One interesting part of the recent China - Publications panel report was the discussion of technological change and the timing of GATS commitments. The specific interpretive question where this arose was the following: whether China's GATS commitment on "sound recording distribution services" in Sector 2.D, covering Audiovisual Services, "extends to the supply of such services through the delivery of content to the consumer 'electronically,' and not embedded in a physical medium such as a CD or DVD." The U.S. viewed the inscription "sound recording distribution services" in Sector 2.D. as a commitment on the distribution of recorded sound, "whether as a physical or non-physical product." By contrast, China contended that its commitment under "sound recording distribution services" "covers the distribution of sound recordings only as a physical product."
In the context of looking at "supplementary means of interpretation" pursuant to Vienna Convention Article 32 in relation to this issue, the Panel considered "the circumstances of the conclusion of China's Protocol of Accession annexing China's Schedule to the GATS, in particular evidence of the existence at that time of distribution of sound recordings in non-physical form." That is, it looked at whether sound recordings were being distributed in electronic form at the time China's WTO accession was concluded. The key aspects of its reasoning were as follows:
7.1235 China argues that the electronic distribution of sound recordings as an established business and the legal framework for such business emerged only after the negotiation of its GATS Schedule and its accession to the WTO. According to China, this was part of the circumstances of the conclusion of its GATS Schedule that have to be taken into account when interpreting its commitment on "sound recording distribution services".
...
7.1237 The Panel considers that, in seeking to confirm the "common intention of Members" with respect to a commitment in a GATS Schedule, evidence on the technical feasibility or commercial reality of a service at the time of the service commitment may constitute circumstances relevant to the interpretation of its scope under Article 32 of the Vienna Convention. This is particularly true where, like China's entry on "sound recording distribution services", the commitment is not explicitly linked to a well-defined system of services classification, such as the CPC. At the same time, the significance of any evidence of lack of technical feasibility or absence of commercial reality of the service at the time of the service commitment would need to be carefully evaluated. We consider therefore that any evidence that sound recordings delivered in non-physical form were not, unlike today, technically possible or commercially practiced at the time China's Schedule was negotiated might, in principle, be relevant as a supplementary means of interpretation with respect to the scope of that commitment.
...
7.1239 ... China's Accession Protocol, including its GATS commitments, contains the terms of accession agreed between China and the WTO, and reflects the common intention of China and the WTO. This common intention was formed when the final text of the Protocol was approved by the WTO on 10 November 2001 and was accepted by China on 11 November 2001....
7.1242 ... the evidence presented by the parties suggests that the electronic distribution of music had become a technical possibility and commercial reality, albeit limited, by 1998, and in any case before the entry into force of China's GATS Schedule following its accession to the WTO on 11 December 2001.
...
7.1246 In sum, the record indicates that the electronic distribution of sound recordings had become a commercial reality in many markets before China's accession to the WTO. China was aware of this fact. The domestic legal framework for the electronic distribution of sound recordings in China, to the extent that this is relevant for our interpretation, was under consideration in China from as far back as 1998, although put in place only in 2001. China had clearly taken note of, and was altering its domestic law to take into account the commercial reality of electronic distribution of sound recordings before its accession to the WTO in 2001.
7.1247 We find therefore that the electronic distribution of sound recordings was technically feasible and a commercial reality as early as 1998 and, in any case, before China's accession to the WTO in December 2001. We are therefore not persuaded that the meaning of the phrase "sound recording distribution services" cannot extend to the distribution of sound recordings in non-physical form, for the reason that negotiators of China's GATS Schedule and, more broadly, WTO Members, had at the time no conception of the technical or commercial viability of this form of distribution.
In essence, the Panel's finding was that electronic distribution was well-established at the time China made its commitments on "sound recording distribution services," and thus it is covered by those commitments.
One implication of the Panel's finding seems to be that as a result of changes in technology, different Members may have different GATS obligations, even where the terms of their commitments are identical, depending on the date on which the commitments were made. In particular, countries who negotiated their GATS commitments during the Uruguay Round (which most Members did) could have different obligations than China and other recently acceded Members with regard to certain kinds of services, despite having the same language in their commitments.
