RESTRICTEDWORLD TRADE
ORGANIZATIONS/WPDR/M/4
6 April 2000
(00-1388)
Working Party on Domestic Regulation
REPORT ON THE MEETING HELD ON 24 FEBRUARY 2000
Note by the Secretariat
1. The Working Party on Domestic Regulation held a meeting on 24 February 2000.  The
agenda for the meeting is contained in Airgram WTO/AIR/1243.  The main focus of the meeting was
further discussion of the concepts of necessity and transparency, in respect to the development ofhorizontally applicable disciplines on domestic regulation for services.
(a) Discussion of necessity, transparency, equivalence and international standards
2. A new informal paper from the European Communities, circulated as Job No. 1061, dated
24 February 2000, together with the earlier papers from Australia and the Secretariat (circulated asS/WPDR/W/1, dated 19 July 1999, and Job No. 5929, dated 8 October, 1999, respectively), was the
major focus of discussion.   Discussions were held in informal mode.
3. The Chairperson initiated discussions by su mmarizing the main points from the previous
meeting.  Regarding the Secretariat paper, attention had especially been focused on paragraphs 13, 14
and 21-24, as reported in the previous minutes.  These paragraphs concern the legitimate objectives
specified in the TBT and SPS agreements, the "third aspect" of the necessity test, and the issue of
potential additional legitimate objectives.  The communication from Australia included two main
points of interest to Members:  the first was paragraph 2 dealing with the scope of regulatory coverage
under GATS Article VI:4, and the second was paragraph 5 concerning strengthening the necessity
test.
4. The Chairperson later summarized the discussion on necessity by stating that the Australian
paper had provided a good focus for discussing the scope of the types of regulation to be covered.
Some Members thought the existing coverage of Article VI:4 was sufficient (i.e. qualification
requirements and procedures, licensing requirements, and international standards);  some Members
wished a larger scope;  and other Members felt the additional elements suggested in the Australianpaper were actually included in the existing cove rage.  Other comments included a suggestion that
certain WPPS documents, such as W/9, would be useful in this regard.
5. The second aspect of the Australian paper discussed a definition of the necessity test:  many
delegations thought a definitional approach to necessity was useful.  One delegation suggested fourspecific aspects to be considered, i.e. determination whether a measure is trade-distorting, decision on
whether a measure is actually necessary, use of least trade distorting measures, and the use of
concepts such as economic and technological feasib ility to determine least trade restrictive.  Some
delegations, however, felt that references to economic and technological feasibility were not required,
as they were already included in the general concept of necessity.  Some Members, concerned aboutthe use to be made of the jurisprudence to date, suggested changes to strengthen the wording of the
necessity provision as contained in the Australian paper;  others said the existing wording of the
accountancy disciplines was preferred to either suggested change.
6. Delegations had welcomed the new paper from the European Communities, and some initial
questions were raised by Members.  The Chairperson noted that delegations should review this paperS/WPDR/M/4
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for the next meeting.  Concerning legitimate objectives, there were some who saw the merits of
developing an illustrative list, while others felt such work might not be productive at the horizontal
level.  The relationship between GATS Article VI and XIV was discussed.  Article  VI measures were
said by some delegations to be primarily technical in nature, while Article XIV exceptions were said
to relate more to sovereignty issues.  Other delegations felt the objectives in Article XIV wereobtainable in the context of Article VI.  One delegation also stated that Members needed to consider
further the question of less-burdensome alternatives to certain trade-restrictive measures, e.g. high
license fees, restrictive visa procedures, land ownership restrictions, etc.
7. Concerning transparency, the Chairperson su mmarized by noting that two delegations,
Canada and Japan, had stated they would be submitting papers.  The OECD Secretariat would be
asked to give an informal presentation of its recent paper on transparency issues.  Some delegationshad expressed concern that developing countries would face resource constraints in regard to any new
transparency requirements.  Reference had also been made to monitoring work under other WTO
agreements, notably the ongoing TBT review.  Discussion of equivalency and international standards
would occur at a later time.
(b) Discussion of procedures for Secretariat consultations with international professional
organizations
8. The second item on the agenda was procedures for Secretariat consultations with international
professional services organizations.  Discussion was again held in informal mode.  The Chairperson
noted that Members had previously agreed to provid e the Secretariat with listings of international
organizations which they wished to have consulted.  Three submissions had since been made: the first
two were from Australia and Thailand, which were circulated on 16 February as Job Nos 864 and 863,
respectively;  the Hong Kong, China contribution was circulated as Job No. 1013, dated 22 February.
9. The Chairperson enquired whether any Members wished to report on their domestic
consultations with professional services organizations.  Noting that the submissions had included
some regional organizations, he observed that Members should decide whether such organizations
should be consulted.  Otherwise, the Secretariat had confirmed that the organizations recommended
by Members appear to conform with the criteria for relevant international organizations as defined
under the GATS.
10. In summarizing the discussions, the Chairperson noted that Members wished to have more
time to consider the list of organizations to be consulted.  One delegation expressed the wish to
postpone the process until domestic consultations had been completed.  Some Members wished to
include regional organizations in the listing.  One Member had wished to limited consultations to only
those professions which all Members had consulted domestically;  others pointed out the possibilitythat this might not be feasible, as some Members may not have consulted with any professional
organizations.  Canada had added the names of tw o additional organizations it wished to have
consulted.
11. The Chairperson concluded by stating that the Secretariat would compile a composite listing
of Member submissions, together with some brief background information, including whether they
appear to conform with the GATS criteria for relevant international organizations.
(c) Request for observer status from the International Association of Insurance Supervisors
12. The Chairperson noted that a request for observer status had been received from the
International Association of Insurance Supervisors.  This request was contained in Job No. 779, dated
10 February 2000.  This Association was also requesting observer status from the Committee on
Financial Services.  Members agreed with the Chairperson's suggestion to hold the discussion in
formal mode.S/WPDR/M/4
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13. The delegate of the United States noted that the issue of Observer status was still under
discussion by the General Council, but said his delegation was open to the possibility of ad hoc
approval.
14.  The delegate from Hong Kong, China said that his delegation was flexible in respect to
Observer status for discussions on insurance services, but wished to reflect further on the issue.
15. The Chairperson agreed that further reflection was required, and suggested that Members save
the issue for the next meeting.
(d) Date of Next Meeting
16. The Chairperson said that the date of the next meeting, preferably to be held near the time of
the next meeting of the Council for Trade in Services, would be determined on the basis of
consultations with the new Chairperson.
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