RESTRICTED
WORLD TRADE S/WPGR/M/4
19March 1996
ORGANIZATION(96-0989)
Working Party onGATS Rules
REPORT OFTHE MEETING OF23FEBRUARY 1996
Note bytheSecretariat
1. Thefourth meeting oftheWorking Party onGATS Rules waschaired byMr.Stuart Carre
ofCanada. Theagenda consisted offouritems: negotiations ongovernment procurement under
Article XIIIoftheGATS, negotiations onemergency safeguards under Article XoftheGATS, next
meeting oftheWorking Party, andOther Business.
Negotiations onGovernment Procurement under Article XIIIoftheGATS
2. TheChairman observed thatindeciding howtorespond totheArticle XIIInegotiating mandate
ongovernment procurement, itwasimportant toconsider whatlessons could bedrawn fromtheexisting
plurilateral Government Procurement Agreement (GPA). Inparticular, heconsidered itwould beuseful
tounderstand whytheGPA hadnotattracted broader membership. Onerepresentative saidthather
authorities hadsubscribed totheTokyo Round Agreement onGovernment Procurement, buthaddecided
nottoparticipate intheUruguay Round Agreement because ofitsreciprocity-based discriminatory
features. Thisdecision hadnot,however, influenced theopen andnon-discriminatory approach to
procurement maintained byherauthorities. Another representative indicated thathiscountry also
maintained open, non-discriminatory andtransparent procurement arrangements, buthadnotsigned
theGPA. Among thereasons forthiswere thefactthatwithitscurrent membership, theGPA did
notseemtooffersignificantprocurementopportunitiesfordevelopingcountries,andmembershipimplied
significant administrative costs.
3. Onedelegation expressed theview thatakeyelement ofasound procurement regime was
transparency. Transparent procurement arrangements required timely publication ofinformation on
tenders andtendering decisions, equitable procedures based onclearcriteria, andeffective arrangements
todealwithanydisputes thatmayarise. Theestablishment ofsucharrangements didnotnecessarily
require detailed orcumbersome procedures. Anumber ofother delegations agreed thattransparency
wasveryimportant inthefieldofprocurement. Itwassuggested thattransparency should bethefocus
ofdiscussion atafuture meeting. Several delegations emphasized thatindealing withtheGATS
negotiating mandate onprocurement, itshould beborne inmind thatthere weredifferent models or
approaches tothedevelopment ofamultilateral procurement regime from which governments could
choose.
4. TheChairman recalled thatatthelastmeeting oftheWorking Party, theSecretariat hadbeen
asked toprepare anoteonalternative approaches toinformation gathering onMembers ’procurement
regimes. Theresulting document wastobefound inS/WPGR/W/7 andAddendum 1.TheChairman
noted thatwhile nodelegation hadquestioned theneedtoimprove theinformation baseavailable to
theWorking Party, certain differences ofemphasis wereapparent astohowthismight bestbeachieved.
Anumber ofdelegations stressed theneedforasystematic andreasonably detailed approach based
onaquestionnaire, evenifthisproved relatively timeconsuming. Other delegations emphasized a
more flexible andinformal approach totheissue, which would notbeoverly burdensome uponS/WPGR/M/4
Page2
governments. Most ofthese delegations alsoexpressed theviewthatinformation should begathered
onavoluntary basis. Among theother issues mentioned bydelegations, uponwhich more information
might beuseful, were thereasons whycountries hadnotsigned theGPA, theeconomic impact of
procurement activity, andtheexperience ofgovernments withprocurement regimes under regional
tradeagreements. Itwasalsosuggested thatusemight bemade ofinformation onnational procurement
regimes contained inthecountry reports prepared fortheTrade Policy Review exercise. Several
delegations saidthatwhatever approach wasadopted, theWorking Party should becareful nottoallow
thesearch forinformation tobecome asubstitute forengagement inserious discussion ofthesubstantive
issues involved indealing withtheArticle XIIInegotiating mandate.
5. Members agreed thattheSecretariat should drawupalistofquestions thatgovernments might
berequested toanswer. TheChairman saidthatsuchadocument would beprepared forthenextmeeting
oftheWorking Party, atwhich timehehoped agreement could bereached toinitiate aninformation-
gathering exercise. TheChairman alsoproposed thatatthenextmeeting butone,theWorking Party
should focus explicitly onthequestion oftransparency inthefieldofgovernment procurement.
Following thesuggestion ofcertain delegations, healsoproposed thattheSecretariat beavailable at
thatsame meeting toanswer anyquestions thatMembers might wishtoraiseinregard totheGPA.
TheChairman informed theWorking Party that,asagreed atanearlier meeting, hehadconferred
withtheChairman oftheCommittee onGovernment Procurement, andhadagreed tomaintain contact
aswork proceeded.
Negotiations onSafeguards under Article XofGATS
6. Anumber ofdelegations reiterated theirviewthatitwasnecessary todevelop anemergency
safeguardsmechanisminGATS.AnescapeclausewasessentialifMembersweretocontinuetoschedule
specific commitments andsupport progressive liberalization oftradeinservices. Otherwise, Members
would havenomeans todealwithunforeseen circumstances thatcaused orthreatened injury todomestic
industry. Several delegations saidthattheimmediate taskbefore theWorking Party wastoexplore
anddefine concepts necessary forasafeguard provision. Inthisconnection, work wasneeded onsuch
concepts asdomestic industry, injury, “imports, ”andlikeservices. Acentral issuewashowtodesign
possible safeguard measures inthelightofcommitments under GATS based onmodes ofsupply.
Inthisconnection, anumber ofdelegations referred toparticular problems associated withtheconcept
ofsafeguardsunderthosemodesdealingwithcommercialpresenceandthemovementofnaturalpersons,
where safeguard measures inapost-establishment context maybeundesirable. Some delegations also
observed thatthenature andduration ofremedies needed tobeexamined. Statistical problems would
havetobeaddressed. Afurther question waswhether rulesofgeneral applicability could bedeveloped,
orwhether asectoral focus wascalled for.Onedelegation saidthatwhile there wasnodoubt that
practical difficulties andconceptual challenges would ariseinthedesign ofanysafeguard mechanism,
these factors should notprevent Members fromexamining thefundamental question astowhether or
notthere wasacaseforanemergency safeguard provision under GATS.
7. Other delegations continued toexpress reservations about thedesirability ofasafeguard
mechanism under GATS, bothonconceptual andpractical grounds. Intheview ofsome ofthese
delegations, itwould bemisleading torelytooheavily onsafeguard provisions relating togoods as
amodel forprovisions inservices. Thiswasinpartbecause import surges ofthekindthatmight occur
inthecaseofgoods werenotaphenomenon typically encountered inthefieldofservices. Moreover,
thedesign ofGATS permitted Members toproceed gradually withliberalization commitments. Some
delegations wereoftheviewthatArticle XXIprovided asuitable vehicle foraddressing problems that
mayariseasaresult ofcommitments taken under GATS. Onedelegation suggested thatthepossibility
ofamore flexible useofArticle XXIprovisions should beconsidered asapotential safeguard
mechanism, andnoted thatstraightforward reliance forsuchpurposes onArticle XXIasnowconstituted
couldleadtoanexcessivelyfrequentuseoftheprovision.AnotherdelegationalsonotedthatArticleXXIS/WPGR/M/4
Page3
didnotallow action tobetaken immediately, andrequired compensatory adjustments inMembers ’
specific commitments.
8. Anumber ofdelegations argued thatthewording oftheArticle Xnegotiating mandate meant
thatMembers were committed todeveloping asafeguard mechanism. Other delegations contested
thisinterpretation, arguing thatboththewording ofthemandate andthehistory ofitsnegotiation
indicated thatnocommitment hadbeenmade toagree onasafeguard provision. Rather, Members
hadagreed toexplore thecaseforsuchaprovision. Some delegations saidthatwhatwasimportant
atthisstage wasthatMembers should engage seriously innegotiations onthesubject, andnotmerely
stateaposition fororagainst asafeguard mechanism. Onedelegation saidthatitmaybenecessary
toacquire more experience oftheoperation ofGATS before deciding whether toinstitute anemergency
safeguard provision.
9. Inresponse toarequest fromanumber ofdelegations, theChairman saidthattheSecretariat
would prepare afurther noteonsafeguards, focusing ontheapplicability totradeinservices ofconcepts
andprinciples usedinthegoods context intheAgreement onSafeguards. Thisnotewould beavailable
attheWorking Party’snextmeeting.
Next Meeting oftheWorking Party
10. TheChairman saidthatthedateofthenextmeeting would bedecided inconsultation with
delegations.
Other Business
11. Nomatters were raised under Other Business.