./.RESTRICTEDWORLD TRADE
ORGANIZATIONS/WPGR/W/43
20 June 2003
(03-3307)
Working Party on GATS Rules
- DRAFT -
UPDATE TO THE ANNUAL REPORT OF 2002 OF THE WORKING PARTY
ON GATS RULES TO THE COUNCIL FOR TRADE IN SERVICES (2003)
1. Since its last annual report1, the Working Party on GATS Rules held 3 formal meetings.2  In
each meeting, the Working Party considered the th ree negotiating mandates it is entrusted with:
emergency safeguard measures (Article X);  government 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 examination included desirability and feasibility of an
emergency safeguard mechanism (ESM), the interpretation of the GATS Article X mandate, modal
application, safeguard-type provisions contained in economic integration agreements and in WTO
instruments, as well as S&D.  Members also discussed possible common elements of various types ofESM, based on the Synopsis
3 and on the Overview of the Synopsis,4 and process-related issues such
as transparency, notification, consultation, surveillance provisions and expedited dispute 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 for
further progress in the negotiations.  One such example was presented at the February meeting by
Thailand, on behalf of the ASEAN Members.
4. As requested by Members the Secretariat prepared three background documents: (i) a
Compilation of References Made by Delegations 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.
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 Measures8, 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
                                                     
1 S/WPGR/8, 5 December 2002.
2 Meetings of 3 December 2002, 25 February 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.
8 S/WPGR/9.
9 S/WPGR/7.S/WPGR/W/43
Page 2
of 13-14 May, delegations gave further consideration to the Report.  At the same meeting, the
European Communities introduced a written contribution on  Scope for Emergency Safeguard
Measures (ESM) in the GATS.10
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.11  In May, the European Communities
introduced a new contribution proposing a legal framework for negotiations on government
procurement in services.12
7. Members stressed the need to avoid duplication between the WPGR and the Working Group
on Transparency in Government Procurement (WGTGP).  The WPGR should be aware of the relevant
issues raised in the WGTGP, and information exchanges between the two Groups should be allowedfor 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.
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 by30 June 2003 under his responsibility to report on the progress of work.
13
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.14  Two main issues emerged from the discussion: (i) the scope of a
generic definition of subsidies in the services context, including the relevance of the definitioncontained in the SCM Agreement; and (ii) the meaning of the concept of trade-distortive or
"actionable" subsidies.  The need for more inform ation on services subsidies from Members as well as
other sources such as other intergovernmental organizations was also stressed by some delegations.
11. On 17 March 2003, the Chairperson circulated a revised Checklist on Subsidies ,
15 as had been
agreed at the February meeting.16  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. definition of a subsidy in trade in services.  Second, a
new issue has been added, relating to concepts relevant 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 Working 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.
__________
                                                     
10 S/WPGR/W/41.
11 S/WPGR/W/39.
12 S/WPGR/W/42.
13 S/WPGR/7, paragraph 5.
14 JOB(02)207.
15 JOB(03)/57.
16 The first version of the Checklist had been circulated as Job No. 4519, 17 July 2000.