TWN Info Service on Trade and WTO Issues  (July08/22)
22 July 2008
Third World Network

Trade: New services text calls for binding current liberalisation in GATS
Published in SUNS #6520 dated 18 July 2008

Geneva, 17 July (Martin Khor) -- A new report on services, in the form of a "text", was issued today by the Chair of the services negotiations, Ambassador Fernando de Mateo of Mexico, but there was no agreement on its contents at an informal meeting on services held at the WTO this morning.

The report, entitled "Elements Required for the Completion of the Services Negotiations" and dated 17 July, is an update of an earlier report (26 May). De Matteo says his revised draft is the result of consultations he has had in different groups and configurations.

According to trade diplomats, the new draft had been agreed to at a 15 July meeting of Ambassadors of the so-called "Enchilada Group", comprising the US, EU, Japan, Canada, Brazil, India, China, South Africa, Pakistan, Philippines, Indonesia, Malaysia, Thailand and others.

However, the report was opposed by Venezuela, Bolivia and Cuba at today's meeting. They maintained their position that a text on services was unnecessary and inappropriate, since the "modalities" for services had already been concluded at the Hong Kong Ministerial meeting of the WTO in 2005.

The most significant part of the report is in Paragraph 4, in which states that members shall to the maximum extent possible respond to requests by offering deeper or wider commitments and such responses shall, where possible, substantially reflect current levels of market access and national treatment and provide new market access and national treatment in areas where significant impediments exist.

There are caveats in the paragraph, such as that the commitments shall be in line with levels of development and national policy objectives of developing countries.

There is no doubt, however, that acceptance of such a paragraph would constitute a major concession on the part of developing countries. For many months, a large number of developing countries had rejected the pressures from developed countries to accept a text stating that there be a comparable level of ambition in services as in agriculture and NAMA, and that developing countries should agree to bind their current actual level of liberalisation, as well as to offer more market access and national treatment commitments.

The reported agreement at the ambassador-level Enchilada Group meeting came as a surprise to observers, as well as to some expert-level delegates of developing countries, who had not seen the new paragraph 4 language before the meeting. Nor had the capitals of several of the developing countries been consulted or given their approval, according to some diplomats.

"It may seem like there are some safeguards in the caveats and conditions, but this is also part of a slippery slope that erodes the development flexibilities achieved in GATS and the various services guidelines," said a developing country diplomat.

Some diplomats stressed that the Chair's report was only a draft, and that it had not been adopted at the informal services meeting held on 17 July.

In particular, the three countries (Venezuela, Bolivia and Cuba) continued to oppose the Chair's report.

Venezuela said it strongly rejected the adoption of a single negotiating text (put forward by the Chair). It criticised the Chair for the lack of transparency and participation in the drafting of his report, which had taken the form of a text. The text clearly focused on the needs of developed countries to have more market access in areas of their interest, which they claimed was needed to balance the "big concessions" they claim to make in agriculture.

Bolivia said that the report should have reflected the views of various countries and not just give language the Chair had put forward. Some countries including Bolivia had rejected the need for a text but this was not reflected in the report.

The Chair at the end of the meeting said that three countries had objected to his report. He would call for further consultations, and some parts may have to change.

Paragraph 4 of the report is as follows:

"Members reaffirm that the services negotiations are an essential part of the DDA. They recognize that an ambitious and balanced outcome in services would be integral to the overall balance in the results of the DDA single undertaking. Negotiations must therefore be driven by a high level of ambition and political will as reflected in the other areas of the DDA. 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 development of developing and least-developed countries. There shall be no a priori exclusion of any service sector or mode of supply. Respecting the existing structure and principles of the GATS, Members shall, to the maximum extent possible, respond to the bilateral and plurilateral requests by offering deeper and/or wider commitments. Such responses shall, where possible, substantially reflect current levels of market access and national treatment and provide new market access and national treatment in areas where significant impediments exist, in particular in sectors and modes of supply of export interest to developing countries, such as modes 1 and 4, in accordance with Article IV of the GATS. Commitments shall be commensurate with the levels of development, regulatory capacity and national policy objectives of individual developing countries. In making such commitments, Members shall be guided by paragraphs 1, 2 and 7 of Annex C of the Hong Kong Ministerial Declaration." +