SERVICES NEGOTIATIONS STRUGGLE TO KEEP UP PACE

On 2 July, the special (negotiating) session of the WTO Council for Trade in Services approved recommendations charting a road map to pursue further services negotiations. The recommendations, already presented by Chair Alejandro Jara at the 30 June Trade Negotiations Committee, are set to be part of a framework deal on the overall Doha Round negotiations (see related story, this issue). In other recent developments, Brazil submitted its long-awaited services offer, Colombia initiated a debate on visa procedures that represent an obstacle to services trade, and Taiwan highlighted some examples of subsidies in the area of services.

Recommendations for the July framework package

The recommendations (JOB(04)/86/Rev.1, dated 30 June 2004), to be incorporated in a framework package deal on the Doha Round by an end-July deadline, were agreed following a long debate. They call on Members that have not yet presented their offers to do so as soon as possible. While no clear deadline was set, the likely timeframe, according to trade sources, would be from three to four months. The recommendations also indicated that a date for submitting revised offers should be agreed as soon as feasible. Agreement on a date would bring the services negotiations to the point where the "core" market access commitments would be negotiated and transformed into revised offers.

Most offers made so far by Members have reflected a low level of ambition and only a few include new liberalisation commitments (see BRIDGES Weekly, 8 April 2004). The recommendations addressed this lack of ambition by requiring Members to ensure a high level of quality in all offers, particularly in sectors and modes of supply of export interest to developing countries and with special attention to least developing countries. The recommendation also indicated that in achieving higher levels of liberalisation, Members may not a priori exclude any service sector or mode of supply of export interest of developing countries. In this regard, Members took note of the particular interest of developing countries with regard to Mode 4 (movement of natural persons). Finally, the recommendations called on Members to intensify their efforts to conclude the negotiations on rulemaking under the General Agreement on Trade in Services (GATS).

Brazil makes strategic services offer

The Brazilian Ambassador to the WTO, Luiz Felipe Seixas Correa, announced the submission of the Brazilian initial offer in last weeks' Services Council. According to observers, the long-awaited Brazilian offer responds to two strategic lines of action that surpass the services context. The first indicates that even if agricultural negotiations have not yet moved along as Brazil had hoped, the country is doing its best to continue moving the services negotiations and taking a constructive stance. Secondly, the actual offer does not include new commitments in services sectors of strong interest to certain developed countries, such as the financial sector, telecoms, energy and transport. Brazil also excluded sensitive areas from a public policy point of view such as health education and social welfare services. In presenting the offer, the Brazilian Ambassador also made a link between progress on market access for services and negotiations on GATS rules-related issues, including domestic regulation, safeguards and subsidies.

The new initial offer includes commitments in 14 services sub-sectors in areas not covered by the current Brazilian list of commitments. The new sub-sectors covered include veterinary, technical testing, fishing, personnel placement and supply, investigation and security, equipment maintenance, packaging, convention services, travel agencies, tour operators and building services, among others. While most WTO members welcomed the Brazilian offer, some expressed caution by indicating that a closer look at the Brazilian offer was in order before making any assessment on the quality and trade value of the offered commitments.

Colombia takes the initiative on visa procedures

In a recent meeting of the Working Party on Domestic Regulation, Colombia presented an informal document (JOB(04)/84, dated 28 June 2004), which included, for the first time, a typology of administrative measures relating to procedures for obtaining and renewing visas or entry permits that represent potential or actual obstacles to trade. The typology developed by Colombia is based in a survey conducted by the public and private sectors in areas where mode 4 is a relevant trade activity. The survey led to the conclusion that most visa procedures make it difficult and in many cases impossible for Colombian enterprises/nationals to compete in international services markets and therefore hindered trade in services supplied through Mode 4.

The type of administrative measures required by the immigration authorities for the issuance of a visas or entry permit that could create obstacles to trade include lengthy visa processing times, high processing costs, burdensome documentation requirements, complex and excessive conditions for visa application and renewal, a lack of transparency and legal certainty about qualifying criteria, and a lack of pre-established administrative procedures.

In its document, Colombia recognises the right of Members to regulate and to introduce new regulations on the supply of services within their territories in order to meet national policy objectives. Nevertheless, there are specific cases in which regulations, while they may be legitimately intentioned, could be applied in such a way as to undermine the commitments that have been negotiated. The GATS addresses the trade-restrictiveness and burdensome nature of measures to ensure that they do not become unnecessary barriers to trade in services and undermine the liberalisation of trade in services undertaken by Members. Colombia also recalled that the Annex on Movement of Natural Persons Supplying Services under the Agreement establishes one fundamental element relevant to visa procedures: it limits the regulatory capacity of governments to the application of measures of a temporary nature, ensuring that such measures are not applied in such a manner as to nullify or impair the benefits accruing to any Member.

The Colombian informal paper generated mixed reactions and a great deal of curiosity among WTO Members. Most developed countries reaffirmed that they have full sovereign right to establish visa procedures and that that right should not be limited by the GATS. Developing countries indicated that while visa issuing is closely linked to the right to regulate, the type of examples identified by Colombia clearly show that many procedures could become de jure and de facto an obstacle to trade and even a situation of nullification and impairment.

Taiwan uses case studies to find a definition of services subsidies

Some WTO Members are starting to bring issues to the "ground" when developing new disciplines for services subsidies in the Working Party on GATS rules. Taiwan recently presented, in an informal note (JOB(04)78), a list of hypothetical cases of governmental subsidies programmes. This list of hypothetical cases is designed to serve as a basis for identifying some of the elements that could be part of a working definition of a services subsidy. The main elements identified by Taiwan included the existence of a financial contribution, the benefit to the supplier of a service, the distortiveness of the programme, and the existence of a particular recipient (specificity). While most of the elements identified match those of the current definition of "subsidies" in the Agreement on Subsidies and Countervailing Measures, Taiwan said that new elements identified should not preclude discussions on whether new disciplines should or should not have a definition of services subsidies. The hypothetical cases included export performance subsidies, subsidies to innovation and technology upgrading, tourism incentives and subsidies in infrastructure building.

ICTSD reporting; "Brazil submits market access offer for Doha Round Trade Services Talk," WTO REPORTER, 24 June 2004.