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The Necessity Test The following communication has been received from the delegation of Korea with the request that it be circulated to the Members of the Working Party on Domestic Regulation.

COMMUNICATION FROM THE REPUBLIC OF KOREA 1. There have been many constructive discussions on how to define the “necessity test” in the context of domestic regulation for trade in services. The proposals made by Canada, Australia, and EC have each contributed to stimulating and advancing the discussions in this area. However, as each proposal and relevant agreement uses different wording for outlining and defining the necessity test, there has been some confusion as to the exact meaning and implications of its use. 2. Korea is of the view that the different wording – such as “trade-restrictive” or “burdensome,” – despite some variance in nuance and focus, does not differ in their implications. This paper thus aims to clarify any differences that exist, elaborate on the possible alternatives that can be used, and suggest a draft provision for the necessity test that could be used in establishing multilateral rules for domestic regulation. 3. In the meantime, there still remain unresolved issues like what should be considered a “legitimate policy objective,” or what factors should be considered to determine the feasibility of an alternative measure. For an effective and strict application of the necessity test, these two issues need to be resolved. However, they will have to be discussed at another time.

General Agreement on Trade in Services: negotiations concerning Domestic Regulations under GATS Article VI(4)

(November 24, 2000) "In the current preparatory negotiations on services (part of the “built-in” agenda at the WTO) governments are developing positions regarding GATS Article VI(4) which requires the development of “disciplines” on countries’ domestic regulations over services. Specifically, the article seeks to prevent “unnecessary barriers to trade” in regulations regarding “qualification requirements and procedures, technical standards and licensing requirements” and to ensure that regulations are “not more burdensome than necessary to ensure the quality of the service.” In our view, this entire exercise is unjustified. There should be no role for the WTO in overseeing non-discriminatory domestic regulations (those which do not discriminate in standards and qualifications based on nationality.) This exercise represents a wholly unwarranted intrusion of trade law into important domestic public safety laws".