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S/WPGR/M/88  
 
3 February 2016  
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Working Party on GATS Rules    
 
REPORT OF THE MEETING HELD ON 14 OCTOBER 2015 
NOTE BY THE SECRETARIAT1 
The Working Party on GATS Rules (WPGR) held a meeting on 14 October 2015, chaired by Mr Don 
McDougall of Canada. The proposed agenda and the Chairperson's annotated agenda for the 
meeting were circulated in documents WTO/AIR/WPGR/3 and JOB/SERV/220 respectively. The agenda was adopted. 
1  ITEM A – ADOPTION OF THE ANNUAL REPORT TO THE COUNCIL FOR TRADE IN 
SERVICES (S/WPGR/W/66) 
1.1.  Pursuant to the annual reporting requirem ents to the Council for Trade in Services, the 
Chairman invited Members to adopt the draft annual report of 2015 contained in document 
S/WPGR/W/66.  
1.2.  The Working Party adopted the annual report.2 
2  ITEM B - NEGOTIATIONS ON EMERGE NCY SAFEGUARD MEASURES (ESM) UNDER 
ARTICLE X OF THE GATS 
2.1.  The Chairman recalled that,  in February 2014, Members had commenced a dedicated 
discussion on their experiences with services-rel ated emergency safeguard provisions in their 
bilateral and regional trade agreements (RTAs) . The discussion continued during 2014. At the 
Working Party's last two meetings, in March and June 2015, the proponents had re-affirmed their 
continued interest in pursuing work on emerge ncy safeguard measures and invited Members to 
review again their 2007 proposal as contained in document JOB(07)/155. The Chairman opened 
the floor for Memb ers' comments. 
2.2.  Turning to possible future work on emerge ncy safeguard measures, the representative of the 
Philippines, on behalf of the delegations of Brunei Darussalam, Cambodia, Indonesia, Lao People’s 
Democratic Republic, Malaysia, Myanmar, the Philippines, Thailand and Viet Nam, encouraged 
Members to contribute to the dedicated discussion on emergency safeguard provisions in bilateral 
and regional trade agreements. Members were also urged to review the proponents' 2007 proposal 
for an “Annex on Article X Emergency Safeguard Measures”  (document JOB(07)/155), which 
contained rules on establishing an ESM mechanism in Members’ domestic framework. The proponents stood ready to hold informal consulta tions with interested delegations. In view of 
developments in data availability and their continued relevance in trade agreements, they called 
for continued work on emergency safeguard measur es in conformity with the built-in mandate in 
GATS Article X, the Doha Development Agenda and the Hong Kong Ministerial Declaration. At the October 2015 meeting of the Council for Trade in Services in special session, the 'Friends of ESM' 
had reiterated their constructive engagement in all aspects of the services negotiations with the 
ultimate objective of achieving a development-or iented outcome in MC10 and post-Nairobi. This 
included their particular interest on emergency safeguards. The proponents hoped that the post-
Nairobi agenda would include all the unfinished business in services, including the continued work 
on emergency safeguard measures based on the built-in mandate. He informed delegations that 
                                               
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 The Annual Report of the Working Party on GATS Rules to the Council for Trade in Services (2015) was 
issued in document S/WPGR/26, dated 15 October 2015. S/WPGR/M/88 
 
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  the proponents were also contemplating possibilities to resume technical discussions on services 
statistics. The last time the Working Party had looked into ESM-relevant data dated back to March 2011.
3 The 'Friends of ESM' envisioned holding a follow-up discussion focusing on new 
developments since 2011, and would consult with the Chairperson, interested Members and the 
Secretariat to that end. 
2.3.  The Chairman thanked the proponents for their statement. He suggested that the Working 
Party take note of the statement and revert to this issue at its next meeting. 
2.4.  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 Ch airman reminded delegations that, at the last 
meeting in June 2015, the delegation of the Euro pean Union had proposed that Members exchange 
information on existing practices regarding the treatment of foreign-owned or -controlled established service suppliers in government pr ocurement procedures, notably with respect to 
national treatment. Further to a Member-led sharin g of experiences based on a series of questions, 
the delegation of the European Union had propos ed that the Secretariat be asked to analyse 
Members' practices in this regard as reflected notably in their trade as well as their investment 
agreements. In the subsequent discussion, some Members had asked the EU delegation to provide 
further details of its proposal in writing; this had been done in document JOB/SERV/215, which contained further details regarding the questions on which Members could exchange information. The Chairman opened the floor for Members' comments. 
3.2.  Highlighting the increased relevance of go vernment procurement for trade in services, the 
representative of the European Union explained th at, at the request of Members, his delegation 
circulated a proposal for future work in docu ment JOB/SERV/215. It proposed that Members 
exchange information on their existing practice s regarding government procurement, to improve 
mutual knowledge of existing regimes and pave the way for more concrete and better informed discussions. His delegation proposed to analyse how established (locally incorporated) service 
suppliers were treated in procurement procedures, notably with respect to national treatment. 
Information among Members could be exchanged notably on: (i) how Members treated foreign-
owned or -controlled established service suppliers with respect to government procurement procedures, in comparison with local service suppliers; (ii) whether there was any discrimination 
and, if so, in what form or for which sectors or activities. Was the discrimination based on the 
origin (foreign ownership) of the established company? How frequent were discriminations on the sole basis of capital ownership? (iii) What good practices could be drawn from national 
experiences? Further to this exchange of info rmation among Members, as a second step, the 
Secretariat could be asked to examine how these questions were addressed in Members' regional trade and/or investment agreements.  
3.3.  The representative of Turkey informed de legations that, as was the case in the European 
Union, companies legally established in Turkey were granted national treatment in government 
procurement procedures as a general principle. In this context, it might be worthwhile to analyse 
why mode 3 was commercially the most significant mode of supply (as mentioned by the EU 
delegation at the last meeting). Why were foreign service suppliers not able to participate in 
government procurement tenders via modes 1 or 4? Understanding the reasons behind this 
unbalance, and trying to devise ways to increase participation via modes 1 and 4, might be useful. 
Before delving into the questions contained in the EU proposal, the discussion should first focus on whether opening public procurement markets cont ributed to economic growth and development. 
Finally, she asked whether the delegation of the European Union had data regarding the share in 
the intra-EU procurement market of relatively less developed EU member States – including 
                                               
3 See the report in document S/WPGR/M/73. This included presentations by the WTO Secretariat’s 
International Trade Statistics Section on the statistics from official sources at the domestic and international 
level ‒ including balance of payments (BOP), foreign affi liates' trade in services (FATS), and the extended 
Balance of Payments Services Classifi cation (EBOPS). The Secretariat also presented the 'Services Profiles' with 
statistics on transportation, telecommunications an d financial services for some 90 economies.  The 
Secretariat’s Rules division made a presentation on statistics and indicators used in safeguard investigations in trade in goods. S/WPGR/M/88 
 
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  statistics broken down by: (i) company size (to assess which type of companies benefitted most 
from the Single Market); and (ii) modes of supply.  Her delegation looked forward to receiving any 
information the European Union could provide in this regard, and stood ready to engage in bilateral consultations to help shaping the content of any future debate in a way reflecting the 
interests of the broader Membership.  
3.4.  The representative of Argentina thanked the EU delegation for its initiative. Without 
prejudging the scope of the mandate in GATS Articl e XIII:2 in relation to the application of GATS 
Articles II, XVI and XVII to the government procurement of services, his delegation wished to state 
that any exchange of information on existing practices regarding the procurement of services, as proposed by the European Union, should include also other modes of supply relevant for the government procurement of services – in particular modes 1 and 4. His delegation wished to stress 
that, thanks to ongoing technological developments, mode 1 had become the most dynamic mode 
of supply in many service sectors and had a high growth potential, notably for business services. That mode was of special importance for small and medium-sized enterprises (SMEs) engaging in 
international services trade and for developing  countries more generally. Furthermore, the 
schedules of parties under the revised GPA, as well as under a large number of regional trade 
agreements with a chapter on government procurem ent, usually included service sectors involving 
mode 1 as a priority. As a consequence, a high degree of discrimination existed against third-Party 
suppliers from countries outside these agreements. Thus, his delegation advocated that the EU proposal include also modes 1 and 4.  
3.5.  The representative of Chile thanked the de legation of the European Union for its proposal. 
Echoing previous speakers, his delegation advocated including modes 1 and 4 as well.  
3.6.  The representative of India thanked the EU delegation for its written submission. Her 
delegation asked for further information regarding the purpose and final objective of the 
envisioned information exchange, after completion of its first two steps. More clarity was needed 
also concerning the interplay between the mand ate in GATS Article XIII and the GPA. It was 
important to understand the scope of the negotiating mandate of Article XIII. In the past, an 
information gathering exercise on national procurement regimes had taken place, and a series of 
communications from the European Union and so me other Members had been discussed in the 
Working Party. However, her delegation believe d that there had been no convergence amongst 
Members to engage in a substantive debate to establish disciplines, or decisions, on services 
procurement. Members had not been convinced that this would yield benefits for developing 
countries. How did the opening of public procurement markets help developing countries' economic growth and development? That question needed to  be answered first. There were many issues, 
which needed further discussion before delegations could embark upon any exercise of the kind 
suggested by the European Union. Her delegation ha d no appetite for this proposal at this stage, 
especially at this critical juncture of preparations for the forthcoming ministerial conference. 
3.7.  The representative of Canada thanked the European Union for submitting its proposal in 
writing. An exchange of views on countries’ existing practices in relation to mode 3 suppliers could 
be useful, particularly regarding good practices th at could be drawn from national experiences. The 
scope of the EU proposal was, however, very am bitious and gathering the amount of information 
suggested might be burdensome for Members. Th erefore, his delegation suggested that the 
exercise be simplified in order to create a way forward that would reveal useful information without being overly burdensome. To this end, hi s delegation sought clarification on: (i) whether 
the European Union intended to include its Member States; (ii) how "foreign-owned" or "foreign-
controlled" would be defined (e.g. 51% ownershi p, 100% ownership, or the nationality of the 
board members); and (iii) whether it would it be more useful to examine the treatment of foreign-
owned enterprises in general. Members of the Secretariat in their personal capacity had already 
produced a detailed paper on the relation be tween services and government procurement 
commitments, including in the context of RTAs. His delegation wondered, with respect to paragraph 4 of the EU proposal,
4 what additional  information it suggested the Working Party 
requested from the Secretariat.  
3.8.  Summarizing the interventions, the Chai rman took note that there were a number of 
Members interested in exploring whether modes 1 and 4 should be included in the information 
exchange. Some Members expressed an interest in having consultations on how to shape a 
                                               
4 Contained in document JOB/SERV/215 of 25 September 2015. S/WPGR/M/88 
 
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  possible future discussion. He also took note of India's concern about having this kind of 
conversation at this point in time. He suggested that he would undertake consultations with 
interested Members in early 2016 on how to move forward on this issue ‒ including holding an 
open-ended informal meeting. 
3.9.  The representative of the European Union stated his delegation's readiness to work together 
with the Chairperson and interested delegations to further clarify the issues raised at the meeting. 
In response to the questions posed by the represen tative of Canada, he explained that concerning 
the definition of "foreign-owned or -controlled", the idea was to rely on the definitions in GATS 
Article XXVIII(n). Regarding the meaning of "established" service suppliers, he referred to the definition of "commercial presence" in GATS Article XXVIII(d); a subsidiary would be the starting 
point. His delegation was open to cover also other modes of supply. The proposal's starting point 
had deliberately been precise and narrowly-defined as, in the past, the European Union had been criticised over too comprehensive/ambitious proposal s. His delegation stood ready to work with the 
Chairperson and other interested delegations to dr aft a work program covering the different modes 
of supply. In response to the last question pose d by the representative of India, he wished to 
clarify that there was no precondition to prove any given topic's pro-development impact in order 
to be able to discuss it. This being said, his delegation was open to address this point in the course 
of the discussions. 
3.10.  The Chairman suggested that the Working Pa rty take note of the statements made and that 
he start consultations with Members on how to take the work forward in the New Year.  
3.11.  It was so agreed. 
4  ITEM D – NEGOTIATIONS ON SUBS IDIES UNDER ARTICLE XV OF THE GATS 
4.1.  Turning to subsidies, the Chairman observed  that the discussion had stood at an impasse for 
some time. No new ideas on how to carry forward the work in this area had emerged from his 
informal outreach to Members preceding this meet ing. Following these introductory remarks, the 
Chairman opened the floor for Members' observations. No delegation asked for the floor. 
4.2.  The Chairman invited the Working Party to revert to this item at its next meeting.  
4.3.  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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