neighboring services such as telecommunications<sup>46</sup> . This and other overlap cases are particularly problematic when the commitment level is very different for the alternative classification possibilities. It must also be clear that due to their increasingly integrated nature a commitment in one of these areas (database services, for instance) without a commitment in another area (market research and public opinion polling services) might not be worth much for certain BPO activities.

As described below, some of the lack in correspondence for support services is also attributable to the fact that even the most liberal GATS schedules have not used the full potential of the W/120 classification to commit categories that best match business support services. Especially residual catch-all categories that were designed to make the provisional CPC and the W/120 exhaustive were mostly not listed in schedules<sup>47</sup> .

# **Route 2: Indirect Coverage As Inputs To Services Specified In W/120**

The situation does not improve if we try to “infer” input service commitments from commitments on main service classifications (e.g. commitment on insurance claims processing inferred from a commitment on Non-life insurance services). First of all, this inference procedure would not benefit _goods manufacturers_ that rely on support services for their operations (e.g. billing, payroll services). Secondly, even for service suppliers, the coverage of input services is not legally certain.

The broad definition of the "supply of a service" of the GATS under Art. XXVIII(b) explicitly includes the _production, distribution, marketing, sale and delivery of a service_ . Consequently, it could be assumed that all operational processes (e.g. payroll and billing) to support a service supplying organization are included if a commitment is made on a certain “final” service (e.g. financial services). Unfortunately, that interpretation does not prevail.

One undermining element of the “expansive” interpretation of certain specific commitments can be found in a small but significant footnote in the market access article of the GATS<sup>48</sup> . Its main message is even if a Member makes a full commitment on a particular service activity (no listing of limitations), it remains free to maintain measures that limit “inputs for the supply of a service”. The interpretation of this footnote can have far-reaching implications with respect to the value of existing commitments.

A watertight interpretation of this limitation is difficult because the GATS itself does not use or define the meaning of “input for the supply of a service” in other part of the treaty. In fact - as opposed to goods manufacturing processes - the dissociation of the “core service” and

> 46  Communication from India, S/CSS/W/141, 22 March 2002. With the new technologies many overlaps arise between the computer, the audiovisual and telecommunication services (e.g. multimedia content provision). But overlaps also arise between business and technology-related commitments in cases where for instance a special databank service is created and supplied for financial portfolio management for instance. 47

> In practice, some of the corresponding entries are in residual categories of sub-classifications or catch-all categories that did not receive much attention during the Uruguay Round. As opposed to what it may suggest the W 120 category “12. Other Services not included elsewhere” (95+97+98+99) is not a catch-all category for all services that could not be classified elsewhere.

> 48  Footnote 9 of the GATS” Subparagraph 2(c) does not cover measures of a Member which limit inputs for the supply of services” refers to GATS Art. XVI (2) on the scheduling of (c) limitations on the total number of service operations or on the total quantity of service output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test.

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