RESTRICTED
WORLD TRADE S/WPGR/W/6
18December 1995
ORGANIZATION
(95-4100)
Original: English Working Party onGATS Rules
COMMUNICATION FROM THAILAND
ADiscussion Paper onGATS Emergency Safeguards
ThefollowingcommunicationiscirculatedattherequestofThailandtoMembersoftheWorking
Party onGATS Rules.
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Rationale forGATS Emergency Safeguards
1. Oneoftheunfinished businesses oftheUruguay Round Multilateral Negotiations isthe
negotiations onemergency safeguard measures.
2. Article XoftheGATS provides, interalia,that“there shallbemultilateral negotiations on
thequestion ofemergency safeguard measures based ontheprinciple ofnon-discrimination. Theresults
ofsuchnegotiations shallenter intoeffect onadatenotlaterthanthree years from thedateofentry
intoforce oftheWTO Agreement ”.Thequestion inthisprovision isnotthequestion ofwhether or
notthere isaneedtohaveaprovision concerning emergency safeguard measures, butthequestion
ofhowbesttoprovide aprovision onemergency safeguard measures thatreally effective forresolving
theemergency situations oftrade inservices onanon-discriminatory basis.
3. Itistruethatthereareanumber ofsafety valves provided forintheGATS; suchasaMember
canchoose toopentheservice sectors thatitisready tocompete withforeign companies; itcanalso
exemptitselffromapplyingcertainadvantages,favours,privileges,orimmunitiestoallGATSMembers
bymeans oftheMFN Exemption. However, itisgenerally agreed thattheMembers havetheobligation
toprogressively liberalize theirtradeinservices. Thedeveloping Members mayhavecertain leniency
towards suchliberalization, butstilltheyhavetoincrease theirparticipation inthisprocess. TheMFN
Exemptions arenoteternal. Inprinciple, theMFN Exemptions mustbeterminated within 10years;
andinfact,theyaresubject toreview within 5years. Inaddition, onceaMember opens itsservice
sectors, theMember mustextend national treatment toallother Members inrelation tothese service
sectors without exception. Consequently, intheforeseeable future, nearorfar,aMember mayencounter
asituation inwhich itneeds totakeemergency safeguard measures toalleviate orcorrect thesituation.
4. Itmayalsobeargued thattheGATS hasalready contained provisions concerning restrictions
tosafeguard thebalance ofpayments, general exceptions, andsecurity exceptions; however, those
safeguard provisions maynotinallcases provide relieve orsolution totheemergency safeguard
situations.
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5. Inthisconnection,itshouldbementionedthattheGATTalsocontainstheprovisionsconcerning
these matters, butyettheGATT alsohastheArticle XIXrelating toemergency action onimports of
particular products. Moreover, theAgreement onTextiles andClothing notonlyprovides forthe
situations whereby normal emergency safeguard measures under theArticle XIXcanbeinvoked, it
alsoprovides forthespecial situations whereby special emergency safeguard measures canbeapplied.
6. Therefore, thereshould benovalidreasons fornotcontemplating andproviding forprovisions
intheGATS totakecareofthesituations whereby theemergency safeguard measures areneeded,
takeintoaccount thefactthattheGATS isquite newtotheMembers, andthereby itcould notinall
circumstances beenvisaged tocover allofitsnegative impacts.
Nature ofGATS Emergency Safeguards
7. Inthecontext oftrade inservices, unlike thecontext oftrade ingoods whereby thegoods in
questions maybestopped attheborders foremergency safeguard reasons, itmaybeargued thatthe
samemeasures asemployed inthecaseoftradeingoods cannot beundertaken. However, themeasures
tobeemployed inthecontext oftrade inservices arenotnecessary besimilar toorthesame asthe
measures employed inthecontext oftrade ingoods.
8. Themeasures inthecontext oftheformer maytaketheforms ofatemporary freezing ofthe
expansion ofcommercial presence offoreign companies incertain sector oftrade inservices, ora
temporary suspension oftheapplication ofnational treatment tothenewforeign companies inthat
sector while recognizing theacquired rights ofthose whohadalready established theircommercial
presence. These arejustthemeasures thatcould beconceived ofasthepossible measures forthe
emergency safeguard situations. Further researches andworks mustbedoneinorder toarrive atthe
bestpossible measures.
Actions tobetaken
9. Ifitcould beofanyassistance, theWTO secretariat maybeasked toprovide adetail study
onhowbesttoprovide thesaidrules, andinthiscontext, theSecretariat should undertake toexplore
therules, examples andprecedents onthissubject notonlyfromrecent multilateral treaties, butalso
from theoldorexisting bilateral treaties, aswellasnational legislations onthesubject. Thereason
forthisundertaking isthatthesubject oftrade inservices onamultilateral basis maybesonewand
innovation thatrules, examples orprecedents onthesubject could notbefound intherecent multilateral
treaties. Theattempt tofindtherules, examples orprecedents onthissubject butcircumscribed itto
therecentmultilateraltreatiesmaybetantamounttotheattempttofindtherules,examplesandprecedents
onthismatterintheplaceswheretheymaynotexist.Moreover,bilateraltreatiesandnationallegislations
onthesubject canbetreated asareflection ofpractice ofstates onthematter, andthatcould beserved
asastarting point oftheprocess ofnegotiations ontheprovisions onemergency safeguard measures.
10. TheSecretariat mayalsoberequested tocontemplate thenewappropriate rulesonthismatter,
since thematter maybesonewandhasnever hadrules, examples norprecedents before. However
thatdoesinnowaymean norimply thatthematter isnotimportant nornecessary. Onthecontrary,
theabsence oftherulesforthematter ofutmost important suchasthisdoessignify thattheMembers
ofthisWTO should begin thenegotiations andconclude them assoonaspossible withtheview to
providing therules togovern theundertaking ofthemeasures within theperiod provided forinthe
Article XoftheGATS.