WORLD TRADE  
ORGANIZATION  S/WPGR/W/59 
28 May 2010 
 
 (10-2969) 
Working Party on GATS Rules Original:   English 
  
 
COMMUNICATION FROM THE UNITED STATES 
 
GATS Article XV (Subsidies):  Questions for Members by the United States
 
  
 The following communication, dated 27 May 201 0, from the delegation of the United States 
is being circulated to the Members of the Working Party on GATS Rules.   
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1. The United States has expressed the view in prio r meetings that, in order to facilitate an 
informed discussion of services subsidies unde r GATS Article XV, Members need a better 
understanding of the kinds of practical problems proponents of new disciplines are facing, as well as the impact of those problems on international trade.  Although a focus on practical commercial concerns should be the hallmark of discussions of  proposed WTO disciplines,  the United States has, 
to date, found little private sector interest in this topic, from either U.S. or foreign service suppliers.
1   
This lack of interest on the part of those with the greatest potential to be negatively affected would 
seem to raise questions about the extent to whic h services subsidies impact commercial matters, and 
certainly poses a major hurdle to effective policy form ulation.   For example, it will be difficult for 
this working group to formulate a definition of ser vices subsidies, and to design effective disciplines 
if appropriate, without a full understa nding of the nature and extent of the measures we are seeking to 
address. 
2. Recognizing the concern that discussion of services subsidies to date has not been anchored in 
a concrete understanding of the relatio nship of this issue to international trade, the work plan which 
this group agreed to this year ca lls for a discussion of this issue: 
 In the spirit of the "fact-finding" mandate of Article XV on information exchange, Members 
could also consider using the exercise to share in formation not only on subsidies granted, but 
also on trade-distortive effects encountered in  a non-attributable manner. It would be very 
relevant to know, in particular:  
• What trade-distortive effects have ser vices and service suppliers encountered due to 
subsidies not subject to the provisions of Articles II and XVII of the GATS? 
 • Why has it not been possible to deal  with these problems, if they involve 
discriminatory subsidies, through negotia ting Article XVII commitments on national 
treatment?
2 
                                                      
1 In its examination of this issue, the OECD also took note of the lack of interest on the part of private 
sector service suppliers.  ANALYSIS OF SU BSIDIES FOR SERVICES: THE CASE OF EXPORT 
SUBSIDIES; OECD Trade Policy Working Paper No. 66, TAD/TC/WP(2007)15/FINAL (28 January 2008). 
2 INFORMAL NOTE BY THE CHAIRMAN: Work Programme on Information Exchange on 
Subsidies pursuant to GATS Article XV, JOB/SERV/I (28 January 2010).  S/WPGR/W/59 
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3. In an effort to advance that crucial part of the work plan, the United States proposes an 
elaboration of these questions, in order to gain a better understanding of the nature and extent of 
commercial problems faced by services exporters, and of the perceived gaps in the current WTO legal 
regime which may require adoption of new discip lines.  While many of these proposed questions 
explore the extent to which existing concepts  in the WTO Subsidies Agreement and GATS are 
relevant to problems which may be faced by services exporters, these questions should not be 
understood to represent a view by the United St ates on the relevance of those concepts under 
Article XV of the GATS.  Nor will responses be taken as a formal view that the concepts are relevant 
unless the responding Member indicates otherwise. 
4. We urge all Members, but particularly those ca lling for an intensified focus on this area, to 
address the following: 
(i) Please identify measures of concern which you ha ve encountered and which you believe fall 
within the scope of Article XV.  In so doi ng, please identify the affected services sector 
(including, if possible, CPC numbers).  It is not  necessary to identify the specific Member that 
has adopted the measure of concern, but please be as specific as possible in describing the 
measure. 
(ii) Was the measure of concern first brought to your  attention by a domestic services supplier or 
industry, or was the issue identified sua sponte  by the government?  If the latter, to what 
extent have domestic service supplie rs expressed concern about the issue? 
(iii) Please describe the nature of the measure of c oncern.  If possible, please specify whether the 
measure takes the form of a grant, loan, loan guarantee, equity infusion, government revenue 
foregone, provision of goods or services, income or price support.  Does the measure of concern take some other form?  If the measure of concern is carried out indirectly by an entity 
entrusted or directed by the government, please describe the circumstances. 
(iv) Do you have information which would allow yo u to quantify the measure  of concern?  Are 
you able to estimate its effect on trade?  If so, please provide that information.  If you are not 
able to quantify the effect on trade, please explai n the basis for believing that the measure has 
a distortive effect on trade. 
(v) Is the measure of concern “specific” to an en terprise or industry or group of enterprises or 
industries, as that term is used in Article 2 of  the Subsidies Agreement?  If so, please describe 
those enterprises or industries. 
(vi) Is the measure of concern contingent upon expor t performance?  Is the measure of concern 
contingent upon the use of domestic over impor ted goods and/or services?  If yes, please 
explain how you made the determination that the measure in question included either of these 
contingencies. 
(vii) Is the measure of concern itself provided in th e form of a service supplied in the exercise of 
governmental authority, within the meaning of Article I.3 of the GATS (i.e. is the alleged 
“subsidy” a government-provided service)?  Is the measure of concern a form of government 
procurement under Article XIII of the GATS (i.e. is the alleged “subsidy” provided by means 
of government procurement)? 
(viii) Does the measure of concern create treatment le ss favorable to foreign suppliers than to 
service suppliers of the Member in question?  If so, why has it not been possible to address 
the issue under Article XVII?  S/WPGR/W/59 
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  (ix) Is the measure of concern addressed in the schedul e of the Member in question?  If so, have 
you approached the Member in question a bout changing its scheduling under either 
Article XIX or XXI of the GATS? 
(x) What changes to the GATS do you believe woul d be necessary in order to permit you to 
address the measure of concern effectively?   
 
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