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Ongoing negotiations on countries domestic regulations under the GATS Article 1:4 mandate.

The GATS already contains disciplines on barriers to trade in services in the form of restrictions on https://www.wto.org/english/docs_e/legal_e/26-gats_01_e.htm#art16">market access (Article XVI) and on https://www.wto.org/english/docs_e/legal_e/26-gats_01_e.htm#art17 national treatment</a> (Article XVII). Market access restrictions encompass quantitative restrictions such as limitations on the number of services suppliers, total value of services transactions or assets, total number of services operations, the total quantity of services output, the total number of persons that may be employed, as well as measures restricting or requiring specific types of legal entity or joint venture, and foreign equity limitations. <p> The obligation of national treatment prohibits the discriminatory treatment of foreign services and services suppliers when compared to domestic services and services suppliers. In drafting the GATS, negotiators recognized that non-quantitative, non-discriminatory measures relating to licensing and qualification requirements and procedures, and technical standards could also adversely affect trade in services. For example, excessively lengthy, complex and opaque licensing procedures may discourage foreign services providers from doing business in the market of another WTO member. By the same token, lack of objective and transparent criteria, on the basis of which authorities would grant a qualification, may disguise protectionist intentions. Article VI:4 is not intended to start a deregulatory process, but rather to lead to better regulation that has the potential to address and prevent undesirable regulatory practices. In more general terms, WTO negotiations on domestic regulation disciplines seek to boost good regulatory practices and to enhance regulatory quality, with a view to boosting economic growth and development. </p> Evolution of the negotiations Between 1995 and 1998, WTO members negotiated in the Working Party on Professional Services the <a href="http://docsonline.wto.org/imrd/directdoc.asp?DDFDocuments/t/s/l/63.doc" target="_blank">Disciplines on Domestic Regulation in the Accountancy Sector</a> (<u>S/L/64</u>) and adopted the Guidelines for Mutual Recognition Agreements or Arrangements in the Accountancy Sector (S/L/38). The Accountancy Disciplines were intended to be integrated into the GATS at the end of the Doha Round of trade negotiations (S/L/63). Therefore, they have not yet entered into force. Subsequently, a <a href="https://www.wto.org/english/tratop_e/serv_e/s_coun_e.htm#domestic">Working Party on Domestic Regulation</a> was established in 1999 for the continuation of the negotiations, replacing the earlier Working Party on Professional Services. The mandate of the Working Party is to develop generally applicable disciplines and to develop disciplines as appropriate for individual sectors.</p> <p> WTO members have focused on negotiating general disciplines on domestic regulation applicable to any services sectors within the scope of the GATS. Members felt that work on general disciplines would be more efficient than negotiating specific disciplines for each sector. </p> <p> In December 2005, the WTO Hong Kong Ministerial Declaration called on members to intensify negotiations and to develop a text for adoption before the end of the Doha Round.&nbsp; </p> <p> In the Working Party on Domestic Regulation, more than 60 WTO members have submitted drafting proposals. These were consolidated into a number of texts issued by the chair of the working party. &nbsp;The most recent was contained in a 2011 <a href="http://docsonline.wto.org/imrd/directdoc.asp?DDFDocuments/t/s/wpdr/w45.doc" target="_blank" title="MS word format; opens in a new window">Progress Report</a> reflecting progress in the negotiations up to 2011 and containing possible options for disciplines on domestic regulation.&nbsp;</p> <p>Following a slowdown in negotiations between 2012 and 2015, activities were revived in 2016, with a number of text proposals submitted by members in the hope of securing an outcome by the 11th Ministerial Conference (MC11) in Buenos Aires in December 2017. However, no outcome was achieved at MC11. </p> The Working Party on Domestic Regulation met most recently in March 2019 to discuss a revised proposal for disciplines on domestic regulation.</p>

Domestic Regulation within the Framework of GATS

by Jan Wouters and Dominic Coppens, Institute for International Law Working Paper No 93 - May 2006 1. INTRODUCTION ............................................................................................... 4 2. EXPLORING THE WEIGHING SCALE OF GATS: BALANCING MEMBERS’ RIGHT TO REGULATE AND TRADE LIBERALIZATION ....... 4 3. GENERAL FRAMEWORK OF GATS ............................................................. 7 3.1. SCOPE ............................................................................................................. 7 3.2. GENERAL OBLIGATIONS ................................................................................... 8 3.3 SPECIFIC COMMITMENTS ................................................................................... 9 3.4. GENERAL EXCEPTIONS ................................................................................... 11 3.5. PROGRESSIVE LIBERALIZATION ...................................................................... 12 3.6. INSTITUTIONAL ISSUES ................................................................................... 12 4. ARTICLE VI ON DOMESTIC REGULATION WITHIN THE FRAMEWORK OF GATS ................................................................................... 12 4.1. THE ROLE OF ARTICLE VI IN THE FRAMEWORK OF GATS................................ 12 4.2. ADMINISTRATION AND APPLICATION OF DOMESTIC REGULATIONS.................. 14 4.3. FUTURE DISCIPLINES ON DOMESTIC REGULATION .......................................... 16 4.3.1. The Working Party on Domestic Regulation (WPDR)............................. 17 4.3.2. Disciplines Developed under Article VI:4: the Accountancy Disciplines 19 4.3.3. Key Issues for Future Disciplines........................................................... 21 a) Legal Status of Future Disciplines............................................................ 21 b) Scope of Future Disciplines ..................................................................... 22 1. Type of Measures................................................................................. 22 2. Restricted to Non-Discriminatory Measures? ....................................... 24 3. Unconditional or Conditional Disciplines? ........................................... 35 4. Level of Government ........................................................................... 36 5. Sectoral or Horizontal Level?............................................................... 38 c) Content of Future Disciplines................................................................... 39 1. Transparency disciplines ...................................................................... 39 2. Necessity Test...................................................................................... 41 3. Mutual Recognition.............................................................................. 48 4. Role of International Standards ............................................................ 50 4.3.4. Article VI:5 on Provisional Application ................................................. 51 5. CONCLUSION: BALANCING THE RIGHT TO REGULATE AND TRADE LIBERALIZATION, EQUILIBRIUM REACHED?........................................... 53

Non-Discrimination and the Pillars of International Economic Law – Comparative Analysis and Building Coherency

Nicolas F. Diebold University of Lucerne Date Written: June 30, 2010 Abstract This working paper was presented at the Second Biennial Global Conference of the Society of International Economic Law (SIEL) 2010 in Barcelona, available on SSRN and as IILJ Emerging Scholars Paper 18 (2010). The final version is published uner the title 'Standards of Non-Discrimination in International Econocmic Law' 60 International and Comparative Law Quarterly (2011), 831-865. The principle of non-discrimination constitutes a corner-stone in different fields of international economic law, notably international trade in goods and services as well as intellectual property and investment protection. While its basic rationale appears to be straight forward, the application of the different elements which constitute a non-discrimination obligation has proven to be most complicated. Due to the high fragmentation in international economic law, adjudicating bodies are applying different interpretations and standards with regard to ‘less favourable treatment,’ ‘likeness,’ ‘regulatory purpose’, and ‘necessity’. This article shows the different theories for each of these elements on the examples of WTO law, NAFTA, investment protection and EU law and demonstrates how these theories affect the scope and liberalizing effect of the non-discrimination obligation. The article then attempts to develop a coherent factor-based application of non-discrimination rules suitable for all fields of international economic law. The article submits the theory that the elements of nondiscrimination should not be applied as strict legal conditions which must be proven by a complainant, but as a range of soft-factors which may be weighed and balanced by the adjudicating bodies. Keywords: Non-Discrimination, National Treatment, Like Products, Like Circumstances, Less Favourable Treatment, WTO, GATT, GATS, NAFTA, Bilateral Investment Treaties

likeness

"The existing (WTO) case-law on non-discrimination indicates that when defining likeness for the purpose of assessing regulation, one should rather focus on the interchangeability of the services by applying a cross-price elasticity test. In Japan – Alcoholic Beverages II, the Panel has stated explicitly that “the appropriate test to define whether two products are ‘like’