REPORT OF THE MEETING HELD ON 16 June 2016
NOTE BY THE SECRETARIAT
The Committee on Specific Commitments (CSC) held a meeting on 16 June 2016. The agenda for the meeting, contained in WTO/AIR/CSC/5, was adopted.
1 item a - appointment of the chairperson for the committee
1.1. The outgoing Chairperson, Ms. Brigitte Lüth from Austria recalled the work the Committee had done in the past year. She encouraged delegations to be more engaged in the Committee's work and make optimal use of this body in the future. She noted that the Chairperson of the Council for Trade in Services had recently concluded his consultations on the slate of names for the Chairpersons of the subsidiary bodies and that Mr. Changtian Han from China had been proposed for this Committee. The Committee then elected Mr. Changtian Han as its new Chairperson by acclamation. The meeting was thereafter chaired by him.
2 item b - scheduling issues
2.1. The Chairperson recalled that at the last meeting, the delegation of Turkey had presented a communication (contained in document JOB/SERV/224, dated 29 February 2016) with a view to reviving the Committee's discussion on economic needs tests (ENTs). Turkey had put forward some ideas on how to proceed with future work concerning ENTs. Turkey's proposals included: (1) an update of the Secretariat’s Note on ENTs by examining the schedules of new Members and revised offers; (2) a review of Members’ ENT entries in FTAs to see if there was a commonly acceptable definition of ENTs and a commonly acceptable way of scheduling; (3) an exchange of information by Members on a voluntary basis with respect to ENT requirements specified in their legislation and the actual application of ENTs; (4) identification of common elements in criteria for ENTs by mode and sector.
2.2. At the last meeting, the Committee had agreed to task the Secretariat to update its Note on ENTs by examining the schedules of newly acceded Members. Accordingly, on 25 May 2016, the Secretariat had issued the second addendum to its Note on ENTs, which was contained in document S/CSS/W/118/Add.2. He then invited the Secretariat to introduce this addendum.
2.3. The representative of the Secretariat stated that this document was self-explanatory, updating the previous notes by adding the ENT entries contained in the schedules of 11 Members in total that had acceded to the WTO since the issuance of the first addendum, i.e. 16 April 2010. Five out of the 11 Members had inscribed a total of 18 ENTs in their schedules as market access limitations. Of these entries, 14 were inscribed in the sectoral section under Mode 3, and four were in the horizontal section under Mode 4. The new entries brought the total number of ENTs inscribed in the schedules to 279 (instead of 261 in 2010) by 99 Members (94 in 2010). Of the 279 entries, 54 were inscribed in the horizontal section (with 43 under Mode 4, 10 under Mode 3 and 1 under Mode 1), while 225 tests were sector-specific with the vast majority (167) scheduled under Mode 3. As in the previous Notes, this Note also included borderline cases where entries did not contain the terms of "economic needs tests", but were "ENT-like". These entries were included to illustrate their ambiguities and for reasons of transparency.
2.4. The Chairperson noted that ENTs-related entries in Members' schedules were often ambiguous and thus created much uncertainty to specific commitments. These entries drew attention to a number of questions that had been raised in the past and remained valid for today's discussion, such as: What was meant by "economic needs"? Could, for example, public interests or social development also be considered as "economic needs"? What kind of measures might qualify as an ENT? Would, for example, city development planning or social development programme be qualified as an ENT?
2.5. The representative of Turkey reiterated the proposals her delegation had made. Thanking the Secretariat for the update of its Note on ENTs, she noted that new Members had also inscribed ENTs in their schedules, bringing the total number of ENTs to 279. As highlighted in Turkey's communication as well as the Secretariat's Note, ENT entries remained ambiguous, and many lacked clear criteria. This situation led to the unpredictability of specific commitments and constituted indirect barriers to market access. She urged Members to express their views on her delegation's proposals, hoping that the Committee could agree on how to move forward.
2.6. The representative of India stated that the updated Secretariat Note was a first step in the way forward suggested by Turkey. The new addendum strengthened the need for work on ENTs in the Committee. Members were all aware of the problem of interpreting scheduled ENTs, most of which were vague, ambiguous and inconsistent with the Scheduling Guidelines which required the scheduling of ENTs to be specific and effective. While, according to GATS Article XVI, ENTs were quantitative restrictions, most ENT entries were qualitative, lacking quantitative criteria. Although Mode 4 related ENTs were the main problem for India, India was willing to consider all modes as proposed in Turkey's communication. In the run-up to the Nairobi Ministerial, India had made a submission on transparency in Mode 4 commitments, which had raised the same basic issue of improving information on existing commitments to ensure the effective operationalization of specific commitments. Lack of transparency resulted in ineffective access and made commitments meaningless. Her delegation supported Turkey's proposal that the Secretariat update the Note by including revised offers, which would help clarify whether there was a trend towards removing ENTs or making them more specific. The idea of looking into whether ENTs were scheduled differently in FTAs than in the GATS was also appealing. Recalling that at the last meeting the Secretariat had hinted that ENTs might be defined differently in FTAs than in the GATS, she suggested that the definitions of ENTs in FTAs be examined as this might provide some insights on the subject.
2.7. The representative of the European Union reiterated his delegation's general support for further work on ENTs. He also reiterated his delegation's reservation on Turkey's proposals related to FTAs and exchange of information, believing that they lacked precision. He therefore suggested that Turkey provide more details on their proposals and clarify the exact objective of the exercise. He understood from India's intervention that the main problem with ENTs was the implementation of the requirements contained in Scheduling Guidelines, not the requirements per se.
2.8. The representative of Canada noted that the new addendum to the Secretariat Note highlighted the value of improving transparency in the ENT-related scheduling. Reiterating his delegation's interest in pursuing further work on ENTs, he thought it worthwhile exploring Turkey's proposal to undertake an examination of the ENT scheduling practice in FTAs.
2.9. The representative of Seychelles stated that her delegation had scheduled ENTs and supported further work in this regard, which would allow for more transparency.
2.10. The representative of Australia reiterated her delegation's support for further work on ENTs. While the Secretariat Note was useful, it had limitations as it examined only GATS commitments whose level was low and which provided little transparency on how domestic systems were working. She said that the most productive step might be to combine Turkey's proposals on FTAs and exchange of information. ENTs had been an important issue in Australia's FTA negotiations since lack of transparency had a significant impact on trade in services. Australia had approached the issue in different ways through both scheduled commitments with improved transparency and negotiated disciplines. It would be useful to share Australia's experience of tacking ENTs in FTAs and learn from other Members' experience in this regard. Open to other ideas, Australia hoped to hear more concrete details about further work on ENTs before moving forward.
2.11. The representative of Switzerland supported further work on ENTs as they undermined the value of commitments, in particular their legal certainty, even where the criteria were transparent. Lack of transparency in the criteria of ENTs would increase legal uncertainty. With respect to Turkey's proposals, while supportive that the Secretariat should examine ENTs in offers, his delegation had reservations on undertaking work on FTAs as the WTO could not change what had been done in FTAs.
2.12. The representative of the United States confirmed the strength of the GATS to accommodate and adapt to the future. With respect to the discussion on ENTs, he was disappointed that the interventions at this meeting were repetitive of those at the last meeting. He questioned the utility and value of having more Secretariat notes and the appropriateness of examining offers. On the proposal regarding FTAs, he indicated that any analysis of FTAs would suffer from lack of information and lack of transparency. While the Committee might pursue the proposed exchange of information on a voluntary basis, there was no progress since the last meeting. Suggesting that the proponents put forward something new and concrete in order to move forward, he urged delegations not to repeat their interventions at the next meeting.
2.13. The representative of Turkey thanked Members' support for the proposals. Her delegation would consider the questions raised and might come up with new proposals at the next meeting.
2.14. The Chairperson noted that the delegations continued to have different views. He would hold consultations on how to proceed with Turkey's proposals in the Committee. He then suggested that the Committee take note of the statements made and revert to this item at its next meeting.
2.15. It was so agreed.
3 item c - classification issues
3.1. The Chairperson recalled that there had been no substantive discussion on any specific classification issues at the last meeting. A number of delegations had reiterated that the discussion on the issue of "new services" had been exhausted. The ideas of discussing "Other" categories in W/120 and adding more references to the classification of W/120 had not generated broad support in the Committee. A number of Members had indicated their interest in having discussions on the classification of some particular sectors. He then solicited constructive ideas and/or suggestions from Members.
3.2. The representative of China noted the importance of services classification issues as a clearer classification could form a better foundation for future negotiations and give Members more confidence in further liberalization. Technological innovations and regulatory challenges in recent years highlighted the urgency of having serious discussions on services classification. The discussion in the CSC had helped Members better understand related issues and grasp the latest development in services industries, which provided a solid basis for future work. Thanking the Secretariat for their hard work to support Members' discussion, China suggested that the Chairperson further consult with Members, strengthen the communication with the Secretariat and guide Members' discussion more effectively by reviewing relevant documents with a view to achieving positive outcomes in the CSC.
3.3. The Chairperson indicated that he would hold consultations on future work under this agenda item. He then suggested that the Committee take note of the statement made and revert to this item at the next meeting.
3.4. It was so agreed.
4 item D - other business
4.1. No delegation made interventions under this item. The Chairperson adjourned the meeting.
 This document has been prepared under the Secretariat's own responsibility and is without prejudice to the positions of Members or to their rights and obligations under the WTO.