RESTRICTEDWORLD TRADE
ORGANIZATIONS/WPGR/M/40
23 December 2002
(02-7073)
Working Party on GATS Rules
REPORT OF THE MEETING OF 3 DECEMBER 2002
Note by the Secretariat1
1. The Working Party on GATS Rules held its fortieth meeting under the chairmanship of
Mr. Thomas Chan, from Hong Kong, China.  The agenda for the meeting was contained in
WTO/AIR/1984.  It included six items:  adoption of the annual report to the Council for Trade in
Services;  negotiations on emergency safeguard measures under GATS Article X;  negotiations ongovernment procurement under GATS Article XIII;  negotiations on subsidies under GATS
Article XV;  date of the next meeting; and othe r business. The Chairperson drew attention to the
Annotated Agenda (JOB(02)/202) in which he propos ed themes for discussion.  The agenda for the
meeting was adopted.
A. ADOPTION OF THE ANNUAL REPORT TO THE COUNCIL FOR TRADE IN SERVICES
2. The Chairperson recalled that the draft annual re port of the Working Party to the Council for
Trade in Services had been circulated on 20 November 2002 as document S/WPGR/W/40.  Like its
predecessor, this report conveyed factual information on the activities carried out by the Working
Party since the 2001 annual report had been issued.  He drew attention to a typo in the draft report:  in
paragraph 9, the informal document referred to was in fact JOB(02)/84 and not --82.  This typo wouldbe corrected in the final version of the report.
3. The representative of Poland enquired whether reference to the paper on subsidies circulated
at this meeting by his delegation could be referred to in paragraph 9 of the report. The Chairperson
replied that this would not be possible since the paper had not officially been circulated yet.
However, it would be mentioned in the 2003 annual report.
4. The representative of the United States asked that the following words be added at the end of
the first sentence of paragraph 5:  "… and on desirability and feasibility of such a mechanism".  This
would reflect the fact that the US written contribution addressed the issue of desirability and
feasibility and not that of an ESM as such.  The representative of the Philippines said the issue of
desirability and feasibility was already referred to in the second sentence of paragraph 5 and alldelegations were aware that it was still under discussion.  The text should therefore be maintained as
it was.  The representative of the United States recognized that the issue of desirability and feasibility
was mentioned in the second sentence, which referred to issues being discussed.  The first sentence,
however, addressed written contributions by Members, which made it necessary there to also include
a reference to desirability and feasibility.  Duri ng the following exchange of views, involving the
delegations of the Philippines, Thailand and the United States, the representative of Uruguay
suggested that the first sentence of paragraph 5 refer to " [V]arious delegations presented formal and
informal written contributions in relation to the mandate contained in Article X".  The Chairperson
suggested that the report be adopted, subject to this change.  Further, in paragraph 9, the correctreference was JOB(02)/84 (and not –82).  It was so agreed.
                                                     
1 This document has been prepared under the Secretariat's own responsibility and without prejudice to
the positions of Members and to their rights and obligations under the WTO.S/WPGR/M/40
Page 2
B. NEGOTIATIONS ON EMERGENCY SAFEGUARD MEASURES  (ARTICLE X OF THE GATS )
5. The Chairperson said that, as agreed at the meeting on 23 October 2002, the Secretariat had
prepared a note highlighting core elements contained in the various written proposals that Members
had put on the table in the negotiations under GATS Article X.  This Note, entitled Core Elements
Contained in Members' Proposals – Overview of the Synopsis,  had been circulated as JOB(02)/200.
The table contained in this document gave an overview of the issues raised by Members.  This Note
was meant to be a guide to reading the Synopsis (J OB(01)/122 + Add.1) and, therefore, followed the
same structure.
6. He recalled that, according to the work programme on emergency safeguard measures agreed
by the Working Party in July,2 Members were encouraged to put forward submissions as early as
possible before 31 December 2002.  Moreover, Members had agreed, inter alia , to identify, elaborate
and consolidate elements for an ESM, and to address the question of feasibility and desirability of anESM.  It had also been agreed that the Chairperson would circulate a note by 15 March 2003 to report
on the results of such work.   This meeting provided an opportunity for delegations to continue their
exchange of views on the issues of desirability and feasibility.  The Annotated Agenda prepared for
this meeting also proposed that delegations give further thought to various issues which had been
raised on 23 October, i.e.:  (i) to identify possible common elements for a services ESM based on theSynopsis;  (ii) to examine concrete cases or examples where a safeguard measure would be needed
and how it could be applied; (iii) to discuss the idea of working out a procedural framework or core
mechanism, or combining different models that have been proposed; (iv) to further address process-
related issues, such as transparency, notification, consultation and surveillance provisions;  and (v) to
explore the idea of expedited dispute settlement proceedings.  He reminded that, according to thework programme on ESM, the Chairperson was expected to circulate a note by 15 March 2003,
"identifying areas of convergence and divergency among Members, with a view to providing a basis
to facilitate further negotiations".  Needless to say that Members' input and contributions would be
crucial to enable the Chairperson to fulfill this task.  He proposed that the Working Party continue
discussions on emergency safeguard measures in informal mode.
3  It was so agreed.
C. NEGOTIATIONS ON GOVERNMENT PROCUREMENT  (ARTICLE XIII OF THE GATS )
7. The Chairperson said that the work programme on government procurement agreed by the
Working Party encouraged Members to put forward submissions as early as possible before
31 March 2003, and stipulated that discussion should continue on the basis of submissions from
Members and materials available.  He recalled that, at the last meeting, Members had addressed the
Communication from the European Communities and their Member States on government
procurement of services.4
8. The representative of the European Communities recalled that, in some services sectors,
government procurement represented more than 50 per cent of total activity, which reduced in the
same proportions the value of specific commitments in these sectors.  Opening government
procurement was a tool for development, enabled public authorities to purchase services at the lowest
cost, and could favour transfer of technology and know-how.  The EC proposed that negotiations ongovernment procurement make full use of the flexibility offered by the GATS and develop a
multilateral framework taking into account Members' needs at all level of development.  Members
could start negotiating an understanding including rules and procedures on transparency as well as
modalities for the application of Articles II, XVI and XVII.  Then, they could decide which sectors
                                                     
2 S/WPGR/7, specifically paragraph 3.
3 See Summary of Comments Made During the Informal Meeting of 3 December 2002 , Note by the
Secretariat, JOB(02)/216.
4 S/WPGR/W/39.S/WPGR/M/40
Page 3
would be opened and to what extent.  Sectors in which commitments regarding access to, and national
treatment in respect of, government procurement of services would be undertaken would be subject to
the multilaterally agreed rules.  This flexible  framework would allow governments to take into
account legitimate concerns.  For instance, should a government wish to reserve certain procurement
to local small-and-medium sized enterprises, it could determine a threshold below which thecommitments would not apply.  The EC was ready to  discuss further any concern or comment with all
interested delegations.  He regretted that, due to time constraints, delegations could not engage in a
substantive discussion at this meeting.
9. The representative of Switzerland said that government procurement was an important topic
deserving a thorough discussion at the next meeting.  The representative of the Philippines said that
his delegation was concerned about the EC proposal because it exceeded the negotiating mandate in
Article XIII.  In his view, negotiations under this agenda item were limited to transparency issues.The representative of Canada  said that his delegation attached importance to this agenda item and
would forward questions to the European Communities.  The representatives of Malaysia, Peru ,
Indonesia and Kenya  supported the statement made by the representative of the Philippines.
10. The Chairperson said that he would hold an informal meeting in January or February next
year to continue discussion of this topic.  At that meeting, the agenda items would be addressed in the
following order:  government procurement, subsidies and emergency safeguard measures.
D. NEGOTIATIONS ON SUBSIDIES  (ARTICLE XV OF THE GATS )
11. The Chairperson drew attention to an informal contribution by Poland on definition of
services subsidies.5  He regretted that, due to time constraints, discussion of this agenda item had to be
postponed and suggested to revert to this issue at the next informal meeting.
E. DATE OF THE NEXT MEETING
12. The Chairperson indicated that the next formal meeting of the Working Party was expected to
take place during the next cluster of services meetings, which had been tentatively scheduled from
27 February to 3 March 2003.  The Working Party woul d meet during the first week of the cluster and
the exact date would be communicated to delegations in due time.
F. OTHER BUSINESS
13. The Chairperson recalled that, at the last meeting, he had informed the Working Party that he
had received a letter from Ambassador Smith, Chairman of the Special Session of the Committee on
Trade and Development, requesting information on any discussions or other developments relating to
special and differential (S&D) treatment that had taken place in the Working Party on GATS Rules.
A few days later, he had received a letter from Ambassador Jóhannesson, Chairman of the Working
Group on Trade and Transfer of Technology, seeking similar information in relation to trade andtechnology transfer.  As agreed at the last meeting of the Working Party, he had replied to these
Chairpersons, informing them in a factual manner on issues related to, respectively, S&D and trade
and technology transfer, that had arisen – or not, as the case may be – in this Working Party under
each of the three agenda items.  Copies of the two letters were available outside the meeting room.
These letters were without prejudice to the position of any Member on the issue of S&D.
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5 JOB(02)/207.