RESTRICTED  WORLD TRADE  
ORGANIZATION  S/WPGR/M/66 
25 January 2010 
 
 (10-0368) 
Working Party on GATS Rules  
  
 
REPORT OF THE MEETING OF HELD ON 10 NOVEMBER 2009 
 
Note by the Secretariat
1 
  
1. The meeting was chaired by Mr. Felipe Lopea ndia from Chile.  The agenda for the meeting 
was contained in WTO/AIR/3472.  The agenda was adopted
.       
I. NEGOTIATIONS ON EMERGENCY SAFEGUARD MEASURES UNDER 
ARTICLE X OF THE GATS   
2. The Chairman  recalled that discussions on emergency safeguard measures (ESM) had been 
pursued in informal mode. 
3. The representative of Canada  thanked the Secretariat for the informal note on the treatment of 
the concept of "domestic industry" under the an ti-dumping, subsidies and safeguard agreements 
(Job(09)/146 and Job(09)/146/Corr.1).  While Canada continued to have concerns on the need for an 
ESM in services, it was of the view that a multilate rally agreed definition of "domestic industry" 
would be an essential step in the development of a potential ESM.  Canada was not convinced of the 
practicality or desirability of having multiple defin itions of "domestic industry".  Such an approach 
would undermine the ability of the GATS to deliver liberalizing outcomes and would lead to a less 
predictable world trading system.  Canada supported,  as a general principle, conceptual consistency 
across agreements.  In this regard, the definition of "domestic industry" in the safeguards agreement 
was broader than that found in the agreements  on antidumping, and on subsidies and countervailing 
measures, as it included the notion of directly compet itive products.  The broader concept used in the 
Agreement on Safeguards would seem particularly preferable in the services context, as different modes of service delivery may make it necessary to have a certain level of flexibility.  
4. The representative of Thailand
 spoke on behalf of the dele gations of Brunei Darrusalam, 
Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Thailand and Vietnam .  He underscored that 
an ESM would act as a temporary measure allowi ng a Member experiencing an influx of services, 
following liberalization, to take reasonable step s to mitigate or neutralize the serious injury 
experienced by a given service industry.  The purpose of an ESM would not be to act as a punitive instrument but to remedy the overall situation in a given service industry.  A similar concept existed 
in the Agreement on Safeguards for trade in goods.  Members were encouraged to consider the ESM 
concept with an open mind and to help develop ESM rules acceptable to all.  
5. The representative of the United States
 noted that his delegation continued to be willing to 
hear all views on the issue of an ESM, but was particularly grateful for the recent opportunity to discuss, in informal mode, concepts such as "domest ic industry" in the services context.  Given the 
complexity of the subject matter, it had not been surprising that the discussion had been very 
confusing.  It had also underscored concerns previ ously expressed by the US on the feasibility of an 
                                                     
 
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/WPGR/M/66 
Page 2  
 
  ESM in the services context.  He reiterated that in his delegation's view, given the flexibility of the 
GATS, an ESM might not necessarily be desirable. Th at said, the US would continue to keep an open 
mind and listen to views expressed by other Members.   
6. The representative of India
, with reference to the questions posed by the Chairman in 
informal mode, believed that it would be desi rable for the entire membership to agree upon a 
definition of "domestic industry".  The definitio n would be relevant not only to potential ESM 
measures, but also in other rule-making areas.  There should be a universal definition which would 
include providers established in the territory of an other Member regardless of origin or ownership. 
7. The representative of Japan  recalled a suggestion made at a previous informal meeting that an 
ESM should be considered from the perspective of: (i) what should be protected by such a 
mechanism; (ii) from what circumstance; and (iii) for what purpose.  Japan believed that these three 
questions remained very important and hoped that the proponents would be able to clarify further.  
Significant differences existed between goods an d services and these should be discussed when 
considering an ESM for services. In particular, trade in services was more complex that trade in goods, as it could occur through four modes of supply.  At the last formal meeting of the Working 
Party, the Philippines had made a good presentation on the substitution effect of one mode for 
another.  In such a situation, protection against an increase in imports from one mode could have an 
adverse effect on other modes.  It would thus be useful to discuss each mode and to consider the cases 
where it would be necessary to have an ESM.  In th is regard, it would be helpful if the proponents 
could provide concrete examples of when an ESM might be needed.  
8. The representative of th e European Communities
2 noted that the informal discussions on the 
concept of "domestic industry" had been very inter esting.  However, the debate had highlighted many 
difficulties and underlined the EC's doubts about utilising the concept of "domestic industry" in 
services for the purpose of an ESM.  While the EC was not in favour of Members applying individual 
and different definitions of "domestic industry", it did not see how Members could agree on a single 
multilateral definition.  The discussions conducted in informal mode had clarified certain questions 
but the EC remained as doubtful as ever on the feasibility of an ESM in services.  
9. The Chairman  took note of the statements made and s uggested that the Working Party revert 
to this item at the next meeting.  It was so agreed.  
II. NEGOTIATIONS ON GOVERNMENT PROCUREMENT UNDER ARTICLE XIII 
OF THE GATS 
10. The Chairman recalled that the communicati on from the European Communities on a draft 
GATS Annex on Government Procurement in Servi ces, as contained in S/WPGR/W/54, had been 
discussed in the informal technical discussions.  No further interventions were  made under this agenda 
item.  The Chairman suggested that the Working Party revert to this item at the next meeting.  It was 
so agreed.  
III. NEGOTIATIONS ON SUBSIDIES UNDER ARTICLE XV OF THE GATS 
11. The Chairman  recalled that at the last meeting of the Working Party on 6 October 2009, 
several delegations had called for more focused wo rk to be undertaken on developing disciplines to 
                                                      
2 On 1 December 2009, the Treaty of Lisbon amendi ng the Treaty on Europe an Union and the Treaty 
establishing the European Community (done at Lisbon, 13 December 2007) entered into force.  On 
29 November 2009, the WTO received a Note Verbal (W T/L/77) from the Council of the European Union and 
the Commission of the European Communities, stating that, by virtue of the Treaty of Lisbon, as of 
1 December 2009, the European Union replaces and succeeds the European Community.   S/WPGR/M/66 
 Page 3 
 
 
  avoid the trade distortive effects of subsidies in services.  In this regard, the Working Party had 
discussed in informal mode possible avenues for inte nsifying work.  In this connection, the Chairman 
underscored that to energise the negotiations on subsidy disciplines, inputs were needed from 
Members on the nature of the trade distortive eff ects of subsidies in services, and the solutions 
proposed for addressing them.    
12. The representative of Switzerland  requested that the statement made by his delegation in the 
informal segment of the meeting be reflected in th e minutes.  With respect to the question posed in 
JOB(09)/166, Switzerland had been every clear that an agreed definition was not a pre-requisite for 
the exchange of information.  No definition was needed  in order to exchange in formation or to be able 
to comply with the mandate under Article XV of th e GATS.  He recalled that much work had been 
done in the past.  The document S/WPGR/W/13 prov ided information on subsidy limitations found in 
some Members' schedules of specific commitments.  A series of documents, with the symbol S/WPGR/W/46, had also provided an overview of di sciplines on subsidies in free trade agreements.  
In the document S/WPGR/W/47, Members had been provided with a list of studies on subsidies, including on export subsidies, undertaken by interna tional organizations.  He stressed that there were 
many examples of work which demonstrated that an  agreed definition was not needed in order to 
identify and exchange information, and urged Memb ers to initiate the required information exchange 
exercise.  In terms of trade-distorting effects, he  agreed that efforts should be focused on those 
subsidies that were the most distortive, such as expor t subsidies.  In this connection, there should be 
no modal exclusions, since all modes of supply might a priori  contain trade distorting effects.   
13. The representative of India
 requested that the statement made by his delegation in the 
informal segment of the meeting be reflected in the minutes.  During the last Services Cluster in 
October 2009, India had emphasized the urgency of fi nalizing an appropriate definition of "subsidies" 
in the context of services trade.  He believed that  the lack of an agreed definition on subsidies had 
inhibited the exchange of information.  India w as committed to working with  the larger membership 
to reach a consensus on these issues.  He recalled that the Chairman had asked whether an agreed 
definition on subsidies was a pre-requisite for inform ation exchange.  In India's view a definition was 
not a pre-requisite but desirable.  Further, Indi a believed that informati on could be exchanged by 
Members based on their own identification and understa nding of subsidies related to trade in services.  
However, this should not preclude Members from wo rking simultaneously on developing a mutually 
agreed definition of subsidies.  As a first step , Members could share information on the subsidies 
covered by limitations inscribed in schedules of sp ecific commitments.  To facilitate the exchange of 
information, a template had to be devised so that  information could be provided in a standardized 
manner.  
14. India believed that in view of the acknowledge d trade distorting effect of subsidies in 
services, more focused and specific efforts would be required from the entire membership.  Interventions by Members had so far been general in nature.  This could not advance the goal of 
achieving consensus on specific issues such as th e definition of subsidies, nor on accelerating 
information exchange.  After these steps had been taken, the more ambitious objective of multilateral 
disciplines on subsides could be targeted.  At this stage, India was of the view that more time would need to be allocated to technical discussions.  He  requested the Chairman to formulate a clearly 
defined timetable and roadmap for further discussi ons and information exchange.  As to the way 
ahead, his delegation would be willing to play a cons tructive role in any kind of process, be it in a 
small or large group format.  He recalled that in the Committee on Trade in Financial Services, the EC 
had suggested that effects of mitigation measures be taken up in the Working Party on GATS Rules, 
under the discussion on subsidies.  It would be usef ul if the Chairman could begin consultations on 
how to take this forward.  India also supported the suggestions made by Ca nada and would be willing 
to work with Members on advancing them. S/WPGR/M/66 
Page 4  
 
  15. The representative of the United States
 remarked that it defeated the purpose of having 
informal discussions, if Members re quested that statements made under that mode be reflected in the 
records of the formal meeting.  However, since ot her Members had done so, the US would also like to 
have its statement included in the minutes of this meeting.  In this connection, he requested the 
Chairman to consult with Members in advance to  determine whether they would prefer to hold 
discussions in formal or informal mode.  He concurred with Members who had expressed the view 
that there should be continued work on a definition of  subsidies for the exchange of information.  For 
the US, this was a very practical matter since its  relevant agencies had to know with clarity and 
precision what governmental programmes should be reported.  To that extent, the work undertaken by the Working Party in the past had been very helpfu l, and the US hoped that it would continue and help 
identify an appropriate definition.    
16. The US representative underscored that his delega tion had some hesitation with the proposal 
to discuss subsidy limitations in schedules of specific commitments.  In his view, these limitations had 
been included not because Members necessarily consid ered them to be subsidy programmes.  This 
would not have been possible because there was no defi nition of subsidies in the GATS.  Rather, these 
limitations had been scheduled because they were cons idered to have some sort of interaction with 
Article XVII.  There would be very little commonality  that can be derived or distilled from comparing 
these types of limitations in schedules.  The US reca lled that Members had a general desire to identify 
those subsidies which were the most trade distor tive.  As expressed by Canada, the US shared a 
similar concern that the Working Party should not be  working on a remedy in search of a problem.  
There had not been a significant amount of commercia l complaints with respect to subsidies in the 
services area.  Rather than beginning with the assumption that certain governmental programmes 
cause trade distortive effects, the US believed it would be better to start with some empirical examination of the extent to which there had been  trade distortive effects.  Following from such an 
examination, work could then move towards defini ng the types of subsidies that should fall within 
that category. 
17. The representative of Canada
 noted that she would not request for the intervention made by 
her delegation in the informal segment of the meetin g to be included in the minutes.  However, the 
record of this meeting should reflect Canada's reque st to the proponents to provide some explanation 
on why certain elements had been included in the provisional definition, as well as on the key 
departures from the Agreement on Subsidies and Countervailing Measures.  
18. The Chairman  took note of the statements made and s uggested that the Working Party revert 
to this item at the next meeting.  It was so agreed.  
19. In summing up the meeting, the Chairman  noted that the continuation of informal technical 
discussions on the three GATS Rules areas would appear to remain the appropriate format for conducting work.  Under ESM, the concept of "domest ic industry" remained relevant and discussion 
on this topic would be kept open.  However, should any delegation wish ed to revisit any of the other 
technical elements contained in the proposals on ESM,  he would be open to such a discussion.  On 
government procurement, the Chairman noted that the EC had provided a very clear presentation of 
its proposal in the informal technical discussions a nd as there had not been as many interventions on 
this occasion as previously, he would keep this di scussion open so that it could be continued at a 
future meeting.  With regard to subsidies, he would  consult Members on the suggestion to formulate 
a work programme.  
IV. OTHER BUSINESS 
20. No items were raised under this agenda item. 
__________