RESTRICTED  WORLD TRADE  
ORGANIZATION  S/WPGR/M/62 
28 January 2009 
 (09-0398) 
Working Party on GATS Rules  
  
 
REPORT OF THE MEETING OF 2 DECEMBER 2008 
 
Note by the Secretariat
1 
  
1. The meeting was chaired by Ms. Jan Bailey from New Zealand.  The agenda for the meeting 
was contained in WTO/AIR/
3284 .  The Chairperson  noted that this was the last formal meeting for 
the year.  Thus, in addition to the usual agenda items, the adoption of the Annual Report for 2008 had 
been included.  The agenda was adopted .   
I. ADOPTION OF THE ANNUAL REPORT TO THE COUNCIL FOR TRADE IN 
SERVICES (S/WPGR/W/57) 
2. The Annual Report as contained in S/WPGR/W/57 had been circulated to delegations in 
advance of the meeting.  The Chairperson  noted that the report was brief and factual, reflecting that 
the Working Party had held two formal meetings a nd two informal meetings since its last period of 
reporting in 2007.  The Annual Report  for 2008 was adopted  without any changes. 
II. NEGOTIATIONS ON EMERGENCY SAFEGUARD MEASURES UNDER 
ARTICLE X OF THE GATS   
3. The Chairperson  recalled that on emergency safeguard measures (ESM), the delegations of 
Brunei Darussalam, Cambodia, Indonesia, Malays ia, Myanmar, the Philippines, Thailand and 
Vietnam had at the previous meeting informally pr oposed some additional input to their submission 
contained in JOB(07)/155.  The Chairperson  invited further comments from delegations.  
4. The representative of the Philippines  on behalf of the proponent s of JOB(07)/155, recalled 
that the Working Party had been di scussing the issue of ESM for a long time.  He further noted that, 
given the prevailing uncertainty in the Doha De velopment Agenda (DDA) negotiations as well as the 
current global financial and econom ic situation, it was opportune for Members to reflect on the 
market access negotiations from a broader perspective.  He unde rscored that during periods of 
uncertainty, issues relating to domestic regulation as well as emergency safeguard measures and, to a 
certain extent, subsidies, take on a different pe rspective.  He stressed the political and economic 
importance of  the ESM proposal to the proponents.  
5. The proposal did not suggest a specific mechanism but contained rules permitting Members to 
apply ESMs subject to certain disciplines. An attemp t had been made to strike a balance between the 
use of a protective safeguard in emergency situations  and the risk of domestic regulatory capture.  In 
this regard, market conditions that might justif y the use of an ESM would be subject to two 
criteria:  (i) they must be serious and (ii) at th e same time be sufficiently realistic to allow the 
operationalisation of an ESM.  Certain disciplines on th e types of safeguard measures, as well as their 
application, were also proposed.  Moreover, in response to concerns  raised by Members, the acquired 
                                                      
1  This document has been prepared  under the Secretariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO.  S/WPGR/M/62 
Page 2  
 
  rights of investors that were already established and present in a domestic economy would be 
protected.  Other provisions included in the propos al were those on notification and consultation, 
special and differential treatment, as well the future  review of any safeguards enforced.  The proposed 
rules left some space for adaptation among Members taking into considerati on different levels of 
development and regulation, as well as th e prevailing domestic situation.   
6. The representative of the Philippines
 also recalled that a couple of possible alternatives or 
supplemental avenues for implementing an ESM had b een discussed informally in past meetings.  For 
any delegations not familiar with these ideas, the proponents would be willing to continue discussions 
on a bilateral or plurilateral basis, as well as in futu re informal meetings.  Under the mandate of the 
Hong Kong Ministerial Declaration,  the items unde r the Working Party were to be discussed in 
accordance with their respective mandates and timelin es.  In this connection, the Chairperson was 
asked to facilitate informal discussions and meeti ngs in the new year.  The representative of the 
Philippines also noted that the proponents intended to intensify "informal informals" to exchange 
views and ideas amongst interested delegations.  He stressed that the proponents attached 
considerable political and economic  importance to the negotiations of emergency safeguards in 
services.  This was  reflected by the amount of political capital and work that they had put into this 
issue at the WTO, as well as in other fora.   
7. The representative of the United States  underscored that his delegation continued to view the 
market access elements of the services negotiations as being critical.  It would therefore not be seeking to move further ahead in discussing emerge ncy safeguard measures before market access got 
more fully underway.  He stressed that certainty was provided through market access and not by 
introducing safeguard measures.  While encouraged  by the willingness of proponents to work with 
Members bilaterally or plurilaterally, he reiterated that his delegation would not be looking to adopt 
proposals that undermined ma rket access commitments. 
8. The representative of the European Communities
, while appreciating the explanations 
provided by the ESM proponents, reiterated that his delegation was still not convinced of the 
feasibility and desirability of ESMs in services. 
9. The representative of Switzerland  reiterated that his delegati on remained unconvinced by the 
feasibility and desirability of ESMs, since the GATS w as already sufficiently flex ible.  He shared the 
view of the United States that such measures would add  another layer of un certainty.  Nevertheless, 
his delegation would be ready to continue discussions  next year within the framework of "informal 
informals".  Several questions had already been posed to the proponents in these sessions and he 
looked forward to receiving responses to them, and to hopefully move towards some conclusion at 
some stage.   
10. The representative of Canada  noted that the Working Party had not had any significant 
discussions on ESMs for some time.  He highlighted that, like some other Members, Canada had in 
the past expressed a certain amount of scepticism on the workability, feasibility and desirability of 
ESMs.  His delegation nevertheless shared the view  of Switzerland that, depending on the situation of 
the negotiations in the new year, it might be worthw hile to return to the framework of "informal 
informals".  This would allow Members to excha nge views on their various positions.  Moreover, he 
noted that there should be enough time next year to pursue such discussions. 
11. The representative of Japan  reiterated her delegation's commitment to undertaking 
negotiations under the GATS Rules mandate.  While fundamental difficulties still remained, such as 
the measurability of injury, or the scope of domestic industry, the efforts of the ESM proponents were 
appreciated and she noted that supplemental pr oposals for safeguard measures had been discussed 
informally.   S/WPGR/M/62 
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  12. The representative of Australia  welcomed the improvements that had been made by ESM 
proponents to their proposal.  While there was s till some way to go, she welcomed the willingness to 
engage in informal consultations  on ESMs and expressed her delegati on's willingness to be part of 
that process. 
13. In responding to the comments made, the representative of the Philippines  noted that the 
proponents recognized that the GATS had considerable built-in flexibility.  He further noted that this 
was the result of positions nego tiated by developing Members dur ing the Uruguay Round and which 
continued to be held.  However, he stressed that  in light of the experience of many developing 
Members, for instance in the ma rket access negotiations in the DDA, it would still be necessary to 
build on that flexibility through the specific and concrete operationalization of ESMs.  He further 
noted that, while some Members had referred to  supplemental proposals, these had been introduced 
in informal mode at the previous meeting of the Working Party, and the proponents would prefer not 
to discuss them in a formal meeting.  On the issu e of desirability and feasibility, he recognized that 
over the years a diversity of views had been expr essed on ESM and that the proponents had sought to 
address them through the evolution of their proposal.  
14. On market access negotiations and emergency saf eguard measures, the representative of the 
Philippines recognized, as an engaged player in th e multilateral trading system, the equal importance 
of market access and the negotiations on market acce ss.  However, he stressed that Members had been 
very clear from the beginning that the DDA was not a market access round.  In particular, developing 
Members and, to a certain extent, developed Members had insisted that there had to be balance in the 
negotiations between market access, domestic regulati on and GATS rules.  He further noted that this 
was clearly expressed in all ministerial communiqués,  as well as in communiqués by Leaders.  In this 
regard, the proponents had been very clear that fo r them to be able to accept any outcome in the 
services negotiations and to bring it back to their  constituents, there had to be a credible outcome on 
the question of ESM.  He did not share the opinion expressed that ESMs would contribute to further uncertainty. 
15. The Chairperson
 thanked the representative of the Philippi nes for recalling the contents of the 
most recent ESM proposal (JOB(07)/155).  She note d that a number of delega tions had also reiterated 
some of the fundamental issues that had remained under discussion over the years.  She added that 
delegations were open to the idea of more discussi ons under the framework of "informal informals" 
next year, so as to explore some of the ideas that had been introduced by the proponents.  She looked 
forward to consulting with proponents and interested  delegations in the new year.  The Chairperson  
also proposed that in light of the proliferation of preferential trade agreements, it might be useful for 
the Working Party to request the Secretariat to  update its note on safeguard-type provisions in 
economic integration agreemen ts (S/WPGR/W/4/Add.1).  
16. The representative of the European Communities  supported the proposal to update the 
Secretariat note on safeguard-type provisions and requested that the same also be done for 
government procurement.  The Chairperson  confirmed that under the respective agenda items she 
would also be proposing that similar Secretariat notes on government procurem ent and subsidies also 
be updated.  
17. The Chairperson  invited the Working Party to take note  of comments made.   
III. NEGOTIATIONS ON GOVERNMENT PROCUREMENT (ARTICLE XIII) 
18. The Chairperson  invited further comments in relation to  the latest proposal from the European 
Communities, contained in S/WPGR/W/54, which proposed the text of an annex to the GATS on 
government procurement in services.   S/WPGR/M/62 
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  19. The representative of th e European Communities
 reiterated the continued importance that his 
delegation attached to the proposal on government  procurement.  He recalled that the proposal 
contained a framework that would allow Member s to open government procurement on services in 
selected sectors and subject to conditions on thres holds and entities.  These commitments would be 
accompanied by a minimum common set of multilatera l rules which would only apply to government 
procurement in these strictly defined areas.  It  was highlighted that the European Communities 
considered it necessary to have rules so as to guara ntee a minimum level of information and treatment 
of all tenders.  He further noted that rules on go vernment procurement in services already existed in 
free trade agreements, as well as at the national level.  These shared a number of common characteristics.  For instance, government procuremen t was subject to national treatment with possible 
exceptions.  There were also rules on publication, information, call for tenders, qualification of 
suppliers, time limits, news of simplified procedures,  disputes, offers and publication of decisions.  
20. The representative of the European Communiti es stressed that these rules were well known 
and that the proposal simply sought to establish a multilateral framework.  In this regard, he 
underscored that the situation of developing member s had been duly taken into account.  As with 
other Members, developing members would be able to choose the exact scope of application of their 
commitments.  Transition measures had also been  proposed and there would be the possibility to 
maintain price preferences, offsets, as well as other instruments.  There was thus much flexibility in 
the proposal on government procurement.  It was highlighted that on past occasions the economic 
importance of government procurement had been explai ned.  In view of current difficulties with the 
global economic slow down, there might be measures undertaken by governments to give a boost to 
affected sectors.  In this connection, public expenditures might increase, thus giving rise to more 
government procurement, which w ould strengthen the case for the removal of existing barriers to 
trade in this very large sector.  He underscored that the framework propo sed was in accordance with 
the mandate on government procurement.  Given the importance of the issue and global economic 
circumstances, he urged Members to drop tactical considerations and engage in a serious discussion 
on government procurement on the basis of concrete proposals.  
21. The representative of China
 noted that there were divergent views on the mandate of 
Article XIII concerning the scope of the negotiati ons on government procurement.  He further noted 
that his delegation shared the view that the mandate of Article XIII was not sufficiently clear.  It was highlighted that the WTO plurilateral government  procurement agreement (GPA) also covered 
services, for instance, construction services.  He st ressed that the situation was clearer in the goods 
area as there was only one agreement covering the purchase of goods by government agencies, 
namely the GPA.  In this connection, he sought  clarification on the extent to which the WTO 
plurilateral agreement on government procurement would have a bearing on the negotiations under 
Article XIII.   
22. Discussions continued in informal mode
.  
23. The representative of South Africa  requested clarification from the Secretariat as to whether 
the GPA also covered the procurement of services. 
24. The representative of the Secretariat  clarified that the GPA is one of the plurilateral 
agreements in Annex 4 to the WTO Agreemen t.  During the Uruguay Round negotiations, the 
coverage of the GPA had been extended to cove r services as well.  Schedules of commitments under 
the GPA could therefore contain obligations on services.  On the difference between the GPA and 
Article XIII negotiations, it was recalled that at the end of the Uruguay Round, the aim was to try 
establish multilateral disciplines on government procurem ent.  At that time, the GPA was negotiated 
as a plurilateral agreement as it was regarded to ha ve a relatively high threshold of commitments 
which did not allow for the participation of all th e contracting parties of the GATT, nor now for all  S/WPGR/M/62 
 Page 5 
 
 
  Members of the WTO.  Thus, while the GPA did cover services, the objective of the Article XIII 
negotiations were quite different in terms of its multilateral nature.  
25. The Chairperson  invited the Working Party to take note  of comments made and recalled that, 
as discussed under the earlier item, the Secretariat w ould update the note on Government Procurement 
Related Provisions and Economic Inte gration Agreements (S/WPGR/W/49). 
IV. NEGOTIATIONS ON SUBSIDIES (ARTICLE XV) 
26. The Chairperson  recalled that the Working Party had before it the Communication from 
Hong Kong, China and Mexico, as contained in JOB( 07)/27, which highlighted the possible relevance 
of the notions of non-actionable or "green box" subsid ies to subsidies in trade in services.  She also 
recalled that Hong Kong, China and Mexico had pr ovided their preliminary views to the questions 
listed in paragraph 6 of JOB(07)/27 on assessing the relevance of non-actionable subsidies and that 
these were contained in the document 28 November  2007.  She noted that some delegations had 
previously indicated that they wanted additional time to consider the issues that had been raised. 
27. The delegation of Hong Kong, China  recalled previous work in the Working Party to improve 
the information exchange on subsidies, including by the Secretariat.  She noted that efforts had been 
made by her delegation to facilitate discussions in this area.  It had proposed a definition of subsidies 
to promote that information exchange.  To conf ine the scope of the discussions, an alternative 
approach had also been suggested by looking at what  could be meant by non-actionable subsidies.  In 
addition, she noted that there had been very help ful compilations by the Secretariat on subsidies based 
on information provided in Trade Policy Review repo rts.  There was thus enough information to help 
carry forward the discussion should Members be willing to do so.  
28. She highlighted that, as point ed out in the inte rvention by the representative of the 
Philippines, in times of uncertainty, discussions in th e rules area, such as on domestic regulation, took 
on even more significance.  Nevertheless, her delega tion had the time to wait and this would allow for 
the collection of even more examples of subsidi es that could further facilitate discussions.  Her 
delegation was willing to be guided by the Chairp erson and agreed to the proposal to update the 
relevant Secretariat notes.  She recalled that UNCTAD had previously made a presentation in the 
Working Party on subsidies.  In this connection, she proposed that, should Members be interested, it 
might be helpful if the OECD, that had also unde rtaken some research in the area of subsidies in 
services, could be invited to present their work.  Sh e also noted that the Secretariat note on subsidy 
disciplines relating to trade in services in economic integration agreements (S/WPGR/W/46) could be 
updated.    
29. The representative of th e European Communities  supported the proposal by 
Hong Kong, China to invite the OECD.  He furthe r noted that the OECD has also undertaken some 
studies on government procurement in a number of countries and proposed that it also be invited to cover the government procurement issue. 
30. The representative of the United States
, while noting the merit in having the OECD brief 
Members on its research in the area of subsidies in services, requested further information on the 
study so as to see if it would be an useful and acceptable addition to the Working Party's discussion.  
31. The Chairperson  clarified that the OECD study was on export subsidies in services and had 
been published in January 2008.  She requested the S ecretariat to circulate a copy of the study to all 
Members and proposed that the Working Party proceed on an ad referendum  basis.  In this 
connection, any delegation havi ng any reservation on inviting the OECD should inform the 
Secretariat before 5 January 2009.  Should nothin g be received by that date, an invitation would be 
issued to the OECD to present its work at a future meeting of the Wo rking Party.  She also noted that S/WPGR/M/62 
Page 6  
 
  the Secretariat would update its paper on subsidy di sciplines relating to trade in services in economic 
integration agreements (S/WPGR/W/46) 
32. The representative of China
 supported the proposal to invite the OECD present its study on 
subsidies to the Working Party.   
33. The Chairperson  further noted that, as had been propo sed by the European Communities, the 
Secretariat would also look into whether the OE CD had undertaken relevant studies on government 
procurement in services.  
34. The Chairperson  invited the Working Party to take note  of the comments made.  
V. DATE OF NEXT MEETING 
35. The Chairperson  suggested that the next formal meeting be held during the next cluster of 
services meetings, subject to the usual consultations.    
VI. OTHER BUSINESS 
36. No items were raised under this agenda item.   
37. Before closing the meeting, the Chairperson  provided some personal reflections on the future 
work of the Working Party.  She noted that the Working Party had been discussing the issues of ESM, 
government procurement and subsidies for some 13 years.  In all three areas, comprehensive 
negotiating proposals had been put forward and, wh ile there have been some discussion of the 
elements proposed, views still remained divergent.  During most of last year, many delegations had 
been mindful of the state of play not just in other parts of the services negotiations but of the Doha Round overall, and discussions in the Working Party had been limited.  It was thus good to get the 
feedback, particularly on ESM, that delegations we re willing to participate in consultations on some 
of the proposals that had been raised informally. 
38. She recalled that the Working Party was a nego tiating body and not a standing body under the 
Council for Trade in Services.  As a negotiating body , the Working Party was e xpected to work on the 
ministerial mandate given to it to intensify effort s to conclude the negotia tions on rule-making under 
the various GATS Articles.  There were, not least, some technical issues, that could and should be 
examined further, without distracting from work elsewhere.  The Chairperson stressed that it was 
ultimately for Members to decide on how they wished to undertake futu re work and that she remained 
ready to facilitate any necessary consultati ons and discussions to that end.  
 
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