RESTRICTEDWORLD TRADE
ORGANIZATIONS/WPDR/M/20
31 March 2003
(03-1803)
Working Party on Domestic Regulation
REPORT ON THE MEETING HELD ON 24 FEBRUARY 2003
Note by the Secretariat1
1. The Working Party on Domestic Regulation (WPDR) held its twentieth meeting on
24 February.  Due to the absence of the Chairperson of the Working Party, the meeting was chaired
by the Chairperson of the Council for Trade in Services, Ambassador Mary Whelan of Ireland.  Theagenda for the meeting is contained in Airgram WTO/AIR/2032.  Before adopting the agenda, the
Chairperson noted that, under Item D of the agenda, the Working Party had invited the OECD to give
an informal presentation of their recent paper on mutual recognition agreements (MRAs).  Members
agreed to adopt the agenda.
2.  Before moving to the agenda items for consideration, the Chairperson reminded Members
that available at the back of the room was a strikeout version of the latest  Summary  of Discussions on
the Checklist of Issues for WPDR  (JOB(02)/30/Rev.4, dated 19 February 2003). To simplify
procedures, and to avoid more than one version of that document, she suggested that the Working
Party follow in the future the same procedure as used in updating Annex I of the Examples  paper, i.e.,
to indicate any substantive changes in bold type.  If that was acceptable to Members, the WorkingParty could also apply the same method to revisions of the Synthesis  paper.  Members so agreed.
A. APPOINTMENT OF THE CHAIRPERSON
3. The Chairperson noted that first item on the ag enda was the appointment of the Chairperson.
As Members were aware, the current Chair of the WPDR, Mr. Sérgio Santos from Brazil, had been
assigned a new posting, and was consequently unable to chair the meeting.   According to the rules of
procedure, the appointment of a new chairperson for the Working Party should have taken place at the
meeting based on a proposal from her as the Chairperson of the Council for Trade in Services.Unfortunately, she was still continuing consultations on the Chairmanships of the four subsidiary
bodies to the Services Council and was not yet in a position to make concrete proposals.
4. Regarding the consultations, the Chairperson gave a brief account of the state of play,
presenting her prospective nominations for the subsidiary bodies, and asking Members to contact her
at head of delegation level by 27 February if they had any comments.   The Chairperson then noted
that, according to the rules of procedure, in the absence of the chairperson the Working Party should
elect a Chairperson for the current meeting.  For that purpose, it had been suggested by some
delegations that she would chair the meeting, and she asked if that would be acceptable to the
Working Party.  Members approved the suggestion that Ambassador Whelan chair the meeting.
B. DEVELOPMENT OF REGULATORY DISCIPLINES UNDER GATS ARTICLE VI:4
1. Discussion of Concepts Relating to the Development of Disciplines
                                                     
1 This document has been prepared under the Secretariat's own responsibility and without prejudice to
the positions of Members and to their rights and obligations under the WTO.S/WPDR/M/20
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5. The Chairperson noted that the main item on the agenda was the Development of Regulatory
Disciplines under GATS Article VI:4 , with the first sub-item being the Discussion of Concepts
Relating to the Development of Disciplines .  At the previous formal meeting on 4 December 2002,
Members had a lively discussion of the measures listed in the Examples  paper, sparked by an informal
paper from China (JOB(02)/203, dated 3 December 2002).  The Chair’s summary of these informaldiscussions was contained both in the Minutes and the Summary  of Discussions.  At the informal
meeting on 28 January, further detailed comments were made on the measures in the Examples  paper
(JOB(02)/20/Rev.4, dated 21 February 2003). As before, a detailed resume of these informal
discussions was contained in Annex III of the Examples  paper.
6. The Chairperson then asked if any Members would like to make any additional comments on
the measures in the Examples  paper, on the basis of the four questions Members had earlier agreed to
address.  As with the previous meetings, Members s hould indicate if they wished their interventions to
be recorded in the Minutes;  otherwise, the examination would be on an informal basis, followed by a
summary of discussions from the Chairperson.  Members might also comment on their plans tocontribute additional regulatory examples, or to clarify existing examples, she stated.
7. The delegation of Japan, which asked for their interventions to be included in the Minutes,
noted they had submitted a basic outline for disciplines on domestic regulation (initially circulated as
a room document and subsequently distributed as JOB(03)/45, dated 3 March 2003).  The paper
presented some of the relevant elements in the GATS and the accountancy disciplines.  Japan’s
proposal was composed of a two-page basic outline for a possible Annex on Domestic Regulation, a
diagram on applicability of disciplines, and a legal text.  Japan believed that, following an extensive
discussion of regulatory examples, it would be useful to start discussing disciplines on the basis ofconcrete provisions.  As mentioned by other delegations, adjustments would need to be made to the
Accountancy Disciplines  in order to make them applicable across the board to other sectors.  Members
therefore needed to begin discussing possible disciplines on a text basis, and Japan hoped their paper
would be useful to help stimulate further thinking in this regard.
8. The delegation of Japan responded to Members’ preliminary comments on the paper.  With
respect to visa procedures, the delegation said that Japan was still contemplating the issue, and for that
reason had included para 4 in its draft proposal.  The footnote to para 4 indicated that the Annex could
be applicable to licensing requirements which served as a basis for admitting natural persons into a
Member's territory.   Japan wished to have further discussion of the issue, and was of the view that
disciplines might be applicable to visa procedures where Article VI:4 came into play.  There was also
the possibility of considering separate disciplines for Mode 4.  Regarding the issue of transparency
and competent authorities, Japan had included paras 9 and 11 in the draft.  In certain cases, thereference to Members concerned actions by competent authorities.
9. The delegation of Japan gave further responses to Members’ comments.  Regarding para 6,
Japan had thought the reference to national policy objectives, as mentioned in the GATS preamble,
was useful.  On para 10, the objective was not to impose any type of test or certification procedure on
Members, but only to understand the rationale behind specific regulatory measures.  On para 7, thedelegation agreed it was drawn from the TBT agreement, because Japan had thought that a “sunset
clause” was a useful instrument for trade liberalization.  Regarding para 8, it was not the intention to
designate a separate official journal for publication purposes.  Para 11 was a best endeavour clause
concerning the role of the competent authorities.  On the reference in para 12 and other paras to
emergency situations, Japan was not thinking of GATS Article X situations, but rather situationswhere prior notice would not be rational or would diminish the usefulness of certain measures, e.g.
disciplinary measures.  On para 13, Japan acknowledged there might be difficulties in applying public
comment procedures, and therefore included flexibility by making it a best endeavour requirement
limited to central government measures.  On para 14, the delegation was open to better wording to
provide some leeway for exceptional situations.  Para 19 was also a best endeavour provision.  Theother elements of Japan’s draft were mostly from the Accountancy Disciplines , but some, such as paraS/WPDR/M/20
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30 regarding measures taken after granting a license or qualification, as well as Section XI on
administrative guidance, were new elements.  The delegation confirmed that Japan intended the draft
Annex to be applicable to all sectors where specific commitments had been made, and not only to
commitments on professional services.  Japan had also taken note of the many questions and
comments on para 4, and hoped to deepen the discussion regarding the entry of natural persons.
10. The Chairperson thanked Japan for providing their paper, which had led to a very stimulating
discussion.   She noted that the details of the info rmal discussions would be added to Annex III of the
Examples  paper.
11. Returning to formal mode, the Chairperson  opened the floor for comments on any of the
issues covered under the Summary  of Discussions (i.e. General Issues, Transparency, Equivalence and
International Standards), or under the agenda sub-item as a whole.  No further comments were
received.
2. Development of Disciplines for Professional Services
12. The Chairperson noted that China had presented a formal paper on their domestic
consultations at the 4 December WPDR meeting, followed by oral reports from Chinese Taipei and
Canada.  Both delegations had since circulated formal reports on their domestic consultations, as
documents S/WPDR/W/21 , dated 24 January 2003, and S/WPDR/W/22 , dated 10 February 2003,
respectively.  The Chairperson then asked if Chinese Taipei would like to introduce their paper,
followed by Canada.
13. The delegation of Chinese Taipei noted that their paper was based on consultations with 88
government bodies and 58 domestic professional associations.  The paper concluded with the
observation that some professional associations were not familiar with the Accountancy Disciplines ,
which might be a reason for the low response rate and few comments received.
14. The delegation of Canada said their report reflected what they had indicated verbally in the
December formal meeting, i.e. that land surveyors generally supported the Accountancy Disciplines .
Canada was continuing consultations with the legal profession.  The delegation reiterated its support
for the consideration of disciplines specific to the pr ofessions, to run in parallel with the consideration
of generic disciplines, i.e. a double-track approach.
15. The Chairperson opened the floor for comments on the two papers, noting that, at the same
time, Members might also wish to report on the status of their own domestic consultations.  No
comments were received.
16. The Chairperson then offered the floor for further discussion of the Synthesis  paper, the latest
version of which had been circulated as JOB/(02)/204/Rev.1, dated 21 February.  She observed that
Members might also wish to comment on whether they would like to add a summary of discussions tothe Synthesis  paper as well.  No comments were received.
17. Returning to formal mode, the Chairperson
 opened the floor for the discussion of any other
topics under the agenda sub-item.  She also asked the Secretariat to speak briefly on the status of
consultations with international professional organizations.
18. A Secretariat representative noted that a report on the status of consultations with
international professional organizations had been made at the informal meeting on 28 January,
indicating that some responses had been received.  Most of the responses were positive, but a few
indicated they did not wish to participate.  Since that time some further positive responses had been
received, but it was nonetheless necessary for the Secretariat to conduct follow-up enquiries to ensure
a high rate of participation.  Although there were no definitive results to date, some initial informationS/WPDR/M/20
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had been received regarding work by various professions on regulatory issues, for example on model
mutual recognition agreements.
C. ORGANIZATION OF THE WPDR SEMINAR
19. The Chairperson noted that the third item on the agenda was the organization of a workshop
on domestic regulation.  Based on comments received at the previous formal and informal meetings,
the Secretariat had been requested to prepare a draft Outline for consideration by Members at this
meeting.   The Outline was circulated as JOB(03)/35, dated 21 February 2003.  She asked the
Secretariat to introduce the outline.
20. A Secretariat representative noted that the Outline was largely self-explanatory, and
highlighted three points.  First, the Outline did not include any sessions on basic information about the
GATS, instead assuming that participants were al ready familiar with the Agreement.  Second, the
workshop focused on the substance of the issues under discussion, and not on the negotiations or otherinstitutional aspects.  The third point was that Session VI on future possibilities was intended to be a
theoretical exercise, i.e. to point out possible options.  Remaining questions to be decided by
Members included whether to invite contributions  from other organizations, such as UNCTAD and
the OECD, as well as the timing for the workshop.
21. The Chairperson then opened the floor for comments, asking Members in particular to
address the issue of whether to invite other international organizations that had undertaken work on
domestic regulation, notably UNCTAD and the OECD, to make contributions to the event.  She also
asked Members to express their views on timing.
22. The delegation of the United States said they supported a seminar, but wondered whether it
could be assumed that regulators and other participants were fully familiar with the GATS.  The
seminar therefore might include a session on that aspect.  On timing, the delegation said it might be
useful to have the workshop close to the next WP DR meeting.  Session III should not be limited to
horizontal disciplines, but instead refer to the Examples paper.  On Session IV, there were six types of
measures to be discussed, including transparency.  On Session VI, the delegation suggested adding
Japan’s paper for discussion.
23. The delegation of India said they agreed with the contents of the proposed workshop.
Regarding the participation of other international organizations, they supported the participation of
UNCTAD and the OECD.  On timing, since May was difficult due to preparations for the Ministerial,
the seminar should be held immediately after Cancun.  Otherwise, it might be necessary to find time
during the services weeks.
24. The delegation of the European Communities said, under Session IV, they supported
including all six types of measures.  They also supported adding the OECD and UNCTAD as
speakers.  On timing, the delegation suggested during the services week close to the WPDR meeting,
stating that after Cancun seemed late.
25. The delegation of Chile stated they supported the draft Outline.  Sessions III and IV should be
combined, with transparency added to the scope of examples.  Adding the OECD and UNCTAD as
speakers would be extremely useful, and the timing should be before Cancun if possible.
26. The delegation of the Republic of Korea stated they supported the Outline.  The aim of the
workshop should not only be a general introduction to the WPDR’s work, but also include the current
negotiations.  The delegation suggested shortening the first day, and extending the second day.
Regarding Session V, on applying the  Accountancy Disciplines  to other professional services, it
might be helpful to understand the different sectors.  On timing, they supported late May, inS/WPDR/M/20
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conjunction with the services week, i.e. as soon as possible.  The Republic of Korea also supported
adding the OECD and UNCTAD, and suggested providing relevant documents in advance.
27. The delegation of Australia endorsed including OECD and UNCTAD.  Participation should
be broad, especially involving developing countries, and the delegation enquired about the availability
of funding.  The timing should be as close as possible to the Working Party meeting, and beforeCancun.  A background session on GATS might need to be added to day one, the delegation stated,
while Session VI might not require as much emphasis.
28. The delegation of Canada said they supported holding the workshop.  The purpose was to
educate regulators, and therefore Canada encouraged broad participation, including by other
international organizations.  Canada supported Australia’s comments on Session VI, and felt it should
not stray into the WPDR mandate.
29. The Chairperson observed there appeared to be general agreement among Members to include
the OECD and UNCTAD, and to hold the seminar close to the next WPDR meeting, possibly before
Cancun.  Members could ask the Secretariat to prepare a revised Outline, she stated, to serve as the
basis for further consultations.
30. The delegation of Hong Kong, China supported the workshop and the Chairperson’s
statement.  Useful GATS background materials were available, such as those prepared for the
Scheduling Workshop, and could be used for the seminar.
31. The delegation of Argentina wondered about attendance at the workshop, and noted it was
tied to the issue of financing for developing countries.  They were also concerned about the date, but
believed that back-to-back with the WPDR meet ing would be better.  The delegation supported
including the OECD and UNCTAD, and adding a session on general information about the GATS.Regarding Session VI, Argentina emphasized that it should not prejudge the work of the WPDR.
32. The delegation of Chinese Taipei supported holding the workshop as soon as possible before
the Cancun meeting.  They suggested providing background materials in advance, rather than adding
a session on general information.  The delegation also suggested removing Session V, and including
the contents in Session III.  On Session VI, they had some reservations, stating that public discussions
should not prejudice the current negotiations.
33. The delegation of Guyana was concerned that two days might not be enough to cover the six
sessions proposed in the Outline, and wished to have definitive information on the availability of
funding.  On timing, the delegation supported having the workshop before the Cancun meeting
34. The delegation of the European Communities, regarding background materials, emphasized it
would be useful to have them in advance.
35. Asked by the Chairperson to respond to Members' comments, a Secretariat  representative was
somewhat doubtful regarding possible funding.  Members in the Committee on Trade and
Development had recently placed a 5 per cent limit on the ad hoc  funding of technical assistance
expenditures.  Guidance was needed on the intended audience, in order to determine the final
programme.  On timing, many Members had indicated they wished to have the workshop before
Cancun, and close to the services meetings.  As the upcoming services weeks were scheduled for May12-23, and 1-11 July, one possibility was to hold the seminar on the Thursday and Friday before the
next services clusters, i.e. 8-9 May or 26-27 June.  The Secretariat would produce a revised
programme, after Members’ comments had been received, and consult with UNCTAD and OECD
regarding their contributions.S/WPDR/M/20
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36. The delegation of India, regarding timing, noted that the General Council was meeting on 13,
15 and 16 May, and the TNC on 8 and 9 May.  The delegation preferred May to June, and suggested
adjusting the dates of the CTS Special Session.
37. The Chairperson concluded the discussions by stating that the next WPDR chairperson would
conduct consultations on the remaining issues.  She noted that adjusting the dates of the CTS Special
Session  might reduce the time available for bilateral discussions, and therefore the issue of timing
might best be taken up in informal consultations.  She observed that the Secretariat would circulate a
revised Outline, and would enquire about possibilities for financing.
D. MUTUAL RECOGNITION AGREEMENTS:  PRESENTATION BY THE OECD
38. The Chairperson noted that, at the informal meeting on 28 January, it was observed that the
OECD was preparing a paper on MRAs, and seve ral Members had suggested that the OECD be
invited to make an informal presentation.  Members also asked that the MRA paper be distributed inadvance of the current meeting;  it was circulated as JOB(03)/28, dated 13 February 2003, and was
part of Members’ documentation.  Julia Nielson of the OECD had kindly agreed to give the
presentation;  the Chairperson gave her the floor.
39. Following the informal OECD presentation, the Chairperson asked whether any Members
wished to make comments.  The delegations that responded indicated their comments were on a
preliminary basis.
40. The delegation of Thailand emphasized that they had great interest in Mode 4, and had
concluded that the lack of recognition could nullify market access.  For Thailand, not only the
recognition of formal educational qualifications wa s important, but also the recognition of experience
and other non-educational aspects.  The delegation noted the benefits for SMEs of work onrecognition.
41. The delegation of the Philippines stated that the limited progress on MRAs to date should not
preclude them as vehicles for progressive liberalization.  Difficulties included the reluctance to
recognize the equivalence of foreign suppliers;  only certain universities were being recognized by
Philippines' trading partners, while comparable universities were not recognized.  Latitude should begiven towards allowing experience to count for educational requirements, the delegation stated, while
noting that domestic professional associations were not all aware of the importance and benefits of
MRAs.  The Philippines looked forward to exploring the opportunity to operationalize the use of
MRAs as building blocks for further liberalization.
42. The delegation of India noted that the extent of recognition under Mode 4 was quite limited,
and that market-access commitments alone would not provide actual market entry.  As observed in the
OECD paper, Article VII did not concern the substance of recognition.  Much needed to be done tooperationalize Article VII, and possible approaches were outlined in India’s negotiating proposal.
India looked forward to receiving Members’ suggestions, and to multilateral discussions on the issue.
The delegation drew attention to other issues iden tified in the OECD paper, e.g. the relationship
between Articles V and VII.  Agreeing with th e OECD paper that MRAs were demand-driven, the
delegation noted that India faced roadblocks over trading partners’ reluctance to negotiate MRAs.
43. The delegation of Egypt stated that the reference in the OECD paper to the need for
implementation of Article VII:4 notification requirements was important, as well as the need for clear
accession provisions for MRAs.  The delegation supported a stronger interpretation of Article VII:3,
as well as the inclusion of technical assistance provisions in MRAs for developing countries.
44. The delegation of China emphasized that MRAs, while difficult to negotiate, were important
for developing countries.  In light of the differences in export capacity between developed andS/WPDR/M/20
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developing countries, more consideration should be given to the recognition of medium-level and
even junior-level qualifications, including the recognition of experience.  Existing MRAs were often
for senior-level qualifications, e.g. for architects and engineers, and not for medium and junior-level
qualifications, e.g. for machinery operators, chefs, etc.  In order to improve MRAs, China believed
Members should hold discussions on the recognition of the educational background of servicessuppliers.
45. The delegation of Hong Kong, China stated that, while there were doubts regarding the
applicability of Article VII to recognition arrangements between professional bodies, such
arrangements might be crucial for giving meaningful effect to market access commitments.  The
delegation noted that Article VII did not provide for the means to make MRAs happen, and
emphasized that more in-depth discussion was needed on the role of the WPDR with respect to
recognition.
46. The delegation of Chile stated that Mode 4 was of vital importance, and that recognition
agreements could be a useful tool to facilitate the movement of natural persons.  Chile had signed
several MRAs, including those related to regional arrangements, but some agreements had hardly
been implemented as there was not enough information available at the professional level.
47. The delegation of Argentina emphasized that MRAs would be more useful if there was
greater market access under Mode 4.  Article VII required that agreements be notified;  however, the
requirement under Article VII.2 to extend MRAs to third parties could also be a disincentive as MRAs
were based on trust between the parties concerned.  The delegation stated that the recommendations in
India’s negotiating proposal constituted a very pertinent way of making further progress.
48. The delegation of Indonesia stated that MRAs were a very important issue, especially
considering that some Members were working on agreements in professional services and other
sectors at a time when Indonesia was having difficulties in negotiating agreements with trading
partners.  The delegation looked forward to further discussions at the next meeting, and therefore
proposed to retain the issue on the agenda, a nd to ask the OECD for another presentation.
49. The delegation of the United States said the OECD paper confirmed that MRAs were difficult
to achieve.  In the United States, MRAs were concluded on a federal and sub-federal basis, and only a
limited number of organizations were capable of conducting MRAs.  The delegation questioned
where the discussion on MRAs fit into the WPDR, and asked if the issue of recognition should be
moved to the CTS Special Session.
50. The delegation of Mexico, like other Members, believed in MRAs as a mechanism to
facilitate access under Mode 4.  Regarding the U.S. comments, the delegation stated that MRAs were
an important part of the WPDR work, and urged that the issue be kept on the agenda.  The GATSrecognized that MRAs could not be imposed, and we re voluntary.  As previously mentioned, there
needed to be demand for an MRA and, more importantly, mutual trust was required.  Members
needed to look at the various levels of mutual recognition, the delegation stated, including recognition
between the professionals themselves, recognition by conformity assessment organizations, and
recognition at the government level.  In any case, achieving recognition was a gradual process.
51. The delegation of the European Communities stated that, while facilitating the movement of
natural persons was important, Members should not underestimate the difficulties involved with
MRAs.  The delegation also had some doubts about on putting the issue on the agenda, noting that the
WPDR mandate related to Article VI, and not Article VII, but that the issue could perhaps be
discussed under Article VI:6.
52. The delegation of Brazil noted that MRAs were not only related to Mode 4 issues.  One issue
to be considered could be which entities were capable of signing MRAs, noting that someS/WPDR/M/20
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professional bodies did not have national coverage.  Another issue could be to discuss which entities
had the legal authority to create MRAs as well as the coverage of the MRAs to be reached.
53. The delegation of the Philippines supported Indonesia’s proposal, noting that many Members
had expressed keen interest in the issue, and that most of the comments were made on a preliminary
basis.  As justification for continuing discussion, Members had the requirements of Article VI:6, aswell as the inclusion of the issue in previous Chai rperson’s Notes.  The delegation also asked for the
Secretariat’s view.
54. A representative of the Secretariat observed that, while there might be a question as to
whether Article VII was part of the WPDR manda te, the issue of recognition was covered under
Article VI:4, to the extent that it concerned licensing, qualifications and technical standards. This
coverage was reflected in the Summary of Discussions , which included on page 12 a question
concerning equivalence.  The Secretariat further noted that Articles VI and VII were different types oflegal provisions, with Article VII providing legal co verage for recognition arrangements in regard to
their deviation from the non-discrimination requirements of Article II.
55. The representative of the OECD stated that Members had made very interesting and useful
comments, including those on how agreements actually worked in practice.  Also interesting were the
comments on the need to recognize experience, and on the link between academic and professionalqualifications.  Trust between regulators was very important.  The representative noted that the OECD
was willing to serve as a further resource for information, if the WPDR so requested.
56. The delegation of Guyana, on the issue of mutual recognition, asked for the Secretariat's view
on whether the GATS obligations relating to MRAs were only incurred with respect to agreements
signed by Members, or were also incurred with respect to agreements signed by professionalassociations within their territories.  The Secretariat responded by noting that recognition measures,
including MRAs, were covered by the GATS as measures affecting trade in services.  Such measurescould be taken by governments, but could also be taken by non-governmental bodies, to the extent
that they were exercising delegated governmental authority.
57. The Chairperson concluded by thanking the OECD representative for her excellent
presentation.
E. DATE OF NEXT MEETING
58. The Chairperson stated that the next item on the agenda was the date for the next meeting.  In
accordance with the practice of grouping meetings of subsidiary bodies close to meetings of the
Council, she suggested that the next meeting be he ld during the week just before the next CTS and
Special Session meetings, i.e. the week beginning 12 May 2002.  Members approved the
Chairperson’s suggestion.
F. OTHER BUSINESS
59. Under Other Business, the representative from UNCTAD informed the Working Party that
UNCTAD would hold a “brain-storming session” on domestic regulation at the end of April for
services trade negotiators.
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