RESTRICTED
WORLD TRADE S/WPGR/W/22
23July1997
ORGANIZATION
(97-3150)
Original: English Working Party onGATS Rules
COMMUNICATION FROM ASEAN
Emergency Safeguards
Thefollowing communication isbeing circulated attherequest ofASEAN toMembers ofthe
Working Party onGATS Rules.
______________
TheASEAN would liketoexpress oursupport totheChairperson 'ssuggested approach
(3June1997) onthesubject ofemergency safeguards byaddressing the4questions.
These questions aretheprime andkeyelements thatmustbefirsttackled, andshould serve
asastarting point ofourproceedings onthesubject.
However, duetotherelatively newandrather lackofinformation andresearch onthesubject,
definitive answers tothese questions cannot bemade atthistime.
Asaresult,theASEANcanonlyprovidepreliminaryobservationsonthem,ontheunderstanding
thattheyarewithout prejudice toourrighttocome backtothequestions andtoamend orwithdraw
ourpositions asappropriate inthelightofnewinformation orthemore elucidation onthesubject which
maybetranspired inthecourse oftheproceedings.
1. Onwhose behalf would emergency safeguard action betaken?
Theemergency safeguard measures (ESMs) would betaken temporarily toprotect thenational
industry, which isunderstood tomean thetotality ofthenatural persons and/or juristic persons supplying
likeordirectly competitive services oftheMember taking themeasures according totherespective
definitions provided forinArticle XXVIII (Definitions) oftheGATS, inorder toenable themtoadjust
toforeign competition.
2. Inwhat circumstances would emergency safeguard action betaken andwhat would be
thepurpose ofsuchaction?
TheESMs would apply toallmodes ofsupply, including both pre-establishment and
post-establishment ofcommercial presence, inthecasewhereby, asaresult ofunforeseen development
andoftheeffect oftheobligations incurred byaMember under theGATS, thereisadramatic increase
inconsumption offoreign services, inabsolute orrelative terms, tosuchanextent thatitcauses or
threaten tocause disruption ofthenational industry producing likeordirectly competitive services
oftheMember taking themeasures.
./.S/WPGR/W/22
Page2
Thedramatic increase inconsumption offoreign services could beassigned toafixedpercentage
oftheaverage levelofsupply offoreign services concerned asawhole oftheprevious representative
years, suchas100,150or200%,thethreshold ofwhich issubject tonegotiation.
3. What approach should beadopted inrespect ofinjury/adverse effects, andtherelevant
casual linkbetween injury/adverse effects andcommitments under theGATS?
Theinjury should beserious injury, which could bemeasured byemploying, mutatis mutandis ,
themethod ofmeasuring serious injury provided forinArticle 4.2and4.3oftheAgreement on
Safeguards, namely:
Intheinvestigation todetermine whether thedramatic increase ofconsumption offoreign
services hascaused orarethreatening tocause serious injury tothenational industry producing like
ordirectly competitive services, thecompetent authorities shallevaluate alltherelevant factors ofan
objective andquantifiable nature having abearing onthesituation ofthatindustry; including inparticular
therateandamount ofincrease inconsumption offoreign services inabsolute orrelative terms; the
change inlevelofsupply ofservices ofthatindustry; andthelossofprofits andemployment ofthat
industry.
Thedetermination referred tointheabove paragraph shallnotbemade unless theinvestigation
demonstrate,onthebasisofobjectiveevidence,theexistenceofthecausallinkbetweendramaticincrease
ofconsumption offoreign services andserious injury orthreat thereof .When factors otherthandramatic
increase ofconsumption arecausing injury tothenational industry atthesame time, suchinjury shall
notbeattributed todramatic increase ofconsumption.
4. What measures would betaken under theemergency safeguard mechanism? Aresome
measures deemed more suitable thanothers?
Twomeasures, namely: (1)restriction onmarket access, which could include bothregulations,
taxes, quotas, andembargo; and(2)suspension ofnational treatment could beparticularly appropriate
tobeusedasemergency safeguard measures. These measures could betemporarily employed toall
modesofsupply,includingbothpre-establishmentandpost-establishmentcommercialpresence,depending
onthecaseinvolved. Forinstance, restriction onmarket access could beemployed inmode 1(cross
border supply), mode 2(consumption abroad), mode 3(pre-establishment commercial presence), and
mode 4(movement ofnatural persons) oftheGATS, while suspension ofnational treatment could
beemployed tomode 3(both pre-establishment commercial presence (incasewhere thereisnoembargo
onmarket access), and/or post-establishment commercial presence), andmode 4(movement ofnatural
persons).Incaseofpost-establishmentcommercialpresence,acquiredrightshouldberespected,namely
anybenefit derived fromgranted national treatment during theperiod ofnoESMs should bepreserved.
Suggestion
Since thissubject isrelatively new, andthere isonlyafewinformation andresearch onitto
helpusintheprocess ofconceptualizing andformulating provisions ontheESMs, itshould beadvisable
thatwerequest theWTO Secretariat andother appropriate international organizations, suchasthe
UNCTAD andOECD which arefamiliar withandexpert onthesubject toassist us.Theassistance
maybeintheform ofgathering information orconducting research onthesubject forus.
Aseminar onthesubject could alsobeanother avenue togainknowledge onthesubject.