RESTRICTED
WORLD TRADE S/WPGR/M/7
19September 1996
ORGANIZATION(96-3687)
Working Party onGATS Rules
REPORT OFTHE MEETING OF29JULY 1996
Note bytheSecretariat
1. Theseventh meeting oftheWorking Party onGATS Rules waschaired byMr.Stuart Carre
ofCanada. Theagenda consisted ofsixitems: negotiations onsubsidies under Article XVoftheGATS;
negotiations ongovernment procurement under Article XIIIoftheGATS; negotiations onsafeguards
under Article XoftheGATS; work oftheWorking Party inrelation totheSingapore Ministerial
Meeting; dateofthenextmeeting oftheWorking Party; andother business.
Negotiations onsubsidies under Article XVofGATS
2. TheChairman noted thataparticular theme inearlier discussions hadbeenhowtodefine
subsidies inorder tobeabletoproceed withtheinformation exchange called forinparagraph 1of
Article XV. Several delegations hadsuggested thatastarting point should betheexperience gained
under theAgreement onSubsidies andCountervailing Measures. TheChairman posed thequestion
whether thedefinitions employed inArticle 1andArticle 2ofthisAgreement would besuitable as
abasisfortheinformation exchange onsubsidies relating totrade inservices. Henoted thatthebasic
thrust ofthedefinition inArticle 1involved anactual orpotential charge onthegovernment account,
oranyincome orprice support, thatconferred abenefit. Article 2defined specificity. Thus, the
notification requirements under theAgreement onSubsidies andCountervailing Measures concerned
specific subsidies thatconferred abenefit andinvolved anactual orpotential charge onthegovernment
account (including revenue foregone) oranyformofincome orpricesupport. TheChairman reminded
Members thatthepresent exercise didnotinvolve anotification requirement, butmerely aninformation
exchange. Given theexploratory nature oftheexercise, perhaps itshould bekeptassimple aspossible
inthefirstinstance. Moreover, there wasnosense inwhich information provided would besubject
tolegalinterpretation. Several delegations reiterated thelatterpoint, emphasizing thatallthenegotiating
mandate called forwasanexchange ofinformation.
3. Anumber ofdelegations doubted theappropriateness ofaquestionnaire approach tothe
information exchange exercise. Others indicated thattheysawlittlealternative toanapproach based
onaquestionnaire. Itwasgenerally agreed thatitwould behelpful todevelop asetofrelevant questions,
butitwasimportant nottoinsist uponexcessive uniformity, asthiswould militate against theprovision
ofuseful information. Theapproach should besufficiently flexible toallow Members todescribe their
subsidy policies inthemanner theyregarded asmost useful forthework oftheWorking Party. It
wasalsonoted thatifnecessary, additional information could besolicited from Members atalater
stage. Onedelegation stated thattheapproach adopted, including inrelation tothedefinition ofsubsidy,
should takeadequate account ofdeveloping country considerations. Another delegation expressed the
viewthatitwould bemore useful tofocus uponthekinds ofsubsidies employed byMembers, rather
thanupon thetrade effects ofsuchmeasures, since itwould frequently bedifficult tojudge thetrade
effects ofsubsidies inaservices context.S/WPGR/M/7
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4. Alldelegationswhospokeonthematteragreedthatitwasnecessarytohaveaworkingdefinition
ofsubsidies forthepurpose oftheinformation exchange. However, several delegations wereofthe
view thatthedefinitional element contained inArticle 2oftheAgreement onSubsidies and
Countervailing Measures wasunsuitable forthepresent purposes. Iftheinformation exchange exercise
related onlytospecific subsidies asdefined inArticle 2,thiswould truncate discussion intheWorking
Party andfrustrate transparency. Thesuggestion wasmade thattheworking definition should bebased
onArticle 1oftheAgreement, andthatMembers could thenindicate additional definitional elements
iftheysowished. Thisapproach wasendorsed bytheWorking Party andtheChairman indicated
thattheSecretariat would draftasetofpossible questions tobeaddressed intheinformation exchange
exercise. TheWorking Party would consider theproposed questions atitsnextmeeting.
Negotiations ongovernment procurement under Article XIIIofGATS
5. TheChairman referred tothediscussions regarding government procurement thatweretaking
placeinthecontext ofpreparations fortheSingapore Ministerial Meeting, andsaidthatitwasimportant
tostayabreast ofthosediscussions, astheymayhaveimplications fortheWorking Party'sconsideration
ofitsnegotiating mandate inthisarea. Anumber ofdelegations agreed withtheChairman, andone
saidthataproliferation ofduplicative negotiating mandates andprocesses should beavoided. The
representative oftheUnited States saidthathisauthorities hadputforward aproposal intheheads
ofdelegation preparatory process forSingapore. Hesaidhisgovernment favoured ahorizontal focus,
believing thatasingle instrument covering allprocurement wasdesirable, evenifsome specificities
relating toservices might havetobedealtwithseparately. Another delegation saidthatitshould be
borneinmindthatanegotiatingmandatealreadyexistedinservices,whereasthecomprehensiveapproach
wasstillonlyaproposal.
6. TheChairman alsoreminded delegations thattheWorking Party hadagreed toavoluntary
exchange ofinformation regarding national procurement regimes. Sofar,answers totheprocurement
questionnaire agreed bytheWorking Party (S/WPGR/W/11) hadonlybeenreceived from Norway
(S/WPGR/W/11/Add.1) andSwitzerland (S/WPGR/W/11/Add.2). Anumber ofdelegations indicated
thatanswers tothequestionnaire wereunder preparation incapitals andwould besubmitted shortly.
Negotiations onsafeguards under Article XofGATS
7. TheChairman recalled thattheWorking Party hadagreed atitsMarch meeting toholdinformal
discussions onsafeguards, andthatitwould beuseful ifdelegations weretoputforward some oftheir
ideas onthequestion ofanemergency safeguards mechanism inGATS. Although noadditional
submissions hadbeenmade tothose ofAustralia (S/WPGR/W/5) andThailand (S/WPGR/W/6), the
Chairman proposed thattheWorking Party should holdaninformal meeting prior toitsnextformal
session. Thisproposal wassupported bytheWorking Party. TheChairman expressed thehopethat
aninformal setting would provide theopportunity topushthediscussion forward bothonsubstance
andprocedural questions. Henoted thatthedeadline forcompleting thesafeguards negotiations was
31December 1997, which waslessthanayearandahalfaway, andthatmuch work remained tobe
done.
8. Thedelegations ofEgypt, India, Malaysia, Pakistan, Peru, Thailand andVenezuela submitted
aninformal noteatthemeeting which listed sixpoints fordiscussion. These weredefinitional issues,
criteria fordetermining serious threat ofinjury intradeinservices, examination ofemergency safeguard
measures inother documents, theobjectives ofemergency safeguard measures inGATS, examination
ofpossibleemergencysafeguardmeasuresfordifferentmodesofsupply,andspecialneedsfordeveloping
countries. Eleven other delegations expressed theirsupport forthisproposal. Three other delegations
voiceddoubtsaboutthemeritsofthecaseforemergencysafeguardsinGATS,butwelcomedtheinformalS/WPGR/M/7
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noteandagreed thatthediscussion needed tobeadvanced. Several delegations emphasized thatmany
oftheissues involved inthisdiscussion were technically complex andinneedofcareful attention.
Consideration ofthework oftheWorking Party inrelation totheSingapore Ministerial Meeting
9. TheChairman raised thequestion whether theMinisterial Meeting inSingapore provided an
opportunity topushforward thework oftheWorking Party onanyfront. Itwasforconsideration
whether there were anyareas where newinstructions from Ministers might beuseful. Delegations
indicated thatthese matters would bediscussed induecourse, including inthecontext oftheheads
ofdelegation process andtheCouncil onTrade inServices.
Dateofthenextmeeting oftheWorking Party
10. TheWorkingPartyagreedtoholditsnextmeetingontheafternoonofTuesday,8October1996,
immediately following aninformal meeting thatwould takeuptheissue ofsafeguards.
Other business
11. Nomatters were raised under other business.