RESTRICTED  
  
S/WPGR/M/87  
 
28 September 2015  
(15-4992)  Page: 1/4  
Working Party on GATS Rules    
 
 REPORT OF THE MEETING HELD ON 2 JUNE 2015 
NOTE BY THE SECRETARIAT1 
The Working Party on GATS Rules (WPGR) held  a meeting on 2 June 2015, chaired by the 
incoming Chair, Mr Don McDougall of Canada. The proposed agenda and the Chairperson's 
annotated agenda for the meeting were circulated in documents WTO/AIR/WPGR/2 and JOB/SERV/206 respectively. The agenda was adopted. 
1  ITEM A - NEGOTIATIONS ON EMERGE NCY SAFEGUARD MEASURES (ESM) UNDER 
ARTICLE X OF THE GATS 
1.1.  The Chairman recalled that,  at its February 2014 meeting, the Working Party had initiated a 
dedicated discussion on Members' experiences with services-related emergency safeguard 
provisions in their bilateral and regional trade agreements. Views shared in that meeting were 
summarized in a Note from the Chairperson (document JOB/SERV/186). The dedicated discussion continued in subsequent meetings of the Working Party, in May and September 2014. Next to the 
Member-led sharing of experience on safeguard measures in their regional trade agreements 
("RTAs"), the Secretariat had also prepared, upon Members' request, an updated Note entitled "Safeguard-type Provisions in Economic Integration Agreements − a Consolidated List as of 31 July 
2014 based on Notifications to the WTO under Article V of the GATS" .
2  Having recalled these two 
strands of work, the Chairman opened the floor for Members' comments. 
1.2.  The representative of the Philippines, on  behalf of the delegations of Brunei Darussalam, 
Cambodia, Indonesia, Lao People’s Democratic Republic, Malaysia, Myanmar, Philippines, Thailand 
and Viet Nam, indicated that her comments regard ed the work carried out in the WPGR, and were 
without prejudice to the process undertaken by the Chair of the Special Session of the Council for 
Trade in Services regarding the post-Bali work progra m. The "Friends of ESM" felt that, in order to 
address the mandate in GATS Article X, Members must build on the work and findings of the past 
few years. In particular, the proponents would appreciate further comments from Members regarding the dedicated discussion on safeguard-ty pe provisions in bilateral and regional trade 
agreements. She also invited Members to review again the proponents' 2007 proposal for an 
“Annex on Article X Emergency Safeguard Measures” (document JOB(07)/155). The proponents 
were available for informal consultations to discuss Members' thoughts and comments regarding this proposal.  Members should not be fazed by the gradual work on this topic in the past two 
decades. Based on promising developments in technical areas and continued relevance of services 
safeguards in existing trade agreements, the proponents called for continued work on ESM in order to abide by the mandate of GATS Article X, the Doha Development Agenda and the Hong Kong 
Ministerial Declaration. 
1.3.  The Chairman thanked the proponents for their statement. He suggested that the Working 
Party take note of the statement made and revert to this issue at its next meeting. 
1.4.  It was so agreed. 
                                               
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. 
2 Document S/WPGR/W/64, dated 4 September 2014. S/WPGR/M/87 
 
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  2  ITEM B – NEGOTIATIONS ON GOVERNME NT PROCUREMENT UNDER ARTICLE XIII OF 
THE GATS  
2.1.  Turning to government procurement, the Ch airman recalled that, at the Working Party's last 
meeting in March 2015, one of the authors had presented the changes introduced in the final 
version of the WTO Working Paper entitled "The Relationship between Services Trade and 
Government Procurement Commitments: Insights from relevant WTO agreements and recent RTAs" .
3 The changes had been included in response to comments received from Members in earlier 
discussions.  In the subsequent debate, one delegation had suggested, as a possible way forward, 
to have a Member-led exchange ‒ and possibly some background research by the Secretariat ‒ on 
the treatment of locally established service suppliers with respect to government procurement. 
More discussion was needed to define the contou rs of possible future work in this respect, 
including possibly work to be requested from the Secretariat. The Chairman opened the floor for 
Members' suggestions regarding either the WTO Working Paper or ideas on future work. 
2.2.  The representative of the European Union stated that, as government procurement was 
increasingly becoming a critical issue relevant to trade in services, his delegation would welcome 
further discussions on this topic in the Working Part y, as indicated at the last meeting. As a next 
step, the EU wished to propose that Members exch ange information on existing practices regarding 
the treatment of established service suppliers in government procurement procedures, notably 
with respect to national treatment. Mode 3 (i.e., services supplied via foreign commercial presence) was commercially the most significant am ong the four modes. His delegation suggested 
that Members exchange information in respect of  the following questions: 1) How did Members 
treat foreign-owned or controlled established service suppliers, as compared to "domestic" service suppliers, with regard to government procurement procedures?  2) Was there any discrimination 
either in the legislation or in practice?  And if so, in what form and for which sectors/activities? Was 
there any discrimination based on the origin of established companies? How common was discrimination based on capital ownership?  3) Wh at good practices could be drawn from national 
experiences?  Further to such Member-led exchan ge of information, his delegation wished to 
propose that the Secretariat be asked to analyse Members' practices in this regard as reflected in their regional trade agreements, addressing the above-mentioned questions.  
2.3.  The EU representative informed delegations that, with respect to government procurement 
procedures, the European Union treated foreig n-owned established service suppliers as EU 
companies – hence without any discrimination on grounds of capital ownership. A company established in one Member State was accorded the fu ll benefit of access to the EU internal market, 
including in respect of public procurement. His delegation would circulate the questions mentioned 
earlier in due course, and welcome a first discussion  on these at the Working Party's next meeting. 
2.4.  The representative of India thanked the EU delegation for its comprehensive oral 
presentation, asking for the questions to be provided in writing in order to facilitate consultations 
with her capital. She observed that the WTO Working Paper on "The Relationship between Services 
Trade and Government Procurement Commitments: Insights from relevant WTO agreements and recent RTAs"  also mentioned mode 4 – albeit to a limited extent. The Paper cited the differential 
treatment of foreign service suppliers in government procurement as one of the major constraints 
on international trade in services through the movement of natural persons. Her delegation believed that this aspect of government procurement – namely its limited benefits, if any, in an 
area that was essential for export interest to developing countries – had to be factored in any 
discussion, study or future work of the Working Party. 
2.5.  The representative of Turkey also asked the delegation of the EU to provide further details on 
its proposal in writing.  She cautioned Members against focussing only on mode 3, which already 
enjoyed much better conditions, inviting them to include also mode 4. 
2.6.  The representative of Canada thanked the EU for its ideas on how to take forward the work 
on government procurement. The issue of non-discrimination of established service suppliers in 
government procurement markets raised interestin g questions, which could be usefully examined 
in this Working Party. His delegation supported pu rsuing this line of work and looked forward to 
receiving more details on the EU proposal. 
                                               
3 The final version was released in November 2014 as WTO Working Paper No. ERSD-2014-21. See the 
following webpage: https://www.wto.or g/english/res_e/re ser_e/wpaps_e.htm  S/WPGR/M/87 
 
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  2.7.  The Chairman invited the Working Party to ta ke note of the statements made. He invited the 
delegation of the European Union to circulate its questions in writing, if possible in advance of the 
next meeting. The Working Party would revert to this item at its next meeting.  
2.8.  It was so agreed. 
3  ITEM C – NEGOTIATIONS ON SUBS IDIES UNDER ARTICLE XV OF THE GATS 
3.1.  Turning to subsidies, the Chairman reminded delegations that the Secretariat had circulated a 
revised version of its Background Note entitled "Subsidies for Services Sectors ‒ Information 
contained in WTO Trade Policy Reviews"  in January 2015 (S/WPGR/W/25/Add.7/Rev.1). At the 
preceding meeting, a couple of delegations had commented upon the Secretariat Note. He acknowledged that discussions on this topic had stood at an impasse for a while. No new ideas on how to carry forward the work in this area had emerged from his informal outreach to Members 
preceding this meeting. Following these introducto ry remarks, the Chairman opened the floor for 
Members' observations. 
3.2.  The representative of Turkey wished to pr ovide further information with regard to Turkey's 
Savings Deposit Insurance Fund scheme. She explained that her delegation approached the 
Secretariat Background Note with great caution wh en it came to the financial sector, given the 
latter's crucial role for overall economic stability. Regarding financial services, Members had the 
right to implement any measure taken to protect the integrity and stability of the financial system, 
as provided in Paragraph 2(a) of the GATS Annex on Financial Services. The Turkish Banking Rehabilitation and Restructuring Program was conducted within two separate subcategories: (i) the restructuring of public banks controlled by Treasury ; and (ii) the resolution of private banks by the 
Savings Deposit Insurance Fund ("SDIF") scheme. This program was aimed at strengthening the 
financial structure of public banks, and some of the problematic banks were either liquidated or 
transferred to the private sector. A significant amount of revenue was collected from the transfers 
of ownership of these banks, or from the sales of assets transferred to SDIF from problematic 
banks. The funds transferred to the public banks co uld be classified in two different categories. The 
first one regarded awarding public banks securities  issued by Treasury in exchange for Treasury's 
existing debt held by these banks, in order to  strengthen their liquidity position and, also, 
restructure existing public debt.  This operation could not be regarded as funds transfers since the government had not taken any extra obligations. The second category involved capital injections to public banks. Her delegation was of the view that these could not be interpreted as subsidies. 
Turkey's SDIF scheme was fully in line with the recommendations of international standard-setting 
bodies for financial services such as the Financial Stability Board and the Basel Committee on Banking Supervision. 
3.3.  The representative of Ecuador thanked the Secretariat for updating its Background Note, and 
indicated that his delegation was in favour of provisions regulating subsidies under the condition 
that a special and differential treatment as well as the necessary policy space be secured for 
developing countries to support the promotion and diversification of their services sector. This was 
a general principle that had to govern any future negotiation.  
3.4.  The Chairman thanked the delegations who sp oke. He invited the Working Party to take note 
of the statements made and revert to this item at its next meeting.  
3.5.  It was so agreed. 
4  ITEM D – FUTURE WORK 
4.1.  The Chairman explained that the item "futur e work" had been placed on the agenda in light 
of ongoing discussions in various WTO bodies on el ements for the post-Bali work programme. Over 
the last weeks, the Chairman of the Special Session of the Council for Trade in Services had been 
consulting on the services elements of a work programme. While the overall discussion on future 
work was to be held in the Council for Trade in Services in Special Session, Members might want 
to discuss how to proceed more specifically with the GATS Rules topics in the context of the post-
Bali work programme under this agenda it em. He opened the floor for comments.  
4.2.  No delegation took the floor. S/WPGR/M/87 
 
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  4.3.  The Chairman invited the Working Party to take note of the lack of statements. He would 
reassess the situation to evaluate whether to revert to this item at a later meeting. 
4.4.  It was so agreed. 
5  ITEM E – OTHER BUSINESS 
5.1.  No matters were raised under this agenda item. 
5.2.  The meeting was adjourned. 
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