RESTRICTED  WORLD TRADE  
ORGANIZATION  S/WPGR/M/69 
15 September 2010 
 (10-4651) 
Working Party on GATS Rules  
  
 
REPORT OF THE MEETING HELD ON 1 JULY 2010 
 
Note by the Secretariat
1 
  
1. The meeting was chaired by Ms. Gabriela Kules za from Poland.  The agenda for the meeting 
was contained in WTO/AIR/3576.  The agenda was adopted. 
2. The Chairperson
 noted that since the previous formal meeting on 27 April 2010, she had been 
consulting delegations on various ideas for furthe r work in all three GA TS Rules areas.  She 
underlined that the consultations had been productiv e, and that delegations had shown a willingness to 
engage on various ideas for future work.  She indi cated that she would report on her consultations 
under the respective agenda items.  
I. NEGOTIATIONS ON EMERGENCY SAFEGUARD MEASURES UNDER 
ARTICLE X OF THE GATS   
3. On emergency safeguard measures (ESM), the Chairperson  recalled that the delegations of 
Brunei Darussalam, Cambodia, Indonesia, Malays ia, Myanmar, the Philippines, Thailand and 
Vietnam had suggested that a presentation on servi ces statistics could help better inform the ESM 
discussions of the adequacy and ava ilability of potentially relevant da ta.  This suggestion seemed to 
be generally acceptable to dele gations, though the exact content, format and timing of such a 
presentation remained to be defined.  In this c onnection, she highlighted that the Secretariat had 
informed the Working Party that a 2006 Background No te on international trade statistics in services, 
as contained in the document S/C/W/27/Add.2, was being updated for the Council for Trade in 
Services and was expected to be ready by the end of 2010.  To avoid replication with on-going work 
in the Council, she proposed having the presentation on statistics after the Council discussion of that 
document, as it would provide a good basis for a more  focused treatment of this subject within the 
context of ESM negotiations.  She suggested that in the interim, delegations might wish to revert to 
one of the other proposals contained in the room document of 30 March 2009, on the way forward in 
the ESM negotiations.   
4. The representative of the Philippines , on behalf of the delegations of Brunei Darussalam, 
Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Thailand and Vietnam , recalled that in the 
Working Party discussions on ESM the lack of good unified and harmonized statistics on trade in services had been highlighted as a problem.  A lthough the ESM proponents had  consistently argued 
that data would be provided by na tional statistical offices, regulatory agencies, or other international 
or professional organizations, the issue had recurred in discussions through the years.  He noted that 
against this background, the proponents had in th eir room document of 30 March 2009 suggested 
having a statistics presentation in the Working Party on five sub-issues.  Firstly, a general background 
briefing from the Secretariat on the collection of se rvices statistics and services trade data at the 
national, regional or multilateral le vel.  This would include a basic description of the organizations 
                                                     
 
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/69 
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  involved, the kind of statistics and trade data publicly  accessible and available at this time, as well as 
an assessment of their accuracy, reliability and quality .  This element of the presentation would give 
Members a sense of the universe of information al ready available and provide useful context for 
discussions on relevant market conditions or fact ors, as had been suggested in the ESM proposal 
of 2007.  Secondly, the presentation could provide ex amples of "best practices" by national statistical 
offices in the collection of services trade statistics.  Thirdly, a number of questions with respect to the 
lack of data disaggregated by sector and mode of su pply could also be addressed .  In the past, claims 
had been made that data was not sufficiently disaggreg ated to allow informed decisions to be taken on 
a modal and sectoral basis.  Thus, what practical problems had arisen from this situation, what were current practices, who were the major exporters and importers of services, and what value of exports 
and imports did they represent.  Answers to these qu estions would inform the debate on statistics in 
the Working Party. Fourthly, clarification could be  given on how mode 4 statistics were collected, and 
whether such data would indeed be more reliable and available, as compared to mode 3.  This element 
of the presentation would help clarify concerns of developing Members that it would be easier to impose an ESM in mode 4, as compared to mode 3.  Fifthly, what proxies could be used to address 
existing gaps in statistics and data collection.   
5. While some Members had raised the issue of  redundancy and repetition with work in the 
Council, from the perspective of the proponents, a presentation on statistics in the Working Party 
would be useful for a number of reasons.  Discussi ons in the Working Party would be more focused 
on ESM-related issues than those in the Council.  Gi ven different interests and priorities, not all 
Members might come to the Council prepared for a di scussion that would be pertinent and relevant to 
the ESM negotiations. As had been highlighted by the Secretariat, the revision of the Note on 
statistics for the Council would not cover all the issues proposed for a specific presentation on statistics to the Working Party.  Moreover, some Members might claim that the Council had no mandate to discuss ESM issu es.  In terms of a broader discussion on statistics, he underscored that the 
proponents did not consider a symposium or work shop to be necessary.  The proposal had carefully 
used the term "presentation" as the objective had b een to have an informal and candid discussion on 
the issue of data availability.   
6. In terms of the way forward, the proponents concurred with the next steps proposed in 
paragraph 3 of the annotated agenda circulated by the Chairperson.  A more focused presentation on 
statistics in the context of emer gency safeguards could follow the Council discussion on statistics.  
That sequence could work well and would be a compromise that the proponents could endorse.  On 
the ultimate goal of the exercise, he recalled that , as had been stated previously, the purpose would be 
to better inform the ESM discussions as the subject had been raised in the past.  He hoped that 
through greater awareness of the subject, it would be less of an issue and that  the Working Party could 
move forward to tackle more sensitive and fundame ntal threshold questions.  As for the interim 
period, he noted that the proponents had yet to  formulate specific suggestions for technical 
discussions, but would endeavour to come up with so me concrete ideas.  These would most likely be 
based on the issues raised in the room document of 30 March 2009.  The Chairperson might wish to 
undertake consultations with interested Member s so as to discuss this point further.   
7. The representative of the United States
 expressed his appreciation for the constructive 
suggestions and the flexibility shown by the prop onents, in light of other on-going work under the 
auspices of the Council for Trade in Services.  He noted that during the discussions, the proposal had 
evolved from a symposium or conference-like ev ent to something more along the lines of a 
presentation, to be conducted, perhaps, by the Secr etariat.  This caused his delegation some grave 
concern, especially with respect to the five s ub-issues suggested by the representative of the 
Philippines.  He underlined that these concerns would not  have arisen if the issues were to be taken up 
in the context of a symposium or conference by outside presenters.  However, the proposal as it now 
stood seemed to be aimed at a presentation by the S ecretariat.  While the US would have no problem 
with the Secretariat compiling a compendium of authorities involved in gathering data on services  S/WPGR/M/69 
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  trade, it would have difficulties if the Secretariat were, for example, to speculate on which authority 
was considered to be the most competent.  Simila rly, the other issues raised by the proponents would 
require legal conclusions with respect to how the ESM proposal would function in light of the 
statistics gathered.  These were not conclusions that  the Secretariat would be in the best position to 
draw and should be discussed by Members.  He not ed that his delegation would not favour another 
conference or symposium.  The format of a presentation was preferable, but he urged caution, as the 
issues that could be explored by the Secretariat w ould have to be different from those addressed in a 
symposium. 
8. The representative of China  supported the proposal from the Philippines on behalf of the 
proponents for an ESM-focused discussion of services trad e statistics.  In such an event, the Working 
Party could have a more detailed technical discu ssion on issues such as the timing and methodology 
for the collection of services statistics.  His delega tion also supported the Chairperson's proposal for 
having a focused presentation on sta tistics in the Working Party.  
9. The representative of Canada  also concurred with a presentation on services trade statistics.  
The specific questions contained in the proposed out line by the Philippines were quite extensive and 
would provide for an interesting discussion.  The lim ited availability of accurate and timely trade data 
for services continued to present significant challenges for Members.  In Canada's experience, one of 
the major impediments to such efforts had been th e lack of financial and technical resources devoted 
to the collection of services trad e data.  Therefore, his delegati on supported the suggestion by the 
Chairperson that this presentation should take pl ace after the Council had discussed the updated Note 
on statistics.  As the representative of the Philippi nes had suggested, the proposed presentation in the 
Working Party should address the best methodologies and most efficient practices in the collection of 
services data by national statistics agencies and/or  international organizations.  In view of the 
experience of the discussions on financial services held earlier in the week, Members would benefit from having outside experts from organizations, w ho have the necessary experience, such as the 
World Bank, the OECD, the UN Statistics Division and the International Monetary Fund.  
10. The representative of the Philippines
 clarified that, as had been expressed in the informal 
consultations, the discussion could take the form of  either a presentation, symposium, conference, 
workshop or something less formal.  Firstly, for the proponents the format was not important and their main interest laid in having a discussion on issues th at had arisen in the ESM negotiations with regard 
to the use and availability of data.  He underscored that the proponents had raised concerns when the 
idea of a broader workshop or symposium had been s uggested in the informal consultations.  Should 
such an approach be taken, the Working Party could be bogged down over the next few months in a 
protracted discussion on the proposed agenda, structure and possible speakers.  The proponents would prefer avoiding such a discussion and focus instead on the substance.  Secondly, on the concerns 
raised by the representative of the US, as explained in  the informal consultations, the issue of "best 
practices" would be left to Members and the Secretariat would not be asked to make a value 
judgement on this matter.  Thirdly, with respect to  the other issues raised by the US, the suggestion of 
a presentation by the Secretariat had been propo sed as a compromise in view of the forthcoming 
discussion in the Council on statistics.  He recalled th at the original proposal, contained in the room 
document of 30 March 2009, had suggested not only  presentations by the Secretariat but also by 
resource persons from international organizations doing work in this area.  He stressed that the 
proponents were not seeking a large event and were  only aiming to have a discussion on the issue of 
statistics and data.  He underscored that some of the initial comments from Canada would initiate the 
kind of discussion that the proponents had been seeking.  
11. The representative of Chile
 expressed appreciation for the explanation given by the 
Philippines.  His delegation's view on the matter was si milar to that of Canada.  Whatever format the 
discussions took, it would be beneficial to explore th e issue of statistics and data collection.  Chile 
supported the way forward described by the Chairperson at the beginning of the meeting, namely that S/WPGR/M/69 
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  the  presentation in the Working Party should take place after the Council discussion of the updated 
Note on statistics.  Having a statistics presenta tion in the Working Party should not prejudge the 
position that any Members might have on emergenc y safeguard measures and should therefore not be 
a cause for concern, as had been expressed by the United States.  The proposal for a presentation and 
discussion on statistics was positive and beneficial , and Chile had no difficulty in supporting it. 
12. The representative of Bolivia
 supported those delegations interested in having a discussion on 
statistics in services.  It was very important for actors in this sector to have certainty on statistics and, 
indeed, on the methodology for gathering reliable data.  While Balance of Payments and other 
methodologies were often used, it would be very interesting to review the various concepts and 
techniques.   
13. The Chairperson  took note of all the statements made.  She summarised that there seemed to 
be a willingness to have a presentation on statistics, though its shape and structure would need further 
refinement.  To avoid overlap with the forthcoming discussion in the Council, any presentation would take place after that event.  She noted that the discussion in the Working Party should also be more 
focused.  In the meantime, she would be willing to conduct consultations on any other issues which 
Members would like to discuss, such as those in contained in the room document of 30 March 2009.  
II. NEGOTIATIONS ON GOVERNMENT PROCUREMENT UNDER ARTICLE XIII 
OF THE GATS 
14. The Chairperson
 recalled that informal discussions held in 2009 had focused on the 
procedural rules contained in the proposed GATS Annex on Government Procurement.  In recent 
consultations it had been highlighted that, whilst th e discussions had been useful, more feedback on 
the subject was needed.  Therefore, to stimulat e exchanges a dedicated discussion in the Working 
Party on the developmental releva nce of government procurement in services had been suggested.  
There seemed to be a willingness to discuss this id ea further and various topics had been suggested, 
including the level of openness of the procuremen t market in developed economies for services, 
potential barriers posed by complex bidding procedur es, the relationship between goods and services 
procurement, and the relative benefits of commitments under the plurilateral Government 
Procurement Agreement (GPA) as compared to those taken in the GATS.  She asked delegations for 
their views on the idea of a dedicated discussion, as well as any thoughts on the possible content and 
timing of such an event.   
15. The representative of the European Union  stressed the need to revive discussions on 
government procurement in services.  She underscore d that the issue had high economic importance 
and merited further attention from Members.  There were two avenues that could be pursued.  First, 
some Members had encouraged the EU to conti nue explaining the concepts underlying the EU 
proposal for a GATS Annex on Government Procuremen t.  She noted that her delegation would come 
back to the proposal and provide further details at future Working Party meetings.  Second, to 
complement that work, it might be helpful to have a broader discussion about why government 
procurement in services could be interesting to Me mbers.  With regard to the second avenue, she 
suggested developing a work programme for the next meetings by starting with three possible topics.  
The first could be the economic relevance of govern ment procurement in services, both in developed 
as well as in developing countries.  She suggested looking at domestic systems for government procurement as well as the international angle.  This  could include regulatory systems and reforms, as 
well as market access for procurement in services.   
16. Complementing this first topic would be nationa l experiences with procurement, both in terms 
of opening up the home market as well as access to the markets of other Members.  In this connection, 
it would be beneficial to compare the experien ces of both developed a nd developing country 
members.  Building on this, Members could discuss how  the Working Party could deal with the issue  S/WPGR/M/69 
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  of procurement, including with respect to the EU proposal but also more broadly.  In terms of the 
format, she stressed it was not her delegation's intent to have a large event, and the EU would be open 
to other views on this matter.  The topics could be addressed either through a dedicated discussion in the Working Party, or it could be a separate half- or full-day event which w ould be somehow linked to 
the formal meeting.  She noted that these were in itial suggestions which coul d be developed further 
based on the reactions of Members. 
17. The representative of Pakistan
 considered it important to con tinue exploring different avenues 
of work.  In this sense, Pakistan supported the  initiative taken by the EU to pursue a systemic 
approach by exploring the issues in government pr ocurement, including with regard to the national 
experiences of various Members.  He noted that ther e were certain questions that would need to be 
addressed, such as which Members would share thei r experiences.  For instance, would these only 
include GPA signatories or other Members as well, including those that had not been involved with 
multilateral or plurilateral government procurement a rrangements?  He noted that these details could 
be worked out in due time.  In terms of format , his delegation would be quite open to the options 
suggested, though a dedicated discussion in the Working Party might best serve the purpose.  
18. The representative of the United States  expressed appreciation for the constructive suggestion 
from the EU for a dedicated discussion on government  procurement.  He noted that it would very 
helpful if there could be some way of coordi nating the discussion with dates when government 
procurement specialists would be in Geneva fo r the GPA.  These specialists could give a good 
perspective on how the subject was being treated in the GPA context and how discussions there could connect with those being undertaken within the Working Party.   
19. The representative of Switzerland
 expressed appreciation for the efforts taken by the EU to 
revitalise the discussions on government procuremen t, which had been somewhat neglected by the 
Working Party.  His delegation welcomed any init iative that could bring the subject back on the 
agenda and supported the proposal of the EU to  have a work programme so as to move the 
discussions forward.  He thanked othe r delegations for their support.  
20. The representative of Japan  expressed support for a dedicated discussion on government 
procurement as well as the various ideas presented by the EU.  He noted that it would be especially 
important to reflect on the good experiences of developing countries with respect to government procurement.  Notwithstanding the GPA, it would be important to have multilateral disciplines on 
government procurement and to ensu re consistency between both sets of rules and commitments.  As 
had been suggested by United States, it would be  good to have the participation of government 
procurement experts at the dedicated session. 
21. The representative of Chile
 agreed with the suggestions from the EU for pursuing further 
work on government procurement.  His delegation supported the idea of pursuing work along the lines 
mentioned, in particular, with re gard to developing economies.  The benefits that could stem from the 
liberalization of government procurement markets,  in terms of improving efficiency, combating 
corruption and bringing economic development, ha d been mentioned before and were known to his 
delegation.  On that basis, Chile we lcomed and supported the proposal.  
22. The representative of South Korea  endorsed the proposal by the EU to invite experts as it 
would help move the discussion forward a nd engage Members in a real debate. 
23. The representative of Chinese Taipei  registered his delegation's support for the EU proposal.  
24. The representative of Singapore  supported the relevance of the EU proposal.  Her delegation 
would be open to ways to progress discussions on go vernment procurement a nd believed that it would 
be useful to have a focus on developing countries.  S/WPGR/M/69 
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  25. The representative of the Philippines
 noted that while his delegation did not object to the 
proposal in principle, he had understood that the EU had wanted feedback on some preliminary ideas 
and would be providing  a more  detailed proposal.  He sought clarification on this point.  
26. The representative of Canada  registered his delegation's support for the EU proposal.  A better 
discussion amongst Members would be useful and mo re enthusiasm had been expressed in this 
meeting on the subject than had been the case for a while. 
27. The representative of Indonesia  noted that his delegation shared the support expressed by 
Members for a dedicated discussion on government proc urement.  However, he  stressed that the 
discussion should be balanced, with a focus not only on the opening of markets, but also on the development objectives of developing countries with regard to government procurement. 
28. The representative of Turkey
 sought clarification as to whether any representatives from non-
governmental organizations would be present in the dedicated discussion. 
29. On the specific question from the repr esentative of Turkey, the Chairperson  noted that the 
details on a possible dedicated discussion on governme nt procurement had not yet been decided.  
30. The representative of the European Union  expressed her appreciation for the support given to 
the proposal for a dedicated discussion on government procurement.  With regard to the questions 
raised, it would indeed be very useful to get an exchange with government procurement experts when 
they happened to be in Geneva for GPA meetings.  This would be especially relevant for sharing 
experiences on national systems.  It would also be interesting to hear the experiences of both GPA and non-GPA Members.  She highlighted that the prelim inary ideas presented at this meeting would be 
developed further.  
31. The Chairperson
 took note of the widespread support  to organise a government procurement 
event in a form of dedicated discussion.  She undertook to continue working with Members on 
developing the discussion. 
III. NEGOTIATIONS ON SUBSIDIES UNDER ARTICLE XV OF THE GATS 
32. The Chairperson  recalled that during her informal cons ultations a number of delegations had 
indicated that they would be submitting their res ponses in accordance with the timeframe indicated in 
the Work Programme on Information Exchange.  She encouraged all Members to participate actively 
and asked if they had any further updates to provide.   
33. The representative of Mexico  informed Members that her capital was currently working on its 
submission and that it would be submitte d within the established timeframe.  
34. The representative of Canada  noted that consultations were on-going in capital with relevant 
federal departments and agencies, and that his delegation was aiming to provide an eventual 
submission in July to the Secretariat. 
35. The representative of Hong Kong, China  noted that his delegation would be providing its 
submission within the timeframe set out in the Work Programme. 
36. The representative of Korea  informed Members that consultations were on-going with 
relevant government departments a nd that efforts  were being made  to meet the timeframe of the 
Work Programme.  He stressed that his delegation had been facing several difficulties in collecting 
data, but recognized that the exercise was mandated by Article XV of the GATS and that all Members had to make their best efforts to provide the required information.  S/WPGR/M/69 
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  37. The representative of India  noted that his capital was in the process of collecting and 
compiling the necessary information.  He stressed that this was a complex and time consuming exercise.  Despite the resource constraints faced by  India as a developing country, his government 
aimed to meet the timeframe.  As had been stated  by the representative of Korea, he urged other 
Members, especially developed Members having larger  services trade, better resources and statistical 
systems, to participate meaningfully in the Wo rk Programme so as to make it a success.  His 
delegation also looked forward to the discussion that would follow the compilation of responses 
circulated by the Secretariat. 
38. The representative of Norway
 highlighted that her delegation had provided information 
previously and that it intended to report also under the current exercise.  Work was on-going and 
would be finalized as soon as possible.  
39. The representative of Colombia  noted that his delegation woul d be submitting its information 
in reply to the questionnaire on information exchan ge.  He hoped that other Members would also be 
providing relevant information so as to enable work to continue on this matter. 
40. The representative of the European Union  confirmed that her delegation's contribution was 
being finalized and that it would be submitted in July. 
41. The representative of Chile  confirmed that the information would be submitted by the end of 
the month.  At the same time, he urged all delegati ons to participate in the exercise.  The mandate had 
been outstanding for a very long time and it w as the membership's obligation to fulfil it.  
42. The representative of Thailand  noted that his delegation woul d be meeting the timeframe for 
submissions and looked forward to the discussions that would follow.  
43. The representative of New Zealand, Japan and Chinese Taipei  also confirmed that their 
delegations would be meeting the timeframe  for the submission of information.  
44. The representative of Indonesia  informed Members that dome stic consultations were on-
going so as to collect the necessary information for submission.  He noted that, as highlighted by the 
delegation of India, it was a complex exercise, but he  expected that it would be possible to  provide 
information to the Working Party within the timeframe 
45. The representative of the United States  noted the discussion's focus, so far, on the submission 
of information by Members under Article XV of th e GATS.  In this connection, his delegation had 
submitted a formal Communication, the contents of which were self-explanatory, under this agenda 
item.  As yet, no responses had been received to any of the questions posed on the practical problems 
that Members might be facing with respect to subsidies.  Nevertheless, a number of statements of 
support had been given informally.  He would welc ome feedback on any questions that might have 
been overlooked or not sufficiently addressed.  So far,  there had been no indications of any practical 
problems relating to subsidies under Article XV.  He, nevertheless, looked forward to receiving 
responses to the questions posed, perhaps within the timeframe set out in the Work Programme.  
46. The representative of India  noted that his comments would be preliminary as the 
communication submitted by the US was still being ex amined.  Firstly, the questions posed should not 
detract from the focus on the Work Programme on Information Exchange.  Members had already 
commenced the process of collecting data and until that had gained some maturity, it would not be 
very useful to change the format which had been  agreed upon four to five months ago.  Some 
Ministries and stakeholders were already working on that basis.  His delegation was of the view that 
the Communication from the US should not be linked to the Work Programme.   S/WPGR/M/69 
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  47. Secondly, he did not share the premise that ther e was a lack of interest on the part of the 
private sector with regard to the issue of subsidies.   He believed, instead, that there was a lack of 
awareness and a shortage of data on services trade.  The OECD Working Paper No. 66, which had been referred to in the Communication, had stressed  that one constraint in the on-going multilateral 
subsidies negotiations related to the lack of in formation on subsidy measur es.  He hoped that the 
Work Programme would, to some extent, be able to address this gap.  Thirdly, some of the questions 
raised in the Communication would be answered through the process of information exchange.  
Therefore, he suggested as an alternative that th e questions raised by the US be taken up after the 
information received from the Work Programme had been assessed.  At that stage, it would be 
possible to see whether the information submitted wa s pertinent and if not, what future action might 
be taken.  Fourthly, regarding a point raised about "finding a solution without a problem", he recalled 
that the mandate in Article XV on information exchange  was clear.  It related to all domestic subsidies 
without any particular conditions, or prejudgeme nt on their possible trade-distorting effects. 
48. The representative of Canada
 noted that the US Communication had raised a number points 
which were similar to those made by his delegation in previous mee tings.  Notably, it was important 
for Members calling for disciplines on services su bsidies to present concrete examples on where 
subsidies had been responsible for distorting trade, in order to ensure that the Working Party would 
not be working on a remedy in search of a problem .  He stressed that sharing problems encountered 
was part of the information exchange programme that  Members had agreed to undertake.  In terms of 
timing and sequencing, his delegati on would prefer that the questions put forward by the US be 
tackled after the results of the current information exchange exercise, in order to avoid breaking the 
current momentum.   
49. The representative of Hong Kong, China  stressed that his delegation had approached the 
subsidies issue from a systemic point of view.  Pursuing work under the mandate conferred did not 
prejudge the existence of any trade distortive effect s of subsidies, or the means that Members would 
have to address such effects.  That subject would be for a subsequent discussion after the fulfilment of 
the mandate on information exchange.  However, he  agreed with the observation made in the US 
Communication that any information on trade-specific concerns or practical problems would be useful 
to the information exchange discussion.  Therefor e, he encouraged Members who had received or 
collected such information to share it with the Working Party.  In doing  so, the structure set out in the 
Communication could be used.  He believed that a discussion on problems encountered would complement the information exchange exercise.  While his government had not undertaken an 
exercise to systematically collect information on such problems, complaints were sometimes received 
on governmental assistance extended to enterprises as well as the possible impact on competition in 
specific sectors.  He noted that, while such compla ints might not have been raised with a view to 
developing multilateral disciplines, they touched on the potential effects of subsidies on trade.  
Therefore, his delegation would be interested to explore the subject further.  
50. With respect to the questions posed in the Communication, he believed that the membership 
might be in a better position to respond after th e information on subsid y measures and programmes 
had been provided.  Nevertheless, a number of inter esting issues had been raised.  For instance, why 
was a subsidy needed, how could the measure and its  effects on trade be quantified, what would be 
the relevance of the concept of specificity and, in  the case of export subsidies, how would a subsidy 
contingent upon export performance be determined?  To what extent  were discriminatory subsidies 
used, did non-discriminatory subsidies distort trade and could there be alternative ways of addressing 
the issue other than through developing discip lines.  These questions, which were posed in the 
Communication, were valid and it would be inter esting to discuss them so as to gain a better 
understanding.  However, in terms of  sequencing and timing, it would be  preferable to first conclude 
the information exchange exercise.  S/WPGR/M/69 
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  51. The representative of Switzerland  expressed appreciation for the US Communication, as 
contained in document S/WPGR/W/59, which he believed would help  advance work under 
Article XV of the GATS.  He stressed that the mand ate on subsidies was not to establish the facts, but 
rather to exchange information concerning all subsid ies related to trade in services and to enter into 
negotiations with a view to developing the necessary multilateral disciplines to avoid the 
trade-distortive effects that subsidies might have.  In  this connection, he gave the example of subsidies 
contingent upon export performance, namely e xport subsidies.  His delegation regarded the 
contribution by the US as being complementary to, and not a prior condition of, the mandate contained in Article XV.  As such, he did not see a real need to go th rough the stage proposed, 
although he noted that each Member had the right to raise questions and his delegation would be 
happy to provide substantive replies to specific requests.  
52. He noted, in general, that Members had sought to create through the GATS a legally secure 
and predictable environment for all investors and se rvice suppliers so as to ensure that commercial 
activities would be undertaken on an equal footing a nd not be prejudiced by trade measures aimed at 
distorting competition.  Thus, while the GATS permitte d the use of subsidies, provided they were in 
accordance with a Member's obligations, his dele gation was concerned with the use of export 
subsidies.  These measures were, in principle, non-discriminatory under the terms of Article XVII of 
the GATS and also outside the scope of Article II.  Yet since their main aim was to change the terms 
of trade, such subsidies would, by definition, be distortive.  The fact that the GATS authorized their 
use reduced predictability for investors and shoul d be eliminated through the development of 
appropriate disciplines. 
53. He made the following observations with respect to  each of the questions contained in the US 
Communication.  First, the fact that subsidies coul d be granted with a view to changing the modalities 
of trade was a cause for concern.  Export subsidies were particularly troubling since all sectors were 
affected, and the victims of the distortion, in addition to having no legal security, had no means of 
action.  In the sub-prime crisis, which began in 2007 and spread to the whole economy, some 
measures were taken by a large number of governme nts to save institutions in danger of collapse.  
These measures were very extensive and affected a ll sectors, even those which were thought to be 
sheltered from their scope.  Such actions, which had involved the commitment of public funds on an 
unprecedented scale, had been discussed throughout the world.  Second, providing legal security and 
predictability for enterprises was part of the GATS mandate.  Enterprises encountered serious 
problems, when they drew up their plans of activiti es, as they could not anticipate measures of this 
kind.  Given that investments were ever higher, this  uncertainty was a cause of great concern.  Third, 
the sub-prime crisis had shown that rescue and su pport measures might take all forms and that the 
instruments chosen could be easily substituted.  The objective behind a measure could be more 
detrimental to those operating within a mark et than the form actually taken.   
54. Fourth, in the case of an export subsidy, the obj ective would be to substitute trade. Often, the 
exact quantitative effect would not be known even to  the Member that had introduced the subsidy.  
However, the significance of an export subsidy woul d not be in its quantitative effect, but in the 
intention behind it.  This could be illustrated thr ough the three-country example previously given.  
Country A made full commitments in sector xy.  An enterprise in Country B established a commercial 
presence in Country A and provided services in that sector.  Country C decided to subsidize the exports of services in that same sector to Country  A.  The suppliers, among others, of Countries A 
and B were affected by the measure.  The supplier in B would lose its share of the market as a result 
of the measure by Country C, but would have no possible means of response.  The legal security which the supplier in B had enjoyed as a result of the commitment taken by Country A would be impaired.  Conversely, Country A's attempts to ensure an open and competitive market would be 
foiled.  Whether or not the government of C had cal culated exactly the effects sought by the measure 
introduced would be of little importance.  Country  C, through the introduction of its measure, had 
sought to distort trade and injure a service supplier as well as a whole sector.  In this example, S/WPGR/M/69 
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  Countries A and B had developed their relations on a long-standing and open basis, but these efforts 
were nullified by a measure taken by Country C against which they would powerless to act.  This was a case which justified the prohibition of such measures. 
55. Fifth, since export subsidies were designed with  the particular objective of distorting trade, 
they are deemed to be specific.  Sixth, as these subsidies might easily be administered in accordance 
with a Member's rights and obligations under the GA TS, an affected Member would not be able to 
take action to defend its service suppliers against the injury caused  by such subsidies.  Such 
unfriendly practices should be prohibited.  On the other hand, import substitution measures which 
favoured domestic service suppliers came within the scope of Article XVII of the GATS and, 
consequently, could not be maintained by Members if they had undertaken full commitments in the 
sectors concerned.  Such measures were covered by the GATS and Members might resort to the 
existing GATS disciplines should a Member breach its obligations.  Seventh, as stated in the reply 
given to questions three and four, the intentio n behind the export subsidy would be of more 
importance than the instrument chosen.  However,  he would like further information from the 
delegation of the United States as to how governme nt procurement or a service supplied in the 
exercise of government authority co uld constitute an export subsidy. 
56. Eighth, should a Member grant a subsidy that di scriminated in favour of domestic suppliers 
and had taken full commitments in that sector, the affected Member may, if it deemed it advisable, 
avail itself of the instruments available under the GATS.  Ninth, the problem with export subsidies 
was that the effects produced were not limited.  As in the example given above, the service supplier of 
Country B is injured by a Country C measure which had been aimed mainly at Country A.  Country B 
had no legal means of action, since C's measure wo uld not be covered by the GATS.  Commitments 
undertaken by the Members would play no role.  Te nth, by developing disciplines relating to export 
subsidies and by prohibiting such subsidies, Me mbers could fill a gap in the GATS and achieve a 
higher level of legal security and predictability for ser vice suppliers.  Thus, the constant risk that such 
subsidies might be introduced could be set aside, which was what the economy needed.  Existing 
subsidies should be identified in an exhaustive a nd clearly defined manner and, on the basis of the 
results of negotiations, be reduced or even e liminated.  In any case, enterprises would enjoy 
transparency, unlike the situation which existed today. 
57. The representative of the European Union
 considered the US Communication to be very 
useful as it elaborated upon an important part of the Work Programme.  She noted that the Communication had quoted from the Work Programme a nd was certainly part of it.  She recalled that 
Members had been asked to identify trade distortiv e effects caused by subsidies to services and that 
the mandate of Article XV called on Members to deal  with those subsidies.  The questions posed by 
the US could facilitate fact-finding in this area, especia lly if some replies to the first question could be 
found. 
58. The representative of Brazil
 noted that the Communication from the US was still being 
analysed by his capital.  Preliminarily, the questi ons appeared relevant and could contribute to the 
Working Party by allowing a better understanding of the issue.  He asked the representative of  
Switzerland if he could circulate his comments in writing.  
59. The representative of Japan  felt that the communication from the US had raised important 
issues such as whether subsidies po sed any problems, and if so, what problems could not be solved by 
Article XVII of the GATS.  Both questions were very  substantive, and it woul d be useful to have a 
full discussion on these points.  He thanked the repr esentative of Switzerland for providing answers to 
the US questions.  He hoped for more inputs from the proponents of subsidy disciplines, and would 
expect further suggestions and answers.  Whils t his delegation would need to conduct a thorough 
check, at this moment, no complaints had been received from the Japanese industry concerning the 
use of subsidies by other Members.  Should there be  any problems, he believed that these could be  S/WPGR/M/69 
 Page 11 
 
 
  resolved under Article XVII.  Except for export subs idies, which had been raised by Switzerland, in 
some cases subsidies were extended to the domestic service industry, with conditions on the priority 
employment of nationals.  This c ould be a concrete example of a type of subsidy which violated 
Article XVII and it could be useful to have a further discussion on this issue.   
60. He stressed the importance of keeping with the timeframe of the information exchange 
exercise.  Any discussion on the issues raised in the US Communication should be conducted in 
parallel with that work as the information submitte d could be useful.  While the time might not be 
right to take up substantial issues, subsidies to ser vices raised complex questions with respect to the 
differences between various sectors and modes of s upply, as well as the calculation of benefits and 
injury.  He hoped that at a later stage it would be possible to discuss these points.  With regard to the 
information exchange exercise, the objective was not to criticize specific Members, therefore he urged 
delegations to avoid any type of "finger pointing" in their submissions.  He was pleased to note that 
many Members would make a contribution within the timeframe and, should it be feasible, it would 
be useful to statistically quantify the data for the purpose of further discussions. 
61. The representative of the United States   thanked the numerous delegations that had expressed 
support for the questions that had been put on the ta ble.  He looked forward to receiving further inputs 
and, as the representative of the EU had noted, his delegation would be particularly interested in 
hearing responses to the first question, and at least some views with respect to the others.  While he 
had taken note of the view expressed by some delegati ons that the issues raised were not part of the 
information exchange exercise, he strongly disag reed, as the Work Programme was clear on this 
point.  With regard to sequencing, he had doubts as to why any decision would be necessary.  He 
highlighted that his delegation had only asked for information which might already be in the 
possession of the ministries involved in the WTO ne gotiations.  No information collection would be 
necessary in order to address the questions contained in the Communication.  Even if the ministries 
involved in WTO negotiations were not aware of any relevant government programmes, that would in 
itself be useful information.   
62. He reiterated the request to the representative of  Switzerland to circulate his statement as he 
had clearly done a lot of thinking on this issue.  In light of that, he hoped that Switzerland would be providing some responses with regard to the specifi c problems that their service suppliers had faced.  
He noted that at several points Switzerland had made  the assertion that the intention of the subsidizing 
government was what mattered and not the amount of the subsidy.  Colleagues in other areas of the 
WTO would be quite alarmed to hear this assertion.   He hoped that, in the future, Switzerland could 
elaborate on its view that quantification of the am ount of benefits provide d by a government would 
not be relevant to the questi on of whether a subsidy existed per se .  A specific question had been 
asked on how government procurement could constitute an export subsid y or a subsidy in general.  
While the US had not encountered this kind of pr ogramme, the question had been designed to gather 
information from Members as to whether any such me asures existed.  He could certainly imagine a 
scenario in which a government procured a services at a price in excess of the value, but that 
procurement was contingent upon export performan ce of the company from which the service had 
been procured.  He stressed that the example gi ven was hypothetical and that his delegation had not 
encountered such a programme.  Indeed, this w as the case for many of the programmes for which 
information was being sought.  This was pr ecisely why these questions had been posed. 
63. The Chairperson
 recalled that with respect to the proposal from Switzerland for disciplines on 
export subsidies, as contained in the room docum ent RD/SERV/4, it had been suggested during her 
consultations that it could be useful to have an  expert from the Secretariat explain the various 
provisions of the Agreement on Subsidies a nd Countervailing Measures (ASCM), since these 
underpinned the proposal.  She sought the views of Members on this suggestion.  The Secretariat 
would also appreciate further guidance on what spec ific aspects of the ASCM would require further 
clarification. S/WPGR/M/69 
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  64. The representative of Switzerland
 noted that his response to the US questions would be 
included in the minutes of the meeting and that  his delegation would welcome having further 
constructive discussions.  The previous exchange on the proposal was contained in the document 
S/WPGR/M/68 and he invited delegati ons to review that document.  In  terms of future work, he could 
envisage a process by which each article of the pr oposed disciplines would be reviewed.  He noted 
that his delegation had previously proposed having an  informal presentation by a Secretariat expert on 
the ASCM, in particular on services-related issues under that Agreement.  At the moment, nevertheless, it could be possible to cont inue working without such a presentation. 
65. The representative of the United States
 noted that with respect to a presentation by a 
Secretariat expert, he would want to know more cl early what the expert would be asked to opine 
upon.  As recent news headlines had indicated, the ASCM was a very delicate instrument and there 
were many disagreements among Members about th e exact meaning of the provisions of that 
Agreement.  It could be very difficult for the S ecretariat to provide a broad-based explanation of 
export subsidies without wading into areas that are subject to disputes. 
66. The representative of Canada  thanked the delegation of Switzerland for having provided 
detailed answers to questions raised at the last me eting of the Working Party.  These answers and the 
proposed disciplines on export subsidies were being reviewed.  As had been mentioned previously, 
the Swiss proposal was generally in line with the view expressed by his delegation that further 
progress on the Article XV mandate might be fou nd by Members taking a close look at the most 
egregious types of potentially trade-distorting service subsidies, a category under which some export subsidies might fall.  This approach would also be  in line with Members' experiences with multilateral 
rules on the goods side, where disciplines had alread y been developed prohibiting the use of subsidies 
specifically deemed to be trade distorting.  At the same time, since most Members were currently 
engaged in the information exchange exercise, it might be preferable to postpone a detailed 
examination of the Swiss proposal until the membersh ip had the chance to discuss the results of the 
information exchange exercise and see whether expor t subsidies in services had been identified as a 
problem.  He noted that his delegation could support the idea of having a Secretariat  expert brief the 
Working Party on the ASCM, provided that the pr esentation covered all elements of the Agreement 
and not just those specifically linked to the Swiss proposal.  He believed that a more comprehensive 
presentation would be useful to Members, as it woul d cover a wider range of subsidy-related topics 
which may be raised at a later stage of the discu ssion.  These could include, for example, conflict 
resolution, the boundaries between actionable and no n-actionable subsidies, and other matters. 
67. The representative of Switzerland
 noted that his delegation woul d give further consideration 
to the topics that could be covered in a presentati on by a Secretariat expert.  Concerning postponing 
examination of the Swiss proposal, he remained co nvinced that each Member should be entitled to 
raise new ideas at any time.  Thus, he could not see any difficulty with having the proposal discussed 
at the same time as the information exchange exercise. 
68. The Chairperson  took note of the statements made.  She thanked delegations for their 
productive comments and the discussion on the US Communication.  She noted that she would continue to consult on the idea of inviting a S ecretariat expert to brief Members on the ASCM.  
IV. OTHER BUSINESS 
69. No items were raised under this agenda item. 
 
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