. /.  WORLD TRADE  
ORGANIZATION  S/WPGR/14 
25 November 2004 
 (04-5143) 
Working Party on GATS Rules   
  
 
ANNUAL REPORT OF THE WORKING PARTY ON GATS RULES  
TO THE COUNCIL FOR TRADE IN SERVICES (2004) 
 
 1. Since its annual report for 2003, the Worki ng Party on GATS Rules held five formal 
meetings: on 2 December 2003, on 10 and 15 Marc h 2004, on 24 March 2004, on 23 June 2004, and 
on 20 September 2004.
1  While the meeting of 10 and 15 March was specifically devoted to the issue 
of the deadline for the negotiations under Article X, the three negotiating mandates the Working Party 
is entrusted with were put on the agenda of th e other meetings: emergency safeguard measures 
(Article X), government procurement (Article XIII),  and subsidies (Article XV).  The Working Party 
also held a number of informal meetings. 
I. NEGOTIATIONS ON EMERGENCY SAFEGUARD MEASURES UNDER GATS 
ARTICLE X 
2. At the meeting of December 2003, discussions  focused on the hypothetical example of an 
emergency situation provided by a group of delegations from ASEAN2, as well as on a non-paper 
earlier submitted by the delegation of Switzerland wh ich analyzed avenues available under a "no ESM 
scenario".  At the meeting of 10 and 15 March, the Working Party agreed on the content of a draft 
decision on the extension of the negotiati ons pursuant to the mandate under Article X3, which was 
later adopted by the Coun cil for Trade in Services.4  In subsequent meetings, delegations discussed an 
informal communication from the group of ASEAN Members (JOB(04)/4), which provided further thoughts on an emergency safeguard mechanism.  Members expressed divergent views on various 
aspects, including regarding desirability and feasib ility.  To facilitate discussions, the Chairperson 
compiled a list of main questions raised (JOB(04)/ 49).  Focal issues of interest included situations 
justifying a safeguard, link to progressive liberaliz ation, the concept of limited window, domestic 
industry and acquired rights, injury  determination, applicable me asures and modal issues, duration 
and compensation, surveillance, a nd special and differential treatment .
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II. NEGOTIATIONS ON GOVERNMENT PROCUREMENT UNDER GATS 
ARTICLE XIII 
3. At the meetings of December 2003 and March 2004, dele gations continued their discussion of 
an earlier communication from the European Comm unities on a proposed framework for government 
procurement of services under the GATS (S/WPGR/W/ 42).  They also considered an informal 
communication from Singapore (JOB(03)/216), which listed a number of issues and questions for 
further discussion in the light of the proposal by th e European Communities.  At the meetings of June 
                                                      
1 Reports of these meetings are contained in documents S/WPGR/M/45, S/WPGR/M/46 (and corr.1), 
S/WPGR/M/47, S/WPGR/M/48 and S/WPGR/M/49.  They sh ould be read in conjunction with this report.  
2 Brunei Darussalam, Indonesia, Malaysia, Myanmar, the Philippines and Thailand.    
3 As reflected in S/C/W/236. 
4 As reflected in S/L/159. 
5 Discussions on emergency safeguard measures are re flected in paragraphs 5-22 of S/WPGR/M/45, in 
S/WPGR/M/46 and S/WPGR/M/46/Corr.1, paragraphs 2-38 of S/WPGR/M/47, paragraphs 46-47 of 
S/WPGR/M/48, and paragraphs 39-58 of S/WPGR/M/49.   S/WPGR/14 
Page 2  
 
 and September 2004, discussions focused on a ne w communication from the European Communities 
(S/WPGR/W/48), which provided examples of how commitments and MFN exemptions relating to 
government procurement could be incorporated in  the GATS.  The delegation of Hong Kong, China 
circulated an informal communication (JOB(04)/130) , which listed questions relating to the proposal 
from the European Communities.   Many questions and issues were raised, including the application 
of the MFN obligation, the relationship to the GP A, modal application, scheduling approaches, the 
possibility of distinguishing between goods and services,  link to development, and procedural rules.  
As requested, the Secretariat prepared a Note on Government Procurement-Related Provisions in 
Economic Integration Agreements (S/WPGR/W/49).  
4. A number of delegations continue d to reiterate that, in their view, the negotiating mandate 
under Article XIII did not entail market access issues, while others thought that these were covered.  
Some delegations drew attention to  the General Council's decision, in the July Package, that there be 
no negotiations on the Singapore issue of transparency in government procurement, while others pointed out that the July Package also called on Me mbers to intensify efforts to conclude the rule-
making negotiations, includi ng those on Article XIII.
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III. NEGOTIATIONS ON SUBSIDIES UNDER ARTICLE XV OF THE GATS 
5. Delegations first focused on an informal communication from Chile (JOB(03)/218), which 
provided anonymous examples of subsidies that might distort trade in services.  Delegations tended to 
concentrate on the first example, which raised is sues relating to export subsidies.  Members also 
discussed an informal communication from the dele gation of Chinese Taipei on the definition of 
subsidies in services (JOB(04)/78).  At the l ast meeting, discussions focused on an informal 
communication from the delegation of Hong Kong, China that put forward some thoughts on the 
possible way forward on aspects such as the informat ion exchange, other sources of information about 
subsidies, the definition of subsidy, and trade dist ortion (JOB(04)/127).  Noting the lack of progress in 
that area, some delegations called for a target date to be set for the exchange of information pursuant 
to Article XV, while others raised doubts about the pr ecise meaning of Article XV in that regard.  The 
importance of working on a definition of subsidy was stressed, as well as the need for discussing 
concrete negotiating proposals.  It was also recommended to address different aspects of the negotiations in tandem.  As requested, the Secretar iat produced four Notes, which were subsequently 
discussed: Overview of Subsidy Disciplines Relating to Trade in Services in Economic Integration 
Agreements  (S/WPGR/W/46), List of Publications from Inte rnational Organizations Relating to 
Subsidies in Services  (S/WPGR/W/47), Subsidies for Services Sectors: Information Contained in 
WTO Trade Policy Reviews  (S/WPGR/W/25/Add.4), and Limitations in Members' Schedules Relating 
to Subsidies  (S/WPGR/W/13/Add.2) . 
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6 The discussions on government procurement are reflected in paragraphs 23-33 of S/WPGR/M/45, 
paragraphs 39-53 of S/WPGR/M/47, paragraphs 26-45 of S/WPGR/M/48 and paragraphs 2-38 of S/WPGR/M/49. 
7 The discussions on subsidies are reflected in paragraphs 34-52 of S/WPGR/M/45, paragraphs 54-80 
of S/WPGR/M/47, paragraphs 5-25 of S/WPGR/M/48, and paragraphs 59-80 of S/WPGR/M/49.