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S/WPGR/M/81  
 
20 August 2013  
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Working Party on GATS Rules    
 
 REPORT OF THE MEETING HELD ON 20 JUNE 2013 
NOTE BY THE SECRETARIAT1 
The Working Party on GATS Rules (WPGR) held a meeting in the morning of 20 June 2013, chaired 
by Mr Felipe Sandoval from Chile. The proposed agenda and the Chairman's annotated agenda for 
the meeting were circulated in documents WTO/AIR/4142 and JOB/SERV/154 respectively. The agenda was adopted. 
By way of introduction, the Chairman set out the spirit in which he hoped to steer the Working 
Party in the coming months.  While acknowledging the difficulties that the Doha Round − and 
multilateral negotiations more generally − were facing, he reminded delegations that the three 
GATS Rules mandates contained in GATS Articles X, XIII and XV were approved many years before 
the DDA was launched. They were part of the " unfinished business" from the Uruguay Round. He 
invited delegations to re-engage on the three topics in a dedicated way.   
1  ITEM A: NEGOTIATIONS ON EMERGENCY SAFEGUARD MEASURES (ESM) UNDER 
ARTICLE X OF THE GATS 
1.1.  Commencing with emergency safeguard meas ures, the Chairman reminded delegations that, 
at the March 2013 meeting, the proponents had suggested discussing emergency safeguard 
provisions in existing RTAs/FTAs involving ASEAN members, and possibly also other FTAs.2 They 
had proposed that Parties to these agreements could share their experiences regarding the inclusion, invocation and implementation of a safe guard clause – if any.  This could help better 
understand the kinds of circumstances that might call for emergency action in services, as well as 
factors that might militate against it.  Similarly, it could be interesting to learn about domestic 
legislation enabling safeguard actions in the services field. Following this introduction, the Chairman opened the floor
 for delegations' views. 
1.2.  The representative of the Philippines, also on behalf of the delegations of Brunei Darussalam, 
Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Thailand and Viet Nam, reminded 
delegations of the proponents' revised room document (RD/SERV/79/Rev.1 of December 2012), 
which compiled their proposals and thoughts on ESM in the past 16 years. They had, in addition, 
shared ideas on a few developments including ESM provisions in FTAs/RTAs and on global value chains. At this point, they would like to acknowledge the success of the Membership and the Secretariat, particularly through the leadership of  Ecuador, in the recent conduct of the dedicated 
discussion on macroprudential measures at the Committee on Trade in Financial Services (CTFS). 
With the understanding that the discussion was wi thout prejudice to Members' positions in the 
negotiations and was not intended to come up with any legal interpretation or modification of the 
prudential carve-out, Members were forthcoming in  sharing policies and experiences on the topic. 
On many occasions, the proponents had stressed their view, that emergency safeguards remained relevant as a policy tool in the dynamic age of cont inued growth in services trade, primarily due to 
political economy considerations. This gained particular significance with the emergency of global 
value chains and the consequent finding of greater than expected global services trade flows. While the state of the overall negotiations had impacted on Members' appetite to engage in 
substantive talks on ESM, its continued relevance in the 21
st century necessitated greater technical 
and policy understanding, even outside of the cont ext of imminent negotiations. Governments' and 
                                               
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. 
2 Refer to S/WPGR/M/80 of 24 May 2013, paragraph 1.6. S/WPGR/M/81 
 
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  stakeholders' concerns with the sudden influx of services imports would not go away, even if they 
were not able to discuss them in the Working Party. The inclusion of ESM provisions in various RTAs and FTAs, including ones that recently entered into effect, was a promising take-off point for a dedicated technical discussion. The latter would, of course, be without prejudice to Members' 
positions in the ESM negotiations, and would primarily be held to enhance awareness and 
understanding of recent relevant developments. The ESM proponents wished to explore Members' 
views on a discussion focused on delegations' sharin g of experiences with regard to ESM provisions 
in their FTAs and RTAs. While there had previously been such an examination in the Working 
Party, they thought there was value in exploring th e possibility of having some of the proponents 
provide details on, for example,  the ESM provisions in their FTAs, experiences with implementation 
and thoughts on the way forward. Other Members, who were signatories to agreements containing 
ESM provisions, would also be welcome to shar e their experiences. The discussion would be 
Member-driven. If there was appetite for such  a discussion, the proponents were looking at 
circulating a non-paper and participating in informal consultations prior to the next meeting. They 
would target said discussion, depending on the pace  of progress, for later this year or early next 
year. He was looking forward to hearin g Members' views on this proposal. 
1.3.  The representative of Switzerland thanke d the ESM proponents for their statement. While 
reserving his delegation's position regarding the suggestion made, he enquired whether the 
proponents had given some thought to an alternative option, namely to mandate the Secretariat to prepare a compilation of emergency safeguard provisions in existing RTAs/FTAs involving ASEAN members, and possibly other FTAs. Such a compilati on could be circulated to Members. He asked 
the proponents whether they would be willing to consider this alternative approach. 
1.4.  The representative of the Philippines, also on behalf of the delegations of Brunei Darussalam, 
Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Thailand and Viet Nam, replied that, 
indeed, his group had considered both options in an exploratory manner. They had come to the 
understanding that having the proponents, and possibly other delegations, sharing their experiences with Members would be a good first step. However, this initial stage would not 
preclude more comprehensive technical work later on, which could also involve the Secretariat – 
dependent on the outcome of the Member-driven sharing of experiences. 
1.5.  The representative of the United States agreed that the logical first step was to let the 
proponents – and possibly other Members who were signatories to PTAs comprising ESM provisions 
– report about their experiences including how these provisions had been used, if at all. He called 
for caution on the possibility, as a second step, to ask the Secretariat to review all existing PTAs to try identifying emergency safeguard provisions. Members had not yet necessarily determined what 
an emergency measure looked like. The first step was to let Members, who were signatories to 
agreements containing ESM provisions, share their experiences.  Only subsequently could it be 
decided whether the Secretariat might undertake some work in that regard.  
1.6.  In view of the preceding, the Chairman pr oposed that, ahead of the next meeting, he would 
reach out to the delegations that spoke and all other interested ones, to discuss a possible 
framework for a dedicated discussion/sharing of experiences. He hoped that the proponents could share with Members a proposal in writing, ideally in advance of the next meeting.  
1.7.  It was so agreed. 
2  ITEM B: NEGOTIATIONS ON GOVERNME NT PROCUREMENT UNDER ARTICLE XIII OF 
THE GATS 
2.1.  Turning to government procurement, th e Chairman indicated that the item would be 
introduced by a presentation on the revised Government Procurement Agreement (GPA) and its 
significance for services trade by a representative of the Secretariat's Intellectual Property Division 
in charge of the GPA. Copies of the presentation were made available at the back of the room, and 
a hand-out version of the presentation was included in document RD/SERV/95. After the presentation, he intended to open the floor fo r Members' questions and answers, and ideas on 
possible next steps.  
2.2.  In his presentation, the representative of the Secretariat highlighted the main characteristics 
of the renegotiated GPA formally adopted in March 2012. At the time of speaking, the Agreement S/WPGR/M/81 
 
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  covered 42 WTO Members (counting the EU-27 as 28),3 and ten Members were seeking 
accession.4 A further six Members had provisions regarding accession to the Agreement in their 
respective Protocols of Accession to the WTO.5 The GPA included rules on non-discrimination, 
transparency and procedural fairness in governme nt procurement, while also addressing market 
access, i.e., access to the Parties' procuremen t markets. The latter was recorded in detailed 
Appendices, which specified the different government departments and agencies subjected to the Agreement's obligations as well as the covered goods and services.  
2.3.  There was an important interface and comp lementarity between the GPA and the GATS, both 
legally and economically. From a legal point of view, the "mirroring provisions" of the GPA and the GATS defined these Agreements' respective ambit and scope. The GPA was intended to cover government procurement "as such", without bearing on matters such as rights of establishment or 
modes of supply. The complementarity of the tw o Agreements had been carried further in the 
recently adopted revised GPA, whose Article II:2 contained language similar to the one used in GATS Article XIII:1. Article II:2 of the GP A ("Scope and Coverage") specified that "For the purpose 
of this Agreement, covered procurement means procurement for governmental purposes: (a) of 
goods, services, or any combination thereof: (i) as specified in each Party's annexes to Appendix I; 
and (ii) not procured with a view to commercial sale or resale, or for use in the production or 
supply of goods or services for commercial sale or resale … ." A number of GPA Parties explicitly 
stated in their GPA schedules that their services commitments were "subject to the terms and 
conditions set out in their respective GATS commitments"  or used words to that effect.  From an 
economic point of view, procurement represented as  much as 30% of services trade according to 
some studies. Often a service supplier's largest contract in a given market was with a 
governmental entity. Thus, GPA commitments on services could have a significant impact on the competitiveness of individual service suppliers, and on their ability to effectively use establishment 
rights granted by Members under the GATS. A contrario,  if a foreign service supplier was excluded 
from government procurement contracts, this would have a bearing on its competitiveness and viability on that market. A broad range of servic es was covered under the GPA, including business, 
telecommunications, computer and related, construction, environmental and transport services.  
2.4.  The representative of the Secretariat then addressed key changes in the recently adopted 
revised GPA with particular implications for services trade. Specifically on services coverage, 12 Parties added new services sectors as a result of the GPA renegotiation.
6 In all, over 50 new 
services sectors or sub-sectors had been covere d. Eight Parties had increased the coverage of 
telecommunications services. As a result, nine Parties were now covering telecommunications 
services in full. All Parties provided full coverage of construction services (CPC 51). For the first 
time, three Parties – the EU, Japan and Korea – explicitly covered build-operate-transfer (BOT) 
arrangements/public works concessions and othe r forms of public-private partnerships. In 
addition, several Parties reduced their thresholds and/or deleted their country-specific derogations, 
which previously limited coverage. Finally, de facto  coverage of services also expanded as a result 
of the addition of over 500 new procuring entities  to the Agreement (in total, across all Parties). 
The GPA renegotiation thus had a significant services dimension. He also described the future work programmes, which constituted the third element of the conclusion of the GPA renegotiation. They 
were going to deal with matters such as SMEs and their ability to access procurement markets; 
sustainability in government procurement; improvement of statistics; the exclusions and restrictions that continued to apply in Parties' Annexes; and the role of safety standards in 
international procurement markets.  
                                               
3 These 42 WTO Members: (1) Armenia;  (2) Canada;  (3) the European Union, together with its, at the 
time of speaking, 27 member States;  (4) Hong Kong, China;  (5) Iceland;  (6) Israel;  (7) Japan;  (8) Korea;  (9) Liechtenstein;  (10) the Kingdom of the Netherlands with respect to Aruba;  (11) Norway;   (12) Singapore;  (13) Switzerland;  (14) the Sepa rate Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu (Chinese Taipei);  and (15) the United States . Subsequently, on 1 July 2013, Croatia became the 43
rd 
WTO Member to accede to the GPA as it joined the EU. 
4 These comprised: (1) Albania; (2) China; (3) Georgia; (4) Jordan; (5) the Kyrgyz Republic;  
(6) Moldova; (7) New Zealand; (8) Oman; (9) Panama; and (10) Ukraine. Subsequently, on 30 July 2013, Panama withdrew its application for accession to the GPA. 
5 These comprised: (1) the Former Yugoslav Republic of Macedonia; (2) Mongolia; (3) Montenegro;  
(4) the Russian Federation; (5) Saudi Arabia; and (6) Tajikistan. 
6 New services sectors had been covered by: (1) the European Union; (2) Hong Kong, China;  
(3) Iceland; (4) Israel; (5) Japan; (6) Korea; (7) Liecht enstein; (8) the Netherlands with respect to Aruba;  
(9) Norway; (10) Singapore; (11) Switzerland; and (12) the United States.   S/WPGR/M/81 
 
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  2.5.  Following the presentation, the Chairman opened the floor to Members for questions and 
comments. 
2.6.  The representative of the European Union welcomed the Secretariat's very comprehensive 
and stimulating presentation. She shared th e assessment made therein that government 
procurement represented an important component and source of income for service suppliers. 
Therefore, securing access to service procuremen t markets was essential, via appropriate domestic 
legislation on access for foreign bidders, but also through internationally bound commitments. 
Government procurement was most relevant for services experts' discussions, also in light of the 
GATS' built-in mandate.  
2.7.  Regarding the GPA framework, the Secretariat's presentation clearly revealed its significant 
contribution to the liberalisation of service proc urement between the Parties. The GPA for the first 
time introduced generalised transparency discipl ines for "covered" services, thereby setting an 
international standard, which had been further developed in numerous preferential trade agreements (PTAs). Rules mirroring the ones in the GPA could even be found in PTAs between 
non-GPA  countries. Sector-wise, the Uruguay Round negotiations that led to the 1994 GPA and 
subsequent negotiations had ensured that a large share of the services most valuable for cross-border trade and procurement via establishe d companies was subject to market access 
commitments between the Parties (such as IT, telecommunications, construction, environmental, 
financial and transport services). Market access in that context meant the right to tender in those 
sectors. 
2.8.  Similarly, the 1994 GPA and the revised GPA had enlarged the scope of public entities 
covered by the Parties and, thus, corresponding business opportunities. The fact that the coverage 
of sub-central entities (regional entities, provinces and municipalities) progressively became a standard had a decisive influence on the share of services in procurement contracts as well as the 
nature of these contracts. It implied further secured access to infrastructure programmes at the 
sub-central level, for instance, regarding public works or telecommunications. Another important aspect of the further liberalisation achieved under the revised GPA was, as rightly underlined by 
the Secretariat, the inclusion of public-private pa rtnerships, BOTs and public works concessions. In 
a climate of budgetary constraints for many Part ies, this would generate additional business 
opportunities,
 enlarging the range of services offered within the same contractual set-up.   
2.9.  The Secretariat had also analysed certain limitations inherent to the GPA framework in its 
current shape. The most interesting one, from a GATS perspective, was the very nature of 
government procurement commitments, which were only applicable to the right to tender. A number of GPA Parties had stated in their GPA serv ices commitments that the latter were "subject 
to the terms and conditions set out in their resp ective GATS commitments". For service suppliers, 
this introduced some uncertainty on their legal capacity to supply the service for which they could tender on the basis of market access. Such a structure also rendered government procurement 
negotiations on market access particularly complex. Even concerning the right to tender, the 
current GPA construct included loopholes (such as se rvice sectors that were not, or only partially, 
covered) as well as many reservations. In the GPA context, the different levels of ambition between the Parties had led to a departure from the MFN principle. These limitations had only 
partially been remedied in the revised GPA. Therefore, the European Union had advocated a solid 
future work programme that focused on these shortcomings, but also on covering SME access to government procurement and sustainable procurement practices − to be started after the entry 
into force of the revised GPA.  
2.10.  The above-mentioned features of the GPA confirmed that there was a real justification for 
developing, in parallel and as a complement to th e GPA, a government-procurement pillar within 
the GATS. For many years now, her delegation ha d advocated such an approach based on several 
papers and, in 2006, they had tabled a more comprehensive proposal.
7 In a nutshell, a 
government-procurement pillar could build upon the " acquis " of the revised GPA in terms of rules. 
The "regulatory gap" between GPA and non-GPA countries had never been as narrow as today 
thanks to the diffusion of GPA "standards" in numerous PTAs. Thus, she argued, the adjustment 
cost would be reduced. The GATS' edge would be to negotiate in a MFN context with a "holistic view", both on terms of supply and right to tend er. This should help assessing more immediately 
                                               
7 Communication from the European Communitie s on Government Proc urement in Services 
(S/WPGR/W/54, 20 June 2006). S/WPGR/M/81 
 
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  the effective market access generated by a given commitment on government procurement and, 
conversely, avoid the risk of negotiating government-procurement commitments for sectors where the terms of supply did not guarantee th e possibility to supply the service. 
2.11.  The delegation of Australia noted that the Secretariat had estimated the revised GPA's 
overall market-access enhancement package to  total some $80-100 billion annually. She 
wondered whether the Secretariat had an estimate of  what part of this amount could be attributed 
to the expanded services coverage. 
2.12.  The representative of the Secretariat promised to try and verify this issue. 
2.13.  The representative of Hong Kong, China poin ted out that, in its presentation, the Secretariat 
had referred to the GPA's three cornerstone principles as being non-discrimination, transparency 
and procedural fairness in government procurement. Strictly speaking, MFN was thus not amongst 
them. In their commitments, Parties could maintain Party-specific derogations and reciprocity-
conditions. He asked whether, from an intellectual point of view, the Secretariat thought that the lack of a strong, overarching MFN principle impede d the realization of the GPA's full potential.  
2.14.  The representative of Switzerland distingu ished two broad categories of international trade 
law obligations: those international obligations effectively introducing new entitlements for right 
holders, and those that simply consolidated an existing, de jure  or de facto, situation. In the 
merchandise field, customs tariffs on imported goods belonged to the first category. They 
benefitted from an extremely precise and exclusiv e classification, the Harmonized System (HS). 
The tariff treatment granted to a given traded product − and the foreign exporter's corresponding 
legal entitlement − derived directly from the product's classification under the HS (its HS code). In 
the case of services, however, most of the time, international obligations served to consolidate an 
existing situation. The services classification sy stem was based on the United Nations Provisional 
Central Product Classification (CPC), which was more flexible in its application. He enquired how 
the GPA dealt with service-sector description and classification. How did Members in the GPA 
determine whether a given service sector or subsector was, or not, covered by a given commitment?  
2.15.  The representative of Japan commended the Secretariat for expounding so clearly the 
strong practical interaction between GATS and GPA commitments. The presentation made it clear 
how service suppliers greatly benefitted from the combined  access to procurement and commercial 
services markets. In that context, she enquired  about the forthcoming Staff Working Paper that 
would compare the commitments in relevant WTO Agreements and recent RTAs.  
2.16.  The representative of the European Union asked the Secretariat for more information 
regarding the mention of the recent Appellate Body Reports in the Canada — Renewable Energy 
and Canada — Feed-In Tariff Program  cases.8 She also pointed out to the fact that the GPA 
renegotiation had introduced changes to GPA Article V ( "Special and Differential Treatment for 
Developing Countries" ). That provision showed that the GP A did not cater only to the needs of 
developed countries, but contained a number of flexibilities in favour of developing countries. 
2.17.  The representative of South Africa asked for further clarification regarding the revised GPA's 
developmental provisions devised to encourage acce ssion by developing countries (GPA Article V). 
Secondly, he asked how the Parties would handle the definition of SMEs in the future related work 
programme in light of the important differences between countries in that regard.  A SME in the 
United States, for instance, corresponded to a large corporation in South Africa. 
2.18.  Regarding the question posed by the repres entative of Hong Kong, China on the status of 
the MFN principle under the GPA, the representative  of the Secretariat merely observed that, in 
the context of the GPA renegotiation, a number of Parties had expressed concerns at the apparent 
lack of full application of the MFN principle. They were specifically worried about gaps in coverage, 
and aspects of service procurement being covered by particular Parties for the benefit of some, but 
                                               
8 Appellate Body Reports, Canada — Certain Measures Affecting the Renewable Energy Generation 
Sector  and Canada — Measures Relating to the Feed-in Tariff Program, WT/DS412/AB/R, WT/DS426/AB/R, 
adopted 24 May 2013, paras. 5.54-5.85. 
 S/WPGR/M/81 
 
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  not necessarily all, Parties. Thus, this was a concern that had been raised by a number of Parties 
in the renegotiation. 
2.19.  In response to the query by the repres entative of Switzerland, he confirmed that 
classification was also a difficult issue in the GPA. Indeed, the service procurement commitments 
undertaken thereunder, also partly relied on the W/120 Sectoral Classification List and the CPC. He 
hoped that the Secretariat would know more about GPA and  GATS comparative approaches to 
classification, once it would have completed a more detailed comparison between GPA service 
procurement and GATS commercial-services commitm ents. In addition, he informed that one of 
the GPA's future work programmes, foreseen as an outcome of the renegotiation, would deal specifically with classification issues, and the bene fits that might be achieved from greater use of 
common nomenclature systems. Thus, these were issues for the GPA Parties and the Committee 
on Government Procurement as well.   
2.20.  With respect to the question by the re presentative of Japan, he explained that the 
Secretariat had just begun the process of comparing the GPA services commitments of some 
Parties with their corresponding GATS commitments. Hopefully, this analysis would shed light on 
how GPA service procurement commitments could in fluence the overall competitiveness of service 
suppliers.  
2.21.  In response to the first question posed by the representative of South Africa, the 
representative of the Secretariat agreed that de finitions of, and approaches to, SMEs could differ 
broadly among countries. The work programme in this area was not intended to be prescriptive or to endorse any particular method. Rather, it wo uld begin as a transparency exercise, providing 
Parties with an opportunity to present their different approaches. A very first step in that work 
programme was an analytical SME survey to be undertaken by the Committee on Government Procurement to seek information from Parties on their measures and policies to assist, promote or 
facilitate SME participation in government procurement.
9 On the second question, the revised 
transitional measures available to developing countries wishing to accede to the GPA were one of the very significant outcomes of the renegotiatio n .  T h i s  n e w ,  t a i l o r e d  a p p r o a c h  t o  " s p e c i a l  a n d  
differential treatment" included the possibility for a developing country − based on its 
development needs and with the agreement of the Parties – to maintain price preference 
programmes or offsets under certain conditions during a transition period, and to phase-in procurement commitments over time. However, it was important to keep in mind that the use of 
these transitional measures was intended to be time-bound and based on specific developmental 
needs of particular countries acceding to the GPA.  
2.22.  Finally, in response to the first question from the EU representative, he explained that he 
had merely wished to draw attention to the Appellate Body Reports in the Canada — Renewable 
Energy and Canada — Feed-In Tariff Program  cases.  Some of the language interpreted by the 
Appellate Body in these Reports regarded GATT Article III:8(a), which contained language similar 
to the one in GATS Article XIII:1.  
2.23.  The Chairman thanked the Secretariat for it s presentation and delegations for their inputs, 
and opened the floor for Members' ideas on possible next steps.  He recalled that, in the March 
2013 meeting, Members had agreed to discuss a forthcoming WTO Staff Working Paper that would 
examine the relationship between services- and government procurement-related disciplines, and 
look into the coverage of commitments on government-purchased services versus  commercially-
purchased ones in recent RTAs.  He hoped that it could be finalized in time for the next meeting. 
2.24.  The representative of the European Union expressed her delegation's full support for the 
work programme suggested by the Chairman. They  were looking forward to receiving the Staff 
Working Paper. 
2.25.  The representative of Switzerland hoped that, as part of its future work, the Secretariat 
would also examine the systemic question of the use of the CPC for obligations of the nature of 
those undertaken in the GPA. 
2.26.  The representative of the Secretariat took note of the statements. 
                                               
9 See GPA/113, Annex C, para. 3.2; p. 439. S/WPGR/M/81 
 
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  3  ITEM C: NEGOTIATIONS ON SUBS IDIES UNDER ARTICLE XV OF THE GATS 
3.1.  Turning to subsidies, the Chairman recalled some of the findings of the Secretariat's 
Background Note entitled "Subsidies for Services Sectors ‒ Information contained in WTO Trade 
Policy Reviews"  (S/WPGR/W/25/Add.6). Subsidies were us ed in a range of sectors, served a 
variety of policy objectives, and took many diffe rent forms.  Available evidence suggested that 
they tended to concentrate in four main areas: hotels and tourism, transport, financial, and telecommunications and ICT-related services. As Members had had more time to "digest" the 
Note, he wished to open the floor for questions and reactions on the information provided. He also 
asked for suggestions on how to move forward, based on information contained in the Note or otherwise.  One possibility in that respect was fo r Members, based on the Note, to identify subsidy 
measures that shared common features in respect of: their form (production, investment, export 
or consumption subsidy); how they were provided (on a national-treatment basis, or not); the 
affected mode(s) of supply; and their possible trade effects, including potential distortions. It would also be useful if Members could point out to the Secretariat those measures appearing in the 
Note, which were no longer in force.  
3.2.  The representative of Hong Kong, China th anked the Secretariat for its updated Note, which 
listed a broad variety of measures that might, or might not, fall into the categories of "services 
subsidies".  Even if they were determined to constitute a subsidy, the measures might have no 
distortive effects and thus not be the main focu s of the negotiation mandate in GATS Article XV. 
The wide range of examples inventoried was useful to define the universe  of measures that 
Members might have an interest in. At the same ti me, however, the Note pinpointed the difficulties 
and shortcomings associated with using information contained in Trade Policy Review (TPR) 
reports. In many instances, the limited level of details contained in these reports made it difficult to assess the measures' exact nature, ultimate bene ficiary and, above all, trade effects. Commonly 
found examples were: tax incentives, duty-free treatment or other preferential benefits for 
services and service suppliers located in special economic zones; measures to fill individual enterprises' financing gaps; or grants to help enterprises financing their R&D activities. However, 
in most, if not all of these cases, the Note was unable to specify whether the measures were 
available only to domestic services/service suppliers, or also to foreign ones.  
3.3.  Specificity and conditionality upon export performance were key elements to assess a 
measure's possible trade effects. The representative of Hong Kong, China acknowledged that the 
WPGR was not the body in charge of conducting trade policy reviews. He nevertheless wished to 
share his delegation's observations on some individual Members' measures as cited in the Note. For example, at the bottom of page 37 of Note  S/WPGR/W/25/Add.6, there was a mention of a 
concession scheme by Mexico, which covered also the "supply of export services" . What was the 
meaning of "export services" ? Which services did the IMMEC Decree apply to, and were foreign 
services and service suppliers eligible, or not? These pieces of information were lacking in the 
Note. On page 61, the Note cited two examples regarding Brazil: firstly, a measure on credit 
schemes whereby the Brazilian Development Bank (BNDES) facilitated access to credit at preferential conditions for the "offering or development of services for export" . It would be useful 
to learn what these entailed. Secondly, on the bo t t o m  o f  p a g e  6 1 ,  i t  w a s  s t a t e d  t h a t  B r a z i l ' s  
domestic shipping industry was exempted from certain taxes for the operation of international 
maritime transport. It would be interesting to better understand the potential trade impact of that measure. Page 83, item (c) of the Note referred to a measure by the United States in maritime 
transport: the Maritime Security Programme (MSP) provided a fixed payment to operators of 
domestically flagged vessels under the 2003 Maritime Security Act. While this seemed to be, prima 
facie, a national security measure, the question was whether the operators of domestically flagged 
vessels enjoying the payment were also operating commercial  services. Finally, on page 84,  
item (iii)(a) of the Note mentioned a measure wh ereby the Japanese government provided support 
to Japanese flag carriers under the international ship regime. The question arose whether this measure involved any subsidy to domestic suppliers for their international commercial  activities. 
These were simply examples he had come across when reading through the Secretariat Note.  
3.4.  The representative of the European Union wa s of the view that, in the work programme to be 
decided upon, it would make sense to "slice" the Se cretariat Note into more "digestible" parts. She 
suggested discussing the Note sector by sector with, for instance, transport services, R&D 
services, etc. However, she was open to other delegations' suggestions in that regard. She supported the statement by the representative of Hong Kong, China regarding the benefits of the 
Secretariat Note. The latter had, of course, some natural shortcomings linked to the nature of the S/WPGR/M/81 
 
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  information contained in the TPR reports. Neve rtheless, Members could share their experiences 
based on the Note, for instance on a sector-by-sector basis. This could help in identifying potential trade-distortive effects. 
3.5.  The representative of Switzerland lent hi s delegation's support to the statement made by 
Hong Kong, China and thanked the Secretariat for its document. There clearly were many points 
that could be taken up in the framework of a work programme. Compiling the information contained in TPR reports was an excellent idea.  Still, he wished to remind delegates that, a 
number of Members (including Switzerland) had submitted, between 1997 and present, 
Communications on their subsidy programmes related to services. Another aspect that could be highlighted in future works was the link between subsidy measures and certain GATS provisions (notably Articles XVII and II). In the framework of a possible future work programme, his 
delegation also wished to pursue more specifical ly the question of export subsidies. The 2008 
OECD Trade Policy Paper had demonstrated that it was possible to conduct useful research in this regard.
10 Finally, he suggested encouraging TPR experts to pay even greater attention to subsidy 
measures in future reports.  
3.6.  The representative of Mexico supported th e statement made by the representative of Hong 
Kong, China. Her delegation advocated further anal ysis to be conducted based on the Secretariat's 
Note, and she looked forward to providing respon ses to the questions posed by Hong Kong, China 
at the next meeting. Establishing a work programme would be very useful. 
3.7.  The representative of the United States raised concerns about the suggestion made by the 
representative of Switzerland regarding the greate r attention to be paid to subsidies in future 
TPRs. Members had not defined what a subsidy in relation to services looked like. It would thus be 
difficult to advise TPR experts on what specifically to look for. He reminded the Working Party of the United States' Communication, circulated in 2010, with questions for Me mbers to fa cilitate an 
informed discussion of services subsidies under GATS Article XV.
11 His delegation had not, thus far, 
received proper answers to these questions. 
3.8.  The Chairman thanked Members for their inputs and suggested that the Working Party take 
note of the statements made. There seemed to be  enough interest from Members and issues on 
the table for the Chair to consult further on the ideas and sensitivities that have been raised as well as on possible next steps. He proposed that he would conduct an open-ended informal 
consultation ahead of the next meeting,  with the help of the Secretariat.  
3.9.  It was so agreed. 
4  ITEM D: OTHER BUSINESS 
4.1.  No topic was raised under this agenda item. 
4.2.  The meeting was adjourned. 
__________  
                                               
10 Geloso Grosso, M. (2008), "Analysis of Subsidies for Services: The Case of Export Subsidies" , OECD 
Trade Policy Papers, No . 66, OECD Publishing; http://dx.doi.org/10.1787/244346861402 . 
11 Communication from the United States on "GATS Article XV (Subsidies): Questions for Members by 
the United States" , S/WPGR/W/59, 28 May 2010.