Brussels, 17/10/2007 (Agence Europe) - On 28 September 2007, under the banner of the Global Services Coalition, the service industry's representative organisations recalled how important it was that the Doha Round should reach results for services equivalent to those foreseen for agriculture and non-agricultural manufactured goods (NAMA). Speaking in London on Monday 15 October, during a conference organised by the European Services Forum, WTO Director General Pascal Lamy, who continues to work out of the limelight to make discussions on this chapter move forward, reaffirmed the importance of services and took stock of progress being made in talks, which are well advanced at technical level but which suffer from insufficient political support.
Given the size of the global services economy - legal services, accounting, audit, architecture and engineering, ICT services, postal and mail services, telecommunications, financial services, air transport services, rail, maritime and road services - which is estimated at about 68% of world GDP and $2 800 billion in global trade in 2006, and the rapid advancement in technology, the potential for further growth is “tremendous”, Lamy said. “Services are a critical component of the Doha Round”, he said, specifying that, although positive results in services are needed so as to complete the single undertaking, the question is now that of knowing how to sequence them in the most suitable way so that participants manage to conclude at the same moment after having attained their objectives.
In talks on services in which some forty countries take part (OECD, EU, United States and Australia in the lead and a number of ASEAN countries like Singapore, South Africa, Brazil, China, Egypt and China in particular), progress is less visible than in the agriculture and NAMA chapters. “Negotiations on trade in services are unlike those on agriculture and industrial goods, as there are no tariffs in services and barriers are not easily quantifiable. We cannot, therefore, use general formulae of general percentage reductions. This is a traditional request-and-offer negotiation”, Mr Lamy explained. Negotiations to liberalise international trade in services are being conducted along two concurrent tracks: - bilateral bargaining (known as “request-offer”) between governments to improve market access opportunities (known as “specific commitments”) in each other's markets, the results of which will be applied to all trading partners; - and multilateral negotiations among all governments to establish any necessary rules and disciplines which will apply to the whole WTO membership, with certain special provisions for developing the least-developed countries). According to the first track, each country decides what he wants to ask of its trade partners, in what sector it is willing to make new access commitments and how it wants to meet the requests received. More specifically, members decide which of the four ways set out in the General Agreement on Trade in Services (GATS), allowing provision and marketing of services, they wish to commit to: - Mode 1 or “cross-border supply” is where services are supplied from one country to another (e.g. international telephone calls); - Mode 2, or “consumption abroad” where consumers or firms make use of a service in another country (e.g. tourism); - Mode 3 or “commercial presence” where a foreign company sets up subsidiaries or branches to provide services in another country (e.g. foreign banks setting up operations in a country); - and Mode 4, or “movement of natural persons”, where individuals travel from their own country to supply services in another country (e.g. fashion models, architects or consultants).
Advances made on the services chapter are nonetheless considerable. Since multilateral requests were launched in 2006 (EUROPE 9242), the technical meetings of the negotiating committee on services have allowed participant countries to clarify their requests and their concessions. Plurilateral request/offer negotiations have now run their course and there is focus on more intensive bilateral negotiations. “In this phase, members have to work on a best-case scenario and be ready to submit their final revised offer in services', Lamy said, welcoming the smooth unfolding of the negotiation process so far. He warned: “The main stumbling block has been insufficient political will”. “There are difficult challenges that need to be faced in politically sensitive areas and contributions must come from both developed and developing country members”, he stressed. Finally, Pascal Lamy said the other component of the service negotiation gradually getting into place are negotiations on domestic regulation (question of requirements foreign service suppliers have to meet in order to operate in a market, for instance on licensing or technical standards) but also delays on questions relating to safeguard measures, subsidies and public procurement.
Responsible for guiding discussions of the services negotiating committee, Mexican Ambassador Fernando de Mateo was mandated end September to draw up a draft compromise on services that will not see the light of day until the Falconer/Stephenson texts on agriculture and NAMA have been revised. It is good news, however, for the Global Services Coalition whose principal wish is now to take services forward from the technical phase to the political phase. (E.H.)