RESTRICTEDWORLD TRADE
ORGANIZATIONS/WPDR/M/15
10 April 2002
(02-1962)
Working Party on Domestic Regulation
REPORT ON THE MEETING HELD ON 12 MARCH 2002
Note by the Secretariat
1. The Working Party on Domestic Regulation (WPDR) held its fifteenth meeting on 12 March.
The agenda for the meeting is contained in Airgram WTO/AIR/1728. Discussion throughout the
meeting was based largely on two new Chairperson’s Notes (JOB(02)/4, dated 30 January 2002 andJOB(02)/22, dated 7 March 2002).
2. The Chairperson opened the meeting by suggesting that Members reverse the sequencing of
the first two items on the agenda, i.e. to have the Organisation of Future Work  come before the
Development of Regulatory Disciplines under GATS Article VI:4 .  Members agreed to the suggestion.
3. Before moving to the substantive items for consideration, the Chairperson noted that, as
requested at the previous WPDR meeting, the Summary of Discussions on the Checklist of Issues for
WPDR  had been separated from the Minutes, and circulated separately, as JOB(02)/03 dated 29
January 2002.  According to the usual practice, a strikeout version of the Summary  had been provided
at the back of the room for reference.
(a) Organization of Future Work
4. The Chairperson introduced this agenda item by stating that, as Members were aware, paras
14-19 of his Note of 30 January  had raised this issue .  The WPDR had recently had an informal
meeting (on Friday 1 March) so as to provide an opportunity to have an initial exchange of views.
This was followed by a further Chairperson’s Note, JOB(02)/22, dated 7 March.  As mentioned in his
latest Note, Members had had a very good exchange of opinions  at the informal meeting, and he
believed it would be useful to lay out some further thoughts on the organisation of future work in
advance of the formal meeting.  He then opened the floor for initial comments by Members.
5. The representative of Uruguay, making preliminary comments, stated that Members needed to
leave some flexibility to the new Chairperson.  Paras 3 and 4 of the latest Note were important, he
stated, and Members needed to bear in mind para 7 of the Negotiating Guidelines, i.e. that work under
Article VI:4 should be finished before negotiations on specific commitments were concluded.  With
only about 33 months left to finish work under Article VI:4, it was important to have an exchange ofviews on the best way to organize the work in order to meet that objective.
6. The Chairperson then proceeded paragraph by paragraph in his latest Note, stating that, in
paras 3 and 4, he had observed that there would appear to be a general desire for the Working Party to
adopt a more focused approach to its work, and that an important part of this would involve engaging
more substantively in a review of the actual regulatory issues  that related to Article VI:4, including
the updated version of the Examples  paper ( Examples of Measures to be Addressed by Disciplines
under GATS Article VI:4, JOB(02)/20 dated 7 March 2002).  In so doing, he believed that it would be
very important for the WPDR to actively explore ways to ensure that all Members, particularly
developing and least developed, had an opportunity to participate in those discussions.S/WPDR/M/15
Page 2
7. The representative of Thailand stated that her delegation had some reservations about the
WPDR reviewing regulatory examples.  They wished to first have more responses from Members,
and more time for Members, especially developing and least developed, to submit examples.  She also
asked what the Chairperson meant by the “review” of regulatory issues.  The Chairperson replied that,
by “review”, he had not meant to imply that any fixed procedures or set outcomes were intended, but
instead that Members would focus closely on an examin ation of the regulatory issues so as to provide
greater clarity as to what the disciplines envisaged by Article VI:4 might be able to address.
8. The representative of the European Communities said that, with respect to paras 3 and 4, it
was important to keep in mind the timeframe set by the Negotiating Guidelines.  On para 4, the EC
welcomed the review of measures, as well as the work by the Secretariat.
9. The representative of the United States welcomed  the change in focus from the abstract to the
more concrete, and said that the updated Examples  paper was very useful.  The U.S. was very open to
ideas on how to progress in looking at actual regulatory measures, and believed it would be useful to
integrate this process into the ongoing wider work of the WPDR with respect to general issues,
necessity and transparency.
10. The U.S. idea, on a preliminary basis, was to look sequentially at categories of regulatory
measures, including examining to what extent regulatory measures might not be addressed by existingGATS disciplines.  This would including discussing any “grey areas” regarding Article VI:4 and
Articles XVI & XVII, as well as examining to what extent Articles XVI & XVII could not address
particular regulatory measures.  Members could also examine the extent to which existing horizontal
rules, including Articles II, III, VIII and IX, might not be able to address such measures, the
representative stated.  At that point, Members could look at how potential disciplines on transparencyand/or necessity could address such problems.  Finally, Members could consider whether certain
measures were common to many sectors, as well as to discuss the administrative costs and burdens of
addressing regulatory barriers.  The representative then asked Thailand if their concerns were more
related to professional services and the Synthesis  paper ( Synthesis of Results to Date of the Domestic
Consultations in Professional Services (Fifth Draft) , JOB(01)/162 dated 27 November 2001).
11. The representative of Brazil stated that Members needed to clarify the objectives of the
disciplines to be developed, and supported the move  away from the abstract to the more concrete.
Regarding the U.S. suggestions, he commented, on a prel iminary basis, that they seemed to be useful,
especially the idea of examining the extent to which Articles XVI & XVII could address particular
regulatory measures, which could include issues identified in both the Examples  paper and the Special
Session negotiating proposals.  The representative noted that his delegation had made the point earlier
that some Special Session proposals, including for accountancy, did not distinguish between Article
VI:4 measures and those under Articles XVI & XVII.  The representative suggested that Members
bear in mind the objectives of the Article VI:4 mandate, i.e. the creation of regulatory disciplines, and
avoid extended theoretical discussions.  He emphasized that the creation of horizontal disciplines
under Article VI:4 was one of the most important issues for the current negotiations.
12. The representative of Hong Kong, China agreed  entirely on the need for more focus on the
concrete, stating that the listing of regulatory measures was important.  He supported the examination
of examples in greater detail, and noted there was a readily available pool of examples in the
negotiating proposals.  The Synopsis  paper (CTS Special Session, Synopsis of Negotiating Proposals ,
JOB(01)/63 dated 3 May 2001) mentioned many regulatory barriers, he stated, including lack of
regulatory transparency, compulsory membership in professional associations, different sub-federalregulations for the recognition of qualifications, excessive fees and overly burdensome documentation
requirements.  Some negotiating proposals even proposed solutions, he noted, including suggesting
additional Article XVIII commitments.  The representative wondered whether Members would agree
to have the Secretariat extract the regulatory barriers from the Synopsis , keeping the sectoral
references.  He also agreed with revising the Examples  list in greater detail.S/WPDR/M/15
Page 3
13. The Chairperson asked Members in their interventions to address the issue of having the
Secretariat extract the regulatory examples in the Synopsis.
14. The representative of Mexico stated that the suggestion in para 4 of the Chairperson’s Note
was most appropriate, and noted that Members had not yet seriously discussed the measures already
identified.  In addition, no new examples had been submitted for several months.  Regardingobjectives, the representative noted that Article VI:4 and Articles XVI & XVII were in different parts
of the GATS.  Members needed to bear in mind that the objective was the development of disciplines,
noting the complementary relationship between Articles III and VI.  Comparing what was not covered
under Articles XVI & XVII was a good idea, he stated.  Members should always think about the
horizontal nature of disciplines.  The representative emphasized that more focused discussions were
required, and supported having the Secretariat integrate more examples, centring on the three VI:4
categories of licensing requirements and procedures, qualification requirements and procedures, andtechnical standards.
15. The representative of Canada supported the discussion of specific measures, especially those
contained in the Examples  paper, and suggested that it be made a separate sub-item on the agenda.
She emphasized that the objective should be to provide a clear understanding of the regulatory
measures and restrictions covered by Article VI:4.  Her delegation supported and reiterated the needfor clear, precise examples of measures not covered by Articles XVI & XVII and not already found in
the accountancy disciplines.  Canada also sup ported Hong Kong, China’s idea on the review of
Special Session proposals, focusing on Article VI:4, as stated by Mexico.
16. The representative of Japan agreed on the need to focus on concrete examples, stating that it
would be useful for Members to examine the relevance of the accountancy disciplines and the existing
GATS articles, as well as to determine what requirements may be missing.  Japan supported the U.S.
idea on examining whether a discipline should be horizontally applied, or should be of a more sector-
specific nature.  Disciplines related to the transparency of regulatory procedures or requirements
tended to be more easily applied horizontally, the representative stated, while disciplines related to the
appropriateness of a procedure might be of a more sector-specific nature.  Regarding Hong Kong,China’s idea, Japan felt it would be necessary to “streamline” the procedure for discussing regulatory
examples, and to know which documents would be discussed and in what order.  The Examples  paper,
the Synopsis  paper, and S/C/W/97 ( International Regulatory Initiatives in Services , dated 1 March
1999) were all full of good examples, the representative noted, adding that a new synthesis or a cross-
referencing of the relevant Secretariat papers could be useful.
17. The representative of Thailand stated that their concern extended to the regulatory examples.
Her delegation was actually not opposed to a review, and Thailand was planning to submit a list of
barriers.  Thailand also could not yet support Hong Kong, China’s idea, because the proposals were
mostly from the developed countries.  The representa tive noted that the same situation existed in the
CSC, and said that it should be up to Members to submit examples.
18. The Chairperson emphasized that the future progress of the WPDR was in Member’s hands.
He observed that the regulatory issues confronted by Thailand were probably shared by others, and
therefore all Members would benefit from a more focused debate.
19. The representative of Australia agreed with focusing on concrete issues, and said they
remained committed to a multilateral focus.  The U.S.  initiatives were worth considering, she stated,
and Australia agreed on the relevance of the accountancy disciplines.  The representative also agreed
with the idea of “gap analysis”, i.e. determin ing where further work was required.  The negotiating
proposals did provide important examples, she stated, and having the Secretariat compile examples
would be the most efficient method.  Australia strong ly agreed with Brazil that the VI:4 work was
extremely important, and with Uruguay that it wa s necessary to think ahead to the conclusion of
negotiations.S/WPDR/M/15
Page 4
20. The representative of the United States, while welcoming the opportunity to extract from
negotiating proposals, noted that the Hong Kong, China idea was similar to an earlier suggestion in
the WPDR.  The consensus at the time was that individual Members would extract regulatory
examples from their negotiating proposals, and the U. S. view was that this should continue to be the
case.  The representative thanked Thailand for their clarification, and agreed with Australia that “gap
analysis” should be an objective for the WPDR.
21. The representative of Chile agreed with the Chairperson’s Note on a more concrete focus, and
was open-minded in terms on how to proceed, noting that very few delegations had provided
examples to date.  The delegation of Nicaragua also agreed that a more specific approach was needed,
and supported Hong Kong, China’s idea, stating that  it would be helpful for delegations which were
currently collecting data on VI:4 issues.  They stated it was important to consider horizontal as well as
other approaches to creating disciplines.
22. The representative of Hungary shared the view in para 3 of the Chairperson’s Note, stating
that the review of regulatory examples, togeth er with Hong Kong, China’s suggestion, would be
useful.  He urged Members to provide further examples.  The representative agreed with the U.S.
view of looking at the concrete within the context of the abstract, and with Australia and Japan on the
relevance of the accountancy disciplines.  He supported Brazil on the importance of the horizontalapproach, as well as Uruguay on the importance of the timeframe for concluding negotiations.
23. The representative of the European Communities,  on a preliminary basis, welcomed the U.S.
suggestion on the integration of examples with regulatory concepts, especially the distinction between
measures falling under Article VI:4 and those under Articles XVI & XVII.  On Hong Kong, China’s
proposal, the EC wished to reflect on the Secretariat role, noting that Members all had the Synopsis
paper.  She agreed that the accountancy disciplines were very relevant.  On the Examples  paper, she
noted the negative formulation, e.g. “excessive fees”, and stated that a more neutral formulation was
needed.
24. The representative of Switzerland stated that the WPDR needed to work on more concrete
issues, and supported the review of regulatory measures based on the Examples  paper.  Hong Kong,
China’s idea was interesting, he said, and Members should give increased importance to the
accountancy disciplines.
25. The representative of Brazil, regarding the examination of measures mentioned in the
negotiating proposals, agreed that the process should be Member-driven, but noted that any Member
could raise any measure, including those in other Members’ negotiating proposals.  The representative
of the United States agreed that any Member coul d raise anything they wished. With regard to a
Secretariat compilation, however, he stated that the view of many delegations was that they should
decide whether to raise issues from their negotiating proposals.
26. The representative of India said that his delegation would reflect on the U.S. and Hong Kong,
China ideas.  He agreed that a more focused approach was needed.
27. The Chairperson summarized by stating that Members had a very timely and useful
discussion on the “road ahead” for the WPDR.  Members were generally of the view that it was time
to take a more focused approach, i.e. to focus more on the regulatory barriers and issues that services
suppliers actually faced.  The WPDR’s work was an “educational process” for all Members, he stated,
noting that Members had raised a number of specific questions that the WPDR might focus upon,
including whether Article VI:4 was the most appropriate means for dealing with certain regulatory
measures.  The more focused approach would be evolutionary, the Chairperson stated, and the debatewould therefore follow on that basis.  Concerning  work for the Secretariat, he noted there was no
consensus.  It was clear, however, that Members could draw upon any information when making a
contribution to the WPDR, in order to get a better grasp of the regulatory issues concerned.S/WPDR/M/15
Page 5
28. The Chairperson continued by noting that, as mentioned in para 5 his Note, Members at the
informal meeting had suggested that the Summary and the revised Checklist of Issues  (JOB(01)/92
dated 19 June 2001) be collapsed into one document.  The new document would continue to reflect
the current views of the Members from both formal and informal discussions, but would not constitute
anything else.  It would be up to the Members themse lves to decide how best to utilise the contents of
this document in future discussions.
29. The representative of the European Communities said that the Checklist  had been very useful,
but there was no need to continue updating it as a separate document.  She agreed with the suggestion
to collapse the two documents.  Members then approved the Chairperson’s suggestion.
30. The Chairperson, turning to the Disciplines on Domestic Regulation in the Accountancy
Sector  (S/L/64 dated 17 December 1998), as well as the Guidelines for Mutual Recognition
Agreements or Arrangements  in the Accountancy Sector  (S/L/38 dated 28 May 1997), stated that para
6 of his Note had observed that the informal discussions had highlighted that it was ultimately up to
each Member itself to decide the relevance of th ese documents to the on-going work in the Working
Party.  He then observed that para 7 of his Note had raised the question of the Working Party’s work
on professional services , and had attempted to summarize discussions at the informal meeting on 1
March.
31. The representative of India, regarding para 7, noted that the idea of a paragraph by paragraph
review of the accountancy disciplines and the Synthesis  paper had been raised in the Chairperson’s
Note of 30 January.  Delegations had observed that the Synthesis  paper took into account the views of
only certain Members, he stated.  India was underta king consultation with professional associations,
and the preliminary results were not very negative, but they felt it was too early to begin discussingthe Synthesis  paper in detail.  The representative stated that review of the accountancy disciplines
should only take place after review of the  Synthesis  paper had been completed.
32. The Chairperson observed that the Synthesis  limitations were well known, and said that an
examination of the paper could help guide the consultations of those Members that had not yet
reported.
33. The delegation of Thailand confirmed their reservations, noting that only four developing
countries had responded to date.  They wished to see more reports of consultations, as well as a
broader range of sectoral coverage.  The delegation thanked the Chairperson for the clarification of
the issue expressed in para 7, and said they would try to be constructive on the issue.  The
representative of Malaysia stated that their reserv ations had been expressed at the informal meeting,
and noted that para 7 accounted for this.  Para 7 therefore indicated the best way to proceed, he said.
The delegation of Canada said they also supported what was suggested in para 7.  They were also
continuing their domestic consultations.
34. The delegation of Mexico stated that they had believed it was necessary to wait, but were also
aware that the initial deadline for reporting was March 2000.  Members should consider a tentative
date for proceeding, he stated.  Mexico very much wished to have more discussion on professional
services.  More time was unlikely to greatly increase the number of reports, the representative stated,and therefore more flexibility was needed from Members.
35. The representative of Uruguay agreed with Mexico in principle. Deadlines would help to
revitalize the process, he stated.  There was also the idea of consulting international professional
services organizations, he noted, observing that these specialized organizations were likely to have
information which could be of benefit.  Members would need to reach agreement in this regard aswell, he stated.S/WPDR/M/15
Page 6
36. The Chairperson noted there was a sense from Members of the need to be more focused on
professional services as well.  Although the Synthesis  could not be representative of Members’ views
as a whole, due to the limited number of reports, it would be useful for delegates to reacquaint
themselves with the thinking of their colleagues, he stated.  Members would also need to address the
issues raised by Uruguay and Mexico at the next meeting, the Chairperson stated.
(b) Development of Regulatory Disciplines under GATS Article VI:4
37. The Chairperson noted that, at the previous formal meeting on 29 November 2001, the
Working Party had traversed a range of issues based upon a previous Chairman’s Note.  Good
progress continued to be made on a number of issues, with discussions continuing to be more focused
on the horizontal aspects, as opposed to professional services.  In advance of the current meeting, he
had presented some further thoughts in a Chairperson’s Note, JOB(02)/4, dated 30 January.  His
intention was to ensure that Members had as fruitful and constructive discussions as possible at thismeeting.
(i) Discussion of Concepts Relating to the Development of Disciplines
General Issues
38. The Chairperson noted that the first sub-item in this area was the discussion of concepts
relating to the development of disciplines.  Turning first to general issues , he stated there were a
number of issues to be addressed, ranging from examples of actual regulatory  issues  to
federal/sub-federal measures .  Paras 4-10 of his Note had raised a number of questions in relation to
these various issues.  He then opened the floor for comments.
39. The representative of Japan, with respect to the issue of “onerous visa procedures” and the
scope of Article VI:4  mentioned in para 5, said that VI:4 measures should be directly related to
competence, ability to supply the service, and quality  of the service, as stated in VI:4 (a) and (b).
Therefore, visa procedures would be applicable only if they were directly related to one of those
factors.  In any case, visa procedures would still be subject to para 4 of the Annex on Movement of
Natural Persons , he stated.
40. The representative noted that, in the accountancy disciplines, the requirements concerning
licensing procedures were not the same as those for qualification procedures.  Members therefore
needed to be more clear on the distinctions between  the two, e.g. with respect to court activities of
lawyers.  Regarding the application of disciplines, Members should discuss this issue in the future, he
stated.  As he had noted before, transparency was easier to apply on a horizontal basis.  On
federal/sub-federal measures , Japan believed they should both be subject to the same disciplines.
41. The representative of Brazil, regarding general issues , said the foremost issue was the
applicability of horizontal disciplines.  He reiterated his delegation’s earlier view, i.e. that they should
apply only where specific commitments had been made.  Reasons for this view were the overall
structure of Article VI, the fact that the objective of disciplines was to ensure effective market access,
and the fact that GATS commitments were made in the sectors selected by Members.  Concerning
federal/sub-federal measures , the representative said that Article I:3(a) should be strengthened, noting
that many VI:4 measures were implemented at the sub-federal level.  On para 9, concerning thedefinition of regulations , he noted that one delegation had previously raised doubts on the coverage of
Article III:3, in the light of Article XXVIII(a). Brazil believed that Article III:3 covered all kinds of
measures, taken at and
 all levels of administration.
42. The representative of Hong Kong, China also  reiterated his delegation’s views regarding
applicability.  In practice, domestic regulations were imposed independently of market access
considerations, i.e. for ensuring good domestic policies.  In this respect, regulatory disciplines couldS/WPDR/M/15
Page 7
serve the objective of progressive liberalization, he stated.  Article VI:4, and Articles XVI & XVII
were designed to deal with different aspects of measures.  Therefore, there was in principle no logic
for VI:4 disciplines to hinge on commitments under Articles XVI & XVII.  Disciplines could be seen
as precursors to progressive liberalization.  The representative’s objective was to emphasize that it
was still too early to decide on applicability.  Regarding federal/sub-federal measures , he associated
his delegation with Brazil’s comments.
43. The representative of the Philippines, while noting that Article VI:4 covered a relatively
broad spectrum, was of the view that visa procedures might not be covered.  He asked for more
clarification of Japan’s views.  On para 6, his delegation believed application should only be where
specific commitments had been made.  He appreciated the idea in the Chairman’s note that it was up
to Members to decide, i.e. on a voluntary basis.  On para 7, regarding administrative burden , he stated
that special and differential (S&D) treatment might be necessary for developing countries.  Onfederal/sub-federal measures , he agreed with Brazil with respect to application.
44. The representative of Guyana, regarding para 5, expressed concern that visas were typically
required for consumers and services providers from developing countries, but not for developed
countries.  This was a constraint to the supply of services, he stated, and an issue that must be
addressed.  On the scope of Article VI:4 , Guyana agreed that disciplines only applied to specific
commitments, but noted the cross-sectoral effects of regulatory measures.  In the case of economic
needs tests, for example, there were often no legal provisions to underpin the scheduled restrictions.
On federal/sub-federal measures , the representative noted that sub-federal regions had negotiated as
separate entities, e.g. different rules applied in New York and California for engineers.  Disciplines
must therefore apply at the “ground level”, he stated.
45. The representative of Uruguay, on para 5, said that the visa issue in principle went beyond
VI:4, and even the GATS.  On para 6, he agreed that each Member should decide for themselves,
although their legal obligation would only be where there were specific commitments.  The issue was
now solved, and should be pulled out of the discussions, he stated.  On para 7, administrative burden
was an important issue.  S&D treatment should be given further consideration, the representativestated, both in this regard and with respect to domestic regulation in general.  On para 10, regarding
federal/sub-federal measures , the question to be asked was what Members wanted, he said, e.g. full
transparency or only partial transparency.
46. The representative of the United States, regarding Japan’s comments, said that the visa
reference was very interesting, and showed the type of analysis his delegation wished to undertake.
He agreed with Japan on the horizontal application of transparency disciplines.  The representative
thanked Brazil for the clarity of their intervention on Article III:3, and stated that Hong Kong, Chinahad made some very good points on the merits of applying regulatory disciplines.  Regarding
Guyana’s intervention, he noted that visa problems could affect trade interests.  He also pointed out
that U.S. submissions to the WPDR had not attemp ted to distinguish between federal and sub-federal
measures.
47. The representative of Japan, responding to the Philippines, said they believed visa procedures
would not normally fall under Article VI:4, but wondered if they might in certain specific cases.
Regarding Uruguay’s comments, Japan recognized the right of Members to control the entry of
natural persons, but also believed that onerous visa procedures might imply the nullification or
impairment of specific commitments.
48. The representative of India, regarding para 6, said that horizontal disciplines under Article
VI:4 should be applicable only where there were specific commitments. Regarding
federal/sub-federal measures , it would be administratively burdensome to extend measures to the sub-
federal level, he stated.S/WPDR/M/15
Page 8
49. The representative of Brazil, regarding para 5, agreed that immigration policies were out of
the scope of GATS.   However, to the extent that visa requirements were related to the granting of a
license, such measures might fall under VI:4.  Noting that specific provisions existed for other modes
of supply, e.g. footnote 8 of the GATS regarding capital movements, he stated that mode 4 visa issues
should therefore be taken into account.  Regarding Hong Kong, China’s intervention, he said that,merits aside, the structure of the GATS agreement, i.e. the positive listing of commitments, was well
known, and was beneficial to both developed and developing countries.
50. The representative of Mexico, on para 5, said that, although visa procedures might possibly be
related to the granting of a license or qualification for a services supplier, it was not the purpose of
Article VI:4 to cover that kind of procedure.  Members should not to take the issue too far, he stated,
otherwise they would get bogged down in lengthy discussions.  Members should instead examine
what was specifically mentioned in Article VI:4.  Regarding para 10, the representative thanked theSecretariat for its Note (JOB(02)/21, dated 7 March 2002), which indicated that the problem was the
lack of compliance with existing notification obligations.
51. The delegation of Guyana, without prejudice to their final position, stated they saw the need
to distinguish the temporary movement of services consumers and providers from that of permanent
migration.  With respect to temporary movement, the issue of visas must be addressed, he stated.  Thedelegation of Cuba, on para 6, said they did not feel it was up to each Member to decide applicability
on a voluntary basis.  On para 7, the delegation stated that administrative burden  was matter of
particular concern, and that S&D treatment would be appropriate in that regard.
52. The representative of Korea, on the visa issue, said it might be related to qualification and
licensing requirements.  The basic assumption of VI:4, however, was non-discrimination, he stated,
but visas were discriminatory measures.  The representative agreed with Japan, that there could be
non-violation cases.
53. The Chairperson summarized by stating that Members had a quite useful discussion on
general issues, and Members had already made an effort to be more focused.  A number of
delegations had raised specific issues regarding para 5 of his Note concerning visa procedures.Members would need to further discuss this issue, but it had been a good start to a more focused
approach.  A few delegations had raised the issue of S&D treatment, both in terms of administrative
burden and regulatory disciplines in general, and this would obviously require further discussion.  The
question of the applicability of horizontal disciplines, and the issue of federal/sub-federal measures,
had prompted useful interventions, and Members woul d need to return to these issues at the next
meeting.
Necessity
54. The Chairperson then turned to the next group of topics, which was the issue of necessity .  As
Members knew, there were a number of questions and issues raised in relation to this issue, but
Members had had limited discussions in recent times.  At the previous meeting, he made the
observation that the first, and probably most significant, question that the Working Party was
considering was the criteria for the necessity test , which obviously included the idea of the “third
aspect” .  He then opened the floor for further comments on necessity .
55. The representative of India agreed that a horizontal necessity test could not be too specific.  A
panel would examine the objectives of the regula tion, and then apply the general necessity test.
Governments should decide legitimate objectives for themselves, he stated, and any listing of
legitimate objectives could only be illustrative, not exhaustive.
56. The representative of Brazil confirmed his delegation’s position that disciplines should
involve both transparency and necessity.  Transparency alone would not achieve the objectives of theS/WPDR/M/15
Page 9
GATS, he stated.  He agreed that the focus should move away from legitimate objectives, which
should not be questioned.  With respect to determining whether a measure was more trade restrictive
than necessary, his delegation was not sure how the proportionality criteria suggested by the EC
would work in dispute settlement.  The representativ e said that another issue that should be further
discussed was the “third aspect”, i.e. the question of whether a less trade restrictive alternative wasavailable.  Economic feasibility, technological feasibility, administrative burden, etc. could be
considered, he stated, but it should not be the WTO’s role to determine what measures should be
adopted.  S&D treatment could also be considered in this regard.
57. The representative of the European Communities agreed that Members had moved away from
discussing legitimate objectives.  Regarding proportionality, a panel should not assess the validity or
appropriateness of any policy objective, she stated, but instead could focus on whether the measure
was proportionate to the intended policy objective, taking into account the level of development.
58. The representative of Mexico stated that Members must be aware that regulations were not
created for trade purposes in general, and especially not for international trade purposes.  Members
must therefore be careful about how they approached the necessity issue, he stated, emphasizing that
he wished to hear the views of those specia lized in analyzing the impact of regulations.
59. The representative of Canada thanked Brazil for mentioning the third aspect, and agreed it
might need further discussion.  She stated that Canada was continuing to analyze the extent to which
the accountancy disciplines might be used as the basis for horizontal disciplines.
60. The representative of the United States noted that each Member had their own prejudices with
respect to necessity and transparency, and there was no collective sense of the problems to be
addressed and the best means to do so.  Members needed to integrate the examination of specificregulatory measures into the discussion, he stated.  He noted that the Article VI:4 mandate to develop
any necessary disciplines was itself a necessity test.
61. The Chairperson concluded by noting that the more focused approach would necessarily
inform the WPDR discussions.  Members had a useful discussion of necessity, he stated, with a
number of delegations raising important issues that had not recently been discussed.
Transparency
62. The Chairperson moved to the next issue, the question of transparency .  At the previous
meeting, he had observed that the issues of transparency objectives  and compliance  with existing
notification requirements  were currently the primary focus of the Working Party.  In his view, it was
in these areas that some of the more substantive questions arose as to the possible shape of any
transparency disciplines that Members might be able to develop.  Once these questions had been
clarified, he believed the remaining issues and questions might become somewhat easier to answer.
63. The Chairperson observed that, since the previous meeting, the Secretariat had circulated (as
JOB(02)/21, dated 7 March) a brief summary, by sector , of Members’ notifications to date of central
and local government measures.  He then opened the floor for any comments that delegations wished
to make relating to transparency.
64. The representative of Japan stated that possible useful elements for horizontal disciplines
from the accountancy disciplines included paras 3, 4, 5, 6, 7, 8+14 combined, 13, and 15 to 18.
65. The representative of Brazil, regarding Japan’s intervention, stated that many of the issues
mentioned might not be directly related to transparency.  There was very little in the accountancy
transparency disciplines not already covered by existing GATS obligations, he stated, and priority
should be given to implementation of existing obligations.  JOB(02)/21 had several implications, theS/WPDR/M/15
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representative stated, i.e. that the implementation of Article III:3 requirements had not occurred, and
that developing countries had made most of the notifications.  The Members concerned should
therefore explain why more obligations were needed, he stated, noting Brazil’s view that no additional
transparency disciplines were needed.
66. The representative of Hong Kong, China agreed  that the effective implementation of Article
III obligations would go a long way to address transparency issues.  He observed that the transparency
provisions in the accountancy disciplines required making known not only the relevant measures, but
also the rationale behind those measures.  His delegation believed that this requirement would be an
important element of any horizontal disciplines to be developed under Article VI:4, as it would be
crucial for the effective administration of any necessity test.  It also illustrated the interdependency
between transparency and necessity, he stated.
67. The representative of India, noting that Japan had earlier suggested the introduction of a
system for public comments, stated that India had been holding domestic consultations on the
transparency provisions of the accountancy disciplines.  The preliminary view was that prior comment
provisions would cause unnecessarily administrative  burden.  Overall, India felt that transparency
disciplines should not go beyond Article III.  The representative supported Brazil’s comments against
any additional transparency obligations.
68. The representative of Japan, responding to the comments of Brazil and India, acknowledged
the importance of the existing Article III obligations, but said that his delegation still felt the need for
more precision to make the obligations operational.  Consultations with the private sector had
revealed many cases where procedures and criteria for granting licenses were unclear and even
discretionary.  Elements of the accountancy disciplines which could help address this problem, e.g.the provision that requirements must be pre-established, were not necessarily already existent in
Article III, the representative stated.  More disciplines vis-à-vis services providers were needed, he
stated, and not additional requirements for notifications to Geneva.
69. The representative of the United States said th at Brazil had raised valid points, and noted that
the problem of Article III implementation covered both developed and developing country Members.
Further examination of the problem was required, he stated, and it was important to have the correct
mix of notifications to the WTO and transparency at the trading level.  The latter seemed to provide
more value-added, he stated.
70. The representative of Mexico stated there was still a long path to follow on the
implementation of Article III.  He wondered whether cross-notification provisions in services were
the element that was lacking.  The representative of the Philippines agreed that the primary problem
appeared to be a lack of Article III implementation.  He was not sure whether transparency disciplines
should oblige Members to directly inform private services suppliers.  Instead, the contact and enquiry
points should be relevant in this regard, he stated.
71. The representative of Canada emphasized that transparency was a key element.  The contents
of Article III were substantively different from the transparency elements of the accountancy
disciplines, she stated, and there was no overlap or repetition.  Publishing promptly should be the wayof informing the private sector.  Administrative burden was an important issue, the representative
stated, and flexibility was required.  Regarding sub-federal measures, she noted that Canada had made
several notifications.
72. The representative of Uruguay stated that transparency was important for all Members.  The
level of notifications was low, less than one per Member.  Members therefore needed to find the most
effective way to achieve transparency, he stated.S/WPDR/M/15
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73. The Chairperson concluded by stating that the previous speakers had already summarized the
main issues.  Important topics raised included the objectives of any disciplines to be created, as well
as the existing GATS notification requirements.  The Secretariat Note had been a catalyst for
discussion, he stated, helping to indicate that Article III implementation was a priority issue for
Members.
Equivalence and International Standards
74. The Chairperson noted that the last two topics were equivalence  and international standards .
He observed that, at the previous meeting, one delegation had indicated that the concepts of
equivalence and international standards were very important, especially for developing country
Members to increase their trade in services.  The key question was what Member saw as the relevance
of equivalence and international standards to the development of regulatory disciplines.  He then
asked whether any delegations wished to make any additional comments.
75. The representative of Thailand stated they were interested in the issue of equivalence, and
were consulting domestically on what should be the role of the WPDR in regard to equivalence.
76. The Chairperson concluded discussion under the first agenda sub-item by stating that
Members had a useful discussion and exchange of views regarding of concepts relating to the
development of disciplines.
(ii) Development of Disciplines for Professional Services
77. The Chairperson observed that the second agenda sub-item was the development of
disciplines for professional services.  Members had a useful discussion earlier in connection with the
issue of the organization of future work, he stated, and noted that professional services were addressed
in the  Synthesis  paper prepared by the Secretariat, as well as in his Note of 30 January.  He then
opened the floor for comments.
78.  The representative of Mexico reiterated his earlier statement that professional services were
extremely important, and therefore Members should be more objective and precise, including with
regard to timeframes.  He stated that Mexico was willing to work on the basis of the Synthesis  paper.
79.  The Chairperson stated that the goal of the earlier discussions had been to try to set the road
ahead for professional services.  Members were at tempting to familiarize themselves with the issues
concerned, without having any fixed results in mind.  The questions of new timeframes and the
relationship with international organizations were issues that needed to be addressed.
(c) Date of Next Meeting
80.  The Chairperson stated that the next agenda item was the date of the next meeting.  In
accordance with the usual practice of grouping meetings of the subsidiary bodies close to meetings of
the Council for Trade in Services, he suggested that the next meeting again be held during the weekjust before the next Council and Special Session m eetings, i.e. the week beginning 27 May.  Members
agreed to the Chairperson’s suggestion.
(d) Other Business
81. The Chairperson noted there were two topics under this agenda item, which had been raised
by himself and Hong Kong, China.  He gave the floor first to Hong Kong, China.
82. The representative of Hong Kong, China noted that many delegations had been invited a
recent meeting of services experts held in Paris at the OECD concerning domestic regulation.  For theS/WPDR/M/15
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benefit of Members who did not attend as well as for the purpose of transparency, he suggested that, if
Members agreed, the WPDR could invite the OECD to summarize the results of the meeting on a
non-attributable basis.  The Chairperson agreed with Hong Kong, China’s suggestion.  Members  also
agreed to invite the OECD to summarize the results of the Paris meeting.
83. As the second item, the Chairperson stated he wished to discuss the status of Working Party
documents, without attempting to reach a conclusion at the current meeting.  He observed that certain
informal WPDR documents, including the Examples  paper and his Chairperson’s Notes, could be very
useful but were restricted, and suggested that Members explore the possibility of de-restricting
informal documents, or allowing wider dissemination.
84. The representative of Australia asked if there was a listing of informal documents, as her
delegation found them difficult to access.  The Secretariat replied that all informal documents should
be available on the Members’ website, and that they would check to see if there were any technical
problems regarding access.
85. The representative of India stated there was merit in the Chairperson’s statement, but that
Members should think about how it should be done, e.g. by reissuing informal documents as regular
documents.  The representative of the European Communities agreed with India, including on the
merits of derestriction, and noted that WPDR work had attracted much outside attention, perhaps
because important documents were restricted.  She suggested that the old and new WPDR
chairpersons consult with Members on the issue.
86. The representative of Mexico also agreed with India, and stated that Members must be careful
on the issue.  With regard to the Chairperson’s Notes, he stated that Members should think about
some form of “prior consensus” to prepared the Notes for release as formal documents.  Therepresentative of Uruguay stated that Members needed to clearly distinguish between formal and
informal documents.  He suggested that a proposal be made to Members to reclassify the documentsconcerned as formal documents.
87. The representative of Malaysia stated that India’s point was valid, and that informal
documents were not publicly distributed.  For important documents, Members could decide to
derestrict them, he stated.  He also noted the usual six-month waiting period for the derestriction of
formal documents, and asked what Chairperson intended.  The Chairperson agreed there were existing
rules, and said he did not have any definitive ideas.  The incoming and outgoing chairpersons couldconsult with Members, he stated.  The representative of Brazil stated they were open-minded on the
issue, and noted as a precedent that the Secretariat informal note on necessity had been made public.
88. The Chairperson concluded by stating that misinformation outside the WTO about the WPDR
had stirred him to act.  Members would explore the issue further.
(e) Appointment of the Chairperson
89. The Chairperson noted that the Chairman of the Council for Trade in Services had not yet
made a proposal for the new Chairperson of the WPDR, so Members would need to revert to this item
at the next meeting, albeit without him in the Chair as this was his last meeting.  He would therefore
expect the new Chairperson to assume the chairpersonship from the beginning of the next meeting.
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