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TWN Info Service on WTO and Trade Issues (Mar06/3)

7 March 2006
 

Plurilateral services requests made at WTO in 14 or more sectors

On 28 February, 14 collective requests were made or were expected to be made at the WTO on selected countries to take part in plurilateral sectoral meetings under the WTO's services negotiations.

The requests were made by groups of WTO members known as "interested parties" or "Friends" of particular sectors, in line with the mandate of the WTO's Hong Kong Ministerial Declaration.

The Declaration introduced the new plurilateral negotiating method in services and said that plurilateral requests should be made by 28 February or soon after. It also says that members receiving such requests "shall consider" the requests.

The plurilateral services method was a controversial issue at Hong Kong, with many developing countries opposing an attempt to make participation in such negotiations mandatory.

At a WTO services meeting in February, several developing countries stressed their understanding that participation in plurilateral meetings and negotiations would be on a voluntary and non-mandatory basis.

The European Commission and the United States Trade Representative's Office announced on 28 February that they had joined others in submitting collective requests in various sectors.

Below is a report on the submission of plurilateral requests. It was published in the SUNS.

With best wishes
Martin Khor

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Plurilateral services requests made at WTO in 14 or more sectors

By Martin Khor, Geneva, 28 Feb 2006


Several collective requests were made on 28 February to selected countries to take part in plurilateral sectoral meetings under the WTO's services negotiations. More requests are expected to be made in the next few days.

The requests were made by groups of WTO members known as "interested parties" or "Friends" of particular sectors, in line with the mandate of the WTO's Hong Kong Ministerial Declaration.

According to the Declaration, the request-offer method can be applied plurilaterally as well as bilaterally, and plurilateral requests should be made by 28 February or soon after. It also says that members receiving such requests "shall consider" the requests.

The Declaration also gives deadlines for submission of revised services offers by the end of July, and the submission of Members' final schedules by the end of October 2006.

The plurilateral method in services negotiations was a significant and controversial issue at Hong Kong, with many developing countries opposing an attempt to make participation in such negotiations mandatory.

Only after the text was considerably watered down was it accepted by the concerned countries, and even then two members (Cuba and Venezuela) stated their reservations to the Annex on services at the closing session of the Hong Kong Ministerial.

At a meeting of the WTO's Services Council in February, several developing countries (including Brazil and the Philippines) stressed their understanding that participation in plurilateral meetings and negotiations would be on a voluntary and non-mandatory basis.

The European Commission and the United States Trade Representative's Office both issued statements on 28 February announcing that they had taken an active role in joining others in submitting collective requests in various sectors.

It is not immediately known to which members the requests have been sent. According to diplomats, each country receiving a request is provided the names of the members making the request, but not the names of other members receiving the request.

The request letters contain an invitation to attend an inaugural plurilateral meeting to discuss the request for that particular sector, to be held during the next "cluster" of services meetings scheduled for 27 March to 3 April.

Collective requests have been made or are expected to be made for at least 14 sectors, and requests are also expected for some modes of supply, especially Mode 4 (temporary movement of natural persons).

According to the EC's press release, the EU has participated in collective requests in the following 11 sectors: Legal services; Architectural and engineering services; Computer services; Construction services; Postal and Courier services; Telecommunication services; Environmental services; Financial services; Maritime transport services, Air Transport; and Energy services.

It added that the EU is not participating in any request addressing audiovisual and cultural services, education services, health services or water for human use, or in any request that could more generally impact on the operation of public services.

The USTR's office, meanwhile, revealed that it had joined in collective requests for 12 sectors: Telecommunications; Financial services; Computer and related services; Distribution services; Express delivery services; Energy services; Environmental services; Legal services; Construction services; Architectural and engineering services; Audiovisual services; and Education services.

There are 14 sectors that the EU and US are involved in. The US is making requests in some sectors, such as audiovisual and education services, which the EU is not.

The USTR statement said that the collective requests seek the removal of: (1) Foreign investment limitations; (2) Restrictions on form of establishment (e. g., prohibitions on branching); (3) Prohibitions on supplying services cross-border (e. g., via the Internet); (4) Nationality requirements; (5) Discriminatory regulatory policies; and (6) Restrictions on competition (e. g., limitations on new entrants).

An international trade analyst, who has seen drafts of several of the plurilateral documents, has described the requests as "an assault on the markets of the developing countries". It is an attempt to get the developing countries to allow the giant foreign firms to enter freely, a privilege which the developed countries were unable to get from their failed attempts to introduce a multilateral investment agreement in the WTO.

Nor were they able to achieve automatic market opening through the bilateral request-offer process, since each member is able to decide whether to agree to requests made on it. The plurilateral method is a new attempt to put pressure on selected developing countries to open up more than they would like to, said the analyst.

According to a WTO secretariat statement, the plurilateral negotiations will be a process of direct engagement among members. Neither the Secretariat nor the Chairperson of the services negotiations will be involved and the exchanges at the meetings will be strictly private unless otherwise decided by the members.

The Secretariat added that the plurilateral requests are made directly from the demandeurs to the other members and the Secretariat is not systematically informed of the requests or their contents. It is also not clear if members will release the contents of their requests.

According to diplomatic sources, in the requests in most of the sectors, the main demandeurs are the developed countries, including the EU, the US, Canada, Australia, Japan and Norway. Singapore, Hong Kong, Taiwan and Korea are also among the demandeurs in many of the sectors, while a few other developing countries such as Mexico are also among the "interested parties" in a few sectors.

Before the requests were submitted, there was talk in the corridors that some of the major "demanding" members were unable to agree among themselves on various aspects of the requests to be made and the process. In particular, it was said that the US was not particularly interested in an active role in the plurilateral process, as it felt that it could achieve its goals more effectively through the traditional bilateral process.

According to an European source, there was also some concern raised by EU member states in the EU's Article 133 committee over the 11 plurilateral requests that the EC supported because various member states could not agree to going as far as some of the requests wanted to go. However, they agreed that the EC could support the requests on the basis that the EU would not itself make 100% of the commitments demanded in the plurilateral request documents.

It is unclear how the plurilateral process will be run when the services cluster of meetings begin on 27 March. The "interested members" making the requests have invited the targeted members to meet in sectoral meetings, and will presumably make presentations and clarifications of their requests.

Since participation at the sectoral meetings is not compulsory, the first test would be how many of those invited turn up. And at the meetings (or after), it is not clear how interest or non-interest is going to be articulated or responded to.

 


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