S/WPGR/M/39

S/WPGR/M/40

S/WPGR/M/36

World Trade
Organization RESTRICTED S/WPGR/M/38
26 July 2002 (02-4172) Working Party on GATS Rules

REPORT OF THE MEETING OF 15 JULY 2002

Note by the Secretariat

The Working Party on GATS Rules held its thirty-eighth meeting under the chairmanship of Mr.
It consisted of six items: work programme for the Working Party; negotiations on safeguards under GATS Article X; negotiations on subsidies under GATS Article XV; negotiations on government procurement under GATS Article XIII; date of the next meeting; and other business.
Work Programme for the Working Party
The Chairperson recalled that paragraph 2 of the Communication from the Chairperson of the Working Party on GATS Rules transmitting the Draft Fourth Decision on Negotiations on Emergency Safeguard Measures stipulated that, "the Chairman will carry out consultations to establish a programme structuring future work of the Working Party".
Second, benchmarks for submissions were indicative, with a view to encouraging Members to put forward submissions on the respective subjects as early as possible, and would be without prejudice to Members’ right to put forward further suggestions and raise relevant issues by way of submissions at any time, under any of the three subjects of negotiation.
Noting that there were some remaining concerns, he proposed that Members consider adopting the work programme in JOB(02)/82 with the following changes: (i) "work programme" would read "work programmes" throughout the text to reflect that separate work programmes were established for the respective subjects of negotiations, and the first paragraph should be read as referring to all three work programmes; (ii) a reference to paragraph 7 of the Negotiating Guidelines would be added in paragraph 2 of JOB(02)/82.
Moreover, it was not appropriate to repeat the first paragraph under each agenda item because the first sentence of paragraph 1 of JOB(02)/82 related only to emergency safeguard measures.
Her delegation would be prepared to look at the suggestions made by Mexico and India, but could not give any guarantee as to what it would do with them without having seen them in writing.
Moreover, in line with the suggestions he had made in the morning: (i) an "s" had been added to "work programme" (title, paragraphs 1(a) and 2), to make it clear that each item had a separate work programme, and to recognize the fact that they were at different stages of progress; and, (ii) a reference to paragraph 7 of the Negotiating Guidelines had been added to the work programme on emergency safeguard measures.
The representative of Switzerland said that, in spite of remaining concerns, his delegation had come prepared to support the work programme as contained in JOB(02)/82, which would have enabled the Working Party to proceed in a precise manner on the substantive issues.
the second and third sentences of that paragraph would be deleted, and the words "under each negotiating mandate" would be inserted at the end of the first sentence.
The ad referendum procedure provided a period of time during which those delegations which might still be in doubt as to whether they could join the consensus, could come back and notify the Secretariat that they were not able to join the consensus.
In this regard, delegations might give some thought to what they would see as possible outcomes from a broader perspective, taking into account not only their standpoints, but also the views and positions expressed by other Members.
After having reached some understanding on this issue as soon as possible, Members would be ready to move on to the next step, which was designing a mechanism or procedure governing Members' temporary suspension of their commitments.
The new informal paper suggested that the definition contained in the Agreement on Subsidies and Countervailing Measures (SCM Agreement) be used as a working basis, but Members might use any other definition of subsidy, as long as it was specified.
At the last meeting, his delegation had suggested that the Secretariat update its note on information contained in WTO Trade Policy Reviews (S/WPGR/W/25), and undertake a compilation of subsidy-related information found in the various sectoral proposals.
A representative of the Secretariat said that the initial demand for this compilation had been triggered by the feeling that, as the information exchange under Article XV was not taking off, there was a need to find a substitute.
The representative of the Republic of Korea said that factual information provided by the Secretariat, such as updating information contained in TPR reports and compiling relevant elements in sectoral proposals, could be considered as part of the information exchange in Article XV, which concerned all subsidies.
The representative of the European Communities said that the communication in S/WPGR/W/39 underscored the size of government procurement markets, as well as the particular interest developing countries would have to liberalise this sector.
She enquired what the EC position was with respect to thresholds, since this issue was not mentioned in the EC communication; yet, it was an important one.
Japan had particular interest in the sectors of construction, engineering and architecture, and, in the light of further explanations from the EC, might want to submit an own contribution.
paragraph 1 of Article XIII exempted government procurement from the application of Articles II, XVI and XVII.
He enquired how the European Communities had selected the sectors mentioned in paragraph 13 and said that governments' participation in other sectors, such as energy, telecommunication or audiovisual services was still important in a number of countries.
Similarly, the raising of any relevant issues for discussion by Members should be without prejudice to the continued discussion already being undertaken by Members and vice versa.
1 reads as follows: "
to identify, elaborate and consolidate elements for ESM and to address the question of feasibility and desirability of ESM;"

See also Communication from Australia on Questions raised at the informal meeting of the Working Party on GATS rules held on 12 February 2002, JOB(02)/9, 13 February 2002.

It consisted of six items: appointment of a new chairperson; negotiations on safeguards under GATS Article X; negotiations on subsidies under GATS Article XV; negotiations on government procurement under GATS Article XIII; date of the next meeting; and other business.
However, as the Chairman of the Council for Trade in Services had not finalized his consultations on the chairmanships of the subsidiary bodies at that time, it had been decided that the hand-over would take place at the beginning of the following meeting.
Members had expressed support for these guiding principles and had indicated that they agreed on, or had flexibility to accept many of the suggested elements.

Discussion on substantive issues
The Chairperson invited delegations to continue their examination of the Communication from the European Communities and Their Member States on Modal Application of an Emergency Safeguard Measure (S/WPGR/W/38, 21 January 2002), as well as the Communication from Australia on Elements for a Possible "Core Mechanism" for Temporary Suspension or Modification of Commitments (JOB(02)/8, 13 February 2002).
negotiations on subsidies (article xv of the gats)
The Chairperson said that, in the course of his consultations on a work programme, some Members had indicated an intention or willingness to discuss a programme structuring future work on subsidies.
The Secretariat could do some background work, including an update of its Note on information contained in Trade Policy Reviews and a compilation of subsidy-related information found in the various sectoral proposals submitted to the Special Session.
He agreed with Chile that the Checklist should be revised and recalled that Article XV provided for an information exchange concerning all subsidies related to trade in services.
She drew attention to the fourth sentence of Article XV:1, which stipulated that negotiations should recognize "the role of subsidies in relation to development programmes of developing countries and take into account the needs of Members, particularly developing country Members, for flexibility in this area".
In the past, the Working Party had already addressed various interesting issues under this agenda item and it might be useful to refer to reports of past discussions.
He further suggested that the Secretariat update the background note on information contained in WTO Trade Policy Reviews (S/WPGR/W/25 and Addenda) and undertake to compile subsidy-related information contained in the sectoral proposals presented by Members to the Special Session.
Since these reports were not meant to address specifically subsidy issues, TPR-based information did not necessarily provide a comprehensive picture, nor allow judgement on whether those subsidies had trade-distortive effects or not.
The representative of Brazil noted that the background note on TPR-related information had already been updated twice and asked why it was problematic to undertake a third update.
The representative of the European Communities recalled that the Negotiating Guidelines provided that negotiations on government procurement in services should be completed prior to the conclusion of negotiations on specific commitments.
The European Communities intended to work actively on this issue in the Working Party and was ready to discuss with interested delegations their specific interests.
XVI and XVII did not apply pending the entry into force of negotiated disciplines, which did not mean that these provisions were excluded from the scope of the negotiating mandate.
Should the Secretariat be asked to undertake background work, it could only be a list of documents containing relevant contributions and discussions.
While paragraph 1 of Article XIII exempted government procurement from the application of Articles II, XVI and XVII, other GATS provisions did apply to government procurement.
Since some progress had already been made in the discussions for a work programme on emergency safeguard measures, it might not necessarily be helpful to pursue one single work programme for the three issues.
Date of the Next Meeting
The Chairperson indicated that the next formal meeting of the Working Party was expected to take place during the week of 15 July The definitive date would be communicated in due time.
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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.