report contained in TN/S/20 had 
included an Annex that sought to provide a first outline of Members' specific expectations for the 
round, the barriers faced by their services suppliers and their individual assessments of the offers on TN/S/M/16 
Page 80  
 
 the table.  Although preliminary, this outline provide d information that could be useful in producing a 
profile of a package of results for services with regard to sectors and modes of supply.  He had 
announced that a series of open-ended informal meetings in October c ould be dedicated to the further 
identification of objectives, including through the re finement of the inputs delegations provided for 
the Annex.   
247. With regard to the subsidiary bodies, including rules, the Chairman said he would relay that 
the Chairperson of the Working Party on Domes tic Regulation (WPDR) ha d reported that Members 
had worked in both informal and formal meetings with a view to advancing work for Hong Kong.   
The Chairperson of the Working Party on GATS Rules (WPGR) reported on discussions on emergency safeguard measures, subsidies and government procurement.  With respect to 
safeguards, the Chairperson had highlighted that va rious delegations had showed openness to consider 
alternative ideas or approaches and had noted th e importance of engagement from all sides.  
Delegations had also pursued their discussions on subs idies, in particular regarding ways to achieve 
progress on the information exchange, and government  procurement.  The Working Party had asked 
the Chairperson to undertake consultations on the way forward.  The Chairperson of the Committee 
on Specific Commitments (CSC) reported on possible work in informal and formal meetings that 
would aim to improve the clarity, certainty, comparability and coherence of schedules that would enter into force at the end of the round.  The Chairperson remarked that in general the offers had not 
improved the clarity of existing commitments.     
248. The Chairman said that he would report on the schedule of work for th e autumn that he had 
outlined in his last report and sought to address th e situation in the services negotiations.  In this 
regard, three open-ended informal meetings had b een held at which Members discussed extensively 
ways to intensify the request-offer process and comp lementary approaches to the negotiations within 
the parameters of the GATS and Negotiating Guidelin es.  Specifically, seven non-paper proposals on 
these topics had been explored through extensive ques tions which had sought to clarify the proposals.  
On the various proposals themselves there had been divergent views.  However, all delegations had 
indicated their willingness to continue discussing wa ys to strengthen the negotiating process.  One 
open-ended informal meeting had been held on th e Implementation of the LDC Modalities.  Since the 
last formal meeting, the LDCs had put forth two notes on this topic that outlined a number of proposals.  Members had welcomed the LDC Group's pa rticipation and further consultations would be 
necessary in order to clarify positions and see wher e the common ground might lie on these proposals.  
One open-ended informal meeting had been held  on the Proposals on GATS-related S&D Treatment 
Provisions.  The African Group had informed the C ouncil that text-based discussions were underway 
in small groups and that they would respond to the Chairman's invitation to use his good offices at the appropriate juncture.   
249. Under Other Items, specifically the Assessment of Trade in Services, the Chairman said he 
would indicate that a presentation had been made by  the International Organisation for Migration, the 
World Bank and the WTO on the report of a jointly organised experts meeting entitled "Managing the 
Movement of People:  What can be learned for mode 4 of the GATS?" that had taken place on 4-5 November 2004.  This had been the second such experts meeting that had brought together trade 
negotiators and migration officials with a view to  strengthening the dialogue between the two.  While 
the point had been made that movement of natu ral persons under the GATS represented a very small 
sub-set of overall migration, some Members had noted that some of issues being discussed in the 
context of migration overall might inform the Counc il's work on mode 4.   Substantive discussion had 
also been held on the basis of an extensive presen tation by Rwanda on its experience with trade in 
services since the Uruguay Round.  This presentation outlined the role of services in the Rwandan 
economy, its relatively modest export capacity, as well  as some of the challenges faced in creating the 
necessary institutional and regulatory framework.    TN/S/M/16 
 Page 81 
 
 
 250. The Chairman said that he would also refer to  three proposals that had been substantively 
discussed under the agenda item Negotiating Proposal s.  A proposal from Switzerland outlined that 
delegation's method of assessing the quality of offers numerically.  A number of Members had expressed interest in learning more about this met hod, which sought to help improve transparency and 
comparability in assessing the quality of offers.  Th e delegation of Switzerla nd had said that it was 
seeking a method through which the quality of mode 4 commitments could be quantified.  A number 
of Members expressed interest in a proposal from Pakistan on mode 4 issues related to non-trade 
concerns, return and temporariness of suppliers unde r this mode.  A third proposal from Chile, Hong 
Kong China, India and Mexico on cross-border suppl y (CBS) enumerated a number of issues related 
to CBS which the proponents felt could be pursued  in dedicated and focused discussion.  It was 
requested that the Chairman conduc t consultations in this regard. 
251. On the Implementation of LDC Modalities, the Chairman would report there had been 
substantive discussion on the basis of a room document from the LDC Group and a communication from the European Communities.  In its room doc ument, the LDC Group submitted three proposals to 
further the implementation of the LDC Modalities.  Discussion on these proposals he presumed would 
be pursued in consultations bearing in mind the Council's work prior to the Hong Kong Ministerial 
Conference.  The communication from the Europ ean Communities contained responses to questions 
posed by the LDC Group in a July 2005 informal proposal, which also pertained to the implementation of the Modalities.  A number of dele gations seized the opportunity of this discussion 
to report that they had provided answers to the LDC Group's questions bilaterally.  On Proposals for 
S&D Treatment Provisions, Rwanda, on behalf of  the African Group, had reported to the Council on 
text-based consultations.  Given the short time prio r to Hong Kong, the Group had suggested that 
work in the coming weeks focus on on e of the proposals, and that examination of the others continue 
in the new year.   
252. Under the heading Future Work, the Chairman said that he would report that Members were 
aware that they needed to keep their eye on the ball, namely a good draft services text for Hong Kong.  
This would be the key to a satisfactory result in the services negotiations.  In terms of process, the 
Special Session was required, pursuant to the July Package, to provide a full report to the TNC with 
possible recommendations for the purpose of the Sixth Ministerial Conference.  Finally, it had been agreed that the Chairman would produce a list of po ssible elements for the draft services text of the 
Ministerial Declaration, based on indications from de legations at and outside of the meeting.  The 
suggestions at the meeting had re lated to a wide range of the Council's work as well as to the rules 
negotiations.  He said he would leave future work on these elements in the hands of his very capable 
successor.  The next formal meeting of the Special Session was to take place on 31 October and 3 November 2005.   The Chairman invited th e Council to take note of his statement. 
253. The Council so took note
. 
I. OTHER BUSINESS  
254. There was no other business. 
J. APPOINTMENT OF A NEW CHAIRPERSON OF THE SPECIAL SESSION OF THE COUNCIL FOR 
TRADE IN SERVICES  
255. The Chairman  recalled that the Council had earlier agreed  to amend the agenda to include this 
item.  In view of his departure as Chairman of th e Special Session, the Chairperson of the General 
Council, Ambassador Amina Mohamed of Kenya, ha d engaged in consultati ons with delegations 
regarding the election of a successor.  In document WT/GC/96, she had informed delegations of the 
outcome of her consultations and on the procedure for appointing the new Chairperson of the Special TN/S/M/16 
Page 82  
 
 Session.  It was with pleasure that he informed  the Council that His Excellency, Mr. Fernando de 
Mateo y Venturini, Ambassador of Mexico, had been  deemed appointed the Chairman of the Special 
Session of the Council for Trade in Services.  It was with great pleasure that he moved that the 
Council confirm Ambassador de Mate o's appointment as its Chairman. 
256. The Council so agreed
. 
257. Ambassador Fernando de Mateo of Mexico  thanked Ambassador Am ina Mohamed of Kenya, 
Chairperson of the General Council, for her efforts in  the process that had just been outlined.  He 
further thanked the Ambassador Alejandro Jara of Ch ile for his unparalleled leadership and dedication 
in leading the Council.  He expressed his gratitude to Members of the Council for their support and 
trust.  He pledged his utmost efforts in dischar ging his duties and looked forward to working with 
delegations constructively towards a su ccessful completion of the negotiations. 
258. The delegations of Brazil , India , Hong Kong China , Guatemala , Chile , the United States , the 
European Communities , Zambia , the Philippines , Cuba , Ecuador , Japan , Mexico , Mauritius  on behalf 
of the ACP , Barbados  on behalf of Caricom , and Nigeria  expressed their gratitude to Ambassador 
Alejandro Jara of Chile for his tireless efforts as Chairman the Special Session and offered him their 
best wishes.  They also congratulated Ambassador Fernando de Mateo on his appointment and 
pledged their support in the carrying out of his functions. 
259. The Chairman  invited the Council to take note of all th e statements made before he adjourned 
the meeting.   
260. It was so agreed . 
 
_______________ 
  TN/S/M/16 
 Page 83 
 
 
 ANNEX 
 
Comments by selected delegations at informal meetings of the Special Session  
of the Council for Trade in Services held on 13, 22 and 28 September 2005  
 
 1. Speaking at an informal meeting on 13 Sept ember, the representative of Chinese Taipei
, 
associated her delegation with the statements by ot hers that the traditional request-offer method alone 
was not producing the desired results in terms of th e overall quality of initial and revised offers in the 
services negotiations.  She said that it was very important to note that nothing in the GATS prevented 
Members from revisiting the scheduling approach contained in the Agreement.  Referring to a 
proposal on complementary approaches from her delega tion, she said that it intended to complement 
the request-offer approach by introducing multilatera l and plurilateral approaches in order to widen 
Members' commitments and deepen liberalization in  infrastructure services.  Before introducing each 
approach, she said that some preparatory work woul d be necessary to check the real substance of the 
commitments offered by Members.  Referring to figur es contained in the proposal that analysed 64 
initial and revised offers across all W/120 sectors, she said that the regime offered appeared extremely 
restrictive and left considerable room for improveme nt.  She said that it was in this context that her 
delegation proposed a multilateral approach in m odes 1-3 that Members undertake commitments in 
"X" per cent of the sectors identified by UNCTAD as infrastructure sectors, and that the commitments 
offered reflect at a minimum the existing level of ma rket access.  Secondly, the proposal foresaw that 
Members would commit to eliminating "Y" per cent of market access limitations in these sectors as 
listed in their schedules in order to reflect the le vel of ambition of the ser vices negotiations.  In doing 
so, special consideration would be given to develo ping countries, and to LDCs in particular.  With 
respect to the horizontal mode supply, Chinese Taipei proposed that the pattern of mode 4 
commitments gradually move its focus away fro m ICTs and become de-linked from mode 3. 
Commitments on business visitors, contractual servic e suppliers, and independe nt professionals would 
be offered in at least "Z" per cent of committed sector s.  With respect to the plurilateral approach, she 
encouraged Members, in light of the significant role that had been played by friends groups, to continue to build on this foundation and to e ngage in constructive discussions on those sectors 
highlighted by UNCTAD as well as on modes of supply.  Chinese Taipei firmly believed that commitments arrived at through a plurilateral approach in these sectors would complement the 
multilateral approach she had outlined, owing to the spill-over effect from liberalization in the 
infrastructure sectors.    
2. Speaking at an informal meeting on 22 September, the representative of Indonesia
 supported 
the statement made by Brazil at that meeting on th e proposals that had been made with respect to 
complementary approaches.  Indonesia's basic concer n was that the setting of a mandatory target and 
benchmark in the services negotiations was, in its view, inconsistent with the flexibilities provided 
under Article XIX of the GATS as well as the Negotiati ng Guidelines that all had agreed to in March 
2001.  Secondly, he emphasized that Article XIX, pa ragraphs 1 and 2, needed to be read in their 
totality and not separately.   
3. Speaking at an informal meeting on 22 Septem ber the representative of Antigua and Barbuda , 
speaking on behalf of Anti gua and Barbuda, Barbados , Jamaica , Dominica , Grenada , St. Kitts and 
Nevis  and St. Vincent and the Grenadines , indicated support for the statement made by Brazil.  He 
said that these delegations wished to make a few preliminary comments on the assessment of the 
proposals on complementary approaches to the GATS ne gotiations and reserved the right to revert to 
this issue.  He recalled Article XIX:2 stated that, "[t]he process of liberalization shall take place with 
due respect for national policy objectives and the le vel of development of individual Members, both 
overall and in individual sectors".  It further stated that, "[t]here shall be appropriate flexibility for 
individual developing country Members for opening  fewer sectors, liberalizing fewer types of TN/S/M/16 
Page 84  
 
 transactions [and] progressively extending market access in line with their development situation".  It 
was left to countries to determine the number and ra nge of offers that they would submit to other 
Members of the WTO.  He said that the proposals that had been put forward by a group of developed countries, which sought to provide complementary approaches to the GATS negotiations, undermined 
the spirit of Article XIX.  They aimed to undermin e the flexibility, individuality and policy space 
provided for in Article XIX by forcing develo ping country Members, and particularly small 
vulnerable economies, to adopt a pace of liberalization as defined by targets that would be inimical to 
their interests.  The proposed new approach es would make it impossible for domestic services 
suppliers to maintain their domestic markets.  Such  deep levels of liberalization in more sub-sectors 
than the co-sponsors would rationally commit to  would undermine their development goals and 
objectives. As these proposals did not aim to f acilitate the process of development for small 
developing countries, the result would be a "crowdi ng out" of domestic suppliers .  This issue was of 
significance to the co-sponsors particularly in light  of the fact that 50 per cent of the services firms 
among them employed less than five persons.   
4. Referring to the proposal submitted by Chinese Ta ipei and other Members, the representative 
of Antigua and Barbuda said that it suggested that  countries make full commitments in infrastructure 
services.  Likewise, the proposals put forward by the European Communities spoke of "commitments 
by a critical mass of Members".  Section B of th e proposal submitted by Japan refered to "concrete 
targets".  These proposals suggested that developing countries should make commitments in sectors in 
which the developed countries had a competitive advant age and in which they wanted greater market 
access.  This approach went against the grain of  GATS Article IV.  Moreover, the proposals required 
that all Members adopt a similar approach and di d not take into account the fact that small and 
vulnerable countries, such as the co-sponsors, were unable to undertake the same pace of 
liberalization as larger developing countries.  The a pproaches did not adhere to the principle of special 
and differential treatment and the individuality of the GATS.  He said that the application of a formula 
approach suggested by New Zealand, Japan, Chines e Taipei and others, and Switzerland in assessing 
liberalization should not be applied to services trade since it undermi ned the flexibility provided for in 
Article XIX.  The value ascribed to commitments ma de by one country might not be as meaningful to 
other countries because of different levels of development and differen t economies.  The use of the term 
"commercially meaningful" used in paragraphs 8 and 11 of the proposal submitted by Korea seemed to 
speak only to the value of the commitment of de veloping countries to developed country trading 
partners.  The ultimate test needed to remain Memb ers' individual assessments of the offers made by 
others in light of its national development objectiv es as envisaged in Article XIX.  He said that 
paragraph 7 of the EC proposal did not provide the flexibility enshrined in Article XIX of the GATS 
since it sought to determine countries' economic policy and direction by prescribing the sectors in which 
countries should make offe rs.  He said that the pr oposals sought to reinterpre t the GATS and would have 
the effect of restrict ing the flexibilities available to countries (a hallmark of the GATS).  They sought to 
increase market access for developed countries to the co-sponsors' market s.  For this reason, they were 
unable to endorse the proposals.  He said that it was regrettable that in a development round more attention was not being paid to ensuring that deve loping countries would be the primary beneficiaries 
of the services negotiations, rather than the de veloped countries who accounted for 80 per cent of 
global services exports.  The co-sponsors were comm itted to the success of the services negotiations 
and looked forward to working with  all delegations in order to ensu re a mutually beneficial result. 
5. Speaking at an informal meeting held on 28  September, the representative of Hong Kong, 
China  said that in about five weeks time the Counc il would need to present to the TNC a services 
package for the Hong Kong Ministerial Conference.  He r sense was that, rather than coming closer to 
this objective, Members were growing further apar t on what could be included in that package.  
Rather than dwelling on how Members had arrived at  this situation, she preferred to focus her 
comments on the way ahead.  She said it was positive to see the many proposals on complementary 
approaches on the table and the many questions and answers that had been ex changed.  She thought 
this was an essential process to better understand the content of all the proposals and for the  TN/S/M/16 
 Page 85 
 
 
 proponents to identify the common elements in th eir proposals which garnered the widest acceptance 
among the membership.  She said that all Memb ers had a responsibility in moving forward the 
negotiations and in delivering a go od outcome for the Ministerial Conference.  The responsibility to 
move the process forward was not the Chairman's  alone, but rather a collective responsibility and 
hence all deserved a proper opportunity  to deliberate all the proposals on the table.  She stressed that 
this was only a part of the work that would bring Me mbers to their collective goal and to the point of 
discharging their collective responsibility, which was to  set an objective or a set of objectives for the 
services negotiations.  This was important because ma ny Members needed an objective so that they 
could show their industries what each would obtain from the round.  Secondly, an agreed objective on services expressed in the Hong Kong Ministerial Decl aration would provide the missing link in the 
overall equation for the negotiations.  While others might prefer the terms "level of ambition" or 
"target", she used the term "objective" to underlin e her view that a positive result would occur at the 
Ministerial Conference and for the round as a whole.  Nonetheless, she recogn ised that the political 
reality remained that for at least a portion of Me mbers, they would determine whether the services 
negotiation of the round would be amb itious in the light of their assessme nt as to the level of ambition 
for the rest of the agenda.  Hong Kong, China respect ed this strategy, but strongly urged constructive 
and progressive ground work in the services negotiations  that would ensure that when Members were 
ready for ambitious results for services in Hong Kong, they would find themselves on solid ground 
from which to deliver. 
6. The representative of Hong Kong, China said that  the bilateral request-offer approach had not 
been as effective as her delegation would have liked in delivering quality offers and she agreed work 
could be envisaged on complementary approaches.   In her delegation's view, complementary 
approaches could be employed to pursue different objectives from those of the bilateral request-offer 
approach.  Indeed, any result arising from any such  approaches would need to be multilateralised.  
The outcome would be required to represent a collec tive rise in the level of trade liberalization as 
envisaged under GATS Article XIX.  She said that the complementary approaches, like the bilateral 
approaches, were provided for under Article XI X and the Negotiating Guidelines as a means to 
achieving the same objective.  She urged the memb ership to separate the setting of the collective 
objective or a set of specific objectives for indivi dual sectors and modes of supply for the services 
negotiations from the development of approaches to operationalise that objective or measure how 
much that objective had been a ttained.  While delegations might have differences of views on 
complementary approaches, she was confident that  they could continue to discuss them.  She 
reiterated that there was no question in her mind th at all had a collective responsibility to reach an 
agreed objective in the services negotiations, as for other areas in the negotiation.  Hong Kong, China 
saw work on these objectives to be at the top of th e list of priorities.  These objectives, she said, 
should consist of strong and readily understandabl e statements of political weight outlining the 
collective will of Members to liberalise world trade and services in both quantitative and qualitative 
terms.  
7. Turning specifically to the proposals, the repres entative of Hong Kong, China said that there 
were a number of types of proposals on the table.  These included those that proposed to set targets;  
those that set out possible features of plurilateral negotiations through a critical mass of Members in 
individual sectors and modes of supply;  and those for developing a tool for individual or collective assessment of offers.  Hong Kong, China's preference  was for Members to focus their attention on the 
first two elements as they were more directly relate d to the important task of identifying and setting an 
objective or a set of objectives for the services negotiations, as well as a path for work beyond the Hong Kong Ministerial Conference.  The assessment of offers was an on-going exercise which she surmised all Members had been engaged in since the first initial offers had b een submitted in 2002.  In 
this connection, she said that a number of propo sals had added to the tools Members had at their 
disposal for this purpose.  She said that he r delegation would like to see convergence among the 
various proposals submitted.  It also sought to contri bute to the excellent ideas it had put forth jointly 
with China, Pakistan and Chinese Taipei in a pr oposal contained in JOB(05)/215 aimed at ensuring TN/S/M/16 
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 that some very important systemic elements woul d be sufficiently covered in the on-going discussion.  
In the document, the co-sponsors highlighted three su ch systemic elements, namely the 'four Cs' in 
scheduling and classification, economic needs tests,  and MFN exemptions.  She said the paper would 
be introduced at the formal meeting of the Speci al Session and she invited all Members to study the 
document and accord these elements the importan ce they deserved in the negotiations.   
8. Speaking at an informal meeting held on 28 September, the representative of El Salvador
 
expressed her gratitude for the submissions presente d and wished to refer to various documents 
containing proposed complementary approaches.  Ha ving carefully reviewed the different documents 
and having taking into account the concepts they contained, she said that the proposals envisaged 
liberalising sub-sectors, determining levels of co mmitments and adding commitments.  El Salvador 
believed that these approaches needed to be handled carefully as their application could go against the 
preamble to the GATS which envisaged different le vels of liberalization while respecting national 
policy objectives.  She recalled that Article XIX:2 st ated that the process of liberalization needed to 
respect policy objectives and the levels of develo pment of different Members generally and in 
different sectors.  She said that El Salvador was concerned about certain approaches since they could 
be used as a basis for comparison among Members wi th different interests in different sectors.  
9. Speaking at an informal meeting held on 28 September, the representative of Peru  said that it 
appeared to him that all Members sought to be am bitious, not merely in respect of services but with 
respect to all areas of the DDA negotiations.  His delegation's experience with the bilateral approach 
indicated that the main difficulties had not been rela ted to drafting Peru's ambitious offer, but rather 
the replies received to its requests.  This reality  led him to wonder whether the difficulty was in 
logistics and process or in the political decisions invol ved in replying to the requests.  Secondly, Peru 
felt that the bilateral approach as outlined in the Negotiating Guide lines needed to remain the main 
approach.  He said that it was important to ensu re that complementary approaches were indeed 
complementary, and would not lead to a situati on in which there were a series of concurrent 
alternative approaches that would make the pro cess complex especially for developing countries that 
had fewer skills and capacities to re ply to plurilateral requests such as those suggested by Canada.  He 
said that Members in informal consultations ha d shared their general evaluations and had not 
encountered major difficulties in any exercise that i nvolved indicators or objectives.  He recalled the 
suggestion by the US to set a multilateral objective.   The question was how within this exercise 
Members could be certain that sectors which were commercially meaningful for developing countries 
would be covered. He said that ge neral objectives could be defined, while in practice, sectors and sub-
sectors of interest to developing countries might fall by the way-side because it would be left to 
countries to determine in which sectors or sub-sector s they would commit.  An attempt at defining 
additional criteria and indicators could make the appr oach very complex.  He said that the main 
objective continued to be how to ensure that the re sult would be ambitious.  Peru shared some of the 
concerns expressed by others in this regard and supported efforts to ensure that the negotiations 
produced effective results which would cater to the interests of the developing countries.  In this 
regard, he referred to a joint submission contai ned in JOB(05)/161, whic h contained a number of 
items linked to mode 4.  He recalled that this m ode had particularities and specificities which needed 
to be analysed individually.  He noted that an ex ercise which did not take up the specificities of mode 
4 would have to come up with new indicators to ensu re that mode 4 was taken into account by trading 
partners.  He indicated that his delegation had a numb er of questions for which it reserved its right to 
revert to this issue.  He thanked Hong Kong, China for having underlined two essential points:  the 
'four Cs', which were meaningful , and the elimination of ENTs.  
10. Speaking at an informal meeting held on 28 September, the representative of Guatemala  
thanked Hong Kong, China and Canada for their pr esentations and supported the points raised by 
Argentina and Brazil.  She said that to date informal meetings had been held to discuss 
complementary approaches at which a number of pr oposals had been tabled.  Guatemala had studied 
these different proposals in a constructive spirit and with an open mind.  Nonetheless, Guatemala did  TN/S/M/16 
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 not see the need for approaches other than the request -offer approach in its different forms, such as 
bilateral and plurilateral.  Means within the re quest-offer approach coul d lead to significant 
commitments in light of the economic realities in i ndividual developing countries and their particular 
development goals.  She said that trade in services did not equal trade in goods as the negotiation was 
far more complex.  The use of percentages, goa ls, and other targets might lead to a delay in 
undertaking commitments rather than facilitating them .  She recalled that, in the July cluster, many 
delegations including her own had indicated that Members should bear in mind, in considering 
complementary approaches, sensitivities and the Ju ly Package.  Having analysed each of the 
proposals, Guatemala was concerned that the spir it in which the Special Session was conducting its 
work might be prejudiced by them.  Another elemen t to be borne in mind was the development of the 
regulatory framework in countries at various leve ls of government and whether it was necessary to 
create regulatory frameworks before locking in liber alization through a commitment.  Her delegation 
was concerned that these and other factors might not be  considered.  Also important was the weight of 
the sector in an economy.  She said, for example, that there were developing countries whose national economic activities were limited to a few key service sectors.  Commitments in these sub-sectors 
might have a greater impact than a commitment in a sector that was subject to little or no international 
trade.  The approaches gave the same value to a co mmitment in the former as to the latter and did not 
take into account the fact that, for instance, a commitment in a given sector might represent for a 
given country committing on 50 per cent of its econom ic activity.  Factors intrinsic to national 
economic activities such as these could neither be  assessed nor compared under the proposals for 
complementary approaches that tended to give all commitments equal weight without taking account 
of the importance of certain sectors to the economies  of developing countries.  In conclusion, she said 
that Guatemala believed that the Negotiating Guid elines contained in document S/L/93 reflected the 
appropriate procedures to guide the negotiations and bore in mind the needs of all Members.  She reiterated in this regard the importance of th e application of paragraph 12 of the Negotiating 
Guidelines. 
11. Speaking at an informal meeting on 28 September, the representative of Indonesia
 thanked 
Canada and Hong Kong, China and ot hers that had put forth recent proposals with a view to help 
move forward the market access negotiations in servi ces.  He observed that these two proposals could 
be used as an acceptable approach in addition to existing the bilateral request-offer method.  He 
reiterated comments by others that the discussions  on the proposed complementary approaches should 
be based on the Doha Declaration, the Negotiati ng Guidelines, the Scheduling Guidelines, and the 
Decision adopted by the General Council on 1 August 2004.  In this regard, Indonesia fully associated 
itself with views expressed by the delegation of Malays ia, in particular with respect to the rationale of 
the need to keep the conduct of services negotia tions under the GATS framework and the Negotiating 
Guidelines that had been agreed by all Members.  Finally, he reiterated the flexibility granted by the 
GATS to developing countries, which he said should be kept as the main element in every aspect of 
services negotiations in order to achieve balanced benefits for all Members. 
 
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