RESTRICTED
WORLD TRADE S/CSC/W/11
9October 1997
ORGANIZATION(97-4331)
Committee onSpecific Commitments
ABRIEF ANALYSIS OFCASES OF"ADHOC SCHEDULING"
INPAST SERVICES NEGOTIATIONS
Note bytheSecretariat
1. Atthelastmeeting oftheCommittee onSpecific Commitments, on16June1997, there was
awidely shared viewthattheCentral Product Classification wasingeneral agoodbasisforscheduling
butthatthere maybecases where itwould benecessary todepart from it.Thisnotedescribes the
examples ofadhocscheduling thathavealready occurred during thecourse ofthenegotiations. This
mayhelptodetermine thereasons whyitwasfeltnecessary toadopt specific scheduling techniques
inparticular sectors andmaybearlessons forthefuture.
2. There arefourcases where adhocscheduling provisions werecommonly agreed (asindividual
ad-hoc scheduling byonecountry ofaspecific sector, ofwhich numerous examples exist, isnotour
subject here). These were: theairtransport annex, thescheduling oftelecommunications, thefinancial
services annex andthedraftmodel schedule inmaritime transport.
I. THE CASE OFAIRTRANSPORT:
3. When theSecretariat made itsfirstattempt todraft aclassification (MTN.GNS/W/50,
13April 1989"Reference listofsectors, notebySecretariat") airtransport wasnotseparately classified
butwasjoined withseaandlandtransport inaninverted classification where thethree-digit items were
freight transportation/passenger transportation/charter services andauxiliary services, andthefour-
digitsubitems were: air/ocean/rail/road/and internal waterways.
4. Thespecificity ofairtransport withregard toclassification wasnoted forthefirsttimeduring
the"sectoral testing exercise" ofAugust 1990(GNS/TRANS/3, 8August 1990). During thismeeting
several delegations pointed outthattheimplementation oftheprinciples andrulesagreed attheMontreal
Ministerial meeting (thatistransparency, progressive liberalization, national treatment, MFN/non-
discrimination,marketaccess,increasingparticipationofdevelopingcountries,safeguardsandexceptions
andregulatory situation) were certainly easier toundertake with regards tosoftrights/doing
business/ancillary services thantohardrights, while underlining atthesame timethedifficulty of
defining thetwoconcepts. Inconclusion theChairman stated "Anumber aofdelegations feltthat
itshould bepossible toinclude certain lesscontroversial issues -theso-called softrights -inthe
multilateral agreement, leaving themore difficult issues -theso-called hardrights -aside atthisstage.
Concern hadalsobeenexpressed overthedifficulties oflisting hardrights andsoftrights. Inthis
connection apossible approach wastoavoid terms suchassoftrights andhardrights andinstead work
outtwoseparate listsofitems. Typically alldomestic andinternational operating rights would beon
thefirstlist.Thesecond would contain items which prima faciemight beincluded inamultilateral
agreement.Exampleswouldbecomputerreservationssystems(CRS),commercialsalesanddistribution,
fundtransfers andaircraft maintenance".S/CSC/W/11
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5. Except forfundtransfers, theabove listing reflects thedistinction actually made intheair
transport annex between hardandsoftrights, though during thedrafting oftheAnnex thepossible
application oftheagreement toownership, groundhanding andeven inparttotraffic rights was
discussed1.Thethree sub-sectors covered bytheGATS them appear inthedraft final actof
20December 1991, buttheirdefinitions werefurther refined during informal negotiations in1993.
6. They could notbedefined byreference totheCPCsincetheidentification ofthethreeservices
intheCPCisverydeficient. Computer reservation services, forexample, donotappear assuchin
theCPC. Repair andmaintenance aircraft appears onlyaspartofawider item, CPC8868, "repair
services ofothertransport equipment onafeeorcontract basis"which hasnoprecise definition. Finally
"selling andmarketing ofaircraft transport services" alsodonotappear asaservice assuchinthe
CPC: thedistribution items oftheCPCdonotcontain positions forthesaleofservices. Onecould
argue thatselling andmarketing isincluded intheitemCPC 731"passenger transportation byair"
butthatwould beimplicit. Furthermore aspecific definition wasneeded forselling andmarketing
asthose activities arelimited totheaircarrier concerned alone (cfpara6(b)oftheannex "...means
opportunities fortheaircarrier concerned...").
7. Inthecaseofairtransport thedeparture fromtheCPCispartially necessitated bytheinability
oftheCPCtocapture agiven scope. Butthisgiven scope stems fromasectoral exception (traffic rights)
which isunique andmaybeprovisional, asregular reviews areforeseen.
II. THE CASE OFTELECOMMUNICATIONS:
8. Inthecaseoftelecommunications, itcould beargued thattwosuccessive departures from
CPC haveoccurred. ThefirstwasMTN.GNS/W/120, where thecorrespondence between W/120
items (a)to(o)withtheCPCitems isfarfrom being exact, andthesecond wastheinformal "Draft
Model Schedule ofCommitments onBasic Telecommunications" (JobNo.1311) which wasdrafted
inthefallof1993 andreissued intheNGBT inApril 1995.
9. Theelaboration ofthetelecommunications partofW/120 wasatechnical process andnota
politicalandnegotiatingone.Ittooktheformofindividualtechnicalremarksandsuggestionsaddressed
bydelegations totheSecretariat andthatiswhyonecannot tracethegenesis ofthisnomenclature in
theofficial documents oftheUruguay Round.
10. Thelevelchosen forthecorrespondence was,except inonecase, fourdigits, which reduces
thenumber ofCPCpositions available toseven (7521, 7522, 7523, 7524, 7525, 7526, 7529). Among
those seven positions onlyfour(7521, 7522, 7523 and7529) were used. Among thefifteen W/120
items a.too.onlytwoseem tohave a"full" correspondence withCPC: a."voice telephony"
correspondingtoCPC7521ande."telegraphservices"correspondingtoCPC7522.However,CPC7521
islimited topublic voice telephony whereas thenegotiators didnotviewvoice telephony limited to
public service. Similarly, theCPCdefinition of7522 appears wider thanjusttelegraph services. The
remaining thirteen W/120 items areputincorrespondence withpartsofCPCitems (thatisthemeaning
ofthetwoasterisks); parts which arenotclearly defined. Furthermore CPC item7523 "dataand
message transmission services "isputincorrespondence withnineW/120 items.
11. From thisdescription ofthecorrespondence itisclearthattelecom experts considered theCPC
breakdownasinadequate,excessivelyaggregatedandsubdividedinanunusablemanner.Theytherefore
delineated suigeneris subsectors thatwere closer totheeconomic andregulatory reality.
1(cfMTN/GNS/TRANS/W/4, andMTN/GNS/TRANS/4)S/CSC/W/11
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12. Theprocess wastaken further intheelaboration ofthemodel schedule ofcommitments for
basic telecom inOctober-November 1993. Inthiscasethenegotiating group decided thatforbasic
telecommunications -thatisforitems a.tog.plusrelevant listings under o.ofW/120, -"categories"
could beadded inthefirstcolumn inorder tosegment theitems offered andtobeableinsome instances
tooffer apartofoneitem. Those categories were based onfourdistinctions: (i)local/long
distance/international services; (ii)Wire based/radio based; (iii)onaresale basis/facilities based;
(iv)forpublicuse/fornonpublicuse.Furtherprecisionthatcommitmentswouldbe"technologyneutral"
(unless otherwise indicated) wasintroduced during thecourse ofthebasic telecommunications
negotiations inaninformal noteoftheChairman dated 16October 1996ontechniques forscheduling
satellites services andinanoteoftheChairman dated 16January 1997 ("Note forScheduling Basic
Telecom Services Commitments").
13. InthecaseoftelecomW/120alreadydepartedfromCPC.W/120subsectorswereeithergrouped
differently and/or weremore disaggregated. Further disaggregation enabled schedules tofollow more
closely thevarious regulatory regimes andthevarious levels ofliberalization.
III. THE CASE OFFINANCIAL SERVICES:
14. Thecaseoffinancial services issomewhat similar totelecoms. There havebeentwosuccessive
departures form CPC, thefirstduring theelaboration ofW/120 inJuly1991, andthesecond, less
substantial, during theelaboration ofthefinancial services annex towards December 1991. Among
76schedules ofcommitments onfinancial services (counting EUasone)asof30June1996, 19have
followed theclassification oftheannex and33theclassification ofGNS/W/120.
15. InGNS/W/120 thedifferences withCPCwithregard toinsurance arethefollowing: accident
andhealth insurance areincluded in"life" insurance instead of"non life"insurance asintheCPC;
reinsurance andretrocession, which werenotspecifically mentioned inCPCandwerepartofaresidual
category "other insurance services n.e.c" havebeensingled out;and"broking andagency services"
and"services auxiliary toinsurance" havebeen regrouped withinsurance services.
16. Theannex goesonestepfurther inthedisaggregation of"services auxiliary toinsurance" in
W/120 byseparating "intermediation suchasbrokerage andagency" fromtheauxiliary services and
byspecifying explicitly some ofthose auxiliary services: consultancy, actuarial, riskassessment and
claim settlement services.
17. Inbanking andother financial services, W/120 introduces amuch more detailed breakdown
thantheCPC. Forinstance CPC 81339 "other services auxiliary tofinancial information n.e.c"is
putincorrespondence withseven different items orsubitems inW/120. Furthermore insome cases
therelationship between theCPCcodes andtheW/120 items isnotclear. Finally, theannex isonly
marginally different from W/120 inbanking andother financial services.
18. Thisstateofaffairs ininsurance andbanking canbeseenasareflection oftheneedforfinancial
services negotiators toemploy amuch more disaggregated classification which theCPC could not
provide.S/CSC/W/11
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IV. THE CASE OFMARITIME TRANSPORT:
19. The"draft schedule onmaritime transport", which emerged inDecember 1992, wasfurther
developed in1994. Aversion wasissued inApril 1996 which included multimodal transport. This
draftschedule isclearly adeparture from CPC withsuigeneris definitions although itquotes CPC
items intwoinstances ("international transport "CPC7211and7212and"storage andwarehousing "
CPC742). Therestofthemaritime auxiliary services donothaveareference toCPCandhaveaproper
definition contained inanote.
20. Theportservices listed asbeing "available tointernational maritime transport suppliers on
reasonable andnon-discriminatory terms andconditions" intheadditional commitments column do
notrefertotheCPC. However, sixofthenineitems inthislisthaveanequivalent intheCPCand
one-emergency repair facilities -hasapartial equivalent intheCPC. They donothavespecific
definitions.
21. Theclassification ofthemodel schedule ismore extensive asitcovers subsectors absent from
ornotexplicitly quoted intheCPC. These include customs clearance services, container depot services
andmaritime agency services formaritime auxiliary services andport'scaptain services, provisioning
fuelling andwatering services andshorebased operational services essential toshipoperations, including
communications, water andelectric supplies forportservices. Tobecomplete onemustnotethatthe
model schedule omits therental ofvessels withcrew(CPC 7213) which ispartofmaritime transport
inW/120.
22. Thereason forthedeparture fromCPChereisclearly theneedtocover allservices effectively
available thatwerenotcompletely listed orthatwerelisted butdefined inawaythatwould havecreated
problems (cargo handling including dockers 'activities forinstance). Theneedtoinclude multimodal
transport wasanother reason fordeparture fromtheCPC, where itdoesnotappear. Precision, adequacy
andflexibility aretherefore inthiscasethethree main reasons fornothaving retained theCPC.