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Intergovernmental Policy Advisory Committee
Services Working Group
Daniel Watson, Director Services Trade Negotiations
Christopher Melly, Director Services Trade Negotiations
Office of the United States Trade Representative
600 17th Street, N.W.
Washington, DC 20508
May 31, 2007
Dear Mr. Watson and Mr. Melly:
As we are aware, the Chair of the WTO’s Working Party on Domestic Regulation (WPDR) has issued a third draft text, pursuant to article VI:4 of the General Agreement on Trade in Services (GATS) governing the domestic regulation of services. Given intensifying WTO Doha Round discussions, it seems that this draft may serve to inform serious negotiations going forward. Hence, the IGPAC Services Working Group has reviewed the Chair’s third draft with particular care. In considering our comments, we have relied upon guidance from the “Outline of the U.S. Position on a Draft Consolidated Text in the GATS Working Party on Domestic Regulation” (per USTR website and Attachment A).
Attached for your review, please find an analysis prepared for the IGPAC SWG by Georgetown's Harrison Institute. Additionally, we would like to express our sincere appreciation for progress achieved to date, and provide an indication of our priority concerns, with suggestions for revisions and clarifications to this WPDR draft.
The IGPAC SWG commends your success in negotiating for:
- the deletion of the necessity test in the introduction;
- the insertion of specific language clarifying that coverage excludes limits on commitments under general provisions;
- the deletion of equivalence and verification under qualification requirements and procedures;
- the deletion of the WTO notification requirement under technical standards, and
- the retention of “should” rather than “shall” with respect to consideration of international technical standards.
Nevertheless, we have some remaining concerns, the most significant of which are detailed below:
- #2 (and in all instances of usage throughout draft): include a clear definition of "objective" to mean "not arbitrary or with rational basis."
- #2: revise text as follows: "...based on objective and transparent criteria [such as] including but not limited to competence, the ability to supply the services, external impacts, environmental impacts, or other public policy impacts of the service(s)..."
- #3: revise definition of "national policy objectives" in footnote to "national policy objectives to include objectives identified at national or sub-national levels."
- Under General Provisions, in order to reflect the US position (“Our consistent position has been that horizontal application would depend on the nature of the disciplines, and that strong disciplines in all areas would not be feasible on a horizontal basis.”):
- #11: move this paragraph out of “General Provisions” and narrow its application.
- #11: delete "pre-established" in all instances of usage OR clarify that its application is limited to licensing of professional services only and/or that it pertains only to the final licensing decision.
- #11: define “objective” per #2 above.
- #11: clarify that "relevant to the supply of the services to which they apply" includes scope for subfederal public policy by revising as follows: “relevant to the supply, quality and external impacts of the services to which they apply.”
- For Licensing Requirements and Procedures, it is essential to clarify that there is limited scope, focused on the licensing of professional services, per the cautions of the US position (“Given the strong preference of Members for horizontal disciplines, we support a very cautious approach in the area of requirements. This is an area that very quickly touches on the content of regulations and can impinge on Members’ right to set appropriate standards to ensure the quality of services, public health and safety, environmental protection, prudential financial practices, and other important policy objectives. Our ability to support disciplines in this area will depend greatly on the nature of the proposed disciplines, the clarity of their scope of application and flexibility in the level of compliance.”)
- #17: clarification is needed as to the meaning, intent and implementation of this provision, the potential coverage of state measures under “residency requirements,” and their potential intersection with immigration (mode 4) and security policies.
- #18: revise to read: “…licensing procedures, related to licensing of professional services, including application procedures and, where applicable, renewal procedures, are [ as simple as possible ] appropriate and…. Applicants shall be allowed a reasonable period for the submission of license applications for licenses of professional services, and….” Such edits would clarify and limit scope of the “one competent authority” reference.
- #19: add a footnote to define “impartial” as follows: “ ‘impartial’ does not exclude licensed professionals from review by boards of professional peers.”
- #26: add the following language: “…licensing fees for the licensing of professionals [ are commensurate with ] have regard to the costs incurred….”
- Qualification Requirements and Procedures:
- #27: delete the word “positive” to accord due deference to established process.
- #30: amend language, to be consistent with the model language in the Korea-US FTA, and to remove bias against legitimate public policy objectives: “Each Member shall endeavor to ensure that qualification procedures for professional services are [ as simple as possible ] appropriate and.…”
- #39: clarify scope by adding language as follows: “fees relating to qualification procedures for professional services are commensurate….”
- Technical Standards: With the US position (“We take a very cautious approach in this area. The concept of technical standards is not well-developed in the services sector, few countries have regulations in this area, and so far the proposed definitions for technical standards are very vague. In this area we can support general provisions related to transparency and public availability.”) providing guidance:
- #41: clarification is needed as to potential new procedural requirements imposed by reference to “international standards” – noting that mild “should” language should not imply a mandate.
- #41: add a footnote to “national policy objectives” per #3 above: "national policy objectives to include objectives identified at national or sub-national levels."
- consider providing a limited meaning for “measures” under technical standards, i.e. voluntary standards set by professional or occupational standards-setting organizations duly recognized by governments.
- clarification of the duration of the transitional period for developing countries would be helpful, as would discussions about how states' expertise might be utilized for Trade Capacity Building.
Institutional Provisions: in support of the US position that “We do not support the creation of a new negotiating mandate at this time.” suggested revisions include:
- delete all reference to “any further work under Article VI:4”, rename entity to be established as “Committee for Consultation on the Implementation of Established Domestic Regulation Disciplines,” and explicitly limit the work of the Committee to deal only with implementation issues, without any on-going negotiating mandate whatsoever.
We sincerely hope you find this information useful as WPDR negotiations progress, and look forward to our continued consultations. Thank you.
Sincerely,
Kay A. Wilkie
Chair, IGPAC
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