SERVICES COUNCIL CONSIDERS NEW LDC MODALITIES DRAFTS

During its meeting on 4 July, the WTO Council for Trade in Services (CTS) negotiating session considered, inter alia, new informal documents on modalities for the special treatment of Least Developed Countries (LDCs) in the current services negotiations. Prepared by the WTO Secretariat and the US, the documents (jobs (03)/127 and 133, not yet derestricted) propose alternative language on LDC modalities, following a proposal made in May by Zambia on behalf of the LDC group of countries in a effort to move the issue forward before the Cancun ministerial (see BRIDGES Weekly, 21 May 2003). The LDC group has since been working to elaborate the modalities, which many non-LDC developing countries also supported.

The alternative language prepared by the WTO Secretariat was based on the Zambian proposal and the result of consultations with, and proposals from, various Members. The document attempts to summarise views expressed by non-LDC Members, and is intended to assist Members in considering further steps with regard to the adoption of modalities. It seeks to provide a more technical format, and to insert some of the concerns of LDCs into the legal architecture of the General Agreement on Trade in Services (GATS). Some of the language was changed from its initial, binding format to best endeavour language, taking away much of the legal weight of the initial proposal of LDCs modalities presented by Zambia. This tendency is even more emphasised in the proposed language tabled by the US, where best endeavour language is applied horizontally to all the modalities proposed by the LDC. The LDC call for increased technical assistance is deleted in the US proposal, and only the continuation of current programmes encouraged. According to some observers, the proposed alternative texts would not help change the current direction of the current request-offer phase of services liberalisation much, where LDCs will, in any case, have to be very careful in how they deposit their commitments, and possible gains might depend on the "generosity" of other WTO Members.

Background

Under the GATS, special and differential treatment (S&D) shall be provided for developing country Members, with special priority given to LDCs. The services negotiating guidelines also indicate that services negotiations shall aim to increase the participation of developing countries in trade in services, giving special priority to LDCs. In order to address these issues, the CTS has been discussing possible modalities for the special treatment of LDCs since the approval of the services negotiations guidelines. Negotiations on LDC modalities seek ways and means to grant S&D during the services negotiations under Article XIX (negotiation of specific commitments) of the GATS.

ICTSD reporting; "Services Negotiations Progress and Pitfalls," SOUTH BULLETIN 45, October 2002.