EC, OTHERS TABLE REQUEST FOR LIBERALISATION OF ENVIRONMENTAL SERVICES

On 28 February, Australia, Canada, the European Communities, Japan, Korea, Norway, Switzerland, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, and the United States circulated a collective request for a number of large developing countries to open their environmental services markets to foreign services providers. Specifically, the request asks them to open up their sewage; refuse disposal; sanitation; cleaning of exhaust gases; noise abatement; nature and landscape protection; and other environmental protection services in specific ways. However, it explicitly excludes any request for water for human use (i.e. the collection, purification and distribution of natural water).

Request marks new services liberalisation process

WTO talks on the liberalisation of services in the Committee on Trade in Services Special Session (CTS-SS) had until the end of 2005 used a bilateral "request-offer" process, under which one country would request another to open up a particular service sector in a particular way, and the recipient country could consult with the asking one and then decide whether to offer to open the named sector in the way requested. However, at the Hong Kong Ministerial Conference in December 2005, WTO Members decided to allow a group of Members to submit a 'plurilateral request' on services, and set an end-February 2006 deadline for such requests. The sending out of a number of different requests prompted one Western official to dub it, tongue-in-cheek, the first successfully-met deadline in the Doha Round negotiations.

Paragraph 31(iii) of the Doha Declaration mandated WTO Members to negotiate on "the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services". While the environmental goods part of this mandate has been taken up at some length in the Committee on Trade and Environment Special Session (see related story, this issue), CTS-SS work on environment services had to date been limited to a few scattered requests for liberalisation of environmental services. Most notably, the EC at one point had asked several developing countries to open their water provision sectors to foreign investment, a request that they later took back after a backlash from civil society and several developing countries.

Broad sectoral coverage requested

In the WTO Services Sectoral Classification List (WTO Document MTN.GNS/W/120 ), the environmental services sector is defined as being comprised of four sub-sectors of activity: sewage services; refuse-disposal services; sanitation and similar services; and other environmental services. However, the UN Central Product Classification (CPC) system contains several additional sub-sectors of activity for environmental services, namely, cleaning services of exhaust gases, noise abatement services, nature and landscape protection services and other environmental services not elsewhere classified. The plurilateral request encourages recipients to liberalise in all four WTO sub-sectors and the UNCPC sub-sectors as well, but urges all recipients to include in particular commitments in their sewage; refuse disposal; sanitation; cleaning of exhaust gases; noise abatement; nature and landscape protection; and other environmental protection services sectors.

Level of commitment

WTO Members have divided up the type of trade in service provision into four categories or "modes". Mode 1 covers cross-border supply, where only the service crosses the border (e.g. telecommunications); Mode 2 covers consumption abroad (e.g. tourism); Mode 3 covers commercial presence of a service supplier (e.g banking services supplied by a foreign bank subsidiary); and Mode 4 covers the movement of "natural persons", that is the temporary movement of workers to a country to provide services.

The request does not ask for the recipients to open services under Mode 1, but asks them to fully open Mode 2 (including tourism) for all subsectors, for example. On Mode 3, they point out that most environmental services are supplied in this way and asks recipients to "undertake ambitious commitments", including barriers to commercial presence like foreign equity limitations, joint operation requirements and restrictions or requirements on types of legal entity for foreigners such as requirements for joint ventures for a license to operate in a country. It also asks, in Mode 4, for recipients to ensure the mobility of people providing environmental services.

Liberalisation could benefit environment, demandeurs say

The request highlights its link to the paragraph 31(iii) mandate, and notes that the countries presenting the document believe that liberalisation in these sectors could benefit the exporters and importers of the services and the environment and development as well. It notes, however, that services liberalisation should not hinder governments' ability to impose performance and quality controls on environmental services and other ways that the governments can make sure that service suppliers are fully qualified to carry out their tasks in an environmentally sound manner. While noting that a number of environmental services are granted public monopoly and exclusive rights at a central or local level, it says that foreign suppliers should be able to compete with local ones to provide those services. In addition, it points out that government procurement of services under national laws is not covered by the request, and reiterates that all WTO Members can under WTO rules establish, maintain, and enforce their own levels of protection, for consumers, health, safety and the environment.

The Special Session of the Council for Trade in Services (CTS-SS) will reportedly meet informally on 7 March to discuss how to proceed with the plurilateral market access negotiations (see Bridges Weekly, 1 March 2006).

ICTSD reporting; "US is Active Participant in Coalition to Jumpstart WTO Services Negotiations," US TRADE REPRESENTATIVE PRESS RELEASE, 28 February 2006; "WTO Circulates Plurilateral Requests; EU Participates in 11 Services Initiatives," WTO REPORTER, 1 March 2006; "EU and others launch 'plurilateral' process to boost Doha services negotiations," EUROPEAN COMMISSION PRESS RELEASE, 28 February 2006; "WTO services negotiations move up a gear," REUTERS, 1 March 2006.