RESTRICTED  WORLD TRADE  
ORGANIZATION  S/WPGR/W/46/Add.1 
11 May 2009 
 (09-2316) 
Working Party on GATS Rules  
  
 
OVERVIEW OF SUBSIDY DISCIPLINES RELATING TO TRADE IN SERVICES  
IN ECONOMIC INTEG RATION AGREEMENTS 
 
Note by the Secretariat
1 
 
Addendum  
  
I. INTRODUCTION 
1. At its meeting of 2 December 2008, the Secretariat was asked to provide an update of its note 
S/WPGR/W/46/Add.1 ( Overview of Subsidy Disciplines Relating to Trade in Services in Economic 
Integration Agreements ).   
2. This Note builds on, and complements, prev ious notes by the Secretariat contained in 
S/WPGR/W/46 and S/WPGR/W/12.  It takes into account the 45 new agreements that have been 
notified to the WTO under GATS Article V betw een 1 November 2003 to 31 March 2009 and focuses 
on specific disciplines on services subsidies that go  beyond existing GATS-type  obligations such as 
most-favoured nation or national treatment.  Subsidy pr ovisions that have already been described in 
S/WPGR/W/46 and S/WPGR/W/12 have not been rep eated.  Annex 1 contains the list of economic 
integration agreements re viewed by this Note.  
3. Of the agreements reviewed, three were f ound to contain specific disciplines on subsidy 
practices relating to services.  Of these, two were  agreements related to the enlargement of the 
European Communities to 25 and then, subsequently , to 27 Member States.  Six other agreements, 
while not containing specific disciplines on subsidy pr actices, provided for future  consideration of the 
issue and in some cases the possi bility to request consultations
2.  Apart from the agreements 
concluded by the European Free Trade Association with Korea and Chile, and by China with Macao, 
China and Hong Kong, China, the remaining 36 ec onomic integration agreements have excluded 
subsidies or grants from the scope and coverage of the obligations contained in the chapter on trade in 
services.  This carve-out for subsidies, which does not exist in the GATS, was also found in certain 
agreements to be extended to the disciplines on investment.  
4. This Note does not purport in any way to prejud ge the nature or qualification of the measures 
referred to as "subsidies" within the meaning of GATS Article XV. 
 
                                                      
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.  
2 The provision for consultation is often phrased in  a similar manner to Article XV.2 of the GATS. S/WPGR/W/46/Add.1 
Page 2  
 
  II. OVERVIEW OF RELEVANT PROVISIONS 
A. A
GREEMENTS WITH SPECIFIC DISCIPLINES ON SUBSIDIES IN SERVICES SECTORS  
5. In the previous Secretariat Notes (S/WPGR/W/ 12 and S/WPGR/W/46) the subsidy disciplines 
contained in the following economic integration agreements were described: the EC Treaty; the 
Europe Agreements3; the European Economic Area Agreement (EEA);  the Australia-New Zealand 
Closer Economic Relations Agreement (ANZCE RTA); and the Revised Treaty of Chaguaramas 
establishing the Caribbean Community including the CARICOM Single Market and Economy.  
6. Of the agreements notified to the WTO since 1 November 2003, specific subsidy disciplines 
were identified in the following:    
(a) Enlargement of the European Union to 25 Member  (1 May 2004) and 27 
Members (1 January 20074) 
(i) As a result of accession, the new Members States of the EC are fully subject 
to the provisions governing State aid in the EC Treaty (see Title VI, Section 2 "Aids Granted by States").   In particular, Article 87 (1)
5 provides that:  
1. Save as otherwise provided in this Treaty, any aid granted by a 
Member State or through State r esources in any form whatsoever 
which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market. 
 
(ii) The respective Acts of Accession for th e enlargement of the EC to 25 and 27 
Member States contain transitional provisions requiring the phasing-out of EC-incompatible fiscal aid to small and medium-sized enterprises, and to offshore companies; provisions on the conversion of incompatible fiscal aid to large companies into regional invest ment aid; and provisions on State aid 
for environmental protection and for restructuring of shipbuilding and steel 
industries.  The expiry dates for these transitional arrangements range from 2005 to 2011
6.  
                                                      
3 The Europe Agreements were terminated on 1 May 2004 (for Czech Republic, Estonia, Latvia, 
Lithuania, Hungary, Poland, Slovenia and the Slovak Republic) and 1 January (for Bulgaria and Romania), 
following enlargement of the Euro pean Union.  See document WT/R EG/GEN/N/3 and WT /REG/GEN/N/4.  
4 As with all the agreements listed below, the dates in brackets indicate the date of entry into force.  
5 Specific cases providing exemption from the discipline contained in Article 87 (1) are listed under 
Article 87 (2) and (3).  
6 See inter alia  Annexes II, IV of the Act of Accession fo r the enlargement of the EC to 25 Members, 
and its Protocols 2 and 8; and Annex VII of the Act of Accession for the enlargement of the EC to 27 Members 
and Annex VII of its Protocol.   S/WPGR/W/46/Add.1 
 Page 3 
 
 
  (b) Iceland-Faroe Islands Agreement ("the Hoyvík Agreement") (1 November 2006) 
(i) The Agreement, which applies to trade in services, provides the possibility to 
bring any distortion (or threat) of competition due to state aid to a Joint Committee.  The relevant provision is quoted below:  
H. With respect to state aid: 
 
ii. If a Contracting Party finds that state aid or aid through state resources by the other Contracting Party distorts or threatens to distort competition by favouring certain undertakings or sectors, the former Contracting Party may bring the matter before the Joint 
Committee in accordance with Article 8. 
 
 B. A
GREEMENTS WITH PROVISIONS CALLING FOR FUTURE CONSIDERATION OF THE ISSUE  
7. A number of agreements, while not containing specific disciplines on subsidy practices, either 
provide for future consideration of the issue.  Some  refer in that regard to the possible incorporation 
of the results of the negotiations under GATS Articl e XV.  The relevant provisions, which are self-
explanatory, are  reproduced below: 
(a) China-Singapore Free Trade Agreement (1 January 2009) 
Article 60 
3. This Chapter shall not apply to subsidies or grants provided by a Party or to 
any conditions attached to its receipt or con tinued receipt of such subsidies or grants, 
except:  (a) as otherwise specified in this Agreement; or   
(b) disciplines that may be developed under Article XV of the GATS as may be 
reviewed with a view to their incorporation into this Agreement.  
(b) Agreement on Trade in Services of the Framework Agreement on 
Comprehensive Economic Cooperation between ASEAN and China (1 July 
2007) 
Article 14 
 Subsidies   
1.  Except where provided in this Article, this Agreement shall not apply to subsidies or grants provided by a Party, or to any conditions attached to the receipt or 
continued receipt of such subsidies or grants, whether or not such subsidies or grants are offered exclusively to domestic services, service consumers or service suppliers.  If such subsidies or grants significantly affect trade in services committed under this 
Agreement, any Party may request for cons ultations with a view to an amicable 
resolution of this matter.  
 S/WPGR/W/46/Add.1 
Page 4  
 
  2. Pursuant to this Agreement, the Parties shall:  
 (a) on request, provide information on s ubsidies related to trade in services 
committed under this Agreement to any requesting Party; and   
(b) review the treatment of subsidies wh en relevant disciplines are developed by 
the WTO. 
(c) Trans-Pacific Strategic Economic Partn ership (Brunei Darussalam, Chile, New 
Zealand and Singapore) (28 May 2006) 
Article 12.14: Subsidies 
 
Notwithstanding Article 12.3, the Parties shall review the issue of disciplines on 
subsidies related to trade in services in  the light of any disciplines agreed under 
Article XV of GATS with a view to thei r incorporation into this Agreement. 
 
(d) Free Trade Agreement between Jordan and Singapore (22 August 2005) 
Article 4.4  
 
4. The Parties shall review the treatment of safeguard measures, subsidies 
and domestic regulation in the context of developments at the WTO including the 
results of the negotiations on disciplines on domestic regulation measures 
pursuant to Article VI:4 of the GATS. Pursuant to such developments, the Parties shall enter into consultations to consider any amendment to this Agreement as 
appropriate.  
 
(e) Comprehensive Economic Cooperation Agreement between the Republic of 
India and the Republic of Singapore  (1 August 2005)7 
Article 7.15: Subsidies   
 
1. The Parties shall review the treatment of subsidies in the context of 
developments in multilateral fora of which both Parties are Members.  
 2. In the event that either Party considers that its interests have been adversely 
affected by a subsidy or grant provided by the other Party, upon request, the other 
Party shall enter into consultations with a view to resolving the matter.  
 
3. During the consultations referred to in paragraph 2, the subsidising Party may, as it deems fit, consider a request of the other Party for information relating to the 
subsidy scheme or programme such as:  
 
(a) domestic laws or regulations under which the measure is introduced;  
(b) form of the measure (e.g. grant, loan, tax concession);  (c) policy objective and/or purpose of the measure;  
                                                      
7 An exclusion for subsidies or grants is also contained in the investment chapter (Article 6.2) but there 
is no corresponding provision for consultations or review of the treatment of subsidies in the context of 
developments in multilateral fora.  S/WPGR/W/46/Add.1 
 Page 5 
 
 
  (d) dates and duration of the programme or subsidy and any other time limits 
attached to it; and  
(e) eligibility requirements of the measure (e.g. criteria applied with respect to the potential population of beneficiaries).  
 
4. The provisions of Chapter 15 of this Agreement shall not apply to any requests 
made or consultations held under the provisions of this Article or to any disputes 
that may arise between the Parties out of, or under, the provisions of this Article. 
 
(f) Agreement between the EC and Chile (1 March 2005) 8 
Article 95 
Scope  
4.   The provisions of this Chapter sha ll not apply to subsidies granted by the 
Parties. The Parties shall review the issue of disciplines on subsidies related to 
trade in services in the context of the re view of this Chapter, as provided in 
Article 100, with a view to incorporating any disciplines agreed under Article XV 
of the GATS . 
 
C. AGREEMENTS EXCLUDING SUBSIDIES IN SERVICES SECTORS  
8. Of the economic integration agreements re viewed, 36 contain a specific exclusion for 
subsidies from the scope of coverage of the oblig ations on trade in services as well as from certain 
provisions on investments, should these exist.   Typi cally, the exclusion applies to subsidies or grants, 
which in most agreements are further defined to include government-supported loans, guarantees and 
insurance.  The relevant provisions are listed in Annex 1.    
 
_______________ 
 
                                                      
8 A similar provision to Art.95.4 is contained in the Chapter on Financial Services which provides that,  
"The Parties shall review the issue of disciplines on subsid ies related to trade in financial services, with a view 
to incorporating in this Agreement any disciplines  agreed under Article XV of GATS" (Art.116.4).  
  S/WPGR/W/46/Add.1 
Page 6 ANNEX  
Economic Integration Agreements Notified under 
GATS Article V since 1 November 20031 
 
RTA Name Date of 
notification  Date of entry 
into force  Document 
reference  Subsidy 
disciplines Future 
consideration Subsidy exclusion2 
Australia - Chile 03-Mar-09 06-Mar-09 S/C/N/484   Art.9.2:3(c) and  
Art.10.9:5(c) 
China - Singapore 02-Mar-09 01-Jan-09 S/C/N/483   Art.60.3 
US - Peru 03-Feb-09 01-Feb-09 S/C/N/473   Art.11.1:4(d) and 
Art.10.13:5(b) 
US – Oman 30-Jan-09 01-Jan-09 S/C/N/472   Art. 11.1:4(d) and 
Art. 10.12:5(b) 
Japan – Philippines 11-Dec-08 11-D ec-08 S/C/N/470   Art.70.2(c) 
EC – CARIFORUM 
States EPA 16-Oct-08 01-Nov-08 S/C/N/469 + 
REV.1   Art.60.3 
Brunei Darussalam – 
Japan 31-Jul-08 31-Jul-08 S/C/N/466   Art.73.2(e) 
Iceland - Faroe Islands 10-Jul-08 01-Nov-06 S/C/N/465 Art.H(ii)   
Japan - Indonesia 27-Jun-08 01-Jul-08 S/C/N/462   Art.76.2(c) 
ASEAN - China (S) 26-Jun-08 01-Jul-07 S/C/N/463  Art.14.2 Art.14.13 
Panama - Chile 17-Apr-08 07-Mar-08 S/C/N/442 + C.1 + 
443   Art 10.1:3(d) 
Pakistan - Malaysia 19-Feb-08 01-Jan-08 S/C/N/440   Art.68.2(c) 
Japan - Thailand 25-Oct-07 01-Nov-07 S/C/N/419   Art.72.2(c) 
Chile - Japan 24-Aug-07 03-Sep-07 S/C/N/398   Art.79.1:5(b), Art.106.2(e) 
and Art.117.4(c) 
EC (27) Enlargement 26-Jun-2007 (S) 01-Jan-07 S/C/N/397 Annex VII of 
the Act of 
Accession4   
Trans-Pacific Strategic 18-May-07 28-May-06 S/C/N/394  Art.12.14 Art.12.3:2(d) 
                                                      
1  Text of the agreements listed and other related documents can be found on the WTO Secretariat RTA Database http://rtais.wto.o rg/UI/PublicMaintainRTAHome.aspx. 
2 The following agreements exclude subsidies from the application of certain investment provisions: 
3 Although subsidies are excluded any Party may request consultatio ns for subsidies or grants significantly affecting trade in s ervices for trade in se rvices committed under 
the agreement. 
4 These are transitional measures that are to  be read in conjunction with the relevant discipline contained in the EC Treaty (se e Title VI, Chapter 1, Section 2 "Aids Granted 
by States".  
   S/WPGR/W/46/Add.1
 Page 7RTA Name Date of 
notification  Date of entry 
into force  Document 
reference  Subsidy 
disciplines Future 
consideration Subsidy exclusion2 
Economic Partnership 
India – Singapore 03-May-07 01-Aug-05 S/C/N/393  Art.7.15 Art.6.2:5 and Art.7.2:2 
Panama - Singapore 04-Apr-07 24-Jul-06 S/C/N/392   Art.9.10:4 and Art.10.2:3(d) 
MERCOSUR (S) 05-Dec-06 07-Dec-05 S/C/N/388 + 
CORR.1  Art XVI  
US – Bahrain 08-Sep-06 01-Aug-06 S/C/N/375   Art.10.1:4(d) 
EFTA - Korea, Republic 
of 23-Aug-06 01-Sep-06 S/C/N/373 -- -- -- 
Costa Rica - Mexico 17-Jul-06 01-Jan-95 S/C/N/374   Art. 9.2:3(c) and 
Art.13.8:3(b) 
Japan – Malaysia 12-Jul-06 13-Jul-06 S/C/N/371   Art.94.2(c) 
Jordan - Singapore 07-Jul-06 22-Aug-05 S/C/N/370  Art 4.4.4  
Guatemala - Mexico 03-Jul-06 15-Mar-01 S/C/N/369   Art. 10.2:2(c) and Art. 
14.9:3(b) 
Honduras - Mexico 20-Jun-2006(S) 01-Jun-01 S/C/N/368 + 
REV.1   Art. 10.2:2(c) and Art. 
14.9:3(b) 
El Salvador - Mexico 23-May-06 15-Mar-01 S/C/N/367   Art. 10.2:2(c) and Art. 
14.9:3(b) 
Dominican Republic - 
Central America - United 
States Free Trade 
Agreement (CAFTA-DR) 17-Mar-06 01-Mar-06 S/C/N/365 
S/C/N/391   Art. 10.13:5(b) and Art. 
11.1:4(d) 
Korea, Republic of - 
Singapore 21-Feb-06 02-Mar-06 S/C/N/363    
US – Morocco 30-Dec-05 01-Jan-06 S/C/N/362   Art.10.12:5(b) and 
Art.11.1:4(d) 
Thailand - New Zealand 01-Dec-05 01-Jul-05 S/C/N/361   Art. 9.3:3 
EC-Chile 28-Oct-2005(S) 01-Mar-2005(S) S/C/N/360  Art.95.45 Art.95.4 
Mexico - Nicaragua 17-Oct-05 01-Jul-98 S/C/N/359   Art. 10.2:3(c) and Art. 
16.7:2(b) 
Japan – Mexico 31-Mar-05 01-Apr-05 S/C/N/328   Art.97.2(e) 
Panama - El Salvador 
(Central America) 24-Feb-05 11-Apr-03 S/C/N/325   Art. 10.9:5(b) and Art. 
11.02:3(a) 
Thailand - Australia 27-Dec-04 01-Jan-05 S/C/N/311   Art.803.2(a) and Art.902.1 
US – Australia 22-Dec-04 01-Jan-05 S/C/N/310   Art.10.1:4(d) and 
                                                      
5 Provision for future consideration is lim ited only to trade in financial serivces.  
  S/WPGR/W/46/Add.1 
Page 8 RTA Name Date of 
notification  Date of entry 
into force  Document 
reference  Subsidy 
disciplines Future 
consideration Subsidy exclusion2 
Art.11.13:5(b) 
EFTA – Chile 03-Dec-04 01-Dec-04 S/C/N/309 -- -- -- 
EC (25) Enlargement 26-Apr-04 01-May-04 S/C/N/303 Annexes II, IV 
of the Act of 
Accession6   
Korea, Republic of - 
Chile 08-Apr-04 01-Apr-04 S/C/N/302   Art.10.9:5(b) 
and Art. 11.2:3(d) 
Chile-El Salvador 
(Central America) 05-Feb-2004(S) 01-Jun-02 S/C/N/299   Art. 11.2:3(a) 
China - Macao, China 27-Dec-03 01-Jan-04 S/C/N/265 + 
ADD.1 + ADD. 2 -- -- -- 
China - Hong Kong, 
China 27-Dec-03 01-Jan-04 S/C/N/264 + 
ADD.1 + ADD.2 -- -- -- 
US – Singapore 17-Dec-03 01-Jan-04 S/C/N/263   Art.8.2:3(d) and 
Art.15.12.5(b) 
US – Chile 16-Dec-03 01-Jan-04 S/C/N/262   Art.10.7:5(b) and 
Art.11.1:4(d) 
 
__________  
                                                      
6 These are transitional measures that are to be read in conjuc tion with the relevant discipline contained in the EC Treaty (see  Title VI, Chapter 1, Section 2 "Aids Granted 
by States".