Topics handled by WTO committees and agreements
Issues covered by the WTO’s committees and agreements

SERVICES: NEGOTIATIONS

WTO negotiations on GATS rules

The negotiations on GATS rules focus on three distinct areas, which WTO members were unable to consider in detail and agree upon within the timeframe of the Uruguay Round.

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As a result, the GATS includes the following three negotiating mandates:

  1. Article X of the GATS calls for negotiations on the question of emergency safeguard measures, based on the principle of non-discrimination
     
  2. Article XIII of the GATS calls for multilateral negotiations on government procurement in services, as opposed to the plurilateral WTO Agreement on Government Procurement
     
  3. Article XV of the GATS stipulates that negotiations will be held with a view to developing the necessary disciplines to avoid the trade-distortive effects of subsidies that may arise in certain circumstances and to address the appropriateness of countervailing procedures.  It also requires members to exchange information concerning all subsidies related to trade in services that they provide to their domestic service suppliers.

 

Working Party on GATS Rules  back to top

The Working Party on GATS Rules was established in March 1995 by the Council on Trade in Services to carry out the negotiating mandates contained in the GATS on emergency safeguard measures, government procurement in services and subsidies.

 

Why negotiate on GATS rules?  back to top

According to its proponents, in addition to existing safeguard provisions in the field of trade in goods, an emergency safeguard instrument could be helpful to service suppliers faced with unexpected adverse developments arising from members' obligations under the GATS.  It would permit a member to temporarily suspend its GATS commitments in the event that it determines that its domestic service suppliers experience serious injury or that there is a serious threat to the viability of its domestic industry.    

The lack of multilateral rules covering government procurement has been perceived as a significant gap in the international trading system.  Government procurement represents between 15 and 20 per cent of GDP, and procurement of services constitutes a substantial part of this total.  Likewise, access to government procurement markets and contracts, including foreign ones, is an important factor for the competitiveness of individual service suppliers.   

Members recognize that, in certain circumstances, subsidies may have distortive effects on trade in services.  The negotiations thus aim at developing necessary multilateral rules on subsidies to avoid such trade-distortive effects.  At the same time, it is acknowledged that subsidies may also be an important tool of economic, social or cultural policy, and that the negotiations have to take into account the need for flexibility of members, particularly developing ones.

 

State of play  back to top

Annex C of the WTO Hong Kong Ministerial Declaration in 2005 instructed negotiators to “intensify their efforts to conclude the negotiations on rule-making […] in accordance with their respective mandates and timelines”. 

Members have engaged in focused discussions as mandated in the Hong Kong Ministerial Declaration.  However, given the fundamental divergences over the objectives and expected outcome of the negotiations, discussions in the Working Party on GATS Rules have not been able to move to a text-based process.  Members have nevertheless engaged in substantive technical discussions to better understand the proposals and the options available.

The Chairman of the Working Party on GATS Rules produced a Progress Report (S/WPGR/21) on 14 April 2011, reflecting the progress so far achieved in the discussions.  This Progress Report has been attached to the Report by the Chairman of the Council on Trade in Services to the Trade Negotiations Committee (TN/S/36) dated 21 April 2011.