RESTRICTED
WORLD TRADE S/WPGR/W/23
21August 1997
ORGANIZATION(97-3560)
Original: Spanish Working Party onGATS Rules
COMMUNICATION FROM PERU
Emergency Safeguards
Thefollowing communication isbeing circulated attherequest ofPerutomembers ofthe
Working Party onGATS Rules.
Thedelegation ofPeruattaches great importance toemergency safeguards forservices asa
useful instrument forcountering thepossibly negative effects oftheliberalization oftrade inservices.
Inthisconnection,weconsiderthatamultilateraldisciplineonthisissuewouldencouragemanyMembers
oftheWTO -particularly developing countries -toparticipate actively inthenextround ofnegotiations
fortheyear2000. Moreover, inviewoftheroleplayed byservices intheoverall functioning ofthe
economy andinthedevelopment process, webelieve thatageneral emergency safeguard mechanism,
whose implementation would notdepend onsectoral liberalization commitments andwhich would not
necessarily berestricted bysuchcommitments, would bethemost appropriate.
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1. Onwhose behalf would emergency safeguard action betaken?
There appears tobeaconsensus thatthebeneficiary ofanemergency safeguard would depend
onthemode ofsupply towhich thesafeguard applies, asisexplained inthechairperson 'snoteof
1May1997.
Another issue istherelevance ofthedefinition ofdomestic industry andnational industry.
InPeru, according tothedomestic legislation ineffect, thewords "domestic industry" would include
industries established inPeru, whether theyareowned bynationals orforeigners.
2. Inwhat circumstances would emergency safeguard action betaken andwhat would be
thepurpose ofsuchaction?
Weagree withdelegations which consider thatan"unforeseen development" would beareason
fortheadoption ofanemergency safeguard. Themeasure should betime-bound anditshould beapplied
onanon-discriminatory basis. Inanyevent, thepurpose ofsuchameasure would betoremedy any
situation thatarose asaresult ofcommitments under theGATS.
Itisalsoobvious thatanygeneral emergency safeguard would notbedesigned todealwith
thesituations included inArticles XIIoftheGATS (balance-of-payments difficulties), XIV(measures
taken forreasons ofpublic order ormorals, security, public health interalia)andXXI(modification
ofschedules), andwith unforeseen developments such asthose listed byPeru in1989
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(documentMTN.GNS/W/74),namely,protectionofconsumersandthephysicalinfrastructure,prevention
ofdominant market positions, orother practices identified more recently.
Inother words, webelieve thatasafeguard measure forservices should bemore thanasimple
extrapolation ofsafeguards suchasthose provided fortrade ingoods. Wetherefore consider thata
safeguard measure forservices should bebroader andshould notberestricted tocovering thecase
of"injury orthreat ofinjury duetoanunforeseen increase inimports", because inthecaseofservices
thiscould onlytheoretically apply tomode 1,asother delegations havealready remarked.
3. What approach should beadopted inrespect ofinjury/adverse effects, andtherelevant
causal linkbetween injury/adverse effects andcommitments under theGATS?
Inthecaseofemergency safeguards provided tocounter injury orthreat ofinjury, itisessential
tolaydown objective criteria forassessing injury, forexample, impact onvolume ofsales, market
share, profits, employment levels.
4. What measures would betaken under theemergency safeguard mechanism?
Themeasures would depend onthemode ofsupply. Inanyevent, depending onthemode
ofsupply, themeasures should notbelimited tomarket access measures butshould alsocover temporary
suspension ofthenational treatment principle.