RESTRICTED
WORLD TRADE S/WPPS/M/2
24November 1995
ORGANIZATION
(95-3740)
Working Party onProfessional Services
REPORT OFTHE MEETING HELD ON19OCTOBER 1995
Note bytheSecretariat
1. TheWorking Party onProfessional Services helditssecond meeting on19October. Theagenda
forthemeeting wascontained inAirgram WTO/AIR/177.
2. Thechairperson drewtheattention ofdelegations toadocument entitled Communication from
theEuropean Communities andtheirMember States presenting theCurrent Community system onthe
recognition ofprofessional qualifications heldbymembers oftheaccountancy profession, whoare
nationals ofECMember States (S/WPPS/W/3). Therepresentative oftheEuropean Community
introduced thisdocument andindicated thatanannex ontheEighth Company Law Directive
(84/253/EEC) ontheapproval ofpersons responsible forcarrying outthestatutory audits ofaccounting
documents wasunder preparation. Itwassubsequently circulated asdocument S/WPPS/W/3/Add.1.
Thefirstpaper explained thegeneral system fortherecognition ofprofessional education andtraining
aswellasitsunderlying principles andscope ofapplication. Itwassuggested thatthesmall number
ofaccountants whohadobtained recognition oftheirdiplomas under thegeneral system hadlessto
dowithproblems inpassing theaptitude testandmore todowiththereality ofprofessional practice
intheaccountancy sector which wasexplained inthepaper.
3. Turningtothefirstagendaitem,thechairpersonrecalledthattwoSecretariatdocuments(entitled
Functions oftheWorking Party onProfessional Services inrelation toaccountancy andTheaccountancy
sector contained indocuments S/WPPS/W/1 andS/WPPS/W/2) hadbeen circulated andinvited
delegations 'reactions tothem.
4. With respect tothefirstdocument therepresentative ofJapan, referring toparagraph 8on
thetrade effects ofqualification requirements andprocedures, found itdifficult tounderstand, given
theconsiderable national differences inthisarea, theassertion intheparagraph thatdiscriminatory
requirements wereunlikely tobeacommon ormajor barrier. Second, regarding paragraph 12ofthe
samedocument, therepresentative disagreed thatinternational standards developed byIFAC andIASC
were widely used, thelatter standards being limited tocertain countries. Third, withrespect to
paragraphs 30to33ofthesecond document (thesection onparticularities offederal states), hesaid
thatregulatory measures taken atthesub-federal levelwere important andshould alsobediscussed
intheWorking Party. Fourth, hewondered whether paragraph 82ofthesamedocument tooksufficient
account ofthepublic andsocial nature ofaccounting andinparticular auditing services provided by
accounting firms. Fifth, inreferring toparagraph 84ofthesame document, hesaidthatinternational
alliances between accounting firms constituted arealistic approach which dealtwithdifferences inthe
regulatory regimes ofcountries. Sixth, hedidnotagree withthestatement inparagraph 99thatthe
mutual recognition ofprofessional qualifications would notleadtotheremoval oftrade barriersS/WPPS/M/2
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enumerated inthepaper; mutual recognition wasinfactanefficient andrealistic wayofencouraging
thedevelopment ofinternational trade inservices. Headded, referring tothesame paragraph, that
theapproximation ofnational lawsgoverning agiven profession wasoutside thescope oftheWorking
Party.
5. Therepresentative fromAustralia, inreferring toparagraph 112ofS/WPPS/W/2 onmutual
recognition under theAustralia-New Zealand Closer Economic Relations Trade Agreement
(ANZCERTA), saidthatcurrent discussions between thetwocountries applied toregistrable professions
which, inAustralia 'scase, didnotinclude accountancy. TheAgreement would provide that,for
occupations which required registration, professionals inAustralia orNewZealand would getautomatic
registration inoneortheother country provided theymettheregistration requirements intheother.
Itwasexpected thatthenewarrangements would come intoeffect on1January 1997. Sheemphasised
thatthediscussions underway didnotcover recognition ofqualifications butdealt withrecognition
ofregistrable occupations.
6. Therepresentative ofCanada, referring tocomments made byJapan, saidthatadistinction
hadtobedrawn atnational levelbetween thevarious categories ofprofessionals toproperly understand
paragraph 8ofdocument S/WPPS/W/1. Heexpressed agreement withthecomments onfederal States
contained indocument S/WPPS/W/2 referred toabove. Finally, hesaidthatparagraph 105ofthe
latter paper referred totwoprovinces inCanada maintaining citizenship andseven provinces residency
requirements; heasked towhich provinces theSecretariat wasreferring.
7. Regarding thesecond andthirdagenda items, thepresentations bytheOECD andUNCTAD
ontheirwork intheareaofprofessional andaccounting services respectively, theOECD Secretariat
representative made apresentation covering: first, thescope andresults ofthesurvey onactivities
andregulations onaccess forprofessional services inOECD countries; second, theOECD Categorized
inventory ofmeasures affecting trade inprofessional services and,third, areport ontheSecond OECD
Workshop onProfessional Services which hadbeenheldinParis earlier thatweek. Thetextofthe
presentation wassubsequently circulated toparticipants indocument S/WPPS/W/4. Inresponse to
points raised byJapan concerning thepresentation, theOECD Secretariat representative recalled that
thequestion oftransmitting thematerial hadbeendiscussed inthecontext oftheOECD Workshop
andithadbeenagreed thattheinformation presented could beprovided. Headded thatthefulldetails
oftheinventory would bemade available assoonastheywerecompleted following reception ofthe
finalround ofcomments from OECD member countries.
8. Therepresentative oftheUNCTAD Secretariat explained theroleoftheInter-governmental
Working Group ofExperts onInternational Standards ofAccounting andReporting (ISAR) andits
mainactivities inpromoting international harmonisation ofcorporate accounting andreporting practices,
andimproving accounting education inthedeveloping countries. Thematerial contained inthe
presentation wassubsequently circulated indocument S/WPPS/W/5.
9. Turning tothefourth agenda item, thereport bytheSecretariat ontheearlier presentation by
representatives oftheInternational Federation ofAccountants (IFAC) attheSecretariat seminar, it
wasnoted thattheseminar hadtaken place inlinewiththedraftguidelines forrelations between the
WTO andnon-governmental organizations. Essentially, three things hadtaken place attheseminar:
first, adescription ofthefunctions, nature andmembership ofIFAC; second, adescription ofthe
work oftheInternational Accounting Standards Committee insetting international standards andsome
discussion ofcompliance withthem; third, asummary oftheresults ofthesurvey which IFAC had
carried outamong itsmembers onregulations andbarriers totheperformance ofinternational trade
inaccountancy services. Thetextofthepresentation wassubsequently circulated toWorking Party
participantsasaninformaldocumentof6NovemberentitledIFAC/WTOSeminaronissuesandmeasures
affecting accountancy services .S/WPPS/M/2
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10. Regarding theorganisation ofwork, thechairperson saidthatthegroup hadnowamuch clearer
ideaofthecontent anddirection oftheefforts undertaken inother fora. Thisshould helpdelegations
when deciding onhowtobestusetheinformation provided bytheOECD, UNCTAD andIFAC, and
howtoorganise thefuture work ofthegroup. Delegations feltthatthevolume ofinformation made
available tothem wasimpressive. Regarding future work, thechairperson thensuggested thatthe
Secretariat prepare abriefanalysis ofwhataspects ofthegroup 'swork programme werecovered by
thework carried outbyOECD, ISAR andIFAC; shestressed thattheSecretariat would needinputs
from delegations regarding theadequacy oftheinformation sofarpresented forthepurposes ofthe
Working Party andencouraged delegations tocommunicate these views totheSecretariat by
10December. Inabroader perspective, thechairperson reminded thegroup thatitsmain function
wasnottogather information buttodevelop recommendations foranydisciplines thatmight beneeded
inorder toensure thatthedomestic regulatory requirements mentioned inGATS Article VI:4andin
theWorkingPartymandatedidnotbecomeunnecessarytradebarriers.Shethereforeinvitedsuggestions
fromdelegations, ifpossible inwriting totheSecretariat, onhowthegroup should proceed initswork.
Onedelegation suggested thatparticipants should communicate, inpreparation forthenextmeeting,
anindication oftheirpreferences andwork priorities; thisdelegation hadissued aprovisional non-
exhaustive listofmeasures tobeexamined bytheWorking Party.
11. Subsequent todiscussion itwasdecided toholdthenextmeeting oftheWorking Party on
16January 1996. Regarding participation ofobservers, itwasagreed thattheUN,UNCTAD, IMF,
theWorld Bank andtheOECD beinvited again asobservers tothemeeting.