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Foreword by the WTO Director-General
Trade is sometimes viewed as an economic activity that only favours larger companies. Certainly it is undeniable that trading internationally is often much more costly and difficult for micro small and mediumsized enterprises (SMEs). The smaller the business the bigger the barriers can seem.
Conclusions
Micro firms and SMEs are heterogeneous by nature ranging from small producers of non-tradable services to born-global suppliers of digital products from lowproductivity farmers to producers of fine specialty crops and from informal tailor shops to formal garment assembly factories.
Covered or not Covered: That is the Question
The GATS does not offer a definition of "services" but services need to be identified and classified for the operation of the Agreement especially for the scheduling of specific commitments on market access and national treatment. There is no obligation on WTO Members to use any particular classification system in undertaking commitments. Nevertheless an informal document produced for the services negotiation during the Uruguay Round the Services Sectoral Classification List (W/120) was used and continues to be used as the principal guiding classification system not only in the WTO but also in bilateral and plurilateral services trade negotiations outside of the WTO. WTO jurisprudence has also noted the role of W/120 in the determination of sectoral coverage of GATS commitments. However services classification does not receive enough attention it deserves. This paper attempts to make contribution by providing an overview of services classification and highlighting its relevance to both trade negotiations and WTO dispute settlement. It consists of four sections. Section I reviews how a services classification system was introduced into the multilateral trading system and describes the main features of W120. Section II takes a closer look at some aspects of the classification system drawing attention to challenges in its application which arise from inter alia services with multiple end-uses overlaps between sectors and the issue of "new services". Section III considers the implications of classification on GATS commitments by examining a number of WTO dispute settlement cases. Section IV concludes. In conclusion the paper underlines the importance of services classification in assisting governments in clearly and accurately undertaking commitments. It also notes that WTO Members have taken or suggested various pragmatic approaches to addressing challenges in the application of the current services classification system. The proposed approaches again highlight the role of classification in ensuring the clarity certainty and predictability of specific commitments in services.
Acknowledgements
Acknowledgements are due to the International Civil Aviation Organization the International Labour Organization the International Monetary Fund the International Road Federation the International Telecommunications Union the International Trade Centre the International Union of Railways the Organisation for Economic Co-operation and Development the Statistical Office of the European Communities Swiss Re the United Nations Conference on Trade and Development the United Nations Statistics Division the United Nations Economic Commission for Europe the World Bank Containerisation International (through the United Nations Conference on Trade and Development) Netcraft (through the World Bank) and Standard’s and Poor (through the World Bank). The assistance of all these organizations in supplying statistics as well as other information has greatly facilitated the work of the WTO Secretariat.