12:18 PM Dec 19, 1994


Geneva 16 Dec (TWN) -- The Services sub-committee of the WTO Preparatory Committee was unable to reach any agreement Friday on the issue of the 'scope' of the General Agreement on Trade in Services and its applicability to governmental measures relating to social security and bilateral/plurilateral agreements in this area.

The sub-committee was neither able to agree on a clarificatory wording to declare such measures to be beyond the scope of GATS nor on its report on this to the WTO final Prepcom meeting on 22 December. The Chairman of the sub-committee will now make a report on his own responsibility.

The issue of the applicability of the GATS to governmental measures on social security and whether the benefits of bilateral plurilateral treaties and agreements would need to be extended to others had been raised almost at the end of the services negotiations, with the Nordics and some of the Europeans seeking a blanket exemption.

Some others including India, Pakistan and Egypt did not agree to any blanket exemption and said each measure had to be judged from the viewpoint of its trade effects. Some of their nationals, going on a temporary assignment to 'deliver' services, find themselves hit by local social security taxes.

On 14 December 1993, when the GATS negotiating group ended the negotiations and its report to the TNC, the Chairman had made a statement to the effect that "a number of delegations have raised concerns about the extent to which the category of measures (social security, investment guarantee) fall within the scope of the GATS". This issue was left to be addressed in the post-Marrakesh process with a deadline of 14 December 1994.

Talks since then did not resolve the issue, nor could any agreement be found for the wording in the report of the subcommittee where the chairman had proposed a sentence that "it has not been possible to reach agreement as to whether these measures fall within or outside the scope of the agreement".

This wording, favoured by the EU would have shifted the burden of proof about scope on anyone raising a complaint -- unlike the GATS definition which is an all-inclusive one, with scope to countries to seek exemptions from the MFN and national requirement provisions in their schedules.