RESTRICTED
WORLD TRADE S/WPPS/M/4
2April 1996
ORGANIZATION
(96-1199)
Working Party onProfessional Services
REPORT OFTHE MEETING HELD ON18MARCH 1996
Note bytheSecretariat
1. TheWorking Party onProfessional Services helditsfourth meeting on18March 1996. The
agenda forthemeeting wascontained inAirgram WTO/AIR/275/Add.1.
2. Thefirstitemtobetakenupconcernedtheissuesthathadbeenproposedforfurtherconsideration
aslisted intheSecretariat informal noteof24January 1996andannexed tothereport ofthelastmeeting
(S/WPPS/M/3). TheChairperson recalled thatdelegations hadbeeninvited tosubmit papers onways
inwhichtheissuescouldbeaddressedandonpossiblemultilateraldisciplinesascalledforinthemandate
oftheWorking Party. Inthisconnection anumber ofinformal papers hadbeensubmitted andcirculated
comprising twopapers from Canada entitled North American Free Trade Agreement: Annex on
Professional Services andMutual recognition ofregistered/licensed engineers byjurisdictions of
Canada, theUnited States ofAmerica andtheUnited Mexican States tofacilitate mobility inaccordance
withtheNorth American FreeTrade Agreement ;adiscussion paper bytheEuropean Communities
andtheirMember States entitled Comments fordiscussion onaccountancy intheWorking Party on
Professional Services ;apaper bytheUnited States onMultilateral guidelines formutual recognition
agreementsonprofessionalservicesandtwopapersfromAustraliaentitledCompetency-basedassessment
andPriority listofissues ,thelatter constituting aranking oftheissues proposed forconsideration.
3. Allofthesubmissions, andanumber ofsubsequent comments made bydelegations thathad
notsubmitted papers, focused inonewayoranother onthedevelopment ofguidelines formutual
recognition. TheNAFTA Annex onProfessional Services presented byCanada provided anexample
ofanexisting model onguidelines formutual recognition which hadbeenfound useful byseveral
Canadian private sector users. Similarly, thesecond Canadian document wastherecently concluded
mutualrecognitionagreementreachedundertheNAFTAAnnexonProfessionalServicesbetweennational
engineeringassociationsinCanada,theUSandMexico.TheUnitedStatespaperbuiltontherecognition
provision inGATS Article VIIandprovided anoutline showing howmultilateral guidelines could
bedeveloped toassure thatthenegotiation ofmutual recognition agreements wasconsistent withGATS
principles.Inadditiontocommentingonallthelistedissues,theECpaperconsideredthatmuchpractical
work could bedoneindeveloping recognition guidelines anditproposed thattheworking party could
elaborate aframework which could serve asamodel when Members decided toconclude amutual
recognition agreement. Finally, theAustralian paper oncompetency-based assessment inaccounting -
which consisted essentially ofhighly specified performance criteria against which competency could
beevaluated -wastabled asadifferent wayofaddressing theissue ofmutual recognition. Thepoint
wasmade thatitwasnecessary toensure thatguidelines formutual recognition should beopenand
flexible inorder toprovide forthepossibility ofhaving awiderange ofmutual recognition arrangements
thatmight bedeveloped among WTO Members.S/WPPS/M/4
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4. Other comments thatwere made bydelegations underlined theneedtoexamine anddiscuss
thefollowing issues: whether licensing requirements could belimited tocertain activities ofaccountants
instead ofhaving general licensing requirements; howtoassess theregulatory rationale forcertain
measures(e.g.establishmentormembershipofprofessionalassociationrequirements)andhowtoexamine
alternative, less-distortive waysofreaching justifiable regulatory objectives; theneedtotakeadequate
account ofdifferent national regulatory systems foraccountancy indiscussions ofliberalization oftrade
inaccountancy services; theneedtofocus onqualifications forindividual accountants andmeasures
affecting them; theroleplayed byprofessional associations andthepotential trade andcompetition
effects; howtopursue theideaofinternational accreditation ofaccountants which could bedeveloped
withtheassistance ofsuchbodies asIFAC inorder toencourage professionals tosupply services in
countries which areatdifferent stages ofdevelopment; theneedtoexamine regulations governing the
establishment ofacommercial presence including control, ownership andinvestment restrictions,
limitations onform oflegalentity, scope ofbusiness limitations anduseoffirmname.
5. Regarding thenotebytheSecretariat ontheBackground information ontheAgreement on
Technical Barriers toTrade andtheAgreement onImport Licensing Procedures (indocument
S/WPPS/W/6), itwasfeltbysome delegations thattherewereelements inbothagreements thatcould
addprecision andclarity towhatcurrently existed intheGATS andwhich required further exploratory
work. Thetwoagreements contained anumber ofprovisions relating totrade ingoods which were
conceptually relevant forthediscussion ondeveloping disciplines fordomestic regulation inthearea
ofservices and,according toonedelegation, inthisregard careful attention needed tobepaidtothe
specificities oftheaccountancy sector.
6. Turning tothedraftquestionnaire onaccountancy which hadbeencirculated toallparticipants
on16February 1996, theChairperson reminded delegations thatatthelastmeeting oftheworking
party itwasagreed thattheSecretariat prepare aquestionnaire, toberesponded toonavoluntary basis,
focusing onspecific aspects ofdomestic regulation affecting theaccountancy sector primarily innon-
OECD countries. Since thedistribution ofthequestionnaire theChairperson hadheldinformal
consultations which resulted inanumber ofamendments proposed bydelegations. Alltheproposed
amendments, aswellasnewsuggestions made atthemeeting, werediscussed; thissubsequently led
tothefinalization ofthequestions inthequestionnaire anditscirculation toallparticipants.
7. Withrespect tohowcountries should respond tothequestionnaire, theChairperson proposed
thatcountries thathadnottaken partinanyprevious surveys would beinvited torespond totheentire
questionnaire andthatthose countries thathadparticipated inother surveys (OECD, IFAC and
UNCTAD) would beinvited torespond onlytothose questions which werenotcovered inprevious
surveys. Inthisregard, shenoted thatitwould behelpful ifgovernments would lookatthequestions
which hadbeenanswered inprevious surveys bytheirprofessions orcountries andcheck thatthe
information wasrelevant andcomplete. Thiswould assist theSecretariat inavoiding thecollation of
incomplete replies when compiling theresponses onacountry basis attheendofthequestionnaire
process. Itwasagreed thatparticipating countries should haveuntil21June1996 torespond tothe
questionnaire inorder toallow forprocessing andcirculation oftheinformation contained inthe
responses ahead ofthenextmeeting oftheworking party.
8. Finally, theChairperson suggested, andparticipants agreed, thattheworking party holdone
more meeting before thesummer break, subsequently agreed for12July, andanother intheautumn,
on17October, inorder toprepare aprogress report totheCouncil forTrade inServices ahead of
theSingapore ministerial meeting. Itwassuggested thattheJulymeeting could focus ontwoorthree
oftheissues thathadbeen identified andalsoinclude presentations, perhaps on11July, bythe
International Accounting Standards Committee andalsotheInternational Organisation ofSecurities
Commissions inorder toexplain therolethatinternational accounting standards canplayincontributing
tointernational trade inservices andininternational securities offerings. Regarding theparticipationS/WPPS/M/4
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ofobserver organisations atthenextmeeting, itwasagreed thattheUN,UNCTAD, theIMFand
theWorld Bankbeinvited asobservers within thecurrent framework ofadhocprocedures which were
being usedbytheGeneral Council anditssubsidiary bodies. Asnomatters wereraised under Other
business themeeting wasclosed.