SERVICES CLUSTER INCONCLUSIVE, NEGOTIATIONS IN TROUBLE

The increased activity in the ongoing WTO services negotiations has not been matched by actual progress, said Abdel-Hamid Mamdouh, chief of the WTO Secretariat's Services Division, following the end of the three-week 'cluster' of services talks (see BRIDGES Weekly, 23 February 2005).

The period of intense multilateral, plurilateral, and bilateral meetings concluded with a 25 February gathering of the Special Session of the Council for Trade in Services (CTS). At the meeting, Members reviewed the progress of the negotiations thus far, and discussed how to structure negotiating work in preparation for the Hong Kong Ministerial Conference in December.

Members call for increased emphasis on services

Representatives from several delegations -- including the unusually high number of ambassadors in attendance -- said that Members need to highlight the importance of the services talks to the Doha Round negotiations in capitals as well as at 'mini-ministerial' and other meetings in the run-up to Hong Kong. They urged Members that had not done so to make their initial offers in the bilateral request-offer process through which market access in services trade is negotiated. Although the cluster saw three new initial offers -- Barbados and Uganda announced that they would soon make their initial offers, following Indonesia's 21 February market access offer -- the extent of liberalisation offered has been highly limited and the process as a whole is proceeding well behind schedule, points which were reiterated by both Mamdouh and CTS Chair Ambassador Alejandro Jara of Chile.

At the meeting, a number of countries said that progress by the May date for revised offers set out by the July Package (WT/L/579) would help determine the shape of the 'first approximations' of a final Hong Kong agreement that are supposed to emerge by the end of July (see BRIDGES Weekly, 16 February 2005). Over 40 Members are yet to make their initial offers, including relatively larger developing economies such as the Philippines, South Africa, and Morocco.

US to make revised offer by May, not expanding its Mode 4 offer

Delegates report that the US has indicated in bilateral meetings that it is unwilling to expand upon its initial offer under 'Mode 4,' which provides for the temporary cross-border movement of service-providing professionals. It is also standing firm about meeting the May deadline for revised offers. This may affect the request-offer process, as some developing countries had initially wanted to see the US' final offer before making offers of their own. Developing countries such as Brazil, China, and India have been urging the industrialised economies to improve their offers under Mode 4, which was described at the 25 February meeting as a central part of the negotiations.

Jara to organise intersessional work

Members spoke of the need for the 'intersessional' work that is to take place until the next services cluster in June to work on a 'two-track' basis. One track would focus on the substance of the negotiations, while the other would seek to outline elements of a potential package to be adopted at Hong Kong. There was widespread support for Jara to continue to channel the direction of intersessional work in rules and domestic regulation as well as market access, in cooperation with Members and the chairs of the subsidiary bodies of the CTS.

Countries lauded the 'Friends' groups -- groups of Members that support particular areas of the negotiations, such as telecommunications liberalisation -- for their transparency in communicating the substance of their discussions to the rest of the WTO Membership, and urged them to make concrete proposals (see related story, this issue).

Mamdouh described services as "the crisis item" on the agenda of the mini-ministerial meeting in Kenya, suggesting that a failure to reach agreement on services liberalisation could sabotage agreements on trade in agriculture and industrial goods. The next intersessional services meetings are supposed to take place at the end of April.

ICTSD reporting. "WTO Services Chair Voices Hope for Momentum in Doha Round Negotiations," WTO REPORTER, 28 February 2005; "WTO talks on services markets face 'crisis,'" FINANCIAL TIMES, 1 March 2005.