RESTRICTEDWORLD TRADE
ORGANIZATIONS/WPDR/M/22
22 September 2003
(03-5012)
Working Party on Domestic Regulation
REPORT ON THE MEETING HELD ON 1 JULY 2003
Note by the Secretariat1
1. The Working Party on Domestic Regulation (WPDR) held its twenty-second meeting on
1 July under the chairpersonship of Mr. Johannes Bernabe of the Philippines.  The agenda for the
meeting is contained in Airgram WTO/AIR/2130.  Members agreed to adopt the agenda.
2. Under Other Business , the Chairperson noted that three room documents had been circulated,
by the delegations of the European Communities, Chinese Taipei and India, respectively.  In addition,
the Secretariat had recently circulated a revised version of the Outline for the WPDR Workshop, as
JOB(03)/35/Rev.2, dated  30 June 2003.
A. UPDATE TO THE ANNUAL REPORT OF 2002 OF THE WORKING PARTY ON
DOMESTIC REGULATION TO THE COUNCIL FOR TRADE IN SERVICES (2003)
3. The Chairperson observed that the first item on the agenda was the adoption of the update to
the 2002 annual report to the Council.  The updated annual report was mandated as part of the reports
for the Cancun Ministerial Meeting, and a draft version had been circulated to Members, as document
S/WPDR/W/24, dated 20 June 2003.  The Chairperson asked if any delegations wished to make
comments on the draft report.
4. The representative of the United States said that the issue of whether the WPDR was creating
horizontal or sectoral disciplines was still open, and she hoped to have that clarified somewhere in the
report.  One area she suggested was under paragraph 4, after the second sentence, adding the wording
“…including on whether to proceed on the basis of horizontal or sectoral disciplines”.  The
representative was not adamant on the placement or the exact language, but did ask to clarify that the
issue was still in the discussion phase.
5. The delegation of Canada suggested that the names of the Chairpersons, both outgoing and
incoming, be added to the report.  The delegation of Japan noted there was reference to the proposal
from Japan in paragraph 4, and said they would like to include the statement that Members welcomed
the Japanese contribution and made extensive preliminary comments.  The representative of the
United States repeated her delegation’s suggested text, following a request by Brazil.  She said their
suggestion was to reflect that it had not necessarily been decided as to whether the Working Party had
agreed to sectoral or horizontal disciplines for domestic regulation.
6. The Chairperson asked Members to comment on the proposed revisions.
7. The delegation of Brazil said they were not sure if the insertion of the U.S. text should be
made at the end of paragraph 4.  They under the impression that the issue presented by the United
States was a more general one, and not related specifically to the Japanese paper.  The representativeof the United States noted that her delegation had raised the issue during discussions of Japan’s paper,
                                                     
1 This document has been prepared under the Secretariat's own responsibility and without prejudice to
the positions of Members and to their rights and obligations under the WTO.S/WPDR/M/22
Page 2
but accepted that their text could be included earlier in the draft report.  The Chairperson suggested
placing the text in paragraph 2, which was accepted by the United States.
8. The delegation of the European Communities questioned the suggestion made by the United
States, asking if the Working Party needed to decide between the two approaches, or whether they
might go together.  The delegation was under the impression that the Working Party instead needed toaddress the question of creating any necessary disciplines.  The delegation of the United States said
they did not think that the approaches were mutually  exclusive, nor that they had to together.  The
inclusion of their comments was more a statement of fact of the present situation of the Working
Party.  The United States felt it was still in their interest to possibly pursue a sectoral approach, but
was open to a horizontal or sectoral approach.
9. The delegation of Hong Kong, China said the point about the question of horizontal or
sectoral disciplines being open was a good one.  He suggested that the U.S. text should read "…
including on whether to proceed on the basis of horizontal and/or sectoral disciplines".  The United
States supported the suggestion, noting they did not expect that the end result of discussions would
only be horizontal disciplines.
10. The Chairperson noted the comments made by delegations, and observed that the report had
been carefully drafted to avoid any specific reference to horizontal or sectoral disciplines.  He also
noted it was not implied that a decision should be made on pursuing either a horizontal set of
disciplines or a sectoral approach.  He suggested that the U.S. proposal be added to paragraph  2 of
the draft report.  He stressed that the language did not in any way intend to pre-empt or prejudge the
approach of the Working Party, but merely to capture the fact there was an extensive discussion, and
that the question remained open as to whether or not to proceed on the basis of horizontal or sectoraldisciplines.
11. The delegation of the European Communities said they preferred the compromise suggested
by the delegation of Hong Kong, China, and asked if the Secretariat could prepare a draft text to view
the suggested changes.  The Chairperson then asked the United States to clarify the intention behind
their suggested revision.  The delegation of the United States said their interest was to use the updated
report to explain to others the intricacies of the discussions in the Working Party.  They had alwayssupported sectoral disciplines, and horizontal disciplines on transparency.  The U.S. point was that
someone reading the update to the annual report might consider that the draft annex was an agreed
approach, rather than a basis for negotiations.  They agreed that the Secretariat should prepare a draft
text for consideration.
12. The Chairperson observed that delegations had suggested that the Secretariat prepare draft
language to be considered later in the meeting.  Members so agreed.
13. Later reverting back to the subject of the update to the annual report, the Chairperson
suggested that paragraph 2 of the draft report be revised by adding at the end of the paragraph the
sentence “No conclusions have yet been reached on any of the issues raised", as well as changing the
phrase "regulatory disciplines" in the first line to "any necessary disciplines”.  He then asked if
Members agreed with the changes.  Members so agreed, thereby approving the update to the Annual
Report of 2002 of the Working Party, with the revised paper to be circulated for subsequent
consideration at the Council level.S/WPDR/M/22
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B. DEVELOPMENT OF REGULATORY DISCIPLINES UNDER GATS ARTICLE VI:4
1. Discussion of Concepts Relating to the Development of Disciplines
Singapore’s paper on GATS Article VI:5 / Japan’s Draft Annex on Domestic Regulation
14. The Chairperson noted that the main item on the agenda was the Development of Regulatory
Disciplines under GATS Article VI:4 , with the first sub-item being the Discussion of Concepts
Relating to the Development of Disciplines .  At the previous formal meeting, on 15 May, the
delegation of Japan had introduced a revised version of their Draft Annex on Domestic Regulation , as
JOB(03)/45/Rev.1, dated 30 April 2003.  Members made extensive comments on the revised draft, as
recorded in the Minutes, followed by detailed responses from Japan.  The delegation of Singapore had
subsequently circulated an informal paper, JOB(03)/113, dated 11 June, as a follow-up to their
intervention during the 15 May formal meeting.  The Chairperson then asked if Singapore wished to
introduce their paper.
15. The representative from Singapore noted that Article VI:5 served as an interim provision
pending the Article VI:4 negotiations.  Some Members might hold the view that VI:5 was purely
provisional and subsequently would disappear;  other Members might feel that VI:5 was a set of
interim disciplines with important elements which need ed to be incorporated into the VI:4 disciplines.
Singapore’s informal paper did not indicate whether or not VI:5 elements should be incorporated intothe VI:4 disciplines, and left that as an open question to be discussed.
16. The first element of Article VI:5 to be examined, the Singapore representative stated, was the
notion of “reasonable expectations” found in VI:5(a)(ii).  When read in conjunction with the chapeau
of VI:5, it could be concluded as having the effect of grandfathering domestic regulations which
existed at the point of time that Members undertook their commitments.  Another element Membersneeded to consider was nullification and impairment, which was incorporated in Article 3:8 of the
DSU, where the burden of proof seemed to be on the complainant rather than the respondent.  The
third point was the notion of "at the time", also in VI:5(a)(ii).  The representative asked whether the
phrase referred to the time the commitments were made, to the conclusion of the negotiations, or
when the commitments came into effect.  The issues raised by that question referred not only to the
Members in 1995, but also newly acceded Members and new commitments in the new round.  His
delegation was raising such issues, as they were timely due to the discussions on VI:4 disciplines.
Members might want to consider whether VI:5 elements should be incorporated, but that would
depend upon the ambition of the final VI:4 disciplines, he stated.
17. The Chairperson stated that, unless Japan also wished to make any initial comments at that
point, he would open the floor for any further comments and questions by Members.  Members
thanked the delegations of Singapore and Japan for their papers, and made the following comments,
most of which were preliminary.
18. The representative of Indonesia, regarding Japan’s proposal, requested Members to address
the theoretical as well as the practical difficulties.  Considering the spirit behind Article VI of the
GATS, he believed that nothing in the Article was intended to interfere with the way Members
proposed, prepared or adopted certain measures of general application.  The GATS recognized thesovereignty of Members to develop domestic procedures that best suited their political, social, and
economic conditions, as well as their legal and constitutional systems. The representative believed
that Article VI:1 had a limited meaning, and that the spirit of Article VI should be understood in
relation to Article III on transparency.  The idea behind the words "inform" or "notify" referred to in
Article III was to pose an examination of measures, and not to prevent measures.  In addition, ArticleIII:5 referred to “significantly affecting trade in  services”, which was much more appealing to his
delegation than the term “affecting trade in services” found in  Article VI (VI:1).S/WPDR/M/22
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19. For any Member, the Indonesian representative stated, formulating measures not only
involved substantial material technical and requirements, but also political, social, and even cultural
dimensions which were impossible to measure.  The special character of particular services sectors or
sub-sectors was an issue that could complicate any across-the-board approach towards domestic
regulation.  In the case of financial services, for example, the possibility of multiple effects of a singlemeasure was difficult to predict.  It was possible that certain measures that were initially not intended
to affect trade in services could do so, due to unforeseen indirect implications.  The representative
also raised the issue of administrative and budgetary burden on developing Members, as a result of the
obligations mentioned in Japan’s draft annex.
20. The representative of China noted that paragraph 4 of Japan’s paper specified that the draft
annex did not apply to measures regulating the entry or temporary stay of natural persons.  Thus, it
excluded the movement of natural persons from coverage of the disciplines, he stated. Therepresentative recalled that the Examples  paper (JOB(02)/20/Rev.6, page 5) included an example
under licensing requirements of restrictions on registration (i.e. residency requirements which
prevented foreign engineers from signing off on drawings and managing projects).  That was
sufficient to prove that some licensing requirements were related to, and affected, the movement of
natural persons.  Therefore, the representative considered it necessary and important to includeprovisions on the movement of natural persons in future disciplines on domestic regulation.
21. Secondly, many qualification requirements directly affected the implementation of service
contracts, an area which China considered the paper had not given enough attention. On paragraph 22,
the representative asked for further elaboration of the meaning of "pre-established".  On paragraph 23,he noted that, as stated in paragraph 52 of the Minutes, Japan believed that provisions onqualifications acquired in the territory of another member or on MRAs seemed to be less relevant in
services sectors other than professional services.  The representative observed that many measures
listed in the Examples  paper were not related to professional services, but rather to services in general,
for example items 2, 3, 5 and 6 on page 4 under qualification requirements.  Recognition of
qualifications was an issue to be addressed under Article VI:4, which had been demonstrated by the
paragraphs 19-21 of the Accountancy Disciplines .  The representative asked for the draft text to be
revised, taking into account these issues, to introduce specific, concrete provisions on qualification
requirements and the equivalence of qualifications.  Thirdly, the representative proposed that
measures from the Examples  paper on which a common understanding had been reached should also
be included.
22. The representative of China also commented on paragraph 3 in Japan’s proposal, stating he
shared similar concerns with many Members regarding the scope of coverage, and hoped that Japan
would explain what other measures fell under the jurisdiction of the draft annex, in addition to
licensing requirements and procedures, qualification requirements and procedures and technical
standards.  On paragraph 7, the representative wonder ed who would bear the burden of proof in terms
of the sunset clause, and how the clause would actually operate.  He considered that point 3 of
paragraph 13 would result in considerable cost and administrative burden to Members, and hoped theparticular situation of developing country Members would be taken into consideration.  The
representative stated that his capital was consulting further on paragraphs 30 to 34, and would update
Members at future meetings.
23. The representative of Norway supported limiting application of the necessity test to sectors
where Members had undertaken commitments, and applying disciplines on transparency across all
sectors.  The WPDR had previously discussed whether the necessity test should apply to legitimate
objectives or to national policy objectives;  the delegation of Norway supported application to
national policy objectives, because the assessment of what should be considered as legitimate
objectives fell under the principle of a Member’s right to regulate.  The representative stressed the
importance of any necessity assessment to take into account the technical and economic feasibility ofa measure, including the level of development of a Member as well as the specific nature of theS/WPDR/M/22
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sector.  His delegation would be interested to he ar the views of Members on how such considerations
be taken into account.  Regarding paragraph 18 of Japan’s proposal, the representative pointed out
that in several Members, application proced ures had been standardised to cut down public
administration costs.  Such standardisation might make the application procedures more burdensome
for applicants, but cutting administrative costs was an important policy objective.  He indicated thathis delegation would be interested in hearing to what extent the proposed disciplines would take into
account such economic considerations.
24. The representative of Chinese Taipei stated that her delegation also was not comfortable with
the carve-out in paragraph 4 of Japan’s paper.  The issue, however, did give rise to the question of
whether were included in the five categories of measures covered under Article VI:4; she was under
the view that visa measures had different characteristics than measures under VI:4.  Professional
services providers mainly faced the critical issue of the recognition of their capabilities, and shebelieved it would be more efficient to address mode 4 issues from that perspective, either in Japan’s
paper or in a separate annex for professional services.  On item 3 of paragraph 13, the representative
was under the view that it would be administra tively burdensome for governments to compile and
give a response to each public comment.  She suggested changing the wording to make it a non-
obligatory requirement.  Regarding administrative gu idance, as stipulated in paragraphs 32 to 34, the
representative of stated that more detailed information was needed, and that it should be subject to
disciplines on transparency.  In paragraph 35, which related to judicial tribunals, she wondered if
arbitral and administrative tribunals should also be covered as in GATS Article VI:2(a).
25. On the Singapore informal paper, the Chinese Taipei representative noted that Article VI:5
provisions could have potential implications for commitments in Members’ schedules, and shared the
view of the Singaporean delegation of not prejudging or prejudicing the discussion of the draft
proposal by Japan and regulatory examples.  Regarding the issue of "at the time", she stated that the
covering point should be the completion of the negotiations, e.g.  for the Uruguay Round negotiations
it would be the end of 1993, and for the extended negotiations it should be the time of the completed
negotiations.  The same principle should apply to newly acceded members at the time of theiraccession.  Regarding nullification and impairment and the burden of proof, the representative stated
that measures could be notified at the time of the completion of negotiations and would therefore
enjoy grandfather status.  If a dispute arose from measures which had been notified, the burden of
proof would be the same as stipulated in Article III:5 of the DSU;  if the dispute arose outside of the
scope of the Member’s notification, the burden of proof appeared to be on the complainant.
26. The delegation of the European Communities agreed that Singapore’s paper was timely, and
hoped that more delegations would put elements on the table to address systemic issues.  They
supported the suggestion contained in the Singaporean paper requesting the Secretariat to look into
the issues in more detail, and to provide some history and background on Article VI:5.
27. The delegation of India agreed with the comments from the delegation of China, especially on
the issue of paragraph 4 of Japan’s paper, and noted that such a carve-out was possibly not required.
He believed that Article VI:4 did not have that kind of carve-out, and that measures related to theentry of natural persons should also be part of the VI:4 disciplines.  As regarded the issues of
qualification requirements and procedures, they believed that greater thought needed to be given and,
as some Members had indicated, that many of the issues related to recognition were not restricted to
professional services.
28. The representative of Brazil noted that the questions raised in Singapore’s contribution were
very relevant to the creation of disciplines under Article VI:4.  Nevertheless, he felt that Members
should avoid abstract discussions, and focus instead on concrete suggestions on the issue of Article
VI:4.  He felt it would be interesting to see how the Japanese paper addressed the issues raised by the
paper from Singapore.  The fact that Article VI:5 was provisional did not seem to prevent Members
from trying to look into VI:5 in order to see whet her some elements should be used for Article VI:4.S/WPDR/M/22
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With regard to the third line of paragraph 5(a) of Article VI ("…shall not apply licensing and
qualification requirements and technical standards.."), he noted that "shall not apply" could be read
“shall not apply future licensing and…" or "shall not apply to existing licensing and…".  If the
drafters were thinking only of future licensing and qualification requirements, it would read “shall not
adopt or establish…”.  However, the verb “apply” seemed to refer to existing licensing andqualification requirements and technical standards.  If this interpretation was accepted, then the
grandfathering issue was perhaps not a complicated one, because existing and future measures were
covered by VI:5 and Article VI as a whole, the representative stated.
29. The representative of Hong Kong, China look ed forward to more submissions, especially
from developing countries, for a broader view of the issues.  He suggested that informal meetings
would be useful for a more open examination of individual elements, perhaps before or after the
October cluster.  He noted that Singapore’s paper raised three relevant issues: “grandfathering”;nullification and impairment; and burden of proof.  Looking at the language in paragraph 5 itself, he
felt that those elements were related more to the transitional nature of Article VI:5.  The Article stated
"pending the entry into force of disciplines..", and he observed that paragraph 5(a)(i) referred back to
the criteria that were enshrined in VI:4(a-c).  The key objective of VI:5 was to ensure that the
standards that were set in paragraph 4(a-c) would not be comprised while negotiations underArticle VI:4 were ongoing.  The representative noted that the formulation of VI:4 was non-exhaustive,
due to the inclusion of the words inter alia .  He felt there was a distinction between the elements
contained in VI:4(a-c) itself, which were referred to in VI:5(a)(i), and those elements which were in
the preamble in VI:5(a) and VI:5(a)(ii), especial ly the words "could not reasonably have been
expected" and "at the time".  The representative was interested in the Secretariat's view of the historyof VI:4 and VI:5 in that regard.
30. The Hong Kong, China representative also expressed interest in the issue of nullification and
impairment, in particular, the notion of those issues as contained in Article XXIII.  If VI:5 fell away
after VI:4 disciplines came into effect, the element of nullification and impairment would still be
preserved in Article  XXIII.  He noted that the phrase "could not reasonably have been expected" hadbeen compared to the effect of grandfathering.  His delegation was unsure whether there was such a
categorical distinction of application of VI:5 to pre-existing or new measures.  If, for example, a
Member undertook a commitment on mode 4 in a particular service sector, it would be expected that
the Member eliminate procedures that would make  it impossible for someone from abroad to have
their qualifications certified.  As to how the disciplines should be related to pre-existing regulation, it
would also be logical to consider the notion of st andstill, the representative stated.  Regarding the
issue of burden of proof, he noted the Secretariat's elaboration at the last meeting that it rested on thecomplainant, as there were no rules established on domestic regulation.  He felt that if the rules
developed under VI:4 were effective as rules applicable to all Members, then nullification or
impairment should be presumed if there were any violation of such rules, in accordance with
paragraph 8, Article 3 of the DSU.
31. On Japan’s paper, the representative of Hong Kong, China noted that a starting point for any
examination would be comparing measures in relation to mode 4 with the scope envisaged in the
Annex on Movement of Natural Persons.  This would be a crucial point in respect to not preventing a
Member from applying measures regarding the orderly movement of natural persons.  On the other
hand, there was the question of what kind of mode 4 measures would be included under the GATS,
and whether they would be within the scope of eventual disciplines that would be developed.  Theissue of transparency was another interesting point, i.e. the distinction between transparency at the
inter-governmental level, and at the operational level between regulators and service suppliers.  His
delegation felt that it was important that transparen cy should apply at the level of regulators and
suppliers, especially to small- and medium-sized suppliers, most of whom would be in developing
countries.  Another distinction with regard to transparency would be the issue of application to federaland sub-federal level.  He urged that transparency disciplines be equally applicable to the federal andS/WPDR/M/22
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sub-federal levels, in order that they could serve a useful purpose in ensuring that regulations would
not become undue barriers to trade.
32. On the issue of administrative burden and costs, the representative of Hong Kong, China
agreed that it was an important element that would have to be taken into account in devising any
transparency disciplines.  However, regulatory di sciplines themselves would also simplify existing
regulations or procedures or requirements, so the burden of implementation would be reduced.
Paragraph 13 of the Japanese paper on public comment procedures fit in well with his comments, as
prior notice of measures would have to take into account the need to balance the benefits of prior
consultation and the administrative burden that would be imposed.  The Examples  paper showed that
many regulations were being applied at a sub-federal level;  if there was considered to be a need for
such a provision, the representative asked why it should be confined to the level of the central
government, which would render it pointless in the case of suppliers who were facing regulators at the
sub-federal level.  The representative asked if the provision should be applied to regulators instead of
the central government.
33. The Chairperson took note of the request for informal consultations and further insights from
the Secretariat in regard to the background of the drafting history of Article VI:5.  He then gave the
floor to the Secretariat to respond.  The Secretariat stated that paragraph 5 of Article VI needed to be
placed in the broader context of the WTO system.  As a legal system, the WTO system was not about
enforcing the law, but  about protecting negotiated rights and contractual obligations.  The objective
was to protect the benefits from negotiated commitments.  Across the WTO system, there were two
types of litigation scenarios:  one based on a violation of an explicit obligation;  and the other based
on an action by another Member that damaged the interests behind a commitment, i.e. nullification orimpairment.  At all times, with the exception of paragraph 5 of Article VI, nullification or impairment
was associated with non-violation cases.
34. The Secretariat noted that Article XXIII of the GATS established the legal right for any
Member to challenge the action of another Member.  Paragraphs 1 and 2 were about situations where
a Member was alleged to have violated an obligation.  Paragraph 8 of Article 3 of the DSU spoke ofsituations where there had been a violation, and would be a prima facie nullification or impairment.
The reference to nullification or impairment in that context was not about establishing a situation, but
about presuming the situation had occurred.  Situations where there had not been a violation, but there
had been an action which caused nullification or impairment, were the scenario of Article XXIII:3 of
the GATS.  There were two conditions required:  that a measure which did not violate any obligation
caused nullification or impairment of a benefit from a negotiated commitment;  and that the measure
subject to a dispute was not reasonably expected at the time of negotiation of the commitment.  Ifthose two conditions were established, there would be nullification or impairment, and the Member
concerned would be obliged to provide compensation.  The Chairperson noted that the Secretariat's
statements were on a consultative basis, and did not constitute an interpretation of Article VI:5.
35. The representative of Singapore raised two points in relation to mode 4 as mentioned in the
Japanese paper.  He observed that, in looking at Article VI and the Annex on the Movement of
Natural Persons, the Annex applied to Article VI, and Article VI did not exclude the Annex.  He noted
that paragraph 4 of the Japanese paper captured elements of the Annex including "…does not apply to
measures regulating the entry of natural persons...”, etc.  Other elements in the Annex were not
reflected in the Japanese paper, e.g. paragraph 2 stating "... shall not apply to measures affecting
natural persons seeking access to the employment market of a Member, ...".  The representative askedwhether there would be a legal implication in ca pturing some elements of the Annex while other
elements were excluded.
36. The representative of Thailand also asked if the Secretariat could provide written information
on Article VI:5.  On Japan’s paper, she agreed with  the delegations of China, India and Hong Kong,
China, and did not see qualification issues as less relevant in services sectors other than professionalS/WPDR/M/22
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services.  She noted that the mode 4 and qualification issues were tightly interwoven, as qualification
requirements were imposed on suppliers in many services, e.g. restaurants, computer services,
transport and education.  Therefore, a serious attempt should be made to take qualification issues into
account, and to address recognition in future disciplines.  Her delegation favoured horizontal
disciplines, and looked to have them reflect qualific ation issues in an adequate manner.  The Japanese
proposal could be further fleshed out on qualifications, she said.  On the issue of mode 4, she shared
the view that the draft annex might not cover everything.  If the disciplines were to be made attractive
to developing countries, then mode 4 should be taken into account.  The representative also asked for
clarification from the Chair regarding the EC paper and the request for informal discussions from
Hong Kong, China.
37. The Chairperson noted the statement by the delegation of Thailand, and stated that his
intention was to exhaust the discussion on the basis of the papers by the delegations of Japan and
Singapore, and to return to the EC paper at a later time in order to give delegations time to study and
prepare.  With regard to the informal consultation s, he understood that there would be a free-flowing
exchange of ideas on the elements from the various submissions, together with any other elements
that Members felt had not been included.
38. The representative of the United States supported the request for informal discussions from
Hong Kong, China.  With regard to Mode 4 and reco gnition, she felt it would be useful to refer to the
Examples  paper, noting that China had mentioned an example on residency requirements that might
help clarify the Working Party’s view.  Large portions of recognition issues might be dealt with under
the Council for Trade in Services, she said, as it was an Article VII issue.  The representative sought
clarification on licensing requirements and procedures versus specific commitments under mode 4,and where the line was to be drawn between trade policy, immigration policy and security policy.  Her
delegation wished to consult with colleagues on the cross-references to Articles in other agreements,
and therefore would come back to Singapore’s paper at a later time.
39. The delegation of Canada suggested that, with regard to the Singapore paper, there might be
value in looking at the concepts in Article VI:5 an d to what extent they should form part of the
exercise in Article VI:4.  He recalled there was an earlier Note from the Secretariat, entitled Article
VI:4 of the GATS: Disciplines on Domestic Regulation Applicable to all Services,  that might be
relevant to the discussion.  With regard to informal consultations, the delegation agreed and suggested
that the elements to be discussed be broadly defined, including issues which had arisen from the
Japanese paper, Article VI:5 and the Examples  paper.  He expressed concern about the request to the
Secretariat regarding a paper on nullification and impairment, as the issue was of high sensitivity, and
would need to consult with capital.  The Chairperson noted that the Secretariat document Canada
referred to was S/C/W/96, issued on 1 March 1999.
40. The representative of Switzerland noted that the Singapore paper raised important issues on
Article VI:5 and its relation to possible future Article VI:4 disciplines.  With regard to the concept of
grandfathering, she wondered whether domestic regulation existing at the time the specific
commitments were undertaken should therefore be excluded from the scope of application ofArticle VI:5.  The words "apply" and "in a manner which" were used by the drafters, and if they had
wanted to exclude existing domestic regulations they could have used the words "adopt" or "draft”.
Regarding the time of when the commitments were ma de, she felt that it was less relevant if existing
domestic regulation was also included in the scope of application of Article VI:5.
41. The delegation of Colombia agreed with paragraph 4 of Singapore’s paper regarding the
provisional nature of Article VI:5.  They considered  that some elements should be linked within the
framework of the discussion of VI:4, especially with the Japanese proposal. The delegation felt that
the connotation on grandfathering found in the do cument was not the most appropriate one when
defining the provisional nature of VI:5.  They also noted that a document issued by the Negotiating
Group on Rules (JOB(03)/44/Rev.1), dated 5 March 2003, mentioned that the grandfathering rightsS/WPDR/M/22
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used most often in legal and commercial wording indicated cases where certain parties were given the
right to maintain certain pre-existing measures which otherwise would be incompatible with the
provisions in the new treaty.  The legal connotation of grandfathering could be found in other
provisions of the WTO Agreement, the delegation noted, and hence there was interest in providing
information related to ongoing discussions in other WTO bodies.
42. The delegation of Korea stated that the issues raised in the paper by Singapore were relevant
and timely, and considered that Article VI:5 should be tackled as part of the process.  He supported
using the term standstill instead of grandfathering, as the delegation of Hong Kong, China had pointed
out.  Regarding background information on the history of Article VI:5, he considered that written
information and interpretation would be needed for a greater understanding.
43. The representative of New Zealand considered the ongoing work on regulatory examples as
complementary to the broader work on domestic regulation.  She commented on the richness of the
discussion, which she felt illustrated the complexity of the issues under discussion.  She stressed that
her delegation was focused on the issue of scope, and hoped to take part in the debate in future
sessions.
44. The Chairperson noted that Members had consistently indicated that they saw the work on
regulatory examples as a very useful complement to discussions on the submission by Japan, and the
paper to be presented by the EC.  The delegation of China had already started the process of analysis
of how certain examples could be more adequately addressed by disciplines.  As no other delegations
had comments at that time, the Chairman gave the floor to Japan to answer the questions on their
paper posed by Members.
45. The representative of Japan noted the extensive comments on their paper.  He agreed with the
suggestion from Hong Kong, China on taking up some elements in future discussions in informal
mode.  In relation to the questions on objectives and scope of coverage, he stated that on page 10 there
was a diagram that illustrated what kinds of measures were intended to be covered by the different
paragraphs within the disciplines.  The Annex would apply mostly to the five measures which were
specified in Article VI:4, and only to other measures in terms of transparency provisions andprocedures of juridical tribunals.  The discrepancy between the objective and the scope of the
measures to which the disciplines would be appl ied would not be as great as thought by some
Members.
46. On paragraph 4, the representative of Japan took note of the comments by Members.  He
stated that the carve-out explicitly resulted from the basic question of whether measures related to
mode 4 were actually licensing and qualification requirements or procedures.  He considered it was
useful to start from the point of clarification of the Annex on the Movement of Natural Persons, tohave a better idea of what was covered under the GATS, and in order to reflect on which parts would
be relevant under Article VI:4 disciplines.  Members also mentioned looking into concrete examples,
which might be a useful way to examine mode 4 measures that might be related to licensing
procedures and qualification procedures.  He also noted the legal implications of referring to only part
of the Annex.  It was not the intention of Japan to include paragraph 2 type measures in the scope ofapplication of the draft annex.
47. On paragraph 6, the representative of Japan thanked Norway for its intervention on national
policy objectives.  On paragraph 7, Japan drew the provision from the TBT treaty, Article 2.3, which
would have to be consulted regarding the burden of proof.  On the issue of transparency, he
emphasised that the administrative burden had decreased with the progress of information technology,and that the benefits resulting from increased transparency should also be considered.  On paragraph
13 regarding public comment procedures, the representative emphasised that they had put an element
of flexibility into that provision.  Such procedures were being introduced in many countries, including
developing countries, and therefore he felt that Members should accommodate a best endeavourS/WPDR/M/22
Page 10
obligation.  There was a reference to the burden of the obligation of central governments to present
views or comments received, but he did not feel it necessary to reply to each comment submitted.  He
felt it would be better that the public understood why their comments had or had not been taken into
consideration when formulating policies.
48. In reply to question regarding standardized administrative procedures, the representative of
Japan felt they would have to be accommodated in terms of national policy objectives.  Regarding the
comment on pre-established requirements, the wording was taken from the Accountancy Disciplines .
He took note of the comments made on recognit ion and MRAs, and agreed that Members should
engage in more examples.  He welcomed an y contribution from Members on provisions for
recognition of qualifications that might be useful across the board.  On paragraph 23, his delegation
for open to suggestions on wording.  The representative thanked Members for having discussed the
issue of administrative guidance, and agreed with their comments in trying to address those types of
governmental measures that would also affect trade in services.  He hoped there would be further
discussion on the kind of disciplines necessary in that respect.  He noted the difference in the
formulation on the issue of procedures for judicial tribunals, between that paragraph and paragraph
VI:2 of the GATS.
EC Proposal for Disciplines on Licensing Procedures
49. The representative of the European Communities apologised to Members for the late
submission of their paper (subsequently circulated as S/WPDR/W/25, dated 10 July 2003).  The
development of disciplines was an importance component in the current round of negotiations, she
stated, and should contribute to creating a more trade-friendly and transparent regulatory framework.
Work on the disciplines should not be undertaken with the intention to prescribe or impose regulatoryapproaches or substance on Members.  Their paper, following upon the proposal from Japan, was a
more limited approach, setting out a concrete proposal on licensing procedures.  Licensing procedures
were relevant to all services sectors where licences were required, and could be a particular burden in
sectors dominated by small and medium-sized enterprises or individual service suppliers.  The
approach of the EC delegation was not to address the substance of regulations, or the substantiverequirements to be fulfilled to obtain a licence, but to focus on the procedures.  That approach was
limited, but it was not the intention of the delegation to exclude any other issues under the mandate of
Article VI:4.
50.  The representative of the European Communities said that three points should be addressed
by disciplines on licensing procedures:  transparen cy procedures, building upon the existing principles
in Articles III and VI;  potential trade restrictiveness of licensing procedures, on the basis of
Article VI:4(c);  and procedures related to the review of administrative decisions, as seen in theprovisions of Article VI:2.  Disciplines on licensing procedures in services had already been
developed in different contexts, for example, the Accountancy Disciplines  contained specific parts on
licensing procedures, as well as the rules developed in the Reference Paper for Telecommunication
Services.  Those existing provisions, in force or pending entry into force, were of a general nature, but
constituted a good point of reference for the development of disciplines for licensing procedures in allservices sectors.  The representative considered that the disciplines and procedures for licensing
should ensure a number of objectives (as listed on page 3 of S/WPDR/W/25).  Licensing procedures
should be pre-established, they should be publicly available, and should be based on objective criteria.
Procedures should identify activities for which a licence would be required, as well as the terms and
conditions under which a licence can be obtained, including all critical information for the completionof an application, relevant timeframes and critical deadlines.  Procedures should also identify the
competent authority, and identify if and what kind of appeal procedures existed.
51. Part III of their paper included elements for disciplines on licensing procedures, the
representative of the European Communities said.  These were taken from the Accountancy
Disciplines  and the telecoms reference paper, as well as existing provisions from the Agreement onS/WPDR/M/22
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Import Licensing Procedures which, although not to be  considered as a parallel reference, contained
useful elements.  The proposed disciplines were intended to address procedures to be followed for the
submission and processing of an application unde r a licensing, or any other, authorisation regime
which required the submission of an application or other documentation.  One of the most elements
was that procedures should be pre-established, publicly available and objective.  Another importantprinciple was that procedures would be neutral and administered in a reasonable, objective and
impartial manner.  Several basic elements should be adhered to under the subject of transparency, as
listed in the paper; however, if there were exceptions to the established rules, they also should be
made publicly available.  The idea of introducing a change in licensing procedures effecting trade in
services was also listed in the paper, and Members should provide an opportunity for comments.  The
last part of the paper introduced three provisions which referred to licensing decisions that timeframe
elements should be specified by the authorities, th e applicant should be informed together with the
reasons if an application was denied and the possibility of appeal.
52. Members thanked the delegation of the European Communities for their paper, and made the
following preliminary comments:
53. The delegation of Japan asked whether the scope of the licensing procedures in the EC paper
covered situations such as simple registration by a service provider prior to entry into the market,
including procedures for the recognition of foreign qualifications as was sometimes the case for
foreign legal consultants.  Paragraph 3 of the general provisions, which referred to a decision of and
procedures used by competent authorities preparing, adopting and applying licensing procedures, was
slightly confusing. The delegation asked for clarification with regard to paragraph 7, where the EC
delegation referred to the procedures that should be pre-established, made publicly available, andauthenticated copies of documentation.  For paragraph 12, sub-item (h), the delegate requested the
definition of the phrase “public involvement”.  On paragraph 15, which referred to "review and
decision” by all the relevant authorities, he asked whether the review and the decision would be taken
together or separately.
54. The representative of Hong Kong, China said that the approach taken by the EC delegation
was useful.  The possible elements of disciplines listed could be used as a starting point to address the
regulatory examples.  The approach did not exclude other issues mandated under Article VI:4, and he
expected the discussion to continue on other aspects, including qualification procedures and
qualification requirements.  The representative noted that some elements were taken from the
Agreement on Import Licensing Procedures in the goods context, and therefore would need
modification in the services context.  He posed the question of whether the language in paragraph 19,
where reference was made to "prior conditions for the supply of a service in the territory of aMember", needed to be adjusted, especially when co nsidering that licensing might also be required in
some Members’ jurisdictions for the supply of services under mode 1.
55. Regarding the second sentence of paragraph 3 of the general provisions, the Hong Kong,
China representative asked if reference was being made to the competent authority, or to the process
of making the decision.  He noted that paragraph 5 referred to the acceptance of submissions of
applications in an electronic form, and wished to know whether it was already the case in the
domestic regimes of the EC, for example if there was a requirement for electronic submissions to have
the same legal status.  With regard to transparency procedures, and to the review of licensing
decisions, he wished to have further discussions.
56. The delegation of New Zealand noted that during the rich debate there was no attempt to
impose particular regulatory approaches.  They requested clarification, in the second sentence of
paragraph 3 of the EC paper, of the phrase "it shall be separate from any supplier of services for
which a licence is required". They wondered how the requirement that a competent authority be
separate from services suppliers would affect professional bodies that had a role in the licensing orS/WPDR/M/22
Page 12
registration of services suppliers, as the professional bodies themselves might not be services
suppliers but their Members would be.
57. The representative of China noted that the papers produced by the EC and Japan had different
approaches.  The Japanese paper encompassed all the elements referred to in Article VI:4, whereas the
EC paper did not.  Therefore, her delegation posed the question of whether the EC intended to have aset of disciplines on licensing procedures as well, or if they envisaged that the elements for licensing
procedures in the Japanese paper would be inserted into their paper.  She also asked whether the
licensing disciplines proposed by the EC would apply only to the sectors where Members had made
commitments.  She agreed that the wording in paragraph 3 under Section 3 on licensing procedures
was confusing;  her delegation thought the issue dealt with the independence of the regulator, and did
not think that element should be under licensing procedures.  She also sought clarification on the two
sentences in paragraph 11, and on the wording in paragraph 12(e)-(h) involving public involvement.To conclude, she stated her delegation thought that the disciplines under Article VI:4 should be
horizontal, and should encompass all elements.
58. The delegation of Chile sought clarification on various points of the EC paper, such as the
wording of paragraph 2, stating that "licensing procedures shall be neutral in application".  Further
information was on requested concerning the second line of paragraph 3, where it referred to“impartial”;  on paragraph 5 where it referred to electronic format;  and on paragraph 9, with regard to
“2(a)”, as well as with regard to "Such timeframe may reflect public consultation processes".
59. The representative of Peru said that the EC paper was a very good basis for further work, with
many positive elements.  He shared the view of New Zealand with regard to paragraph 3 where the
EC made reference to the competent authority being separate from any service provider.  The EC took
into account import licensing procedures but, as those procedures referred to goods, he sought
clarification on how those standards would apply to services.  Regarding documentation requirements
in paragraphs 6 to 8, he asked if the EC had considered the case of translations.  In many countries
translations would be seen as a requirement, but were costly and could be considered a barrier to the
service providers dealing with licences.  He also requested clarification on paragraph 9, where itreferred to "stipulated under 2(a)", and said that para 14 needed examination.
60. The delegation of India shared the concerns of other Members on paragraph 3 as to whether
"it" referred to the competent authority.  If this we re so, then it would be difficult to separate the
regulator from the service supplier.  However, if it  was looking at the need to separate the two in
terms of independence, then it might be part of the licensing procedure itself.  They also sought clarity
on the word "impartial".  On paragraph  13, they asked if the words “exception, derogation or
changes” were the same kinds of things.
61. The delegation of Korea noted that the two different perspectives of the papers could be seen
as complementary.  The paper by Japan was comprehensive, and the EC paper was more focused in
detailing elements that could be included in the di sciplines.  They posed the question to the EC on
what elements should be prescribed in disciplines, and what should be left to the discretion of each
Member.
62. The delegation of Chinese Taipei shared the questions raised by previous speakers, and noted
that certain elements were related to both licensing and qualification requirements.  They considered
the disciplines on licensing procedures as a useful starting-point;  however, they sought clarification
from the European Communities on "where possible by electronic means" in paragraph 12(a).
63. The delegation of Colombia said the EC paper included very important elements on the
extension of the discussion of Article VI:4.  They questioned whether the procedures for obtaining a
visa were included as part of licensing procedures, as well as the transparency aspects when a visa isS/WPDR/M/22
Page 13
requested.  The delegation of Thailand thanked the European Communities for their paper, and said
they would comment at a later date.
64. The representative of the European Commun ities thanked Members for their questions and
gave preliminary responses.  Although the Agreement on Import Licensing Procedures referred to
goods, her delegation was very careful in using only some of the elements and changing the languageto a services context.  In answering the questi on on how the EC paper would relate to the Japanese
proposal, she said that the idea was to follow upon the comprehensive ideas from Japan's paper, by
addressing one issue in more detail.  The EC paper was intended as a complement to Japan’s paper,
and not as an alternative.  She hoped more Members would put proposals on the table, and move the
work forward.  The question on paragraph 3 was a very subtle and difficult one when thinking about
professional associations who might have delegated power, and therefore become self-regulatory
agencies.  She considered it a very important principle, and a professional body in its function as aregulatory body should still try to retain an independent and neutral, impartial approach.  With regard
to paragraph 5, submitting applications in electro nic format was an addition made to the existing
provision of the Accountancy Disciplines , and many institutions and regulatory authorities now
provided for that possibility.
65. On paragraph 9, the representative of the European Communities explained the intended
reference was to 12(a).  In 12(h), "public involvement in the licensing process" was a new element on
public comment procedures that should be taken into account.  There were sectors in the EC where
the process of awarding a licence would involve the competent authority having a process in place for
public comment.  This should be possible, but would influence the process and timeframe necessary
to come to a decision.  It would be useful for licen sing applicants to be aware of such processes and
adjust their expectations.  In answer to the question posed on paragraph 11 where a licence once
granted should enter into force immediately, and in accordance with the terms specified therein, the
EC considered there might be a condition which required a certain period of time lapsing before the
licence could enter into force.  It should be stipulated in the terms and conditions, and should not be
understood as contradicting the entry into force, making clear the conditions and timeframe.  Shewould provide answers to the other questions at a later stage.
66. The Chairperson said he would not attempt to summarize, and reiterated New Zealand’s
comment that the extent of participation indicated the richness and complicated nature of the issues
being discussed.  In respect to the Japanese paper, he noted that many delegations had requested
clarification as to the scope and perceived special treatment for mode 4, as well as further information
on transparency, public comment and administrative guidance.  Also raised were recognition issues,
and whether they should be addressed, and how certain aspects of the Accountancy Disciplines  might
be put into a broader context.  The paper by Singapore raised many pertinent questions, e.g. on
grandfathering or standstill commitments, how Article VI:5 related to work under Article VI:4, on
burden of proof, nullification and impairment, and the notion of “reasonable expectations”.
Regarding the paper from the European Communities, the Chairperson noted the extensive
preliminary discussions on scope and approach.  Whereas the Japanese paper took a more macroperspective of the disciplines to be considered, the EC paper was more specific, focusing on licensing
procedures.  He considered that the discussions had produced a useful mix of issues, which could be
taken forward in the context of a free-flowing exchan ge of ideas in informal sessions of the Working
Party, possibly after the Cancún Ministerial meeting.  He encouraged Members to table more
proposals on possible elements for disciplines, either through formal submissions or informal papers.S/WPDR/M/22
Page 14
Examples Paper
67. The Chairperson noted that, at the May meeting, comments had been made by several
delegations on the measures listed in the Examples  paper.  The resume of those comments was
contained in Annex III of the Examples  paper, which had been updated and circulated by the
Secretariat as JOB(02)/20/Rev.6, dated 24 June 2003.  As recorded in the Minutes, he had noted in hisinformal consultations that Members had indicated they wished to offer additional substantial
comments and to add more examples, as well as give more opportunities for developing country
participation.  Some Members had also suggested examining the measures in the Examples  paper in
light of the provision of Japan’s draft annex.
68. The Chairperson also noted that, as mentioned earlier, the delegation of Chinese Taipei had
circulated a room document.  This document was entitled Examples of Measures to be Addressed by
Disciplines under GATS Article VI:4 .  He asked Chinese Taipei to introduce their paper.
69. The delegation of Chinese Taipei noted that the discussion of regulatory examples was
complementary to discussions of the proposals by Japan and the EC.  After discussing the issue with
services regulators in Chinese Taipei, they had provided additional examples.  The list included
minimum paid-in capital requirements in the telecommunications sector;  employment of licensed
brokers, agents and adjusters by insurance companies;  the requirement that licensed professionalsoccupy a certain proportion of the management in professional engineering consulting companies and
hospitals;  prior approval needed for employment of managerial personnel, and several technical
standards related to minimum paid-in capital adjustme nt;  and the requirement that internal documents
must be in an official local language, the use of domestic headings and codes rather than those
according to international practice, and non-transparent domestic regulations.
70. On the question of whether the examples raised in the paper were related to Articles XVI or
XVII of the GATS, the delegation of Chinese Taipei was of the view that the examples did not fall
within the scope of the measures stipulated under Article XVI, nor were they measures as describedunder Article XVII, since they appeared to be applied on a non-discriminatory basis to foreign
services suppliers.  Some of the measures were designed to ensure service quality or the sustainableoperation of certain business concerns.  Others were designed to ensure transparency in the disclosure
of information to local customers.  The delegation welcomed an exchange of views on their paper.
71. The Chairperson then asked if any Member wished to make any comments on Chinese
Taipei’s paper or on the measures in the Examples  paper.  He reminded delegations that the four
questions Members had agreed to ask when l ooking at each measure individually were:
(a) Is the measure already covered by Articles XVI and/or XVII?
(b) If not, is it addressed by any other provisions of the Agreement (e.g. Articles II, III,
VIII, IX)?
(c) If not, does it fall clearly within the scope of Article VI, in particular VI:4 (licensing
requirements, qualification requirements, technical standards, licensing procedures
and qualification procedures)?;  and
(d) If so, is the measure adequately addressed by the relevant provisions of the
Accountancy Disciplines , or are modifications required?
72. As with the previous meetings, Members should in dicate if they wish their interventions to be
recorded in the Minutes, the Chairperson stated;  otherwise, the examination will be on an informal
basis followed by a summary of discussions from the Chairperson.  Members might also comment on
their plans to contribute additional regulatory exampl es, or to clarify existing examples, he stated.S/WPDR/M/22
Page 15
73. The Chairperson summarized the informal discussions.  He noted that, due to the recent
submission and circulation of the document from Chinese Taipei, it was not incorporated in the
Examples  paper revised by the Secretariat, but would be added in the next revision.  Several
delegations had consistently expressed support for retaining this agenda item in the Working Party's
meetings, and it would encourage Members to re-visit the Examples  paper and correlate it with the
papers already on the table, i.e. the Japanese and EC papers.  The primary purpose behind the
examples exercise was to help identify elements which could be the basis for further discussions of
disciplines.  In this regard, if the work examin ed elements that would form the basis for future
disciplines, it would be worth re-visiting the examples and engage in a more active discussion of the
Examples  paper.  The Chairperson urged more Members to submit examples, and to engage in further
debate on the examples on the table so far.  At the suggestion of the Chairman, Members agreed to
retain the item on the agenda, and took note of the statements made.
74. Returning to formal mode, the Chairperson  asked if Members had comments on any of the
issues covered under the Summary  of Discussions , the latest version of which had been circulated as
JOB(02)/3/Rev.6, dated 24 June 2003.  No comments were received.
75. The Chairperson stated that, before closing discussions under that agenda sub-item, he wished
to note that, at the previous meeting, the Secretariat had agreed to update, hopefully by the current
meeting, the informal paper on necessity (Job No. 5929, dated 8 October 1999).  He had been
informed by the Secretariat that it was not possible to provide an adequate paper for the current
meeting, but that the update will certainly be available for the next meeting.  He was also told that, as
always, comments and ideas from Members would be welcome.
76. The Chairperson concluded by stating that the Secretariat would carry forward the
suggestions made by delegations at the previous meeting, and proceed to prepare an update of the
informal paper on necessity.
2. Development of Disciplines for Professional Services
Recognition Issues
77. The Chairperson then turned to the other main aspect of the work on regulatory disciplines,
i.e. the Development of Disciplines for Professional Services .  He noted that, at the previous meeting,
Members had continued their discussion on MRAs and the paper by the OECD, which had earlier
been circulated as JOB(03)/28, dated 13 February 2003.  Members also made comments on the formal
paper by the United States on MRAs, circulated  as document S/WPDR/W/23, dated 10 March 2003.
As he had noted at the start of the current meeting, the delegation of India had circulated a room
document on recognition issues.  The Chairperson asked if India wished to introduce their paper.
78. The representative of India said that the inform al paper tried to look at different issues and
alternatives, not suggesting by answers, but by aski ng how to move the process forward.  He said that
it would be useful to recollect the mandate regarding recognition issues, and take into account the
Ministerial  Decision on Professional Services  (S/L/3), as well as the application of paragraph 6 of
Article VI by establishing guidelines for the recognition of qualifications.  Also important were the
Decision on Domestic Regulation  (S/L/70) and the establishment of the Working Party on Domestic
Regulation, which was assigned the mandate of the previous Working Party on Professional Services.
Recognition was one of the core issues, particularly for professional services.  The mandate in
Article VI:4 did have a bearing on recognition, and it was one of the crucial elements which had a
bearing on market access in Mode 4, especially for professional services, and therefore on the
negotiations.
79. The paper suggested various approaches that could be taken to help move the issue of
recognition forward, the Indian representative st ated.  This included the mandate for development ofS/WPDR/M/22
Page 16
disciplines for professional services, under which an exercise had been carried out to look at the
extent of the applicability of the Accountancy Disciplines  to other professional services.  In this
respect the proposed seminar would be very useful.  Other approaches could be to draw attention to
Article V:6, and the mandate under paragraph 2(c) of S/L/3 to establish guidelines for the recognition
of qualifications.  Possible options that could be considered included guidelines for the establishmentof recognition agreements, where Members could built on the existing MRA Guidelines (S/L/38) for
accountancy .  The representative believed this was a method by which bilateral MRAs could be
achieved via multilateral principles guiding the establishment of such recognition agreements.
Another possibility would be additional commitments  in the context of Article XVIII, drawing on the
principles of Article VI:4.  The Secretariat Examples  paper listed recognition problems that might
need to be addressed by disciplines under Article VI:4.  It might be a useful exercise to have a
separate list that focused on recognition, the representative stated, to make Members look at certainelements that would help in establishing guidelines for the recognition of qualifications.
80. Members thanked the delegation of India for their informal paper, and made the following
preliminary comments:
81. The representative of the United States asked for clarification on the scope of the mandate,
and whether mutual recognition should be an issue dealt with in the Council for Trade in Services, but
she recognized the linkages many Members expressed to the work in the WPDR.  Her delegation
wished to retain recognition measures within the Examples  paper, in order to relate them to licensing
requirements in terms of creating disciplines.  She was open to the idea of issuing a new document,
but stressed that the examples be structured in terms of what was agreed to be discussed.
82. The representative of Thailand said that her delegation felt that the issue of recognition was
linked to the issue of qualification procedures and requirements, and therefore should be dealt with in
the Working Party.  She said that the Indian paper reflected points made by her delegation in previous
years, i.e. that the lack of recognition was a major barrier to mode 4.  Even with market access and
national treatment, trade failed due to lack of recognition of qualifications.  Within five major sectors,
i.e. professional services, construction, education, health and tourism, her delegation found that thegreatest barriers to mode 4 were the lack of recognition of qualifications, which included not only
education but also experience.  If there were no way to overcome this problem, there would be no
gain from multilateral negotiations on services for developing countries.  She found the two-track
approach interesting:  one to work separately on professional services;  the second on other kinds of
recognition.  She felt that strengthening the existing MRA Guidelines would be more beneficial,
perhaps to establish some principles at the multila teral level to guide recognition agreements.  Her
delegation was of the opinion that multilateral discussions and the development of disciplines couldbe used as guidelines for making such MRAs.
83. The representative of Chile stated that recognition was closely tied with qualification
requirements, and therefore her delegation felt the issue could be dealt with in the Working Party on
Domestic Regulation.  She supported the suggestion for a separate list of examples as a good idea to
push the work forward.
84. The delegation of the European Communities felt that there could be room for work on the
issue of MRAs, if the mandate of the previ ous Working Party on Professional Services was
undertaken in the mandate of the WPDR.  The EC supported the development of disciplines on
professional services, and agreed to continue the examination of the extension of the Accountancy
Disciplines .  They felt that further examination was needed on establishing guidelines for the
recognition of qualifications.  They requested clarification on the third line of option (1) in India’s
informal paper, which stated "with a view to exploring the inclusion as an additional commitment".
They asked whether the inclusion would be automatic, or whether it would be an additional
commitment that every Member would have the possibility to negotiate on the basis of Article XVIII.
The delegation noted that at least one Member in their initial offers had taken an additionalS/WPDR/M/22
Page 17
commitment on architectural services, where the qual ification requirement was waived provided that
the foreign architect worked with a duly qualified local architect.  They noted that additional
commitments negotiated on the basis of Article XVIII were subject to the MFN requirement, while
autonomous recognition not covered by an additional commitment was not subject to MFN.  The
delegation sought clarification on the possibility to what extent the work was to be undertaken by theWorking Party, or whether it was an issue subject to negotiation between Members.
85. The representative of Singapore said that his capital was examining to what extent
Article VI:4 would cover mutual recognition.  He noted that Article VII:2 provided for recognition
agreements, stating that there must be adequate  opportunity for other interested Members to join
MRAs.  Therefore, he felt that the issue of MRAs should be an area for bilateral negotiations, rather
than a general outcome by the Working Party.
86. The representative of Hong Kong, China said that his delegation was aware that recognition
was an important issue for qualifications.  His capital would study the paper, and he looked forward to
further discussion on the suggestions made in the paper on how to move forward on the issue.  He
sought clarification regarding the placement of the issue on the Working Party's agenda.  He was open
to examining possible ways of addressing the issue of recognition, and noted that the solutions raised
could be outside the context of the WPDR, including the negotiation of MRAs.  The representativefelt that there were other ways to address the issue of recognition, such as the approach submitted by
India regarding the development of disciplines for professional services.  Even if the actual
achievement of the solutions might take place outside the Working Party, the preliminary discussions
on the issue of recognition and on identifying ways to overcoming qualifications as barrier to trade
services could take place within the Working Party, he stated.
87. The representative of Canada said his delegation was interested in discussions related to
recognition on a multilateral basis.  Previously, his delegation pursued these discussions in the context
of Article VII, which was addressed by the Council for Trade in Services.  He felt that much of the
previous discussion had been based on Article VI:6, as noted in the Indian informal paper, but the link
between Article VI:6 and Article VI:4 was confusing, and to bring the two elements together wouldblur further discussion.
88. The representative of Columbia said that, in her view, the Working Party could take up
discussions on the relationship between qualifications and recognition, and that it would be one of the
appropriate contexts in which the issue could be discussed.  She felt that the discussion should not be
exclusive, but complementary.  She noted that, in another context, India had submitted a paper on
notification as provided for in Article VII of the GATS.
89. The representative of Peru said that the Indian informal paper made positive and constructive
inputs, and gave a new impetus to the work in the WPDR.  He noted that the second paragraph of the
Indian paper indicated the mandate, and the scope of the mandate, for the discussion of the topic of
recognition in the Working Party.  He supporte d the idea that the Working Party examine the
alternatives submitted by India.  He agreed with the assessment that recognition was a fundamental
element in ensuring effect market access, particularly in mode 4 for professional services.  The lack ofrecognition for professional or equivalent qualifications could act as a significant barrier, which
would affect the commitments made in the mode 4 negotiations.  He recognized that the concerns
regarding the appropriate forum for these issues were important, but thought that Article VII
concerned notification, whereas India’s point was to make Article VI:6 more effective.
90. The representative of Thailand said the MRA Guidelines (S/L/38) were only for procedural
matters, and therefore not helpful in terms of substance.  In her opinion, what was needed were
guidelines on more substantive issues, such as the definition of MRAs.  The present MRA Guidelines
did not cover that issue, she stated.  Her delegation felt that the issue could be discussed in thisS/WPDR/M/22
Page 18
Working Party.  It could also be discussed elsewhere, depending on the type of question and the
content, and her delegation would use this prerogative to do so.
91. The delegation of Indonesia said they were very concerned about recognition and, after
examining the paper, would come back to the issue in future meetings.
92. The delegation of South Africa agreed with India that progress on recognition was important,
as it had an impact on commitments and the type of liberalization that happened with regard to
mode 4.  Multilateral disciplines would be important for a country like South Africa, which had
limited capacity.  The Working Party could start work on a multilateral basis as far as recognition
issues were concerned, so that disciplines could possibly be agreed when Members were involved in
specific bilateral negotiations.
93. The delegation of Singapore said they felt it was important to make a distinction between
Articles VI:4, VI:6 and VII, and not to overlap the provisions.
94. The representative of China said that her delegation was of the view that recognition was an
integral part of the discussion under Article VI:4.  The representative emphasized that her delegation
was not discussing MRAs, but rather the recognition of qualifications as stated in the third paragraph
of the Indian paper.  All the types of measures mentioned under Article VI:4 related to recognition,
and as such it was one of the core issues under the work programme of the Working Party.
95. The representative of the United States clarified that her delegation was not looking at MRAs
in the Working Party, and welcomed the suggestion for clarification on the difference between
Articles VI:6 and VII.  She sought other Member’s  interest in negotiating guidelines, and examining
what legal impact they might have.  She asked for clarification on what was to be accomplished by the
work on mutual recognition, whether it was only for professional services and how it related tospecific commitments under mode 4.  She also requested clarification of the reference (in the second
paragraph of page 16) in the Summary of Discussions to medium-level and junior-level qualifications,
and whether it was related to mode 4 specific commitments.
96. The delegation of the European Communities noted that the mandate for the Working Party
on Professional Services for developing guidelines on mutual recognition would be limited to
professional services.  They sought clarification from the delegation of India whether options (1) and
(2) in the informal paper would apply only to professional services, or to any services sector included
in MTN.GNS/W/120.
97. The delegation of Chinese Taipei reiterated that professional services providers faced the
critical issue of the recognition of their professional capabilities. She felt that it would be more
efficient to address the problem of the movement of natural persons from this perspective, and
therefore supported the Indian submission where it indicated certain opportunities, in particularly thedevelopment of possible multilateral guidelines on recognition.  However, she also shared the views
of the EC, and asked for clarification on whether recognition as indicated in the paper referred only to
professional services.
98. The representative of India clarified that their paper for the Council for Trade in Services
looked at Article VII in terms of notification obligations, and was therefore involved with the
implementation of Article VII rather than the issue of recognition per se .  He believed there were
separate roles in terms of what the CTS could do, and what the Working Party on Domestic
Regulation could examine.  His delegation was not looking to negotiate MRAs, but rather to examine
multilateral mechanisms that could be applied to actual bilateral discussions of MRAs.  The present
Guidelines  were a list of what an MRA should contain, the representative noted, but if Members were
to have a more meaningful discussion they should consider the principles under which Members
could negotiate the establishment of MRAs.  Regarding the issue of creating guidelines, the first stepS/WPDR/M/22
Page 19
would be only for professional services rather than the entire range of services.  The various
alternative approaches and distinctions between Articles VI:4, VI:6 and VII were not intended to be
overlapping, but parallel options, he stated.
99. The Chairperson concluded by stating that severa l delegations noted that Article VI:6 touched
upon the very core of qualification requirements.  In that respect, Members indicated there was ample
basis for continuing discussion of recognition issues in the Working Party.  Members highlighted the
fact that where the mandate of the WPDR built upon the terms of reference for the Working Party on
Professional Services, there was latitude for discussing the recognition of qualifications, as indicated
in the Indian informal paper.  Clarification was sought by some Members regarding the relationship
between Articles VI:6, VI:4 and VII.  The distinction between the issue of recognition vis-à-vis  the
possible means of addressing it, as several delegations mentioned, would be clearly beyond the
mandate of the Working Party.  He suggested that Members further consider the Indian paper underthe same agenda item at the next meeting, as well as further discuss the issues raised by Members
regarding the relationship between Article VI:4 and VII work.  Members so agreed.
Consultations in Professional Services
100. The Chairperson then offered the floor for any further informal  discussion of the Secretariat
paper, Synthesis  of Results to Date of the Domestic Consultations in Professional Services , the latest
version of which had been circulated as JOB/(0 2)/204/Rev.1, dated 21 February 2003.  He also asked
if any Member wished to update the Working Party on the status of their domestic consultations.  No
comments were received.
101. Returning to formal mode, the Chairperson  then turned to the topic of the Secretariat
consultations with international professional organizations.  At the previous meeting, the Secretariat
was asked to prepare a compilation of the comments received to date.  The compilation was
subsequently circulated as JOB(03)/126, dated 25 June 2003.   The Chairperson asked the Secretariat
to introduce their paper.
102. The Secretariat noted there was a deliberate similarity between the compilation and the
Synthesis  paper.  The first page of the compilation indicated the status of the responses, and would be
updated as new comments were received.  The detailed responses could be found in the other sections.
The comments received to date included both preliminary and final responses, as well as plans by
some organizations to provide comments in the future.
103. The representative of Canada noted that some of the responses received, those of the
architects and veterinarians especially, proved to be substantive and useful.  He considered them of
value to the continued discussions in the Working Party.
104. The representative of Hong Kong, China thanke d the Secretariat for reminding associations to
respond to the questionnaire.  He noted that 14 responses had been received, and many of them raised
positive and valuable feedback.  Many of the responses also lent their support for using the
Accountancy Disciplines  as a basis for disciplines in their respective professional services.  There
were suggestions for further strengthening and clarification of the disciplines, and he felt it would be
useful to examine them further and urge the remaining associations to respond or make furthercomments.
105. The Chairperson concluded by stating that encouragement would be given to the international
associations to provide comments in time for the preparation for a revision of the paper.S/WPDR/M/22
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C. ORGANIZATION OF THE WPDR SEMINAR
106. The Chairperson noted that the third item on the agenda was the organization of the WPDR
seminar.  Based on comments received at the last formal meeting, the Secretariat had circulated a
revised outline, as JOB(03)/35/Rev.2, dated 30 June 2003.  The major outstanding issue, however,
was the date for the seminar, about which Members had agreed that the Chairman would conductinformal consultations.
107. The representative of the United States said that  her delegation had received widespread
interest from regulators in participating.  She found the outline to be focused on trade policy and
regulators, and this might serve the purpose of how to define the audience.  Some regulators would
attend the first day of the seminar if something was scheduled specifically for them, she stated, rather
than come only for the second day.  She supported the effort made by the Secretariat.
108. The delegation of Canada supported the revised draft outline, and hoped that impetus would
be made for domestic regulators to attend the workshop.  The delegation of Australia said they were
satisfied with the revised draft.  Their preference would be to hold the workshop in the second week,
or at the end of the first Services Week.
109. The representative of Mexico supported the idea of the workshop in order to have dialogue
between negotiators and regulatory bodies.  She expressed her delegation’s desire for a practical
workshop, in order to look at the question of trade for all countries and to help developing countries.
Such a workshop could include experts from many different sectors, public, private and the world of
academia, and also the international organizations that answered the request for information.  She
noted that the OECD was also carrying out studies in the area of professional services.
110. The Chairperson said he wished to revert to the issue of the workshop timing.  Several
developing country delegations had suggested holding the meeting in the second week of the cluster
of services meetings, as their regulators could stay on for the week of the Special Session and
participate in possible bilateral negotiations.  This offered the opportunity that regulators, who might
not otherwise participate in the Special Session, would be able to remain rather than return to capital.
Therefore he proposed that the seminar would be held in the week of 6-10 October, specifically onMonday and Tuesday of that week.  In order to facilitate this, adjustments would be made to the
scheduling of subsidiary bodies meetings in the first week.
111. The delegation of the United States asked for clarification on whether the Working Party on
Domestic Regulation would be held on Friday, 3 October, and asked when the seminar would be held.
The Chairperson reiterated that, presuming the Special Session would be held on Friday of the first
week of the October cluster, and the Council for Trade in Services would be held on the Thursday ofthe first week, the previous Monday to Wednesday would accommodate the subsidiary bodymeetings.  This would accommodate the Working Party on GATS Rules, the Committee on Specific
Commitments and the Committee on Trade in Financial Services.  Therefore, the Working Party on
Domestic Regulation could then be held in the second week of the cluster.  He proposed that the
seminar take place in the second week, on Monday and Tuesday morning, and the formal meeting of
the Working Party would be on Tuesday afternoon.
112. The delegation of Brazil said that, during informal consultations, his delegation raised the
issue that the seminar would be held just before the formal meeting of the Working Party.  This was in
order for delegates from capitals to have an introduction to the GATS, an introduction on professional
services, discussions on the development of disciplines, and discussions on horizontal applicability.
They agreed with the Chair's suggestion, which he felt would accommodate logistical aspects and helpextract a much better outcome from the seminar.S/WPDR/M/22
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113. The Chairperson emphasised that the WPDR meeting in October would therefore be reduced
to a half-day session.  The informal meeting scheduled to take place before the formal meeting would
help delegations in a free-flowing exchange of id eas of the work in the Working Party in advance of
the formal meeting.
114. The representative of the United States said that she presumed that within the second week
the Special Session would reconvene on a specific day.  She sought clarification on which day.  The
Chairperson said that the concluding meeting of the Special Session would take place on Friday, 10
October.  He was not aware whether it would be a morning or an afternoon meeting.  However, hestated, any agreement on the schedule of meetings made in the Working Party would have to be
endorsed by the other subsidiary bodies and the CTS in Special Session.
115. The representative of Peru said he supported the delegation of Brazil's statement.  He
considered it important that the seminar be held back-to-back with the formal session of the Working
Party on Domestic Regulation, in order for the regulators to participate so as to have theoretical
background of the subject.  He requested clarification on the funding for the seminar in order to have
strong input from developing Members.
116. The Chairperson turned to the issue of funding of the seminar.  The resolution of the contents
of the draft outline provided the platform for asking  formally the Institute for Training and Technical
Cooperation to respond positively to the request for funding.  This track paralleled the idea of looking
for possible funding opportunities among Members interested in providing assistance to developing
country regulators to assist in the seminar.  The aim was to find the funding to allow one, if not two,
developing country regulators to attend the seminar in October.
117. The representative of the United States asked if the Chair was requesting agreement from
Members on his previous statement.  She stated that her delegation found that Members were not
available to have bilateral negotiations on the Friday of the second week.  Therefore, she suggested
the Special Session take place in the afternoon of the previous Friday.  She was concerned that time
allowed for the bilateral negotiations would be reduced to only two days.
118. The Chairperson concluded by stating that, at the last Special Session, it was decided that the
concluding portion of the October Special Session meeting would take place over a full day.
However, that issue would have to be taken up by the Chair of the Special Session.  He reiterated that
the seminar could take place on Monday and Tuesday of the second week of the services cluster, and
the formal meeting of the Working Party on Domestic Regulation could take place on the Tuesday
afternoon of that week.
D. DATE OF NEXT MEETING
119. The Chairperson stated that the last item on the agenda was the date for the next meeting.  As
discussed under the previous agenda item, the CTS would need to confirm the meeting dates.  With
this understanding, and in accordance with the practice of grouping meetings of subsidiary bodies
close to meetings of the Council, he suggested that the next meeting be held during the week of
6 October, preferably on the afternoon of Tuesday, 7 October on the conclusion of the seminar.
Members approved the Chairperson’s suggestion.
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