RESTRICTED
WORLD TRADE
S/WPDR/W/4
3 May 2000
ORGANIZATION
(00-1809)
Working Party on Domestic Regulation
Original: English
COMMUNICATION FROM THE UNITED STATES
GATS Article VI:4: Possible Disciplines on Transparency in Domestic Regulation
The following communication has been received from the delegation of the United States
with the request that it be circulated to the Members of the Working Party on Domestic Regulation.
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1.
This paper builds upon the Chair’s recommendation for an example-driven exercise in the
discussion of transparency in domestic regulation. Progress in this area should, in the view of the
United States, be based in part upon a review of transparency commitments in WTO agreements
governing trade in goods, as well as the Accountancy Disciplines, that have no equivalent in the
existing services commitments. While the specific content of these agreements differ, a factual
description of the transparency disciplines therein should serve as a useful basis for discussion
focused on building at least equivalent disciplines in the GATS, as appropriate.
A.
TRANSPARENCY AND SERVICES TRADE LIBERALIZATION
2.
Transparency is a basic principle underlying trade liberalization, where the removal of
explicit barriers to trade is in large part only meaningful to the extent that firms and individuals know
what laws, regulations and procedures may affect their activities. It has also been argued that
regulatory transparency is conducive to fairer and more effective governance and improves public
confidence in government, regulatory performance and economic efficiency, removing economic
distortions that might otherwise undermine domestic policy objectives and the rationale for
liberalization.
3.
Based upon the comparisons outlined below, the United States believes that Members should
develop disciplines on transparency in services that are at least as comprehensive as those prevailing
in WTO agreements on trade in goods. Services sectors and the effective operation of agreements on
trade in services may be more sensitive to non-transparent regulatory procedures, given the cost and
complexity of delivering services across borders or establishing commercial presence in a destination
market. Additionally, transparency in the formulation and application of regulations may serve as a
basis for and contribute to the effectiveness of disciplines on the other areas under discussion in the
Working Party on Domestic Regulation.
B.
EXISTING OBLIGATIONS IN THE GATS
4.
Existing GATS obligations on transparency are weaker than similar provisions in the WTO
Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary (SPS) Agreements and in the
provisionally agreed to Accountancy Disciplines. They do not establish a regular, formal system of
notification. Rather they consist only of an obligation to publish (and not necessarily before they are
effective) or otherwise make publicly available measures affecting trade in services, and establish
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inquiry points that will provide, upon request, specific information on a Member’s regulatory
measures or other international agreements to which it is a party.
5.
The GATS also contains two exceptions from general transparency obligations. Article IIIbis
exempts Members from providing confidential information, the disclosure of which would impede
law enforcement, otherwise be contrary to the public interest or which would prejudice the legitimate
commercial interests of public or private enterprises. Article XIVbis, paragraph 1(a) exempts
Members providing information which they consider would be contrary to essential security interests.
Members should note that future disciplines on transparency should not be construed as affecting the
operation of these articles of the GATS.
C.
TRANSPARENCY COMMITMENTS IN THE TBT AND SPS AGREEMENTS
6.
Commitments within the TBT Agreement comprise a more comprehensive approach to
transparency and cover the development, adoption, and application of regulations and procedures
which are used to determine that the relevant requirements are fulfilled. These aspects of the TBT
Agreement were summarized by the Secretariat for the Working Party on Professional Services
(S/WPPS/W/6) as follows:
Considerable importance is attached to ensuring that advance knowledge of technical
regulations, standards and conformity assessment procedures is available to all WTO
Members. By means of a notification obligation, the Agreement lays down that if the
technical regulations or procedures for conformity assessment prepared by Members are not
the same as, or are not based substantially on, international standards, and if they may have
a significant effect on the trade of other Members, they must be notified to other Members
through the WTO Secretariat at a sufficiently early stage in their drafting (generally at least
sixty days prior to their formal adoption) so as to allow reasonable time for other Members to
make comments.
Members are required to take the comments of other Members into account before adopting
the regulations or conformity assessment procedures and publishing them. In the case of
standards, standardizing bodies which accept the Code of Good Practice are required to
notify their work programmes so that interested parties can be informed of the standards they
are preparing and to take into account comments received when further processing the
standards.
Under the GATS an effective notification requirement exists only for new
measures which significantly affect trade concerning services covered by a Member's specific
commitments, the general transparency requirement being limited to the obligation to publish
"all relevant measures of general application.
7.
Article 7 of the SPS Agreement, with reference to provisions in Annex B of the Agreement,
establishes similar disciplines on transparency. With regard to publication of measures, excepting for
urgent circumstances, the Agreement specifies that Members shall allow for “a reasonable interval
between the publication of a sanitary or phytosanitary measure and its entry into force” so as to allow
time for producers, particularly those in developing countries, to adapt their products and production
methods to the new requirements. Additionally, the Annex sets a higher standard for the
establishment of inquiry points. Beyond notification relating to the introduction of measures, such
notification points shall provide information including but not limited to:
·
control and inspection procedures used to apply a regulation or measure;
·
risk assessment procedures, factors taken into consideration, as well as the
determination of the appropriate level of sanitary of phytosanitary protection; and
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·
details concerning the membership and participation of the Member, or of relevant
bodies within the jurisdiction of the Member, in international, regional or bilateral
agreements or organizations within the scope of the agreement, and the texts of such
agreements and arrangements.
8.
The notification procedures under the SPS Agreement establish that Members introducing a
proposed sanitary or phytosanitary regulation, where an international standard, guideline or
recommendation does not exist or the content of the proposal is not substantially the same as the
content of an international standard, shall notify other parties of the proposed regulation. Such
notifications are to specify the products to be covered by the regulation, describe the objectives and
rationale behind the proposed regulation, and allow, without discrimination, reasonable time for other
Members to make comments in writing, discuss these comments and have them taken into account.
D.
ACCOUNTANCY DISCIPLINES
9.
The Accountancy Disciplines, provisionally adopted by the Council for Trade in Services in
December, 1998, are not as fully developed as those in the SPS and TBT agreements but nevertheless
comprise a higher standard on transparency than prevails in existing GATS obligations. The
notification requirement in the sector will include an obligation to provide information describing,
wherever applicable, the activities and professional titles which are regulated and information on
technical standards. Members will also publicize requirements and procedures to obtain, renew or
retain licensing or professional qualifications and the monitoring arrangements for ensuring
compliance with such. In addition, the agreement establishes:
E.
·
an obligation to endeavor to provide opportunity for comment, and to give
consideration to such comments, before adopting measures which will significantly
affect trade in (accountancy) services;
·
a requirement to provide, upon request, information on the rationale behind
regulatory measures in relation to legitimate objectives for such measures; and
·
the publication of procedures for review of administrative decisions.
FOR FURTHER CONSIDERATION
10.
As a general consideration, the United States believes that Members should promote the
widest possible application of transparency commitments in domestic regulation. The above review
of existing transparency commitments in the WTO TBT and SPS agreements suggests several specific
transparency measures that the United States believes should be addressed.
11.
Drawing from the TBT and SPS Agreements, the United States believes that Members should
address disciplines on the notification of proposed regulations and solicitation of comments from
interested parties. In this regard, we believe that promotion of impartial and transparent regulation
should be based on allowing parties adequate time for the preparation and submission of such
documents, as well as establishing procedures for submitting commentary, publishing new
regulations, or amendments to existing regulations, and records of the procedural elements involved in
formulating measures, including making relevant submissions publicly available.
12.
With regard to applying regulations, where a license or qualification is required to provide a
service, Members should address obligations to specify and make publicly available measures relating
to the criteria to obtain such a license or qualification and the terms and conditions under which it is
offered or revoked.
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13.
Where feasible, it would also be appropriate to make administrative licensing procedures
publicly available. Coverage of such procedures could include, by way of example, information
specifying the period of time normally required to reach a decision on a complete, uncontested
application for a license or authorization to provide a service; description of the nature and extent of
disciplinary actions; and the process for notifying violations of the terms and conditions of a license.
This would also include notifications relating to reasons for denial or revocation of a license or
authorization.
14.
Implementation of these transparency measures also should include making publicly available
the names, official addresses and other contact information (including website, telephone, facsimile)
of competent authorities.
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