WORLD TRADE
ORGANIZATIONTN/S/10
11 July 2003
(03-3802)
Council for Trade in Services
Special Session
SPECIAL SESSION OF THE COUNCIL FOR TRADE IN SERVICES
Report by the Chairman to the Trade Negotiations Committee
1. Since the Fourth Session of the Ministerial Conference, the Special Session of the Council for
Trade in Services has held nine formal meetings on 3-6 December 2001; 19-22 March 2002; 5-6 June 2002; 23 July 2002; 28 October and 1 November 2002; 9 December 2002 and
13 January 2003; 3-6 March 2003; 19-22 May 2003; and 4-10 July 2003.  Reports of the meetings are
contained in documents S/CSS/M13 and TN/S/M/1 to TN/S/M/8 inclusive.
1  The reports of the
meetings should be read in conjunction with this report.
I. ORGANIZATION OF WORK
A. WORK RELATED TO THE NEGOTIATION OF SPECIFIC COMMITMENTS
2. At the last Ministerial Conference in Doha Ministers took note of the large number of
proposals submitted by Members related to Trade in Services, reaffirmed the Guidelines and
Procedures for the Negotiations adopted by the Council for Trade in Services on 28 March 2001, anddirected participants to submit initial requests by 30 June 2002 and initial offers by 31 March 2003.
In so doing, Ministers provided impetus to the on-going negotiations on specific commitments.
3. At the commencement of the mandated negotiations in 2000, Members agreed to begin work
with the consideration of negotiating proposal s.  These proposals aim at indicating Members'
negotiating interests in specific services sectors and modes of supply.  They addressed questions
relating to classification of services, market access and national treatment commitments andregulatory issues.  They also addressed the negotiation of existing exemptions from Article II (MFN),
as stipulated in paragraph 6 of the Negotiating Guidelines.  Some 110 negotiating proposals have been
presented, 26 since the last meeting of Ministers at Doha.  In total 47 of these have been presented by
developing country Members. With the onset of th e request-offer process, negotiating proposals have
in some cases addressed issues directly related to the current phase of the negotiation of specificcommitments.  Two such proposals have been presented with the indication that they are the work of
a “friends” group.
4. In accordance with paragraph 15 of the Doha Ministerial Declaration, Members began to
submit initial requests for specific commitments as of 30 June 2002 and initial offers as of31 March 2003. Thirty initial offers have so far been received by the Secretariat, including 15 from
developing country Members.  As foreseen in the Guidelines and Procedures for Negotiations on
Trade in Services, since October 2002 the Council ha s been reviewing progress in the negotiations.
Pursuant to paragraph 15 of the Negotiating Guidelines, the Council started in May 2003 considering
                                                     
1 At the time of this report TN/S/M/8 remained to be issued.TN/S/10
Page 2
on a regular basis the extent to which Article IV is being implemented, with a view to suggesting
ways and means of promoting the goals established therein.
5. The Special Session also remains engaged in important work mandated under paragraph 3 of
Article XIX of the GATS.  Work on one important piece of the negotiating architecture was
completed on 6 March 2003 when the Council adopted the Modalities for the Treatment ofAutonomous Liberalization and t ook note of an accompanying Statement by the Chairman.
2  T h e
statement was made in the context of specific concerns expressed by some Members, including those
recently acceded.  By defining the scope of measures eligible for credit, the criteria for assessing the
value of such measures, and the procedures through which credit will be determined and granted,
particularly for developing countries, the Council has established a tool for the treatment of
autonomous liberalization in the context of the negotiations.
6. Furthermore, paragraph 3 of Article XIX mandates that the Council for Trade in Services
conduct an assessment of trade in services in overall terms and on a sectoral basis.  The Council has
been pursuing this exercise since 1998.  It was also stipulated in paragraph 14 of the Guidelines that
the process would continue throughout the negoti ations.  So far some 145 submissions have been
made, including those in the context of an inform ation exchange programme.  Since the last meeting
of Ministers in Doha, one oral presentation has been made by an invited expert and eight written
communications have been submitted including a checklist by the Secretariat of issues that Members
might wish to take into account when conducting their own assessment at the national level.
7. It is worth noting that a symposium on the assessment of trade in services was held on 14-15
March 2002, and another on movement of natural persons was held on 11 and 12 April of 2002.
B. WORK RELATED TO RULE -MAKING
8. In addition to the elements of the negotiating architecture related to Article XIX of the GATS,
important work on mandated rule-making has been on-going since the Fourth Ministerial Conferencein four areas.  Work in accordance with the mandates contained in Article VI:4 (Domestic Regulation)
has been pursued in the Working Party on Domestic Regulation, while work under Article X:1
(Emergency Safeguard Measures), Article XIII:2 (Government Procurement) and XV:1 (Subsidies)
has been pursued in the Working Party on GATS Rules.  Reports by the Chairs of the Council's four
subsidiary bodies has remained a standing item on the Special Session's agenda.
9. With respect to domestic regulation, Members have recently renewed their focus on the
creation of disciplines under GATS Article VI:4.  Discussions in the Working Party on Domestic
Regulation have focused on elements  largely inspired by the Accountancy Disciplines adopted by the
Council for Trade in Services on 14 December 1998.
3  At the same time, Members have continued the
discussion of regulatory examples.  The key issues on which work has focused include additional
disciplines on transparency, the coverage of Article VI:4 measures in relation to scheduled measures,understanding the necessity of domestic regulatory measures, and the recognition of qualifications.
As well, a symposium on Domestic Regulation is foreseen in 2003.
10. The Working Party on GATS Rules has continued its work on emergency safeguard
measures, government procurement and subsidies.  On 15 March 2002, the Council for Trade inServices adopted, upon recommendation from the Working Party on GATS Rules, a fourth Decision
on emergency safeguard measures which extended the deadline for these negotiations until
15 March 2004. On 22 July 2002, the Working Party adopted work programmes on emergency
safeguard measures, subsidies and government procurement respectively, recognizing, inter alia , that
                                                     
2 TN/S/6 and TN/S/8.
3 S/L/64.TN/S/10
Page 3
these did not prejudge in any way the outcome of the negotiations under the respective agenda items,
and that the undertaking of individual items of work, including the questions of desirability and
feasibility, should be without prejudice to each other under each subject of negotiations.4  W i t h
respect to emergency safeguard measures, the main elements are, inter alia , to identify, elaborate and
consolidate elements for an ESM, to address the ques tions of desirability and feasibility, to encourage
Members to put forward submissions as early as possible before 31 December 2002, and to finalizethe negotiations by 15 March 2004.  For both subsidies and government procurement, the work
programmes provide, inter alia , for continued discussion on the basis of submissions from Members
and materials available, and encourages Members to put forward submissions as early as possible
before 31 March 2003.  As mandated in the work programmes, the Chairperson of the Working Party
issued three notes reporting on the progress of negotiations in the three areas;  the report on
emergency safeguard measures was issued on 14 March 2003
5, and the two reports on subsidies and
government procurement on 30 June 20036.  At its meeting in July, the Working Party had a stock-
taking discussion on the progress made in the negotiations regarding the three agenda items under its
mandate.
II. OUTSTANDING ISSUES
11. The Council is fully aware that one remaining pi ece of the negotiating architecture mandated
under paragraph 3 of Article XIX consists of the Modalities for the Special Treatment for Least-
Developed Country Members.  The Council has been actively engaged in work on this item since
December 2002 when the LDC Group submitted an initial draft which was subsequently revised in
March 2003.7  Members have often expressed the view that the special situation of LDCs in general
and in the context of the negotiations requires the C ouncil to pursue its work on this item with a sense
of urgency in order to reach a timely conclusion.  At its meeting held on 4-10 July 2003, the Council
agreed to keep this item open so that it might continue formal discussions in the coming weeks should
consultations warrant such action.  In the interim I will renew my efforts through consultations.
III. FUTURE WORK
12. While there is a degree of satisfaction with how the negotiations are proceeding, it is
imperative to ensure that the negotiations con tinue to progress in accordance with the agreed
Guidelines and Procedures (S/L/93) towards a successful conclusion.  It is also necessary to achieve a
higher level of participation and engagement by all Members in the negotiations.
13. Technical assistance is essential at this stage of the negotiating process.  The Secretariat must
therefore be able to respond rapidly and flexibly to all relevant requests with priority being given to
those from least developed countries.
14. In order to facilitate the participation of least-developed country (LDC) Members in these
negotiations, Members must make every effort to reach agreement on the modalities for the special
treatment of LDCs in the negotiations prior to the Cancun Ministerial Conference.
15. As agreed in the Negotiating Guidelines, the a ssessment of trade in services, in overall terms
and on a sectoral basis, will continue to be an ongoing activity in the Special Session for the CouncilTrade in Services.  It will continue to inform th e negotiating process.  Members will be examining
ways in which the ongoing exercise could be improved and given greater focus.
                                                     
4 S/WPGR/7.
5 S/WPGR/9.
6 S/WPGR/10 and --/11.
7 JOB(02)/205 and TN/S/W/13 respectively.TN/S/10
Page 4
16. Ministers have agreed in Doha that participants would submit their initial offers by 31 March
2003.  So far only 30 offers (counting the EC as one) have been received.  Members who have not yet
submitted their initial offers must endeavour to do so as soon as possible. It is recognized that the
quality of some of the offers leave much to be desired in respect of  coverage of sectors and modes of
supply as well as the depth of commitments. It should be recalled that the Negotiating Guidelines state
that this process shall aim to achieve progressively higher levels of liberalization of trade in serviceswith no a priori  exclusion of any service sector or mode of supply and shall give special attention to
sectors and modes of supply of export interest to developing countries.  It shall also take place with
due respect for the right of Members to regulate in pursuance of national policy objectives.
Considering the final deadline for negotiations of 1 January 2005, the Ministerial Conference might
wish to provide guidance, including landmark dates by which Members would improve their initial
offers and finally revise them with a view to concluding the negotiations.
17. The negotiations on rule-making under the GATS have been underway since 1995.  The lack
of progress is of concern.  These negotiations are important and we must ensure that they conclude in
accordance with their mandate and within the agreed time-frames. On safeguards, Members would
need to make every effort to narrow down the gaps  between positions.  Members must also devote the
necessary time and effort to advance the negotiations on domestic regulation under Article VI:4,government procurement under Article XIII and subsidies under Article XV. In order for these
negotiations to proceed towards their conclusion, it might be desirable to envisage a meeting of the
Special Session of the Services Council devoted to a review of progress by 31 March 2004.
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