BRAZIL SERVICES OFFER AIMS TO ATTRACT INVESTMENT

A new offer from Brazil on services trade submitted to the WTO in July has just recently been made public. Brazil made its long-awaited initial offer (TN/S/O/BRA, 21 July 2004, not yet available online) conditional on developments in other areas, including agriculture. The Brazilian offer makes a number of market access commitments of interest to various developed and developing country trading partners, with most of the commitments are in so-called Mode 3 (commercial presence), demonstrating Brazil's interest in attracting investment in those areas falling under this mode.

The new Brazilian offer establishes a clear link to negotiations in other fields. As such, Brazil has indicated that its offer is conditional on other WTO Members making satisfactory offers in areas where it has an interest, including agriculture, other modes of services supply such as Mode 4 (movement of natural persons) and advancement in the rule-making area under the General Agreement on Trade in Services (GATS). The Brazilian submission makes clear from the beginning that its proposal cannot be constructed as offering in any way the privatisation of public undertakings or as preventing Brazil from regulating public and private services. This approach follows the same line as India. In its initial offer, India emphasised the importance of policy and regulatory space for public objectives through the use of flexibility in its schedule. India further clarified that its offer could not be interpreted as pushing for privatisation (see BRIDGES Weekly, 28 January 2004).

Market access improvements under Mode 3

Most of the market access commitments offered by Brazil are presented under Mode 3 liberalisation in both the market access and the national treatment sections of the Brazilian offers schedule of commitments. There are a number of services sub-sectors covered by new Mode 3 commitments. These include among others: architectural and engineering services (subject to joint venturing in relation to market access), veterinary services, management consulting services, placement and supply of services personnel, maintenance of maritime and aircraft equipment, packaging services, convention services, general construction services, building an competition of work, commission of agents' services, travel agencies and tour operators, and sporting services.

Brazil's offer shows a great interest in attracting investment in the above-mentioned areas and also a willingness to increase levels of ambition of the current round, especially if services are linked to negotiating issues. Global investment in services is growing rapidly, as demonstrated by a report issued earlier last week by the UN Conference on Trade and Development (see related In Brief, this issue). The only sub-sectors where new commitments can be found outside Mode 3 are veterinary services, which also include Modes 1 (cross border supply) and 2 (consumption abroad). One trade source indicated that the proposal calls the attention to the fact that there are no offers of commitments under Mode 4, which is one of the modes where developing countries have expressed relatively more interest than developed countries.

E-work permits: Switzerland presents its experience in the WTO Services Council

In related news, Switzerland has presented, on 23 September, to the WTO Council for Trade in Services its experience on e-work permits as a way to stimulate discussion on accompanying measures that enhance effectiveness of market access commitments under Mode 4 (see TN/S/W/22, 17 September 2004, at http://docsonline.wto.org). The paper explaining the Swiss experience indicates that the speed of processing work permit applications will play a central role in promoting technology and knowledge transfer and improve suppliers' efficiency. The Swiss experience comes from the Canton of Zurich, which has implemented a digitalised desk for processing work permits. The system used by Zurich deals with registration, applications, and transmission of data, inquiries about status and maintenance of relevant information. It use has attracted many applicants covering more than 37 percent of all applications in Switzerland for work permits. According to one trade source, the example presented by Switzerland is self-explanatory and could encourage other WTO Members to implement a similar system.

ICTSD reporting.