RESTRICTED
WORLD TRADE S/WPPS/M/5
16July1996
ORGANIZATION
(96-2856)
Working Party onProfessional Services
REPORT OFTHE MEETING HELD ON11JULY 1996
Note bytheSecretariat
Under theChairmanship ofAmbassador Saurel ofElSalvador, theWorking Party for
Professional Services helditsfifthmeeting on11July1996, theagenda forwhich wascontained in
WTO/AIR/376.
Thefirstitemontheagenda concerned thestatus ofresponses tothequestionnaire onthe
accountancy sector contained indocument S/WPPS/W/7. TheChairperson recalled thattheWorking
Partyhadearlierdecidedthatitneededupdatedinformationontheregulatorysituationintheaccountancy
sector primarily indeveloping countries inorder tocomplement thesurveys which hadbeencarried
outbytheOECD andIFAC. Responses hadbeencirculated fromCanada (S/WPPS/W/7/Add.5) (no),
Korea (S/WPPS/W/7/Add.3), Norway (S/WPPS/W/7/Add.4), South Africa (S/WPPS/W/7/Add.2)
andThailand (S/WPPS/W/7/Add.1) andwerebeing processed fromthefollowing countries: Argentina,
Australia, Barbados, Morocco, New Zealand, Philippines, Slovenia andUruguay. Anumber of
delegations,comprisingBrazil,theEC,ElSalvador,HongKong,Hungary,Japan,Mexico,Switzerland,
andtheUnited States, announced thattheirquestionnaire responses would soonbesenttotheSecretariat.
TheSecretariat appealed forresponses tobeprovided indiskette form tofacilitate processing and
analysis.
TheUNCTAD representative introduced theinformation contained indocument S/WPPS/W/8
which provided theupdated results ofUNCTAD surveys onvarious issues relating totheaccountancy
profession in37developing countries andcountries intransition. After presenting anoverview of
theresults ofUNCTAD 'swork, shedrew anumber ofgeneral conclusions regarding thesituation
indeveloping countries andcountries intransition compared withdeveloped countries. First, the
general structure oftheprofession andtheconditions forqualification andlicensing werenotdissimilar
tothose indeveloped countries although insome cases theprofessions hadnotyetdeveloped their
ownsystem ofnational examinations orsupervisory procedures. Second, however, therewereanumber
ofdeveloping countries, where theprofession wasstilltobeorganised andwhere students currently
hadtogooverseas inorder toobtain aprofessional qualification. Third, opportunities fortherecognition
offoreign qualifications tended tobemuch lesscommon indeveloping countries andcountries in
transition. Finally, although these countries seemed tobemoving inthedirection oftheprofession
inthedeveloped countries, there wasinmany cases alongwaytogoandagreat needfortechnical
assistance.
Agenda itemBconcerned theestablishment ofguidelines fortherecognition ofqualifications.
Thedelegation ofNewZealand introduced itsnon-paper onrecognition which argued thatrecognition
could occur iftheoccupation wasequivalent inboththepractitioner 'shome anddestination jurisdictions.
Under thisapproach, registration should beaccepted iftheoccupation concerned wassubstantially
thesame. Thus, mutual recognition agreements should focus onoutputs suchasthenature ofthe
occupation, rather thanoninputs suchasthequalifications ofpractitioners.S/WPPS/M/5
Page2
TheChairperson recalled thatthere hadbeenaninformal meeting oftheWorking Party on
22Maywhere itbecame clear thatparticipants haddifferent views astowhether theapproach that
should betaken wasmore related toparagraph 6ofArticle VI(Domestic Regulation) ortoArticle VII
onRecognition. TheChairperson noted thatshehadcirculated aninformal notedated 12June1996
onthisissueandhadsuggested howthegroup might wishtoproceed. Specifically, shehadsuggested
thatthere wasoverlap between theArticle VIandVIIapproaches inthesense thateachcountry had
tohavesome sortofdomestic process toprovide forverification offoreign qualifications which was
anessential partinanyrecognition process. Ifthere wassuchoverlap, itseemed feasible toenvisage
phased discussions, firstconsidering issues relating toimplementation ofArticle VI.6andthenturning
tothedevelopment ofguidelines forundertaking recognition negotiations.
Anumber ofdelegations supported theapproach ofphased discussions asproposed bythechair
withtheemphasis being onguidelines relating toArticle VII. Itwaspointed outthatArticle VI.6
obliged Members tohaveprocedures intheirhome jurisdictions inorder toverify qualifications of
foreign suppliers andinthisregard itwasdifficult toseewhattypeofguidelines could bedrawn up
bytheWorking Party. Itwasfurther pointed outthatitwasnownecessary toenterintothesubstance
ofdrawing upguidelines which would actasakindof"roadmap" forcountries, using thesubmissions
thathadbeentabled. Itwasimportant toensure thattheguidelines remained flexible andnotoverly
prescriptive given thewidevariation between regulatory systems andcircumstances between member
countries. Examples given bydelegations showed thatthere were anumber ofsubstantive elements
which needed tobecovered byanyguidelines forrecognition. These included: thequalification in
thehome jurisdiction ofthepractitioner thatwould beeligible forrecognition; assessment ofthe
qualification inthehostcountry toestablish which oftherequirements werealready met;supplementary
requirements bythehostcountry tomake upforanyshortcomings identified intheassessment; and
definition ofrights oftheforeign practitioner inthehostcountry e.g.access toaprofessional title,
righttopractice certain regulated activities, etc.
Withregard toitemC-Other issues proposed forfurther consideration aslisted intheinformal
noteof24January 1996-theChairperson saidthatanimportant development inthework oftheGroup
wastheagreement onanon-exhaustive listofpriority issues which defined insome detail thepolicy
areas formany ofwhich theWorking Party wasdeveloping multilateral disciplines, including the
guidelines forrecognition ofqualifications. Another issue wastheuseofinternational accounting
standards which hadbeendiscussed before themeeting attheseminar onthework being carried out
bythree international standard-setting organizations: International Accounting Standards Committee
(IASC), International Auditing Practices Committee (IAPC), International Organisation ofSecurities
Commissions (IOSCO).
Another issue wasthedevelopment ofmultilateral disciplines onlicensing requirements and
licensing procedures. Attheinformal meeting of22May, Members began toaddress thekeysubstantive
question onhowtodetermine therulesthatshould bedrawn upinorder tofulfilthatpartofthemandate
which called fortheestablishment ofdisciplines toensure thatlicensing requirements didnotbecome
unnecessary tradebarriers. Thediscussion demonstrated thatfurther analysis oftheissues isrequired
and,inresponse torequests fromMembers, theSecretariat waspreparing afurther paper toanalyze
theapplicabilityoftheconceptsandapproachestakenintheTechnicalBarrierstoTrade(TBT)Agreement
inparticular astheyapplied tolicensing requirements intheaccounting sector. Similarly, theSecretariat
wasanalysing therelevance ofdisciplines andprocedures intheImport Licensing Agreement toensure
thatlicensing procedures intheaccounting sector didnotinthemselves restrict trade. TheSecretariat
intended tocirculate thepaper before theendofthemonth. Asnocomments were made, the
Chairperson passed ontothenextitem.S/WPPS/M/5
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ItemDconcerned thereport oftheWorking Party fortheSingapore ministerial conference .
Regarding thepossible contents ofthereport there wasagreement thatitshould justcontain afactual
account oftheprogress made inthediscussions oftheaccountancy sector sofar.
Regarding what might besaidinthereport about future work anumber ofdifferent views
were expressed. Onedelegation suggested thattheWorking Party should complete itswork on
accountancy bytheendof1997 although others warned against raising unrealistic hopes bysetting
rigid deadlines andemphasised theneedforfurther consultations toclarify thequestion ofhowto
proceed. There weresuggestions thatthereport should alsoinclude areference tostarting work on
other professional services, suchasarchitecture, engineering andlaw. Thereport could alsoaddress
thedevelopment ofgeneric rules which would apply horizontally: theoutlines ofsuchwork were
discernible inthediscussions regarding (a)theapplicability ofahorizontal approach tolicensing
requirementsandotherdomesticrequirementslistedinArticleVI.4and(b)thedevelopmentofguidelines
forrecognition ofqualifications.
Itwasfurther suggested thatthereport could contain areference torecognizing theeconomic
benefits ofdeveloping international accounting standards andtosupporting thework being carried
outinother international foratodevelop acoresetofstandards forthepreparation offinancial
statements.
Following thediscussion, theChairperson observed thattheSecretariat needed considerably
more guidance onthecontents ofsuchareport inorder tobeabletocirculate adraft which could
bethebasisforfurther discussion. Inparticular, more discussion wasneeded onwhether thegroup
wished tousetheSingapore meeting inorder torecommend thatministers givemore direction and
impetus tothework. Some delegations saidthatitwould bepreferable iftheSecretariat would first
draftthefactual partofthereport andthatdelegations would thenreflect on,anddiscuss, possible
recommendations toministers concerning thequestion ofhowtocarry forward thegroup 'swork.
Itwasagreed therefore thattheSecretariat would draftandcirculate before thenextmeeting
afactual report oftheprogress made intheWorking Party. Given theinterest ofanumber of
delegations inseeing abrieflistoftheother issues thathadbeendebated atthemeeting, itwasalso
suggested thattheSecretariat listother issues relating tothepossible elements ofthereport, namely:
plans toexamine otherprofessional services; thedevelopment ofgeneric rulesapplicable toprofessional
andother services sectors; areference toefforts underway inother foratodevelop international
accounting standards; andatimetable forfuture work intheWorking Party.
Inorder toorganize thediscussions, itwasagreed thattwofurther meetings oftheWorking
Party would takeplace before November: onSeptember 23andOctober 17withaviewtofinalizing
thereport forSingapore andforwarding ittotheCouncil forTrade inServices. Before closing the
meeting, theChairperson suggested thatregarding theparticipation ofobserver organizations theUN,
UNCTAD, theWorld BankandtheOECD should beinvited asobservers within thecurrent framework
ofadhocprocedures which were being usedbytheGeneral Council anditssubsidiary bodies and
itwassoagreed.