WORLD TRADE  
ORGANIZATION  RESTRICTED 
S/WPGR/M/73 
7 June 2011  
 
(11-2799) 
Working Party on GATS Rules  
  
 
REPORT OF THE MEETING HELD ON 24 MARCH 2011 
 
Note by the Secretariat
1 
 
 
1. The meeting was opened by Ms Gabriela Kulesza from Poland and then chaired by 
Ms Tamsin Royson from New Zealand.  The agenda for the meeting was contained in WTO/AIR/3720.  The agenda was adopted. 
2. The Working Party elected Ms Tamsin Royson  from New Zealand as its new Chairperson by 
acclamation.  She expressed her appreciation for th e trust given to her by Members and the work 
undertaken by the outgoing Chairperson, Ms Gabriela Kulesza.  
I. NEGOTIATIONS ON EMERGENCY SAFEGUARD MEASURES (ESM) UNDER 
ARTICLE X OF THE GATS  
3. The Chairperson recalled that Members ha d agreed postponing the presentation on ESM-
relevant data until after the discussion in the Counc il for Trade in Services of the updated Secretariat 
Note on statistics on services trade flows.2  The discussion in the Council took place on 
7 March 2011.3  Consequently, and as previously agreed, two presentations would be given at this 
WPGR meeting:  the first one by an expert of th e Secretariat's International Trade Statistics Section 
focussing on the availability at the internationa l level of disaggregated statistics on services trade 
flows that could be relevant in a safeguards’ cont ext;  the second one by a representative of the Rules 
Division on the statistics used under the Safeguard s Agreement in trade in goods.  Copies of the 
presentations were available at the back of the ro om; the slides had also been posted on the Members' 
website under "WTO Resources", "GATS Rules". 
4. In his presentation entitled "Statistics on Services (SOS)" , the representative of the 
Secretariat's International Trade Statistics Section provided an overview of the types of statistics 
available from official sources at the domestic and in ternational level.  In contrast to merchandise 
trade for which detailed, highly disaggregated da ta existed by origin and destination country, 
including prices/unit values, trade in services stat istics were less developed.  Ideally, negotiators 
would have available detailed data  on the value of international services trade flows, by mode of 
supply, service sector, and origin and destination country – based on balance-of-payments (BOP) and 
the more recently developed foreign affiliates trad e in services (FATS) statistics.  However, not all 
countries reported under the more precise Extended Balance of Payments Services Classification 
(EBOPS)4, and FATS data were mainly limited to the OECD area.  Service negotiators would also 
                                                      
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 Note and its Addendum were issued on 22 December 2010 and 7 January  2011, respectively, in 
documents S/C/W/329 and Add.1. 
3 See the report in document S/C/M/103 of 29 March 2011. 
4 More information on the EBOPS classification and detailed definitions of items is contained in 
Manual on Statistics of International Trade in Services, available at http://www.oecd.org/std/trade-services  
 S/WPGR/M/73 
Page 2  
 
  benefit from sector-specific information on foreign di rect investment by destination country, on the 
number of persons supplying services under mode 4, on prices, production, value-added and 
employment.  However, relevant statistics were diffi cult to obtain.  The lack of short-term (i.e., 
quarterly) services trade data represented an extra difficulty.  Finally, in the context of a potential 
safeguard mechanism, it would be useful to have  sector-specific quantitative indicators as well as 
microeconomic data at the level of individual ser vices sectors.  New frameworks trying to link trade 
data with the information containe d in business registers were being developed, but were still at an 
early stage.  Thus, on the whole, a significant gap existed between negotiators' needs and what 
statistics could currently offer.   
5. The Services Profiles  put together by the WTO Secretariat provided statistics for around 90 
economies in four key services sectors: transporta tion, telecommunications, finance and insurance.
5  
To compile them, the Secretariat combined balan ce-of-payments and foreign-affiliates statistics, 
information on investment, pro duction, employment, as well as sector-specific quantitative market 
indicators (for example, the number of international ai rports in the transport sector).  For the Services 
Profiles as well as for its other publications, the WTO Secretariat relied ex clusively on official 
national statistics, i.e., statistics collected, pub lished and disseminated by the competent national 
agencies.  International organizations, including the WTO, did not produce their own statistics.  They 
relied on available data, and genera ted estimates for missing informati on, in order to produce regional 
or world estimates.  International statistics entirely depended on the data collected and disseminated by national  statistical agencies.  There thus was an im portant role for national agencies cooperating 
between themselves and with regional agencies to  ensure the provision of quality data and their 
improvement over time.  
6. The presentation by the representative of the Secretariat's Rules Division focused on the 
statistics and indicators used in safeguard investigati ons in the goods' sector under Article XIX of the 
GATT 1994 and the Agreement on Safeguards (SG Agre ement).  The latter did not require Members 
to use any particular type of statistics, nor did it contain any guidance as to how Members should 
compile statistics.  The investiga ting authority thus possessed discreti on as to what kind of statistics it 
would use in a particular investigation.  Howe ver, that discretion was not unlimited.  The SG 
Agreement stipulated that every Member's investigat ion authority had to demonstrate, on the basis of 
objective evidence , the existence of a causal link between increased imports of the product concerned 
and serious injury or threat thereof (Article 4:2(b) SG Agreement).   
7. Normally it was the petitioner, i.e. the dom estic industry requesti ng the initiation of the 
investigation, that submitted the statistics necessar y to substantiate its request.  However, those 
statistics might not necessarily be as complete as t hose the investigating authority would eventually 
have to base its determination on.  The investigating authority needed  detailed statistics to establish an 
increase in the volume  of imports and serious injury of the relevant domestic industry, and to prove 
the causal relationship between the two.  Article 4: 2(a) of the SG Agreement gave an illustration of 
the kind of "relevant factors of an objective and quan tifiable nature" that the authority had to evaluate, 
namely:  "in particular, the rate and amount of th e increase in imports of the product concerned in 
absolute and relative terms, the share of the domes tic market taken by increased imports, changes in 
the level of sales, production, pr oductivity, capacity utilization, prof its and losses, and employment".  
Statistics on the volume of imports were obtained from Customs or national government agencies in 
charge of statistics.  Those on "serious injury " were often provided by the affected industry, 
respectively its business association.  In practice, st atistics from international organizations played no 
role in safeguards investigations in the goods' area. 
8. Following the presentations, the Chairperson opene d the floor to Members for questions and 
comments. 
                                                      
5 WTO Services Trade Profiles, first published in 2009:  http://stat.wto.org/Home/WSDBHome.aspx   S/WPGR/M/73 
 Page 3 
 
 
  9. The representative of the Philippines, also on be half of the delegations of Brunei Darussalam, 
Cambodia, Indonesia, Malaysia, Myanmar, Thailand and Viet Nam thanked the Secretariat for 
organizing this first set of presenta tions on ESM-relevant statistics.  It provided valuable insights and 
raised awareness of the issues and concerns potentia lly relevant for emergency safeguard measures in 
international trade in services.  
10. As regard the first presentation, the ESM prop onents were encouraged by the improvements 
in the measurement of trade in services statistics.   They believed that with the proper coordination 
among agencies within and among governments, as well as  technical assistance and capacity-building, 
accurate and widely shared statistics meaningf ul for negotiators and policymakers could be 
developed.  In the meantime, services trade conti nued to expand dynamically.  Members needed to be 
forward-looking and proactive in their approach, including on ESM.  The framework for 
operationalizing an ESM needed to be laid down to be ready for implementation on a broad scale 
when the statistics would permit.  The proponent s' proposal for a safeguard mechanism was still on 
the table for Members' consideration.  
11. On the second presentation, the proponents took note that the statistical difficulties to 
determine the appropriateness of a safeguard had not prevented its operationalization in trade in 
goods.  The same elements as the ones used in trade in goods – namely, the surge in the volume of 
imports, serious injury, and the cau sal relationship between the two  – could be applied to trade in 
services.  With proper capacity-building and improvements in statistics, technical problems might be resolved over time.  The rationale behind emergency safeguard  measures and their importance 
remained unchanged.   He thanked the Secretariat for the presentations, which would provide a 
gateway for more in-depth discussions in the future.  The proponents looked forward to working 
further with the Chairperson, the Secretariat, and other interested Members in proposing further topics 
for future presentations.   
12. From listening to the presentations, the representative of Australia concluded that there were 
big statistical gaps both on the services and goods si de.  However, the gaps seemed even bigger in 
services.  While setting up a safeguard mechanis m on the goods' side was already challenging, 
statistics in services were even more problematic. 
13. A representative of the Secretariat responded th at, while current statistical problems indeed 
posed a challenge in a safeguard context, data ava ilability differed between Members.  In addition, as 
indicated in the presentations, business associations  also were a possible data source.  More 
information might be available in individual countries and sectors.  In response to the statement of the 
delegation of the Philippines, he observed that, wh ile the services industry was quickly evolving and 
diversifying, statistics often lagge d behind advances in the real economy.  There was a natural inertia 
in producing and adapting official statistical system s to a fast developing industry.  The Global Forum 
on Trade Statistics held at the WTO in February 2011 aimed at drawing governments' attention to these questions.  
14. Referring to the slides, the representative of Arge ntina remarked that not only were services 
statistics very scarce overall, but there were also major differences between the information available 
to developed and developing Members.  For exampl e, the slides showed that mode-3 statistics (on 
foreign affiliates) were mainly limited to OECD countries.  If a safeguard in services was to be 
introduced, only developed countries could meet th e related statistical requirements.  He asked 
whether the Secretariat experts agreed with th is assessment, and how one could help developing 
countries improving their services' statistics. 
15. The representative of China acknowledged importa nt differences in data availability and 
accuracy between services and goods at all three stag es of a safeguard investigation:  when measuring 
the surge in the volume of imports, when determini ng serious injury of the domestic industry, and S/WPGR/M/73 
Page 4  
 
  when establishing causality between the two.  Neverthel ess, to infer that the lack of accurate statistics 
in services would pose difficulties in an ESM might be an overly generalizing statement.  Depending 
on the country and service sector, more accurate data  might in fact be available.  Self-regulatory 
bodies could be a useful source of data.  As men tioned before by the Philippines, Members should 
look forward: over time, services data would become more accurate. 
16. Given the difficulties experienced with statis tics in the goods' safeguards, the representative 
of the European Union wondered whether reliable st atistics could be developed for the purpose of an 
emergency safeguard in services.  Even for developed economies such as the Members of the 
European Union, computing accurate service statistics, harmonized at the EU level, represented a challenge.  Assessing an increase in the volume of imports, determining "serious injury" of the 
relevant domestic industry and establishing the cau sal relationship based on "positive evidence" was 
already difficult in trade in goods.  It was even mo re challenging in trade in services where statistics 
were much scarcer.  Furthermore, the absence of border controls in services made quantitative 
restrictions difficult to implement.  For all these reasons, his delegation was not convinced that there 
was a basis for launching a positive debate on safeguards in services at this stage. 
17. The representative of the United States recogni zed the importance to improve statistics in 
services.  Proving a causal link, as required in the goods context, would be difficult.  Also, the time 
lag in the reporting made it hard to use statistics in an "emergency" situation.  As the Philippines had 
noted, services trade continued to grow.  His dele gation thought that Members ought to be careful 
about adopting trade measures likely to diminish or even impede that growth. 
18. The representative of the Secretariat's Interna tional Trade Statistics Section explained that 
since 2006 data availability had increased, in particular  regarding the level of sector and partner detail 
of balance-of-payments statistics,6 but also for the new statistical framework on foreign affiliates' 
statistics.  Since then, the Manual on Statistics of International Trade in Services (MSITS 2010)  has 
also been revised and approved by the United Na tions Statistical Commission in February 2010.7  
Nevertheless, balance-of-payments services data remain ed very aggregated and were not available at 
the level of the W/120 sectors.  In trade in good s, a safeguards investigation typically had to 
determine an "increase in the volume of imports".  However, the concept of "imports" was more complex in services given the different mode s of supply.  Determining an increase in volume  was 
further complicated by the absence of price inform ation in services trade, where trade flows were 
available only in nominal value, not volume terms.  
19. On the question whether developed Members we re in a better position to impose a safeguard 
in services than developing ones, the representative of the Secretariat's Rules Division observed that 
the majority of Members imposing a safeguard in the goods sector were developing countries. 
20. The representative of Canada noted that the presentation had made it plain that the Safeguards 
Agreement contained no detailed guidance as to th e kind of statistics Members should use in a 
safeguard investigation.  If Members were to develop any emergency safeguard mechanism in a 
services context, she asked whether it would be useful for subsequent interpretation to create 
guidelines on the type of data to be used. 
                                                      
6 BOP statistics reflect transactions between residents and non-residents. 
7 The Manual on Statistics of International Trade in Services  was developed jointly by Eurostat, the 
International Monetary Fund (IMF), Organization for Economic Cooperation and Development (OECD), United 
Nations Conference on Trade and Development (UNCTAD), United Nations Statistics Division (UNSD), 
United Nations World Tourism Organization (UNWTO) and the WTO Secretariat.  This Manual provides an internationally agreed framework for compiling statistics of international trade in services, responding to the 
growing information needs of trade negotiators, analysts and other users.  S/WPGR/M/73 
 Page 5 
 
 
  21. A representative of the Secretariat replied there was both merit and demerit in establishing 
detailed guidelines.  While they would enhance clar ity, there was also a risk of excessively limiting 
Members' leeway.  Members might want to retain some flexibility.  He could not prejudge what the 
prevailing view would be. 
22. The representative of Colombia queried th e pertinence of discussing the creation of 
safeguards measures in services similar to those existi ng in the goods' context.  His delegation felt that 
the mandate in Article X of the GATS was distinct from the elements contained in Article XIX of the 
GATT 1994.  Nevertheless, the Secretariat presentations had been useful in that they had pointed to a 
whole range of difficulties that arose in the services context.  The current shortcomings of domestic 
services' statistics needed to be overcome and more clarity be provided on how certain measures 
affected countries' trade in services.   
23. Based on the presentations, the representative of  Pakistan raised a number of questions 
relating to:  the meaning of "domestic industry" a nd "imports" for the purpose of determining serious 
injury in the context of services;  the causal relationship between a surge in the volume of services 
"imports" and serious injury of the domestic industr y;  the definition of "like or directly competitive 
services";  and the possible application of an ESM to mode 4.  How exactly would "domestic 
industry" be defined?  Would a 100 per cent fo reign-owned but locally incorporated bank be 
considered a domestic or foreign service supplier?  This determination was far more complex in 
services than in goods.  And how to define a su rge in service "imports"?  Again, would all 
transactions performed by a locally incorporated, 100 per cent foreign-owned service supplier within 
its host country be considered as "foreign service supply"  and thus "imports"?  Further, when trying to 
demonstrate the causal link between increased import s and serious injury of the domestic industry, 
based on "all relevant factors of an objective and qua ntifiable nature having a bearing on the situation 
of that industry"8, such factors seemed easier to establish in the goods' than in the services' area.  In 
services, a great range of measures could have a bear ing on the situation of domestic suppliers.  For 
example in financial services, an increase in the capital adequacy ratio might crowd certain domestic 
players out of the market.  But could this be seen as a contributing factor militating in favour of an 
ESM?  Moreover, the diversified and "custom made " nature of services made it more difficult to 
identify "like or directly competitive services" s upplied by domestic suppliers.  Finally, would an 
ESM also apply to mode 4?  If yes, how would th is be done and what would the determinant factors 
be?  Members could usefully look further into these questions.    
24. The representative of the Philippines felt encourag ed by the debate and thought the objectives 
of the presentation had been achieved.  If Members agreed, the comments made could be incorporated 
and used as a basis for presentations that the Philippines would make in future meetings.   
25. The Chairperson thanked the Secretariat and th e Members for the insightful discussion, which 
highlighted a number of practical and intellectual ch allenges.  A number of Members were interested 
in further reflecting on the issues raised.  To that  end, she took note of the Philippines' willingness to 
propose topics for discussion and welcomed proposals fo r future work.  She suggested that Members 
revert to these issues at the next meeting. 
II. NEGOTIATIONS ON GOVERNMENT PROCUREMENT UNDER ARTICLE XIII 
OF THE GATS 
26. Turning to government procurement, the Chairperson recalled last meeting's presentation by 
the Secretariat on the importance of the Agreemen t on Government Procurement (GPA) for trade in 
services, following which Members had discussed th e interlinkages and potential complementarities 
between GPA and GATS approaches.  Pertinent co mments had been made about the scheduling of 
                                                      
8 Agreement on Safeguar ds, Article 4:2(a). S/WPGR/M/73 
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  GATS commitments by modes of supply, as compared  to the non-mode-specific GPA commitments.  
Today, she wished to look at possible next steps,  and how to organize the dedicated discussions on the 
remaining topics outlined in the proposal of the European Union contained in document 
RD/SERV/23.  Members had welcomed the idea of inviting national GPA experts to one of their 
future dedicated discussions in order to share national experiences on the reform and opening of 
domestic procurement markets, as well as on access to foreign procurement markets.
9  She invited 
views regarding the organization of future work based  on the proposal of the European Union, as well 
as on any other topic delegations wished to address.    
27. The representative of the European Union hoped that a joint session with GPA experts could 
be organized relatively soon.  According to the EU  proposal, the idea would be to have presentations 
by developed and devel oping Members to share national experiences regarding the reform and 
opening-up of domestic procurement systems as well as access to foreign procurement markets.  In 
addition, his delegation was open to  any suggestions by Members to make this session as substantive 
and interactive as possible. 
28. The representative of the United States supporte d continuing work along the lines of the EU 
proposal.  The Chairperson could approach the Chai r of the GPA Committee to find a suitable time to 
engage both government procurement and services experts.   
29. The Chairperson noted that she would consult fu rther when the dates of the next set of GPA 
meetings became available and s uggested reverting to this matter at the next meeting.   
III. NEGOTIATIONS ON SUBSIDIES UNDER ARTICLE XV OF THE GATS 
30. The Chairperson introduced the discussion by reca lling that subsidies were already subject to 
the GATS being "measures by Members affecting trade in services" (GATS Article I:1).  All general 
obligations, including Most-Favoured-Nation treatm ent, thus already applied to subsidies.  
Furthermore, in scheduled sectors Members were bound by the national treatment obligation, subject 
to any limitations inscribed in schedules.  Conse quently, she inferred that the Article XV mandate 
focused on non-discriminatory  subsidies, which "in certain circumstances […] may have distortive 
effects on trade in services".  
31. She recapitulated the two main positions among Members.  On th e one hand, there were those 
who argued that the mandate contained in Artic le XV of the GATS was a clear recognition that 
subsidies might have distortive effects on trade in services.  While not objecting to gathering further 
information on such effects and concrete probl ems encountered by businesses, those Members 
stressed that such evidence should not be a precondition for further work on necessary multilateral 
disciplines.  On the other hand, there were those who were concerned that the Working Party could 
jump to premature conclusions without proper evid enced-based analysis.  They maintained that, in 
order to discipline trade distortions, Members first ha d to identify which actual distortions they sought 
to avoid.  The Chairperson recalled that her pr edecessor had raised the possibility of a parallel or 
"two-leg" approach at informal consultations held on 8 March 2011.  A number of delegations had 
supported that approach, while others had expr essed reservations.  She then invited views on a 
possible way forward.   
32. While not wishing to recapitulate details, the re presentative of India stressed that the joint 
Communication with Chile and Mexico10 was based on the clear and specific mandate of GATS 
                                                      
9 "Session 2" of the EU's proposal in document RD/SERV/23. 
10 Communication from India, Chile and Mexico entitled "Proposal for a Work Programme for the 
Development of Disciplines in Subsidies", contained in  document JOB/SERV/37 dated 24 January 2011.  It was 
presented at the WPGR meeting of 14 February 2011 (see S/WPGR/M/72, paragraphs 26-32).  S/WPGR/M/73 
 Page 7 
 
 
  Article XV, which urged Members to enter into ne gotiations with a view to developing the necessary 
multilateral disciplines to avoid trade-distortive effect s of subsidies in services.  Given the complexity 
of the issue at hand, the Communication had purp osely been kept flexible, non-prescriptive and 
inclusive.  It did not insist on any particular definition, outcome or timeline.  It merely suggested a roadmap for complying with an existing negotiating mandate.   
33. The Communication had garnered a lot of support from Members at the WPGR 
February 2011 meeting.  However, and despite having shown maximum flexibility in the proposal, 
certain Members were opposing the idea of a roadmap, in sisting that, first, concrete evidence of trade-
distortive effects had to be gathered.  His delegatio n agreed that more evidence about trade-distortive 
effects would definitely be useful to th e negotiations.  However, putting this as a precondition  to 
initiating negotiations amounted to challenging the mandate of Article XV.  The opponents had not 
offered any convincing argument or fundamental  economic reasoning why subsidies in services 
caused no trade-distortive effects while subsidies in goods did.  A 2008 OECD Trade Policy Working 
Paper provided several examples of export subsidies in services with details of amounts, criteria, 
objectives, etc.
11  How could it be argued that export subs idies in services had no trade-distortive 
effects?   
34. In an earlier intervention, he had already pointed out that some Members opposed the 
development of multilateral disciplines on subsidi es, while acknowledging the possibility of trade-
distortive effects in other fora.  He recalled th e Communication made by the European Union under 
the Work Programme on Information Exchange.12  Amongst all the Members, the EU had the most 
comprehensive State aid regime in the services area.  The latter banned any aid granted by an EU 
member State or through State resources in any form, which distorted or threatened to distort intra-EU 
competition.  Paragraph 16 of the EU's August 2010 submission clarified that EU State aid rules did 
not distinguish between goods a nd services and applied directly to the service sector, as long as the 
activity was considered as "economic".  To demonstr ate the effect on competition, it was sufficient to 
show that the beneficiary was involved in an econo mic activity and operated in a market where there 
was trade between member States. Thus, when looki ng at trade between its constituents, the EU had 
answered in the affirmative that Stat e aid could distort trade in services.  
35. Several EU regulations concer ned with subsidization and unf air pricing practices in the 
supply of services showed that instances of service subsidies with trade-distortive effects were not 
unknown, and that regulations were in place to address them. 13  These were examples of practical 
commercial concerns that some Members were l ooking for.  Finally, developing multilateral 
disciplines on subsidies in services trade also ha d a development dimension.  Absent any rules 
guaranteeing a level-playing field between domest ic and foreign services and service suppliers, 
developing countries would be more affected given th eir limited capacity to subsidize their domestic 
services industries.  Provided development related concerns were sufficiently addressed, developing 
countries could gain from devising multilateral disciplines.  
36. The representative of the United States recalled that the January 2010 "Work Programme on 
Information Exchange on Subsidies pursuant to  GATS Article XV" (JOB/SERV/1) had foreseen a 
                                                      
11 Geloso Grosso, M. (2008), "Analysis of Subsidies for Services:  The Case of Export Subsidies", 
OECD Trade Policy Working Papers , No. 66 (doi 10.1787/244346861402).  
12 JOB/SERV/1/Add.1 dated 17 August 2010. 
13 COM(2002) 110 final, 2002/0067(COD):  European Commission proposal regarding the protection 
against subsidization and unfair pricing practices in the supply of airline services from non-EU countries;  and 
EU Council Regulation (EEC) No 4057/86 of 22 December 1986 on unfair pricing practices in maritime transport.  
 S/WPGR/M/73 
Page 8  
 
  discussion of the trade-distortive effects encountered due to subsidies not subject to the provisions of 
Articles II and XVII of the GATS.  To date, however , that aspect had remained unfulfilled.  At the 
time, his delegation had agreed to the Work Progra mme on the basis of that consensus to discuss also 
actual distortions and submitted questions to provi de a framework for that discussion (S/WPGR/W/59 
of 28 May 2010).  His delegation di d not intend to agree to furthe r work programmes until all aspects 
of the preceding one had been fulfilled.  This was not a precondition;  it was a condition of the 
existing Work Programme.  The insistence that  Members gathered information on any trade 
distortions caused by subsidies should not be seen as obstructionist, but rather was an essential 
element to crafting any necessary disciplines.  The Working Party should not proceed to another step 
until having reached some conclusions about the extent  of trade distortions caused by subsidies, if 
any. 
37. As recognized by the mandate of GATS Article  XV, and as was true of subsidies for goods, 
any disciplines must flow from the need to preven t/remedy trade distortions.  Members were not 
enjoined under the Agreement on Subsidies and Countervailing Measures from providing non-
distortive/non-injurious subsidies.  Even with respect to prohibited subsidies, their particular status 
was based on extensive experience and understanding th at such subsidies were causing distortions to 
trade in goods.  To the best of his delegation's knowledge, there was nothing similar for services.  
Indeed, even the often-cited OECD paper noted that  limited, if any, evidence had been presented of 
services export-subsidy programmes having a distortive impact on the commercial interests of services providers.  After 16 years of discussions in the Working Party, knowledge was still limited.  
Any subsidy definition in services, and any subseque nt disciplines, must flow from an understanding 
of which measures  were distorting trade.  The Members who believed this issue to be significant had 
had ample time to provide evidence of trade distortions .  However, they had not even made an effort 
to do so.  Consequently, his delegation could not join  a consensus to proceed further without relevant 
evidence, but was prepared to consult further with Members, either bilaterally or in small groups, to 
examine the questions raised in its paper (S/WPGR/ W/59).  The results of these consultations could 
be reported back to the Chair to see if ther e was a basis to proceed on any new ideas. 
38. The delegate of Mexico endorsed the statement of the representative of India.  Referring to 
the proposal co-sponsored with India and Chile (J OB/SERV/37), she stressed its flexibility with no 
specific timelines attached to it.  It was open for all themes put forward in other Members' submissions.  
39. The delegate of Hong Kong, China expressed his support for the proposal of India and others 
(JOB/SERV/37).  His delegation understood the proposed  roadmap to be flexible and not to prejudice 
Members' positions regarding the desirability of any disciplines.  His delegation failed to see any 
conflict between defining a roadmap for future  discussions and seeking a better understanding of 
subsidies' trade-distortive effects.  Therefore, he thought the two ideas could go hand in hand, and 
urged Members to exercise flexibility in this respect. 
40. With respect to the EU regulations cited by th e delegate of India, the representative of the 
European Union stated his delegation's readine ss to provide additional insights if requested.  
However, given the specificities of services trade (suc h as the lack of reliable statistics, different 
modes of supply, linkages with trade in goods and the behaviour of commercial operators), a cautious 
approach was needed when considering any fu ture multilateral disciplines.  Members should 
investigate concrete examples of subsidies having a trade-distortive effect identified by commercial 
operators.  The information exchange had been a pos itive first step but needed to be improved both in 
terms of participation and quality of the informa tion exchanged.  His delegation supported the idea 
put forward by the US to hold a dedicated sessi on to develop a better understanding of where trade 
was being distorted.  Members should also address the important scoping issues identified by the Chairperson in her introduction.  S/WPGR/M/73 
 Page 9 
 
 
  41. His delegation was not opposed to the idea of a new work programme.  However, a better 
understanding of the circumstances that might cause trade-distorting effects was a pre-requisite.  In 
this context, his delegation agreed that the Secretar iat carried out analytical work once the information 
exchange would have yielded a more substantive and coherent picture.  While not denying the 
potentially trade-distortive effects of subsidies, hi s delegation wished to discuss the issue with no 
preconceived assumptions, taking into consideration the GATS legal structure and available business 
input. 
42. The representative of Brazil reiterated his de legation's support for the work programme 
proposed by India, Chile and Mexico and appreciat ed its flexibility.  There was much value in 
analysing the questions raised. 
43. The delegate of Canada  picked up on the suggestion by the US delegation to hold 
consultations on the questions cont ained in document S/WPGR/W/59.  It provided a good basis to 
identify concrete examples of trade-distorting subsidie s.  Without such examples it was not possible to 
proceed to the next step, namely to consider whethe r there was a need for disciplines.  Canada wanted 
to go further into the "fact-finding" mandate.  If the United States was planning to hold small group 
meetings, Canada was interested in participating.   
44. According to the delegate of Colombia, his de legation supported neither of the two positions 
mentioned by the Chairperson in her introduction.  Rather, it preferred the middle ground.  Colombia 
wanted to see more progress in the discussions a nd suggested that the Chairperson carry out 
consultations with all interested Members. 
45. The representative of Japan recalled that her delegation had always stressed the need for 
concrete interest on the part of the private-sector  and for clarity on trade-distortive effects before 
considering any subsidy disciplines.  She thanked I ndia for giving a number of examples, which could 
be explored further.  Her delegation also was in fa vour of consultations to address the questions raised 
by the United States. 
46. The Chairperson thanked delegations for their input .  Clearly, the issue was not to be resolved 
at this meeting, but a number of constructive options for a way forward had been made.  She proposed 
that Members also reflect on the sc oping questions referred to in her introduction to ensure that they 
had a common understanding on the type of subsidi es that possibly needed to be disciplined, and 
proposed to revert to this issue at the next meeting.   She welcomed the information provided by India, 
which several delegations had expressed their readin ess to explore further, and thanked the delegation 
of the United States for the proposal to invite Member s to consultations on the questions raised in its 
paper (S/WPGR/W/59).  In addition, she indicated her availability for consultations as proposed by 
the Colombian delegate.  Noting that the European  Union had raised the issue of the information 
exchange programme, she again encouraged delegations  to submit new and/or improved information.  
She then gave the floor to the Secretariat to co mment on any possibilities to compile or analyse the 
information received under the information exchange programme. 
47. A representative of the Secretariat noted that  the scoping question posed by the Chairperson 
at the outset of the meeting was central to the deba te, including to any possible analytical work to be 
carried out by the Secretariat.  The situation in trade in goods was different insofar as subsidies had 
been carved out from the scope of the national tr eatment obligation under Article III:8(b) of the 
GATT 1947.  The need for disciplines arose only over time, ultimately leading to the Agreement on 
Subsidies and Countervailing Measures as adopted in  the Uruguay Round.  In contrast, the GATS 
itself already provides for non-discrimination disciplines on subsidies, in Articles II (MFN) and XVII 
(National Treatment).  The mandate  of GATS Article XV was to look at "what was left".  Thus, the 
question of what additional types of subsidy measures  Members wished to discipline was central.  
Most helpful would be Members' direct discussion  of the content of their submissions and the S/WPGR/M/73 
Page 10  
 
  identification of potential problems that might warran t further analysis.  This could then help to 
identify any gaps in current disciplines that re main to be addressed if Members so wished. 
48. Concerning any further work to be done by the Secretariat with the information received or 
expected under the information exchange programme, the Chairperson proposed to consult further with 
delegations.  
IV. OTHER BUSINESS 
49. The Chairperson explained that she would be reporting to the Special Session of the Council 
for Trade in Services on 15 April 2011.  Her report w ould cover work done so far and also try to map 
out the way ahead.  The Chairman of the Special Se ssion of the Council for Trade in Services would, 
in turn, report to the TNC heads of delegations mee ting scheduled for the 29 April.  That report would 
cover all the elements of the DDA services agenda, including market access, work on GATS Rules, 
domestic regulation, and the impl ementation of LDC modalities.  Since that there was no other 
meeting of the WPGR scheduled before 15 April, sh e wished to give delegations an opportunity to 
feed any specific points that they would like to see re flected in her report to the Special Session of the 
Council for Trade in Services.  She therefore sugg ested holding an open-ended consultation before 
15 April.  It was so agreed. 
50. The Chairperson then suggested that the Worki ng Party take note of the statements made and 
adjourned the meeting.   
51. The meeting was adjourned. 
 
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