RESTRICTED  WORLD TRADE  
ORGANIZATION  S/WPGR/M/68 
28 May 2010 
 (10-2968) 
Working Party on GATS Rules  
  
 
REPORT OF THE MEETING HELD ON 27 APRIL 2010 
 
Note by the Secretariat
1 
  
1. The meeting was opened by the Mr. Felipe Lopeandia from Chile and then chaired by 
Ms. Gabriela Kulesza from Poland.  The agenda fo r the meeting was contained in WTO/AIR/3535.  
The agenda was adopted
.      
2. The outgoing Chairperson, Mr. Lopeandia, tha nked Members for their trust and cooperation, 
as well as the Secretariat for its support.  He noted that useful technical work had been undertaken in 
all three negotiating subjects during the last mont hs and there had been more energy in the 
discussions, especially in the area of subsidies.  This was positive, especially considering the general 
circumstances of the Doha Round.  In this connecti on, he recalled that the Working Party had adopted 
a Work Programme on Information Exchange in Fe bruary 2010.  He hoped that all Members were 
working in capitals to gather the necessary info rmation as they had the responsibility to make the 
Work Programme a success.  He urged all Member s to comply with the information exchange 
requirement contained in Article XV of the GATS.  
I. APPOINTMENT OF CHAIRPERSON 
3. The Working Party elected Ms. Gabriela Kule sza from Poland as its new Chairperson by 
acclamation.  She expressed her deep appreciation fo r the trust given to her by Members and the  
work undertaken by the outgoing Chairperson, Mr. Felipe Lopeandia.  
II. NEGOTIATIONS ON EMERGENCY SAFEGUARD MEASURES UNDER 
ARTICLE X OF THE GATS   
4. The Chairperson  recalled that at the meeting of the Working Party on 1 February 2010, the 
delegation of Malaysia had indicated that the co-s ponsors of JOB(07)/155 would revert back to the 
Working Party with a revision after the issues raised on "domestic industry" had been fully 
considered.  She requested an update on the s ituation with regard to that document.   
5. The delegation of the Philippines , on behalf of the delegations of Brunei Darussalam, 
Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Thailand and Viet Nam , noted that the 
proponents of emergency safeguard measures (E SM) would want "more focused" discussions to 
continue in 2010.  In this context, he referre d Members to the room document dated 30 March 2009,  
which had contained a number of thoughts on the possible way forward in the ESM negotiations.  He 
thanked the outgoing Chairperson and the Secretariat for the excellent work undertaken on the subject 
of "domestic industry", which was one of the possibl e ways forward outlined in the room document of 
30 March 2009.  He urged the Chairperson to cons ult with Members on whether further technical 
discussions were needed.  From the point of view  of the proponents, good inputs had already been 
                                                      
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/68 
Page 2  
 
  received, but if other Members felt that there w as still a need to continue discussions on "domestic 
industry" they would be ready to engage further in  technical discussions similar to those held last 
year.  Apart from the issue of "domestic industry", he drew attention to para graphs 15, 30, 35 and 39 
of the room document of 30 March 2009.   
6. Paragraph 15 encouraged Members that had so me experience with safeguards in economic 
integration agreement to share their best prac tices and experiences with the Working Party.  
Paragraph 30 suggested inviting res ource persons to provide presentations on services statistics to the 
Working Party.  He noted that the proponents belie ved that this would not only better inform the ESM 
discussions, but could also be an important contribution to capacity building among services negotiators, particularly those from developing countries.  Para graph 35 addressed the "limited 
window" principle, which had received a fair amount of interest from Members, and further technical 
discussions would be welcomed.  Paragraph 39 rai sed the potential GATS implications of bilateral 
investment treaties.  This issue had been raised dur ing the discussions of the Working Party in the past 
and the Chairperson might want to consult with Members to see if technical discussions could be 
devoted to this subject.  From the perspective of th e proponents, the four technical issues contained in 
these paragraphs provided in the short term th e best way forward for pursuing "more focused 
discussion", as instructed by Ministers at the Hong Kong Ministerial Conference.  
7. He noted that, while the proponents had previously  indicated that they would be preparing a 
revision of JOB(07)/155, in the light of the curre nt environment in the overall Doha Development 
Agenda negotiations, it was not an opportune time to table a revised proposal.  He urged the Working 
Party to take advantage of the lull in the negotia tions to conduct further technical discussions.  There 
had been a fair amount of good and candid discussions in many formats throughout the course of last 
year.  If one were to "read between the lines", it would be very clear which direction the current 
proposal would take but the proponents would aw ait for an opportune time before tabling any 
revision. 
 
8. The Chairperson  took note of the statement made and pr oposed that the Working Party revert 
to this item at the next meeting.  It was so agreed.  
III. NEGOTIATIONS ON GOVERNMENT PROCUREMENT UNDER ARTICLE XIII 
OF THE GATS 
9. The Chairperson  recalled that on government procurem ent, her predecessor had conducted 
several rounds of informal technical discussions w ith a focus on elements contained in the proposal 
from the delegation of the European Union (S/WPGR/ W/54).  She noted that at the last meeting the 
European Union had indicated that it would welcome the continuation of such exchanges, in either  
formal or informal mode, so as to receive an y further questions, comments or suggestions from 
Members.    
10. The representative of the European Union  stressed that her delegation would be willing and 
ready to continue with the discussions on the Europ ean Union proposal tabled in 2006.  The technical 
discussions which had been conducted in an informal  format were useful, especially when Members 
engaged in a real debate on technical aspects of  the proposal.  Her delegation would be open to 
continuing with those discussions as well as to c onsidering any new ideas, such as a "workshop-kind 
of approach" with experts invited.  Feedback was required from the membership, be it positive or 
negative, on how to take the discussion forward and structure the debate.  She urged Members not to 
remain silent in all meetings.   
11. The Chairperson  took note of the statement made and pr oposed that the Working Party revert 
to this item at the next meeting.  It was so agreed.   S/WPGR/M/68 
 Page 3 
 
 
  IV. NEGOTIATIONS ON SUBSIDIES UNDER ARTICLE XV OF THE GATS 
12. The Chairperson  noted that there were two areas currently under consideration, the Work 
Programme on Information Exchange and the proposal on export subsidies submitted by the 
delegation of Switzerland, as contained in the room  document dated 28 January 2010.  On the Work 
Programme, since there would only be another three months before the end of July, she urged 
delegations to inform the Working Party on what progress had been made towards compiling relevant 
information on subsidy programmes, as well as the iden tification of any trade-distortive effects.  She 
recalled that as part of the "fact-finding" spirit of this exercise the sharing of experiences would 
facilitate the participation of all Members in the exercise.  
13. The representative of Hong Kong, China  noted that his delegation had responded to the 
questionnaire back in 1999 and was now in the pro cess of consulting within the government so as to 
respond to this new effort to fulfil the informa tion exchange requirement.  Hong Kong, China hoped 
to circulate a response in accordan ce with the Work Programme.  While the exercise called for time 
and resources to be devoted, from his delegation's experience, it would be possible to compile the 
necessary information, especially since the Wo rk Programme expressly provided Members with 
flexibilities.  He called upon Members to res pond more positively and looked forward to the 
discussion that would follow the compilation of Me mbers' submissions.  Members had a mandate to 
develop disciplines on subsidies and Hong Kong, China would be prepared to explore the subject further.  
14. The representative of India
 recalled that the Work Progra mme had already been accepted and 
was a positive development.  The programme had b een acceptable because it provided considerable 
flexibility in terms of the number and choice of sect ors, as well as the level of government involved. 
However, the responsibility for making the progra mme a success depended on Members.  To honour 
the Work Programme, all Members should have started the process of collecting the necessary 
information.  She informed the Working Party that India had done so internally.  This was 
undoubtedly a time-and resource-consuming exercise  but, nevertheless, the process had commenced 
and progress was being made.  India expected all Members, especially developed Members that have 
better information systems and more resources to provide more detailed in formation and honour the 
Work Programme. 
15. The representative of Canada  expressed support for the Work Programme and informed 
Members that consultations had been initiated w ith relevant federal government departments, 
regarding Canada's potential contribution to the pr ogramme.  The exercise w as complex, and the full 
time frame that had been agreed upon would be needed  to complete it.  The presentation of the results 
in autumn and the anticipated discussion by Members would be an ideal preliminary step to having 
more detailed discussions on the need for potential s ubsidy disciplines.  At the same time as fulfilling 
the Work Programme, it would be very important for those Members calling for such disciplines to provide concrete examples of where subsidies have been responsible for distorting trade. 
16. The representative of Switzerland
 endorsed the statement by the representative of 
Hong Kong, China.  He underscored that the time fr ame of the Work Programme was short, namely 
the period from March to July 2010.  He highlig hted that flexibilities had been provided on the 
assumption that this had been the problem for de legations which had not yet met the information 
exchange obligation.  The Work Programme provided a test for Members.  It would be absolutely 
essential that this test be a success, otherwise at the end of July 2010 when the programme came to an 
end, Members would once again be in the normal situation of being subjected directly to the 
requirements of Article XV.  At that time, the sa me problems would likely arise as to the advisability 
of information exchange.  It would be interesting to see if the flexibility provided could play a role 
and be helpful.  As time was limited, he appealed  to Members to participate actively in the Work 
Programme.  He warned against any attempt or temptation of establishing any conditionality between S/WPGR/M/68 
Page 4  
 
  the information exchange exercise and the ne gotiation of subsidy disciplines.  The subsidy 
negotiations had an independent mandate and were autonomous from the Work Programme on 
Information Exchange.  It would not be advisable to  introduce an intermediary step to a negotiating 
mandate that had been ratified by Ministers more th an 10 years ago.  The content of the disciplines are 
to be established by consensus among Members.  Wh ile each might have its own interest, some being 
more offensive and others defensive, a clear objective had been set for this negotiation to take place 
and Members must move forward in that respect.  
17. The representative of Korea
 noted that there had been ta ngible progress on subsidies and the 
Work Programme had raised the level of engageme nt among Members.  His delegation supported the  
programme, which would help fulfil the mandate of  Article XV and set the discussions on the right 
track.  With regard to the proposal on export subs idies submitted by Switzerland, his delegation felt 
that this was a good proposal, and that it could be discussed in conjunction with the information 
exchange exercise. 
18. The representative of China  expressed support for the Work Programme, while noting that his 
government faced particular difficulties in collecting data.  He also encouraged Members that had the 
capacity to provide subsidies to their services indus try to submit information according to the Work 
Programme. 
19. The representative of Chile  informed the Working Group that his capital had already started 
compiling information on subsidies with a view to  presenting it within the agreed time frame.  His 
authorities wanted to send this message in order to  encourage Members to make the Work Programme 
a reality.  The various flexibilities provided for in the Programme should make it easier for 
delegations to provide informati on and abide with the mandate contained in Article XV of the GATS. 
20. The representative of the United States  stressed that the range of topics and measures that 
could be involved in the collection of information,  as well as in the identification of problems, were 
vast.  In the case of the United States, there were  26 federal agencies that offered over 1000 different 
grant programmes, without considering tax incentives or any other forms of subsidies that might be 
involved, some of which included business grants fo r women and minorities.  The range of topics that 
could potentially be reported was enormous, thus making it very important to ask what information 
would be relevant?  That question had not really  been addressed and Members might find themselves, 
at the end of the reporting period, with a scattering of information that they would not know how to 
deal with.  To avoid a "data dump", the greater and more important question to address are where do problems exist?  While not a demandeur in this area,  the United States would like to be persuaded that 
there were some concrete problems in specific sect ors that the Working Party could consider.  Once 
these had been identified, his delegation might be in a better position to provide its analytical 
responses to those problems.  In connection with the proposal from Switzerland and past discussions 
on the definition of subsidies, he recalled that ther e had not been sufficient consideration of what  
aspects of the definition contained in the Ag reement on Subsidies and Countervailing Measures 
(ASCM) would work for services, and what aspects would not.  He noted that in Switzerland's 
proposal, there had been some deviation from th e ASCM definition, but there had not been a 
discussion on why those changes were relevant.  He  felt that there could be some more technical 
exchanges on how services differed from goods, a nd other products, as well as what were the 
problems that Members might want, or find feasible, to address. 
21. The representative of Chinese Taipei
 recalled that at the previous  meeting, his delegation had 
noted that it could go along with the Work Progr amme.  His capital had been reviewing current 
practices, so as to identify which programs might be reported in the information exchange exercise.  
As the outgoing Chairperson had stressed, it would be the responsibility of Members to ensure the 
success of the Work Programme.  His delegation c oncurred with that view and encouraged all 
Members to make their best efforts to provide in formation to the Working Party so as to fulfil the  S/WPGR/M/68 
 Page 5 
 
 
  mandate under Article XV.  He emphasised that information sharing by the Members would not 
prejudge his delegation's future position on this subject. 
22. The representative of Japan  noted that his delegation supported the Work Programme and that 
it would endeavour to submit useful information on subsidies.  Concerning the proposal from Switzerland, he agreed with the representative of the United States that it would be very useful to 
examine the differences between services and goods, for example, by discussing the implications of 
each mode of supply for subsidies.  It may also be useful to use the information submitted under the Work Programme so as to better understand the trade distorting effects of subsidies in the field of 
services. 
23. The Chairperson
 took note that wide support had been expressed for the Work Programme 
and encouraged Members to continue to participate actively, so as to make the information exchange 
exercise a success.  She recalled that at the last  meeting of the Working Party, the delegation of 
Switzerland had submitted a room document date d 28 January 2010 (RD/SERV/4) on disciplines on 
export subsidies and proposed that Members revert to their discussion on this subject.  
24. The representative of Switzerland  noted that at the last mee ting a number of delegations had 
raised some very relevant questions.  He provided responses to each of these ques tions in turn.  First, 
on scope and definition, some delega tions had asked why the proposal did not follow Article 3.1(b) of 
the ASCM which included subsidies contingent u pon the use of domestic over imported goods.  The 
Swiss proposal had placed priority on export subsidi es because this was considered to be the most 
appropriate category of subsidies to begin developing disciplines in  accordance with the mandate of 
Article XV.  Export subsidies not only had distortin g effects on bilateral trade between the Member 
granting a subsidy and the Member on whose territory the effects were felt, but might also affect trade 
with other Members.  Thus, export subsidies ha d a multilateral dimension and, unless they were 
discriminatory, did not currently have to be li sted by Members.  Measures aimed at substituting 
imports by favouring domestic serv ice suppliers fall under the scope of Article XVII of the GATS, 
and consequently, Members that had assumed specifi c commitments could not maintain them.  Thus, 
the value added of covering these measures by referri ng to Article 3.1(b) of the ASCM would be 
negligible.  In the proposal, a choice had been made  to begin with export subsidy disciplines but over 
time as more experience was gained in this area, consideration could be gi ven to developing other 
relevant disciplines.  Second, regarding footnote 1 of the Swiss proposal on the de facto  criterion to be 
applied, WTO jurisprudence had provided useful clarif ication in this respect.  For further information, 
the representative referred Members to the WTO Analytical Index, which in paragraphs 93 to 107 
provided an explanation of the application of the corresponding footnote 4 of the ASCM.    
25. Third, the definition contained in the Swi ss proposal differed from the ASCM because it had 
been necessary to adap t the definition to the services contex t.  For instance, the cross-border 
dimension of trade in services with its four mode s of supply had to be taken into account.  The 
provision contained in Article 1.1(a)(1)(iv) of th e ASCM Agreement on the delegation of powers for 
the granting of subsidies had not been included as it was felt that this had already been covered by 
Article 1:3(a)(ii) of the GATS.  He noted that hi s delegation would, of cour se, be open to, and would 
indeed welcome, any suggestions or remarks regard ing the definition.  Fourth, a question had been 
raised previously on why the provisions of th e ASCM Agreement on specificity had not been 
mentioned.  He explained that, as in the case of goods, export subsidies for services were considered 
to be specific and criteria would be needed to determ ine specificity.  This was an interesting point and 
his delegation would consider it in the event of  a revision of the proposal.  Fifth, on why the 
provisions of the ASCM Agreement relating to injury  or adverse effects caused by subsidies had not 
been mentioned, it was the understanding of his de legation that such provisions were valid for 
actionable subsidies, but not for export subsid ies under the ASCM Agreement.  Thus, no such 
provisions would be proposed for export subsidies in services. S/WPGR/M/68 
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  26. Sixth, on the question of the applicability of remedies and the feasibility of countervailing 
duties, his delegation remained convinced that the provisions of the ASCM should also be able to work for services with some adapta tion.  Even if countervailing duties or countermeasures might be 
difficult to define due to the lack of statistical da ta, Members could rely on the instruments currently 
available as had been done in dispute settlement  cases involving services.  If countermeasures were 
deemed necessary, Members could for example consid er some kind of compensation or suspension of 
concessions.  As some had suggested, his delegation would not have any objection to transcribing the 
ASCM remedies, should that be the wish of Member s.  Seventh, in connection with the Permanent 
Group of Experts, depending on how discussions devel op, it might be advisable to consult that group 
and benefit from their experience where appropriate.   
27. Eighth, some delegations had raised questi ons on whether public spending on tourism 
infrastructure or promotion, or on port infrastructure and public transport, should be considered to be 
export subsidies.  In principle, public spending pr ogrammes for such services or infrastructure were 
not considered to be export subsidies.  However,  depending on how these programmes were defined, 
they might fall into the category of export subsidi es under the definition that might be agreed to by 
Members.  Ultimately, decisions would have to be made on a case-by-case basis and the criterion of 
contingency on export performance should prevail.  In order to ensure maximum transparency, all 
Members that may have such programmes would be i nvited to provide them as examples so that the 
information exchange exercise agreed to by the Working Party in February 2010 could commence.  
Ninth, on whether Annex VII of the ASCM Agreem ent should apply to services, it was highlighted  
that the proposed disciplines were flexible enough to take account of the spec ific needs of the least 
developed countries and other deve loping countries.  Paragraphs 4, 6 and 7 of the Swiss proposal 
specifically and explicitly took account of these needs.  Tenth, a request had been made at the last 
meeting for all the provisions proposed to be describ ed in greater detail.  However, it was not clear 
which provisions were difficult to understand wit hout additional explanati on and how would further 
description help Members to conduct consultations. 
28. The representative of Canada
 asked if the delegation of Switzer land could provide their useful 
responses in writing in order to allow Members to ta ke a little more time to reflect and analyse them.  
29. The representative of Switzerland  noted that the responses would be reflected in the minutes 
of the meeting.  
30. The Chairperson  took note of the statement made and pr oposed that the Working Party revert 
to this item at the next meeting.  It was so agreed.  
V. OTHER BUSINESS 
31. No items were raised under this agenda item. 
 
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