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S/WPGR/M/82  
 
24 January 2014  
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Working Party on GATS Rules    
 
REPORT OF THE MEETING HELD ON 29 OCTOBER 2013 
NOTE BY THE SECRETARIAT1 
The Working Party on GATS Rules (WPGR) held a meeting in the morning of 29 October 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/4220 and JOB/SERV/166 respectively. The agenda was adopted. 
1  ITEM A - ADOPTION OF THE ANNUAL REPORT TO THE COUNCIL FOR TRADE IN 
SERVICES (S/WPGR/W/63) 
1.1.  Pursuant to the annual reporting requirem ents to the Council for Trade in Services, the 
Chairperson recalled that the Working Party's Annual Report, as contained in document 
S/WPGR/W/63, had been circulated in advance of the meeting. Noting that the Report was factual and self-explanatory, he proposed that it be ad opted and transmitted to the Council for Trade in 
Services. 
1.2.  It was so agreed. 
2  ITEM B - NEGOTIATIONS ON EMERGE NCY SAFEGUARD MEASURES (ESM) UNDER 
ARTICLE X OF THE GATS 
2.1.  Commencing with emergency safeguard meas ures, the Chairman reminded delegations that, 
at the March 2013 meeting, the proponents had suggested a discussion focused on Members' 
sharing of experiences with regard to emergenc y safeguard provisions in their bilateral and 
regional free trade agreements (FTAs/RTAs).2 Such an exchange of information could help better 
understand the kinds of circumstances that might call for emergency action in services, as well as 
factors that might militate against. Similarly, it could be interesting to learn more about domestic legislation enabling safeguard actions in the serv ices field. The Chairman then opened the floor
 for 
delegations' views. 
2.2.  The representative of the Philippines, also on behalf of the delegations of Brunei Darussalam, 
Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Thailand and Viet Nam, introduced the 
Communication entitled "Emergency Safeguard Measures (ESM) in Regional and Bilateral Trade 
Agreements: A Proposed Dedicated Discussion"  (JOB/SERV/163). The Communication explained 
the purpose and suggested focus of a dedicated discussion. The proponents had carefully adapted 
their proposal to the state-of-play of the servic es negotiations. The discussion would follow the 
example of previous technical deliberations held in subsidiary bodies of the Council for Trade in 
Services. It aimed at a better understanding of emergency safeguard measures, not just from a conceptual, but also from an operational point of view. Delegations would be invited to describe, 
for instance, the approach adopted in their FT As/RTAs, the ESM language used, circumstances 
giving rise to ESM, as well as implementation experiences (notably particular modes and sectors involved, statistical developments, concerns raised by stakeholder). Finally, the proponents stated 
their flexibility as to the timing of the proposed dedicated discussion.     
                                               
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 S/WPGR/M/80 of 24 May 2013, paragraph 1.6. S/WPGR/M/82 
 
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  2.3.  The representative of the United States th anked the proponents for their written submission, 
which clarified their views. In his delegation 's view, the ESM discussions had always been 
predicated upon parallel market access discussions. As the latter were not currently ongoing in the WTO, his delegation wondered why the ESM issue was raised at this time. Its position regarding 
feasibility and desirability was unchanged. He would not stand in the way of a dedicated 
discussion, but wished his delegation's concerns to be duly reflected.      
2.4.  In view of the preceding, the Chairman pr oposed that, as a next step, a dedicated discussion 
would be held, hopefully during the Working Party's first meeting in 2014. He encouraged 
Members who wished to make any further contributi ons to submit them, preferably ahead of that 
meeting. 
2.5.  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 Chairman introduced the first, preliminary, version 
of the Staff Working Paper entitled "The Relationship between Services Trade and Government  
Procurement Disciplines and Commitments based on relevant WTO agreements (GATS and GPA) 
and recent RTAs"  prepared in cooperation between the Secr etariat's TRIPS Division, in charge of 
the GPA, and the Trade in Services Division. He  stressed that the Staff Working Paper had been 
prepared by its authors in their personal capacity. Thus, the views expressed could not be attributed to the WTO or its Secretariat. The Staff Working Paper analysed commitments' coverage with respect to procurement of services and the different dimensions of "conditions of market 
entry and participation" including approaches to scheduling − both in the GPA and the GATS, and 
in the 68 regional trade agreements (RTAs) identified as covering service procurement. The Chairperson then passed the floor to a representati ve of the Secretariat's Intellectual Property 
Division in charge of the GPA to provide furt her details on the Working Paper's key findings. 
3.2.  Explaining that the Staff Working Paper still was at a preliminary stage, the representative of 
the Secretariat invited Members to convey their comments so that these could still be taken into 
account. He gave a presentation of the Paper's main  findings focusing on the interface between the 
GATS and the GPA. Procurement was a major comp onent of services trade, with some authors 
estimating its share as high as 30%. Often a service supplier's largest contract was with government entities. Thus, if a service supplier wa s to be excluded from these contracts, due to 
restrictions in the procurement process, this could affect his commercial viability irrespective of 
relevant GATS commitments. As shown in the Pa per, recently, an increasing number of RTAs 
contained substantive chapters on government procurement. This had an influence on the viability, 
scale of operations and competitiveness of servic e suppliers in a number of sectors. Conversely, 
rights of establishment and/or of cross-border supply, as provided under the GATS, also had an 
important bearing on how GPA-covered procurement contracts could be performed. Indeed, the 
GPA did not address modes of supply, nor did it pr ovide any rights of establishment or of cross-
border supply.  
3.3.  The representative of the Secretariat indica ted that, out of the 250 relatively recent RTAs 
surveyed for the Paper, 68 had substantive provisio ns on procurement of services. Thus, even if 
they were not GPA Parties, some WTO Members might well be subject to similar disciplines based 
on their respective RTAs. Another contextual point to note was the convergence between the GPA and the RTA regimes, as the RTAs often used the GPA as a template. Overall, there was a 
surprising degree of convergence of international instruments and best practices with regard to 
government procurement. A looming question was whether these developments would facilitate the advancement of multilateral approaches to service procurement – to the extent that the 
methods applied under the different agreemen ts were compatible with one another. 
3.4.  Addressing the complementarity between, on the one side, the GPA and government 
procurement obligations in RTAs and, on the other side, the GATS, he reminded delegates of the "mirroring provisions" (or reciprocal exclusions) in GATS Article XIII:1 and GPA Article III:3, which 
defined the two agreements' respective scope. The GPA's domain was "procurement policy as 
such"; it did not regulate modes of supply or provide rights to establish a commercial presence or to supply services on a cross-border basis. The revised GPA in its Article II:2(a) took up language S/WPGR/M/82 
 
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  similar to the GATS' exclusion to define its scope of application. This separation of the domains 
between the two agreements in turn reinforced their complementarity. A further aspect of this complementarity was that a number of GPA Parties stated explicitly in their GPA services commitments that those commitments were "subject to the terms and conditions set out in their 
respective GATS commitments", or words to that e ffect. Having said that, he highlighted that some 
GPA Parties were of the view that such language was unnecessary because the terms and conditions set out in Member's GATS commitments remained relevant in any case. This 
"bifurcation" of coverage between "procurement  as such" and services' commitments was also 
born out in RTAs and their schedules.  
3.5.  Regarding scheduling approaches under th e GPA and the GATS, the representative of the 
Secretariat explained that the GPA covered procurement of both services and goods in separate 
Annexes. Unlike the GATS, neither the GPA nor th e RTAs with government procurement chapters 
normally referred to "modes of supply". Wh at was similar between GPA Annexes and GATS 
schedules, however, was their reference to th e United Nations Provisional Central Product 
Classification (CPC) List and to the Servic es Sectoral Classification List (document 
MTN.GNS/W/120 of July 1991). Under the GPA, most Parties used positive lists to define services coverage, with some exceptions (United States and Armenia). He described the multi-dimensional 
structure of the GPA schedules, including detailed listings of the entities that were covered at the 
central and sub-central level, as well as separate Annexes on goods, services and construction services. When scheduling commitments on serv ice procurement, RTA parties adopted both 
positive and negative lists (see also preliminary Staff Working Paper, Figure 8). 
3.6.  The representative of the Secretariat th en commented upon the extent of GPA Parties' 
current commitments on service procurement. Th e sectors most often covered were business 
services (e.g. professional and computer services ), telecommunications, construction, aspects of 
environmental services, financial, tourism and travel, etc. However, like other aspects of the GPA, 
services were also affected by country-specific derogations or reciprocity requirements, which had 
the effect of limiting coverage in some cases. Out of the 68 RTAs that included service 
procurement, 12 were between GPA Parties, 36 be tween GPA Parties and non-GPA Parties, and 20 
between non-GPA Parties. A closer examination led to the following initial observations. Where GPA Parties were involved in RTAs, most often they either followed or stayed behind their revised GPA commitments with respect to services' as well as entity coverage – thus preserving a clear 
incentive for GPA accession. RTAs between GPA Parties and non-GPA Parties tended to be 
modelled on the GPA. However, the majority of them provided for less coverage of government 
entities, especially at sub-central level, than the GPA. Finally, some RTAs between non-GPA 
Parties, especially in the Latin American re gion, provided very broad entity coverage.  
3.7.  In conclusion, the representative of the Secretariat emphasized the strong complementarity 
between service procurement and the general di sciplines and commitments governing trade in 
services, both multilaterally and in RTAs. This complementarity was recognized in the legal 
interface between the GATS and the GPA: namely the "mirroring provisions" that defined their 
respective domains. The same legal interface typica lly arose also in regional trade agreements. As 
far as procurement was concerned, RTAs were often modelled on the GPA text; and this could 
facilitate convergence towards common norms. Finally, notwithstanding some "outliers", in 
general, the (revised) GPA retained a deeper an d broader coverage of service procurement as 
compared to the RTAs.   
3.8.  The Chairman summarized some of the key "take-home" messages of the presentation and 
then opened the floor to Members for questions and comments. 
3.9.  The representative of the European Un ion welcomed the comprehensive and clear Staff 
Working Paper as well as the presentation. Both, she felt, lent support to her delegation's stance, 
namely that government procurement was an important economic factor in many service sectors, notably construction, telecommunications and ICT, but also business services. Given the late distribution of the Paper, her comments were still preliminary pending a more detailed analysis by 
capital experts. For her delegation, the most important section of the Paper was Part 3, which 
focused on the interface between market access and national treatment commitments under the GATS, specifying the conditions to supply a service, and the government procurement 
commitments, setting out the right to tender. There was a link between the two, which currently 
was not addressed in the GPA. There could be a mismatch between commitments under both agreements. Over the past years, her delegation had made several proposals to bridge this gap. S/WPGR/M/82 
 
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  With the finalisation of the GPA reform and new trends emerging from a number of RTAs, 
circumstances might currently be more favourable to discuss rules for service procurement, possibly based on a recalibrated new proposal. She suggested that Members reverted to the Staff Working Paper in more detail at the next meeting.  
3.10.  The representative of Switzerland than ked the authors for their comprehensive Working 
Paper. He remarked that among the 250 RTAs analysed in the Paper,3 68 covered public 
procurement in services sectors − meaning that 182 RTAs did not. Was there a structural 
explanation for this? Did the latter RTAs exclude al l procurement or just service procurement? Did 
they include a services chapter or not? Were there any RTAs that incorporated a chapter on 
government procurement, but none on trade in services? Was the propensity to cover service procurement higher in RTAs that had a procurement chapter modelled on the GPA and a GATS-
type services chapter; or was there no such correlation? The representative of Switzerland 
observed that the complementarity analysis between GPA and GATS addressed in Section 3.1 of the Paper (and in particular Figure 3, p. 15) omitted to mention mode 4. It would be useful to 
examine whether, and to what extent, GATS commit ments on mode 4, in particular on contractual 
service suppliers, had an impact on government procurement. This would be particularly relevant in sectors such as business services, and construction and related engineering services. To what 
extent did mode-4 commitments and the recognition of diplomas − or absence thereof − affect the 
implementation of procurement contracts? He also  encouraged the authors of the Paper to discuss, 
at a technical level, the underlying issues, merits and feasibility of multilateral  rules on service 
procurement, as compared to the current dispersal of agreements. 
3.11.  The representative of India thanked the re presentative of the Secretariat for an excellent 
presentation. Her delegation was still examining the Paper and reserved the right to come back 
with more detailed comments at a next meeting. She regretted that the Paper, in its current 
version, did not address the development challeng es of public procurement liberalization, and 
notably the high compliance costs that could affect developing countries and LDCs (notably the prohibition to use preferences to promote certai n national policy objectives). The 68 agreements 
identified in the Paper as having service procurement coverage provided a developed-country, i.e., 
very narrow, focus. It would be interesting to study how RTAs in other parts of the world were 
handling government procurement. 
3.12.  The representative of the Secretariat than ked delegations for their thought-provoking initial 
comments. The authors of the Paper would reflect further on the points raised and try to address 
them in a forthcoming version, after receiving more comments at the next meeting. Regarding the development dimension, he drew Members' attentio n to the explanations contained in the current 
version of the Staff Working Paper regarding new transitional measures for developing countries 
under the revised GPA (Paper p. 5, Figure 1). 
3.13.  The Chairman thanked the authors for th eir Paper and delegations for their inputs. He 
suggested reopening the discussion on the Paper at the next meeting allowing for more 
delegations to examine and comment upon it. Thereafter, he suggested, the authors would produce a revised version of the document.  
3.14.  It was so agreed. 
4  ITEM C - NEGOTIATIONS ON SUBS IDIES UNDER ARTICLE XV OF THE GATS 
4.1.  Turning to subsidies, the Chairman recalled  the Working Party's constructive discussion at the 
previous meeting, in June 2013, based, inter alia , on the Secretariat's Background Note entitled 
"Subsidies for Services Sectors ‒ Information contained in WTO Trade Policy Reviews"  
(S/WPGR/W/25/Add.6). One proposition made on that occasion had been to "slice" the Note to render it more "digestible" and discuss the measures  on a sector-by-sector basis. This could easily 
be done since the overview table (Table 1) was already organized in that way. He then opened the 
floor for Members' comments.     
4.2.   The representative of the United States raised concerns over that proposal since Members 
had not yet reached a consensus on what constituted a subsidy in services. He reminded 
                                               
3 Number of RTAs notified to the WTO before the end of August 2013 that are in force. For the full list of 
analysed agreements, see Appendix Table 1 of the Staff Working Paper. S/WPGR/M/82 
 
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  participants of his delegation's Communication, circulated in 2010, with questions to facilitate an 
informed discussion of services subsidies under  GATS Article XV (S/W PGR/W/59). No proper 
answers had been received thus far. 
4.3.  The representative of Switzerland noted that his delegation had provided responses to the US 
questions (see WPGR meeting report S/WPGR/M/69,  paras. 51-56). The Secretariat's Background 
Note, in particular its Table 1 (S/WPGR/W/25/Add.6, pp. 4-12), he thought, had provided a slightly more coherent global view of existing measures. Despite its many inherent gaps, the Note showed 
that subsidies existed in many important service se ctors that were open to trade. His delegation 
supported any re-organization of the Secretar iat Note that could improve delegations' 
understanding of the information provided.   
4.4.  Following a second intervention by the US delegation reiterating its concerns, the Chairman 
noted the lack of convergence among Members on  h o w  t o  m o v e  a h e a d .  H e  s u g g e s t e d  t h a t  h e  
would approach some delegations ahead of the next meeting, and that Members revert to this item for further discussion. 
5  ITEM D: OTHER BUSINESS 
5.1.  No topic was raised under this agenda item. 5.2.  The meeting was adjourned. 
__________