WORLD TRADE  
ORGANIZATION  RESTRICTED 
S/WPDR/M/56 
21 December 2012 
 (12-7068) 
Working Party on Domestic Regulation  
  
REPORT OF THE MEETING HELD ON 5 DECEMBER 2012 
 
Note by the Secretariat
1 
   
1. The Working Party on Domestic Regulation (W PDR) held a meeting on 5 December 2012, 
chaired by Mr Kerem Alp of Turkey.  The age nda for the meeting was contained in airgram 
WTO/AIR/4055, dated 23 November 2012.  An annotated  agenda for the meeting was circulated in 
JOB/SERV/125.  The agenda was adopted as proposed. 
A. A
NNUAL REPORT OF THE WORKING PARTY ON DOMESTIC REGULATION TO THE COUNCIL 
FOR TRADE IN SERVICES (S/WPDR/W/50) 
2. The Chairman recalled that the Annual Report of the Working Party on Domestic Regulation 
to the Council for Trade in Services as contained in  document S/WPDR/W/50 had been circulated in 
advance of the meeting.  Noting that the Report w as factual and self-explanatory, he proposed that it 
be adopted and transmitted to th e Council for Trade in Services. 
3. It was so agreed. 
B. DEVELOPMENT OF REGULATORY DISCIPLINES UNDER GATS  ARTICLE VI:4 
4. The Chairman noted that there were two sub-items  under this point of the agenda.  First, the 
discussion of technical issues submitted by Members.   Second, the Regulatory Issues Note prepared 
by the Secretariat, as contained in document S/WPDR/W/48 dated 13 June 2012. 
5. For the technical discussions, the Chairman propo sed that, as on past occasions, this item 
would be undertaken in informal mode so as to allo w for an easier and more open exchange of views.  
Discussions on this sub-item continued in informal mode. 
6. On the Regulatory Issues Note, the Chairman recalled that, at the last meeting, it was 
considered that given its length the Note should be di scussed in parts.  Members had also requested an 
indicative schedule of the sectors and modes of suppl y that would be addressed at each meeting in 
2013, so as to give advance notice to capital experts who might need to attend.  In this regard, the 
Chairman circulated a non-paper containing a provi sional schedule.  He explained that the schedule 
had been based on previous experience with the sectoral and modal discussions in the Council for 
Trade in Services.  Furthermore, it had been design ed to facilitate capital expert participation and, 
wherever feasible, sectors and modes had been groupe d according to how they might relate to each 
other from a regulatory perspective. 
7. The Chairman noted that the schedule was inte nded to do no more than to help organize the 
discussions.  It was provisional and subject to change  since, at the end of each meeting, sectors and 
modes to be discussed at the next session would be reconfirmed.  He highlighted that, under current 
                                                      
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/56 
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  planning, in 2013 there would be tw o clusters before summer and two thereafter.  Thus, if Members 
were to meet only during clusters, the discussion of  the Note would have to take place in four 
meetings, which could be very tight , given the range of issues before the Working Party.  Thus, once 
substantive work began, there would be an oppor tunity to assess whether more meetings might be 
needed. 
8. The Chairman suggested the following course of action.  If any delegation had a serious 
substantive problem with the provisional schedule,  they should submit it to the Secretariat in 
one week's time.  If nothing is received by such time,  he would consider that the Working Party could 
proceed in accordance with the provisional schedule. 
9. In addition to the schedule, the Chairman recalled that, at previous meetings, some 
delegations had requested the Secretariat to s upplement the Note with further information on 
development-related issues.  A request had also been  made to add health professionals to the Note.  
He said that the Secretariat was waiting for furthe r guidance from the Working Party, and would also 
invite comments on these issues. 
10. On the schedule for the discussion of the Note  the representatives of Hong Kong, China, 
Chile, Argentina, Australia, China, Canada, the Un ited States, India, Japan and the European Union 
indicated that, while there could be different ways to organize work, they would be guided by the 
Chairman's proposal and could exercise flexibilit y on how to group sectors or modes, as well as the 
order of discussion. 
11. On the specific issue of where financial servi ces should be considered, the representatives of 
Australia, Canada, the United States, Japan and th e European Union stated that the Committee of 
Trade in Financial Services (CTFS) had a mandate to  discuss issues concerning this sector and, given 
its specific technical nature, they would prefer to discuss relevant regulatory issues in that Committee.  
The representatives of South Africa, Hong Kong, China, and the Plurinational State of Bolivia, on the 
other hand, noted that they would prefer to keep  the discussion of financial services in the Working 
Party of Domestic Regulation.  Argentina asked if the discussion could take place in both places.  The 
Secretariat explained that the discussion could take  place both in the CTFS and the WPDR.  However, 
it would be up to the CTFS to decide if it wished to do so and that the WPDR could not decide for 
another GATS body. 
12. The representative of Brazil requested more time  to consider the provisional schedule.  Brazil 
considered that it would make more sense to addr ess all the modes of supply in the first cluster of 
topics, given their cross-cutting nature.  This a pproach would avoid judging supposed affinities or 
logical connections between given m odes of supply and certain sectors. 
13. The representative of Brazil also noted that a section on development issues was missing from 
the Regulatory Issues Note, and requested its inclusi on in the document.  In this regard, he recalled 
that the 2009 Chair's draft text on horizontal disciplin es had a chapter on development.  He noted that 
the Secretariat had very helpfully been in touch with his delegation on the issues which Brazil would 
like examined in a revised Note.  His delegati on had shared some ideas with the Secretariat. 
14. In particular, Brazil had proposed the following id eas:  (1) challenges and constraints faced by 
developing countries to establish institutional and regulatory frameworks adapted to the conditions 
prevailing in their markets and to the characteristics  of different sectors in ra pidly changing external 
environments (i.e, technological advances, new bus iness models) and to the diversity of suppliers 
(private, public, public-private part nerships);  (2) need for regulatory flexibility and policy space for 
developing countries to advance towards "best-fit national regulatory and institutional frameworks", 
through a necessary incremental, trial-and-error process;   (3) anchoring of regulatory and institutional 
frameworks in broad strategies for growth, develo pment and trade, as well as coherence between  S/WPDR/M/56 
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  regulatory objectives and growth and developm ent goals, which frequently include building 
productive capacity;  (4) the importance of robust regulatory and institutional frameworks prior to openness to trade in services, so as to enable a net positive effect from liberalization;  (5) human, 
regulatory and institutional capacity constraints to im prove the quality of regulation, and effectively 
set up, monitor and enforce regulatory and institut ional frameworks;  (6) the role of regional and 
international regulatory harmoniza tion and cooperation initiatives in the development of effective 
regulatory and institutional frameworks in developi ng countries;  (7) the interface between services 
trade liberalization and regulatory and institutio nal frameworks with rega rd to the pace of 
liberalization and the "sequencing" between liberalization and regulation.   Since trade liberalization in 
services essentially addresses regulatory measures, liberalization processes could influence the design 
of domestic regulatory and institutional frameworks,  hence the ability of government to regulate;  
(8) difficulties service suppliers of developing coun tries have with complying with the relevant 
requirements and procedures in export markets;  (9) degree of participation of developing countries in 
standard-setting international organizations. 
15. Brazil proposed that, for the sake of coherence,  information on these issues should take the 
form of an additional chapter on development in a revision of the document S/WPDR/W/48, as 
opposed to an addendum or a separate document with a different code. 
16. The representative of South Africa supported Brazil's comments on the inclusion of 
development aspects in the Note.  He welcomed  the Secretariat's willingness to consider and 
accommodate these concerns, and would continue consulting the Secretariat on the development 
issues which they had in mind.  Development was in trinsic to every sector, and he envisaged that it 
would be discussed across all the sectors and modes of supply. 
17. South Africa expressed some reservations on th e proposal to refer financial services to the 
CTFS and wanted to give further thought to this issu e.  In their view, it was not wise for the WPDR to 
start considering sectoral disciplines and that this should not be the purpose of the discussions.  His delegation was also concerned with the idea of referring issues to other bodies. 
18. The representative of Hong Kong, China was of the view that the purpose of 
a sector-by-sector discussion was to contribute to th e horizontal disciplines.  The CTFS had the right 
mandate to discuss regulatory issues in financia l services.  However, the discussion on regulatory 
issues in the Working Party on Domestic Regulati on (WPDR) would look at the broader picture and 
would be without prejudice to similar discussions in the CTFS. 
19. Hong Kong, China acknowledged the importance of  development.  However, his delegation 
was not convinced that the Secretariat Note on regulatory issues in sectors and modes 
(S/WPDR/W/48) would be the right vehicle to convey this information.  He explained that the Note 
provided Members with a factual account of regu latory practices and potential areas for further 
analysis.  He was not certain whether the aspirati ons highlighted by Brazil on development could be 
addressed within the existing approach taken by th e Note.  He stressed that only Members could 
provide insights and analysis on policy consider ations.  His delegation did not object to having 
a discussion on development and regulation in the Work ing Party, but considered that these would be 
better and more comprehensively addressed in a separate Note. 
20. The representative of India supported the statement made by Brazil and South Africa.  He 
believed that a Note as comprehensive as S/WPDR/W/48 would be more useful to Members if it also 
addressed development.  On the provisional schedul e, India preferred having discussions after the 
development supplement had been prepared.  In term s of the types of development issues which India 
would like reflected, the representative referred to the points made at the Working Party meeting on 
27 June 2012.  He reiterated that in the developm ent supplement his delegation was of the view that 
the Secretariat should present factual issues without prescriptive analysis.  In terms of the provisional S/WPDR/M/56 
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  schedule, India could see where changes might be ma de, but to facilitate the Chairman it was willing 
to exercise flexibility and be guided by his proposal. 
21. The representative of the Plurinational State of Bo livia was not opposed to the structure in the 
provisional schedule for discussions.  However, he wanted to understand the logic behind the listing, 
and to include development.  Boliv ia was interested in a discussion on development, but was not sure 
whether it should be addressed in each sector or as  a separate chapter.  Should there be additional 
informal consultations on this issue, Bolivia would li ke to be included.  On financial services, given 
that it was not a separate issue, he prefe rred to include it in the WPDR discussions. 
22. The representative of Chile highlighted that the schedule was flexible and thus at any point 
delegations would be free to comment on the sectors a nd modes included in the Note.  He agreed with 
Hong Kong, China's comments on the importance of  the development aspects of the discussion. 
23. The representative of New Zealand wanted to di scuss the Note in the most efficient manner 
possible, and was, therefore, in favour of four  sessions.  The representative did not see the need for 
further consultations on the provisional schedule.  She asked where the othe r issues covered by the 
Note would be dealt with, i.e, the results of the discussion and the interesting questions on the use of 
GATS Article XVIII.  The delegate presumed they w ould be considered later, after the discussion on 
each of the sectors and modes. 
24. On the issue of development, the representativ e of New Zealand requested clarification on 
whether the proposal from India was indeed to de lay the discussion of the Note until a supplement 
was ready, and asked the Secretariat on the time frame needed to do this.  She agreed with 
South Africa that development should be treated as a cross-cutting issue.  On the list of issues 
suggested by Brazil, most of them could not be answered based on the information contained in the 
sectoral Notes.  Many of these issues required additional, and perhaps more analytical, policy 
considerations.  They might also deserve further a ttention in their own right.  Like Hong Kong, China, 
the delegation of New Zealand questioned if these issues should be taken separately and in more 
detail so as to avoid delaying the discussion of the Regulatory Issues Note. 
25. The representative of Argentina saw the relevance of Brazil's comment on modes of supply 
and suggested discussing the modes of supply at the beginning of the exercise.  Modes of supply had 
a cross-cutting nature that could influence the deba te in the sectors.  The discussion at the beginning 
would be done without prejudice to the possibility to revert and refer to the relevant modes when each 
sector is discussed. 
26. On the issue of financial services, Argentina ask ed the Secretariat to clarify the mandate of 
the CTFS.  He proposed that financial service s be discussed in both the Committee and in the 
Working Party. 
27. Argentina indicated that it w as interested in development i ssues, and wanted to know more 
about Brazil's suggestions.  He reca lled that development issues were specifically referred to in the 
excellent Secretariat Note on Technical Standard s (S/WPDR/W/49).  Furthermore, he noted that, 
while some Members had comments, nobody opposed or seriously objected to this issue.  Argentina 
would be interested in participating in follow- up consultations on development, should any be 
conducted, and to begin working on this issue at the next meeting. 
28. The Secretariat reminded Members that the discussion on the sectoral paper on financial 
services took place in the Council and in the CTFS, and that both discussions were not mutually 
exclusive.  The representatives of Members might not be identical in both places, therefore Members 
might wish to take the same approach and discu ss financial services regulatory issues in the WPDR 
and the CTFS.  S/WPDR/M/56 
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  29. Regarding development, the Secretariat thanked Braz il for the list of points.  It would be up to 
Members to decide how it wished the Secretariat to  address them.  As usual, the Secretariat would 
make its best effort to cover them.  However, further clarification on several points would be 
appreciated.  On whether the outc ome took the form of either a revision or a separate paper, the 
Secretariat explained that a few technical things should be taken into account.  Firstly, New Zealand 
and Hong Kong, China had made the point that  the products would be different because 
S/WPDR/W/48 was a collection of information fro m the sectoral papers, while the development 
issues proposed for the supplement would have to em erge from a different kind of policy discussion.  
He noted that development issues had already been mentioned in the context of some sectors, among 
them, universal service obligations, questions on regul atory reforms, questions on regulatory capacity 
and infrastructure constraints.  A deeper analysis on development-related issues would have a slightly 
different technical nature and would involve a more  policy related approach.  The Secretariat would 
review the available literature on development.  Secondly, Members might want to consider that 
a revision of S/WPDR/W/48 would also require re-i ssuing the more than 70 pages of the original 
document.  The Secretariat considered that a separa te document would thus ma ke more sense in terms 
of both the importance of the issues to be addressed and the efficient use of resources when 
processing documents, but it would nevertheless be up to Members to decide. 
30. On the provisional schedule to discuss the Regul atory Issues Note, the Secretariat explained 
that, in assisting the Chairman, it had relied on prev ious experience of how the sectoral discussions 
had been undertaken in the Council of Trade in Se rvices.  It had also taken into consideration 
comments previously made by Members on what synergies there might be between sectors and 
modes, such as the reliance of professional services on mode 4 for the supply of services.  It would 
nevertheless be up to Members to decide on this procedural issue. 
31. The representative of Australia recalled the or igin of the Regulatory Issues Note.  The 
Secretariat had been asked to compile regulatory i ssues contained in the sectoral Notes and, based on 
that work, the Secretariat had taken the opportunity  to update the information.  The representative 
explained that there was no direct linkage between the work which the Secretariat had been instructed 
to do and the draft disciplines, which was why the Note did not contain a chapter on development.  Nevertheless, Australia agreed that development aspects of dom estic regulation should be given 
consideration, and thanked Brazil fo r its elaboration of the list of issues that could be dealt with.  
However, her delegation did not un derstand why this additional inform ation could not be provided in 
a separate Note.  This would be more expedient than revising and reissuing the existing Note, which 
was of considerable length. 
32. Australia agreed to organize the discussion of  the Regulatory Issues Note using the schedule 
that the Chairman had outlined in his non-paper.  From the perspective of he r delegation, it would be 
reasonable to deal with this paper in four mee tings.  On the issue of where to discuss financial 
services, she would prefer to hold the discussions in the CTFS because that was the expert body.  
Furthermore, other issues concerning financial services have already been referred to the CTFS, 
i.e, classification issues concerning financial services.  The point of having an expert body was to use it for relevant discussions.  While Australia would pr efer to hold the discussion of financial services 
only in the CTFS, it could accept having the discussions both in the WPDR and the CTFS. 
33. The representative of China supported the continua tion of the discussions on technical issues.  
Nevertheless, they associated themselves with the st atements made by Brazil, South Africa, India and 
others on the importance that should be given to de velopment.  China was flexible and could discuss 
development as a horizontal issue, or in the various sectors. 
34. The representative of Canada noted that it might be difficult to deal with all of the Regulatory 
Issues Note in four meetings but, given the provisiona l nature of the schedule and the interest of some 
delegations to carry out this exercise in four  meetings, they would not object.  Regarding S/WPDR/M/56 
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  development, Canada associated itself with the comments from Hong Kong, China, New Zealand and 
Australia on what should be the scope of the suppl ementary Note.  Looking at some of the topics 
proposed by Brazil, he agreed with others that they might relate to questions of policy.  Canada noted 
the importance of phrasing topics carefully so as to avoid assuming outcomes or requesting the 
Secretariat to make value judgements.  Moreover,  he considered that the existing Note already 
contained development aspects and best practices. 
35. The representative of the United States agreed with New Zealand that there were some 
cross-cutting themes, like development and modes of  supply, which might be dealt in each subject 
area.  Nevertheless, they found the proposed sche dule logical and could exercise flexibility on how to 
organize the discussion of the Note. 
36. The representative of Saudi Arabia said that th ere was no category called energy services, and 
asked for clarification on the mention of energy servi ces in the schedule.  For his delegation, energy 
services was not a sector and, therefore, he requ ested further information on whether its mention was 
perhaps only related to the Regulatory Issues No te, and on what basis it had been included.  
Moreover, he wanted to know what would be the intention of discussing energy services, as the sector 
did not exist.  The Note had already mentioned issues related to other service sectors, like 
engineering, construction and distribution. 
37. The representative of Barbados on behalf of  the small and vulnerable economies (SVEs) 
noted that she would need to coordinate with memb ers of her group on the provisional schedule.  She 
would therefore submit comments at a later date. 
38. The representative of Brazil reiterated that his delegation believed that the purpose of 
discussing the Regulatory Issues Note was to provide  feedback on the horizontal disciplines debate.  
The latter contained a development chapter.  It therefore seemed reasonable to discuss development aspects.  He explained that most of the elements in the list of development issues provided by Brazil 
had been drawn from UNCTAD's report on the Fourth Session of the Multi Expert Meeting on Services Trade and Development.  The conclusions in  that report were based on experiences and best 
practices shared by countries.  It contained elemen ts that would help deve loping countries define 
best-fit regulatory institutional frameworks tailore d to their particular circumstances.  The 
representative considered that those elements may be e xplored in a factual fashion, even if they imply 
policy prescriptions and value judgments based on countries' experiences.  The list of development elements had an illustrative intention.  Brazil relie d on the Secretariat's expertise to transform those 
elements into a proper input for this debate.  He  confirmed that Brazil did not intend that the 
Secretariat provide policy prescriptions.  Moreover, the representative of Brazil noted that, while his 
delegation had considered adding a chapter on development for coherence purposes, in view of the 
technical aspects cited by the Secretariat and others, th ey could be flexible.  He noted that the order of 
topics in S/WPDR/W/48 did not correspond to the or der in the schedule and stressed that process was 
related to substance. 
39. The representative of the European Union highl ighted that the first meeting to discuss the 
Note would be a long one because the Working Party would also discuss the Note on Technical 
Standards.  On development issues, like Austra lia, New Zealand and others, the European Union 
preferred a separate Note rather than a revision of the existing Note. 
40. The representative of India requested clarifica tion from the Secretariat as to whether an 
addendum on development rather than a re vision of the Note would be feasible. 
41. With regard to the financial services discussion,  the representative of South Africa noted that 
discussions by Members in the Working Party were w ith a view to developing horizontal disciplines.   S/WPDR/M/56 
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  He agreed with Hong Kong, China, and recalled th e primacy and immediate relevance of the Working 
Party in the development of horizontal and not sectoral disciplines. 
42. On energy services, the Chairman clarified that , in the sectoral discussions undertaken by the 
Council for Trade in Services in 2009, a Note on  energy services had been issued.  Since the 
Regulatory Issues Note was based on the sectoral Not es, this was why a chapter on energy services 
could be found in S/WPDR/W/48.  The Chairman asked the Secretariat to comment on the question 
from India of document format. 
43. The Secretariat explained that, in terms of the format for the proposed Note on development, 
an addendum, a revision or a separate Note would all be possible, and it would be up to Members to 
decide what they would prefer the Secretariat to produce.  Based on that, the Secretariat would do its 
best to provide the information required by Memb ers.  He explained that there were, however, 
technical implications of each option, which Member s might want to take into consideration.  An 
addendum would follow exactly the same style, fo rmat and content of the parent document, and 
would thus be constrained by the approach and framework already adopted.  Normally addendums 
would be used to add additional f actual inputs, and they were rarely  created to provide completely 
new content or treatment of a new set of subjects.  That being the case, it would depend on what 
approach Members would wish the Secretariat to take  and the expected content of the requested input. 
44.  With regard to the provisional schedule, he reiterated that it was broadly based on a similar 
approach undertaken in the Council for Trade in Se rvices for the discussion of the sectoral papers, 
with some modification based on past experience.  He  stressed that the purpose of the schedule was to 
facilitate organization of next year's work, and no t to complicate or engage in a long procedural 
discussion.  As the schedule had been circulated at  the meeting, the Chairman noted that Members 
might need more time to think about it.  He took note of all the comments made. 
45. Regarding the financial services discussion, th e Chairman believed that the two views 
expressed were not mutually exclusive, and it w ould be up to each body (i.e, WPDR and CTFS) 
Committee to decide how it would tackle the discu ssion on regulatory issues contained in the Note. 
46. On development related issues, the Chairman noted that there was agreement to task the 
Secretariat with the preparation of a supplementa ry Note which would be added to the provisional 
schedule for discussion when ready.  He appreciated Members' views and suggestions on what could be covered in that Note. 
C. F
UTURE WORK 
47. The Chairman informed Members that future work would be a continuation of the current 
endeavours.  His expectation would be to con tinue working, following MC8 political guidance, 
step-by-step, achieving progress where possible,  in an inclusive and transparent manner. 
D. OTHER BUSINESS  
48. No items were raised under this agenda  item.  The meeting was adjourned. 
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