Special session of the council for trade in services




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World Trade

Organization







TN/S/23

28 November 2005






(05-5630)







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.The Special Session of the Council for Trade in Services held a meeting on 31 October, 3 and 24 November 2005. The purpose of this meeting was to provide for a review of progress and a report to the Trade Negotiations Committee in preparation for the Sixth Ministerial meeting in Hong Kong.

2.Many Members continue to express concerns about the lack of progress in the services negotiations to date. For many, the number and quality of the offers submitted so far is deeply disappointing. At present, 69 initial offers have been tabled (representing 93 Members), a total that has remained unchanged since July 2005. Not including least-developed country Members, 23 initial offers remain outstanding. Thirty revised offers (representing 54 Members) have been circulated. Services negotiations rely heavily on a resource-intensive and time-consuming request-offer process. The slow pace at which initial and revised offers have been submitted represents a serious concern to many Members.

3.Over the past weeks the Special Session of the Council has held numerous and intensive open-ended consultations with a view to arriving at a draft Ministerial text on services. This process began formally at the Special Session meeting on 30 September when Members requested that the Chairman produce a list of possible elements for the draft Ministerial text on services. Consultations took place at an open-ended informal meeting on 6 October, and a Note containing an initial list of possible elements was circulated in JOB(05)/234 of 13 October. This list was discussed by Members at an open-ended informal meeting held on 17 October and, on the basis of the suggestions made, I issued a revised list of possible elements on 20 October, which was in turn discussed at an open-ended informal meeting on 24 October.

4.At the request of Members and on the basis of their inputs and suggestions, I then produced an initial draft Ministerial text on services contained in JOB(05)/262 of 26 October, which was discussed at an open-ended meeting on 27 and 28 October. Comments and suggestions were numerous. The Council held a further open-ended informal discussion on 1 November. Subsequent to these discussions, I produced a revised draft text circulated on 7 November. This revision was discussed at an open-ended informal meeting on 18 November. The contents of my original Note have thus gone through four iterations of discussions among Members.

5.At the formal meeting, the Chairpersons of the Working Party on Domestic Regulation and the Working Party on GATS Rules reported on the intensive consultations these bodies had been engaged in. The texts developed in both Working Parties have been included in the draft Ministerial text on services.

6.As a result of these efforts and the various discussions and consultations, I am forwarding to the Trade Negotiations Committee, under my own responsibility and without prejudice to the positions of Members, the draft Ministerial text on services attached to this Report (Annex A). In my view, this text provides solid common ground to move the negotiations forward on the basis of a Ministerial agreement in Hong Kong. With a view to facilitating its integration in the final draft Ministerial Declaration, this draft text is divided into two parts: the first should be considered for incorporation in the main body of the draft Ministerial Declaration, while the second is proposed as an Annex to the Declaration.

7.In the course of the discussion on the draft text, Members have raised a number of concerns. On the paragraphs suggested for incorporation into the main body of the draft Ministerial Declaration (Part I to Annex A of this Report), some Members indicated that they would have liked to have seen reference to the lack of progress in the negotiations to date. Several also indicated that they would have wished to have seen spelt out a level of ambition that included the creation of new market opportunities that were commercially meaningful. However, these concerns were not shared by all Members.

8.With respect to the operational paragraphs set out in a proposed draft Annex to the Ministerial Declaration on services (Part II to Annex A of this Report), divergent views persist on the issue of setting numerical targets and indicators for commitments to be negotiated in this round. As has been reflected in earlier reports, a number of differing proposals on numerical targets for new or improved commitments have been discussed by the Special Session of the Council over the past weeks. Proposals differ, inter alia, with respect to the degree of flexibility accorded to developing countries, the mandatory or voluntary nature of targets, the relationship between the quality of new or improved commitments and the numerical target, and, finally, whether targets would apply individually or collectively to Members.

9.A number of Members stated that numerical targets would help to translate a high level of ambition into meaningful commitments for services in the round. Several Members indicated that inclusion of numerical targets in the text of the Ministerial Declaration would be necessary. Many Members expressed strong reservations about numerical targets, particularly in terms of their compatibility with the GATS and the Negotiating Guidelines, and considered that these proposals were no longer a basis for discussion. Given that the gap between positions remains too wide to be bridged, I have not included a reference to numerical targets in the draft text. It will therefore be up to Members to consider, at the TNC level or above, whether this issue should be pursued further.

10.On paragraph 1 of the proposed Annex to the Ministerial Declaration, some Members expressed concern that the parameters it contains were too prescriptive. At the last discussion a group of Members presented an alternative text that would set out less detailed and less specific parameters. Some other Members believed that the text of the initial paragraph was too vague and should be more binding in order to provide sufficient guidance for the next stage in the negotiations. Other Members said that this paragraph was delicately balanced, and that the equilibrium might be lost if the text were altered.

11.With specific reference to sub-paragraph (c) of paragraph 1 on Mode 3, a number of Members said that this portion of the paragraph was unbalanced in comparison to other sub-paragraphs. They took the position that it would be essential to redress this imbalance and reiterated their suggestions. Others, on the contrary, believed the sub-paragraphs were balanced, and stressed that alterations to any of the sub-paragraphs would require re-balancing elsewhere.

12.On paragraph 2, many Members stated that they did not see the need for a reference to Sectoral and Modal Objectives as Identified by Members (Annex B of this Report) to be included in the Ministerial Declaration. Others felt that such a reference would be helpful in providing guidance for the negotiations. It is worth recalling that the purpose of this Annex is to provide a compilation of sectoral and modal objectives as identified individually or by groups of Members. While it is understood that the compilation represents an aggregate account of the aspirations and ambitions of participants in these negotiations, it cannot be considered exhaustive. The Annex has no legal standing and is without prejudice to positions of Members. Moreover, the Annex on Sectoral and Modal Objectives as Identified by Members would be of an evolving nature so as to allow Members to identify further interests.

13.On paragraph 7 regarding negotiations on a plurilateral basis, a number of delegations felt that the text could have been phrased in a more binding manner. Other Members took the opposite view that certain of its elements were overly prescriptive.

14.While the concerns expressed by Members are duly noted, I believe that the draft text in Annex A provides a sound basis for pursuing the negotiations to their conclusion. It attempts to bridge gaps between positions on the different elements it contains in a manner which, I hope, achieves an acceptable balance. Finally, it will be imperative that Members engage actively in negotiations as early as possible in 2006. A quick start in the new year is necessary, given the particular resource- and time-intensive nature of the services request-offer process as well as the substantial negotiating agenda on rule-making.

_______________



ANNEX a
PART I

Draft Ministerial Text

(Services)

1.The negotiations on trade in services shall proceed to their conclusion with a view to promoting the economic growth of all trading partners and the development of developing and least-developed countries (LDCs), and with due respect for the right of Members to regulate. In this regard, we recall and reaffirm the objectives and principles stipulated in the GATS, the Doha Declaration, the Guidelines and Procedures for the Negotiations on Trade in Services adopted by the Special Session of the Council for Trade in Services on 28 March 2001, as well as Annex C of the Decision adopted by the General Council on 1 August 2004.

2.We urge all Members to participate actively in these negotiations towards achieving a progressively higher level of liberalization of trade in services, with appropriate flexibility for individual developing countries as provided for in Article XIX of the GATS. Negotiations shall have regard to the size of economies of individual Members. We recognize the particular economic situation of LDCs, including the difficulties they face, and acknowledge that they are not expected to undertake new commitments. We recognize the special situation of recently acceded Members who have undertaken extensive market access commitments at the time of accession. This situation will be taken into account in the negotiations.

3.We are determined to intensify the negotiations in accordance with the above principles and the Objectives, Approaches and Timelines set out in Annex [...] with a view to expanding the sectoral and modal coverage of commitments and improving their quality. In this regard, particular attention will be given to sectors and modes of supply of export interest to developing countries.



PART II

Annex [...]

Negotiations on Trade in Services

Objectives

1.In order to achieve a progressively higher level of liberalization of trade in services, with appropriate flexibility for individual developing country Members, we agree that Members should strive to ensure that their new and improved commitments adhere to the following objectives:



              1. Mode 1

(i)commitments at existing levels of market access on a non-discriminatory basis across sectors of interest to Members

(ii)removal of existing requirements of commercial presence

(b)Mode 2

(i)commitments at existing levels of market access on a non-discriminatory basis across sectors of interest to Members

(ii)commitments on mode 2 where commitments on mode 1 exist

(c)Mode 3

(i)commitments on enhanced levels of foreign equity participation

(ii)removal or substantial reduction of economic needs tests

(iii)commitments allowing greater flexibility on the types of legal entity permitted

(d)Mode 4

(i)new or improved commitments on the categories of Contractual Services Suppliers, Independent Professionals and Others, de-linked from commercial presence, to reflect inter alia:

-removal or substantial reduction of economic needs tests

-indication of prescribed duration of stay and possibility of renewal, if any

(ii)new or improved commitments on the categories of Intra-corporate Transferees and Business Visitors, to reflect inter alia:

-removal or substantial reduction of economic needs tests

-indication of prescribed duration of stay and possibility of renewal, if any

(e)MFN Exemptions

(i)removal or substantial reduction of exemptions from most-favoured-nation (MFN) treatment

(ii)clarification of remaining MFN exemptions in terms of scope of application and duration

(f)Scheduling of Commitments

(i)ensuring clarity, certainty, comparability and coherence in the scheduling and classification of commitments through adherence to, inter alia, the Scheduling Guidelines pursuant to the Decision of the Council for Trade in Services adopted on 23 March 2001

(ii)ensuring that scheduling of any remaining economic needs tests adheres to the Scheduling Guidelines pursuant to the Decision of the Council for Trade in Services adopted on 23 March 2001.

2.In order to provide guidance for the request-offer negotiations, the sectoral and modal objectives as identified by Members may be considered.1

3.Members shall pursue full and effective implementation of the Modalities for the Special Treatment for Least-Developed Country Members in the Negotiations on Trade in Services (LDC Modalities) adopted by the Special Session of the Council for Trade in Services on 3 September 2003, with a view to the beneficial and meaningful integration of LDCs into the multilateral trading system.

4.Members must intensify their efforts to conclude the negotiations on rule-making under GATS Articles X, XIII, and XV in accordance with their respective mandates and timelines:

(a)Members should engage in more focused discussions in connection with the technical and procedural questions relating to the operation and application of any possible emergency safeguard measures in services.

(b)On government procurement, Members should engage in more focused discussions and in this context put greater emphasis on proposals by Members, including on proposals for a possible framework for government procurement.

(c)On subsidies, Members should intensify their efforts to expedite and fulfil the information exchange required for the purpose of such negotiations, and should engage in more focused discussions on proposals by Members, including the development of a possible working definition of subsidies in services.

5.Members shall develop disciplines on domestic regulation pursuant to the mandate under Article VI:4 of the GATS before the end of the current round of negotiations. We call upon Members to develop text for adoption. In so doing, Members shall consider proposals and the illustrative list of possible elements for Article VI:4 disciplines.2

Approaches

6.Pursuant to the principles and objectives above, we agree to intensify and expedite the request-offer negotiations, which shall remain the main method of negotiation, with a view to securing substantial commitments.

7.In addition to bilateral negotiations, we agree that the request-offer negotiations should also be pursued on a plurilateral basis in accordance with the principles of the GATS and the Guidelines and Procedures for the Negotiations on Trade in Services. The results of such negotiations shall be extended on an MFN basis. These negotiations would be organized in the following manner:

(a)Any Member or group of Members may present requests or collective requests to other Members in any specific sector or mode of supply, identifying their objectives for the negotiations in that sector or mode of supply.

(b)Any Member or group of Members who have made such requests in a specific sector or mode of supply, together with Members to whom such requests have been made, and any other interested Member, shall enter into plurilateral negotiations to consider such requests.

(c)Plurilateral negotiations should be organised with a view to facilitating the participation of all Members, taking into account the limited capacity of smaller delegations to participate in such negotiations.

8.Due consideration shall be given to proposals on trade-related concerns of small economies.

9.Members, in the course of negotiations, shall develop methods for the full and effective implementation of the LDC Modalities, including expeditiously:

(a)Developing appropriate mechanisms for according special priority including to sectors and modes of supply of interest to LDCs in accordance with Article IV:3 of the GATS and paragraph 7 of the LDC Modalities.

(b)Undertaking commitments, to the extent possible, in such sectors and modes of supply identified, or to be identified, by LDCs that represent priority in their development policies in accordance with paragraphs 6 and 9 of the LDC Modalities.

(c)Assisting LDCs to enable them to identify sectors and modes of supply that represent development priorities.

(d)Providing targeted and effective technical assistance and capacity building for LDCs in accordance with the LDC Modalities, particularly paragraphs 8 and 12.

(e)Developing a reporting mechanism to facilitate the review requirement in paragraph 13 of the LDC Modalities.

10.Targeted technical assistance should be provided through, inter alia, the WTO Secretariat, with a view to enabling developing and least-developed countries to participate effectively in the negotiations. In particular and in accordance with paragraph [...] on Technical Assistance in the Hong Kong Ministerial Declaration, targeted technical assistance should be given to all developing countries allowing them to fully engage in the final phase of the negotiation. In addition, such assistance should be provided on, inter alia, compiling and analyzing statistical data on trade in services, assessing interests in and gains from services trade, building regulatory capacity, particularly on those services sectors where liberalization is being undertaken by developing countries.



Timelines

11.Recognizing that an effective timeline is necessary in order to achieve a successful conclusion of the negotiations by [...], we agree that the negotiations shall adhere to the following dates:

(a)Any outstanding initial offers shall be submitted as soon as possible.

(b)Groups of Members presenting plurilateral requests to other Members should submit such requests by [February 2006] or as soon as possible thereafter.

(c)A second round of revised offers shall be submitted by [date].

(d)Final draft schedules of commitments shall be submitted by [date].

(e)Members shall strive to complete the requirements in 9(a) before the date in 11(c).

Review of Progress

12.The Special Session of the Council for Trade in Services shall review progress in the negotiations and monitor the implementation of the Objectives, Approaches and Timelines set out in this Annex.

_______________

ANNEX b

sectoral and modal objectives as identified by members

The purpose of this Annex is to provide a compilation of sectoral and modal objectives as identified individually or by groups of Members. While it is understood that this Annex represents an aggregate account of the aspirations and ambitions of participants in this round of negotiations, it cannot be considered exhaustive. The Annex reflects only active interests that one or more delegations intend to pursue in individual negotiating areas, and does not contain qualifications or concerns that have been expressed in this context.

This compilation does not, nor is it intended to, represent in any way consensus among Members on any of the objectives identified. The Annex has no legal standing and is without prejudice to positions of Members.

In order to provide structure to the objectives identified under each sector and mode, bullet points have, to the extent possible, been organized according to the following headings:



              Scope of commitments (sectoral or modal)

              Limitations for reduction or elimination

              Regulatory issues and additional commitments for negotiation

              MFN Exemptions for reduction or elimination



              Scheduling issues to be addressed

During the successive discussions on the identification of sectoral and modal objectives in the Special Session of the Council for Trade in Services, Members have made references to certain joint as well as individual submissions which represent their views on various issues. A list of those submissions is attached. It should be understood that the contents of this Annex cannot substitute for those submissions.
_______________

  1. Legal Services


Members have identified individually or in groups the following objectives:

Scope of commitments (sectoral or modal)

  • minimum viable commitments to allow foreign lawyers and law firms to provide legal advisory services in foreign and international law directly, and in domestic law (host country law) through commercial association or employment of domestic lawyers, and to facilitate mobility of legal service suppliers under mode 4

  • identification of specific legal services by using terminology to define "legal advisory services"; "legal representational services"; "legal arbitration and conciliation/mediation services"; and "legal services"

  • maximum number of Members committing on legal services, including through encouraging appropriate terminology to qualify the scope of commitments concerning "domestic law (host country law)"; "foreign law"; and "international law"

Limitations for reduction or elimination

  • commercial presence and residency requirements for modes 1 and 2, particularly for the practice of foreign law and international law

  • nationality and prior residency requirements particularly for the practice of foreign law and international law

  • limitations on establishment as a branch, particularly for the practice of foreign law and international law

  • discriminatory limitations on the form of establishment

  • limitations that prevent partnership or other forms of commercial association or collaboration between foreign lawyers/law firms and domestic lawyers/law firms

  • limitations that prevent recruitment of lawyers admitted/licensed to practice domestic law

  • quantitative restrictions on the number of offices that can be established, in particular economic needs tests (ENTs)

  • limitations on the use of professional title as authorized by the foreign or domestic jurisdiction

  • limitations on mobility of legal service suppliers in mode 4


  1. Other Professional Services


Members have identified individually or in groups the following objectives:

Scope of commitments (sectoral or modal)

  • more commitments in modes 1 and 2 for all categories

  • unimpeded cross-border trade for all categories

  • horizontal mode 4 commitments for all categories, with a special emphasis on professionals on contract, including independent professionals

  • mode 1 and mode 4 commitments for engineers

Limitations for reduction or elimination

  • joint venture and equity restrictions in mode 3

  • barriers such as ENTs or federal and sub-federal regulations on mode 4 suppliers

  • barriers for independent professionals


  1. Computer and Related Services


Members have identified individually or in groups the following objectives:

Scope of commitments (sectoral or modal)

  • all activities and all modes of supply within the sector

  • the whole sector at the two-digit level (CPC 84)

  • full commitments reflecting the current situation in which trade barriers are not common

Limitations for reduction or elimination

  • removal or elimination, in particular, of:

    - unbound entries in mode 1

    - foreign equity limits

    - residency requirements

    - establishment prerequisites



Scheduling issues to be addressed

  • exploration of possibility of an "understanding" on scheduling at the 2-digit level and its legal form, if any


  1. Other Business Services


Members have identified individually or in groups the following objectives:

Scope of commitments (sectoral or modal)

  • inclusion of 'Other business services', in particular: management consulting services, advertising services, market research services, maintenance and repair of equipment services, technical testing and analysis services, beauty and physical well-being services, spa services, specialty design services, and trade fair and exhibition organization services        


  1. Postal and Courier Services


Members have identified individually or in groups the following objectives:

Scope of commitments (sectoral or modal)

  • all postal and courier services no longer subject to monopoly

  • courier and express delivery services

  • all segments not under universal service obligations  

Limitations for reduction or elimination

  • market access limitations on services opened to competition under modes 1 and 2 and, in particular, mode 3    

  • scope of monopoly or exclusive rights

  • measures discriminating against or otherwise impeding foreign market participation

Regulatory issues and additional commitments for negotiation

  • anti-competitive practices, including cross-subsidies

  • universal service obligations

  • independence of regulators

  • licensing practices and procedures

  • relation between GATS and UPU legal instruments

MFN Exemptions for reduction or elimination

  • elimination of MFN exemptions on postal services and related transport services

Scheduling issues to be addressed

  • exploration of use of a new classification scheme that better reflects commercial and regulatory situations

  • possibility of a common approach reducing uncertainty about the status of different suppliers and clarifying the scope of committed services, including elements such as:

    - full description of committed activities

    - clear delineation between competitive and reserved services

    - neutral classification to ensure that commitments on competitive areas apply to all suppliers, including postal entities

    - clarification of any relationship with commitments in other sectors (e.g. transport)




  1. Telecommunication Services


Members have identified individually or in groups the following objectives:

Scope of commitments (sectoral or modal)

  • broad coverage of the sector in a technology-neutral manner

  • significant commitments in all modes of supply  

  • work with LDCs and developing country Members to find ways to encourage new and improved offers and provide technical assistance to support this process 

Limitations for reduction or elimination


  • exclusive rights

  • ENTs

  • restrictions on the types of legal entity permitted

  • limitations on foreign equity

Regulatory issues and additional commitments for negotiation


  • commitment to all provisions of the telecommunications Reference Paper

MFN Exemptions for reduction or elimination


  • elimination of MFN exemptions

Scheduling issues to be addressed


  • ways to improve clarity and certainty in view of scheduling- and classification-related concerns


  1. Audiovisual Services


Members have identified individually or in groups the following objectives:

Scope of commitments (sectoral or modal)


  • more commitments with respect to the production, distribution and projection of motion pictures/videos, sound recording, and the production and distribution of tv programmes

  • commitments on modes 1 to 3 that reflect the level of de facto openness

MFN Exemptions for reduction or elimination


  • elimination of MFN exemptions

Classification issues to be addressed


  • need to update the classification to ensure that offers reflect market realities

    - the term "home video entertainment" (defined to include, inter alia, video tapes and optical discs) should be substituted for "video tapes"

    - distribution of motion pictures and home video entertainment should be clarified to mean "licensing for exhibition, broadcast or other transmission"

    - radio and tv services should be divided into two new sub-sectors: "radio and tv production services" and "radio and tv distribution services"

    - "radio and tv distribution services" should be clarified to mean "licensing of radio and tv programmes"



  • broadcast transmission services relating to the networks over which radio and tv programming is distributed should not be considered an audiovisual service, but a communication service covered elsewhere


  1. Construction and Related Engineering Services


Members have identified individually or in groups the following objectives:

Limitations for reduction or elimination


  • foreign equity limitations

  • joint venture and joint operation requirements

  • discriminatory licensing or registration procedures

  • restrictions on the types of projects that can be undertaken by foreign service suppliers

  • restrictions on the movement of natural persons


  1. Distribution Services


Members have identified individually or in groups the following objectives:

Scope of commitments (sectoral or modal)


  • commitments in all four sub-sectors (commission agents' services, wholesale trade services, retailing services and franchising) in modes 1, 2 and 3

  • exclusions for sensitive products should be minimized

  • better access in particular under mode 3 in wholesale and retail trade

Limitations for reduction or elimination


  • foreign equity limitations


  1. Education Services


Members have identified individually or in groups the following objectives:

Scope of commitments (sectoral or modal)


  • secondary, higher/tertiary and other education services

  • bindings that reflect actual levels of liberalization

Limitations for reduction or elimination


  • restrictions on the use and import of educational materials, including material supplied online

  • "unbound" entries in mode 2

  • commercial presence requirements linked to the provision of distance learning

  • lack of accreditation possibilities for online education services

  • joint venture and minimum foreign equity requirements, where these restrict twinning arrangements and other institute-to-institute arrangements

  • inability of foreign institutions to establish branch campuses within local institutions

  • restrictions preventing foreign institutions from directly marketing education services and/or recruiting students

  • limitations on the ability to run onshore education programmes in collaboration with local partners

  • restrictions on repatriation of funds by joint-venture educational establishments

  • restrictions on the movement of education service suppliers

  • limits on the number of foreign nationals represented on the board of educational institutions

Regulatory issues and additional commitments for negotiation


  • recognition of qualifications

Scheduling issues to be addressed


  • remove references to quality and qualification requirements if these are neither discriminatory nor limit market access


  1. Energy Services


Members have identified individually or in groups the following objectives:

Scope of commitments


  • meaningful commitments, based on CPC, for all activities composing the energy services sector and across all modes of supply

  • commitments in the oil and gas sector, e.g., for exploration services, services incidental to mining, technical testing and analysis, and toll refining services

  • ownership of natural resources is outside the scope of the negotiations

Regulatory issues and additional commitments for negotiation


  • need to ensure, inter alia, access to energy, reliability of supply, protection of consumers and the environment ('right to regulate')

Scheduling issues to be addressed


  • use of the Scheduling Guide for Energy Services (JOB(03)/89) tabled by some Members for scheduling commitments on energy and energy-related services in the WTO

  • the absence of a specific energy services section in W/120 should not prevent the scheduling of commitments as the Scheduling Guidelines (S/L/92) provide sufficient flexibility


  1. Environmental Services


Members have identified individually or in groups the following objectives:

Scope of commitments


  • high levels of market access across sub-sectors, as far as possible

  • mode 1 commitments for as many sub-sectors as possible, in particular advisory services

  • objective of full commitments for mode 2

  • ambitious commitments for mode 3, removing barriers on commercial establishment; if exclusive rights are awarded, foreign suppliers should be able to participate in the tender and operation of the service

  • mode 4 commitments to ensure mobility of service suppliers such as remediation specialists, conservationists and geomatic professionals

  • commitments across all sub-sectors listed in CPC Prov., i.e. 9401 to 9409, taking into account the interplay with related services, such as construction, engineering, technical testing, and analysis and management consulting services


  1. Financial Services


Members have identified individually or in groups the following objectives:

Scope of commitments (sectoral or modal)


  • commitments on commercial presence (mode 3) for all financial services

  • commitments on modes 1 and 2 in appropriate sub-sectors (e.g. financial services addressed to sophisticated customers, like reinsurance, asset management, and securities; marine and energy insurance services; provision and transfer of financial information and financial data processing)

Limitations for reduction or elimination


  • limitations on the right to establish new and to acquire existing companies

  • limitations on legal form

  • limitations on foreign ownership (i.e. freedom to establish in the form of wholly-owned subsidiaries, joint ventures or branches)

  • non-discriminatory limitations such as monopolies, numerical quotas or ENTs and mandatory cessions

  • discrimination in the application of laws and regulations

Regulatory issues and additional commitments for negotiation


  • transparency in the development and application of laws and regulations, transparent and speedy licensing procedures

Scheduling issues to be addressed


  • use of the definitions in the GATS Annex on Financial Services

  • clarification of the distinction between modes 1 and 2


  1. Health Services


Members have identified individually the following objectives:

Limitations for reduction or elimination


  • Limitations relating to non-portability of insurance schemes under modes 1 and 2
  1. Tourism Services


Members have identified individually or in groups the following objectives:

Scope of commitments (sectoral or modal)


  • full commitments on market access and national treatment for: Hotels and restaurants (CPC 641-643); Travel agencies and tour operators services (CPC 7471); Tourist guides services (CPC7472); Other; Fishing license services (CPC 91131); Hunting license services (CPC 91131); and Spa services (CPC 97029)

Limitations for reduction or elimination


  • horizontal limitations affecting commercial presence (eliminate or make explicit reference that they do not apply to tourism services)

  • restrictive conditions for purchase, lease or use of real estate

  • requirements for commercial establishment or presence under modes 1 and 4

  • nationality or residency requirements

  • ENTs, especially in mode 3

  • limitations on the participation of foreign capital

  • requirements to establish specific types of legal entities    

Regulatory issues and additional commitments for negotiation


  • ensuring that immigration authorities facilitate the movement of tourists

  • recognition of professional qualifications acquired in the territory of another Member on the basis of equivalency of education, and use of qualification recognition methods

  • facilitation of the temporary entry of natural persons supplying services with respect to visa and temporary residency provisions

  • elimination of anti-competitive practices and unfair competition

  • access on a commercial basis to computer reservation systems/global distribution systems subject to transparent, reasonable and objective criteria

  • cooperation for the sustainable development of tourism

MFN Exemptions for reduction or elimination


  • elimination of sector-specific MFN exemptions applicable to all sectors


  1. Maritime Transport Services


Members have identified individually or in groups the following objectives:

Scope of commitments (sectoral or modal)


  • commitments according to the Maritime Model Schedule and on sectors listed therein

  • commitments based on existing or improved offers as provided by decision S/L/24        

  • commitments on a range of Maritime auxiliary services (modes 1, 2 and 3)

Limitations for reduction or elimination


  • eliminate in particular the following limitations concerning International freight transport (less cabotage) (CPC7212) in modes 1, 2 and 3:

    - cargo reservations

    - restrictions on foreign equity participation

    - nationality requirements of board members

    - preferential taxation

    - restrictions on right of establishment

    - restrictions on vessel registration


Regulatory issues and additional commitments for negotiation


  • access to and use of port services

  • access to and use of services necessary for the conduct of multimodal transport operations

MFN Exemptions for reduction or elimination


  • elimination of MFN exemptions


  1. Air Transport


Members have identified individually or in groups the following objectives:

Scope of commitments (sectoral or modal):


  • commitments on all air transport services covered by the GATS, including ground handling (note: there is no agreement among Members on the precise scope of application of the GATS to this sector)


  1. Other Transport Services


Members have identified individually or in groups the following objectives:

Scope of commitments (sectoral or modal)


  • commitments in road, rail and pipelines transport services  

Limitations for reduction or elimination


  • reduction or elimination of restrictions in mode 3 for road and rail transport

MFN Exemptions for reduction or elimination


  • elimination of MFN exemptions regarding road transport


  1. Logistics Services


Members have identified individually or in groups the following objectives:

Scope of commitments (sectoral or modal)


  • commitments according to the Freight Logistics Checklist proposed by some Members (TN/S/W/20)

  • no substantial limitations on right to commercial establishment (mode 3) in Core freight logistics services (Part 1 of the checklist), with reference to particular modes of transport as necessary

  • no substantial limitations on modes 1, 2 and 3 for a range of modes of transport instrumental to logistics services in Freight transport services (Part II(1) of the checklist)

  • no substantial limitations for mode 3 and in other modes of supply, as appropriate, for a wide range of activities in Other related logistics services (Part II(2)of the checklist)

  • commitments on Non-core freight logistics services, as far as practicable (Part III of the checklist)

Regulatory issues and additional commitments for negotiation


  • acceptance of electronic versions of trade administration documents

  • entitlement to supply listed freight logistics services (from services auxiliary to all modes of transport , freight transport, courier services and distribution services) in combination, subject to measures necessary to prevent anti-competitive behaviour

  • assurance that procedures and formalities such as documentary requirements, customs clearance, customs inspection, and electronic processing are not unnecessarily burdensome


  1. Modes 1 and 2


Members have identified individually or in groups the following objectives:

Scope of commitments


  • development of a possible list of commercially meaningful and clearly specified sectors/sub-sectors to allow for targeted commitments, including, inter alia, in professional services, business services, other business services, computer and related services, research and development services, tourism, part of education services, with the possible sensitivity of cross-border trade in some sectors to be recognized

  • mode 1 commitments in sectors such as telecommunications, transport, postal and courier, distribution, and financial services

  • similar levels of commitments in modes 1 and 2 whenever possible

Limitations for reduction or elimination


  • in commercially meaningful sectors, bind existing levels of liberalization, in particular by removing commercial presence requirements and discriminatory measures

  • consideration of other restrictions such as horizontal limitations (especially subsidies)

Scheduling issues to be addressed


  • possibility to capture technological developments, including through two-digit classification and specific listing of new activities

  • use of plurilateral approaches, such as model schedules or checklists

MFN Exemptions for reduction or elimination


  • address MFN exemptions


  1. Mode 3


Members have identified individually or in groups the following objectives:

Scope of commitments


  • commitments should reduce limitations to the fullest extend possible; bindings shall not be more restrictive than applicable language

  • commitments should include, in principle, the right to establish new and acquire existing companies

Limitations for reduction or elimination


  • restrictions on foreign equity participation, in particular below 51 per cent

  • elimination or relaxation of restrictions on type of legal entity and of joint venture requirements

  • elimination of discriminatory ENTs

  • right to acquire real estate connected with the establishment of commercial presence

Scheduling issues to be addressed


  • commitments to be drafted in a clear, transparent and precise manner

  • concise indication of any inconsistencies with Articles XVI and XVII

  • clear indication of the criteria for ENTs according to the Scheduling Guidelines


  1. Mode 4


Members have identified individually or in groups the following objectives:

Categories of natural persons


  • commitments to be undertaken in all main categories: Business Visitors (BVs); Intra-corporate Transferees (ICTs); Contractual Service Suppliers (CSSs); Independent Professionals (IPs); Others

  • commitments on each of the main categories to be based on common definitions and parameters and to provide for specific market access conditions

  • coverage of commitments to be extended to better cover categories of persons not linked to commercial presence (CSSs and IPs), with adequate sectoral coverage

  • commitments on ICTs to be extended

  • commitments on Installers to be undertaken

  • scope of commitments to be extended to lower skilled workers

Limitations for reduction or elimination


  • economic needs/labour market tests (LMTs); if not possible, specify non-discriminatory and objective criteria in the schedule

  • quantitative restrictions; where quotas cannot be removed, increase quotas

  • measures preventing longer periods of stay tailored to the specific needs of each category of natural persons

  • non-renewal of periods of stay

  • excessive formalities where renewal is permitted

  • citizenship and residency requirements

  • pre-employment conditions; where removal is not feasible, period of prior employment with home country juridical person to be clearly specified and not to exceed a particular time period

  • labour market conditions, including wage parity requirements (without prejudice to other employment laws, such as minimum wage requirements)

  • discriminatory tax treatment

Regulatory issues and additional commitments for negotiation


  • transparency of entry procedures and provision of information relevant to entry, temporary stay and work authorization for each of the categories of natural persons scheduled

  • administrative procedures affecting entry and stay, especially regarding visas

  • recognition and qualification requirements

Scheduling issues to be addressed


  • commitments on the basis of common categories, using similar terminology and parameters

  • sector-specific commitments to complement the horizontal section and bind deeper levels of liberalization

  • transparency of commitments: templates for providing readily available information on a voluntary basis


List of Submissions by Members
A. Legal Services

Communication from Australia, Canada, Chile, the European Communities, Japan, Korea, New Zealand, Singapore, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, and the United States, Joint Statement on Legal Services, TN/S/W/37, 24 February 2005.


Communication from Australia, Canada, Chile, the European Communities, Japan, New Zealand, Switzerland, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, and the United States, Legal Services – Objectives for Further Liberalization and Limitations to be Removed, JOB(05)/276, 7 November 2005.
B. Computer and Related Services

Communication from Australia, Canada, Chile, the European Communities, Hong Kong China, India, Japan, Korea, Mexico, New Zealand, Norway, Singapore, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, and the United States,  Joint Statement on the Negotiations on Computer and Related Services, TN/S/W/38, 25 February 2005.


Communication from the European Communities, Coverage of CPC 84 – Computer and Related Services, TN/S/W/6, 24 October 2002.
C. Postal and Courier Services

Communication from Australia, the European Communities, Hong Kong China, Japan, New Zealand, Switzerland, and the United States,  Guidelines for Scheduling Commitments Concerning Postal and Courier Services, Including Express Delivery, TN/S/W/30, 17 February 2005.


Communication from the European Communities, Proposal for a Reference Paper, TN/S/W/26, 17 January 2005.
D. Telecommunications Services

Communication from Australia, Canada, the European Communities, Japan, Hong Kong China, Korea, Norway, Singapore, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, and the United States, Liberalization of Telecommunications Services, TN/S/W/50, 1 July 2005.

Communication from Australia, Canada, the European Communities, Hong Kong China, Japan, Korea, Norway, Singapore, Switzerland, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, and the United States, Statement on Telecommunications Services at the Special Session of the Council for Trade in Services on 30 September 2005, JOB(05)/253, 18 October 2005.

Communication from Australia, Canada, the European Communities, Hong Kong China, Japan, Korea, Norway, Singapore, Switzerland, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, and the United States, Statement on the Quality of Telecommunications Offers at the Special Session of the Council for Trade in Services on 1 July 2005, JOB(05)/252, 18 October 2005.


E. Audiovisual Services

Communication from Hong Kong China, Japan, Mexico, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, and the United States, Joint Statement on the Negotiations on Audiovisual Services, TN/S/W/49, 30 June 2005.
F. Construction and Related Engineering Services

Communication from Australia, Canada, Egypt, the European Communities, Guatemala, Japan, Korea, Mexico, Norway, New Zealand, Singapore, Switzerland, Turkey, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, and the United States, Joint Statement on Liberalization of Construction and Related Engineering Services, JOB(05)/130, 30 June 2005.


G. Energy Services

Communication from Australia, Canada, the European Communities, Japan, Norway, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, and the United States, Statement on Liberalization of Energy Services, Council for Trade in Services – Special Session, Room Document, 1 July 2005.


Communication from Chile, the European Communities, Japan, and the United States, Proposed Guide for Scheduling Commitments on Energy Services in the WTO, JOB(03)/89, 12 May 2003.
H. Environmental Services

Joint Statement from Australia, Canada, the European Communities, Japan, Norway, Switzerland, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, and the United States, Room Document, Joint statement on the level of ambition for environmental services, Council for Trade in Services – Special Session, Room Document, 17 October 2005.


I. Financial Services

Communication from Australia, Bahrain, Canada, the European Communities, Japan, Norway, Oman, Panama, Singapore, Switzerland, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, and the United States, Liberalization of Financial Services, TN/S/W/43, 8 June 2005.


Communication from Brazil, Electronic Commerce and Financial Services, JOB(05)/103, 13 June 2005.
J. Tourism Services

Communication from Brazil, Colombia, the Dominican Republic, El Salvador, India, Indonesia, Nicaragua, the Philippines, and Thailand, Review of Progress in Negotiations, including pursuant to paragraph 15 of the Guidelines for Negotiations, TN/S/W/23, 29 September 2004.


K. Maritime Transport Services

Statement by Japan, Common Views on Negotiation Objectives on Maritime Transport Services, by a "Group of Members Interested in Maritime Transport Services", 17 October 2005.


L. Logistics Services

Communication from Australia, Hong Kong China, Liechtenstein, Mauritius, New Zealand, Nicaragua, Switzerland, and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, Logistics Services, TN/S/W/20, 25 June 2004.


Communication from Australia, Hong Kong China, Japan, Switzerland and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, Objectives for Liberalization of Logistics Services, JOB(05)/264, 27 October 2005.
M. Modes 1 and 2

Non-Paper from India, Mexico, New Zealand, and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, Cross-Border Supply of Services – Statement of Objectives for the Negotiations, Council for Trade in Services – Special Session, Room Document, 17 October 2005.

Communication from Chile, Hong Kong China, India and Mexico, Discussion Paper on Relevant Issues for Liberalization of Cross-Border Supply in GATS Negotiations, JOB(05)/214, 29 September 2005.

Communication from Australia, Chile, Hong Kong China, India, Mexico, and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, Joint Statement on the Cross-Border Symposium Held by the WTO in April, 2005, JOB(05)/90, 1 June 2005.


N. Mode 3

Non-Paper by Australia, Canada, the European Communities, Japan and Switzerland, Benchmark for Mode 3; 31 October 2005.

 

Communication from Australia, Canada, the European Communities, New Zealand, Norway, Switzerland; The Importance of Mode 3 Commitments, Council for Trade in Services – Special Session, Room Document, 1 July 2005.


O. Mode 4

Communication from Argentina, Bolivia, Chile, China, Colombia, Dominican Republic, Egypt, Guatemala, India, Mexico, Pakistan, Peru, Philippines and Thailand, Proposed Liberalization of Mode 4 under GATS Negotiations, TN/S/W/14, 3 July 2003.

Communication from Argentina, Bolivia, Brazil, Chile, Colombia, India, Mexico, Pakistan, Peru, Philippines, Thailand and Uruguay", Categories of Natural Persons for Commitments under Mode 4 of the GATS, TN/S/W/31, 18 February 2005.

Communication from Bulgaria, Canada, the European Communities and Romania, Mode 4: A Common Approach to Scheduling, TN/S/W/32, 18 February 2005.



Communication from Argentina, Brazil, Chile, China, Colombia, Dominican Republic, Egypt, Guatemala, India, Mexico, Pakistan, Peru, Philippines and Thailand, Mode 4: Transparency Issues, JOB(04)/142, 29 September 2004.
__________

1 As attached to the Report by the Chairman to the Trade Negotiations Committee on [...] November 2005, contained in document TN/S/23, as well as any future revisions thereof.

2 As attached to the Report of the Chairman of the Working Party on Domestic Regulation to the Special Session of the Council for Trade in Services on 15 November 2005, contained in document JOB(05)/280.



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