RESTRICTED
WORLD TRADE S/WPGR/M/6
22July1996
ORGANIZATION(96-2887)
Working Party onGATS Rules
REPORT OFTHE MEETING OF3JUNE 1996
Note bytheSecretariat
1. Thesixthmeeting oftheWorking Party onGATS Rules waschaired byMr.Stuart Carre of
Canada. Theagenda consisted offiveitems: negotiations ongovernment procurement under Article
XIIIoftheGATS; negotiations onsubsidies under Article XVoftheGATS; negotiations onsafeguards
under Article XoftheGATS; dateofthenextmeeting oftheWorking Party; andother business.
Negotiations ongovernment procurement under Article XIIIoftheGATS
2. TheChairman recalled thattheWorking Party hadagreed tosetasidepartofthepresent meeting
foradiscussion ontheconcept oftransparency inthefieldofgovernment procurement. Inresponse
toarequest from onedelegation, arepresentative from theSecretariat made ashort presentation on
transparency provisions contained intheAgreement onGovernment Procurement. TheSecretariat
representative saidthattransparency andnon-discrimination were thetwinpillars upon which the
Agreement wasfounded. Sheidentified three essential aspects oftransparency. Thefirstconcerned
pre-tendering procedures andtherequirement fortendering entities toprovide adequate andtimely
information oftheintention toprocure. Secondly, following theaward ofacontract, certain information
relating totheaward decision hadtobemade public. Thethirdgeneral aspect oftransparency provisions
under theAgreement related totheobligation topublish established rulesandprocedures inareadily
accessible manner. TheSecretariat representative alsoreferred todiscussions thathadtaken place
intheCommittee onGovernment Procurement inregard totheinfluence ofinformation technology
inpromoting transparency, including through increased computerization ofinformation relating to
procurement.
3. Many delegations whospoke emphasized thekeyroleofinformation inrelation toprocurement
regimes, andtherefore theneedforamaximum degree oftransparency. Inthisconnection, information
technology wascrucial. Onerepresentative wondered whether thecentralized collection and
dissemination ofinformation might beataskthatcould besuitably performed atthemultilateral level.
Another ideawastousetheInternet asamedium formaking information available inrelation to
procurement.Thepointwasalsomadethatwhileundersomenationalandregionalprocurementregimes
allinformationwascentralized,underothersthiswasnotthecase,andtryingtocentralizeallinformation
mightprovecostlyanddifficult.Severaldelegationsraisedspecificaspectsoftransparency,emphasizing
theimportance thattheyattached tothem. These included theclarity andneutrality oftechnical
specifications intender documents, withemphasis where possible onperformance rather thandesign,
theprior specification ofevaluation criteria, theestablishment ofclear andreasonable deadlines for
allprocedural aspects ofprocurement, andtheuseofbidchallenge possibilities andother aspects of
dueprocess asinstruments oftransparency. Onedelegation expressed theviewthattransparency was
notonlyimportant forsuppliers, butwasalsouseful inobliging purchasers tothink carefully about
theexact nature ofthegood orservice tobepurchased.S/WPGR/M/6
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4. Some delegations expressed theview thatalthough transparency wasobviously ofgreat
importance, theneedtopromote non-discriminatory approaches toprocurement andtorespect due
process werealsovitalelements ofanopenandcompetitive system ofprocurement. Onedelegation,
supported byseveral others, saidthatitwasalsoimportant tobearinmind theobjective ofprogressive
liberalization.Moreover,whiletransparencywasundoubtedlycrucial,itshouldnotbeover-emphasized.
Anexcessiveconcernwithtransparencyrequirementscouldforcegovernmentsandpurchasingauthorities
intoundesirable regulatory interventions whose effect might betoprejudice theopenness ofprocurement
markets. Itwasamatter ofbalance. Another representative observed thattheGATS 'transparency
requirements inArticle IIIapplied toArticle XIII, andwondered whatstatus anynewtransparency
requirements relating toprocurement might havewithin thestructure ofGATS asawhole. Would
theybeofgeneral application, orapplied selectively? Would theybelinked toscheduled commitments,
perhaps appearing asadditional commitments? Other delegations agreed thatthese questions should
beexamined.
5. Therepresentative oftheUnited States made reference tothesubmission byhisauthorities
ofaproposalrelatingtoprocurementinthecontextofpreparationsfortheSingaporeMinisterialMeeting.
Henoted thatthisproposal emphasized theroleoftransparency, andforesaw amore gradual approach
towards thequestion ofnon-discrimination inprocurement. Heurged theWorking Party tokeepabreast
oftheprogress ofdiscussions inthepreparatory process fortheSingapore meeting, since theycould
haveimplications forthework oftheWorking Party. Inthemeanwhile, hewasoftheviewthatthe
GATS exercise should move ahead inaccordance withitsmandate.
6. OnedelegationenquiredabouttheactualcoverageoftheAgreementonGovernmentProcurement
(GPA) interms ofcurrent procurement activity. Therepresentative oftheSecretariat saidthatextreme
caution wasrequired inmaking anyestimates ofcovered procurement. However, itseemed thatmost
central government entities (excluding defence-related entities) werecovered byallGPA signatories.
Perhaps somewhere between one-half andthree-quarters ofallsub-central procurement wassimilarly
covered. Itwasimportant tonotethatthese crude estimates didnotcapture theconsiderable variations
incoverage thatexisted among countries. Noestimate could bemade ofcoverage inrespect ofother
procurement entities, suchasparastatals. Onedelegation emphasized thedifficulty ofmaking reliable
quantitative estimates, andadded thatthere were vastgapsincoverage, worth trillions ofdollars
worldwide.
Negotiations onsubsidies under Article XVofGATS
7. Inconsidering thenextstepsinwork onsubsidies, particularly inrelation totherequirement
todetermine afuture work programme andtoexchange information onsubsidies related totrade in
services, several delegations expressed theviewthatitwasessential toarrive atadefinition ofsubsidy.
Itwasalsosuggested thatperhaps aworking definition could beagreed upon, without prejudice to
anyfuture decision regarding thenature ofsubsidy disciplines under GATS. Adelegation saidthat
iftheconcern wasthatthenegotiations maybeprejudged through theearlyestablishment ofadefinition
ofsubsidy forinformation gathering purposes, onewayofavoiding thisriskwould betofocus inthe
firstinstance ontheobjectives ofsubsidies. Another delegation saidthatatleastinthefirstinstance,
theWorking Party should lookatabroad definition ofsubsidy, going beyond thequestion whether
asubsidy involved adirect budgetary contribution fromgovernment. Thesuggestion wasmade that
asafirststep,theWorkingPartymightconsiderwhethertheAgreementonSubsidiesandCountervailing
Measures provided anyuseful guidance inthematter ofadefinition. TheChairman urged delegations
toreflect further onthisissue, which would betaken upatthenextmeeting.
8. Anumberofdelegationsaddressedthequestionwhetheritwasappropriatetodistinguishbetween
different categories ofsubsidy. Oneofthesedelegations made athree-fold distinction between subsidies
directed explicitly atsupport ofparticular industries, subsidies designed tomeet broad social andS/WPGR/M/6
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economic objectives, andotherforms ofgovernment support. Another delegation saidsubsidy practices
might bedivided between those thatwere broad-based andpermissible, those withtrade effects that
mayneedtobedisciplined,andthosethatwereclearlydiscriminatoryandactionable,inthattheyfocused
onspecific sectors oractivities. Anumber ofdelegations agreed thatcategories suchasthese may
correspond todifferent levels ofdiscipline andavailable remedies thatmight beestablished, inasimilar
fashion totheapproach adopted inthefieldofgoods. However, further analysis would berequired
onthispoint. Adelegation emphasized hisviewthatwhile itmaybewarranted tomake these kinds
ofdistinctions, nosubsidy practices should beexcluded apriori from examination bytheWorking
Party. Anumber ofdelegations wereoftheviewthatalthough itmaybelegitimate toexclude certain
types ofsubsidy, suchasbroad-based social subsidies, fromdisciplines under GATS, suchanapproach
should takeintoaccount theeffects ofsubsidies aswellastheiraims. Onedelegation stated thatany
subsidy disciplines would needtoaccommodate theexistence ofdifferent modes ofsupply under GATS.
Referring toanearlier discussion intheWorking Party, aswellastotheChilean submission in
S/WPGR/W/10, adelegation expressed theviewthatitwasasyetunclear thatinchoosing whether
toemphasize anormative oraremedial approach tosubsidy disciplines, thenormative approach should
beparamount. Itwasyettobeestablished thatinjury andcausality investigations would beespecially
difficult inservices. More generally, agood dealofanalysis remained tobedoneinrelation tothe
subsidy issue.
Negotiations onsafeguards under Article XofGATS
9. TheChairmanrecalledthattheWorkingPartyhadagreeditwouldbeusefultodiscusssafeguards
further inaninformal setting, andthatsuchadiscussion would bemore fruitful ifitwasbased on
written submissions byMembers. Although certain delegations hadindicated theirintention tosubmit
papers onsafeguards, inaddition tothose already submitted byAustralia andThailand, these hadnot
yetbeenforthcoming. TheChairman indicated hispreference towaitforsome written submissions
before fixing adateforaninformal meeting.
Next meeting oftheWorking Party
10. TheChairman saidthatthenextmeeting would bescheduled towards theendofJuly,ifpossible
tocoincide withmeetings oftheCommittee onSubsidies andCountervailing Measures.
Other business
11. Nomatters were raised under other business.