RESTRICTED
WORLD TRADE S/CSC/W/9/Add.1
25February 1998
ORGANIZATION(98-0781)
Committee onSpecific Commitments
AQUALITATIVE ASSESSMENT OFTHE RELEVANCE OFTHE CHANGES
RESULTING FROM CPC REV.1 FOR TRADE NEGOTIATING PURPOSES
BUSINESS SERVICES
Note bytheSecretariat
Addendum
1. Atthe16June1997meeting oftheCommittee onSpecific Commitments, Members requested
theSecretariat toprovide, inaddition todetailed studies ofthechanges resulting from CPC Rev.1
andasummary ofthemain changes, aqualitative assessment ofthose changes fortrade negotiating
purposes.
2. Inthisperspective, thepresent document attempts toevaluate forthebusiness services sector,
which hasbeendiscussed indocuments S/CSC/W/6/Add 6toAdd11,theimpact andtherelevance
ofthesechanges bycomparing themtothebroad pattern oftheactual schedules. Asimilar comparison
hasalready been done indocument S/CSC/W/9 withrespect tothesectors studied indocuments
S/CSC/W/6/Add.1-Add.5 (energy, construction, distribution, tourism, transport). Theresults areof
aqualitative andprovisional nature asthepattern ofactual commitments hasbeenapproximated by
computer searches andsamples andbytheSecretariat 'sgeneral knowledge oftheschedules anddoes
nottherefore reflect exhaustively thewayallcommitments havebeenundertaken northewayagiven
Member hasformulated itscommitments.
3. Thepattern oftheMFN exemptions hasnotbeenstudied asthere aregenerally noreferences
toCPC intherelevant lists. However, when there issuchareference, itisclear thattheadoption
ofCPCRev.1 would haveanimpact onthescope anddrafting ofMFN exemptions, andespecially
inthecaseofsectors without commitments.
4. Theanalysis made fortheBusiness Services sector isbased onthesub-sectoral framework
oftheGNS classification list.Ittherefore distinguishes thefollowing areas: Professional Services
(A),Computer andRelated Services (B),Research andDevelopment Services (C),RealEstate Services
(D),Rental/Leasing Services without Operators (E),andOther Business Services (F).
5. Thisnotedoesnotconstitute inanywayajudgement onthecharacteristics ofCPC Rev.1
perse,butsimply discusses itsrelevance fortrade purposes.
A. PROFESSIONAL SERVICES (GNS classification list,1A)
6. Therehasbeennofundamentalchangeintheprofessionalservicessub-sector,whereCPCRev.1
hasessentially created amore coherent, andsometimes more detailed, structure. Theclarity ofthe
explanatory notes hasbeenimproved, andcertain ambiguities orinaccurate descriptions havebeen
removed.S/CSC/W/9/Add.1
Page2
7. Anewgroup r824concerning "Insolvency andreceivership services" hasbeencreated. In
thiscontext, aconcordance hasbeenestablished withthe"old" residual subclass p86190 "Other legal
advisory andinformation services" ,though this"new" service wasnotexplicitly mentioned inthe
explanatory noteofthissubclass. Ingroup r823"Advisory services related totaxation" ,otherwise
corresponding tothe"old" group p863 "Taxation services" ,thehigher degree ofaccuracy achieved
through theswitch toRev.1 isalsoreflected inthefactthatitwaspossible toremove theresidual
category "Other taxrelated services".
8. Forengineering services (prov CPCgroup p867andCPCRev.1 group r833), anewframework
ofsubclasses hasbeencreated. Itisbased onthedistinction ofdifferent types ofbuilding projects
anddifferent types ofservices supplied atdifferent stages ofthebuilding process. Thishasclearly
improved theaccuracy ofthedescription. Formedical services, thereference toaparticular service,
rather thantoparts ofthehuman body affected bydisease, hashadasimilar effect.1
9. Intotal, 76Members havemade commitments related toprofessional services. Onaverage,
these commitments cover roughly halfofthesub-sectors included intheGNS classification under
paragraph Aofsection 1.45Members havedirectly usedtheGNS classification items (15ofthese
havealsoapplied suigeneris concepts). 31Members havereferred toasetofmore detailed CPC
items supplementing theGNSclassification items (17ofthesehavealsoincluded suigeneris concepts).
Itisworth noting thatsome ofthesuigeneris concepts werecommon toalarge number ofMembers:
inparticular, thedistinction within thelegalprofession between thepractice ofinternational law,the
practice ofaMember 'sdomestic lawandthepractice ofthehome country lawoftheservices provider.
Another example istheenumeration ofmedical specialities inrelation toitem(h)oftheGNS
classification ofmedical anddental services.
10. Asindicated before, CPC Rev.1 improves theaccuracy ofthesectoral definitions inmany
respects.Thereseemstobenoimportantproblemofcoherencebetweenthetwoclassifications.However
oneshould alsobeaware thatthemodifications oftheexplanatory notes mayimpact onthecontent
ofthetransactions covered. Thispoint isalsorelevant tothequestion of"new services" already
considered inaninformal notebytheChairman oftheCommittee onSpecific Commitments
(JobNo.5719).
B. COMPUTER AND RELATED SERVICES (GNS classification list,1B)
11. CPCRev.1 nolonger isolates computer andrelated services assuch. However, thecontent
oftheformer division "Computer andrelated services" hasbeenre-allocated among fivedivisions,
namely anewdivision on"Other professional, scientific andtechnical services" ,aswell as
"Telecommunications services; Information retrieval andsupply services" ;"Support services" ;
"Production services, onafeeorcontract basis" ;"Office, accounting andcomputing machinery"
(thelatter division contains onlygoods).
1Forinstance, CPC Rev.1 refers toconsultation services inpaediatrics, gynaecology-obstetrics, neurology
andpsychiatry, etc.,rather thantomedical services forthefollowing: nervous system; eye; ear; noseand
throat; respiratory system; hepatobiliary system andpancreas; etc.S/CSC/W/9/Add.1
Page3
12. Inthiscontext, thesubstantive changes are:theredrafting oftheexplanatory noteforsubclass
r83141 "Hardware consultancy services" (corresponding totheformer subclass p84100 "Consultancy
services related totheinstallation ofcomputer hardware" )2;theinclusion ofnewimportant items in
theexplanatory noteunder subclass r85990 "Other support services n.e.c."3;andtheconnection made
between provCPCsingle-subclass p84210 "System analysis services" andCPCRev.1 single-subclass
r47520* "Records, tapes andother recorded media forsound orother similarly recorded phenomena
(except cinematographic films)" since thedevelopment ofpackaged software isnowconsidered asan
activity ofthecomputer services industry which results intheproduction ofagood, connected toHS
position 8524.4
13. Ofthe62Members which haveundertaken commitments intheComputer andRelated Services
sub-sector, 50haveonlyreferred toCPCcategories aspresented intheGNS classification list;out
ofthese 50Members, 4havealsoreferred tosuigeneris terms. Bycontrast, 10Members haverelied
onmore detailed CPCitems, using inthree cases suigeneris items. Members haveusedsuigeneris
items orconcepts inorder forinstance toexclude certain services suchastelecommunication related
services orservices related tothefinancial sector. TwoMembers haveexplicitly excluded computer
reservation systems from thecoverage ofCPC 841.
14. There seems tobenoimportant problem ofcoherence between thetwoclassifications inthe
areaofComputer andrelated services, despite thereorganization ofvarious items. However, oneshould
alsobeaware thatthemodifications oftheexplanatory notes mayimpact onthecontent ofthe
transactions covered. Thispoint isalsorelevant tothequestion of"new services" already covered
inaninformal notebytheChairman oftheCommittee onSpecific Commitments (JobNo.5719).
C. RESEARCH AND DEVELOPMENT SERVICES (GNS classification list,1C)
15. There isfullcorrespondence between thecoverage ofthegroups inprov(851, 852,853)and
inrev(811, 812,813). Therealchange concerns thecreation ofnewclasses, instead ofasingle-class,
thedifferentiation arose inprovatthefifthdigit, itnowproceeds fromthefourth digit(ingroup r811,
numbers 1,2,3,4,5and9appear atfour-digit levelinstead offive-digit level, thesame pattern being
reproduced astogroup r812).
2Whereastheoriginalsubclasswassupposedtodealonlywithassistanceservicestotheclientsintheinstallation
ofcomputer hardware andcomputer networks ,thenewversion nowcovers provision ofadvice andassistance
onmatters related tothemanagement ofbusinesses 'andinstitutions 'computer resources ;these services
include assessment ofthecomputer needs oftheorganization, planning oftheorganization 'sacquisitions, counsel
ontheprocurementofhardwareand(also)software,consultancyonsystemsecurity,auditonthecomputer-related
operations oftheorganization, etc.
3These include proof-reading, business services ofintermediaries andbrokers, specialist advice other than
forrealestate, insurance andengineering (specialist services inart,specialist services forcourt oflaw,etc.),
services byagencies onbehalf ofindividuals seeking engagements inmotion pictures, theatrical productions or
other entertainment orsports attractions, placement ofbooks, plays, artwork, photographs, etc.,withpublishers,
producers, etc.,booking andcasting services, motion picture, television andother theatrical casting services,
issue ofreduced-price coupons andgiftstamp, payroll services, including payroll computation andledgers,
management services forcopyrights andtheir revenues (except forfilms), management services forrights to
industrial property (patents, licences, trade marks, franchises, etc.), auctioning services other thaninconnection
withlegal procedures, andother business services notelsewhere classified. Furthermore, theVoorburg Group
hasindicated thattelephone-based support services hasbeen added totheexplanatory note.
4Seedocument S/CSC/W/7, para. 14.S/CSC/W/9/Add.1
Page4
16. IntheUruguay Round, 37Members haveundertaken commitments inthissub-sector. Most
ofthesecommitments arebased ontheGNSclassification categories, which refers toprovCPCgroups
851to853;aswitch towards CPCRev.1 would beunproblematic, asmodifications haveonlyaffected
thesub-levels andkeptthesamestructure andcontent asinprovCPC. Infact,onlyoneminor change
could affect thecommitments foraverylimited number ofMembers: environmental research services
havebeenincluded insubclass r81190 "Research andexperimental development services inothernatural
science",whileresearchandexperimentaldevelopmentservicesonenvironmentalscienceswereformerly
attached tothesingle subclass p85300* "Interdisciplinary research anddevelopment services" .Only
onecountry hasmade commitments inconnection withgroup 853.
17. Again, there seems tobenoimportant problem ofcoherence between thetwoclassifications
intheareaofResearch anddevelopment services.
D. REAL ESTATE SERVICES (GNS classification list,1D)
18. Thetwoitems formerly attached todivision p82,group p821 "Real estate services involving
ownorleased property" andgroup p822 "Real estate services onafeeorcontract basis" havebeen
reintroduced inrevastheystand, keeping thesame titles astheircounterparts (r721 andr722). Only
minor modifications haveoccurred inCPC sub-levels.
19. All19Members which haveundertaken commitments intheRealEstate Services sub-sector
havereferred directly tothetwoprovisional CPCgroups (821and822)constituting thedefinitional
basis ofthissector intheGNS classification list.Onecountry hasmade commitments atthemost
disaggregatedlevel(referringtosubclasses82101-82102),butasthemodificationsbroughtbyCPCRev.1
atthislevelareofminor importance, theyhavenosubstantial effect. Another country hasintroduced
asuigeneris distinction between realestate agents andrealestate agencies, which arenotincluded
neither inprovisional CPC, CPC Rev.1 northeSecretariat 'slist,andanother Member, again ona
suigeneris basis, hasdistinguished between services related toproperties owned initsterritory and
services related toproperties owned abroad. Inbothcases, aswitch towards CPCRev.1 would not
affect thedistinctions made. They would betransferred assuch, while theunderlying structure isnot
modified inCPC Rev.1.
20. Inconclusion, sincecommitments havebeenundertaken withreference totheaggregated items
mentioned intheGNSclassification list,namely groups p821andp822, aswitch toCPCRev.1 would
notrequire anysubstantial rewriting ofMembers 'commitments.
E. RENTAL/LEASING SERVICES WITHOUT OPERATORS (GNS classification list,1E)
21. RelatingCPCRev.1items,withoutlossofcoverage,toprovisionalCPCitemsintheconcordance
tables seems easytorealize. Each ofthebasic items usedintheGNS classification listcorresponds
infulltooneorseveral individual items inCPCRev.1. Theonlyexception isthedivision ofthecontent
ofsubclass p75410* "Equipment rental services" between anewsubclass r73129 "Leasing orrental
services concerning other machinery andequipment without operator" andasubclass r73210 "Leasing
andrental services concerning televisions, radios, video cassette recorders andrelated equipment and
accessories" .Thismayberectified through theexclusion ofprovisional CPC subclass p75410*
"Equipment rental services" .S/CSC/W/9/Add.1
Page5
22. Another problem arises fromtheredrafting oftheexplanatory notes. Incertain instances, the
newdrafting mayhavemodified thescope oftheoriginal explanatory notes.5
23. Atotalof39Members havescheduled commitments intheRental/Leasing without Operator
sub-sector. Several ofthemhavereferred onlytopartsofCPCitems included intheGNSclassification
list,ortosuigeneris material. OneMember hasalsoincluded, under "Other", thefullCPC group
p518 "Renting services related toequipment forconstruction ordemolition ofbuildings orcivil
engineering works, withoperator" .Inanycase,theabsence ofanyimpact onthecoverage ofprovisional
CPC items should allow foradirect, unproblematic transfer.
F. OTHER BUSINESS SERVICES (GNS classification list,1F)
24. IntheGNS classification, the"Other business services" sub-sector hasaparticularly wide
coverage. Thismakes itdifficult tosummarize themodifications arising fromCPCRev.1. Theoverall
impact ofthemodifications istwofold.
25. Ontheonehand, incertain instances, avariety ofstructural changes haveprovided abetter
conceptual framework forthedescription ofparticular types ofservices. Thisisthecasewhen agroup
(three-digits item) oraclass(four-digits items) hasbeensplitintoasetofnewgroups orclasses, which
allow toidentify newconcepts: forinstance, group p867"Architectural, engineering andothertechnical
services" hasbeenbroken upintofournewcomponents: group r831"Consulting andmanagement
services" ,group r832"Architectural services andurban planning andlandscape architectural services" ,
group r833"engineering services" ,group r835"Scientific andother technical services" .6Similarly,
atfour-digit level, classp8675* "Engineering related scientific andtechnical consulting services" has
beendivided between r8351 "Geological, geophysical andother prospecting services" ,r8353 "Surface
surveying services" ,r8354 "Map making services" andr8355 "Weather forecasting andmeteorological
services" .
26. Ontheotherhand, newelements havebeenintroduced through theredrafting oftheexplanatory
notes. Inmostrespects, theyestablish anexus ofnewdetails through introducing newcontent aswell
asclarifying thedrafting oftheprevious explanatory notes. Thiscanbeseeninthefollowing instances:
- Intheexplanatory noteunder subclass r83530 "Surface surveying service" ,there is
additional reference tocollection ofdatabysatellite;
- Intheexplanatory noteunder subclass r83620 "Purchase orsaleofadvertising space
ortimeoncommission" ,theservices ofmedia-buying agencies which buymedia space
onbehalf ofadvertisers oradvertising agencies havebeenadded;
5Forinstance,thetextoftheexplanatorynoteforbothsubclassp83107 "Leasing orrental services concerning
construction machinery andequipment without operator" andthecorresponding subclass r73122 hasnotbeen
modified except fortheaddition ofnewexamples ofconstruction machinery: scaffolding without erection and
dismantling, sitehuts, etc.
6Only twoofthese groups arerelevant totheother business services sub-sector: group r831 "Consulting
andmanagement services" andgroup r835 "Scientific andother technical services" .S/CSC/W/9/Add.1
Page6
- Intheexplanatory noteunder subclass r83610 "Planning, creating andplacement
services ofadvertising" ,newspecific items havebeenintroduced, suchasplanning
(without production) ofadvertising objects orfilms andorganization ofdirect mail
advertising campaigns. Greater accuracy isprovided, including through introducing
references tothemedia tobeused, design ofads,illustrations, posters etc.,writing
ofscenarios foradvertising movies, placement inmedia. Inaddition, CPCRev.1 has
explicitlyexcludedfromthecoveragepublicrelationsservices(linkedtor83121),market
research services (linked tor83700), photography services related toadvertising (linked
tor83812), production offilmforadvertising (r96121).
- Theexplanatory noteunder subclass r85970 "Trade fairandexhibition organization
services" nowextends alsototheorganisation ofeconomics events (trade shows or
exhibitions, atregular orirregular intervals), organisation ofscientific orcultural
meetings andcongresses, supply andsetting-up ofexhibition equipment associated with
theorganisation ofexhibitions (corresponding to1Fs"Convention services" intheGNS
Classification).
27. Overall,71Membershavemadecommitmentsrelatedtothe"Otherbusinessservices"sub-sector.
36Members havedirectly usedtheGNS classification items intheirschedules (12ofthese havealso
applied inaddition asuigeneris terminology), whereas 31Members havereferred toasetofmore
detailed CPCitems supplementing theGNSclassification items (16ofthese haveincluded suigeneris
concepts). Itisworth noting thatsome ofthesuigeneris concepts arecommon toarange ofMembers,
suchasthedefinition ofadvisory andconsulting services relating toagriculture, hunting andforestry
asacomponent oftheservices incidental toagriculture, hunting andforestry.
28. Inprinciple, thecoverage ofsection 1para. FoftheGNS Classification listshould beeasily
preserved ifthere isatransferring toCPC Rev.1. Animportant exception isthecasewhere itis
necessary, toensure theswitch torev1ofaprovisional item, tocontinue tomake reference toanother
provisional item. Forinstance, thisisthecaseofprovisional CPCsubclass p87190 "Other advertising
services" corresponds totheadding upofCPC rev.1 subclass r83690 "Other advertising services"
andsubclass r83620* "Purchase orsaleofadvertising space ortime,oncommission" ,minus provisional
CPCsubclass p87110 "Sale orleasing services ofadvertising space ortime".Thiscould besymbolized
bythefollowing formula: p87190 =r83690 +r83620 -p87110. Inthose instances no"pure" switch
canoccur asthere isa"residual effect" ofCPCprovisional. These situations arerelatively frequent
inthesector of"other business services ".
___________