RESTRICTED  WORLD TRADE  
ORGANIZATION  S/WPGR/W/43/Rev.1 
3 July 2003 
 (03-3552) 
Working Party on GATS Rules   
 
 
- DRAFT - 
 
UPDATE TO THE ANNUAL REPORT OF 2002 OF THE WORKING PARTY  
ON GATS RULES TO THE COUNCI L FOR TRADE IN SERVICES (2003) 
 
Revision  
  
1. Since its last annual report
1, the Working Party on GATS Rules held 3 formal meetings.2  In 
each meeting, the Working Party considered the three negotiating mandates it is entrusted with:  
emergency safeguard measures (Article X);  governme nt procurement (Article  XIII);  and subsidies 
(Article XV).  It also held various informal meetings on the three items. 
I. NEGOTIATIONS ON EMERGENCY SAFEGUARD MEASURES UNDER GATS 
ARTICLE X 
2. Members continued their examination of various  themes as they had emerged from previous 
meetings and submissions.  Issues under examinati on included desirability and feasibility of an 
emergency safeguard mechanism (ESM), the inte rpretation of the GATS Article X mandate, modal 
application, alleged  safeguard-type provisions contained in  economic integration agreements, in 
Members' schedules  and in WTO instruments, as well as S& D.  Members also discussed possible 
common elements of various typ es of ESM, based on the Synopsis3 and on the Overview of the 
Synopsis,4 and process-related issues such as transparen cy, notification, consultation, surveillance 
provisions and expedited dis pute settlement proceedings. 
3. Many delegations called for the Working Party to  discuss actual or hypothetical situations 
where a safeguard action might be needed, and which form action could take, as a prerequisite  as an 
important aspect  for further progress in the negotiations.  One such  example was presented at the 
February meeting by Thailand, on behalf of th e ASEAN Members.  The Working Party is still 
examining whether this example can be considered  as a possible situation justifying an ESM.  Other 
delegations suggested that discussion on alleged existing safeguard-type provisions applying to 
services should continue.  
4. As requested by Members the Secretariat prepared three background documents: (i) a 
Compilation of References Made by Dele gations to Safeguard-Type Provisions5;  (ii) a note on Core 
Elements Contained in Members' Proposals – Overview of the Synopsis6;  and (ii) a note on 
Safeguard-Type Provisions in Economic Integration Agreements7. 
                                                      
1 S/WPGR/8, 5 December 2002. 
2 Meetings of 3 December 2002, 25 Fe bruary 2003 and 13-14 May 2003.. 
3 JOB(01)/122 + Add.1. 
4 JOB(02)/200 and --/Rev.1. 
5 JOB(03)/20. 
6 JOB(02)/200 and --/Rev.1. 
7 S/WPGR/W/4/Add.1. S/WPGR/W/43/Rev.1 
Page 2  
 
5. On 14 March 2003, the former Chairperson of the Working Party, Mr. Thomas Chan, 
circulated under his responsibility a Report on Negotiations on Emergency Safeguard Measures
8, as 
mandated in the work programme on ESM adopted on 22 July 2002.9  Delegations had a first 
exchange of views on this Report during an informal meeting held on 20 April.  At the formal meeting 
of 13-14 May, delegations  the Working Party  gave further consideration to the Report.  Comments 
made by delegations are recorded in the minutes of this meeting.10  At the same meeting, the 
European Communities introduced a written contribution on  Scope for Emergency Safeguard 
Measures (ESM) in the GATS.11  A number of delegations welcom ed this contribution.  Other 
delegations expressed different views.    
II. NEGOTIATIONS ON GOVERNMENT PROCUREMENT UNDER GATS 
ARTICLE XIII 
6. Discussions  continued on the Communication from the European Communities and their 
Member States on government procurement of services.12  In May, the European Communities 
introduced a new contribution proposing a legal framework for negotiations on  government 
procurement in services.13 At the same time, several delegations maintained the view that Article XIII 
excludes from the negotiations the obligations of most-favoured-nation treatment, market access and 
national treatment, whilst others underlined that the mandate of Article XIII:2 included no such 
limitation.  
7. Members stressed the need to avoid  noted the possibility of  duplication between the WPGR 
and the Working Group on Transparency in Govern ment Procurement (WGTGP).  The WPGR should 
be aware of the relevant issues raised in the WGTGP, and information exchanges between the two 
Groups should be allowed for on a flexible basis. 
8. At the same time, several delegations maintained the view that Article XIII excludes from the 
negotiations the obligations of most -favoured -nation treatment, market access and national treatment.  
8. On 24 June 2003, the WTO Secretariat issued a note prepared at the request of Members, 
presenting an Overview of Government Procurement-Rela ted Provisions in Economic Integration 
Agreements.  
9.  Mr. Santiago Urbina, Chairperson of the Working Party, informed that, as mandated in the 
work programme on government procurement adopted on 22 July 2002, he would submit a note by 
30 June 2003 under his responsibility to report on the progress of work.14On 30 June 2003, Mr. 
Santiago Urbina, Chairperson of the Working Pa rty, submitted a note under his responsibility to 
report on the progress of work, as mandated in th e work programme on government procurement 
adopted on 22 July 2002. 15 
III. NEGOTIATIONS ON SUBSIDIES UNDER GATS ARTICLE XV 
10. The delegation of Poland circulated an informal contribution containing thoughts on the 
definition of subsidies in services.16  Two main issues emerged from the discussion: (i) the scope of a 
generic definition of subsidies in the services cont ext, including the relevance of the definition 
contained in the SCM Agreement; and (ii) the me aning of the concept of trade-distortive or 
"actionable" subsidies.  Severa l delegations recalled the mandate in GATS Article XV to exchange 
information concerning all subsidies related to trad e in services that they provide to their domestic 
                                                      
8 S/WPGR/9. 
9 S/WPGR/7. 
10 S/WPGR/M/42.  
11 S/WPGR/W/41. 
12 S/WPGR/W/39. 
13 S/WPGR/W/42. 
14 S/WPGR/7, paragraph 5.  
15 S/WPGR/11.  
16 JOB(02)207.  S/WPGR/W/43/Rev.1 
 Page 3 
 
 
service suppliers.  Members could obtain this in formation from different sources, including 
intergovernmental organizations.   The need for more information on services subsidies from Members 
as well as other sources such as other intergovernme ntal organizations was also stressed by some 
delegations.  
11. On 17 March 2003, the Chairperson circulated a revised Checklist on Subsidies ,17 as had been 
agreed at the February meeting.18  This new revision, prepared again under the responsibility of the 
Chairperson, includes two changes.  First, the question of categorization of subsidies has been 
explicitly spelled out under the first point, i.e. defin ition of a subsidy in trade in services.  Second, a 
new issue has been added, relating to concepts rele vant to what should be regarded as trade-distortive 
subsidies.  The Checklist  is without prejudice to the position of any Member. 
12. Mr. Santiago Urbina, Chairperson of the Work ing Party, informed that, as mandated in the 
work programme on subsidies adopted on 22 July 2002, he would submit a note by 30  June 2003 
under his responsibility to report on the progress of work . On 30 June 2003, Mr. Santiago Urbina, 
Chairperson of the Working Party, submitted a not e under his responsibility to report on the progress 
of work, as mandated in the work programme on subsidies adopted on 22 July 2002. 19 
__________ 
 
 
 
                                                      
17 JOB(03)/57. 
18 The first version of the Checklist had been circulated as Job No. 4519, 17 July 2000. 
19 S/WPGR/10 .