TWN Info Service on WTO and Trade Issues (Feb08/15)

21 February 2008

Please find below an article on the report issued by the Chair of the WTO negotiations on services, on the consultations he has held on the desirability and nature of a possible services text.

This was published in the SUNS on 14 Feb.  Reproduction requires permission of SUNS (

With best wishes
Martin Khor

Chair of services talks issues his report
Published in SUNS #6414 dated 14 February 2008
By Kanaga Raja, Geneva, 13 Feb 2008

The Chair of the services negotiations at the WTO on Tuesday issued a report of his consultations on a services text, in which he has outlined the elements required for the completion of the services negotiations.

Chairman Ambassador Fernando de Mateo of Mexico was originally expected to come out with a services text, rather than a mere report.

The chairs of the agriculture and non-agriculture market access (NAMA) talks have tabled their revised draft modalities texts on 8 February, and the original expectations among many of the services negotiators was that there would be a "services" text from De Mateo.

Some Third World diplomats say un-attributively that though some of the leading developed countries, including the US and EC, wanted a text (that could help them take the focus away from the agriculture issues) and De Mateo was expected to put forward a text (of sorts), WTO Director-General Pascal Lamy apparently did not favour this.

These sources said that Lamy wants to move quickly into a horizontal process (where the agriculture and NAMA texts) are to be taken up together among a small group in "green room type talks" and concessions in one area (by US and EC) could be traded off for concessions in the other (by India, Brazil, Argentina and others) and that he did not want this process to become more complicated by having the agenda clogged up by the services and rules issues.

The report on services issued Tuesday outlines elements where the Chair views there is convergence among members as well as areas where divergences persist. The report also acknowledges Bolivia, Cuba and Venezuela's position in not joining a consensus on a services text.

One services negotiator from a key developing country said that De Mateo not issuing a services text (but only a report) and trying to put the blame on Bolivia, Cuba and Venezuela is too hilarious to be taken seriously - even more so considering that their views in agriculture or NAMA have not held up those chairs from putting forward texts, leaning towards the viewpoints of the US and EC!

The Chair's report does not provide any date for members to submit their revised offers in services, thus leaving this issue open.

In a press release issued Tuesday, the Global Services Coalition - comprising leading service industry associations - welcomed the services report, saying that it affirmed that services is one of the pillars of the Round. However, the coalition said that the report was only a start, and that an intensive and sustained process of services negotiations must now follow.

The coalition added that the report is only a necessary first step in the process, which must include agreement on a statement of ambition for services, and a "signaling conference".

"To ensure that services take their proper place alongside agriculture and NAMA in the Doha Round, there needs to be an early signaling conference involving Ministers, preferably before the conference on modalities for agriculture and NAMA, to clarify and reinforce the commitments which WTO members will need to make on services," said Christopher Roberts, Chairman of the policy committee of the European Services Forum.

In another press release, the Australian Trade Minister Simon Crean also welcomed the release of the services text, saying that "this first draft represents a solid foundation for developing a full services text."

Pointing out that Australia couldn't support a Doha package that doesn't include an ambitious outcome on services, the minister said that he is actively pursuing an early "signaling exercise" where Ministers will signal their services liberalisation commitments.

[According to a report in the "WTO Reporter" on Tuesday, both the United States and the European Union are calling for WTO members to commit to a "signaling conference" on services prior to going into the horizontal negotiations, which is expected to take up the agriculture and NAMA draft negotiating texts.]

In his report, Ambassador De Mateo referred to the series of informal consultations that he has conducted in different formats, including open-ended informal meetings of the Special Session. The purpose of this report, he said, is to reflect the outcome of his consultations so far.

The Chair said that discussions "have revealed considerable convergence on a number of elements to be included in a possible text." However, consensus has yet to be reached on the precise language to be adopted. (These elements are contained in paragraph 4 of his report.)

On a few other elements (contained in paragraph 5 of the report), significant divergences persist, said the Chair, adding that they appear in the textual form in which they were proposed, given the absence of convergence on their inclusion in a possible text. It is understood that the final acceptability of any text would depend on the elements it would eventually contain and the way in which they would be expressed.

The Chair also noted that the delegations of Bolivia, Cuba and Venezuela took the position that they would not join a consensus on a text.

According to Ambassador De Mateo (in paragraph 4 of his report), the common elements identified in delegations' proposals seem to represent a broad area of convergence among Members. Many of those elements are direct reiterations of existing language in provisions of the GATS as well as other instruments relating to the DDA (Doha Development Agenda) negotiations.

These elements are not subject to any disagreement, the Chair maintained. However, their presentation in a selective manner, in a particular sequence or in a new context, may lead to problems of interpretation and perceived balance.

The Chair suggested that, to the extent possible, these elements be covered through the reaffirmation of Members' commitment to the GATS and other related instruments as expressed in sub-paragraph (a).

Accordingly, said the report, the following language could serve as a basis for further consideration of the elements on which convergence has emerged:

(a) Members recall and reaffirm the negotiating mandates and objectives as stipulated in GATS Articles IV and XIX, the Doha Ministerial Declaration, the Hong Kong Ministerial Declaration, the Guidelines and Procedures for the Negotiations on Trade in Services adopted by the Special Session of the Council for Trade in Services on 28 March 2001 and the Decision of the General Council adopted on 31 July 2004. Members reiterate that the negotiations shall be intensified and proceed to their conclusion in accordance with the Objectives and Approaches set out in Annex C of the Hong Kong Ministerial Declaration.

(b) Members recall that the request-offer approach is the main method of negotiation and that, in addition to bilateral negotiations, request-offer negotiations should also be pursued on a plurilateral basis. Accordingly, and pursuant to paragraph 7 of Annex C of the Hong Kong Ministerial Declaration, 21 collective requests were submitted by co-sponsors to other groups of Members (the report lists the relevant sectors and modes where collective requests were made). On the basis of these requests, 21 related plurilateral groups convened four rounds of meetings. Since the Hong Kong Ministerial, participants also held six rounds of bilateral request-offer meetings.

( c) Members have participated actively in the request-offer negotiations. They exchanged indications on possible new commitments that may be reflected in the next round of revised offers, in response to various individual and collective requests. Some Members considered progress achieved so far in the services negotiations was satisfactory compared to other areas of the DDA. Others took the view that so far progress fell well short of responding adequately to their requests. Members shared the view that major strides needed to be taken in order to reach a successful conclusion of the negotiations. They acknowledged that the outcome of these request-offer negotiations would eventually have to be assessed by each participant, including in relation to other areas of the single undertaking.

(d) Members reaffirm that the services negotiations are an essential part of the DDA. They recognize that an ambitious outcome in services would be integral to the overall balance in the results of the DDA single undertaking. Accordingly, the negotiations shall aim at a progressively higher level of liberalization of trade in services with a view to promoting the economic growth of all trading partners, and the advancement of developing and least-developed countries. With due flexibility for individual developing countries, Members shall, to the maximum extent possible, expand the sectoral and modal coverage of commitments and improve their quality. In doing so, they shall be guided by the objectives contained in paragraph 1 of Annex C. In this regard, particular attention will be given to sectors and modes of supply of interest to developing countries.

(e) In accordance with paragraph 5 of Annex C of the Hong Kong Ministerial Declaration, Members are called upon to develop disciplines on domestic regulation pursuant to the mandate under Article VI: 4 of the GATS before the end of the current round of negotiations. Members welcome the progress achieved since the Hong Kong Ministerial Conference and, in particular, that the negotiations have moved into a text-based phase. In light of the extensive and constructive discussions that have taken place, we call upon the Working Party to intensify its work. Members invite the Chairman to continue to consult on drafting revisions, with a view to developing and adopting text before the end of the negotiations.

(f) Members reaffirm their commitment as made in the Hong Kong Ministerial Declaration to conclude negotiations on GATS Rules as mandated in Articles X, XIII, and XV. Members take note of the efforts made since Hong Kong, including through the submission of specific and concrete proposals, to facilitate consideration and engagement in all three areas. Proposals have been submitted on the need for emergency safeguard measures so as to enable more liberal market access commitments; on the need for government procurement disciplines, including a framework for commitments; and on the need for information exchange on subsidies and development of a definition of subsidies. Recognising that divergences still remain, Members are cognisant of the importance attached by some delegations to the objectives and principles contained in these proposals. While there has been more focused work, efforts must be stepped up for enhanced engagement with the objective of advancing the work in the three areas as expeditiously as possible.

(g) In order to conclude the negotiations in a timely fashion, Members shall submit revised offers by [..........].

(h) Final draft schedules of commitments shall be submitted by [..........].

(i) Members shall fulfil the requirement laid out in paragraph 9 (a) of Annex C of the Hong Kong Ministerial Declaration regarding the development of appropriate mechanisms for according special priority to LDCs. They shall strive to do so prior to the submission of revised offers.

(j) Members shall continue to give due consideration to proposals on trade-related concerns of small economies.

(k) Members shall complete the consideration of proposals on Special and Differential treatment referred to the Special Session of the Council for Trade in Services by the Special Session of the Committee for Trade and Development with a view to making clear recommendations for a decision by the General Council.

(l) Members recognize the special situation of recently-acceded Members who have undertaken extensive market access commitments at the time of accession. This situation will be taken into account in the negotiations.

In paragraph 5 of his report, the Chair said that the following texts proposed by delegations, although including some non-controversial elements, also contain elements on which significant divergences persist. Further discussion on these texts is needed.

"For this reason, I did not feel in a position to propose any compromise language. Consequently, these texts are reproduced below as originally proposed by delegations:

(a) Services is an essential part of the Doha Development Agenda. The same level of ambition and political will as reflected in the Ag and Nama modalities is required for services.

(b) In order to advance these negotiations, in responding to bilateral and plurilateral requests, the next offers will adhere to GATS Article XIX and other aspects of the negotiating mandate by, inter alia:

(i) achieving a progressively higher level of services liberalisation, in line with Members' development situation, with appropriate flexibility for individual developing country Members for opening fewer sectors, liberalizing fewer types of transactions, and, when making access to their markets available to foreign service suppliers, attaching to such access conditions aimed at achieving the objectives referred to in Article IV;

(ii) reducing or eliminating the adverse effects on trade in services of measures as a means of providing effective market access, by offering commitments, with limited exceptions, that while respecting the existing structure and principles of the GATS:

-- reflect current levels of market access and national treatment

-- and provide new market access and national treatment in sectors where trade impediments remain;

(iii) securing an overall balance of rights and obligations under the Agreement;

(iv) increasing the general level of specific commitments undertaken by Members under this Agreement.

( c) One way for Members to operationalize the elements (...) is for Members to include in their next offers:

(i) a broader range of sectors and modes of supply; and

(ii) deeper commitments for these sectors and, to the extent possible, full commitments (i. e. without Market Access and National Treatment limitations), taking into account the provisions for developing country Members in GATS Article XIX.

(d) Provide market access to sectors and modes of supply or export interest to developing Members, such as Modes 1 and 4, as indicated in bilateral and plurilateral requests, in accordance with Article IV of GATS." +