RESTRICTEDWORLD TRADE
ORGANIZATIONS/WPPS/M/24
18 December 1998
(98-5109)
Working Party on Professional Services
NOTE ON THE MEETING HELD ON 4 DECEMBER 1998
Note by the Secretariat
1. The Working Party on Professional Services held its twenty-fourth meeting on 4 December
1998.  The agenda for the meeting was contained in airgram WTO/AIR/988.  The main items on the
agenda were the draft disciplines on accountancy, the draft Decision of the Council for Trade inServices on the legal form of the disciplines on accountancy, and draft reports of the WPPS to the
Council for Trade in Services.  Also discussed were ideas for the future work of the WPPS.
(a) Work Pursuant to Paragraph 2(a) of the Decision on Professional Services
Draft Disciplines on Accountancy
2. Introducing the first item on the agenda, the draft Disciplines on Domestic Regulation in the
Accountancy Sector  (S/WPPS/W/21);  the Chairman recalled that discussions on the disciplines had
been substantially concluded at the meeting of 17 July, but there was one outstanding reservation
from the delegation of India.  Having reflected on the points made by the Indian delegation, he wishedto observe that a number of paragraphs in the disc iplines did specifically deal with the need for
domestic regulation in the accountancy sector to be no t more trade restrictive than necessary to fulfill
a legitimate objective, and to not constitute unnecessary barriers to trade.  It seemed that these
provisions should be capable of taking account of the sorts of concerns that the Indian delegation had
been voicing.  The Chairman also noted that there was a "consensus minus one", and therefore asked,
and urged, the Indian delegation to show maximum flexibility.
3. The representative of India stated that, as Members were aware, India had, in the WPPS
meeting on 1 April 1998, suggested the inclusion of an additional paragraph in the section on
qualification requirements with the intention of providing an indication as to what could be the least
trade restrictive measure that should be considered by members in cases where the qualification of a
foreign candidate was not regarded as being equivalent.  In subsequent meetings, based on the
responses and comments that Members had made, India had presented various options and amendedversions of the paragraph.  Members, however, had continued to express certain reservations on the
proposal.  In the meeting held on 16 July, India had in this context expressed its reservations on the
existing formulation of the section on qualification requirements, stating that it did not adequately
reflect India's concerns on the possibility of Members adopting procedures which may be more trade
restrictive than necessary, or which may create unnecessary barriers to services trade in theaccountancy sector.
4. India's basic concern, which had been highlighted in a number of meetings, was that while
fully qualified professionals could, and perhaps should, be put through any kind of pre-license
examination that the host country might so wish, they should not, at least in principle, be asked to go
through the entire professional educational requ irement all over again.  India had thought, and
continued to believe, that this was both a logical and a reasonable suggestion, which would have only
strengthened the draft disciplines, particularly since, in subsequent proposals, India made an
endeavour to address the concern expressed by Members on the issue of hierarchy and of not wanting
to impose any sort of restriction on competent authorities regarding licensing procedures.  India wasS/WPPS/M/24
Page 2
disappointed that, in spite of having significantly modified the original formulation, it was unable to
convince other Members.
5. India continued to feel that the section did not adequately reflect the basic mandate given to
the WPPS, i.e. to establish multilateral disciplines which would ensure that domestic regulatory
measures did not constitute a barrier to trade.  India still felt that there was a need to lay down aprocedure, or at least a pointer towards such a pro cedure, that would help competent authorities in the
territories of Members in issuing licenses in situations where the equivalency between the educational
qualification of domestic and foreign applicants was perceived to be different.  In India's view, this
procedure needed to be least burdensome, and formulated in a manner so that it did not constitute a
barrier to trade.  India felt that this concern would have been best met by incorporating a provision for
a qualification requirement based on a test of professional competence.  Such a test of competency,
with universal applicability, would have provided th e required transparency to the process of granting
of such licences in cases where foreign qualifications were regarded as not being equivalent.
6.   India was at a stage when the proposed draft disciplines for the accountancy sector seemed
to have the approval of all Members, except India, and its reservation on the qualification section of
the disciplines was presumably the only outstanding reservation.  Over the past week, India had been
consciously deliberating on its future course of action.  The delegate wished to record India's gratitudeto the Chairman and others for the formal and informal advice provided.  This advice had provided
India with a light forward.  With all sincerity India accepted the advice, and hoped that other
Members would appreciate the flexibility shown.  However, India wished to emphasise two points:
first, India had take the action to facilitate the conclusion of the work programme, and therefore it
should not be construed as an implicit willingness to go along without an adequate redressal of itsconcern during the development of disciplines on other professional services in the future.  In
addition, India hoped that Members would take into account the substantive suggestions that it had
made while formulating or implementing their domestic regulations, and ensure that these were not
more trade restrictive than necessary to fulfil a legi timate objective, and that the said procedures did
not constitute a barrier to trade in any way.  With  these comments, India thereby joined the consensus.
7. The Chairman responded by thanking the Indian delegation for the helpful statement.  The
Chairman proposed that the WPPS formally adopt the accountancy disciplines.
8. The WPPS adopted the disciplines on accountancy.
Draft Council Decision
9. The Chairman then proceeded to the draft Council  Decision On Disciplines Relating to the
Accountancy Sector  (Job. No. 6481) noting that, at the previous WPPS meeting of 16 November,
there had been a large measure of agreement on the draft Decision.  Only two small text changes had
been introduced, for the purpose of clarity.
10. The representative of Venezuela noted that, at the previous meeting of the Council for Trade
in Services, New Zealand had proposed a broade r work programme, under the GATS Article VI:4
mandate, covering all services sectors.  Venezuela had expressed concern that the new proposal wouldoverlap with work underway in the WPPS, and involve extensive additional work for all delegations;
in this regard, the delegate stated, the requirements of the Singapore Declaration should be obeyed.  In
the understanding of the Venezuelan delegation, the second paragraph of the draft Decision already
aimed at accomplishing the work mandated.  As the New Zealand proposal was connected with the
work of the WPPS, and had not yet been analyzed in depth, Venezuela consequently found itimpossible to join the consensus on the draft Council Decision until the magnitude of the new work
programme became known.S/WPPS/M/24
Page 3
11. The representative of the European Communities was also concerned for the next year, but
said this was a separate issue from the draft Decision.  Article VI:4 was clear on the setting up of
appropriate bodies, and so far the only body that had been established was the WPPS.  The draft
Decision would have no impact on future discussion of Article VI:4 work.  The delegates of Canada,
Australia, Japan , Chile  and Mexico  then made statements expressing similar views concerning the
workload issue, and agreed that the adoption of the draft Decision would not prejudice work in theCouncil.
12. The Chairman noted that many delegations had stated that the work of the WPPS and the
Council in regard to Article VI:4 issues should be properly coordinated and managed.
13. The representative of New Zealand said that she had thought that Venezuela's earlier
questions in the Council were concerned with organizational issues.  What New Zealand had proposed
was consistent with the Singapore Mandate, and a discussion on how to organize both elements of thework could best take place under the agenda item on future work and in future consideration by the
Council.  The delegates from Canada, Brazil
, Argentina , Uruguay , Hungary , Chile  and Switzerland
stated that the draft Decision would not prejudice work in the Council.  They all supported theadoption of the draft Decision by the WPPS.
14. The Chairman noted that Members had expressed a strong view toward adoption of the
disciplines, but they had also expressed great sympathy with the concerns raised by Venezuela.
Therefore, Members need to ensure that the work of the WPPS and any work that might be agreed in
the Council must be properly coordinated and managed.  Noting that the draft Council Decision did
not prejudice the Council's work on Article VI:4, the Chairman asked if Venezuela was now willing to
join the consensus.
15. The representative of Venezuela said she appreciated the comments made by the Chairman
and Members, but that she did not have much flexibility in her instructions.  Therefore, it was
necessary to specifically indicate that discussions to be held in the WPPS and the Council be
coordinated in such a fashion as to not be a burden on delegations.  Such a statement would need to be
more than an opinion expressed by the Venezuela delegation.
16. The Chairman suggested a phrase be added to the end of the first sentence of the second
paragraph of the draft Decision, i.e. "taking into account any decisions which may be taken in the
Council regarding work on Article VI:4".  This was acceptable to Members.  The Chairman then
proposed that the WPPS adopt the Decision on an ad referendum  basis, with a deadline for any
comments by Members of 10 December 1998.
17. The delegate from the United States made a statement (to be added to this part of the
minutes), noting that during the course of developing rules and principles for regulation of the
accountancy profession, the United States had agreed to accept less comprehensive disciplines  than it
had originally sought.  This was undertaken in the usual spirit of compromise necessary to achieve an
agreement to a common text among all the participants, and with the understanding that  delegations
were prepared to make such a common text legally binding in the most expeditious modality available
under the GATS, which would have been the inscription of such a common text in schedules ofparticipating Members.  The outcome, however, was quite a different one.  The only thing that was
certain, under the draft Council Decision, was that it would be some years before accountancy
disciplines took on appropriate legal form, and only with respect to those Members who undertook
specific commitments in accountancy.  Under these conditions, it must be made clear that the
disciplines for regulation of accountancy recommended for adoption by the Council on Trade inServices were not immutable.  Members had the right to revisit the text in the future, during the
course of developing disciplines for other professions, individually or collectively, or in the context of
future negotiations, and the common text could be amended before it was finally made legally
binding.S/WPPS/M/24
Page 4
18. The representative of Japan said that, although not fully comfortable with the language
"including accountancy", Japan was in a position to jo in in the consensus to support the draft Council
Decision.  Japan had contributed by exercising flexib ility.  With regard to the possibility of  future
revision, Japan wished to confirm that the revision of the adopted text of the disciplines for
accountancy was possible only when the consensus is achieved.  The representative also stressed thatrational reasons for making the revision necessary  would need to be shown for building the
consensus.
19. The delegate from Australia stated that Australi a wished to have recorded in the minutes its
disappointment with the level of ambition evident in the current text of the accountancy disciplines.
In Australia's view, the text was an inadequate reflection of the objective set by the WPPS and of the
work accomplished.  While Australia acknowledged that there were advances contained in the
disciplines, particularly in the section on transparency , it remained particularly disappointed at the low
level of ambition reflected in the sections on licensing and technical standards.  Such limited
outcomes did not seem to fit with the commitment made by Members in signing on to the GATS and
Article VI:4, namely to develop disciplines to remove unnecessary barriers to trade in accountancy
services.  Australia looked forward to the devel opment of stronger disciplines in this and other
professional services sectors during the next round of services negotiations, and to giving thosecommitments full legal form.
20. The WPPS adopted the draft Decision on an ad referendum  basis.
Draft Report on the Accountancy Disciplines
21. The Chairman introduced the draft  Report of the Working Party on Professional Services to
the Council for Trade in Services on the Development of Disciplines on Domestic Regulation in the
Accountancy Sector  (S/WPPS/W/22).
22. The delegate of the European Communities suggested that last line of paragraph six be
revised to say "which the WPPS now recommends for adoption", and that the original document
reference numbers be retained for the attachments.
23. The Chairman proposed that the WPPS adopt the draft report on the development of the
accountancy disciplines, with the changes as noted.
24. The WPPS adopted the draft report on the accountancy disciplines.
Draft WPPS Annual Report to the CTS
25. The Chairman introduced the draft Annual Report of the Working Party on Professional
Services to the Council for Trade in Services  (S/WPPS/W/20).
26. Amendments to the text were suggested by the representatives of New Zealand, the European
Communities, Japan , Mexico , Venezuela , Argentina , Brazil , Columbia , Australia  and Uruguay .
27. The Chairman concluded by stating the agreed changes to the text.  The Chairman then
proposed that the WPPS adopt the draft annual report.
28. The WPPS adopted the draft annual report.
Discussion of Future WorkS/WPPS/M/24
Page 5
29. The Chairman opened the floor for comments.  At the request of Venezuela , the discussion
was held in formal mode.
30. The representative of New Zealand made three suggestions in regard to general disciplines:
having the WPPS discuss and clarify the "cluster" of professions delegations had in mind when
discussing general disciplines, noting that the Services Sectoral Classification List (WTO documentMTN.GNS/W/120) seemed to divide logically into two clusters, i.e. professional services sub-sectors
a.-g., and sub-sectors h.-j;  extracting and analyzing the concepts underlying the accountancy
disciplines;  and examining aspects which had received little discussion to date, such as standards,
together with examining aspects which were especially pertinent, such as qualification requirements
and procedures.
31. The representative of Australia made a somewhat similar proposal, stating that the WPPS
should develop generic disciplines covering a group of professions.  The work should be focused on
areas with substantial trade interests, such as architecture, engineering, surveying and law.  She also
stated there was a growing overlap between the activities of lawyers and accountants.  The
representative also said there was no need for further questionnaires.  The delegate of Canada noted
that his country was in the process of consulting with several professional services sectors.  Hesuggested that the WPPS should start first with  the MRA guidelines, examining their general
applicability to other sectors.  Members needed also to reflect about what should realistically be
accomplished in regard to Article VI:4 work.  The representative said there should not be exhaustive
questionnaires, as there was already information available from the OECD and other organizations.
Instead, Members could make submissions regarding th e unique or different features of their regimes.
32. The representative of Japan expressed the concern that, at this stage, the concrete steps
expressed by some Members might not represent realistic goals.  Japan was also in the process of
having a dialogue with professional services i ndustry groups.  Therefore, it might be somewhat
premature to make a decision for priority areas of work.  The delegate proposed a preliminary survey
concerning the applicability of the accountancy disciplines to all the professional services sub-sectors,
as defined in W/120.  Japan believed such a survey should include simple questionnaires forMembers, as well as the utilisation of relevant documents from other international fora such as OECD
and APEC.  The scope of this survey process could include the MRA guidelines as well as the
disciplines.
33. The representative of Hong Kong, China supported the idea of developing generic disciplines,
supplemented by the use of specific disciplines where appropriate.  She also supported the use of
simple questionnaires.  The delegate from the European Communities said it would be useful to see if
clusters of sectors had similar approaches.  The work of other fora would be useful in this respect.  On
the questionnaire issue, the WPPS could send the accountancy disciplines and MRA guidelines to
other professions for their comments.
34. The delegate of Venezuela said she had thought the discussion would be a very preliminary
one, e.g. starting by analyzing what had been achieved.  She enquired as to when the accountancy
disciplines would be derestricted.  In regard to sectors, she stated that Members could deal withlicensing and technical standards on a horizontal basis. The representative of Uruguay also said the
WPPS  should be realistic regarding future work, and that time was needed for consultation, reflectionand analysis.
35. The representative of Switzerland said that a ho rizontal approach would be more appropriate,
and that three issues should be addressed, i.e. what parts of the disciplines could be made horizontally
applicable, what other areas should be addresse d, and whether the MRA guidelines could be made
more widely applicable.  The delegate of Mexico said the work should be realistic, and based on the
accountancy disciplines.  Priorities could not yet be established.  She agreed that a survey could bemade of the applicability of the disciplines to other professional services sectors.S/WPPS/M/24
Page 6
36. The representative of Argentina said that he supported horizontal work in regard to the
development of disciplines for professional services, including a questionnaire using concepts from
the work on accountancy.  The delegate from Brazil said that, first, an analysis should be made of the
horizontal applicability of the accountancy disciplines to other professional sectors. Therepresentative of New Zealand stated that it was necessary to have concrete proposals in order to be
realistic.
37. The representative of Australia stated that the next year would be a time for gathering
information on other professional services.  She said that the accountancy disciplines, rather than a
survey, should form the starting-point.  Members should send the disciplines to other professions, and
collect their responses.  To be realistic, the focus should be on a limited number of sub-sectors.
38. In response to the question concerning document derestriction, the Secretariat noted that the
WPPS documents would remain restricted until their adoption by the Council, after which they would
be automatically derestricted.
39. The Chairman summed up discussions by noting that Members had agreed on the need to be
realistic, and had put forward various suggestions.  The WPPS would revert to the issue at the next
meeting.
(b) Other Business
40. Under "Other Business", the Chairman noted that the next WPPS meeting was scheduled for
9 February.
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