WORLD TRADE  
ORGANIZATION  RESTRICTED 
S/WPDR/M/54 
31 July 2012 
 (12-4230) 
Working Party on Domestic Regulation  
  
REPORT OF THE MEETING HELD ON 27 JUNE 2012 
 
Note by the Secretariat
1 
   
1. The Working Party on Domestic Regulation (W PDR) held a meeting on 27 June 2012, which 
was chaired by Mr. Kerem Alp of Turkey.  The ag enda for the meeting was contained in Airgram 
WTO/AIR/3963, dated 15 June 2012.  An annotate d agenda for the meeting was circulated in 
RD/SERV/105.  The agenda was adopted as proposed. 
A. D
EVELOPMENT OF REGULATORY DISCIPLINES UNDER GATS  ARTICLE VI:4 
2. The Chairman noted that there were two sub-items under this point of the agenda:  
continuation with the technical discussion of the i ssues submitted by Members;  and consideration of 
the regulatory issues Note prepared by the Secretariat (S/WPDR/W/48). 
3. On technical discussions, the Chairman recalled that during the last meeting Members had 
commenced consideration of questions under the following themes:  Simplicity of Licensing and 
Qualification Procedures;  Impartiality of Proce dures and Independence of Regulators;  and Single 
Window of Applications.  The informal summary of the discussion was contained in JOB/SERV/98.  
Members could revert to any outstanding issues from these discussions should they so wish.  At this 
meeting, Members would also have the opportunity  to comment on the themes of:  Submission of 
Applications;  Treatment of Incomplete Applica tions;  Acceptance of Authenticated Copies;  and 
Rejection of Applications.  As on previous occasions , he suggested that this discussion be undertaken 
in informal mode, so as to as to allow for an easi er and more open exchange of views.  An informal 
summary of the discussion would be provided under the Chairman's own responsibility. 
4. The meeting continued in informal mode. 
5. Following the informal discussion, the Chairman  reminded Members that, in accordance with 
the Indicative Work Plan (RD/SERV/71), the next  meeting would address the questions listed under 
the themes of Timeframe for Processing of Appl ications;  Permission to Supply Service After 
Fulfilment of Requirements;  and Fees.  Members were requested to consult their domestic 
stakeholders on these issues. 
6. Moving to the second item, the Chairman invite d the Secretariat to introduce the Regulatory 
Issues Note contained in document S/WPDR/W/48 dated 13 June 2012. 
7. The Secretariat explained that the Regulatory Issues Note followed a request by the Working 
Party made at the formal meeting held on 27 September 2011 (S/WPDR/M/51).  The Note provided 
updated information on regulatory practices and issues in various sectors and modes of supply.  While 
information had been extracted from previous sectoral  papers, it took a fresh look at the issues within 
a broad regulatory context.  In some instances, re ferences to measures other than those covered by 
                                                      
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. S/WPDR/M/54 
Page 2  
 
  Article VI:4 had been included in order to provide a comprehensive regulatory picture.  The first part 
of the Note provided an introduction to the broad context for regulation, including the rationale 
behind various types of regulations and the impor tance of regulatory soun dness in the process of 
services liberalization.  For instance, Box 1 in the Note contained an illustration of examples of 
regulatory objectives.  The second part of the Note  focused the analysis on the GATS context mainly 
on Article VI:4.  In some cases, Article XVI and XVII measures were referred to only to the extent 
that they helped complete the description of the re gulatory context.  It w as also highlighted that 
reference had been made to GATS Article XVIII, as it was another potential to ol to address regulatory 
issues.  In this regard, instead of developing discip lines in the form of an Annex, Members might take 
a slightly different approach by negotiating additio nal commitments.  The scope of Article XVIII was, 
however, broader than Article VI:4.  It encomp assed not only measures on qualification requirements 
and procedures, licensing requirements and procedures,  and technical standards,  but could include any 
issue which Members might deem appropriate to  address.  The Reference Paper on Regulatory 
Principles for Basic Telecommunications was a good example of how this provision could be used. 
8. The Secretariat emphasized that the Note wa s made without prejudice to any approach 
Members might want to use in the negotiations, be it horizontal or sectoral.  Apologies were also 
made for the late release of the Note.  It was unde rstood that, as Members had only had a short time to 
study the document, a fuller consideration may ha ve to wait till a future occasion.  Any preliminary 
comments from Members would nevertheless be appreciated. 
9. The Chairman thanked the Secretariat for the Note.  Given the diversity of issues addressed, 
as well as the size of the document, he felt that it would probably require more than one meeting for 
Members to discuss its content.  He invited Memb ers to provide their preliminary comments on the 
Note's content, as well as on how to best use the information provided. 
10. All the Members who took the floor thanked the Secretariat for the Note.  The representatives 
of India, South Africa, Australia, Hong Kong China,  New Zealand, Turkey, Brazil, China, Chinese 
Taipei, Singapore, and the European Union asked  for more time to study the Note, which they 
considered to be a comprehensive and useful reference tool.  They emphasized that the comments 
provided at this meeting should be considered as preliminary. 
11. The representative of India highlighted the lack of symmetry between developed and 
developing countries on domestic re gulations.  He explained that, in developed countries, domestic 
regulations have evolved over the years and ha ve a strong institutional background, while in 
developing countries, domestic regulations were st ill evolving and many sectors were characterized 
by a regulatory vacuum or weakness in capacity.  He  considered that the regulatory constraints faced 
by developing countries had not been dealt with  in the Note.  The representative specifically 
highlighted paragraph 84 of the Note, which observed that licensing may be used to restrict market 
entry after liberalization, particularly in some count ries where, to date or not long ago, no sectoral 
license had been needed for pr oviding some services, notably express delivery services.  This 
observation, though made in a sectoral context, was considered to apply across sectors.  He also 
expressed concern that developing countries were so metimes pushed to open their markets even in the 
absence of a regulatory framework, and consider ed that there would be a strong case to have 
a developed regulatory framework before libera lizing.  He noted that the information in 
paragraph 269, which stated that services accounted  for about two thirds of FDI inflows worldwide, 
was based on an UNCTAD report of 2006.  This  data appeared out of date, as the UNCTAD 
investment report of 2011 had observed a decline in services FDI after the financial crisis.  Therefore, 
the figures in the Note might have overstated the amount of FDI inflows in services.  Further, he 
noted that some sectors were not mentioned, for example:  medical and dental services, veterinary 
services, services provided by midwives, nurses, phys iotherapist and paramedical personnel.  These 
were very important sectors, deeply affected by domestic regulations.  Regulatory issues for these 
sectors should be added to the Note.  S/WPDR/M/54 
 Page 3 
 
 
  12. The representative of India also highlighted tw o horizontal aspects which his delegation felt 
should be dealt with and discussed separately.  First, the cumbersome and expensive State and 
Province specific licences and qualification requireme nts that prevent access to a single market.  
Service suppliers have to negotiate access to mu ltiple markets within th e same Member and often 
have to face different criteria and parameters.  Second, the funda mental difference in degrees of 
regulatory sensitivity and complexity between qualification requirements and procedures, and 
licensing requirements and procedures. 
13. The representative of South Africa was of the view that the Note should be used in the context 
of horizontal discussions and that it would not be the ri ght time to engage in sectoral discussions.  In 
a preliminary assessment of the document, he requested greater precision on how the discussion on 
regulations and regulatory framework in the Note related to the exercise in which Members were 
engaged, as well as to the market access negotiati ons, domestic regulation ne gotiations and the DDA.  
The development perspective that was raised by I ndia should be added to the second draft of this 
Note, should there be one.  In the Chair's 2009 Dr aft Text there was a chapter on development.  
Therefore, within the regulatory discussions refere nce should be made to special and differential 
treatment, differences in regulatory capacities, and ot her development related is sues.  He considered it 
critical to include those aspects in the Note.  He noted and agreed with some general points 
emphasized in the Note, namely the complexities presented by situations where multiple regulators 
are involved in one sector.  He felt it had been remiss on the part of Members not to have given the Secretariat a more precise mandate for the elabor ation of this Note.  Therefore, his delegation 
considered that it would be important to have  a second draft which included these concerns. 
14. The representative of Hong Kong China provided initial feedback on general aspects of the 
Note.  He welcomed the first part of the Note, wh ich dealt with the issue of regulation in a context 
that was broader than the very focused scope c ontained in GATS Article VI:4.  He stressed the 
importance of regulation, as well as the need for di sciplines.  However, caution should be exercised 
with the use of GATS Article XVIII as an alternative way to address regulatory issues.  In their view, 
the Working Party had a mandate to develop disciplin es that would be universally applicable and not 
optional as was the case for additional commitments.   The Note presented sec tor specific issues but 
this should not lead to an indication that the Wo rking Party would be contemplating negotiations on 
sectoral disciplines.  The review of regulatory issu es at the sectoral level should inform and advance 
the horizontal negotiations.  Important issues had been  raised in the concluding observations of the 
Note.  Some of them might not, however, fall under the scope of the Working Party, for example the 
overarching issue of how regula tions relate to competition. 
15. The representative of New Zealand recalled the pur pose and use of the Note as previously put 
forward by Australia.  By considering whether th ere were common themes and issues arising in the 
various sectors, the Note could inform work on horizont al disciplines.  In light of the extent and detail 
of the Note, it could also be useful for informing potential future work that Members might wish to 
propose with respect to other parts of the Worki ng Party mandate, for example on sectoral disciplines 
or professional services.  For the time being, her delegation did not have an y concrete proposals but 
was intrigued by the possibility of using GATS Artic le XVIII, rather than Article VI:4, to schedule 
additional commitments.  Further c onsideration would be given to this idea.  She noted that these 
were preliminary comments. 
16. The representative of Turkey found the Note  to provide a useful and comprehensive 
compilation of regulatory issues affecting sectors and modes of supply.  Her delegation would provide 
more substantive comments at the next meeting. 
17. The representative of Chile high lighted two interesting elements that could be drawn from the 
Note.  Firstly, regulation and liber alization go hand in hand;  and secondly, the possibility of using 
Article XVIII. S/WPDR/M/54 
Page 4  
 
  18. The representative of Brazil noted that it would revert to the contents of the Note and the 
question of how to best use it on a future o ccasion.  Following the comments made by the 
representative of Hong Kong China, his delegation was concerned with the recurring suggestion in the 
Note for Members to consider the usefulness of new negotiating approaches and methods, namely the 
scheduling of Article XVIII commitments to "address  trade related regulatory concerns" pertaining to 
Article VI:4 issues and beyond.  He asked the Secretariat to further clarify the rationale behind this 
suggestion and the kind of debate it envisaged fro m Members, as the current line of work did not 
contemplate a negotiating mode.  His delegation was of the view that the process should be Member 
driven, in respect of both substance and procedure. 
19. The representative of China referred to th e questions on paragraph 20.  His delegation 
believed that if domestic regulation disciplines could be concluded at an  early date then most of the 
regulatory issues, like qualification requirements an d procedures, technical standards and licensing 
requirements would be effectively addressed.  Neve rtheless other regulatory issues, like recognition 
and co-operation, have an impact on trade in services  and deserve more attention.  He shared the view 
that additional commitments would be an effective complementary way to address those issues, and 
that the reference paper approach could be useful.  As for the questions in paragraph 267 of the Note, 
his delegation would be open to whether the cros s-border supply related conc erns should be pursued 
in the context of the e-commerce work programme  or in regular GATS bodies.  They would be 
interested to explore mechanisms which facilitate  cross-border supply and would like to work with 
Members to promote co-operation among regulators.  With respect to the questions raised in paragraph 303, the schemes designed in the APEC bus iness travel card and the EU blue card were 
good examples of how to facilitate the regional movement of natura l persons.  The provisions in 
Article VII:4 were considered sufficient to ensu re transparency but the question was how those 
provisions should be implemented. 
20. The representative of Chinese Taipei suggested  reviewing the content of the Note in 
two parts, first the sections on sectors at the next meeting followed by those on modes of supply at the 
meeting in December.  After the review, Members w ould be able to evaluate how to make better use 
of the Note. 
21. The representative of the Eur opean Union shared the concerns of Hong Kong, China, and 
New Zealand about the use of Article XVIII as an a lternative route.  The European Union would not 
be against the idea of sectoral work but, like South Africa and Hong Kong, China, was of the opinion that this cannot be seen as an alternative to m oving ahead with horizontal disciplines.  Any sectoral 
work should be used as a basis to contin ue the work on horizontal disciplines. 
22. The representative of Argentina found the Note  very useful because it contained concrete 
facts and he recalled that his delegation had requested a similar Secretariat Note on technical 
standards. 
23. The Chairman reminded Members that the Working Party was not going to take any decisions 
on the Note or its revision at this meeting, a nd invited the Secretariat to comment on Members' 
preliminary reactions. 
24. The Secretariat responded to India's request to add regulatory issues on other sectors that were 
not addressed in the Note, indicating that it would be  able to supplement th e Note with anything else 
that Members deemed appropriate, including the elements  mentioned by India.  It was highlighted that 
the Note only covered the sectors for which sectoral discussions had taken place in the Council.  On 
the query concerning the development dimension, the Note had not elaborated on the challenges faced 
by developing countries because this issue would be a theme in itself and this had not been understood 
to be part of the mandate for this Note.  Rather, the Note contained a diagnostic analysis aimed at 
clarifying regulatory issues.  It was not the intention to prescribe what Members should do about  S/WPDR/M/54 
 Page 5 
 
 
  them.  Other organizations have done work on deve lopment issues.  Nevertheless, if Members so 
wished, the Note could be supplemented accordingl y.  On the reference to Article XVIII, the 
Secretariat was not suggesting that this should be the approach nor was it pointing to any particular 
direction.  Rather, it had been included as a poten tial GATS provision for Members' consideration, in 
order to have a complete picture of the GATS pers pective on regulatory issues.  It was recalled that 
Members had found Article XVIII to be useful in sp ecific sectors, like basic telecommunications.  In 
order to be comprehensive, the Secretariat had highlighted issues and provided information on the 
available GATS "toolkit" to deal with them.  This  complete review of the issues and the GATS was 
without prejudice to how Members would deal with them.  What would be done thereafter would be 
completely up to Members. 
B. FUTURE WORK 
25. The Chairman declared that future work woul d be a continuation of the current endeavours, 
conducted in a transparent and inclusive manner,  aimed at moving forward in small steps in 
accordance with the MC8 decisions. 
26. The representative of Hong Kong, China requ ested a structured discussion regarding the 
technical issues in conjunction with the textual pr oposals discussed for many years in the Working 
Party.  His delegation would like to have the oppor tunity to reflect, in an informal open-ended 
meeting, on how the technical discussion could help  the textual discussion, without entering into 
negotiations. 
27. The representative of New Zealand supported the comment made by Hong Kong, China. 
28. The Chairman would be conducting consultations with delegations on this request and, at an 
appropriate time, would conve ne an informal meeting. 
C. OTHER BUSINESS  
29. No items were raised under this agenda item. 
30. The meeting was adjourned. 
 
__________