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S/WPDR/M/59  
 
28 November 2013  
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Working Party on Domestic Regulation    
 
REPORT OF THE MEETING HELD ON 28 OCTOBER 2013 
  NOTE BY THE SECRETARIAT1 
The Working Party on Domestic Regulation (WPDR) held a meeting on 28 October 2013, chaired 
by Ms. Viràg Halgand Dani of Hungary. The agenda for the meeting was contained in airgram 
WTO/AIR/4216 dated 17 October 2013. An annotated agenda for the meeting was circulated in JOB/SERV/162 dated 18 October 2013. The agenda was adopted as proposed. 
 
1  ITEM A - ADOPTION OF THE ANNUAL REPORT TO THE COUNCIL FOR TRADE IN 
SERVICES 
1.1.  Pursuant to the annual reporting requirem ents to the Council for Trade in Services, the 
Chairperson invited Members to adopt the draft annual report contained in document 
S/WPDR/W/52. The Working Party adopted the an nual report as contained in S/WPDR/W/52. 
2  ITEM B - DEVELOPMENT OF REGULATORY  DISCIPLINES UNDER GATS ARTICLE VI:4 
2.1.  The Chairperson noted that there were tw o sub-items under this point of the agenda. The 
first was the technical discussion of issues su bmitted by Members, while the second was the 
discussion of regulatory issues.  
2.1  Discussion of technical issues submitted by Members  
2.2.   As on past occasions, the Chairperson pr oposed that the technical discussion be undertaken 
in informal mode so as to allow for an easier and more open exchange of views. To structure the 
discussions, she proposed that Members first provide any additional comments on questions 
addressed at the last meeting on 19 June 2013, namely on "general provisions" and 
"development". The floor would then be opened for responses to questions on the "introduction", "institutional provisions" and "legal form and implementation".   
2.3.   Discussions on these topics continued in informal mode. 
2.2  Discussion of regulatory issues 2.4.  The Chairperson then reverted to formal mode for the discussion of the Secretariat Note on 
Regulatory Issues.2 She first opened the floor for any additional comments on the sectors and 
modes of supply discussed at the previous meeting, namely telecommunication services, computer 
and related services, audiovisual services, and modes 1 and 2.  
2.5.  The representative of New Zealand commented on the questions contained in the Regulatory 
Issues note on computer and related services and telecommunications.3 First, her delegation was 
not sure that guidelines on the application of Article XIV to computer and related services would be appropriate, since most Members would want to determine "essential security interests" 
themselves. However, given the relatively specific nature of the situations outlined in 
                                               
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 "Regulatory Issues in Sectors and Modes of Supply", S/WPDR/W/48 of 13 June 2012 and "Services-
Related Regulatory Challenges faced by Developing Countries", S/WPDR/W/51 13 March 2013. 
3 These questions can be found on page 27 and page 66 of the do cument S/WPDR/W/48. S/WPDR/M/59 
 
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  Article XIV.1(b), it could be useful to have discussions about which among the new measures in 
computer and related services would generally be considered to fall under its scope. If consensus could be reached on this, it would be desirable to have it recorded in some form. Second, with regard to ensuring that new spectrum policies would be both competition friendly and GATS 
consistent, she noted that general principles regarding spectrum allocation were to some extent 
already covered in the Reference Paper on Basi c Telecommunications. Thus, her delegation was 
not convinced that further detail would really be needed with respect to these so-called “newer 
spectrum policies”. In their view, it might be better to capture essential points of principle, such as 
non-discrimination and market-based approaches, ra ther than to try to reflect every development 
on the regulatory front. Third, it would be ad vantageous to exchange information on new and 
emerging practices in internet regulation, and to see how they are viewed by Members in relation 
to their GATS commitments, including those on basic telecommunications.  
2.6.  Fourth, with regard to cross-border supply (modes 1 and 2), it might indeed be useful to take 
up issues which are particular to cross-border supply, such as jurisdictional issues and the extra-
territorial application of regulations, and to tease out any commonality of understanding in 
relevant GATS bodies. Fifth, an “on-line application” process in and of itself would be unlikely to resolve and prevent licensing or certification requirements from effectively precluding cross-border 
supply. Rather, work would be required on addressing underlying requirements. Sixth, on the issue 
of cooperation between regulatory authorities across different national jurisdictions, it was noted that there is a range of existing mechanisms to enable regulatory authorities to dialogue, exchange experience and cooperate across many of  the key services sectors. For example, the 
International Telecommunications Union on telecommunications, the World Tourism Organisation 
on tourism and the International Civil Aviation Organization on aspects of air services. Thus, any effort on this front should take  care to avoid duplication.  
2.7.  There were no further interventions on th e other sectors and modes of supply addressed at 
the previous meeting. 
2.8.  The Chairperson proceeded to open the floor for comments on development, maritime 
transport services, road transport services, logistics services, distribution services, and postal and 
courier services. With respect to the sectors, the Chairperson recalled that the Secretariat had in 
the Regulatory Issues note posed the following general questions for consideration by Members: 
(i) are there any other regulatory issues in sectors and modes of supply, apart from those 
discussed in the Note, which may also have impact on trade in services?; (ii) to what extent might 
trade-related regulatory concerns in sectors and modes of supply fall under the scope of domestic regulation disciplines and be addressed through the envisaged Article VI:4 disciplines?; and (iii) 
would the scheduling of Article XVIII additional commitments be an effective complementary or 
alternative way to address any of these concerns ? In this context, would a "Reference Paper" 
approach be useful? She suggested that Members might wish to reflect on these questions when 
commenting on the various sectors. 
2.2.1  Development 2.9.  On development, the Chairperson recalled that some Members had previously shared their 
experiences on regulatory reform and that some ideas on possible further work had been posed. 
She requested views on whether there were any areas which the Working Party might wish to 
pursue further.  
2.10.  There were no further interventions on the subject of development.  
2.2.2  Maritime Transport Services 
2.11.  The representative of Norway believed th at the Secretariat’s note covered the maritime 
transport sector adequately. In the sub-section entitled "other regulatory issues", there was a 
short reference to environment, safety, and social regulations, but the Secretariat Note might have 
covered this issue more comprehensively. Given the international nature of the maritime sector, international safety and environment regulations were extremely important. Such regulations should be developed in the International Maritime Organization (IMO). The International Labour 
Organization (ILO) was equally important for the development of regulations in social issues, most 
recently through the Maritime Labour Convention. S/WPDR/M/59 
 
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  2.12.  The representative of Australia indicated that in recent years the government had 
established a maritime safety authority as a single national regulator for maritime safety. It 
developed, maintained, monitored and enforced na tional standards for commercial vessels, as well 
as established a national law for all commercial vessels operating in Australian waters and a 
national compliance and enforcement system to ensure that laws were consistently applied for all 
commercial vessels. Research and discussions with industry had revealed that common regulatory issues existed across multiple transport services sectors. Namely, regulatory reform in recent 
years had seen a greater push towards more stre amlined and consistent regulatory requirements. 
Regulatory reforms were often partly driven by a desire for a more internationally competitive 
industry, where the key role of foreign services suppliers was recognized. 
2.13.  The representative of Colombia wished to  share the country's experience with respect to 
port reform. In 1991, the juridical framework was established for the participation of the private 
sector in the administration, development and construction of maritime ports in Colombia. In 1993, concessions in relation to government-owned ports were granted to regional port 
companies. Consequently, the construction, maintenance and administration of ports, both public 
and private, had been under the responsibilities of port companies under a regime of concession 
for the last 20 years.  
2.14.  Companies that operated private ports freely established their prices, but needed to 
communicate these to the Superintendent's Office. For the granting of a concession, the demanding party had to be established as a " sociedad anónima portuaria ". The capital could be 
private, public or mixed. In the case of publicly-owned ports operated under the concession 
regime, prices were set in accordance with the following requirements: prices had to be 
competitive, cover the costs of the port company, enable these companies to be profitable, and be communicated to the Superintendent's Office. The same prices were charged for import, export, or 
cabotage operations. 
2.15.  The concession regime had led to improv ements in the development, modernization and 
operation of the port infrastructure. As indicated in the Port Reform Toolkit of the World Bank, to 
which the Secretariat Note made reference, the operation of ports in Colombia had improved 
substantially since the reforms. Among other indicators, ports were operational 365 days a year and 24 hours a day, and waiting time for ships had been cut. However, the energy boom that the country was currently experiencing, as well as the implementation of free trade agreements, 
represented challenges. Currently, 80.5% of external  trade took place through ports. In view of 
these trends and of the new dynamics that would be generated by the enlargement of the Panama 
Canal, it had been considered necessary to conduct a comprehensive analysis of the current 
regulatory and institutional framework so as to identify actions that would yield improvements in 
terms of quality, efficiency, productivity, compet itiveness and sustainability of the port sector. 
Sharing national experiences on regulatory refo rms and approaches in this area was important 
since it permitted to better understand challenges and implications.  
2.16.  The representative of Japan indicated that the country had in place a system that precluded 
the application of the Anti-Monopoly Act with regard to the maritime transport sector. Such system 
was the subject of regular reviews and it had been decided in 2011 that the non-application would 
continue. The system would be reviewed in 2015, taking into account such aspects as the impact 
on the Japanese economy.  
2.17.  The representative of Chile indicated that the country's approach to the regulation of port 
services had been similar to that mentioned by the delegation of Colombia. The majority of ports 
had at some point been state-owned. What was first done was to launch a public bidding process, for all or part of a port. A second step had been to open bidding for new ports where none 
previously existed. Third, a number of ports used by the copper industry in the north of Chile were 
entirely owned by the relevant companies. However, establishing the port infrastructure required obtaining the public right to do so from relevant governmental authorities.  
2.18.  With respect to shipping, Chile had a numbe r of limitations with respect to mode 3. The 
registration of vessels could only be done by na tional legal or natural persons. A national legal 
person was a company with at least 50% of its stock held by nationals. Further, the managers, president and majority of directors in shipping companies had to be Chilean nationals. However, 
the Chilean legal regime also allowed waivers, which essentially applied to domestic maritime 
transport. Such waivers had to be requested by  the domestic industry when faced with scarce S/WPDR/M/59 
 
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  capacity. This system had proved flexible and had been used every year. In practice, the domestic 
maritime transport sector was performing well; two national companies had an important presence abroad.  
2.2.3  Road Transport Services 
2.19.  The representative of Australia noted that as her country did not share land borders with 
other territories it was not a major importer of ro ad transport services. However, recent regulatory 
reforms undertaken at a national level might improve the regulatory environment for foreign 
services suppliers operating in Australia, as well as for Australian exporters reliant on road 
transport to deliver their goods to ports. A series  of regulatory reforms were being undertaken in 
road transport to improve the regulatory environm ent for heavy vehicles used to transport goods. 
The regulatory reform would establish a na tional independent regulator and remove 
inconsistencies between different regulatory regimes across Australia’s states and territories. This 
would include introducing a single heavy vehicle driver licence which could be used across all states and territories, and ensure that competency and testing standards apply. 
2.20.  The representative of Chile referred to the international cargo transport agreement 
operating in Latin America. In this agreement, an exclusive area is established for international 
cargo export via land amongst member countries, na mely Bolivia, Brazil, Peru, Uruguay, Paraguay, 
Argentina and Chile. The representative noted th at he would be happy to share information on 
thus agreement with any interested Members.  
2.21.  The representative of Guatemala provided a national example of a road transport service 
practice. Guatemala was an entry point for goods coming from North America towards Central 
America, as well as the exit point for goods going from Central America towards Mexico. With 
regard to this latter flow, a memorandum of und erstanding existed among transport companies of 
Mexican and Central American origin. Mexican companies can only enter within a certain number 
of kilometres within Guatemala to unload cargo,  which would then be re-transferred elsewhere in 
Latin America. Similar arrangements occur in other countries. This may not be a regulatory restriction as such but it is an existing practice, which seeks to address the size differential 
between Mexico as compared to Central American count ries, as well as to help ensure competition.  
2.2.4  Logistics Services 2.22.  The representative of Australia indicated the following regulatory issues that were of 
concern to the industry: restrictive licensing requirements and lack of freedom to operate 
transport equipment across borders. Difficulties in obtaining licences, which limited the ability of 
logistics and supply chain services suppliers to pr ovide the full spectrum of brokerage services. 
Australia had recently taken initiatives to address the regulatory issues relevant to logistics 
services. Since transportation was a key component of the logistics chain, regulatory reforms on 
road and maritime services had assisted in the logistics sector. 
2.23.  The representative of the European Union noted that paragraph 261 of the Secretariat Note 
mentioned the suggestions made in the context of  the DDA and PTA negotiations for Members to 
develop regulatory disciplines that extended to procedures and formalities such as documentation 
requirements, customs clearance, customs inspection and electronic processing. A specific suggestion referred to in the Note was to accept electronic trade administration documents. 
2.24.  Within the EU, the Commission had adop ted in March 2011 a White Paper on Transport – 
“Roadmap to a Single Transport Area – towards a competitive and resource efficient transport system”. The White Paper defined the Commission’s strategy to address the future challenges of 
transport. One of the concrete initiatives entaile d in the White Paper was the establishment of an 
electronic framework for multimodal transport of goods (e-Freight). Achieving paperless and 
seamless information flows along the whole transport logistics chain was a key objective for both 
the transport sector and the EU. 
2.25.  A variety of stakeholders, be they freight forwarders, transport operators, transport 
authorities or shippers, were working on the facilitation of information exchange for freight transport. However, such initiatives were not coordinated. Initiatives were being developed at the 
sectorial level, in various modes of transport and by different communities of stakeholders without S/WPDR/M/59 
 
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  extended communication between them. This had led to a situation where standards, standard 
implementation and information systems were only usable for specific purposes, on a specific part of the transport chain or in a specific region. 
2.26.  The so-called e-Freight Initiative  that would be launched by the European Commission in 
the coming months, would address this problem. Th e objective of the e-Freight Initiative would be 
to give an overview of the current stakeholders an d actions in the field of e-Freight, at industry, 
national, EU and worldwide levels. Based on this description, the initiative would also identify main 
issues and list possible actions at a European level in order to gather stakeholders and initiatives 
towards the facilitation of the paperless provision and use of information in freight transport. 
2.2.5  Distribution Services 2.27.  The representative of South Africa indicate d that there was no regulatory board overseeing 
all operations of the national retail sector. The Companies Act (2008), the Consumer Protection Act 
(2008), and the Competition Act (1998) were the legal frameworks governing the industry. The Companies Act contained the detailed requirements with respect to company registration. The 
Companies and Intellectual Property Commission (CIPC) was an independent body that focused on 
the registration of companies and intellectual property in South Africa. An external company had to register with the Commission within 20 business days after beginning to conduct business or non-
profit activities in South Africa. If an external  company had failed to register within 12 months 
after commencing its activities, the Commission might issue a compliance notice. 
2.28.  The Consumer Goods Council of South Africa, the South African Retail Council, the Franchise 
Association of South Africa (FASA) and the Council of Shopping Centres South Africa, were some of 
the associations that franchisers were members of. FASA represented franchisors, franchisees and 
the professional organizations that serviced the franchising industry. It aimed to ensure that its members practiced ethical franchising and to ensu re the continued development and expansion of 
franchising in South Africa. FASA was a member of the World Franchise Council.  
2.29.  Foreign providers were free to conclude franchising agreements. The new Consumer 
Protection Act dealt with certain aspects of fran chising. The franchise trade name and trademark, 
logo, and slogan had to be registered with the help of a specialist trademark attorney. Prospective 
franchisors had to set up all the legal documents required to start a franchise, including franchise agreements and licensing with a specialist franchise attorney. A Disclosure Document also had to be prepared. The contents of franchise agreements, as well as Disclosure Documents were 
regulated by the Consumer Protection Act and rela ted regulations. Most contracts tended to be 
subject to South African law, but there was no general prohibition on foreign law serving as the governing law as long as there was some nexus between the law and the contract. The parties 
were free to agree on which court would have jurisdiction or, alternatively, to agree that any 
disputes would be referred to mediation or arbitration. Foreign franchisors were generally not treated differently from domestic franchisors. There were, however, various statutes or aspects 
that would be relevant, such as tax regulations. The Competition Act and the Companies Act also 
applied to franchises. The scope of the Competition Commission's applicability to franchising included: horizontal collusion, vertical collusion, retail price maintenance, exclusive territories, exclusive dealing, tying of products and intellectual property rights.  
2.30.  The representative of Australia agreed with the point made in the Secretariat Note that 
complex and costly administrative procedures to open a new business were a significant 
constraint, particularly for small to medium sized enterprises. In Australia, initiatives had been 
undertaken over time to reduce the business reporting burden  for new businesses. The 
representative noted that cross-cutting issues relating to construction services were also relevant for the distribution sector  since the number and complexity of procedures to obtain a construction 
permits could also impact on market entry. The delegation referred to its contribution to the 
discussions in March 2013 on regulatory issues in construction services. 
2.31.  The representative of Chile said that that the country had scheduled no market access or 
national treatment limitations with respect to reta iling services. On the domestic regulation side, 
the most comprehensive body of legislation that applied was the one relating to competition. 
Historically, the national prosecutor's office had had most involvement in this area. The regulatory framework in place had facilitated rapid developmen t of the sector, both domestically and in terms S/WPDR/M/59 
 
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  of expansion abroad. Indeed, Chilean retailers had a significant presence in Argentina, Brazil, 
Colombia, and Peru.  
2.32.  The representative of the European Union recognized the importance of the distribution 
sector as an intermediary step between produc ers and consumers. Barriers in the distribution 
sector could easily translate into barriers to imports. The European Union believed that zoning laws 
could constitute a barrier that should be scheduled  under article XVI of the GATS. In addition to 
the example given in paragraph 146 of the note, some Members had also implemented regulations 
that made approval of licences dependent on th e distance from local distribution centres or 
markets, which then essentially created a zero quota in a specific geographic area.  
2.33.  Paragraph 150 of the Secretariat Note referred to the fact that differences in consumer laws 
within the European Union reduced the interest  in cross-border online sales of goods. The 
represented noted that significant efforts had be en made in the last years to overcome this 
problem. Distance selling had been progressively harmonised through the Distance Selling 
Directive  and the consumer protection directives on specific issues such as unfair practices or 
misleading advertising. The latest measure in this row of initiatives was the new Consumer Rights 
Directive  which would enter into force in all EU Member States at the latest by 13 June 2014. This 
directive aimed at achieving a real business-to-consumer internal market, striking an appropriate 
balance between a high level of consumer protection and the competitiveness of enterprises. 
2.2.6  Postal and Courier Services 2.34.  The representative of Japan indicated that in his country, since the private mail act enacted 
in 2003, correspondences delivery services had been opened to private business operators and 
there was no longer a monopoly in this field. Th e Japanese Postal Service had been privatized in 
2007. 
2.35.  The representative of the European Union noted that reference had been made to the EU’s 
Third Postal Directive in paragraph 83 of the Note. This Directive had been fully implemented in all 
EU Member States as of January 2013. Hence th e second part of the paragraph was no longer 
relevant. 
2.36.  The representative of Chile stated that  the country maintained a postal monopoly on 
certified letters and stamps. Other than that, Correos de Chile operated in competition with other 
operators. There were no limitations on mode 3 and courier services were open. 
2.37.  The Chairperson thanked Members for their comments and views. She urged Members to 
engage further and to come back on any of the issues raised at subsequent meetings. She took 
note of all the statements and reconfirmed that at the next meeting the Working Party would take up the sections listed for meeting four, namely: development; financial services; tourism services; 
environmental services; energy services; health se rvices; and mode 3. She drew the attention of 
Members to the supplementary Secretariat Note on health services contained in document S/WPDR/W/48/Add.1. It was so agreed.  
3  ITEM C - FUTURE WORK 
3.1.  With regard to future work, the Chairper son noted that the Working Party had gone through 
the 93 questions posed by Members under the technical discussions. As agreed, she would be 
circulating a compilation of all the informal su mmaries and annotated agendas. She hoped that 
Members had found the exchanges useful and would be interested in hearing views and ideas on 
how the Working Party could make best use of what has been learnt. In this regard, she noted that the co-sponsors of the reflections paper would be submitting a second note covering the last few 
technical discussions. The Chairperson also drew the attention of Members that one more meeting 
had been schedule for the discussion of the Regu latory Issues Note. She would, however, be 
willing to consider devoting more time to this  discussion should Members find it necessary.  
3.2.  The representative of Australia thanked the Chairperson for her intention to circulate a 
compilation of the informal summaries of the technical discussions. This would be a very useful 
reference document for future negotiations in this area. She suggested that this document should be updated from time to time, as and when contributions are made, including the next reflections S/WPDR/M/59 
 
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  paper which the co-sponsors would be circulating. She also expressed appreciation for the 
opportunity to discuss new ideas for future work. She noted that in many sectors, free trade agreements have provided an avenue for Members to make ambitious commitments in services. Therefore, her delegation believed that there woul d be value in better understanding the types of 
domestic regulation provisions that have been included in various free trade agreements. This 
could help Members understand how other agreements have tackled some of the issues that this Working Party have been grappling with, and to see what can be learnt from them. Thus, she 
proposed that the Working Party undertake a de dicated discussion focused on the sharing of 
experiences by Members with regard to domestic regulation provisions in their trade agreements. 
This could include sharing the details of domestic regulation provisions in their FTAs and their experiences with implementation. The discussion wo uld of course be Member driven and without 
prejudice to Members’ positions in the domestic regulation negotiations for horizontal disciplines. 
Should there be an appetite for such a discussion , her delegation would ask the Chair to consult 
informally prior to the next meeting. 
3.3.  The representative of New Zealand thanke d the Chairperson for the idea of circulating a 
compilation document. She also thanked Australia for their indication that they intend to prepare a 
second reflections paper. She believed that this would be a very helpful resource to inform future 
negotiations in the Working Party. With regard to the proposal for a dedicated technical discussion 
on Members' experiences in negotiating domestic regulation in free trade agreements, her delegation was of the view that this would be another very useful strand in the Working Party's on-going work. Such a discussion could provide an opportunity to highlight best practices, different 
approaches and even possible commonalities betw een Members' free trade agreements. This could 
help inform Members' consideration of future negotiations under the mandate of this Working Party. Her delegation would welcome the Chair's involvement in convening further consultations 
with Members on the design and scope of such a discussion.  
3.4.  The representative of Chile thanked the delega tion of Australia for the new proposal on future 
work. Chile has been very active at the regional level with regard to negotiating services 
agreements. In this context, the issue of domest ic regulation has been one outstanding element. 
Chile has sought to deepen domestic regulation disciplines in its bilateral trade agreements. The other interesting element to be drawn from this ex perience has been that the interest in domestic 
regulation disciplines as well as the results from free trade agreement negotiations varied. What 
they do have in common is the overall goal of ac hieving a GATS plus agreement. Most of the time, 
though not all, this goal was fully achieved. Agreements negotiated outside the WTO have an 
impact on the organization, and are likely to ha ve even more of an impact in the future.  
3.5.  The representatives of the United States; Mexico; European Union; Chinese Taipei; 
Colombia; Hong Kong, China and Japan supported Australia's proposal to undertake a dedicated 
discussion on domestic regulation in free trade agreements. 3.6.  The Chairperson took note of the statements  made and indicated that she would revert to the 
item at the next meeting. She noted that there was considerable interest in having a dedicated 
discussion on domestic regulation disciplines in free trade agreements and that she would be conducting informal consultations on that matter. She hoped that it would be possible to have a 
rich discussion on this subject in future clusters. It was so agreed.  
4  ITEM D - OTHER BUSINESS 4.1.  No items were raised under this agenda item.  
 
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