RESTRICTED  WORLD TRADE  
ORGANIZATION  S/CSC/M/33 
21 July 2004 
 (04-3156) 
Committee on Specific Commitments  
 
 
  
REPORT OF THE MEETING HELD ON 23 JUNE 2004 
 
Note by the Secretariat
1 
 
 
1. The Committee on Specific Commitments (CSC) held a meeting on 23 June 2004.  The 
agenda for the meeting is contained in WTO/AIR/2336.   
2. The Chairman  suggested to delete item "C. Organization of Future Work" from the proposed 
agenda, and to address issues related to fu ture work of the Committee under the items "A. 
Classification Issues", and "B. Scheduling Issues," respectively.  Under Other Business, he intended 
to invite a representative from the Secretariat to inform the Committee on the ongoing work concerning electronic schedules.   
3. The representative of Hong Kong, China
 wished to raise under Other Business the application 
of the procedures un der Article XXI.   
4. The Committee adopted  the agenda with the proposed change and the addition of the items 
raised under Other Business. 
A. CLASSIFICATION ISSUES  
5. The Chairman  recalled that, at the two previous meetings, the Committee had benefited from 
discussions on Indonesia's proposal on the classification of energy services (S/CSC/W/42).  At both 
meetings, delegations had commented in substance on the proposal, and had posed questions to 
Indonesia.  Noting that several of those questions  had been clarified, he invited the delegation of 
Indonesia to reply to any outstanding issues.     
6. The representative of Indonesia  welcomed the opportunity to provide additional responses.  
On a question by the European Communities, she re plied that licences in the areas of training, 
construction and other related sectors mentioned in  the proposal were issued by the Ministry of 
Energy and Mineral Resources.  The purpose of the detailed energy services classification was to ease 
negotiations and come up with a classification that reflected commercial reality in the energy services sector.  Turning to questions by Canada, she stated that Section 1A.5 of the proposal covered CPC 5113-5, and that Section 1A.5.5 referred to CPC 5114, which dealt with excavating and 
earthmoving work.  Section 1A referred to any geot hermal source used for energy.  Section 1A also 
referred to CPC 86601, which covered all expl oration activities of natural resources, whereas 
CPC 86609 mentioned other activities not classified in CPC 86601 and 86602.  Therefore, CPC 86609 
had been omitted from the proposed classification.  Section 1A.1.6 concerning remote sensing 
services was not referring to information gathering,  but only to map-making.  The services covered by 
section 1A.2.4 concerning solids control were (i) shale shaker, (ii) de gasses, (iii) desilter, 
(iv) desander, and (v) centrifuge.  These were not environmental services.  The services covered in 
section 1A.3.6 were (i) production testing, (ii) artific ial lifting, and (iii) acidizing and fracturing.  She 
                                                     
 
1 This document has been prepared under the Secretariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. S/CSC/M/33 
Page 2  
 
clarified that section 2.2.3 also included processing  and purification services of coke and petroleum 
products. 
7. Turning to the questions by the United States on energy-related education services, she 
explained that in Indonesia general education provid ers were regulated by the Ministry of Education, 
while special education and training providers were  regulated by the ministry in charge of the 
respective sector.  She believed that foreign ener gy service suppliers would provide educational 
services to Indonesian oil workers as was required, depending on the negotiations.  Such services 
would be part of professional services.  Whether the foreign supplier would receive separate payment 
for possible education-related activities would depe nd on the terms of the contract.  Petroleum 
electrical engineering services that were classified  as adult education related to a diploma programme 
under section 4.2.1, degrees/non-degrees education serv ices.  As regards the questions by China, she 
confirmed that the reference in section 1A2.13 shou ld be to down hole tool s services.  Oil and gas 
pipeline construction services were  addressed in section 2.1.3; pre- drilling engineering services were 
covered by section 1A.4, coring services in section 1A.1.5, and tertiary recovery services in 1A.3.4.  
Lastly, she thanked Norway for comments at the last meeting and hoped to have an opportunity to discuss energy classification issues bilate rally with the Venezuelan experts.  
8. The representative of Canada
 informed the Committee that an informal group of Members 
was hosting a seminar on issues related to classification and liberalization of energy services on 
29 June 2004. 
9. The representative of Kuwait  supported the reference in Indonesia's proposal to the particular 
needs of developing countries, and the importance of sustainable development goals.  His delegation 
had received numerous requests in the sector, sometimes pursuing the opening of sub-sectors that did 
not exist in Kuwait, such as derivatives etc.  He wondered whether these items would fit under 
section 3, energy commercialization of services.  As energy services were highly technology and 
know-how intensive, he welcomed the inclusion of energy-related education services in the 
classification.  He asked for clarification whether research and development in energy services under 
section 5.1 could be further disaggregated to include science and research associated with sustainable development questions.  He wondered where exactly gravity and magnetic survey, and seismic data 
interpretation would be included under section 1. 
10. The Chairman
 requested the delegation of Indonesia and Kuwait to circulate copies of their 
statements. 
11. The representative of the United States  hoped that the exchanges in next week's seminar and 
future meetings would bring delegations further together on this important issue.  She noted that 
Indonesia had been consistent in its replies on th e linkages between energy and education services.  
Her delegation had been cautious to the notion of commitments with conditionalities, though 
developing countries had flexibility in that regard.  Her delegation wanted to better understand the 
specific needs of individual countries. 
12. The representative of Indonesia  stated her delegation would revise its proposal when all 
questions had been analysed and replied to.  In response to questions raised by Kuwait, she stated that 
section 1A.1.4 could accommodate gravity and magnetic survey, and section 1A.1.4.2.2 could cover 
seismic data interpretation.  Her de legation was open to expanding the level of detail, as required, and 
agreed with the points raised by Kuwait with regard to the importance of R & D services.   
13. The Chairman  suggested to take note of the statements made and revert to the issue at the next 
meeting.  Turning to Legal Services, he recalled that it had been agreed at the last meeting to 
circulate, for information purposes, two documents re lated to legal services.  The first document was a 
"Resolution in support of a system of terminology fo r legal services for the purposes of international 
trade negotiations" which had been adopted by the In ternational Bar Association (IBA), circulated as  S/CSC/M/33 
 Page 3 
 
 
JOB(04)/17.  The other document had been prep ared by the OECD Secretariat and had the title 
"Managing Request-Offer Negotiations under the GATS:  The Case of Legal Services" (JOB(04)/77).  
He recalled that the question had been raised at the last meeting whether to in vite a representative of 
the OECD to present the paper.  If delegations were interested, the presentation could either take place 
in the CSC, or in the Special Session of the Council.   
14. The representative of Australia  stated that the terminology proposed by the IBA was 
consistent with the approach Australia had been advocating in its proposal, S/CSC/W/32.  The IBA 
Resolution should give confidence to Members in adopting a transparent and clear system of 
terminology that assisted in conducting the negotiations and subsequently in scheduling legal services 
commitments.  The home-, host-, third-, and internat ional law distinctions reflected the realities in 
transnational trade in legal services and provide d for a transparent, flexible, and meaningful 
taxonomy.  In passing the Resolution, the IBA had identified four basic objectives for a terminology 
that allowed negotiations to take place within a neutral framework.  The IBA had noted that such a 
terminology (i) was consistent with the core values  of the legal profession; (ii) provided a solid, 
neutral foundation for nego tiations so that ambiguity and uncertain ty were minimized; (iii) facilitated 
the negotiations without pre-determining the negoti ated outcome; and (iv) assisted in minimizing 
disputes over what had actually been agreed through negotiation.  The IBA system should be 
seriously considered by Members. 
15. The representative of Japan  supported the statement by Australia.  Japan's own proposal had 
gone into the direction proposed by the IBA.   
16. The representative of Switzerland  requested clarification on several points raised in the IBA 
Resolution.  With regard to the objective of the Resolution, he noted that the IBA invited all Members 
of the WTO to adopt the terminology for the pur pose of the negotiations on legal services.  He 
wondered whether the IBA expected Members to schedule commitments in accordance with the 
proposed terminology.  If that was the case, he wondered whether it was expected that Members who 
already had made commitments on legal services ba sed on a different classification would switch to 
the proposed terminology.  Furthermore, it was possible that the categories used by individual 
Members were the same as those advocated by the IBA, but were understood by the respective 
Members to have a different scope.  On the substanc e of the paper, he requested clarification as to 
how the IBA suggested to implement the differentiation s in practice, particularly  with regard to legal 
advisory services.  What would be a possible sancti on of a service supplier that did not respect the 
categories?  He further requested clarification whether documentation and certification services (CPC 86130) fell under advisory or under represen tation services.  He also wondered whether a 
definition of international services in arbitration an d mediation services was necessary, or whether the 
notion of "international" was sufficiently clear.   
17. The representative of Chinese Taipei
 saw several advantages in the system proposed by the 
IBA.  She considered that the current classification in CPC 861 did not correspond to the reality of the legal services sector, particularly due to the emerge nce of the new fields of business and trade law.  
Legal services, like many other prof essional services, tended to be highly regulated as they had to 
meet a range of public policy objectives, such as the protection of consumers.  The system proposed 
by the IBA should lead to greater efficiency and a better outcome of the negotiations as it provided 
Members with the ability to safeguard the practices  of host-country law, while making substantial 
commitments in other sub-categories.  Commitments taken on the basis of the type of law would also facilitate administration of the le gal profession by the competent domestic authority.  The terms, 
“home country law”, “host country law”, “third co untry law” and “internatio nal law” were already 
widely used by Members in their schedules.  Th e scope of these service types, differentiated by 
“advisory services” and “representation services”, was sufficiently clear without specific functions 
needing to be defined.  Her delega tion believed that this differentia tion better reflected the realities of 
present-day transnational trade in  legal services as well as Memb ers’ existing commitments.  In S/CSC/M/33 
Page 4  
 
addition, she noted that the sub-categories proposed by Australia (S/CSC/W/32) were very similar to 
those used in the IBA terminology, despite a few differences.   
18. Turning to the IBA paper, her delegation unde rstood the common definition of “international 
law” to refer to law established by international tr eaties and conventions, as well as customary law.  
She wondered whether this broad scope could lead to uncertainties in the pr actical application or 
interpretation of commitments in this sector?  In he r country, for example, foreign lawyers were only 
permitted to practice the international law recognized by their home country.  She suggested that this 
could be a possible solution.  Another issue related to section "(e) Advisory Services" in the 
definitions used by the IBA.  That section covered the verification of documents of any kind for the 
purpose of, and in accordance with, the requirements  of the specified body of law.  She wondered 
how services provided in the area of notarial activities could be distinguished from the IBA 
definition? 
19. The representative of the European Communities
 sought clarification whether Australia was 
still advocating a new classification or merely a term inology, like the one proposed by the IBA.  The 
IBA had expressly refused to propose a classification.  The draft resolution prepared by the Law Council of Australia had advocated a classification, but after a discussion, in which the EU proposal 
of a single category had been considered to be well founded, the IBA had decided to propose only a 
terminology.  The IBA Resolution contained two reci tals which clarified that the IBA was not leaning 
towards one approach only.  One recital of the Resolution recognized that the "elements of such a 
system may be used in formulating either commitme nts" – the sectoral entry – "or reservations to 
commitments" – limitations – "within the framewor k of the GATS," and that the IBA was "expressing 
no view as to which of the two approaches will mo re fully achieve the objec tives describe d above."  
Another recital recognized " the ro le of law firms in cross-border legal practice," and reserved "for 
further consideration the question whether additiona l standard terminology ma y facilitate negotiations 
on this important issue."  The EC had no problem with the use of a terminology based on the different 
fields of law, but believed that th e transformation of such a terminology into a rigid classification that 
did not reflect commercial reality was undesirable.  As recognized by the IBA, such a classification 
had little relevance for law firms who were the ma in actors in Mode 3, the mode were most 
commitments were made.  A classification reflecting the areas of law in which lawyers were qualified 
was relevant perhaps for Mode 4, but not for the four modes of supply combined.  The IBA 
Resolution left unresolved the questions raised on page 3 and 4 of the EC communication, namely the 
overlap of the different fields of law, and therefore could hardly be translated with sufficient clarity and predictability into GA TS schedules.  He believed that the CSC could work further on definitions 
of the three main activities provided by legal service suppliers without distinguishing the fields of 
law, which would be advisory, representation, as we ll as arbitration and conc iliation services.  Such a 
subdivision might make sense even if it was made at CPC 861-level, as revised in 1997 (i.e. including 
arbitration and conciliation).  
20. The representative of Korea
 stated that the OECD paper should be presented at the CTSS, so 
that Members could take advantage of the presence of their capital-based experts.  Also, the paper 
appeared to include content that might be more appropriately discussed at the CTSS.  After the 
presentation, certain elements of the paper might be discussed in the CSC. 
21. The representatives of Hong Kong, China  and Chile  indicated interest in a presentation on the 
OECD paper, preferably in the CSS, as the paper comprised areas beyond matters dealt with in the CSC.  The representative of Chile
 stated that some of the elements could be discussed at a later stage 
in the CSC. 
22. The representative of the United States  wondered whether the IBA paper was a 
communication from Australia on behalf of the IBA, or a communication from the IBA to the CSC.  
Given that the paper was circulated as a JOB document, she was not clear about its status, as it was not a proposal by a government.  She was therefore reluctant to give it much attention, although she  S/CSC/M/33 
 Page 5 
 
 
appreciated its substantive content.  It seemed that  the CSC, where the paper had been circulated, was 
the right body to discuss the paper, and her delegation would wish to comment on it in the CSC.   
23. The representative of Brazil  recalled that a similar OECD paper had been presented in the 
Committee on Trade in Financial Serv ices.  He agreed with view of the United States that the paper 
should be discussed in the CSC, the subsidiary bodies were supposed to lend substantive support to 
the Special Session.   
24. The Chairman  stated that he would consult with interested Members where the OECD paper 
should be presented, and assured Members that the matter would be resolved taking into account the 
various interests.  Either the paper would be presented in the CSC or he would contact the Chairman 
of the Special Session to see if a presentation in the CTSS was possible in the context of the next 
meeting in September.  The IBA paper had been ci rculated upon the request of Members.  He asked 
whether Australia was in a position reply to any of the questions that had been raised, or whether he 
should transmit these questions to the IBA.  Another possibility was for Switzerland to contact the 
IBA directly for clarification of its questions. 
25. The representative of Australia  stated that the IBA Resolution was not an Australian paper, 
and the IBA had requested the Secretariat to ci rculate it to Members.  Questions on the IBA 
Resolution were best posed to the IBA, and he  suggested to invite the IBA for an informal 
presentation.   In response to the European Communi ties, he confirmed that Australia's legal services 
proposal remained on the table. 
26. The representative of the Brazil  requested clarification as to whether there was a distinction in 
symbol or distribution of documents by intergovernmental organizations or professional associations; 
secondly, he recalled that the paper had been circ ulated upon request by on e delegation, and not upon 
request by the Secretariat of another organization.    
27. A representative of the Secretariat  stated that the rules of procedure made a distinction 
between observer organizations, i. e. intergovernmental organizations, and non- observer organization 
which might be intergovernmental or non-governmental .  Observers had merely the right to request to 
speak, and would be permitted to do so, as approp riate.  No organization had a right to circulate 
documents.  Hence, the approval of Members was always required.  The practice followed in the 
services area was for the Secretariat to report on relevant material received by outside organizations 
and for the Chair to ask Members whether such materials should be made available.  The IBA 
document had been communicated to the Secretariat by the IBA, but was circulated upon request of 
the delegation of Australia, with the agreement of a ll Members.  It was circulated as a JOB document, 
which meant that it was registered  in the WTO document system, so that delegations had electronic 
access to it; further, JOB documents were translated.  It was in delegations hands to decide whether 
such documents should only be processed as room documents.  
28. The representative of Switzerland  reiterated that answers from the IBA to his questions would 
be important.  He was flexible as to the approach es suggested by the Chairman, but considered it of 
importance that the replies were made  available to all delegations.  
29. The representative of Mexico  suggested to forward the questi ons to the IBA, and invite an 
IBA representative to present the do cument and respond to questions. 
30. The representative of the United States  stated that her delegation preferred if the Chair always 
sought clarification on the treatment of non-Memb er documents.  She needed to consult with her 
authorities on how to proceed with the questions pose d to the IBA, or a possible invitation for the IBA 
to present its paper. S/CSC/M/33 
Page 6  
 
31. The Chairman
 stated that he would consult further on this matter.  He noted that no delegation 
wished to take the floor on any other classification issue.  Turning to the organization of future work 
on classification, he recalled that several delega tions had stressed the need to better understand 
commonalities and differences of classifications pr oposed or used by ot her Members.  These 
delegations had suggested more systematic work in the Committee, possibly w ith the assistance of the 
Secretariat. The Chairman's initial ideas on this qu estion were set out in a Note (JOB(04)/56), which 
was discussed at an open-ended informal meeting on 1 June.  The comments at that meeting, as well 
as during subsequent informal consultations, had led him to conclude that – in addition to the current 
practice of presentation of papers in the formal meetings – it might be fruitful if he pursued the 
following steps before each meeting: (i) based on c onsultations with interested delegations (friends 
groups and other delegations who wish to raise questions on classification), the Chairman would identify one or more sectors on which discussion at  an upcoming meeting of the CSC could focus.  
(ii) The sector(s) would be announced sufficiently  ahead of the meeting, to permit delegations to 
submit points they wished to discuss, as well as to  facilitate the presence of capital-based sector 
experts.  (iii) At the same time, it would be an nounced whether the discussions would be held in 
formal or informal mode, depending on consultation s with delegations.  (iv) Where discussions would 
be conducted in informal mode, the Chairman would prepare a non-attributable summary on his own 
responsibility.  Depending on the preference of de legations, that summary could consist either of a 
report to the formal meeting, a JOB document, or a paper outside any document series.  The format of 
the summary would be agreed on a case-by-case basis.   
32. It was needless to say that any Member remained  free to table its own proposals for formal 
discussion in the CSC, and to ask classification questions to other Members.  His consultations had shown that Members were unlikely to agree on a rigid mechanism for work in this area.  He would 
therefore approach the issu es and concerns with particular flex ibility.  It was clear to him that 
delegations would not want to engage in the discussi on of issues that they did not consider ripe, or 
where they felt targeted, or where they were not  comfortable with the general setting of the 
discussion.  He therefore intended to set the parameters for each discussion in such a way as to give 
sufficient comfort to all delegations.  In order to ma ke this track of classification work worthwhile, it 
was critical that delegations felt free to approach him or the Secretariat wi th any preferences or 
concerns that they might have regarding specific classification issues. 
33. His remarks merely meant to inform delegations in broad terms of what he intended to do in 
preparation of future meetings, and did not present a formal proposal on which Members needed to agree.  He remained open to comments and additional ideas.   
34. The representative of Canada
 suggested to opt generally for informal discussions instead of 
consulting individually for each classification topic on  the format of the discussion.  He agreed with 
the idea to provide a summary on the Chairman's own account to the formal session.  If Members 
wished to make parallel submissions to the formal  meeting they remained free to do so.  He was 
convinced that the informal discussion would facilitate a substantive exchange of views.  
35. The representative of the European Communities  stated that it was important that Members be 
informed whether the discussions would take place in formal or informal mode.  
36. The representatives of Hong Kong, China  and Chile  said that they could agree with Canada's 
suggestion of conducting discussions in informal mode.  The representative of Hong Kong, China  
noted that Members who wished to have their statements recorded in a formal way could request 
inclusion in the report of the formal meeting. 
37. The representative of the United States  stated that she was comfortable with the procedure 
indicated by the Chairman.  She wo uld be concerned, however, if a re port on the Chair's responsibility 
was going to have substantive effects on her delegation' s interests.  The status and format of the report 
would influence her delegation's participation in th e discussions.  She wished to ensure that her  S/CSC/M/33 
 Page 7 
 
 
country's rights were preserved if her delegation did not participate and the Chair was putting forward 
a report that appeared to reflect a common view of the membership.  Her experience with non-
attributable summaries showed that these might eith er omit just the names of delegations, or give the 
impression that they reflected a general view.   
38. The representative of Brazil  expected that informal discussions would facilitate more 
substantive exchanges.  Should this expectations no t materialize, the Committee would have to revert 
to formal mode.   
39. The Chairman  noted a preference for holding the discussions generally in informal mode, and 
he would consult on that basis.  The Chair's summary could be simply a working or room document.  
He expected that this particular degree of inform ality would facilitate a more pointed discussion.   
40. It was so agreed.  
B. SCHEDULING ISSUES  
41. The Chairman  recalled the communications by Brazil (JOB(03)/189 and JOB(04)/12) 
containing preliminary questions on a number of in itial offers.  In additio n, Members had exchanged 
views on a set of general scheduling questions submitted by Hong Kong, China as a room document 
at the last meeting.  These questions had now been  circulated as JOB(04)/81.  The delegation of 
Chinese Taipei had circulated its thoughts on the questions raised by Hong Kong, China in document 
JOB(04)/82. 
42. Reporting on his consultations on a possible structure for future work on scheduling issues, 
the Chairman stated that he had received indications  from several delegations that, regardless of the 
format, they would not be in a position to discuss scheduling issues multilaterally for the time being.  
Given this reluctance, he considered it to be of little value to devise an informal process under the 
CSC in order to give comfort to so me delegations, but he would contin ue to explore possibilities.  In 
the meantime, the CSC's terms of reference offered the possibility for any delegation to address any 
scheduling issue in the formal meetings.  He expr essed his confidence that there was a sufficient 
number of delegations willing to co ntribute to this process.   
43. The representative of Brazil  invited those delegations to whom Brazil had posed questions on 
their initial offers to reply to th ese questions.  Scheduling questions had the same importance for the 
negotiating process as classification issues, and it was curious that some delegations had shown 
flexibility to work informally on classification bu t not on scheduling issues.  He hoped that the 
delegations concerned would re -evaluate their positions.   
44. The representative of Hong Kong, China  noted that the ultimate objective of work on 
scheduling issues was to ensure the clarity, certa inty and comparability of specific commitments.  
These "3Cs" were crucial for assessing and ensuring the quality of offers of specific commitments.  
Without them, a satisfactory outcome of the negotiations on specific commitments could not be 
reached.  The CSC had a major role in achieving th is objective.  In furthering substantive technical 
and analytical work on both classification and scheduling issues, the CSC should provide a forum for 
galvanizing Members’ common understanding on these issues.  He hoped to see a greater 
convergence of views in terms of how to schedule specific commitments using comparable 
classifications as well as clear and well-underst ood scheduling methods.  His delegation saw W/120 
and the CPC, together with the Scheduling Guidelines as the foundation for work on classification and 
scheduling in the CSC.  Members should aim for a common understanding of those instruments and 
explore options for additional improvements.  While he did not intend to re-open the Scheduling 
Guidelines, a more widely shared understanding was needed on how they would apply to certain scenarios in order to promote clarity, cer tainty and comparability of commitments. S/CSC/M/33 
Page 8  
 
45. On scheduling in particular, he considered that  two types of issues were involved: issues 
concerning the transparency and precision of the la nguage used in specific entries and offers;  and, 
secondly, issues concerning certain scheduling scen arios which raised questions of a more general 
nature relating to the application of the Scheduling Guidelines.  Both types of  issues were squarely 
within the ambit of the CSC, which had a mandate  to examine schedules of specific commitments, 
including potential schedules, with a view to improving their technical accuracy and coherence, as 
well as to address horizontal issues, including th ose arising from the application of the Scheduling 
Guidelines.  Work in the CSC would not substitut e, but rather complement, the on-going bilateral 
market access negotiations. 
46. His delegation was in favour of informal meetings to address scheduling issues and to 
develop a non-attributable checklist of issues ra ised by Members on scheduling.  To assist the 
preparation of the informal discussion, some time should be allowed for Members to raise their issues 
in advance, and for the Secretariat to categorize and compile them.  A report by the previous 
Chairman on Article XX:2 could be condensed into a checklist of issues that could help Members to 
avoid the ambiguities arising from Article XX:2 when scheduling commitments.  He favoured 
structuring the discussions around the relevant sect ions of the Scheduling Gu idelines, and in the case 
of specific questions relating to sectoral entries, to organize them by sector.  He strongly supported 
the need for a non-attributable checklist of issues  raised by Members during the informal discussion 
for ease of reference and further analysis.  The chec klist could also be a basis for individual Members 
to seek advice from the Secretariat on indivi dual scheduling issues as they saw fit.   
47. The scheduling issues in his delegations' submission were not hypothetical, but based on real 
instances in both existing schedules and offers.  He was happy to reveal the origin of any of the 
questions to interested delegations.  As these we re more general issues, they could be usefully 
addressed in a multilateral forum.  He was flexible on the format of the discussion, but was hopeful 
that a viable formula for an informal process could be devised. 
48. He noted that some of the reactions on his delegation's questions indicated differences in 
understanding between Members.  Concerning the question on economic needs tests (ENTs), he 
recalled a Secretariat Note of 200 1 (S/CSS/W/118), which provided some observations on the nature 
and scheduling of ENTs, and contained a list of ENTs or similar entries in schedules.  He proposed to 
examine the document at the next meeting.  Some of his preliminary thoughts related to the nature of 
ENTs.  Absent a definition in the GATS, he wond ered whether any boundaries existed as to what 
constituted an ENT?  Obviously, the concept appeared in Article XVI:2 (a)-(d), and denoted a test that resulted in the imposition of cert ain quantitative limits.  However, would all tests that purported to 
apply certain kinds of quantitative limits automatically  qualify as ENTs?  Further, what specifications 
were required for an ENT?  If no specifications were required, there might not be any difference between an unspecific ENT and an "Unbound" en try.  Even the emergency safeguards under 
discussion in another forum were intended to be based on specific criteria and rules.  He drew 
attention to three parts in the Scheduling Guidelines that appeared to give guidance to the question of 
ENT.  Paragraph 9 of the Scheduling Guidelines clearly stated that the entry should indicate the main 
criteria on which the test was based.  This notion appeared to build upon the statement that each entry 
in the market access column should describe each  measure concisely indicating the elements which 
made it inconsistent with Article XVI.  Furthermore,  paragraphs 36 and 39 were of relevance as they 
repeated the obligation to identify concisely those elements that made a measure inconsistent with 
Article XVI.  
49. There was an interesting contrast between an ENT and a specific quantitative limit that could 
be applied under Article XVI:2(a)-(d), e.g. a quota.  He wondered what guarantee on the conditions of 
market access each of these quantitative limitations provided, and to what extent an ENT was able to 
provide the same standard of legal certainty, pr edictability and comparability as these quantitative 
limitations.  What would be the value of a commitment  in the form of an ENT if such a standard was 
not afforded?  In his delegation's view, Members mu st enable other Members to identify the specific  S/CSC/M/33 
 Page 9 
 
 
elements which made an ENT inconsistent with Arti cles XVI or XVII.  Such elements would appear 
to include: conditions upon which the ENT would be invoked, criteria upon which the ENT would be 
applied, whether the criteria and the ENT were to be applied in a non-discriminatory form or 
otherwise, and what type of quantitative limit might be imposed as a result of the application of the 
ENT.  The degree of precision required would depend on the individual case, but at the very minimum 
should amount to the same degree of legal certainty  that was generally afforded by other types of 
limitations under Article XVI:2.  After all, the sc hedule represented legally binding commitments, and 
the lack of precision, and in turn legal certainty, cast doubt on the value of such commitments. 
50. A further set of questions related to the scope of criteria for ENTs.  Could an ENT adopt any 
criterion, or would the criteria be confined by the notion of economic needs?  If the basis for an ENT was indeed economic needs, what would be the reasons to apply the ENT or its criteria in a 
discriminatory manner? 
51. The representative of Chinese Taipei
 stated that advancing Members' understanding of 
scheduling issues was particularly relevant in th e context of the ongoing negotiations.  Scheduling 
questions could generally be separated into issues of  transparency and precision of language used in 
the relevant entries, and application of the Scheduli ng Guidelines.  Her delegation was not suggesting 
that the Scheduling Guidelines be amended or modified, but believed that greater in-depth 
understanding was required of how they might apply in  certain scenarios.  A generally higher degree 
of clarity and certainty should be achieved in future scheduling of commitments.   
52. The representative of Chile  expressed his surprise at the dynamics of the discussion.  He felt 
that there had been a backward trend with regard to  exchange of information at the last few meetings, 
and did not comprehend why bilateral discussions we re preferable to multil ateral debate.  Since 
Members asked his delegation to make a better offer, it would seem logical to discuss how such an 
offer should be technically presented.  He consid ered that specific commitments typically reflected 
national laws, and it was peculiar that Members were  talking about transparency with regard to those 
laws without permitting transparent discussion of the corresponding specific commitments in the 
CSC.  Turning to the questions by Hong Kong, China, he noted that Chile agreed with the notion that a Member who had made commitments without specific classification could not simply introduce any 
classification.    
53. The representative of Thailand
 stated that with the GATS an entirely new and complicated 
system of multilaterally binding commitments had ente red into force.  Given this complexity, it was 
not surprising that innocent scheduling errors and ambiguities were common place.  Thailand shared 
the objectives of clarity, comparability and certai nty, as spelt out by Hong Kong, China, and was 
flexible on the format of discussions on scheduling.  Turning to the specific questions raised by Hong 
Kong, China, she was inclined to read a blank entry in the horizontal section as "Unbound".  The 
omission was most likely accidental rather than intentional and did not allow to presume a full 
commitment.  Read together with a "None" in the sector-specific commitments, the "None" in the market access column should lead to an overall in terpretation of no limitations under Article XVI, on 
the assumption that the specific would prevail over the more general entry.  As for the last part of 
question 1, whether a Member could introduce horizontal limitations under a previously blank entry, 
she felt that this should be possible as long as existing sectoral commitments were not undermined.  
54. In response to question 2, she suggested that according to the Scheduling Guidelines, a 
Member had the option to enter "None, except as indica ted in the horizontal section" and then refer to 
the horizontal section to schedule a limited market opening.  Secondly, the Member could enter 
Unbound, which would be read as a full Unbound.  On question 3, referring to the schedule in the 
earlier room document, she stated that "Wonderland" was entitled to prohibit or impose limitations on 
ownership of interest or assets of historical impo rtance.  This was not part of a possible licensing 
scheme, but rather a safeguard-type reservation for future action.  The second example, "acquisition 
of control over business is subject to approval," wa s more complicated.  It w ould have been preferable S/CSC/M/33 
Page 10  
 
to phrase the limitation as "equity participation is limited to x per cent according to the maximum 
threshold stipulated in investment law, competiti on law or merger acquisition law."  The uncertain 
binding was in effect meaningless.  As for cases in which phrases like "subject to approval" or 
"approval required from the authority concerned" we re included in specific commitments, she thought 
that all elements and criteria which were part of  the respective licensing scheme and which might be 
inconsistent with Article XVI and XVII should have been scheduled at the outset.   
55. Turning to question 4, she found it odd to see an "Unbound" followed by the words "except 
followed by a reservation".  This was tantamoun t to Unbound.  The example looked rather like a 
domestic regulation than a limita tion, and therefore might not need to be scheduled.  As for 
questions 5 and 6, the entry "x number of licences" implied a quota; whether or not its allocation procedures could be discriminatory would depe nd on the commitment under the national treatment 
column.  She agreed with Chinese Taipei's view on question 7, i.e. that the status of an ENT in a 
headnote or sector description may be legally questionable;  she also concurred that there should be 
no difference between the terms “economic needs test” and other similar phrases used to describe an 
ENT, e.g. “needs test” or “on the basis of need s”.  On question  8, she observed that a common 
understanding had emerged that the additional commitments column was for positive commitments only, and that limitations such as employment of local professionals should be scheduled under the 
market access column within the meaning of Article s XVI and XX:2.  On question 10, introduction of 
new classification was unproblematic as long as the level of commitment remained intact.  For the 
case in point, it would have been desirable for "Wo nderland" to come up with  a rationale behind the 
re-classification of telecom services.  There might  be doubts as to whether the re-classification was 
intended to circumvent the obligations under the reference paper.   
56. The representative of Cuba
 stated that an open discussion on the scheduling questions that 
had been presented would enhance clarity and tran sparency and would contribute to the bilateral 
negotiations.  Her delegation was flexible as to the format of such a discussion, given the sensitivity 
of certain delegations on certain issues.   
57. The representative of Mexico  stated that ENTs should always be scheduled with their criteria, 
even though Article XVI did not specify that these criteria had to be included.  Therefore, Members 
needed to discuss the development of criteria in or der to include these in the schedules.  Commenting 
on Hong Kong, China's question relating to additional commitments, he noted that these were not 
additional restrictions or limitations, but rather  positive commitments.  Members should be very 
specific when including them.  Text  intended to improve transparency of scheduled restrictions should 
be inscribed together with the restrictions, or perh aps in a footnote.  He generally agreed with the 
replies by Chinese Taipei in response to the questions by Hong Kong, China.  He favoured informal 
discussions on scheduling issues.  The statemen ts should not affect the initial Uruguay Round 
schedules. 
58. The representative of the United States  shared Mexico's statement concerning the need to 
proceed with caution when discussing scheduling issues.  General technical questions concerning scheduling might usefully be addressed in an informal setting.  She sought confirmation from 
Hong Kong, China that it was operating on the basi s of JOB(04)/81, which was identical to the room 
document that had been distributed at the last meeting. 
59. The representative of Switzerland
 stated that his delegation was open to discussing any 
question in bilaterals, which had produced very co nstructive outcomes.  He agreed with Chinese 
Taipei's approach address the questions on the basis of rules that had already been agreed upon, i.e. 
the Scheduling Guidelines.  The questions concerning ENTs were very important, and needed to be 
clarified.  One good way to avoid scheduling prob lems with ENTs was not to schedule such tests 
altogether.   S/CSC/M/33 
 Page 11 
 
 
60. The representative of Canada  suggested that it might be useful to review documents that had 
been produced during the revision of the Scheduling Guidelines, and the development of the 
procedures on rectification and certification.  He suggested that the Secretariat prepare a bibliography 
to remind Members of those documents. 
61. The representative of Hong Kong, China  stated that the previous room document that 
contained a fictitious schedule was merely meant to illustrate the questions which had now been 
circulated, without the schedule, as JOB(04)/81.  He supported the idea by Canada as far as 
discussions on the Scheduling Guidelines were conc erned, but was not convinced of the relevance of 
documents on the procedures for rectification and certification.  He suggested that the Secretariat 
provide, in addition to the bibliography, a summar y of points relevant for the current discussion.  
Previous discussions on the revision of the Scheduling Guidelines had taken place at the beginning of 
the negotiations, and addressed issues for whic h the previous scheduling guidelines had been 
considered inadequate.  Since the present discussion should focus on how to improve scheduling in 
the offers, previous discussions might not be fully relevant.  
62. The representative of the European Communities  stated that it was difficult to draw the line 
between technical scheduling issues  and negotiating issues, but the EC was ready to provide answers 
on purely technical issues.   
63. The Chairman  thanked the delegations that had offered substantive contributions.  He 
suggested that the Committee take note of the statem ents made, and revert to the issues at the next 
meeting.  He proposed that the Secretariat prepare, in a JOB document, a bibliography of documents 
produced in the context of the revision of the Scheduling Guidelines.   
64. It was so agreed . 
C. OTHER BUSINESS  
65. A representative of the Secretariat  recalled that a searchable database of commitments, 
available on the internet, had been established in 2001.  Although the schedules contained therein had 
no legal value, they were a useful research tool, especially for developing co untries.  Currently, the 
database did not include commitments undertaken af ter 1 January 2000.  The Secretariat was thus in 
the process of updating the content of the database  by adding commitments taken since, for example 
those of acceding countries.  In that context, as wa s done in the past, the Secretariat would shortly get 
in touch with delegations whose schedules were being updated or included so as to give them the 
same opportunity of verification, as other Memb ers had at the time the database was created. 
66. The representative of Hong Kong, China  stated that he intended to put on the agenda of the 
Committee the application of Article XXI procedures at a future me eting of the Committee.  In light 
of recent experience, some issues had come to the fore, especially questions concerning claims of 
interest and negotiations of co mpensatory adjustments.   
67. The representatives of Ecuador  and Chinese Taipei  stressed the importance of the supervisory 
function of the Committee with regard to the application of the Article XXI procedures.  
68. The Chairman  suggested that, in accordance with the practice of grouping meetings of 
subsidiary bodies close to meetings of the Council, the next formal meeting be held in conjunction 
with the next services cluster.   
69. It was so agreed . 
 
__________