Introduction

The Uruguay Round produced the first ever set of rules regulating the trade in services, the General Agreement on Trade in Services (GATS). For the first time since the GATT had came into effect in 1948, internationally agreed rules and commitments, broadly comparable with those of the GATT, became applicable to the trade in services.

That the GATS was created should not be interpreted as meaning that themany different views expressedduring its negotiationwere successfully resolved. An agreement on GATS rules could only be reached at the end of the Uruguay Round, and, in order to arrive at an agreement, Members decided to include only basic and commonly accepted rules. Contentious issues or rules, such as safeguards, government procurement and subsidies, which needed to be further defined, were not therefore included in the GATS.

Members generally agreed that the negotiations which were carried out during the Uruguay Round on an emergency safeguard mechanism, government procurement and subsidies and countervailing measures (hereinafter ‘GATS rules’) had to be continued. Members recognised that the relationship between these issues and the trade in services had to be addressed. The mandate to engage or conclude negotiations on emergency safeguard measures, government procurement and subsidies is, thus, provided for in the GATS.

In March 1995, the Council for Trade in Services established the Working Party on GATS Rules to carry out the negotiating mandates contained in the GATS on emergency safeguard measures, government procurement and subsidies. Since July 1995, negotiations on these three issues have been held within the Working Party.