RESTRICTED  WORLD TRADE  
ORGANIZATION  S/WPGR/M/64 
25 September 2009 
 (09-4491) 
Working Party on GATS Rules  
  
 
REPORT OF THE MEETING OF 22 JUNE 2009 
 
Note by the Secretariat
1 
  
1. The meeting was chaired by Mr. Felipe Lopea ndia from Chile.  The agenda for the meeting 
was contained in WTO/AIR/3384.  The Chairman
 announced that Secretariat Notes on emergency 
safeguard measures and subsidies had been circulat ed prior to the meeting and were contained in 
S/WPGR/W/4/Add.2 and S/WPGR/W/46/Add.1 and S/ WPGR/W/46/Add.1/Corr.1, respectively.  Any 
delegations wishing to make any comments pertaining to these documents were requested to do so 
under the relevant agenda items.  The Chairman  informed delegations that an update of the Secretariat 
Note on government procurement rela ted provisions in economic integr ation agreements, as contained 
in S/WPGR/W/49, would follow in due course.  
2. The agenda was adopted .       
3. The Chairman  noted that since the Working Party last  met, he had continued with informal 
consultations on Emergency Safegua rd Measures (ESM), Government Procurement and Subsidies.  
The consultations explored ideas on future work, es pecially in light of the mandate from the Hong 
Kong Ministerial Conference to intensify efforts to  conclude the negotiati ons on rule making under 
Articles X, XIII and XV of the GATS.  From the c onsultations, he sensed that  delegations had found 
it useful to informally explore options from a range  of different perspectives as well as to clarify 
issues relating to the proposals on the table.  Many delegations had felt that better use could be made 
of the Working Party's time by undertaking focu sed "topic-based" technical discussions, which would 
be without prejudice to well known positions on th e respective GATS Rules mandates.  He proposed 
that delegations raise any specifi c issues for these future discussions  under the relevant agenda items 
of this meeting. 
I. NEGOTIATIONS ON EMERGENCY SAFEGUARD MEASURES UNDER 
 ARTICLE X OF THE GATS 
4. The Chairman  recalled the communication from the delegations of Brunei Darussalam, 
Cambodia, Indonesia, Malaysia, Myanmar, the Phil ippines, Thailand and Viet Nam, as contained 
in JOB(07)/155.  He  highlighted that during th e meeting of the Working Party on 30 March 2009, a 
room document was also submitted by these delegati ons providing some additional ideas on the way 
forward in the ESM negotiations.  Delegations were  also informed of a communication received from 
China on a "limited window" for an ESM, which can be found in JOB(09)/56.  
5. In terms of future work, the Chairman  noted that one issue that had been highlighted in past 
discussions, as well as in the room document of 30 March 2009, had been the concept of "domestic 
industry".  He proposed that the first "topic based " informal discussion on ESM discuss the definition 
of domestic industry as contained in Attachment A of JOB(07)/155. 
                                                      
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/WPGR/M/64 
Page 2  
 
  6. The representative of the Philippines
 speaking on behalf the delegations of Brunei 
Darussalam, Cambodia, Indonesia, Malaysia, Myan mar, the Philippines, Thailand and Viet Nam 
requested that their statement at the informal meeting of the Working Party on 18 June 2009 be 
reflected in the record of this meeting.  The pr oponents had noted their appreciation of the Chair's 
proposal for technical discussions, and looked forwar d to having a focused technical discussion on the 
question of domestic industry in the context of th eir proposal for an ESM mechanism in services.  It 
was underscored that since such technical discussion s would be without prejudice to the position of 
Members,  it was hoped that delegations would be prepared to discuss technical issues and not those 
relating to mandate, desirability and feasibility.  Me mbers were urged by the Philippines to set those 
issues aside when engaging in the pro posed informal technical discussions.  
7. The representative of China  introduced the communication on the concept of a "limited 
window" for ESM as contained in JOB(09)/56.  It was highlighted that China recognized the desirability of ESM for trade in services and expr essed interest in participating in substantial 
discussions on technical issues related to safeguard measures.  With regard to the "limited window" 
proposed in JOB(07)/155, it was China's view that  while such a provision had been proposed to 
address concerns raised by some Members on the need to preserve the legal certainty of 
commitments,  it was unwarranted for a number of reasons.  First, trade in services is more susceptible than trade in goods to unforeseen developments, su ch as unforeseeable technology 
advance.  Therefore, it is difficult for Members to conclude that "serious injury" or "threat of serious injury" would definitely occur only within a fi xed period after liberalization commitments have 
entered into force.  
8. Secondly, in the goods sector, there had ne ver been a "limited window" for emergency 
safeguard measures and no suggestion had been made by any Member to add such a window under Article XIX of the GATT or under the Agreement on Sa feguards.  If such a concept had been applied 
to trade in goods, it would not have been possibl e for some Members to take safeguard measures 
against imported goods for which tariff concessions were made in previous rounds of multilateral 
negotiations.  No Member had proposed adding a "limited window" provision to Article XIX of the 
GATT or the Agreement on Safeguards in order to preserve the legal certainty of concessions and 
commitments previously undertaken.  Observing that  in the Doha Round negotiations on liberalization 
commitments in services have been linked to tho se in goods, China posed the question as to whether 
the absence of a "limited window" in the goods sector, would mean that concessions undertaken by Members for trade in goods would not be as legally  certain as the commitments undertaken for trade 
in services.
 
9. Concern was also expressed with the concept of a "limited window", as in China's view it 
would systematically discriminate against: (i) Me mbers that have undertaken more extensive and 
deeper commitments; as well as (ii) sectors or sub-sectors which have been liberalized in more 
depth than others,  either during the Uruguay Round or as a result of accession negotiations.  It was 
further noted that the concept of a "l imited window" was rare in economic integration agreements.  
It was found in only one case and this involved economic inte gration between one Member and its 
neighbours.  Arguably, fewer unforeseen developmen ts are likely in such a context as compared to 
multilateral liberalization.  Moreover, these agreements  basically serve the purpose of  transition into 
economic integration  and could not be duplicated in a multilateral ESM of the type being negotiated 
in the Working Party.  China also expressed its firm  belief that any ESM should be applicable to all 
commitments contained in legally binding final schedules. 
10. The representative of Malaysia  speaking on behalf of Brunei Darussalam , Indonesia , 
Malaysia , Myanmar , the Philippines , Thailand  and Viet Nam  noted the concerns expressed by China 
and endeavoured to take them into account in furt her deliberations on this issue by the group of co-
sponsors.  It was clarified that in the room  document of 30 March 2009 submitted by ASEAN (less 
Singapore), the intention had not been to replicat e safeguard measures found in economic integration  S/WPGR/M/64 
 Page 3 
 
 
  agreements.  Rather, the purpose was to develop an ES M that would be in line with the mandate of the 
Working Group.  Malaysia noted that the co-s ponsors recognized that an ESM should ideally be 
applicable to all commitments taken. 
11. The representative of the United States  (US) expressed surprise at hearing China come out so 
firmly in favour of an ESM mechanism.  He stre ssed that the US remained highly sceptical of the 
benefit or feasibility of an ESM, and was even mo re so following China's communication.  The US 
had a number of questions about China's exact position vis-à-vis an ESM and more particularly the 
relationship between commitments and the possibility of taking ESM measures.  He noted that some 
of the proponents of an ESM mechanism had in  other contexts expressed deep concern over 
contingent trade remedies, and are in fact friends of  anti-dumping.  It was highlighted that China had, 
in informal terms, expressed concern over continge nt trade remedies as they significantly diminish the 
value of tariff reductions made in previous r ounds of trade negotiations, and undermine the market 
access opportunities of the targeted Member.    
12. In this context, the US requested clarification from China as to whether an infinite amount of 
time may pass between commitments and the unfore seen circumstances that would trigger a safeguard 
mechanism.  It was highlighted that no speci fic explanation was provided in the communication 
contained in JOB(09)/56.  The US also referred to  China's position with regard to the steel case, 
where it believed China had clearly expressed that  there must be a logical connection between 
concessions and unforeseen circumstances.  According to  the US, in the steal case, China stated that 
the connection between trade concessions and safeguard measures must be logical and direct.  The US noted that it concurred with that view.  Ther efore, by corollary, the links between services 
concessions, unforeseen circumstances and safeguard measures would also need to be logical and 
direct.  In the communication from China, it was suggested that such links may exist for Uruguay 
Round commitments which are already 14 years old.  The US was sceptical of that and questioned 
how much time would have to pass before any kind  of connection was no longer logical and no longer 
direct.  It wondered whether it would have to be 20 years, 25 years, or more.  
13. The US noted that China had in its communicati on raised the question, "Can it be said that 
due to the lack of a limited window in the goods sect or, the concessions to be undertaken by Members 
for trade in goods will not be as legally certain as the commitments they are requested to undertake 
for trade in services where there will be supposedly a limited window in the eventually established 
ESM?".  In the view of the US, the answer was cl early yes, since a trade concession which is subject 
to a contingency which expires is more certain than  a trade concession subject to a contingency which 
does not expire.  With regard to the question as to why a "limited window" for safeguard measures did 
not exist in the goods context, the US recalled th at such measures are not subject to the Doha 
negotiations, which in its view may explain why no proposal had been submitted on this matter.   
14. Regarding the Secretariat Note on safeguard measures in economic integration agreements 
(EIAs), the US requested clarification on the f actors taken into account by the Secretariat when 
deciding whether a safeguard measure in an EIA would be comparable to GATT Article XIX 
measures.  It was also noted that the various prov isions outlined in the Note are very different from 
the proposal contained in JOB(07)/155.  Almost all pr ovisions in EIAs are multilateral in nature since 
they result in consultations with the Parties to the agreement, and not in unilateral action.  There are a 
few exceptions such as the safeguard provision in  the CARICOM Agreement and the EU provisions, 
which under certain circumstances seem to allow ac tions by certain Member States.  On the NAFTA 
provision, the representative from the US highlig hted that there are significant differences as 
compared to the ESM that had been proposed in the Working Party.  Firstly, NAFTA involves only 
three countries and not 154 WTO Members.  Since only three countries are involved, a relatively limited number of trade problems can arise.  Secondly, the NAFTA provisions relate to one sector and not every sector is committed.  Third, since very specific criteria allowing the use of an ESM had 
been pre-foreseen and pre-negotiated, there was no need to discuss what was an "emergency" and S/WPGR/M/64 
Page 4  
 
  what were "unforeseen circumstances".  Fourthly , unlike the proposal from ASEAN (less Singapore), 
the safeguard is not unilateral since consultations a nd, perhaps, reference to experts, are the main 
outcomes from implementing the NAFTA provision, if it can considered to be safeguard.  It was 
further noted that there was very justified con cern being expressed in the WTO over how the current 
economic and political circumstances might provoke he ightened protectionism.  In this connection, 
Members were asked by the US to consider th e political pressure for using an ESM, if such a 
mechanism existed today, in the face of calls from politicians around the world to slow down the 
growth of outsourcing, mode 1 services, reducing th e amount of investment, and so on.  It was thus 
fortunate that such a mechanism had not been established.   
15. The Chairman
 requested the WTO Secretariat to res pond to the questions posed with respect 
to the Note that was recently issued. 
16. The representative of the WTO Secretariat  explained the approach taken in the present Note 
by recalling that the original document, S/WPGR/W/4 , had been prepared back in November 1995 at 
the beginning of the discussion on this matter.  U pon request from the Working Party, the Secretariat 
had provided a brief account of safe guard procedures in EIAs, and the coverage of the Note then was 
very limited.  Since that time, there have b een successive requests fo r more information and 
S/WPGR/W/4/Add.2 is in response to the last of those requests to broaden the search and to cast the net wider than before.  The parameter reflected in the introductory part of the Note explained what 
had been excluded in the research.  These included the type of provisions found in the GATT or GATS such as general exceptions, exceptions from balance of payments, or in the case of the GATS 
the prudential carve-out.  The Note reviewed EIAs th at had not been covered previously and tried to 
capture anything that resembled the concept of a safeguard provision.  Since such a provision does not 
exist in the GATS, guidance was taken from the saf eguard measure found in the multilateral system, 
namely Article XIX of the GATT.  Based on this conceptual approach, the type of provisions reviewed would not, and need not, necessarily resemb le the ESM proposals that are being discussed in 
the Working Party.  Indeed, that was not the ob jective of the review.  Rather, the purpose of 
S/WPGR/W4/Add.2 was to capture those examples found in EIAs in the hope that they would help 
Members raise the kind of issues that would eventu ally help answer the questions that had been 
discussed for the past 14 years.  
17. The representative of the US
 noted that the research for S/WPGR/W4/Add.2 was based on 
broad parameters.  In light of the explanation by  the Secretariat, he asked why did the Free Trade 
Agreement (FTA) between China and various ASEAN Members not contain an ESM mechanism of 
the type that seemed to be favoured by those Me mbers.  The agreement between China and ASEAN 
Members contained only a simple multilateral cons ultation mechanism rather that a unilateral ESM 
mechanism.  It was further noted the provision exp licitly stated that, "any measure taken shall be 
mutually agreed to by the Parties concerned".  The US asked whether, in light of that, China and the 
ASEAN proponents would agree that any ESM in the GATS should also contain a statement that any 
measure taken pursuant to ESM must be mutually agreed by the Parties concerned. 
18. The Chairman  proposed that delegations continue th e discussion on the contribution by China 
on the concept of a "limited window" and the questions posed by the US.   
19. The representative of Thailand  speaking on behalf of the dele gations of Brunei Darussalam, 
Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Thailand and Viet Nam, reemphasized the desirability of an ESM mechanism.  To these delega tions, the desirability, as well as the feasibility, of 
an ESM mechanism was reflected in the examples  noted in document S/WPGR/W/4/Add.2.  In 
particular, it was noted that safeguard provisions were found in the following agreements.  In the 
enlargement of the European Union (EU) to 25 Me mber States and to 27 Member States, the possible 
serious economic difficulties in any sector afte r economic integration were recognized.  The 
enlargement agreements allow Member States to appl y for authorization to take protective measures  S/WPGR/M/64 
 Page 5 
 
 
  in order to rectify the situation and adjust the sector concerned.  The EC, acting in an emergency 
procedure, may determine the protective measures wh ich it considered necessary.  The revised Treaty 
establishing the Caribbean Community, including the CARICOM Single Market and Economy, also 
recognizes that possible serious difficulties may ari se in any sector due to the exercise of rights 
granted under the Treaty.  CARICOM Member States ma y apply restrictions on the exercise of such 
rights as it considers appropriate to resolve the difficu lties or to alleviate hardships.  The Treaty also 
established a process for notification and stipulates th e scope of the safeguard measures that may be 
taken.  The Europe Agreements, though terminated  on 1 May 2004 and 1 January 2007, following the 
EU enlargement, also provided examples of mark et conditions such as serious difficulties or the 
elimination or a drastic reduction of the total market  share held by companies or nationals in a given 
sector or industry.  The Agreement also provided for the notification of the measure as well as its 
scope.  NAFTA also provided another interesting ex ample of very detailed market conditions that 
would allow for the use of remedial actions in the financial sector in Mexico.  The Convention 
Establishing the European Free Trade Associati on and the Agreement on the European Economic 
Area provide for the application, scope and no tification of safeguard measures, as well as 
consultations.  In view of these examples, Thailand encouraged Members to set aside the discussion 
on the desirability of an ESM mechanism and to contribute constructively to the negotiations under 
the Working Party.   
20. The representative of Korea  expressed support for the Chairman's approach on future work by 
the Working Party, which is to focus on topic-b ased informal discussions on technical issues such as 
the definition of a key terminology.  On the co mmunication from China, as a preliminary comment, 
Korea was of the view that while the proposal might address the problem faced by Members who had 
made wider and deeper commitments, it would rende r commitments as a whole more uncertain.  This 
would be desirable for Members who wish to ensure  predictability and certainty in the multilateral 
trading system. 
21. The representative of Argentina  noted the importance of making progress in the ESM 
negotiations at the same pace as on market access.  Argentina agreed  with Chairman's proposal to 
hold informal technical discussions on ESM, and woul d be prepared to engage on the concept of 
national or domestic industry.  In  response to Members that had doubt s as regards the feasibility or the 
appropriateness of the introduction of  safeguard measures, Argentina recalled that such a mechanism 
already exists for industrial and agricultural goods .  In this regard, Argentina reminded Members of 
the mandate of Article X.  Furthermore, this ma ndate had been reaffirmed  in the Doha and Hong 
Kong Ministerial Declarations.  The Secretariat Note  clearly demonstrates that in one way or another 
all Members had given thought to establishing some kind of instrument which should make it possible 
to deal with unexpected situations in trade in services.   
22. It seemed to Argentina that in at least three of the agreements that China, Singapore, and 
Japan had concluded with various ASEAN Members, pr ovision is made for the inclusion of the results 
of the ESM negotiations at the WTO into the rele vant agreements.  Therefore, it was Argentina's 
understanding that these Members had clearly accep ted the future introduction of this type of 
discipline into their EIAs.  Argentina agreed with  China that the concept of a "limited window" does 
not exist either in GATS nor in the Agreement on Sa feguards.  Therefore, it was somewhat concerned 
about the systemic results of the introduction of this concept in the ESM discussions.  If a "limited 
window" were to be applied, this would discr iminate against Members such as Argentina who 
substantially liberalized in the Uruguay Round.  Argentina would be interested in continuing 
discussions on this matter. 
23. The representative of the EC  supported the work program proposed by the Chairman.  With 
regard to the examples contained in the Secretariat Note, the EC highlighted the particularity of the  
Europe Agreement as well as the Enlargement Ag reement.  For instance, these provisions are 
temporary and relate to a deep process of integratio n which is the accession of the new Member States S/WPGR/M/64 
Page 6  
 
  to the internal market of the EU.  These provisi ons had been discussed in past meetings of the 
Working Party, and the EC would be able to provi de more information should this be required.  
24. The representative of Colombia
 supported the Chairman's proposal to work on the concept of 
domestic industry but suggested building some flexibilit y with regard to the organization of work, so 
as to be able to respond actively to changing circumstances.  On the ESM discussion, it was 
Colombia's view that proposals had not been suffici ently specific, which may had led to uncertainty 
on the part of both governments as well as servi ce providers.  Colombia believed that greater 
precision was required in the discussion and this shou ld be where the Working Party must concentrate 
its efforts.  To do so, it suggested discussing the va rious aspects of an ESM mechanism in an ordered 
manner.  Colombia expressed interest in all th e informal technical discussions convened by the 
Chairman.  
25. The representative of the US  believed that the mandate of Article X as well as the relevant 
paragraph from the Hong Kong Ministerial Declarati on had been mischaracteri zed in the intervention 
by Argentina.  The US recalled that  Article X called only for negotiati ons which have some results.  It 
did not call for any particular ESM nor  any particular  type of measure.  The provision did not call for 
the particular type of measure that had been proposed in the Working Party.  The Hong Kong 
Ministerial Declaration is quite clear in that the Ministers themselves were not convinced there would 
be any result.  Ministers referred repeatedly to  the "question" of, as well as "any possible", ESM, 
suggesting that they were not convinced that any measure was in fact possible. 
26. The representative of the Philippines  fully associated its delegation with the statements made 
by both Malaysia and Thailand on different aspects of the Working Party's deliberations.  On the issue 
of "limited window", Philippines highlighted that  the proponents of an ESM in services, as was 
expressed in the room document of 30 March 2009, comple tely agree that this issue is vital and needs 
to be resolved in the context of the negotiations.  In this regard, the Philippines recalled previous 
communications which are contained in JOB(04)/175 and JOB(04)/4.  In these communications, there are provisions or certain sections that relate to the issue of "limited window " which reveal that the 
issue had not been resolved.  Therefore, China had raised some very fundamental questions on 
whether a "limited window" for an ESM in services is warranted.  From the perspective of the 
Philippines, the underlying question raised by China in paragraph 6 of its communication is why is 
there no mandate or discussions on this issue w ith regard to Article XIX of the GATT and the 
Agreement on Safeguards, if indeed, as had been ar gued, the certainty of commitments made at the 
WTO would be affected.  Moreover, in the services negotiations or in other areas of negotiations, the 
lack of a mandate had not really prevented any Me mber from raising fundamental questions such as 
the one raised by China.   
27. On safeguard measures found in EIAs, the Philippi nes further clarified that the proposal from 
ASEAN (less Singapore) did not seek to copy or replicate such provisions.  Rather, proponents had sought to learn from existing agreements and attempte d to adapt  features that are feasible into the 
WTO system.  The offer by the EC to provide some  more elaboration on safeguard provisions in the 
context of the EU, as well as further informa tion from the US on why the NAFTA model would not 
work in the WTO system would be appreciated.  It was highlighted by the Philippines that this was 
the type of discussion proposed in the room document of 30 March 2009.  The Philippines also underscored that the absence of an ESM in FTAs in the ASEAN region, and in agreements concluded 
by various ASEAN Members, was not an indication of  their level of interest on this subject.  FTA 
negotiations are conducted on a completely differe nt political and economic dynamic from those in 
the WTO.  Moreover, as was highlighted by Argen tina, in virtually all FTAs there is provision to 
revisit the safeguard provision once the ESM negotiations in the WTO are concluded.  
28. With regard to the intervention by the US on the current economic climate, the Philippines 
believed it was speculative to ponder on the political pressures that could arise should an ESM already  S/WPGR/M/64 
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  be in existence.  Should Members wish to venture into such a discussion, it would be more pertinent 
to examine the measures that are actually taken by  Members today in the current context and to 
question how these measures impact in real terms on in ternational trade in goods and services.  On the 
mandate of Article X and the Hong Kong Ministerial Declaration, the Philippines felt that it had also 
been mischaracterized by the US as it was an extremely negative interpretation of the ESM 
negotiations.  The proponents recognize that considerab le technical work is still needed but ultimately 
a large part of these negotiations depend on the will to  take vital and important political decisions.  In 
this regard, the Philippines reemphasized the funda mental political and economic importance of ESM 
for the proponents. 
29. The Chairman  reminded Members that on the issue of "limited window", a summary of past 
discussions on this subject can be in JOB(06)/165.  
30. The representative of Argentina  recalled that Article X states that the results from the ESM 
negotiations should enter into effect no later than th ree years from the date of the entry into force of 
the WTO Agreements.  The guidelines and procedures for the negotiations on trade in services that 
were adopted in March 2001 reaffirmed that Article  X shall be completed by this Round.  However, 
due to delays in the negotiations, these dates were not achieved.  The Hong Kong Ministerial 
Declaration clearly required Members to intensify th eir effort to conclude the negotiations on GATS 
Rules, including those under Article X.  Members have a clear mandate and timeline to follow, yet 
there had been little movement on these negotiations .  It seemed to Argentina that for some 
delegations issues are easier to progress in market  access than in rules.  This approach was not 
warranted as delegations cannot  on the one hand demand market access in services but on the other 
reject the establishment of rules.  
31. The representative of China  highlighted that most of the an swers to the questions raised by 
the US can be found in their communication as contained in JOB(09)/56.  In that document, it was very clearly stated that China wished to contribute to technical discussions undertaken by the Working Party, especially in view of the instructions given by Ministers at the Hong Kong Ministerial 
Conference.  In that connection, China noted that there had certainly been more discussions at this 
meeting of the Working Party than on past occasi ons.  With regard to the relationship between 
concessions and ESM, China underscored that th is subject was outside the scope of its 
communication, which was focused on the issue of  a "limited window".  Moreover, the concerns 
expressed by China in the context of goods on speci al safeguard measures, as highlighted by the US, 
are irrelevant since the ESM negotiations in services are about the possible establishment of 
multilateral contingency measures.  In the goods cont ext, China had expressed concern over the use of  
trade remedial measures taken by some Members, in particular by the US.  Deep concerns on the use of trade remedial measures had also been expressed by many other Members.  It was stressed that China had never proposed the entire removal of the contingency measures in goods.   
32. On the mandate, or lack of one, for a discussi on on a "limited window", China concurred with 
the intervention made by the repr esentative of the Philippines.  The question is why had Members not 
chosen to insist on a "limited window" for the use of  safeguard measures in goods, if one is needed in 
services.  The reasons are contained in the communica tion from China.  If the logic of a safeguard in 
goods is to provide an emergency mechanism when th ere is "serious injury" or "threat of serious 
injury" due to the implementation of multilateral lib eralization commitments, then the same kind of 
logic can also be applied to trade in services.  China did not see any reason for believing that 
emergency situations will never arise in the services trade.  If there is a causal link between "serious 
injury" or "threat of serious injury" and the implementation of multilateral concessions, then a 
safeguard may be warranted.   
33. China noted that despite the fact that unfor eseen developments are less likely as a result of 
EIAs than in the context of multilateral liberaliza tion, a number of these agreements do contain such S/WPGR/M/64 
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  provisions.  In NAFTA, a safeguard is established fo r financial services despite the fact a carve-out 
for prudential regulation is already available to th e parties.  Thus, the NAFTA parties even with 
regard to a foreseen situation, considered it necessa ry to have a safeguard mechanism in place.  In 
services, since most sectors do not have prudential regulations, there is a need to design some kind of safety valve or emergency mechanism for Members.  The representative of China clarified that its 
delegation had consistently and cl early stated its support for the est ablishment of ESM.  Moreover, in 
China's bilateral agreements with some of the tradi ng partners, there is also reference to the need of 
such a mechanism, taking into account the results of multilateral discussions on this issue.  With 
regard to the Hong Kong Ministerial Declaration, it was China's view that Ministers had called for the 
establishment of safeguard measures, so Members shoul d therefore intensify their efforts to conclude 
rules negotiations and engage in more focused discussions on technical issues. 
34. The representative of Indonesia
 shared the views of ASEAN (less Singapore) on the 
desirability of ESM.  Indonesia reaffirmed its st rong political commitment for the conclusion of the 
DDA and it looked forward to having the same s upport from WTO Members with regard to ESM, 
which had been discussed for some 14 years.  It wa s surprised to hear sever al Members repeat the 
same questions on the issue on feasibility and desira bility.  Indonesia believed that  Members should 
be seeking to make it feasible and desirable to establish an ESM mechanism for services.  Many 
technical issues still need to be discussed and Indone sia urged Members to make the effort to work 
through these issues.  
35. The Chairman  noted that the communication from China on the issue of a "limited window" 
for ESM and the Secretariat Note on safeguard measures in economic integration agreement had 
generated an interesting exchange of views among delegations.  In this  connection, he believed that it 
would be appropriate to enter into technical discu ssions in which delegations  would be encouraged  
not to reiterate well known positions but to try instead to approach  issues afresh.  The Chairman noted 
that the definition of domestic industry is a key c oncept in the ESM discussions  and he proposed that 
this be taken up in the first round of technical discussions.  He hoped that through such discussions 
Members would be able to engage productively so th at when the time came to take decisions all 
concepts relevant to an ESM mechanism woul d have been developed and clarified.   
36. The Chairperson  invited the Working Party to take note of comments made.  
II. NEGOTIATIONS ON GOVERNMENT PROCUREMENT UNDER ARTICLE XIII 
 OF THE GATS 
37. The Chairman  recalled that he had conducted a few r ounds of informal consultations  on the 
European Communities` proposal for an annex on gov ernment procurement, as  contained in document 
S/WPGR/W/54.  These consultations had helped clar ify certain technical aspects of the EC's proposal, 
including its relationship to the plurilateral Agreem ent on Government Procurement (GPA).  In this 
connection, the Chairman proposed holding "topic based" informal consulta tions, so as to further 
discuss the main elements of the proposal from the EC.  Such consultations could, for instance, 
commence with the issue of application and exclusion.  
38. As no delegation took the floor on this subject, the Chairman concluded that delegations were 
agreeable to his approach on future work on government procurement.  
III. NEGOTIATIONS ON SUBSIDIES UNDER ARTICLE XV OF THE GATS 
39. The Chairman  recalled that in the negotiations under Article XV, discussions had focused on 
the definition of a subsidy in services.  In this  regard, the delegations of  Hong Kong China and 
Mexico had submitted a proposal on the use of th e notions of non-actiona ble subsidies under the 
Agreement on Subsidies and Countervailing Measur es (ASCM) and "green box" subsidies under the  S/WPGR/M/64 
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  Agreement on Agriculture, as contained in JOB(07) /27.  A communication had also been submitted 
by the delegations of Chile; Hong Kong, China;  Mexico; Peru and Sw itzerland on a provisional 
definition of subsidies based on the ASCM for the purpose of both information exchange as well as 
the development of disciplines on subsidies, and can  be found in document JOB(05)/96.  In terms of 
future work, the Chairman was of the view that while delegations could continue to try to advance 
work on the definition of subsidies, it would be fair  to say that for a number  of reasons little headway 
had been made on this subject.  Other issues that could be taken up in discussions could be the trade-
distorting effects of subsidies in services.  The Chairman requested views from Members on how the subject of subsidies in services should be taken up in  future work.  He noted that at the previous 
meeting of the Working Party as well as in other WTO bodies, including the General Council, 
considerable interest was expressed by a number of  delegations to create greater dynamism and to 
breathe more life into discussions on the issue of su bsidies in services.  The Chairman considered it 
extremely useful to know in what specific and pract ical manner would delegations like to proceed in 
the coming months.   
40. The representative of Korea
 emphasized the importance of Article XV negotiations as many 
governments face economic difficulties with the in creasing and unregulated use of subsidies in 
services.  This trend was worrisome as some of these subsidies may have huge trade distorting effects 
and would be detrimental to the long term sustainability of the targeted sector.  Yet, WTO negotiations on this subject remain stalled.  More specific and focused  efforts are needed so as to 
make progress in the negotiations on subsidy discipl ines, and Korea would be willing to contribute to 
such discussions.  
41. The representative of Hong Kong, China
 referred to the proposals recalled by the Chairman 
on a provisional definition of subsidies in services  and non-actionable subsidies.  Hong Kong, China 
concurred with the Chairman on moving beyond a con ceptual discussion of a definition for subsidies 
and to examine some practical effects in a specific manner.  While it had no new proposal to submit, Hong Kong, China believed that the provisional defi nition that it provided a few years ago could still 
be relevant and would welcome any efforts from ot her delegates on how it could be taken forward in 
future discussions.  
42. The representative of Mexico
 supported the approach proposed by the Chairman on technical 
discussions on the trade-distorting effects of subsid ies.  Mexico would be interested in reviving 
discussion on this issue and it would like to hear  the views of other Members on the definition of 
subsidies.  Mexico noted that it had co-sponsored  proposals on this subject and encouraged Members 
to  reinitiate discussions on the definition of subsid ies as well as possible  trade distortive effects.  
43. The representative of India supported the Chairm an's suggested approach on further technical 
work in the area of subsidies.  In India's view, this  subject had perhaps been the most neglected in the 
Working Party and apart from a discussion on inform ation exchange, as proposed by some Members, 
there had been no further ideas.  India supported the intervention by Hong Kong, China on the need to 
reinitiate discussions by focusing on trade distorti ve effects and in this connection, a provisional 
definition of subsidies is contained in the doc uments JOB(07)/27 and JOB(05)/96.  India urged 
Members that had been calling for disciplines on su bsidies in services, similar to those in the goods 
area, to come forward and support discussions in the Working Party. 
44. The representative of Colombia  recalled that at the meeting of 30 March 2009, the OECD 
presented its study on export subsidies in services.  Colombia suggested that the Chairman may wish 
to keep in contact with the OECD on any further work it may undertake in this area, in particular on 
the trade distorting effects of such subsidies.  It further noted that such work may shed more light on 
the relevant criteria and elements for a pr ovisional definition of subsidies in services. S/WPGR/M/64 
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  45. The Chairman
 noted the suggestion from Colombia on keeping track of any future work by 
the OECD on export subsidies in services.  A number of  delegations had also indicated an interest in 
revisiting a number of documents presented in th e past on a provisional definition of subsidies in 
services.  The Chairman encouraged delegations that  had intervened on the subject to provide more 
specific proposals on how they wished to pursue work in this area.  He noted that some delegations 
had also expressed interest in focusing discussions on the trade-distorting effects of subsidies in 
services.   
46. The Chairman  invited the Working Party to take note of comments made  In terms of future 
work, he indicated that in view of  the comments received, he would circulate a list of topics that could 
be taken up in informal technical discussions.  He noted  that he expected these consultations to start in 
September and that he would seek, as much as possi ble, to have them coincide with the services 
cluster meetings.  
IV. OTHER BUSINESS 
47. No items were raised under this agenda item.   
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