Via Todd Tucker at Eyes on Trade, I came across this discussion of "necessity" in the context of the GATS negotiations (Word doc) on Domestic Regulation (Article VI):
10. The representative of Switzerland wished to address two issues in his intervention, namely the significance of the revised text regarding the Working Party's concrete work now and in the future, and its relation to the negotiating mandate in Article VI:4. He stressed that very important suggestions were not reflected in the revised Chairman's draft. He was disappointed to see that his delegation's proposal, as well as the proposals of other delegations, were not reflected in the draft. In particular he noted the absence of an important aspect of the negotiating mandate, namely the necessity test, contained in the mandate in paragraph (b) of Article VI:4. Absent the necessity test, it would be difficult to make progress on the basis of the Chairman's text. For future meetings, Article VI:5 and VI:4 themselves should continue to be the discussion basis. He opined that a better basis for discussion might have been a text, with the appropriate brackets and footnotes, that had taken on board the other issues that had been debated. Turning to the mandate for the negotiations, he found it to be regrettable that the text fell short , even in its current draft form. Article VI:4 contained the mandate, but it was linked with Article VI:5 which was an operational provision by which Members had to abide. In that sense, the elements of the mandate were not only principles but real obligations. As the provisions in the current draft were without brackets, he assumed that these elements were agreeable with many if not most delegations. While many aspects that were part of the mandate were missing, other aspects that were not part of the mandate had been refined. He was supportive of the changes to the transparency section of the draft, but noted that transparency was not part of the Article VI:4 mandate, except for the transparency of criteria mentioned in paragraph (a).
11. More generally, his delegation considered domestic regulation to be a key aspect of the GATS architecture. Problems arising from domestic regulation made the life of suppliers hard, regardless of any discrimination or market access. It was widely acknowledged that domestic regulation was particularly important for small and medium-sized enterprises which were the back-bone of every economy. Unlike SMEs, big companies had enough resources and lawyers to cope with regulatory barriers. Members should not forget this in their work on domestic regulation, in particular as SMEs were now struggling through the economic crisis, and would be the main beneficiaries from the work of the WPDR.
I think the Swiss delegate makes the argument for GATS disciplines here pretty well. What I found interesting was that I didn't see the other side's arguments set out explicitly in the document. Presumably someone opposed the inclusion of a necessity test, as it was not in the draft text, but nothing was said about this. That's too bad, I think. In my view, this is the kind of trade obligation that needs to be subject to more public debate, so it would have been nice to see a little back and forth.
