At a negotiating session of the Council for Trade in Services (CTS) on 19 May, Zambia, on behalf of the group of least-developed countries (LDCs), tabled a formal proposal (TN/S/W/13, not yet derestricted) on modalities for the special treatment of LDCs in the current services negotiations.

Complementing points made in an earlier informal submission (JOB (02)/205) (see BRIDGES Weekly, 12 December 2002), the LDC group further suggested that LDCs should not be required to offer national treatment to foreign service providers, and that they should not be requested to make 'additional commitments' (GATS Article XVIII) on regulatory issues -- e.g. regarding qualifications, standards and licensing matters -- that would "go beyond their institutional, regulatory and administrative capacities". Zambia further proposed that "preferential market access mechanisms" should be created so as to achieve effective market access for LDCs to the markets of their trading partners. The LDC group also strengthened their demands on movement of natural persons (mode four), suggesting that Members should open their markets to "all categories of natural persons from LDCs, particularly unskilled and semi-skilled persons" without applying a so-called economic needs test. Zambia argued that mode four of unskilled and semi-skilled persons was the most important way for LDCs to market their services globally as well as to reduce poverty.

On the issue of autonomous liberalisation (AL), the LDC group also called for "maximum credit" for their unilaterally undertaken services market openings, while LDCs should not be required to bind these AL measures in their schedules of commitments. Furthermore, the group added some proposals in the area of technical assistance (TA) and capacity building (CB), e.g. demanding that related TA/CB should be provided to LDCs "on a priority basis," and that TA should also cover "institutional and human capacity building and undertaking regulatory reform". In addition, TA should be provided to LDCs enabling them to assess whether trade liberalisation has been able to better integrate LDC service sectors in the global services economy, and whether it takes into account "their special economic situation and their development, trade and financial needs". In their reactions, Members reportedly welcomed the proposal in general and announced their constructive engagement in the issues raised by the LDC group. Nevertheless, trade sources reported some key developing countries said they would have problems with some of the proposals as they were too prescriptive and prejudged the outcomes of the negotiations. Sources further said that several Members had suggested holding informal consultations on the issue.

The CTS will reconvene on Thursday, 22 May, in the afternoon. ICTSD will report on the full CTS special session in the next issue of BRIDGES Weekly.

ICTSD reporting.

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