WT/MIN(17)/8, JOB/GC/166  
JOB/TNC/68, JOB/SERV/274  
 
4 December 2017  
(17-6662) Page: 1/6 
Ministerial Conference  
Eleventh Session  
Buenos Aires, 10 -13 December 2017  Original: English  
 
 DISCIPLINES ON DOMES TIC REGULATION  
AFRICAN GROUP ELEMEN TS FOR MINISTERIAL D ECISION  
The following submission, dated 4 December 2017, is being circulated to the Working Party on 
Domestic Regulation, the Council for Trade in Services, the Council for Trade in Services in Special 
Session, the Trade Negotiations Committee and the General Council, at the request of the African 
Group.  
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1  INTRODUCTION  
1.1.  Since September 2016, discussions on domestic regulation have picked up pace in the WTO. 
The last notable negotiations on domestic regulation took place in 2009 and 2011 respectively.  The 
2009 negotiations ceased because developed countries could not agree to the development and 
Special and Differential Treatment provisions in the tex t. The 2011 negotiations ceased because 
the development provisions were significantly diminished, and developing countries were opposed 
to discarding the 2009 text.  
1.2.  With the renewed interest in domestic regulation, the African Group formally submitted 
thirty-seven questions contained in JOB/SERV/269 to the Working Party on Domestic Regulation 
(WPDR), requesting proponents to elaborate more to clarify our understan ding on the proposed 
Article VI: 4 regulatory disciplines in the General Agreement on Trade in Services (GATS). At the 
meeting of the WPDR on 2 -4 October 2017, some proponents offered a response to some of our 
questions, the statements of which have been circulated in JOB/SERV/270.  
1.3.  We were encouraged to hear many new voices join the discussion and express similar views 
and concerns as the African Group on the impact of the proposed regulatory disciplines. Several 
Members, including from the African Group, provided substantive responses and reactions 
contained in S/WPDR/M/72 to the proponents' replie s. 
1.4.  The recent discussions in the WPDR have been useful in some respects, but they have 
consistently highlighted Members' different perspectives and approaches to  fulfilling the GATS 
Article VI: 4 mandate to develop 'any necessary disciplines' on domestic re gulation. These 
perspectives may be described as conceptual and rooted in fundamentally different policy 
perspectives and imperatives amongst Members.  
1.5.  This communication is an African Group contribution to the ongoing discussion on regulatory 
disciplines in the WPDR. It urges all Members, in particular the proponents, to acknowledge, and 
come to terms with the reality that there are serious concerns with the process, and significant 
divergences by the vast majority of Members persist on the proposed regula tory disciplines.  
1.6.  The African Group is interested in pursuing an inclusive and constructive discussion in order 
to build a common u nderstanding on GATS Article VI: 4, as they were intended. We believe that a 
discussion would give comfort to Members who hig hlighted important divergences in the current 
domestic regulation discussions.  WT/MIN(17)/8 • JOB/GC/166 • JOB/TNC/68 • JOB/SERV/274  
 
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  2  HISTORICAL PERSPECTI VES 
2.1.  The African Group's perspectives on the development of multilateral regulatory disciplines 
have been described by some proponents as 'ideological' or 'p oliticizing the discussion'. In our 
view, 'domestic regulation', by the very nature of the proposed provisions is political; it triggers a 
number of issues relating to the state, and government policy -making. Of particular relevance to 
the WPDR, are concer ns about: (i) the sovereign right to regulate; (ii) the direct involvement of 
foreign governments and interested persons in the domestic policy -making processes of Members'; 
(iii) bringing domestic policy -making processes under multilateral oversight and t he WTO Dispute 
Settlement Mechanism; and (iv) prescribing a single regulatory model.  
2.2.  The African Group's perspectives are informed by a legacy of profound economic, political and 
social fragmentation, including the IMF and World Bank Structural Adjustment  Programmes.  
2.3.  We learned lessons; a one -size-fits-all approach does not work .  
• Little attention was given to the social dimension of development and to the institutional 
weaknesses of African countries.  
 
• Standard economic prescriptions were placed on all Af rican countries, irrespective of 
their stage and level of development.  
 
• Overlooking the unique characteristics of African economies, i.e. the formal modern 
sector; and an even larger informal traditional sector.  
 
2.4.  The African Group have consistently stated that the proposed rules place too much emphasis 
on the institutional and procedural approach to domestic regulation. There is an underlying 
assumption that there is a one -size-fits-all approach or model to regulat ion. The proposed 
domestic regulation rules and so -called 'best -practice' model under the guise of 'good governance' 
would create a framework for regulatory action that would close off important options and space 
for legitimate policy and regulation.  
2.5.  We see this effort going beyond proponents' proposals in domestic regulation under the GATS 
to also include similar proposals in NAMA, and TBT. Most recently, this has also included similar 
rules for Investment Facilitation.  
3  ARE THESE DISCIPLINE S NECESSARY?  
3.1.  The African Group raised pertinent questions about the "ne cessity" of the GATS Article VI: 4 
disciplines, as is required by the GATS.  
3.2.  To date, we have still not obtained any satisfactory response on the necessity for these 
disciplines. Nor have the propone nts been able to demonstrate the extent to which the existing 
provisions under the GATS  are deficient under Article VI:1, VI:2 and VI: 5.  
3.3.  At a recent discussion of the Council for Trade in Services on 6 October 2017 on the digital 
economy, proponents thems elves acknowledged that the nature of the digital economy will require 
governments to regulate in novel ways. Indeed, digitalised delivery of services can also render 
ineffective the GATS Art icle XVI and XVII limitations in our schedules. Until we fully un derstand the 
changing business models, how digitalised services will be delivered differently, how we can 
operationalize our GATS Art icle XVI and XVII limitations in the digital environment, and address all 
unresolved issues such as the technological neutr ality of the GATS - to bind ourselves to these 
domestic regulation rules today would simply limit governmental regulation for legitimate 
objectives, our GATS scheduled limitations, cybersecurity concerns and digital industrialization.  
4  WHO WILL BENEFIT FRO M RULES ON DOMESTIC REGULATION?  
4.1.  In assessing the economic rationale of the proposed rules, net services importers will not 
suddenly or automatically become net services exporters. Basic trade data reveals that in 2016, 
the total export of services for the EU, for example, was USD 2 trill ion. This was more than 22 
times the exports in services of the entire African continent. Japan as an individual economy had WT/MIN(17)/8 • JOB/GC/166 • JOB/TNC/68 • JOB/SERV/274  
 
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  exported more in services than the entire African continent combined (i.e. USD 0.18 trillion). For 
Australia, at its current level,  its exports of services are close to the entire exports of the entire 
African continent.  
4.2.  It is not yet discernible whether outcomes on domestic regulation would deliver 'real benefits 
for all services suppliers – including for developing and least develop ed country (LDC) service 
suppliers'. Given that most developing countries and LDCs are net services importers, the 
obligations arising from the proposed rules to reduce red tape, streamline procedures and increase 
transparency, would have the added effect of benefitting services suppliers who already have first -
mover advantage.  
4.3.  The application and scope of the proposed rules distort the balance in these negotiations 
because they are intertwined with the specific GATS commitments Members have undertaken. 
Some African Members have undertaken more commitments than developed countries, including 
proponents.  
5  THE RIGHT TO REGULAT E 
5.1.  The ongoing discussions on disciplines on domestic regulation reveal that Members still have 
a long way to go to find common ground o n the right to regulate. While we understand t he 
objective of GATS Article VI: 4 disciplines on domestic regulation to ensure that measures related 
to domestic regulation do not undermine commitments taken under GATS Articles XVI (market 
access) and XVII (n ational treatment), the proposed text on General Provisions, Transparency and 
Development of Measures in WT/MIN(17)/7 proceed to undermine the right to regulate.  
5.2.  Regulation is a function of democratic governance, and a tool by which a state seeks to 
achieve certain objectives. These regulatory goals and legitimate policy objectives may consider 
trade issues, but could be designed to achieve a range of other legitimate objectives such as to 
prevent market failures, address important domestic objectives in k ey sectors, or to prioritize 
social, community, health, safety, or even political objectives over trade ones.  
5.3.  Some pertinent questions include: Does the mere recognition of the right to regulate override 
the substantive obligations in the disciplines? Wha t is the legal meaning of "recognize"? What is 
the precise relationship between the right to regulate and the disciplines on domestic regulation? 
Is the right to regulate as suggested in the text absolute, in which case would LDCs need an 
exemption from th e disciplines; i.e. is it unlimited? If a regulation is put in place that is not the 
"least burdensome", or is not considered to be "objective", will Members be challenged under 
these disciplines in the DSB? In which case, is there a right to regulate? Doe s the right to regulate 
lie in the recognition of the right to regulate? Is "recognition " of the right the same as 'holding' and 
'exercising' the right?  
5.4.  The proposed disciplines are further complicated by a separate section on the 'necessity test'. 
It is not entirely clear why there are different proponents for different sections of the 
WT/MIN(17)/7 text, and how a bracketed text among proponents could serve as a starting point 
for discussions on domestic regulation.  
5.5.  The necessity test encroaches on a gov ernment's sovereign right to regulate. Not only does 
this test shift the burden of proof on governments to demonstrate that a measure is necessary to 
achieve a domestic public policy objective, but the government has to also show that it was the 
'least bur densome measure' that could have been taken. Some proponents of the necessity test 
have alleged that governments still have the last word. Yet, these proposals make it clear that this 
will require 'evidence -based' decisions. Read together with the Transpar ency provisions, it will also 
grant all interested persons, commercial interests and Members oversight on who, why and how 
measures are developed and implemented, and as a final resort subject that to multilateral dispute 
settlement.  
5.6.  The African Group have  always approached domestic regulation from a perspective that gives 
paramount importance and affirmation to, amongst other things, the right to regulate and the 
interlinkages between regulations and broader domestic economic imperatives.  WT/MIN(17)/8 • JOB/GC/166 • JOB/TNC/68 • JOB/SERV/274  
 
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  5.7.  Overall, the Gen eral Provisions text on the right to regulate is not sufficient and does not 
address the African Group's concerns. In any case, the General Provisions text is made redundant 
by the substantive provisions that follow immediately thereafter, meaning therefor e that the 
operative paragraphs in 2 -6 negate or in other words are an exception to the recognition of the 
right to regulate in paragraph 1.2.  
6  INDEPENDENCE  
6.1.  In paragraph 3 of the text, it addresses the independence of the competent authority in 
reaching an d administering its decision on whether a service supplier meets the relevant 
requirements. Independence is not synonymous with impartiality. An 'independent' decision 
requires that the decision -maker not have links (formal or informal) with individuals or  
corporations who have a stake in the case before it. Impartiality requires that the decision –maker 
is not biased against certain aspects relevant to the decision to be made. Therefore, the proposal 
refers to both decision -making of the measures and the ad ministration of these measures, which 
expands the scope of the GATS.  
7  THE CURRENT SITUATIO N IN AFRICA  
7.1.  The discussions in the WTO has prompted Members to undertake a critical assessment of the 
status of domestic regulation at the national level. In the cas e of African countries, it has been 
observed that they lag behind in the development of regulatory frameworks. This is primarily 
associated with weak regulatory infrastructure and inadequate government resources and 
capacities. In addition, there is divers ity in the development of regulatory frameworks across 
various services sectors. While some sectors have advanced in terms of building sound regulatory 
frameworks, others are much less developed and in several cases, lack any regulatory mechanism. 
For exam ple, while licenses serve as an important mechanism for addressing consumer needs in 
the case of professional services, not all professions are currently licensed.  
7.2.  Another common feature in the regulatory management of services in African countries, is 
that they are dispersed among several Ministries or regulatory agencies with each one tasked with 
fulfilling a small portion of the overall regulatory oversight and processes. This lends itself to a 
complex system of functioning for administering the typolog y of rules under GATS Article VI:4.  
7.3.  Services suppliers and regulatory authorities in African countries are also faced with 
challenges in implementing technical standards for services trade. This is particularly in the case of 
technical standards that are developed by standard -setting bodies that African countries are not 
Members of, and therefore have not participated in developing these standards. There are also 
difficulties in meeting international standards since the participation of African countries has 
always been limited due to resourc e constraints. The standards developed by international 
standard -setting bodies do not therefore take into account the situation of these countries.  
7.4.  Services suppliers in African countries are also faced with onerous qualification and licensing 
requiremen ts and procedures in their export markets. For example, providing information 
regarding qualification requirements that is not related to the provision of the service or applying 
for duplicated licenses from multiple levels of governments, as well as meeti ng requirements of 
resource -intensive technical standards that limit their ability to export.  
8  THE AFRICA WE WANT  
8.1.  Africa's vision is informed by the African Union's Agenda 2063: The Africa We Want. It places 
at the centre of our development agenda, the er adication of poverty through social and economic 
transformation of the continent. We aspire, through the structural transformation, economic 
diversification and industrialisation of Africa, to create shared growth, decent jobs and economic 
opportunities fo r all our people.  
8.2.  Africa is a continent with considerable growth potential and a simple data analysis without 
accounting for future exponential growth rate of Africa shows that the region requires policy space 
to achieve its industrial policy goals. Witho ut preserving our policy space, and with stringent 
binding domestic regulation rules that would lock us in, Africa's development will be hampered.  WT/MIN(17)/8 • JOB/GC/166 • JOB/TNC/68 • JOB/SERV/274  
 
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  8.3.  We have raised our concerns about the scope of these disciplines. They apply to existing and 
future measures . They apply at every level of government at 'central, regional or local 
governments and authorities and non -governmental bodies in the exercise of powers delegated by 
central, regional or local governments or authorities'. It covers every service sector w here specific 
commitments are undertaken. It is still unclear what " relating to " and "affecting " trade in services 
means. A direct reading of the text suggests that domestic regulation rules may spill over to other 
sectors that simply affect trade in servi ces. WTO jurisprudence has accorded a wide interpretation 
to the scope of the GATS, and almost any type of state intervention, to the extent that it affects 
trade in services, falls under it.   
8.4.  The scope of the proposed rules also distorts the balance in th ese negotiations because they 
are intertwined with how many GATS commitments Members have undertaken. Several African 
Group Members have undertaken substantial liberalisation in a number of services sub -sectors. 
These include African Members who have recen tly acceded, are landlocked Members, small island 
Members, and LDCs. Some of our Members have undertaken even more commitments than 
developed countries, including proponents. Furthermore, most African Members still have 
regulatory and institutional weaknes ses that would make it onerous to comply with the proposed 
rules. The administration and compliance costs are also overlooked in any discussion on domestic 
regulation.  
8.5.  The African Ministers of Trade Declaration on WTO Issues1 of November 2016 (AMOT 
Declar ation) stressed that 'the work we undertake in multilateral trade and rule -making support 
Africa's continental integration agenda and, at a minimum, not undermine it.' The AMOT 
Declaration restated that 'any outcome on GATS Article VI: 4 disciplines on dome stic regulation 
does not involve implementation of new and/or onerous administrative requirements or 
requirements that intrude into the domestic policy -making processes'.  
8.6.  Hence, the WTO negotiations in services should play a role in promoting the developm ent of 
regulatory reform and institutional building efforts as well as contribute to the development of 
supply -side capacity through addressing regulatory barriers faced by exporters from African 
countries. This reform should be in line with our developmen t objectives, and we should be 
cognizant of the implications of prescribing one specific approach or model to regulation.  Any 
negotiations should ensure adequate flexibility for African countries necessary for fulfilling their 
national policy objectives.  
9  WAY FORWARD  
9.1.  In building the Africa we want, the African Group places great importance on having much 
more clarity from the proponents in the development of future disciplines on domestic regulation.  
9.2.  In the short time that is left in the lead -up to, and at MC11, it is not possible to bridge these 
sensitive matters because no amount of best endeavour language or transition periods being 
characterized as Special and Differential Treatment can make up for diminishing African 
governments' sovereign right to regu late, or imposing particular regulatory approaches that would 
constrain our governments' ability to pursue development -driven regulations.  
9.3.  The African Group's questions and concerns can only be addressed through a holistic 
discussion on the right to regula te and the interlinkages between regulations and broader domestic 
economic imperatives. We propose that at MC11, Ministers initiate a discussion on the nexus 
between domestic regulation and trade, with a view to exploring options for more constructive 
work post-MC11 that meets our developmental objectives.  
9.4.  All discussions on the development of domestic regulatory disciplines always come back to 
one very important question: Which disciplines do you think are necessary, and why ? 
9.5.  After MC11, discussions should  focus on how disciplines on domestic regulation shall:  
• Respect the spirit, purpose and intent of GATS Article VI;  
 
                                                
1 WT/L/1004  WT/MIN(17)/8 • JOB/GC/166 • JOB/TNC/68 • JOB/SERV/274  
 
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  • Address the real needs of developing countries, in particular on Mode 4 related -issues;  
 
• Provide absolute protection to the right to regu late. This will include language on the 
'right to regulate' which will form part of the operative provisions of any outcome, and 
not under the preamble or General Provisions section;  
 
• Ensure that all exceptions and exemptions under the GATS shall apply to the provisions 
of any future agreement;  
 
• Establish and utilize operational and effective provisions for special and differential 
treatment;  
 
• Preserve the policy space for all African countries as they pursue development -driven 
regulation. African countries  require flexibility to maintain and introduce regulations. As 
our economies develop, the need for additional regulation becomes necessary. This is 
particularly important, nationally, regionally and continentally as we seek to build the 
Africa we want;  
 
• Reserve and preserve all flexibilities to the fullest extent to allow for the design of 
regulations suited to their individual needs and objectives. This will ensure and allow for 
proper timing and sequencing of regulatory reforms with liberalization aimed  at 
promoting sound and sustainable regulatory practices in African countries;    
 
• Include a mechanism in any potential future disciplines that assesses: the validity, 
appropriateness and impacts of the disciplines, as well as the extent to which the 
discip lines have met the national policy objectives, have achieved the international 
development goals of the GATS, the Doha Work Program, and more broadly, the SDGs, 
and whether any modifications are required to better achieve these objectives.  
 
10  CONCLUSION  
10.1.   The African Group have explained in great detail why we consider the proposed rules as 
being incompatible with Agenda 2063: The Africa We Want, and we have demonstrated how the 
proposed rules do no t adhere to the GATS Article VI: 4 mandate. We have also express ed in detail 
our concerns on the inclusion of the necessity test, and the fact that Transparency and Gender 
have no mandate. We do not agree that the formulation of the Development of Measures proposal 
is within the meaning of GATS VI: 4; the scope of the p roposed rules, the necessity of developing 
these rules, interpretative issues, regulatory capture, preservation of policy space, regulatory 
models, regulatory autonomy and the overarching concerns on the intrusions to our domestic 
policy -making processes.  
10.2.   The African Group states upfront that the WT/MIN(17)/7 text has not addressed most of our 
concerns. These views and concerns are systemic; it points to the need for a deeper, more 
fulsome, conceptua l discussion on GATS Article VI: 4.  
10.3.   In view of this, and taking note of the work done by the WPDR pursuant to Article VI:4 of 
the GATS, and acknowledging that important divergences still persist, the African Group states 
that a consensus -text cannot be presented to Ministers at the MC11 for adoption, and we will  not 
subscribe to any obligations on domestic regulation at the MC11.  
10.4.   The African Group will be prepared to continue the discussion on domestic regulation on the 
basis of the views expressed above on the understanding that other issues of interest to us, in 
other areas are also pursued similarly in a post -MC11 work program.  
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