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TWN Info Service on WTO and Trade Issues (Apr06/9)

13 April 2006
 

Cluster of plurilateral services meetings at WTO


A two-week "cluster" on services ended at the WTO last Friday (7 April), after a flurry of meetings on several sectors, which marked the start of the new "plurilateral method" of negotiations.

There were plurilateral meetings on 20 sectors and modes of supply of services during the fortnight, at which members making demands in a particular sector or mode held discussions with members to whom the request were made.

The meetings were well attended, and there was the presence of capital-based officials from several countries that deal with various service sectors.

While WTO trade officials said the new plurilateral mode of negotiations "definitely injected new momentum" in the services negotiations, trade diplomats from some developing countries that are on the receiving end of the plurilateral requests were less up-beat.

Below is a report of the services meetings.


With best wishes
Martin Khor
TWN

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Trade: Cluster of plurilateral services meetings at WTO

By Martin Khor*  (TWN) Geneva 10 April 2006


A two-week "cluster" on services ended at the WTO last Friday (7 April), after a flurry of meetings on several sectors, which marked the start of the new "plurilateral method" of negotiations.

There were plurilateral meetings on 20 sectors and modes of supply of services during the fortnight, at which members making demands in a particular sector or mode held discussions with members to whom the request were made.

The meetings were well attended, and there was the presence of capital-based officials from several countries that deal with various service sectors.

Sectors covered by the meetings included financial services, telecommunications, professional services, construction and distribution. Meetings were also held on the four modes of services supply.

While WTO trade officials said the new plurilateral mode of negotiations "definitely injected new momentum" in the services negotiations, trade diplomats from some developing countries that are on the receiving end of the plurilateral requests were less up-beat.

"We attended all the meetings to which we were invited," said the Ambassador of a developing country which had received requests to participate in many of the sectoral meetings. "We were willing to listen carefully to what the demandeurs had to say. But many of the countries said they have to refer the requests to their capitals.

"For those of us whose capital-based officials were present, it was a good opportunity for them to exchange views. However, this does not mean that we are already persuaded to make offers in response to the requests."

Another diplomat of a "recipient country", who was heavily involved in the plurilateral talks, said that the mood was good, as the demanding countries themselves agreed that participation in the process is voluntary. "They wanted feedback on what we thought of their requests, but they did not try to force us to accept their views. So we were able to sit there, listen and ask some questions."

In his view, the plurilateral process would not achieve much in this Round in terms of getting members to increase their liberalization offers. "Countries seem to have already made up their minds on what they are able to offer in this Round."

Some developing countries had been apprehensive that pressure would be put on them to open up in several more key sectors, or in more depth, or both.

However, they were able to assure themselves that there was no compulsion to participate, or to make offers in response. "We kept in mind that the plurilateral approach is only a complementary method to the bilateral request-and-offer negotiations and that the key GATS principle is that developing countries can choose in which sector to liberalise and when.

"If the plurilateral method is made into a pressure point to attempt to force us to commit, then it would go against the mandate and it will be counter-productive."

At a meeting of the services council (in special session) on 7 April, at the end of the fortnight, there were differences over whether to hold another "cluster" of meetings in May. According to the original schedule, there would be only one more cluster (in June) before the deadline of end-July for the submission of revised offers.

Some developing countries were against another series of services meetings in May, arguing that smaller delegations would especially be put under pressure of time and personnel, especially since negotiations in other areas would be intensifying.

However, the Chair of the services negotiations, Ambassador Fernando de Mateo, announced that an additional cluster of request-offer negotiations (both plurilateral and bilateral) would be held, starting on 15 May.

Also at the meeting, South Africa announced the tabling of its initial services offer, explaining it had to go through a thorough legislative and consultative process before doing so.

In its statement, South Africa said that it would continue to voluntarily participate in the plurilateral request discussions as it was a means to supplement the bilateral process. "We reaffirm our belief that the strengthening of the plurilateral process should not in any way dilute the developmental and positive list approach of the GATS modalities.

"While the plurilateral process may assist in terms of information-sharing between requesters and requestees, we would caution against this process becoming a negotiating goal in itself. Recognising that the individual plurilateral meetings are not representative of the total membership, we are concerned by plurilateral requests that have resulted in classification and rules-based issues being deliberated in the plurilaterals themselves. The various subsidiary bodies of the Services Council must continue to be the primary forums for the transparent resolution of these issues.

"We also caution against the perception being created by the plurilateral process that the demandeurs have delivered on their offers and the onus is now on the requestees to make new or additional commitments.

"Developed countries must make substantive improvements in their offers and not just technical changes as is currently the case for many of their revised offers. The ambitious stance displayed by their plurilateral requests must be matched, if not exceeded, in their offers."

At the meeting, the Philippines, represented by Ambassador Manuel Teehankee, said his delegation had received 18 plurilateral requests. While there is broad agreement that attendance in the plurilateral meetings is purely voluntary, his delegation attended almost all the 18 plurilateral meetings.

"We found the meetings useful in clarifying the contents of and concerns arising from the requests. We appreciate the willingness of requesting Members to address both general concerns and specific questions," he said.

"However, a number of issues raised were not sufficiently addressed... We would urge requesting Members to be more pro-active in providing further clarification and elaboration. Some of these issues are regulatory concerns relating to Modes 1 and 2; scope of requested mode 2 commitments in some sectors; and the extent requesting Members are ready or able to substantially comply with their own requests."

The Philippines raised the question of the domestic regulation issue emerging in the plurilateral requests relating to modes 1 and 2. This has implications for consumer protection and quality control, as well as liability enforcement, particularly when de-linked from commercial presence in a Member's jurisdiction.

"These concerns should not be dealt with in the domestic regulations negotiations alone. There has to be a serious effort to exchange ideas and best practices in order to provide domestic regulators an adequate level of comfort. Absent such level of comfort, developing Members would be well-justified to invoke the GATS flexibilities.

"The result of the domestic regulation negotiations is critical for developing countries. The results should find the optimal balance between the right to regulate, and the need for necessary disciplines to reduce unnecessary regulatory barriers to trade. This balance now seems more vital. From a negotiator's perspective, regulatory assessment would also be important for developing Members to make informed decisions on the future disciplines."

The Philippines ambassador said that some of the requests were too broad and comprehensive in scope, which resulted in either lack of clarity or specificity as to the interests of the requesting Members. "We understand that this is a function of a collective effort. Bilateral contacts should provide more focus and context to the plurilateral request."

He added that "we need to look at the services negotiations with more practical and realistic lenses." Many developing countries have been providing real, effective, and operational market access through autonomous and unilateral market opening initiatives.

"This notwithstanding, there is some degree of reluctance to bind existing open regimes for a variety of legitimate reasons, not least among them, political or economic sensitivity in some areas, pursuing orderly growth and development of the sector, upgrading of the capability of domestic suppliers, and development of regulatory or adjustment policies."

Responding to many other statements that trade liberalization is necessarily good, he said that the development dividends of trade liberalization cannot be reaped by market openings alone. "We need to ensure that the complex of linked and inter-related domestic infrastructures, institutions, systems and enterprises necessary for effective competition is existing.

"Members who have benefited the most from trade liberalization, are clearly those that recognized the role government can play in development rather than relying on a self-regulated market fixing its problems."

He said the Philippines did not agree with suggestions to hold further plurilateral meetings outside of the scheduled services clusters. "Like others, we will have difficulty in mobilizing the participation of relevant capital officials on a regular basis. Our human resources have limits.

"Such meetings would also be difficult even for Geneva-based delegates since many small delegations do not have officers dedicated only to services and other negotiating areas are equally pressed for time and attention It is the quality of the meetings that count, more than the frequency."

At the same meeting, Brazil also stressed the voluntary and informal nature of the plurilateral negotiations, which it said are not designed to replace bilateral negotiations, but as a complement.

The follow-up of these meeting should not evolve into sectoral negotiations, said Brazil. Plurilaterals are only a basis for negotiation, and not the negotiation itself.

It also stressed that responses to the requests should be made on an individual basis, that developing countries enjoyed flexibilities and that the follow-up should take into account difficulties of developing countries to mobilize experts.

There was need to avoid meeting fatigue, said Brazil, adding that members need time to digest plurilaterals back home.

It suggested some rationalization of plurilateral meetings. For example, there could be a grouping of some of the plurilateral requests (construction services and architectural and engineering services; services related to agriculture, logistics, distribution, MFN).

Also, some plurilateral requests may be better pursued bilaterally (education, audiovisuals and air transport) while some plurilateral requests require more focus (logistic services and cross border supply). In Mode 3, the request could be pursued under the respective sectoral plurilaterals.

Meanwhile, at a press briefing, the Director of the WTO Services Division Mr Hamid Mamdouh said the plurilateral negotiations has been extremely helpful in advancing the services negotiations.

He said the process of preparing collective requests among groups of members has helped the demandeurs to define their strategic areas of interest in a much more focused and realistic way.

Mamdouh said that there was definitely new momentum in the services negotiations.

Mamdouh said that during this cluster of meetings, there have been twenty collective requests that have been submitted by different groups of 'requesting' delegations to various groups of 'requested' delegations.

For each collective request, there was a plurilateral meeting between requesting and requested members, which was organized over the last two weeks.

The process of preparation was extremely helpful in focusing on the substantive elements that the demandeurs want, Mamdouh said. First, was the focus on the sectors and modes of supply; second, focus on the issues within each sector and modes of supply; and third - and most importantly - focus on the strategic negotiating partners.

The total of all this could be seen as a first approximation of what might constitute a critical mass of commitments which the proponents are looking for, he added.

Another element, Mamdouh said, was that there was also an agreement among requesting members that if any of them had not committed to what has been requested, then the requesting member would itself be deemed to have been requested as well. This principle has been agreed to in order to make the re questing members more accountable to what they are requesting.

(* With inputs from Kanaga Raja.)

 


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