RESTRICTED
WORLD TRADE S/WPGR/M/1
29August 1995
ORGANIZATION(95-2510)
Working Party onGATS Rules
REPORT OFTHE MEETING HELD ON17JULY 1995
Note bytheSecretariat
1. Thefirstmeeting oftheWorking Party onGATS Rules waschaired byAmbassador Christer
Manhusen ofSweden. Theagenda consisted ofseven items: appointment ofachairperson, participation
ofobservers,organizationofwork,requirementsfortechnicalassistancefromtheSecretariat,safeguards
negotiations under Article XoftheGATS, future meetings oftheworking party, andother business.
2. TheChairman noted thattheWorking Party onGATS Rules hadbeensetupbytheCouncil
onTrade inServices tocarry outthemandates onsafeguards, government procurement andsubsidies
carried overfromtheUruguay Round. Article XofGATS required thatmultilateral negotiations be
heldonthequestion ofemergency safeguards, theresults ofwhich were toenter intoforce by
1January 1998. Article XIIIofGATS called formultilateral negotiations ongovernment procurement
within twoyears ofentry intoforce oftheAgreement. Finally, Article XVofGATS stipulated that
negotiations would beheldwithaviewtoavoiding trade-distortive effects ofsubsidies andaddressing
theappropriateness ofcountervailing procedures. TheWorking Party wasrequired toestablish awork
programme todetermine how, andinwhattime-frame, negotiations onthese multilateral disciplines
would beconducted.
Appointment ofaChairperson
3. TheChairman indicated thatconsultations werecontinuing ontheappointment ofachairperson
fortheworking party. Henoted thatthenames oftwocandidates hadbeenputforward, butthat
consensus hadnotyetbeenachieved. TheChairman indicated thathewould continue hisconsultations
inthehopeofsettling thematter before thenextmeeting oftheWorking Party.
Participation ofObservers
4. Onthequestion ofobservers, theChairman suggested thattheWorking Party should follow
theprecedent setbytheServices Council. Thiswould mean thatthesame governments invited to
theServices Council would alsobeinvited tomeetings oftheWorking Party, along withfour
international organizations --namely, theWorld Bank, theInternational Monetary Fund, UNCTAD,
andtheUnited Nations. TheWorking Party agreed tothisproposal.
Organization ofWork
5. TheChairman reminded members oftheWorking Party thattwodecisions hadalready been
taken intheServices Council concerning themanner inwhich theWorking Party would organize its
work. ThefirstwasthattheWorking Party would takeupthethreesubjects itwasmandated toaddress
intheorder thattheyappeared intheGATS. Thismeant thatfollowing safeguards, theWorking Party
would takeupgovernment procurement andthensubsidies. Thesecond decision wasthattheWorking
Party would begin work oneachofthethreesubjects inastaggered fashion atintervals offourmonths.
Thus, work onsafeguards would startatthepresent meeting, followed bygovernment procurementS/WPGR/M/1
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around November 1995, andsubsidies inMarch 1996. Onedelegation suggested thatmeetings on
thesesubjects intheservices sphere should, asfaraspracticable, beconducted back-to-back withother
WTO meetings onthesame subjects. TheWorking Party agreed thatinfuture itwould attempt to
co-ordinate itsmeetings inthismanner.
Requirements forTechnical Work bytheSecretariat
6. TheChairman noted thatithadbeenagreed atthefirstmeeting oftheServices Council, on
1March 1995, thattheSecretariat would prepare background notes oneachofthethree topics tobe
addressed bytheWorking Party. Hesaidthatitwasreasonable toanticipate thattheSecretariat might
beasked toprepare additional notes asthework proceeded, andthattherefore thepossibility should
beleftopenforWorking Party requests tobemade onanadhocbasis.
Safeguard Negotiations under Article XofGATS
7. TheChairmandrewtheattentionofmembersoftheWorkingPartytotheSecretariatbackground
noteonsafeguards, contained indocument S/WPGR/W/1. Heindicated thattheSecretariat paper was
intended asapreliminary discussion ofsome basicissues, which gaverisetothequestions summarized
inparagraph 17ofthedocument. Thenotehadavoided addressing issues ofdetail concerning the
nature andscope ofpossible safeguard action ortheprecise modalities ofasafeguard instrument, on
thegrounds thatanumber ofmore basic issues should beconsidered beforehand. Byexamining
safeguards inrelation toeachofthefourmodes ofsupply, thenotedemonstrated thatthecasefor
safeguard action wasnotnecessarily thesame under different modes. Many delegations expressed
their appreciation fortheSecretariat note, which theyconsidered auseful starting point fortheir
deliberations.
8. Onerepresentative raised thequestion whether examples could befound ofsafeguard measures
already inexistence intheservices area. Inhisexperience, suchmeasures were few,anditmight
beuseful toconsider whythiswasthecase. Perhaps theanswer layinthefactthatservices sectors
werealready sufficiently protected, orthatsuchmeasures simply didnotmake practical sense. The
Working Party agreed thattheSecretariat would lookforexamples oftheuseofsafeguard measures
inother international agreements dealing withtrade inservices.
9. Another representative expressed theview thatanyconsideration ofpossible safeguards
instruments would needtotakeaccount ofthedifficulties thatexistwithstatistics inthefieldofservices.
Theissue washowtodealwithsuchmatters asinjury, ormore generally withthepreconditions that
might trigger asafeguard action, intheabsence ofanadequate statistical base. TheChairman agreed
thatthiscould indeed beaproblem, andindicated thattheforthcoming Secretariat paper onstatistical
issues inservices mayprovide auseful background against which toconsider thequestion further at
alaterdate.
10. Several delegations noted thatthenegotiating mandate onsafeguards, setoutinArticle Xof
GATS, didnotprejudge thequestion whether asafeguard instrument wasnecessary ordesirable. In
particular, itwasunclear whatthejustification might beforasafeguard measure taken inthecontext
ofestablishment trade. Inthiscase,asafeguard would constitute adeparture fromnational treatment,
resulting indiscrimination between national andforeign investors inthedomestic market. Some
delegations alsofeltthatthecaseforsafeguard provisions hadtobeconsidered inthelightofthenature
andextent ofexisting commitments andofthewayinwhich specific commitments were scheduled
under GATS. Moreover, inviewofthefactthatcurrent GATS commitments hadentered intoforce
intheabsence ofasafeguard instrument, itwould seem legitimate toconsider thecaseforasafeguard
provision inthecontext offuture, higher levels ofcommitment byMembers.S/WPGR/M/1
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11. Summing up,theChairman saidthattheWorking Party hadhadauseful preliminary exchange
ofviews, andmany delegations hadindicated theirintention toreflect further onthese matters before
theywerediscussedagainintheWorkingParty.Heencourageddelegationstomakewrittensubmissions
totheWorking Party, inorder tofacilitate future discussions.
Future Meetings oftheWorking Party
12. TheWorking Party agreed thatfortheforeseeable future itwould holdmeetings approximately
every twomonths. Thenext meeting oftheWorking Party would beheld onWednesday,
18October 1995.
Other Business
13. Nomatters were raised under other business.