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W ORLD T RADE O RGANIZATION TN/S/2213 October 2005 (05-4689)Council for Trade in ServicesSpecial SessionSPECIAL SESSION OF THE COUNCIL FOR TRADE IN SERVICESReport by the Chairman to the Trade Negotiations CommitteeThe Council for Trade in Services in Special Session met on 26, 29 and 30 September 2005.1.Subsequent to a communication from the Chair of the General Council contained in WT/GC/96, the Special Session of the Council for Trade in Services confirmed, on 30 September, the appointment of H.E. Fernando de Mateo of Mexico as its new Chairman.2.As my successor was confirmed in his functions at the close of the last day of the meeting, this report is made solely under my own responsibility.I.REVIEW OF PROGRESS3.Members of the Council are aware of their collective responsibility to produce a draft services text for the Hong Kong Ministerial Conference within the next few weeks that will provide guidance for the concluding months of the negotiations.4.The services negotiations need at present to better specify the objectives which will translate the repeatedly expressed desire of Members to attain a high level of ambition. From my point of view, it is imperative to produce clear and specific objectives for services at Hong Kong.5.The lack of offers, I believe, results from this sense of a lack of direction. Since the last formal meeting, only one new initial offer and four new revised offers have been tabled. The total number of initial offers submitted is 69 (representing 93 Members); including LDCs, 54 initial offers remain outstanding. I recall that we are now 2 ½ years beyond the date by which submission of initial offers was to take place, and only 15 months away from the anticipated end of negotiations. The total of revised offers submitted is 28 (representing 52 Members); 63 revised offers are outstanding if we set aside LDCs.6.I feel compelled to reiterate that the services negotiations are qualitatively different from the other two pillars of the DDA's market access negotiations. The request-offer process involves a myriad of time- and resource-consuming bilateral meetings. Proposed GATS commitments in offers require that governments consult with a complex web of consumer, industry, regulatory and ministry representatives. Moreover, because the process is reiterative, there will be no time to spare in 2006 in arriving at final offers that fulfil a collective objective.7.In addition to delegations' views on progress in general, a number of communications were the subject of discussion. A formal communication from 11 Members on the importance of mode 3 commitments was presented.1 A number of the non-papers on the intensification of the request-offer1 TN/S/W/53.TN/S/22Page 2process and complementary approaches discussed in informal meetings were re-introduced for the Council's consideration.2 In this regard, Members echoed their comments made at informal meetings (see bullet 1 of paragraph 11). All Members agree that any complementary approach will remain within the negotiating structure set out in the GATS and the Negotiating Guidelines (S/L/93). They reaffirmed that the main method of negotiation is the request-offer approach.8. A number of Members reiterated the flexibility accorded to developing country Members in undertaking commitments. A number of other Members stressed the fact that GATS Article XIX places this flexibility within the context of achieving a progressively higher level of liberalization. In this way, the GATS provided a framework through which Members could liberalize their services trade. The special situation of LDCs in the negotiation was recognised by all Members.9.My report in TN/S/20 included an Annex that sought to provide a first outline of Members' specific expectations for the round; the barriers faced by their services suppliers; and their individual assessments of the offers on the table. Although preliminary, this outline provided information that could be useful in producing a profile of a package of results for services with regard to sectors and modes of supply. I had announced that a series of open-ended informal meetings in October could be dedicated to the further identification of objectives, including through the refinement of the inputs delegations provided for the Annex.10.With regard to the subsidiary bodies, including rules, the Chair of the Working Party on Domestic Regulation (WPDR) reported that Members had worked in both informal and formal meetings with a view to advancing work for Hong Kong. The Chair of the Working Party on GATS Rules (WPGR) reported on discussions on emergency safeguard measures, subsidies and government procurement. With respect to safeguards, the Chair highlighted that various delegations had showed openness to consider alternative ideas or approaches and noted the importance of engagement from all sides. Delegations also pursued their discussions on subsidies, in particular regarding ways to achieve progress on the information exchange, and government procurement. The Working Party asked the Chair to undertake consultations on the way forward. The Chair of the Committee on Specific Commitments (CSC) reported on possible work in informal and formal meetings that would aim to improve the clarity, certainty, comparability and coherence of schedules that would enter into force at the end of the round. The Chair remarked that in general the offers did not improve the clarity of existing commitments.11.Members no doubt recall that in my last report, TN/S/20, as requested by Members I outlineda schedule of work for this autumn that sought to address the situation in the services negotiations.I can report that I have engaged in the following intensive consultations since the summer break:∙Three open-ended informal meetings have been held at which Members discussed extensively ways to intensify the request-offer process and complementary approaches to the negotiations within the parameters of the GATS and Negotiating Guidelines. Specifically, seven non-paper proposals on these topics were explored through extensive questions which sought to clarify the proposals. On the various proposals themselves there were divergent views.However, all delegations indicated their willingness to continue discussing ways to strengthen the negotiating process.∙One open-ended informal meeting was held on the Implementation of the LDC Modalities.Since the last formal meeting, the LDCs have put forth two notes on this topic that outline a number of proposals. Members have welcomed the LDC Group's participation and further2 TN/S/W/52, Job(05)/215, Job(05)/217 and Job(05)/218.TN/S/22Page 3consultations will be necessary in order to clarify positions and see where the common ground might lie on these proposals.One open-ended informal meeting was held on the Proposals on GATS-related S&D Treatment Provisions. The African Group informed the Council that text-based discussions were underway in small groups and that they would respond to the Chairman's invitation to use his good offices at the appropriate juncture.II.OTHER ITEMS12.Under Assessment of Trade in Services, a presentation was made by the International Organisation for Migration the World Bank and the WTO on the report of a jointly organised experts meeting entitled "Managing the Movement of People: What can be learned for mode 4 of the GATS?" that took place on 4-5 November 2004. This was the second such experts meeting that brought together trade negotiators and migration officials with a view to strengthening the dialogue between the two. While the point was made that movement of natural persons under the GATS represents a very small sub-set of overall migration, some Members noted that some of issues being discussed in the context of migration overall might inform the Council's work on mode 4. Substantive discussion was also held on the basis of an extensive presentation by Rwanda on its experience with trade in services since the Uruguay Round. This presentation outlined the role of services in the Rwandan economy, its relatively modest export capacity, as well as some of the challenges faced in creating the necessary institutional and regulatory framework.13.Three proposals were substantively discussed under the agenda item Negotiating Proposals.A proposal from Switzerland outlined that delegation's method of assessing the quality of offers numerically.3 A number of Members expressed interest in learning more about this method, which seeks to help improve transparency and comparability in assessing the quality of offers. The delegation of Switzerland said that it was seeking a method through which the quality of mode 4 commitments could be quantified. A number of Members expressed interest in a proposal from Pakistan on Mode 4 issues related to non-trade concerns, return and temporariness of suppliers under this mode.4 A third proposal from Chile, Hong Kong China, India and Mexico on cross-border supply (CBS) enumerates a number of issues related to CBS which the proponents felt could be used to pursued in dedicated and focused discussion.5It was requested that the Chairman conduct consultations in this regard.14.On the Implementation of LDC Modalities, there was substantive discussion on the basis of a room document from the LDC Group and a communication from the European Communities. In its room document, the LDC Group submits three proposals to further the implementation of the LDC Modalities. Discussion on these proposals I presume will be pursued in consultations bearing in mind the Council's work prior to the Hong Kong Ministerial Conference. The communication from the European Communities contains responses to questions posed by the LDC Group in a July 2005 informal proposal, which also pertains to the implementation of the Modalities.6 A number of delegations seized the opportunity of this discussion to report that they have provided answers to the LDC Group's questions bilaterally.3 TN/S/W/51.4 Job(05)/211.5 Job(05)/214.6 TN/S/W/54 and Job(05)/114 respectively.TN/S/22Page 415.On Proposals for S&D Treatment Provisions, Rwanda, on behalf of the African Group, reported to the Council on text-based consultations. Given the short time prior to Hong Kong, the Group suggested that work in the coming weeks focus on one of the proposals, and that examination of the others continue in the new year.III.FUTURE WORK16.Members are aware that they must keep their eye on the ball, namely, a good draft services text for Hong Kong. This will be the key to a satisfactory result in the services negotiations.17. In terms of process, the Special Session is required, pursuant to the July Package, to providea full report to the TNC with possible recommendations for the purpose of the Sixth Ministerial Conference.718.Finally, it was agreed that the Chairman would produce a list of possible elements for the draft services text of the Ministerial Declaration, based on indications from delegations at and outside of the meeting. The suggestions at the meeting related to a wide range of the Council's work as well as to the rules negotiations. I leave future work on these elements in the hands of my very capable successor.19.The next formal meeting of the Special Session is to take place on 31 October and 3 November 2005.__________7 Please see paragraph (g) of Annex C of the General Council Decision contained in documentWT/L/579.。