RESTRICTED  WORLD TRADE  
ORGANIZATION  S/WPDR/M/40 
12 May 2009 
 (09-2323) 
Working Party on Domestic Regulation  
  
 
REPORT OF THE MEETING HELD ON 1 APRIL 2009 
 
Note by the Secretariat
1 
  
1. The Working Party on Domestic Regulation (WPD R) held its 40th meeting on 1 April 2009.  
The meeting was chaired by Mr. Peter Govindasamy of Singapore.  The agenda for the meeting was 
contained in Airgram WTO/AIR/3340, dated 23 March 2009. 
2. No points were raised under "Other Business". 
A. DEVELOPMENT OF REGULATORY DISCIPLINES UNDER GATS ARTICLE VI:4 
 - REPORT FROM THE CHAIRPERSON  
3. The Chairman
 reported on his discussions with dele gations during the latter part of 2008, 
where it became apparent that the nature and spee d of future work in the Working Party would 
critically depend on a breakthrough in the overall negotiations.  Due to the ongoing impasse in the overall round, he had observed a general lack of  enthusiasm to push forth with substantive 
negotiations in the area of domestic regulation.  He nce, since its last formal meeting in November 
2008, the Working Party had not able to undertak e any substantive work on the development of 
disciplines for domestic regulation.  Neither had th ere been enthusiasm to reflect on a roadmap for 
further work, and it had been suggested that it woul d be more efficient and practical for his successor 
to undertake such discussions.   
4. Further to suggestions by Members, he had c onsulted on the utility of a further revised draft 
text.  While some Members had urged him to s uggest compromise language on some of the difficult 
issues, other had advocated production of text reflect ing in square brackets all positions that had been 
expressed.  Following his consultations, the Chair had decided that it was most appropriate, at this stage, to only make changes to those paragraphs of the text on which discussions had indicated wide 
support for the new language.  These changes were made with the understanding that they left the 
overall balance of the text intact.  At the present stage of the negotiations, the Chair could not offer 
"solutions" to those areas where differences among Me mbers were still broad.  In his judgment, the 
second revision of the draft text, like the previous dr afts, broadly struck a balance between the various 
interests of Members.  While not as ambitious as some might have desired, the text still contained 
legal obligations on a variety of mainly procedural issues.  He recalled that the disciplines would have 
horizontal application, providing a baseline upon whic h future sectoral work might build.  Of course, 
certain concepts as they appeared in  the text needed to be further elaborated or better understood, but 
overall it was his belief that the issues were not insurmountable. 
5. The Chairman
 emphasized that his revised draft text  was not plucked out of a vacuum, but 
built on Members’ negotiating proposals and contri butions.  Over 18 proposals from Members and 
groups of Members on various aspects of the negotiating mandate had been circulated during his 
                                                      
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/40 
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  chairmanship since 2003.  Virtually all Members,  including developing country delegations had 
actively participated in his consultations over the past four years.  Members’ contributions had 
demonstrated the wide spectrum of views on the s ubstance of the negotiations .  Going forward, it was 
his hope that rather than discuss the few changes cont ained in the draft text at great length, Members 
would re-engage on those important issues on which differences persist.  These issues were, by and 
large, listed in his Note on outstanding issues of March 2008, and revisited in the annotated agenda 
for the July 2008 meeting, as well as in the comp ilation of issues raised by delegations, dated 
25 June 2008.  
6. The representative of Hong Kong, China
 noted that the cover note to the revised draft text 
described the text as a point of departure, and re called that the starting point of the negotiations was 
the mandate contained in Article VI:4 of the GATS.   That mandate called on Members to develop the 
necessary disciplines on domestic regulation whic h would be based on objective and transparent 
criteria, not more burdensome than necessary to ensure the quality of this service, and not in themselves a restriction on the supply of services.  The principles and objectives of that mandate were 
very clear, and aimed at producing good regulation to ensure the integrity of markets and the 
protection of consumers.  These principles also dema nded the disciplines to be drafted robustly and in 
the right form, thereby ensuring that hard-earned mark et access commitments materialized in reality, 
especially considering the circumstances the world was facing today, in which it was important to keep markets open and to continue with liberaliza tion efforts.  Liberalization and sound regulation 
were hence twin objectives of the services negotiati ons.  The seminar on Financial Services during the 
previous day had shown that compartmentalization of regulation was a recipe for trouble.  Members 
should embark on developing horiz ontal disciplines that facilitated the sharing of best practices 
among regulators and reduced regulatory arbitrage to ensure the well-functioning of globally 
integrated markets.  
7. Turning to the revised draft presented by the Chairman, she thought that the minor 
amendments from the previous draft did in her view  not do justice to the intensive discussions that 
had taken place in the WPDR over the previous year.  Future work needed to  focus on the two Notes 
that were referred to in the cover note to the re vised draft.  She hoped Members would make good use 
of the present time when the negotiations were not  going as quickly, to iron out several technical 
differences.  It was high time that the text be i ssued in the form of a JOB document, not only to 
facilitate accessibility and transparency , but also to put this very impor tant track of negotiations in its 
rightful place.   
8. The representative of Chile
 stated that neither the revised text, nor the previous draft, met his 
delegation's expectations.  The text did not take  account of many of the proposals put forward by 
Members over the course of the previous year.  More  changes were required that would bring the text 
into compliance with Article VI:4.  None of the proposals put forward by the more ambitious 
Members were integrated in the text, which led to the text being unbalanced overall.  Liberalization 
and regulation had to go hand in hand. 
9. The representative of Mauritius  stated that the Chair had done his best to produce a text which 
reflected both areas of consensus as well as differences  between delegations.  But, at the same time, a 
lot of work that had been done over the last four y ears was not reflected in the text.  It was hard to 
explain the minor evolution of the text, despite in tense discussions, to his taxpayers back home.  He 
requested that the Secretariat organize a briefing for delegations from ACP, African, and SVE 
countries.  He further suggested the production of a consolidated informal note on all issues that had 
been discussed.  Such a document might give a sen se of direction for future work, and would help 
avoid repetition of arguments, especially in light of  the arrival of several new delegates.  His 
delegation wanted to move forward, to compromise , to find a sort of genuine solution for all the 
problems which had been identified.  S/WPDR/M/40 
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  10. The representative of Switzerland  wished to address two issues in his intervention, namely the 
significance of the revised text regarding the Worki ng Party's concrete work now and in the future, 
and its relation to the negotiating mandate in Artic le VI:4.  He stressed that very important 
suggestions were not reflected in the revised Chairm an's draft.  He was disappointed to see that his 
delegation's proposal, as well as the proposals of other de legations, were not reflected in the draft.  In 
particular he noted the absence of an important  aspect of the negotiating mandate, namely the 
necessity test, contained in the mandate in paragraph (b) of Article VI:4.  Absent the necessity test, it 
would be difficult to make progress on the basis of th e Chairman's text.  For future meetings, Article 
VI:5 and VI:4 themselves should cont inue to be the discussion basis.  He opined that a better basis for 
discussion might have been a text, with the approp riate brackets and footnotes, that had taken on 
board the other issues that had been debated.  Tu rning to the mandate for the negotiations, he found it 
to be regrettable that the text fell short , even in  its current draft form.  Article VI:4 contained the 
mandate, but it was linked with Article VI:5 whic h was an operational provision by which Members 
had to abide.  In that sense, the elements of the mandate were not only principles but real obligations.  
As the provisions in the current draft were without brackets, he assumed that these elements were 
agreeable with many if not most delegations.  While  many aspects that were part of the mandate were 
missing, other aspects that were not part of the ma ndate had been refined.  He was supportive of the 
changes to the transparency section of the draft, but noted that tr ansparency was not part of the 
Article VI:4 mandate, except for the transparency  of criteria mentioned in paragraph (a).   
11. More generally, his delegation considered domestic regulation to be a key aspect of the GATS 
architecture.  Problems arising from domestic regulati on made the life of suppliers hard, regardless of 
any discrimination or market access.  It was wi dely acknowledged that domestic regulation was 
particularly important for small and medium-sized enterprises whic h were the back-bone of every 
economy.  Unlike SMEs, big companies had enough resources and lawyers to cope with regulatory barriers.  Members should not forget this in their work on domestic regulation, in particular as SMEs 
were now struggling through the economic crisis, an d would be the main beneficiaries from the work 
of the WPDR.   
12. The representative of Tanzania,
 speaking on behalf of the LDC Group , stated that according 
to the WTO, the intention of GATS was to spur economic growth by removing excessive barriers to 
trade in services and enabling countries to attract foreign investment by opening up highly regulated services to international competition.  Like ot her WTO agreements, GATS was backed up by the 
coercive powers of the organization.  The WTO w as the first worldwide economic institution with the 
capacity to legally enforce its agreements.  Domest ic Regulation was an important component of the 
GATS, by ensuring that measures relating to licensi ng and qualification requirements and procedures, 
as well as technical standards would be implemented in a transparent manner and that they did not 
constitute barriers to trade in services.  Exemption of LDCs from applying an y future disciplines on 
domestic regulation and provision of technical assi stance and capacity building, in response to the 
interests of these countries, were greatly appreciated.  This would help address LDC interests by 
developing their export regulatory capacity.  He therefore supported the language in the second 
revised draft text on possible regulatory disciplines pursuant to Article VI:4 of the GATS prepared under the Chair's responsibility and urged that it should not be diluted. 
13. The representative of India
 echoed the sentiment that the draft fell short of the ambitions of 
many delegations.  Any disciplines that the Work ing Party was producing should build on Articles 
VI:4 and 5.  His delegation had c onsistently argued that trade should not only be free but also fair.  
Market access was one of the pillars  of the services negotiations, but rules, and in particular domestic 
regulation disciplines were the other pillar of thos e negotiations.  Without meaningful disciplines, 
market access could be rendered completely useless.  Judging by the time it had taken to arrive at the 
current draft of horizontal disciplines, work on sector al disciplines would take a very long time.  It 
was more prudent to complete work on horizontally applicable disciplines first.  Referring to the S/WPDR/M/40 
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  current financial crisis, he stated that domestic regulation disciplines became even more relevant in 
the current environment where Members were invoking a host of restrictive measures. 
14. The representative of Barbados,
 speaking on behalf of SVEs,  welcomed the revised draft text 
at the present time even if it did not contain si gnificant and substantive changes.  Although the 
document did not fully reflect the depth of discussions that had ta ken place over the last year, the 
outcome represented a product on which Member s had reached some agreement and which 
adequately captured what the traffic could bear.  She was pleased to see that a number of the SVEs 
specific concerns had been taken on board in this version, but registered her disappointment that the 
document was not in JOB format.  The latter would have been important for transparency, and would 
have been a concrete reflection of  the type of progress that Ministers referred to in the Hong Kong 
Ministerial Declaration, which mandated Members to develop text for adoption.  She hoped that some 
rectification of the document's status coul d take place at an early opportunity.   
15. The representative of Korea  expressed his view that the revision had improved the draft on a 
few issues.  He regretted that suggestions to clar ify the term "disguised restrictions on trade in 
services" had not been reflected in the revision.  Numerous outstanding issues including the necessity 
test needed further negotiation.  He stressed th e importance of these negotiations which aimed to 
prevent arbitrary and unjustified regulatory barriers to trade in services.   
16. The representative of Turkey  stated that the recent changes made  some useful clarifications to 
the draft which his delegation supported.  Based on this new text, further pr ogress could be made by 
addressing some outstanding issues me ntioned by other delegations.  
17. The representative of Mexico  echoed some of the concerns expressed by the delegations of 
India, Chile and Switzerland about the fact that ther e were very limited changes made to the text, in 
light of the work accomplished over the last few y ears.  She reiterated her delegation's commitment to 
the future work of the Working Party. 
18. The representative of Chinese Taipei  stated that negotiations on domestic regulation and 
market access were complementary.  It was important to ensure that Members' measures did not 
constitute unnecessary barriers to trade in services.   The presentations at the financial services 
workshop had concluded that liberali zation had to go together with sound regulation, especially in the 
current global economic situation.  Regulations mu st not be used as a pretence for protectionist 
measures.  Therefore, a set of well-crafted multilateral disciplines on domestic regulation was 
required and could serve as a common guidance for Members to develop or improve their domestic 
regulations.  The second revised text fell short of the expectations of many  delegations and did not 
fully reflect the intensive discussions that Members had conducted since February 2008.  Future work 
needed to take up the two Chairman Notes of  12 March and 25 June 200 8 regarding outstanding 
issues.  Article VI:4 of the GATS as well as para graph 5 of Annex C to the Hong Kong Ministerial 
Declaration provided clear mandates and his delegatio n would continue to work towards the adoption 
of disciplines on domestic regulation by the end of the Doha Round. 
19. The representative of Australia  stated that her delegation attached great importance to 
negotiations on domestic regul ation disciplines, which had not evolved significantly despite intensive 
negotiations on the text.  Her delegation remained  committed to the process and looked forward to 
cooperating with other interested Members and the next Chair to identify creative ways of progressing 
beyond the current impasse.   
20. The representative of New Zealand  expressed her surprise about the limited number of 
amendments in the revised text, and felt that th e comprehensive and often painstaking discussions 
held over the past several months might have b een reflected in this revision with compromise 
language or bracketed text.  This might have made  the text more useful as a working document and  S/WPDR/M/40 
 Page 5 
 
 
  reflective of those previous discussions.  New Zeal and remained committed to a strong outcome in the 
Working Party as a means of giving effect to mark et access commitments negotiated elsewhere.  She 
considered that there was a long way to go in this process.   
21. The representative of Canada  stated that his delegation remained uncomfortable with certain 
parts of the text which overall was a viable b asis for continuing work.  Contrary to the views 
expressed by other delegations, he was of the opinion that not enough work had been done over the 
past twelve months to have a stabilized major overh aul of the previous Chairman's text.  The idea of 
brackets or options might have been attractive to some but the ground work was not there due to the 
circumstances of the overall negotiations  Pushing th ings further along the lines of what some of the 
previous speakers had suggested could have complic ated further progress.  In his delegation's view, 
continuing work on the basis of the text was well  within the parameters of the mandate, and his 
delegation was committed to working with all Memb ers in this regard.  The main problem for the 
domestic regulation negotiations was the impasse in other areas of the DDA.   
22. The representative of Colombia  recorded his delegation's dissatis faction with the direction the 
discussions on domestic regulation disciplines had taken.   The debate had led to the weakening of the 
disciplines, whereas delegations should actually seek to be strengthening them as stipulated by the 
drafters of the GATS, and as the current worldwide cr isis demanded.  The result could not be less than 
the foundation that was set up by the GATS.  Br inging the preparation of the disciplines to a 
successful conclusion would strengthen the WTO as an institution and help Members avoid a trend 
towards protectionism.  It would also guarantee that the organization continued to be a driving force behind economic development.  He noted that of the outstanding issues listed by the Chair, only some 
had been actually given positive consideration in the revised version of the text.  Unfortunately, these 
were not the issues that his delegation deemed to be fundamental.  The modifications seemed again to 
reflect a continued watering down of the text.  He  hoped that the fundamental issues would continue 
to be discussed at technical level with a view to c onclude those discussions when it came to the point 
of adopting political decisions.  To achieve this, the Working Party should increase the frequency of 
meetings, and the results of discussions should be reflected in more official documents. 
23. The representative of Indonesia
 foreshadowed his delegation's contribution to the drafting 
process during future meetings, particularly to guarantee the right of Members to regulate and to introduce new regulations on the supply of services with in their territories in order to meet national 
policy objectives, and because of asymmetries with r espect to the sophistication of services regulation 
in different countries.  Indonesia also sought to reaffirm the WTO's recognition of the difficulties 
faced by services suppliers from developing countr ies in complying with measures relating to 
licensing requirements and procedures, qualifica tion requirements and procedures and technical 
standards of other Members. 
24. The representative of Malaysia
 emphasized the need for discip lines to ensure that domestic 
regulation did not constitute an un necessary barrier to trade.  The disciplines proposed in the revised 
draft text could provide the basis for future nego tiations.  Her delegation ha d reservations regarding 
the criteria imposed to determine transparency , how the provisions on licensing procedures would 
operate as there were some elements that necessarily  would co-exist, and coul d not be independent of 
one another.  She also required clarification on qualification procedures and requirements.   
25. The representative of Kenya , speaking on behalf of the ACP Group of WTO Members , shared 
the view of the Chairman that the current draft te xt was broadly what the general traffic could bear, 
although it did not reflect the position of ACP Members on some of the issues.  The text therefore 
formed an important basis for taking the negotiatio ns forward.  ACP Members believed that it was 
important to have disciplines that would unde rpin market access commitments undertaken by 
Members.  But, of more crucial importance to ACP countries, the final disciplines needed to contain a 
very strong development compone nt, supporting the reform processes that many ACP countries were S/WPDR/M/40 
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  engaged in at the national level in various ser vices sectors, and ensuring that ACP countries 
participated effectively in services trade at the global level.   
26. The representative of Egypt
 stated that more work on the disciplines was required.  Members 
needed to intensify efforts during the next few months to introduce a new text on disciplines. 
27. The representative of China  welcomed the revised text, which usefully captured progress 
made over the past year, even if that progress ha d not been as substantial as many Members had 
hoped.  Despite the progress, more work was required. 
28. The representative of the Philippines  stated that his delegation had strongly encouraged the 
Chairman to leave behind a comprehensive, coherent , and informed summary of the state of play in 
the domestic regulations negotiations.  This was pr imarily to help the Chair's successor as well as new 
and even old delegates.  He was therefore extremel y disappointed that the Chair had decided to leave 
delegations with the document he ha d put before them.  While he respected the Chairman's decision, 
he seriously disagreed with the wisdom of how he had decided to end his chairmanship.  The text did not provide the correct balance.  While he agreed in  principle to the idea of ensuring that the Working 
Party had on the table only what the traffic could bear , he cautioned against turning this principle into 
nothing more than a meaningless slogan which prev ented boldness and ambition.  Going too slowly 
where the Working Party could advance more quick ly could prove dangerous.  Regarding future 
work, he agreed that one needed to reflect on future technical discussions, and emphasized that there 
needed to be balance also within  the rules negotiations.  As a proponent of an emergency safeguard 
mechanism (ESM), his delegation had serious diffi culty if there was no balance between the WPDR 
and WPGR.   
29. The representative of Guatemala
 associated herself with the statement of Barbados on behalf 
of the SVEs.  While she regretted that the draft text had not been issued as a JOB document, she 
nonetheless believed that it was a good foundation to con tinue discussions with a view to looking at a 
set of domestic regulation disciplines.  She hoped th at these discussions would take place as swiftly as 
possible under the auspices of the new Chair.   
30. The representative of Nepal   associated himself with the statement by Tanzania on behalf of 
the LDC Group.  He welcomed particularly pa ragraphs 45 and 46 of the draft document which 
provided LDCs some relief due to their inadequa te technical capability and limited resources.   
31. The representative of Japan  considered the issue of domestic regulation to be very important 
for all WTO Members.   
32. The representative of Singapore  underlined the importance her delegation attached to 
domestic regulation disciplines, which she saw as complementary to market access.  Singapore could 
definitely move forward on the basis of the revised draft. 
33. The representative of the European Communities  stated that further work was still needed on 
the basis of the revised text.  He looked forward to re-engaging in the work on domestic regulation as 
soon as possible while being conscious that the fate  of the domestic regulation negotiations was linked 
to overall progress in the DDA.  
34. The representative of Pakistan  stated that the balance between domestic regulation and market 
access was very delicate.  More work needed to be  carried out to establish the correct balance. 
35. The representative of Brazil  stated that the Chairman's draft texts had been accepted as bases 
for the negotiations, but did not necessarily cont ain convergence on positions or agreement on 
substance.  Brazil had problems with and reservations on many aspects of the text, but not for the  S/WPDR/M/40 
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  same reasons as Switzerland, Hong Kong and other Me mbers.  Nevertheless, the text was a good basis 
and a necessary intermediate step upon which further work needed to be built to achieve balanced 
horizontal disciplines in domestic regulation.  In that  regard, he encouraged th e Chairman to issue the 
text as a JOB document.  Doing so would not im ply any consensus among the membership, but would 
nevertheless consolidate what Members had been able to do over the last three years.   
36. The representative of South Africa  recorded his disappointment in the level of ambition in the 
text, which should have provided greater balance wi th regard to the market access pillar.  A strong 
outcome in domestic regulation was a very importa nt part of the final outcome of the services 
negotiations.  As India had pointed out, Article VI :5 set the floor for the negotiations.  The revised 
text nevertheless provided a starting point and he lo oked forward to continuing the negotiations.  He 
disagreed with Canada's statement that not suffici ent groundwork had been carried out.  It was his 
sense that the negotiations were now at a stage wh ere some tangible and conc rete harvest could be 
yielded. 
37. The representative of the United States  expressed his appreciation for the revised text.  The 
hard work of a Chairman could not substitute for th e hard work of Members and he did not agree that 
the discussions had been really comprehensive and pa instaking, particularly recently, considering the 
magnitude of what was envisaged to be accomplished with the particular text.  That was not to say 
that the text could not form the basis for some ultimate agreement, but the magnitude of what was 
being considered in the Working Party was truly astounding.  The United States were very ambitious 
in the Round as a whole and particularly with r espect to the services negotiations, and his delegation 
shared the concerns that rules should not be put in  place to frustrate market access.  There had to be 
some complementarity between market access and domestic regulation.  That said, it was easy to 
design rules that restricted regulations, but what the Chair had tried to do was something more difficult than that.  The Chair had tried to find a r esponsible way to examine regulations and to find 
horizontal rules that could apply and function appropriately without  unintended consequences.  The 
Chair's job had also been to find a balance betw een facilitating trade and upholding the right of 
national and sub-national governments to regulate trade in services.  In that sense, the revised text was 
in a certain respect a thought experiment that ha d begun several years ago when Members agreed to 
begin discussions on a horizontal basis rather than on a sectoral basis.  The fundamental question asked of all Members by the text was how much could be done on a horizontal basis, and how far could horizontal rules go?  What was the nature of rules that could apply equally to financial service 
suppliers, environmental service suppliers and prof essionals?  Those were very  difficult questions and 
he looked forward to continuing to work with the te xt.  His delegation might have ideas in the future 
about ways to improve the document in order to avoid unanticipated consequences.  He cautioned 
against the scepticism expressed by India that deve lopment of sectoral disciplines would take a very 
long time.  While it was certainly true that developing separate disciplines for every single sector would take a very long time, expediency was not  a good reason to come up with horizontal rules 
where more appropriate sectoral rules would take a longer time to develop.  The long duration of the 
work was indicative of the significance of the exer cise that was being undertaken.  On the issue of 
development, which had not been discussed in a long time, he foresaw a very big and in-depth discussion in the future.  
38. The Chairman
 suggested that Members take note  of the statements made. 
39. It was so agreed . 
B. OTHER BUSINESS 
40. No items were raised under this agenda item. S/WPDR/M/40 
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  C. APPOINTMENT OF THE CHAIRPERSON 
41. The Chairman
 recalled that the outgoing Chairman of the Council for Trade in Services had, 
after consultations, presented delegations with a slat e of names for Chairpersons;  as there had been 
no objections to the proposed slate, he proposed that the Working Party elect Ms. Misako Takahashi 
from Japan as its new Chairperson by acclamation.   
42. The new Chairperson was elected by acclamation . 
__________