RESTRICTED
WORLD TRADE S/C/M/12
19September 1996
ORGANIZATION(96-3763)
Council forTrade inServices
REPORT OFTHE MEETING HELD ON30JULY 1996
Note bytheSecretariat
1. TheCouncil forTrade inServices heldameeting on30July1996. Theagenda forthemeeting
iscontained inparagraph 2ofAirgram WTO/AIR/385.
ITEM A: MATTERS RELATING TOTHEENTRY INTO FORCE OFTHESECOND AND
THIRDPROTOCOLSTOTHEGENERALAGREEMENTONTRADEINSERVICES
2. TheChairperson recalled thattheSecond Protocol relating tofinancial services andtheThird
Protocol relating toMovement ofNatural Persons hadbeenopenforacceptance until30June1996.
Thusfar,theSecond Protocol hadbeenaccepted bytwenty-three Members (Australia, Canada, Chile,
theEuropean Communities witheleven Member States, Hong Kong, Hungary, India, Indonesia, Japan,
Korea, Kuwait, Malaysia, Mexico, Morocco, Norway, Pakistan, Poland, Singapore, South Africa,
Switzerland, Thailand, Turkey andVenezuela). Inaddition, theSlovak Republic, theDominican
Republic, Egypt andthePhilippines hadcompleted theinternal procedures necessary toimplement
theirnewcommitments buthadnotthusfaraccepted theProtocol. TheChairperson stated thatinorder
forthose countries, orother Members, tobeabletoaccept theProtocol after30June1996, adecision
bytheCouncil wasneeded toextend theperiod foracceptance. InsofarastheThird Protocol was
concerned shestated thatthusfar,ithadbeenaccepted by5Members (Australia, Canada, theEuropean
Communities witheleven ofitsMember States, India andNorway). Shenoted that6Members and
fourMember States oftheEuropean Communities hadnotthusfaraccepted theSecond Protocol and,
oneMember and4Member States oftheEuropean Communities hadnotaccepted theThird Protocol.
Shebelieved thatallthedelays insignature wereprocedural innature andthattherewerenosubstantive
problems withtheprotocols orwiththeimplementation oftherelated commitments.
3. TheChairperson stated thatinaccordance withtheprocedures previously agreed forthesecond
Protocol, thefollowing wasnecessary: (i)adecision onwhether theProtocol andtheannexed
commitments would enterintoforce. Suchadecision needed tobetaken byMembers whohadaccepted
theProtocol before 1July1996 andnotbytheCouncil; (ii)adecision bytheCouncil toextend the
timeperiod foracceptance inorder toallow those Members whohadnotthusfaraccepted theProtocol
todoso.Similarly, withrespect tothethirdProtocol, adecision bytheCouncil wasnecessary to
extend theperiod foracceptance inorder toenable those Members whohadnotaccepted theProtocol
todoso.
4. Withrespect totheSecond Protocol, theChairperson noted thatforsome signatories, itsentry
intoforce wasconditional upon anindication from Members whohadnotaccepted thattheywould
dosowithin areasonable period oftimeandthatduring thatperiod theywould implement their
commitments annexed totheProtocol tothefullest extent possible. Sheinvited those Members who
hadnotaccepted theSecond Protocol toindicate theirintention withrespect totheimplementation
oftheircommitments asofthedateofentry intoforce anduntilthecompletion oftheirownacceptance
procedures.S/C/M/12
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5. Therepresentative oftheEuropean Communities stated thattheEuropean Communities and
alltheirMember States werecommitted tothefullimplementation oftheSecond andtheThird Protocols
andthatthedelays inacceptance byfouroftheMember States wereonlyofaprocedural nature. The
representative oftheCzech Republic stated thathisdelegation appreciated theefforts bytheCouncil
toallow acceptance bythose whocould notdosoby30June1996.
6. Therepresentatives ofBrazil stated thathisgovernment didnothaveanysubstantive difficulties
withtheacceptance oftheSecond Protocol andthatthedelay waspurely procedural. However, pending
Congressional approval hisgovernment could notgiveaformal undertaking toimplement the
commitments byBrazil annexed totheProtocol. Headded thatinanycase, hisGovernment wasstill
bound byitsobligations under Article 18oftheVienna Convention.
7. TheChairperson drewattention toajointdraftcommunication fromMembers whohadaccepted
theSecond Protocol which contained their Decision thattheProtocol should enter intoforce on
1September 1996andarequest totheCouncil toextend theperiod ofacceptance oftheProtocol until
30November 1996. Shestated thatunless therewereobjections fromanyoftheMembers concerned,
theCouncil would consider thecommunication confirmed.
8. Therepresentative ofJapan sought confirmation fromtheChairperson thatinthecaseofan
extension ofthedeadline foracceptance, paragraph 2oftheDecision Adopting theSecond Protocol
totheGeneral Agreement onTrade inServices would stillapply. TheChairperson confirmed that
itwould bethecase. Shesuggested thatintheabsence ofanyobjections andinthelightofprevious
statements, theCouncil should takenoteofthedecision byMembers whohadaccepted theProtocol
toletitenter intoforce on1September 1996 andagree totheirrequest toextend theperiod for
acceptance oftheProtocol until30November 1996.
9. TheCouncil soagreed.
10. TherepresentativeofJapanstatedthat,althoughhisdelegationwouldnotobjecttotheCouncil's
decision, herecalled itspreviously expressed viewthatthedecision toextend thedeadline foracceptance
waswithin therights ofthose Members whohadaccepted theProtocol.
11. TheChairpersonthenturnedtotheThirdProtocol.ShestatedthatsincetheProtocolhadalready
entered intoforce, theCouncil might wishtodecide onanextension oftheperiod foritsacceptance
untilthesame dateastheSecond Protocol, (i.e.30November 1996) inorder toallow those whohad
notthusfaraccepted ittodoso.Sheunderstood thatsome Members sought indications from those
whohadnotaccepted theProtocol thattheyintended toimplement theircommitments immediately
anduntiltheirformal acceptance. Therepresentative ofSwitzerland welcomed theearlier statement
made bythedelegation oftheEuropean Communities totheeffect thatallMember States werebound
bytheircommitments under theSecond andThird Protocols. Hestated thathisgovernment wasready
toimplement itscommitments under theThird Protocol untilthecompletion oftheformal acceptance.
12. TheChairperson suggested that,unless there wereanyobjections, theCouncil should decide
toextend theperiod ofacceptance oftheThird Protocol until30November 1996.
13. TheCouncil soagreed.
14. TheChairperson drew attention todocument S/C/W/18 which contained adraftdecision by
theCouncil extending theperiod ofacceptance oftheSecond andtheThird Protocols totheGATS
until30November 1996. Shesuggested thattheCouncil adopt theDecision.
15. TheDecision wasadopted.S/C/M/12
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ITEM B: PREPARATIONSFORTHE1996MINISTERIALCONFERENCEATSINGAPORE
(COMMUNICATION FROM CHILE S/C/W/16, COMMUNICATION FROM
AUSTRALIA S/C/W/17)
16. TheChairperson drew attention tothetwosubmissions made bythedelegations ofChile and
Australia indocuments S/C/W/16 and17respectively. Thetwodocuments contained proposals relating
tothepreparations forthe1996Ministerial Conference. Sheindicated thatinthisregard theCouncil
forTrade inServices should produce asingle report totheGeneral council fortransmission toMinisters.
Thereport should cover thework oftheCouncil itselfandthose ofsubsidiary bodies andofNegotiating
Groups. Each ofthose bodies would produce itsownreport asaninput tothereport oftheCouncil.
Suchreports would besubmitted totheServices Council inadvance ofitsmeeting of24October 1996,
when itshould adopt itsownreport totheGeneral Council. Thereport would constitute mainly of
twoparts; thefirstwould befactual, describing thework donesofarinsubsidiary bodies andinthe
Council during 1996, andthesecond would contain anyrecommendations thatmight beputforward
toMinisters fortheirconsideration andadoption.
17. Therepresentative ofChile inintroducing hisdelegation 'ssubmission, stated thattheGATS
hadprovided inArticle XIXforfuture rounds ofnegotiations, thefirstofwhich wastostartnotlater
thantheyear2000. During theUruguay Round negotiations, commitments onservices hadbeen
negotiated simultaneously withthetextoftheGATS. Atthattimeparticipants hadnothadsufficient
knowledge ofservices regulations. Insubsequent negotiations, however, therehadbeenmoreexchange
ofinformation onregulatory matters. Theobjective ofthesubmission byChile wastoprovide for
asolidinformation basebytheyear2000covering allsectors. Heacknowledged thatsuchanexercise
ofexchange ofinformation would involve asubstantial amount ofwork. However, intheview of
hisdelegation thatwould emphasize theneedforMinisters toissue amandate tostartsuchwork in
1997.
18. Therepresentative ofCanada stated thathisdelegation agreed withthebasicmotivation behind
thesubmission ofChile. However, further reflection wasneeded onthedetails. Hisdelegation was
concerned thattherehadbeenalready aconsiderable amount ofwork underway intheareaofservices
andinsome cases insufficient progress hadbeenachieved. Therepresentative ofMexico agreed with
thisview. Shestated thattheworkload implied bytheproposal ofChile wasquiteserious andwould
involve considerable resources. Shethought itwaspremature todiscuss in1996 thepreparation for
around ofnegotiations which would startintheyear2000. Itwasalsoneeded toseehowsucha
proposal might fitwiththe"built inagenda" forservices.
19. Therepresentative ofAustralia inpresenting theAustralian submission contained indocument
S/C/W/17 noted theconsistency andcomplementarity between thatsubmission andtheonesubmitted
byChile. Sheindicated thatthesubmission byherdelegation hadpreviously beenintroduced atan
informalHeadsofDelegationsmeeting.Theintentionwasnottoproposeanextensiveworkprogramme,
buttoprepare forthenewround ofservices liberalization negotiations mandated intheWTO "built-in
agenda" andduetostartbytheyear2000. Sucharound ofnegotiations would require anextensive
preparatory process, particularly inthelightofthenewdevelopments ininternational services trade.
Therefore, inviewoftheexpected complexity offuture services negotiations, theAustralian delegation
considered itdesirable thatWTO Members articulate acomprehensive preparatory work programme
forthenextround ofservices negotiations andthat,asfaraspossible, allelements ofthework
programme should beinoperation by1997. Sheadded thatmostofwhathadbeenproposed byher
delegation related either toexisting work ortowork thathadbeenmandated intheWTO Agreement.
Shethendescribed briefly various specific elements contained intheproposal astheyrelated tothe
promotion oftransparency, unfinished work under theGATS andimproving scheduling procedures.
Sheemphasized theimportance ofthese matters inthecontext ofthenextround ofnegotiations.S/C/M/12
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20. Therepresentative ofSwitzerland stated thataworkprogramme inservices should conceptually
beseenaspartofawider preparatory work programme under theWTO. Headded thathisdelegation
wasstillstudying thetwoproposals byChile andAustralia. However, anydecisions inthisrespect
would havetotakeintoaccount theoverall balance ofthebuilt-in agenda. TheGATS contained a
specific provision onthedateforthenextround ofnegotiations, thatisnolaterthanfiveyears from
thedateofentry intoforce oftheWTO Agreement. Inother cases, nospecific deadlines hadbeen
identified. Therefore, anynewtimeframes would havetobecarefully analyzed inthelightofGATS
provisions inorder nottoprejudice thebuilt-in flexibility. Hestated thatpriority should begiven
toon-going work inareas suchasGATS Rules, financial services andtelecommunications.
21. Therepresentative ofHong Kong expressed herdelegation 'ssupport forthethinking behind
thetwoproposals. Sheadded thatatSingapore Ministers should make firmcommitments inrelation
tobasictelecommunications andfinancial services negotiations. InsofarasArticle XIXoftheGATS
wasconcerned, there wasaneedtoputintrainsome discussion atanearly stage inview ofthe
complexity offuture negotiations. While aprocess ofexchange ofinformation wasthought tobeuseful,
sheexpressed some reservations inrelation toaquestionnaire based approach.
22. TherepresentativeofthePhilippines,speakingonbehalfofASEAN,emphasizedtheimportance
theyattached tothebuilt-in agenda intheWTO. Sheadded that,byproviding recommendations to
Ministers inSingapore inrelation tothebuilt-in agenda, collective impetus could beprovided inthe
implementation ofthedifferent mandates resulting fromtheUruguay Round. Shestated thatASEAN
delegations would liketoseeintensive discussions onservices, inrelation toitspolicy direction, its
relationship torules intheareaofGoods andcoordination withUNCTAD andother organizations.
Such aprocess would behelpful, especially todeveloping countries, before thenextround of
negotiations. Sheadded thatinrelation tothegeneral mandate ofArticle VI:4oftheGATS, no
discussion hadtaken place thusfarintheCouncil. ASEAN delegations believed thatwork onthe
development ofgeneral disciplines under VI:4should commence aftertheSingapore Ministerial Meeting
intimeforthenextRound ofnegotiations. They alsobelieved thatparagraph 5oftheAnnex onAir
Transport Services warranted attention.
23. Therepresentative ofCanada stated thathisdelegation would agree thatanexamination by
theCommittee onSpecific Commitments ofthetechnical accuracy ofschedules before thenextround
ofnegotiations would beextremely desirable. Itwould alsobeuseful toestablish adeadline for
negotiations ongovernment procurement, safeguards andsubsidies. Heagreed withthesuggestion
thatthework programme onaccountancy should beconcluded andwork onthehorizontal aspects of
professional services startin1997. With respect totheCommittee onSpecific Commitments, his
delegation agreed thattheexamination oftheconsistency ofservices schedules wasanimportant item
ofworkthatneeded tobecompleted priortothenextround ofnegotiations. Hestated thathisdelegation
would begiving further thought totheestablishment ofspecific deadlines where theydidnotexist
forwork onGATS Rules.
24. Therepresentative ofMexico stated thatthetwoproposals needed further consideration. It
wasnotclear howorwhen assessment oftheresults ofcommitments intheareaofservices should
beconducted,norwhethertheCouncilforTradeinServicesshouldembarkuponaprocessofassessment
ofliberalization oftrade inservices. Herdelegation believed thatitwasnecessary toputsome order
intothework relating toprofessional services byestablishing adeadline foraccountancy. Itwasalso
necessary togiveparticular attention toworkonschedules ofcommitments intheCommittee onSpecific
Commitments.
25. Therepresentative ofNewZealand expressed fullsupport forthetwoproposals byChile and
Australia.HerdelegationwasoftheviewthatpreparatoryworkshouldstartimmediatelyafterSingapore
inorder toensure thefulfilment ofallelements oftheagreed Uruguay Round built-in agenda. She
stated thatherdelegation wasonrecord inother bodies insupporting thecommencement ofpreparatory
work forthatpurpose across allareas oftheWTO. Herdelegation alsobelieved thatitwasimportantS/C/M/12
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thatpreparatory work should cover allservices sectors. Sheadded thatinsupporting theearly
commencement ofaprocess ofexchange ofinformation herdelegation wasnotseeking todetract from
theimportant ongoing work inareassuchasBasic Telecommunications, GATS Rules andProfessional
Services.
26. Therepresentative oftheUnited States, bywayofpreliminary comments, agreed inprinciple
withtheideaofinitiating aprocess ofexchange ofinformation inpreparation forthenewround of
negotiations mandated byArticle XIXoftheGATS. Inhisviewtheideascontained inthetwoproposals
wererealistic andconstructive. However, some flexibility wasneeded inrelation todeadlines forwork
intheareas ofsubsidies andgovernment procurement. Herecalled thedeadlines thathadalready been
established indifferent areas ofongoing work under theGATS andstressed theimportance ofmeeting
those deadlines, particularly inBasic Telecommunications andFinancial Services.
27. Therepresentative oftheEuropean Communities stated thatherdelegation wasnotinaposition
tomake detailed comments onthetwoproposals. Thefirstpriority wasthecompletion ofon-going
work indifferent services areas. Anynewwork loadhadtobedecided accordingly. Herdelegation
needed further reflection before itwould takeaposition onthequestion ofawork programme onthe
elaboration ofmodalities under Article XIX.
28. Therepresentative ofArgentina expressed preliminary support fortheideas contained inthe
twoproposals. Intheview ofhisdelegation MFN exemptions alsorequired review. Inprinciple,
hethought itmight bepremature toinitiate awork programme in1997. Newproposals should take
intoaccount theburdens ofon-going work. Heagreed thatwork onaccountancy should beconcluded
bytheendof1997.
29. Therepresentative ofIndia stated thattheMinisterial Conference inSingapore should focus
onimplementation issues. Basic Telecommunications andFinancial Services should receive priority
attention. Turning tothetwoproposals, hethought thattheywereclosely linked. Starting preparatory
work forthenewround wasnecessary. Inanyexercise ofassessment under Article XIX, paragraphs
1and3ofthatarticle should bereadtogether. Henoted thedeadlines established bydifferent GATS
provisions foron-going work andstated thattheabsence ofdeadlines incertain areas should alsobe
taken intoaccount.
30. Therepresentative ofJapan expressed hisdelegations support foradecision byMinisters in
Singapore tostartsome work inpreparation forthenextround ofnegotiations. However, afew
questions needed clarification. Forexample, whatwould bethenature ofthesuggested work? Would
itbelimited toexchange ofinformation orwould itgobeyond that? What would betheprecise
relationship between suchpreparatory work andparagraph 3ofArticle XIXoftheGATS? Should
deadlinesbesetforspecificareasofwork,suchasGATSRules,ProfessionalServicesandtheCommittee
onSpecific Commitments, taking intoaccount theindependent nature ofwork ineachofthese areas?
Healsostated thatthework forthenextround ofnegotiations should belimited totheassessment
oftrade inservices provided forinparagraph 3ofArticle XIX.
31. Therepresentative ofKorea stated thathisdelegation shared Australia 'sviewthatthere was
aneedforfurther effort inservices. Hesupported theproposal thatMinisters inSingapore reiterate
thecommitment tothecompletion ofthebasic telecommunications andfinancial services negotiations
bythesetdeadlines. However, Members should recall thatthebuilt-in agenda fortheWTO constituted
acoherent andcomprehensive framework which wasagreed uponinMarrakesh asasingle undertaking.
Hisdelegation wasconcerned thatcommencing preparatory work inservices atanearly stage andon
aselective basis could destabilize theoverall balance thatwasachieved during theUruguay Round.
Inother forasuchastheAgriculture Committee andtheHead ofDelegations process, hisdelegation
hadtaken anidentical position against theestablishment ofapreparatory workprogramme inSingapore.
Hethought thatitwaspremature fortheCouncil forTrade inServices torecommend apreparatory
work programme inservices totheSingapore Ministerial Conference.S/C/M/12
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32. Therepresentative ofAustralia, inresponse tocomments byother delegations, stated thatthe
term"work programme" might havebeenunderstood toimply more thanwhatwasactually meant.
TheAustralian proposal didnotcontain anyelements thathadnotalready beenprovided forinthe
GATS. Intheview ofherdelegation thepurpose ofaMinisterial Conference wasalways toseek
guidance from Ministers.
33. Therepresentative ofChile stated thattheproposal submitted byhisdelegation wassimilar
tothatofAustralia inthesense thatitaimed atstarting preparations forthenewround ofservices
negotiations. Heacknowledged thatitwould involve aconsiderable workload.
34. TheChairperson suggested thattheCouncil takenoteofthestatements made andrevert to
thisitematitsnextmeeting. Inthemeantime sheindicated thatinformal consultations would take
place.
35. TheCouncil soagreed.
ITEM C: THE APPOINTMENT OFACHAIRPERSON FOR THE WORKING PARTY ON
PROFESSIONAL SERVICES
36. TheChairperson stated thatshehadbeenconducting informal consultations onthequestion
oftheappointment ofasuccessor toAmbassador Saurel asChairperson oftheWorking Party on
Professional Services. Shestated thatshehadreceived nominations ofthree persons aspotential
Chairmen oftheWorking Party. However, shewasstillconsulting andhadnotthusfarreached a
point atwhich aconsensus infavour ofoneofthem could beannounced. Shewould continue her
consultations andhoped thataChairperson would beappointed intimeforthenextmeeting ofthe
Working Party.