Info Service on WTO and Trade Issues (Dec09/17)
Third World Network
domestic regulation talks unripe for a new text
in SUNS #6840 dated 22 December 2009
21 Dec (Riaz K Tayob) -- The Chairman of the GATS Working Party on
Domestic Regulation (WPDR), Ms Misako Takahashi of Japan, has said that
it was not yet time for her to issue a new text for negotiations, and
that she would hold bilateral consultations with WTO members.
emerged at informal consultations held last week on 14-15 December.
The decision by the Chair came despite demands from several Members
including Australia and Chile for a new text. The Chair said
that she did not deny the possibility of a new text, but added that
it was not the time for one at this stage.
next session of the Working Party, scheduled for 10 February 2010,
could discuss whether the talks have matured enough to move to a new
draft text. The Chair also said that it was not a good idea to present
a new artificial schedule for the work of the Working Party.
Chair had proposed in an annotated agenda (Room Document dated 8 December)
that the informal consultations to be held on 14 December (which was
extended to 15 December) discuss General Provisions (Chapter III),
Transparency (Chapter IV) and Institutional Provisions (Chapter XI)
of the 20 March 2009 text prepared by the previous Chair of the WPDR,
Peter Govindasamy of Singapore (also known as Peter's text).
agenda also included follow-up comments on previous discussions contained
in Definitions (Chapter II), Technical Standards (Chapter IX), Development
(Chapter X), and future work of the Working Party. The 14-15 December
consultations also considered the new proposal (Room Document, dated
10 November 2009) tabled by Switzerland and co-sponsored by Australia,
Chile, Colombia, Hong Kong -China,
Republic of Korea
and New Zealand
at the previous informal meeting of the WPDR on 11 November. (See SUNS
#6816 dated 17 November 2009).
to SUNS after the meeting, some developing country trade diplomats
related their understanding of what was discussed at the meeting on
14 and 15 December. There were discussions on a Job Document titled
"Questions on Disguised Restrictions on Trade in Services'
in Relation to the GATS Negotiations on Domestic Regulation" (Job(00)/182,
a communication from China, Pakistan and Switzerland dated 10 December
2009), which raised issues over the term "Disguised Restrictions
on Trade", which is used in Peter's text to discipline domestic
to trade diplomats, discussions focussed on what it means for Members
to ensure that domestic regulations do not constitute disguised restrictions
on trade (paragraph 2 of Peter's text). Brazil
said that there is an important relationship between trade policy and
sectoral policy and a balance needs to be sought between trade and
sectoral policies in order for countries to meet their national policy
to trade diplomats, the US
said that there is a problem between national treatment and domestic
regulation and a deeper discussion was needed. Japan
agreed with the US.
It said that the necessity test was already given in the mandate on
domestic regulations, but it had a flexible position on this.
Chile said that the necessity test,
or whatever it is called, should be in the operative part of the text.
It said the concept of disguised measures is not the best concept,
and the necessity test should be used. China
said that there was need to know what is talked about when "disguised
measures related to domestic regulation" are mentioned.
India said that disguised restriction
on trade is like a necessity test and should be incorporated into the
body of the text. It said there is need to structure the necessity
test in a suitable way for everyone.
Canada said that it does not have
issues with disguised measures on trade, but wanted to see how it was
interpreted in other texts of the WTO. It suggested that the Secretariat
prepare a note, intended as a reference and not to follow those ideas.
Bolivia asked about general exceptions
in the GATS and also for clarity on whether it is presumed that proposed
disciplines apply only to measures that are discriminatory or that
impose limits on market access. The Philippines said that Peter's text
had reached a balance or equilibrium and that it would be difficult
to change elements because this could create imbalances.
to some of the issues raised, Switzerland
said that the GATS articles including Article 14 exceptions are related
to most favoured nation provisions. However, it recognised the concerns
raised by Bolivia
as it related to national treatment and market access in the scope of
application of the disciplines. It added that disciplines in the Chair's
document are not in the scope of national treatment and relevant measures.
to trade diplomats, during the discussions on Peter's text, Brazil said that the section titled
"Introduction" should be shifted to be a preamble. It said
that it preferred to have a provision in paragraph 2 that guaranteed
the right to regulate with the goal to reach public policy objectives.
proposal on the right to regulate. Indonesia
said that the right to regulate should be stated clearly in the text.
Australia preferred that the introduction
in Peter's text be changed to a preamble, which could be used like
objectives. It added that Chapter 3 also has objectives and this could
be added to the mix.
Barbados, for the Small and Vulnerable
Economies (SVEs), said that the right to regulate should be both in
the preamble and in the text, as it helps developing countries.
US said that the right to regulate
emerges from sovereignty. There is no need to have a positive statement
to include the right to regulate. It said that if many countries want
it, it could be flexible and accept it. Chile and Switzerland
presented a similar view to the US.
The EC said that there was no need to put the right to regulate into
the agreement, as it is inherent to the nature of the state. Singapore supported
retaining the reference to the right to regulate.
Brazil asked for clarity on the judicial
relevance of the preamble. The Secretariat said that the preamble informs
two things, the purpose and object of the agreement and the context
of the agreement. The preamble does not have judicial mandatory obligations.
moved on to Paragraph 4 of the Introduction, which relates to recognising
the difficulties that Members would have in complying with the disciplines
in other countries. The second sentence of paragraph 4 makes reference
to all Members but also specifically mentions service suppliers from
to trade diplomats, the EC said that the second sentence should be
removed, or there should be a broader concept, as the problems exist
not only for developing countries but also for developed countries.
response, Argentina and India said that the current language
implies both developed and developing countries. Barbados, for the SVEs, supported
retaining the paragraph "as is".
US referred to the issues it had on
the scope of the disciplines. It had some problems related to the objectives
of the disciplines on national policy and sub-national policy. It has
two types of jurisdictions and in many instances, laws and regulations
coming from sub-national levels have the same validity and should be
recognised as federal law.
these discussions, the Chair provided her summary, stating that the
Job Document from China, Pakistan
on disguised restrictions on trade had some ambiguities. She added
that it could be useful for other Members to understand the real meaning
of disguised measures.
there is still a lack of clarity or a need for a common understanding
of the national and sub-national issues, which needed more discussion.
It was also agreed that paragraph 4 covers both developed and developing
countries, she said.
Australia said that there is need
to keep working on all issues and enough work had been done to move
to new texts. The new text could have brackets with some proposals
that have less consensus. This was supported by Switzerland, which said that the various
proposals should be attributed (to proponents) in the text.
Chile said that the discussions were
mature enough for a new draft text. It said that it regarded Peter's
text as un-balanced, and that it should be changed to gather all Members'
EC felt that the discussions were not mature enough for a new draft.
It proposed a small grouping to negotiate with the Chair on some specific
points of the text. Japan
supported the proposal by the EC to have an annotated text, but not
a new draft.
Cuba opposed having small-group negotiations.
supported a new text with brackets. Barbados,
for the SVEs, said that the Working Party can still have more discussions
and that developing another text would be alright. The US said that there is no need for
an annotated text as proposed by the EC . It still wanted to work on
Peter's text. It did not agree that a small group negotiates with the
Chair, as it could not be productive at this time.
Chair summarised some of the discussions. She said that it was not a
good idea to present a new artificial schedule. She supported the idea
of having an annotated agenda to check (and report on) the progress
made. For the next session, on 10 February 2010, the Working Party
could discuss whether there is enough maturity to move to a new draft.
The Chair had no intention to develop a new text at this stage and
would wait for a little more work to be done.
a new text, Australia expressed
its disappointment. The Chair said that she did not deny the possibility
of having a new text in a new form, but that it was not the time for
it at this stage. She had to find more signals from countries, which
reflect more clearly the consensus and divergences.
were also held on General Provisions (Chapter III), Transparency (Chapter
IV) and Institutional Provisions (Chapter XI) of Peter's text. Under
General Provisions, paragraph 10 reads, these disciplines apply to
measures by Members relating to licensing requirements and procedures,
qualification requirements and procedures, and technical standards
affecting trade in services where specific commitments are undertaken.
They do not apply to measures to the extent that they constitute limitations
subject to scheduling under Article XVI or XVII.
China asked that "to the extent"
be replaced by "which". According to trade diplomats, Argentina said
that in paragraph 10, there is a part which covers domestic regulation
and another that covers the (specific) commitments undertaken by countries,
and there is lack of clarity regarding the right to regulate. The US
had similar concerns as Argentina.
Chile said that the necessity test,
whichever shape it takes, should be in this part of the text, i.e.
were also held on the Swiss proposal of 10 November. According to trade
diplomats, the US expressed some
concerns and made some inputs regarding the 10 November version of
the proposal (including paragraphs 1, 4, 5, 8 and 9). It said that
in some areas, there is confusion and that the proponents don't have
a clear idea. Many concepts are changed and that there are new issues
emerging from this mix. There was need for more discussion.
concluding, Chair said that she did not know if she would prepare another
annotated agenda. In the next Working Party session, the Development
chapter (X) would be discussed. Australia asked
the Chair what work will be done to move forward, and whether its proposal
would be considered.
Chair said that she did not know how to proceed. Members would have
to wait until the next session to discuss if a new draft is needed.
She added that some issues have lacked time for discussion like the
Chile inquired whether more intensive
work will be done preceding the next session, and suggested work in
small groupings. The Chair said that she will discuss issues with all
countries, but that maybe she could have some discussions with some
countries to clarify some points. +
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