WORLD TRADE
ORGANIZATIONS/WPGR/12
3 July 2003
(03-3562)
Working Party on GATS Rules
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, examples presented by Members of safeguard-type provisions contained in economic
integration agreements, in Members' schedules and in WTO instruments, as well as S&D.  There were
diverging views as to whether some of the examples constituted safeguard-type provisions.  Membersalso discussed possible common elements of  various types of ESM, 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 an important aspect
for further progress in the negotiations.  One example was presented at the February meeting by
Thailand, on behalf of the ASEAN Members.  The Working Party is still examining whether thisexample can be considered as a possible situation justifying an ESM.  Other delegations suggested
that discussion of 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 Delegations to Safeguard-Type Provisions
5;  (ii) a note on Core
Elements Contained in Members' Pr oposals – 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
                                                     
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.S/WPGR/12
Page 2
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, 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 welcomed 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 fram ework for government procurement in services.13
At the same time, several delegations maintained  the view that Article XIII excluded 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 noted the possibility of duplicatio n between the WPGR and the Working Group on
Transparency in Government Procurement (WGTGP).  The WPGR should be aware of the relevantissues raised in the WGTGP.
8. At its meeting on 13-14 May 2003, the Working Party requested the Secretariat to prepare a
note providing an Overview of Government Procurement-Related Provisions in Economic Integration
Agreements .  The note was issued on 24 June 2003.
14
9. On 30 June 2003, Mr. Santiago Urbina, Chairperson of the Working Party, submitted a note
under his responsibility to report on the progress of work, as mandated in the 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 context, including the relevance of the definition
contained in the SCM Agreement; and (ii) the meaning of the concept of trade-distortive or
"actionable" subsidies.  Several 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
service suppliers.  The need for more information on services subsidies from Members as well as
other sources such as other intergovernmental organizations was also stressed by several 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
                                                     
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/W/44.
15 S/WPGR/11.
16 JOB(02)207.
17 JOB(03)/57.
18 The first version of the Checklist had been circulated as Job No. 4519, 17 July 2000.S/WPGR/12
Page 3
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. On 30 June 2003, Mr. Santiago Urbina, Chairperson of the Working Party, submitted a note
under his responsibility to report on the progress of work, as mandated in the work programme on
subsidies adopted on 22 July 2002.19
__________
                                                     
19 S/WPGR/10.