WRITTEN QUESTION P-2449/99

by Caroline Lucas (Verts/ALE) to the Commission

(13 December 1999)

Subject: WTO/GATS

Will the Commission inform the European Parliament about the nature of the current work in the 133 Committee covering domestic regulation in the GATS Agreement?

Can the Commission also offer assurance that:

1. its negotiations on domestic regulation will recognise the legitimacy of and safeguard the ability of Member States to devise and implement domestic regulations,

2. it will, in particular, seek to guarantee the freedom of signatories to regulate B in accordance with their own market conditions and policy objectives B and to secure cultural, social and democratic and, possibly, environmental goals,

3. the GATS disciplines of market access and national treatment will not be used to undermine this regulatory freedom?

Answer given by Mr Lamy on behalf of the Commission

(5 January 2000)

The Commission has already undertaken to improve the level of transparency on trade policy issues vis-à-vis the Parliament, and intends to apply this rule also to work related to domestic regulation under the General agreement on trade in services (GATS).

The Commission has been working with the 133 services committee on domestic regulation and GATS since the creation in the World trade organisation (WTO) of the working party of professional services. At that working party, the focus was on establishing guidelines on domestic regulation applicable to the accountancy profession. As the result of that work, voluntary guidelines were adopted by the working party in December 1998. The Commission is sending a copy direct to the Honourable Member and to Parliament's Secretariat.

The working party was subsequently transformed into the working party of domestic regulation, with on mandate over all services sectors. This new working party has, since spring 1999 examined whether and how the accountancy disciplines could be applied to other professional services and considered guidelines on domestic regulation applicable to all other services sectors, or various sectors.

In the implementation of this mandate, the starting point is Article VI of GATS which covers domestic regulation.

From Article VI GATS and the work on accountancy disciplines, it is evident that the objective of WTO work on domestic regulation is not to dismantle it or threaten the sovereignty of WTO members in the consideration of their policies. Legitimate objectives (such as protection of the consumer, environment) are discussed, but there is no attempt to agree on a narrow list of these objectives. On the contrary, the aim is rather to implement domestic regulation, so that the objective is achieved with less trade distorting instruments.

The Commission can therefore confirm that it will ensure that the right of WTO members to regulate, and to introduce new regulations, on the supply of services within their territories in order to meet national policy objectives, as recognised in the preamble to the GATS, is safeguarded in any WTO discussions on the matter. This is a pre-condition for successful services negotiations based on reciprocal trust among all WTO members. It is up to WTO members to decide their national policy objectives.

The GATS offers a number of instruments to reduce progressively the obstacles which might flow from regulatory diversity or inadequate regulation, which fully respect the national regulatory sovereignty of WTO members. Members are offered the possibility to develop disciplines on domestic regulation aimed at ensuring that national regulations do not create unnecessary obstacles to trade in services. They also have the possibility to negotiate or grant recognition of other members' regulations.

The Commission can confirm that the flexibility to undertake specific commitments on market access and national treatment, that is a basic feature of the GATS, will also be safeguarded. Based on their national regulations, members undertake specific commitments which they have to respect and which should not be undermined by new or different regulations. Nonetheless, they have the possibility to negotiate modifications in their commitments as they deem appropriate. Finally, the general exceptions contained in Article XIV allow them to adopt any measure necessary to protect public morals or the fundamental interests of society, or human, animal or plant life or health.