. /. RESTRICTED  WORLD TRADE  
ORGANIZATION  S/WPGR/W/50 
9 November 2004 
 (04-4757) 
Working Party on GATS Rules   
  
 
- DRAFT - 
 
ANNUAL REPORT OF THE WORKING PARTY ON GATS RULES  
TO THE COUNCIL FOR TRADE IN SERVICES (2004) 
  
1. Since its annual report for 2003, the Worki ng Party on GATS Rules held five formal 
meetings: on 2 December 2003, on 10 and 15 Marc h 2004, on 24 March 2004, on 23 June 2004, and 
on 20 September 2004.
1  While the meeting of 10 and 15 March was specifically devoted to the issue 
of the deadline for the negotiations under Article  XV, the three negotiating mandates the Working 
Party is entrusted with were put on the agenda of  the other meetings: emer gency safeguard measures 
(Article X), government procurement (Article XIII),  and subsidies (Article XV).  The Working Party 
also held a number of informal meetings. 
I. NEGOTIATIONS ON EMERGENCY SAFEGUARD MEASURES UNDER GATS 
ARTICLE X 
2. At the meeting of December 2003, discussions focused on the hypothetical example of an 
emergency situation provided by a group of delegations from ASEAN2, as well as on a non-paper 
earlier submitted by the delegation of Switzerland wh ich analyzed avenues available under a "no ESM 
scenario".  At the meeting of 10 and 15 March, the Working Party agreed on the content of a draft decision on the extension of the negotiations pursuant to Article X
3, which was later adopted by the 
Council for Trade in Services.4  In subsequent meetings, delegations discussed an informal 
communication from the group of ASEAN Members (JOB(04)/4), which provided further thoughts on 
an emergency safeguard mechanism.  Members expressed divergent views on various aspects, including regarding desirability and feasibility.  To  facilitate discussions, th e Chairperson compiled a 
list of main questions raised (JOB(04)/49).  Focal issues of interest included situations justifying a 
safeguard, link to progressive liberalization, the concept of limited window, domestic industry and 
acquired rights, injury determination, appli cable measures and modal issues, duration and 
compensation, surveillance, and special and differential treatment.
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II. NEGOTIATIONS ON GOVERNMENT PROCUREMENT UNDER GATS 
ARTICLE XIII 
3. At the meetings of December 2003 and March 2004, dele gations continued their discussion of 
an earlier communication from the European Comm unities on a proposed framework for government 
procurement of services under the GATS (S/WPGR/W/ 42).  They also considered an informal 
                                                      
1 Reports of these meetings are contained in documents S/WPGR/M/45, S/WPGR/M/46 (and corr.1), 
S/WPGR/M/47, S/WPGR/M/48 and S/WPGR/M/49.  They sh ould be read in conjunction with this report.  
2 Brunei Darussalam, Indonesia, Malaysia, Myanmar, the Philippines and Thailand.    
3 As reflected in S/C/W/236. 
4 As reflected in S/L/159. 
5 Discussions on emergency safeguard measures are re flected in paragraphs 5-22 of S/WPGR/M/45, in 
S/WPGR/M/46 and S/WPGR/M/46/Corr.1, paragraphs 2-38 of S/WPGR/M/47, paragraphs 46-47 of 
S/WPGR/M/48, and paragraphs 39-58 of S/WPGR/M/49.   S/WPGR/W/50 
Page 2  
 
 communication from Singapore (JOB(03)/216), which listed a number of issues and questions for 
further discussion in the light of the proposal by th e European Communities.  At the meetings of June 
and September 2004, discussions focused on a ne w communication from the European Communities 
(S/WPGR/W/48), which provided examples of how commitments and MFN exemptions relating to 
government procurement could be incorporated in  the GATS.  The delegation of Hong Kong, China 
circulated an informal communication (JOB(04)/130) , which listed questions relating to the proposal 
from the European Communities.   Many questions and issues were raised, including the application 
of the MFN obligation, the relationship to the GP A, modal application, scheduling approaches, the 
possibility of distinguishing between goods and services,  link to development, and procedural rules.  
A number of delegations reiterated that, in their view, the negotiating mandate under Article XIII did 
not entail market access issues, while others thought th at these were covered.  Some delegations drew 
attention to the General Council's decision, in the July Package, that there be no negotiations on the 
Singapore issue of transparency in government proc urement, while others pointed out that the July 
Package also called on Members to intensify effo rts to conclude the rule-making negotiations, 
including those on Article XIII.  As requ ested, the Secretariat prepared a Note on Government 
Procurement-Related Provisions in  Economic Integration Agreements (S/WPGR/W/49).
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III. NEGOTIATIONS ON SUBSIDIES UNDER ARTICLE XV OF THE GATS 
4. Delegations first focused on an informal  communication from Chile (JOB(03)/218), which 
provided anonymous examples of subsidies that might distort trade in services.  Delegations tended to 
concentrate on the first example, which raised is sues relating to export subsidies.  Members also 
discussed an informal communication from the dele gation of Chinese Taipei on the definition of 
subsidies in services (JOB(04)/78).  At the l ast meeting, discussions focused on an informal 
communication from the delegation of Hong Kong, China that put forward some thoughts on the possible way forward on aspects such as the informat ion exchange, other sources of information about 
subsidies, the definition of subsidy, and trade dist ortion (JOB(04)/127).  Noting the lack of progress in 
that area, some delegations called for a target date to be set for the exchange of information pursuant 
to Article XV, while others raised doubts about the pr ecise meaning of Article XV in that regard.  The 
importance of working on a definition of subsidy was stressed, as well as the need for discussing 
concrete negotiating proposals.  It was also recommended to address different aspects of the negotiations in tandem.  As requested, the Secretar iat produced four Notes, which were subsequently 
discussed: Overview of Subsidy Disciplines Relating to Trade in Services in Economic Integration 
Agreements  (S/WPGR/W/46), List of Publications from Inte rnational Organizations Relating to 
Subsidies in Services  (S/WPGR/W/47), Subsidies for Services Sectors: Information Contained in 
WTO Trade Policy Reviews  (S/WPGR/W/25/Add.4), and Limitations in Members' Schedules Relating 
to Subsidies  (S/WPGR/W/13/Add.2) . 
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6 The discussions on government procurement are reflected in paragraphs 23-33 of S/WPGR/M/45, 
paragraphs 39-53 of S/WPGR/M/47, paragraphs 26-45 of S/WPGR/M/48 and paragraphs 2-38 of S/WPGR/M/49. 
7 The discussions on subsidies are reflected in paragraphs 34-52 of S/WPGR/M/45, paragraphs 54-80 
of S/WPGR/M/47, paragraphs 5-25 of S/WPGR/M/48, and paragraphs 59-80 of S/WPGR/M/49.