RESTRICTED  
  
S/WPGR/M/84  
 
18 June 2014  
(14-3546)  Page: 1/6  
Working Party on GATS Rules    
 
 REPORT OF THE MEETING HELD ON 7 MAY 2014 
NOTE BY THE SECRETARIAT1 
The Working Party on GATS Rules (WPGR) held a meeting on 7 May 2014, opened by Mr Felipe 
Sandoval (Chile) and chaired by the incoming Chai rperson, Mr Saqer Almoqbel (Saudi Arabia). The 
proposed agenda and the Chairperson's annotated agenda for the meeting were circulated in documents WTO/AIR/4290 and JOB/SERV/184 respectively. The agenda was adopted. 
1  ITEM A - APPOINTMENT OF THE NE W CHAIRPERSON FOR THE WORKING PARTY 
1.1.  Based on the consensus reached in the General Council, the Chairperson proposed that 
delegations elect Mr Saqer Almoqbel from Saudi Ar abia by acclamation as the new Chairperson of 
the Working Party. As the outgoing Chairperson, he thanked the Members for their trust and 
support, as well as the Secretariat for its excellent work.  
1.2.  The Working Party elected Mr Saqer Almoqbel by acclamation. 
1.3.  On behalf of all Members the new Chairperson, Mr Saqer Almoqbel, thanked the outgoing 
Chairperson, Mr Felipe Sandoval, for his hard wo rk and dedication, and for leading the Working 
Party in a very skilful and result −oriented way. The Working Party had greatly benefited from his 
competence and untiring efforts. He then thanke d the Members for their confidence and hoped to 
follow in his predecessor's footsteps.  
1.4.  Many of the delegations who spoke at the meeting thanked Mr Felipe Sandoval for his hard 
work and congratulated Mr Saqer Almoqbel on hi s appointment as the new Chairperson of the 
Working Party.   
2  ITEM B - NEGOTIATIONS ON EMERGE NCY SAFEGUARD MEASURES (ESM) UNDER 
ARTICLE X OF THE GATS 
2.1.  The Chairperson recalled that, at its preceding meeting in February 2014, the Working Party 
had held a first dedicated discussion on emergency safeguard provisions in regional and bilateral 
trade agreements. The main purpose of the discussion was to foster a better understanding of emergency safeguard provisions in regional trade agreements (RTAs) by focusing on concrete 
issues, and concerns, in negotiating and implemen ting such measures – including the language 
used, circumstances giving rise to an emergenc y safeguard measure, etc. As agreed in the 
February 2014 meeting, the previous Chairperso n had prepared, under his own responsibility, a 
Note summarizing the views shared during the dedicated discussion. The Note, contained in 
document JOB/SERV/186, summarized the views expressed under five broad items:  
a.  ESM in RTAs, and the fact that there was no one-size-fits-all across the RTAs; 
b.  Political economy considerations presented by the proponents and the ESM as a 
"communication channel" in the advent of a substantial adverse impact; 
c.  Link between a safeguard and further/deeper liberalization commitments; 
                                               
1 This document has been prepared under the Secret ariat's own responsibility and is without prejudice 
to the positions of Members or to thei r rights and obligations under the WTO. S/WPGR/M/84 
 
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  d.  Circumstances giving rise to an ESM; and  
e.  Difficulties in the operationalization of an ESM. 
2.2.  Following this introduction, the Chairperson opened the floor for Members' reactions and 
comments. 
2.3.  The representative of the Philippines, also on behalf of the delegations of Brunei Darussalam, 
Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Thailand and Viet Nam, thanked the 
Secretariat for documenting their presentation an d statements during the dedicated discussion of 
25 February 2014 as reflected in document S/WPGR/M/83. He also thanked the former 
Chairperson for his Note summarizing the views shared in that discussion (JOB/SERV/186), underlining that it had been drafted under the Chai r's own responsibility and was without prejudice 
to any Member’s assessment of the current situation of the ESM negotiations. Judging from 
Members' active participation, as reflected in the minutes and the Chair’s Note, the dedicated 
discussion went a long way towards its objective, which was to foster a better understanding of emergency safeguard provisions in FTAs/RTAs. The proponents felt that there was scope for future 
work that they might explore at the appropriate time.  
2.4.  He provided further elaboration on the po ints made by the proponents at the preceding 
meeting. Firstly, in addition to the previously listed seven trade agreements containing emergency 
safeguard provisions
2, three more should be added: Viet Nam −Japan (2009); 
Malaysia −India (2011) as mentioned by India at the previous meeting; and Malaysia −New 
Zealand (2010). As previously observed, the degree of detail and scope of the ESM provisions could vary from one agreement to the other.  
2.5.  Secondly, he reiterated the conclusions from their earlier presentation, namely that, first, 
emergency safeguard measures had been incorporated in numerous FTAs/RTAs involving the proponents. The consideration of ESM provisions in ongoing ASEAN services negotiations further 
underlined the continued relevance and importance of such disciplines. Second, there were earnest 
expectations on the outcome of the GATS Article X negotiations, and the possible incorporation of 
multilateral  disciplines in these FTAs/RTAs. And third, ev en prior to the conclusion of multilateral 
negotiations, parties to the cited FTAs/RTAs had devised a consultative mechanism – and the 
availability of mutually agreed solutions – for the possible alleviation of adverse impacts that may be caused by the respective FTAs/RTAs. 
2.6.  Thirdly, in reply to the positions of so me Members reiterated at the last meeting, the 
representative of the Philippines on behalf of the Friends of ESM rephrased some lessons that, 
according to them, remained valid:   
a. What applied to John should also apply to Jane . The same elements used in safeguards 
in trade in goods − determination of a surge in imports, serious injury of the affected 
domestic industry, and the existence of a causal link between the two − could be applied 
to trade in services. The existence of GATT Article XXVIII (Modification of Schedules) had 
not precluded the adoption of a safeguard me chanism in trade in goods. Likewise, GATS 
Article XXI should not preclude the possible adoption of multilateral disciplines on emergency safeguard measures in trade in services. Some delegations had argued that such measures might affect the stability and predictability of commitments. Had the 
existence of a safeguard in goods affect ed the stability and predictability of 
commitments under the GATT? Some delegations had invoked the lack of a business case for ESM. In practice, a safeguard in goods was invoked precisely for business to 
strike a balance between allowing the entry of goods from competitive foreign firms and 
ensuring that the domestic industry would continue to contribute to a country's economic growth and development. The same could be said for services. 
b. What seemed not possible today might be possible tomorrow.  Much had been said about 
the difficulties in determining "substantial adverse impact" owing to challenges in statistical measurement and analysis. Data collection and statistical analysis would improve over time. Gathering micro-level statistics from enterprises, which recorded 
                                               
2 Namely ASEAN-China (2007), ASEAN-Korea (2009) , ASEAN-Australia-New Zealand AANZFTA (2010), 
Malaysia-Japan (2006), Thailand-Japan (2007), Mala ysia-Pakistan (2008), and Indonesia-Japan (2008). S/WPGR/M/84 
 
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  disaggregated value-adding services to monitor their costs and revenues, might be an 
area for further exploration.  
c. Having similar elements, characteristics or purposes did not make two things the same.  
A car and a bicycle both had wheels and steering mechanisms, but they were two 
different entities. GATS Article XXI and emergency safeguard measures might both 
provide relief to affected industries. However, the former represented a lengthy process resulting in a long-term closing of borders, while the latter was intended to provide 
rapid, temporary relief.  
2.7.  The representative of the Philippines, on behalf of the proponents, thanked the delegations 
that had expressed interest in, or support for, ESM disciplines. Based on the information gathered from the dedicated discussion, the proponents cont emplated requesting the Secretariat to update 
its Note on ESM provisions in RTAs/FTAs that were currently in force. 
2.8.  The representative of the United States th anked the outgoing Chairperson for his summary of 
the dedicated discussion held in February 2014, whic h touched upon some of the key areas. It did 
not delve into all the concerns raised by his dele gation, but that could not be expected. The Note 
was issued under the Chair's own responsibility. The concerns repeatedly raised by his delegation regarding emergency safeguard measures in services  remained entirely valid. The assumption that 
the existence of an emergency safeguard in goods meant there needed to be one in services was 
misleading. Goods and services were traded in  different ways. A surge in services imports 
(however that would be defined in light of the four modes of supply) − brought about by a market 
opening through a competitive and efficient regime, leading to lower-cost and higher-quality 
services − would seem a positive development. Blocking such an opening through an emergency 
safeguard mechanism would undermine the certainty that trade partners were expecting from commitments. An emergency safeguard mechanism might open the door for abuse by incumbent 
operators fearing competition. For all these reasons, his delegation remained unpersuaded that an 
ESM in services was necessary at this time. 
2.9.  The representative of the European Union echoed the concerns expressed by the 
representative of the United States, pointing out the uncertainties in applying an emergency 
safeguard to services relating, in particular, to the difficulty to determine what constituted a surge in "service imports". It was also questionable how an alleged parallelism between trade in goods and trade in services would work. However, his delegation was ready to continue listening to the 
ideas expressed by the Friends of ESM. 
2.10.  The representative of Chile observed that the Secretariat Note  on "Safeguard-Type 
Provisions in Economic Integration Agreements"  covered agreements notified to the WTO under 
GATS Article V between January 2003 and March 2009.3 Yet, a number of the agreements 
mentioned by the Friends of ESM either had been negotiated or had entered into force after that 
date. It would be useful to update the Secretariat Note to incorporate more recent agreements 
and, possibly, identify those that were not anymor e in force. Discussions should not be based on a 
five-year old document. 
2.11.  The representative of the Philippines back ed the suggestion made by the representative of 
Chile. The ESM proponents had voiced a request to update the Secretariat Note deeming it useful 
for the Working Party's future work on this matter. 
2.12.  The representative of Ecuador also support ed the proposal made by the representative of 
Chile. His delegation considered it important to update the Note, and this should be done by the 
Secretariat. An updated Note would enable Member s to better analyse the issue in their future 
discussions. 
2.13.  The representative of New Zealand requested a clarification as she had understood from 
their initial intervention that the Friends of ESM were contemplating requesting the Secretariat to 
update its Note. However, it seemed from the subs equent discussion that they were indeed posing 
the request at this meeting. If that was the case, her delegation would appreciate some 
                                               
3 Secretariat Note as contained in document S/WPGR/W/4/Add.2 of 25 March 2009. S/WPGR/M/84 
 
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  clarification on the scope and nature of the analys is that was proposed to be undertaken. Would it 
merely update the previous version or was some different/new analysis envisaged? 
2.14.  The representative of the Philippines conf irmed that the proponents had been contemplating 
such request. Given the support expressed in favour of their proposal in the course of the meeting, 
they intended to ask the Secretariat to update its Note based on its existing structure. It would 
provide an updated factual overview of the FTAs /RTAs notified to the WTO since March 2009 and, 
possibly, of those that were no longer in force or had been overtaken by subsequent 
developments. An updated version providing the cu rrent facts could serve Members' future work 
whether analytical or otherwise. 
2.15.  The representative of Chile further elaborat ed on his previous intervention explaining that 
his delegation suggested keeping the work strictly to: (i) updating the Secretariat Note by adding 
relevant agreements not previously covered (e.g., because they had entered into force only after 
March 2009); and possibly (ii) going through the agreements included in previous versions of the Secretariat Note
4 to identify those no longer in force. His delegation was not, at this point, 
suggesting any sort of deeper analysis, or change in the substance of the Secretariat Note.  
2.16.  The representative of Canada stated that his delegation remained unconvinced that an ESM 
would add value to the GATS. As they had said before, it was not clear what kinds of 
circumstances would potentially require an ESM. It was difficult to conceive what a surge in service 
imports would look like, how damage would be assessed and whether it could be linked to a Member's GATS commitments. Nonetheless, his dele gation remained open to further discussion on 
these issues and would not oppose the proposed update of the Secretariat Note. 
2.17.  Taking stock of the different interventions made, a representative of the Secretariat 
recapped that it had been requested to update its Note issued in March 2009 in document 
S/WPDR/W/4/Add.2. The idea would be to remove references to agreements that were no longer 
in force (or provisions that were no longer operative), and add any agreements (or provisions) 
that had entered into force or been notified since March 2009. The new Addendum would follow the same structure as S/WPDR/W/4/Add.2, except  that its content would be updated. Unless 
Members had further observations or comments,  the Secretariat would proceed as described. 
2.18.  In concluding, the Chairperson thanked th e delegations who spoke for their constructive 
interventions. He suggested that the Working Part y take note of the statements made. They would 
be duly reflected in the meeting report. As to th e update of the Secretariat's Note, he had got a 
sense from the meeting that delegations could lend  their support to the proposal made by the ESM 
proponents. He therefore suggested mandating the Secretariat to update its Note.   
2.19.  It was so agreed. 
3  ITEM C - NEGOTIATIONS ON GOVERNME NT PROCUREMENT UNDER ARTICLE XIII OF 
THE GATS 
3.1.  Turning to government procurement, the Chairperson recalled that, at the October 2013 
meeting, a preliminary version of the Staff Working Paper on "The Relationship between Services 
Trade and Government Procurement Commitments: Insights from relevant WTO agreements and recent RTAs"  had been presented by its authors. Being prepared by the authors in their personal 
capacity, views expressed in the Paper were their personal responsibility and should not be 
attributed to the WTO, or the Secretariat. Severa l delegations had provided useful suggestions to 
improve the Paper, and the co-authors were still working based on these comments. A revised, final version would be available in time for the next meeting. Following this introduction, the 
Chairperson opened the floor for questions and comments. 
3.2.  The representative of the European Union noted that his delegation had already provided a 
first batch of comments on the preliminary St aff Working Paper and was looking forward to 
receiving the revised version. 
                                               
4 Secretariat Note S/WPGR/W/4 of 24 November 1995 as updated in Addenda 1 and 2 (dated 20 
February 2003 and 25 March 2009 respectively). S/WPGR/M/84 
 
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  3.3.  The Chairperson suggested that the Workin g Party take note of the statement made and 
revert to this item at its next meeting. 
3.4.  It was so agreed. 
4  ITEM D - NEGOTIATIONS ON SUBS IDIES UNDER ARTICLE XV OF THE GATS 
4.1.  Turning to subsidies, the Chairperson stated  that, as agreed at the previous meeting, the 
Secretariat had issued a revised version of its Background Note entitled "Subsidies for Services 
Sectors ‒ Information contained in WTO Trade Policy Reviews"  (S/WPGR/W/25/Add.7). It had the 
same content as Addendum 6, the difference being that the information on subsidy measures was 
structured according to individual services sector s/sub-sectors. The Chairperson then turned to a 
representative of the Secretariat to introduce the Note. 
4.2.  A representative of the Secretariat explained that the Note covered measures in 
19 sectors/subsectors among which, for instance: tourism and travel related services; a range of 
different transport services; software development services, information and communication technologies related services, data processing services and telephone call centre services; health 
related services; "other" or unspecified services; etc. Citing examples of measures from various 
sectors, he explained how the reorganisation by sector had helped extracting valuable insights from the information contained in Trade Policy Review reports. Taking the transport sector as an 
example, support measures ranged  from tax incentive schemes and duty-free imports to privileged 
access to funding, State aid to back or rescue certain companies, fixed payments to operators and subsidies to public transport services.  
4.3.  According to the findings made, the measures tended to concentrate in five main sectors: 
tourism and travel; transport; financial services; telecommunications services; and software 
development and ICT-related services. Unsurprisingly, public involvement appeared particularly widespread in key infrastructural services. The No te also revealed two interesting recent trends. 
Firstly, software development and ICT-related serv ices attracted an increasingly significant number 
of support measures. Secondly, some Members' manufacturing operations in free zones treated services more and more as directly related to, or even an integral part of, the industrial process. 
Consequently, some support programmes tended not to distinguish anymore between 
manufacturing and service activities, which made it difficult to disentangle the measures applied to 
services from the ones relating to goods. This evolution was reflected in the significant rise of entries in the "Other or unspecified services" category.  
4.4.  As explained in the Note, the compilation suffered from a number of limitations inherent to 
the nature of the information. For instance, the limited level of detail in TPR reports made it difficult to identify the extent to which a benefit was being conferred, as well as its actual 
beneficiary.
5 Another shortcoming was the already-mentioned difficulty to distinguish goods from 
services. Thus, the impact of a given support programme on a specific service  was not always 
ascertainable. Finally, the TPR reports contained no information on possible trade-distortive effects 
of subsidies. These determinations were most appropriately left to Members; the Note merely 
aimed at facilitating the discussions. In conclusion, the representative of the Secretariat invited Members to review the Note, welcoming an y comments or suggestions for changes. 
4.5.  The Chairperson thanked the representati ve of the Secretariat for his introduction. 
Delegations might wish to consider organizing discussions of the revised Note on a sector-by-
sector basis. Information could for instance be collected on: (1) the form of support measures – whether they could be considered to amount to a production, investment, export or consumption 
subsidy; (2) whether foreign  services and service suppliers were entitled to them, or not (national 
treatment); (3) the affected mode(s) of supply; and (4) possible trade effects, including any distortions that might be involved. He then  opened the floor for Members' comments.  
4.6.  The representative of Chinese Taipei expr essed the view that the presentation of subsidy 
measures on a sectoral basis was very helpful. Her delegation still had some editorial questions 
regarding the previous versions and would contact the Secretariat after the meeting. 
                                               
5 In particular, whether the final beneficiary of the subsidy was the company supplying the service or 
the end-user/consumer. S/WPGR/M/84 
 
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  4.7.  The representative of the United States th anked the Secretariat for its hard work in putting 
together the Note. His delegation was still revi ewing the document and had no specific comments 
on its content at this stage. However, his delegation was not sure whether the Note identified any problem, or concern, to be addressed by delegations. As mentioned by the Secretariat, the Note 
did not reveal any trade distortions related to the subsidies described. The only complaint his 
delegation had heard regarding subsidies concerned the audiovisual sector. Before Members embarked on a Chair-led process on the issue, as suggested in the Chairperson's Annotated 
Agenda
6, his delegation would prefer that they answer ed the questions raised by the United States 
in its 2010 Communication (S/WPGR/W/59) regarding the identification of particular problems  
relating to subsidies in services. The word of caution expressed by his delegation on emergency safeguard measures applied equally to subsidies: the mere existence of disciplines on the use of 
subsidies in the goods' area did not necessarily mean  that such disciplines were needed in trade in 
services. The two contexts were completely different. 
4.8.  The representative of Switzerland stressed that, given the great importance attached by his 
delegation to the topic of subsidies in general, and to export subsidies in particular, they 
considered the Secretariat Note to be very useful. His delegation would study it in-depth and possibly come back to it in a later meeting. 
4.9.  The representative of Chile recalled that , over the years, Chile has been one of the 
delegations pushing the issue of developing disciplin es on subsidies forward. At the same time, his 
delegation was realistic and fully cognisant of the current situation of the negotiations in the WTO. However it was precisely bearing this situation in mind, that the Secretariat Note gained greater 
value. By compiling in a systematic manner empirical evidence of Members' subsidy measures in 
service sectors, it enabled delegations to search  for, and more easily understand the information 
already on the table. It gave Members a new tool  to prepare for a more active negotiation in a 
hopefully not too distant future.  
4.10.  The Chairperson thanked delegations for their constructive engagement. He invited the 
Working Party to take note of the statements made and revert to the item at its next meeting.  
4.11.  It was so agreed. 
5  ITEM D: OTHER BUSINESS 
5.1.  No topic was raised under this agenda item. 5.2.  The meeting was adjourned. 
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6 JOB/SERV/184.