SERVICES: PLURILATERAL REQUESTS TAKING SHAPE

Trade negotiators are expecting groups of WTO Members to put forward close to 20 collective requests for countries to open their markets to foreign services providers, across almost every services sector and mode. Sources report that Brazil, China, Indonesia, Malaysia, the Philippines and Thailand are targeted by many of the plurilateral requests, with other countries named in just a handful. 'Friends' groups are said to be preparing requests in specific sectors including telecom, legal, maritime, energy, logistics, and financial services, as well as for increased access for individual workers (so-called 'Mode 4' of the services negotiations), and the expansion of the cross-border supply of services ('Mode 1').

During the 16 February meeting of the Special Session of the Council for Trade in Services (CTS-SS), delegates discussed how to structure the plurilateral market access negotiations that will follow the presentation of the requests. Several delegations want the next services 'cluster,' currently slated to start at the end of March, to allocate more time for meetings among groups of demandeurs and 'demandees,' i.e., the countries receiving the requests. Some developing country delegations expressed concerns that capacity constraints could impair their ability to participate in these negotiations. They asked for meetings not to be scheduled concurrently, so as to ensure that they would be able to have Geneva-based trade negotiators present at each one. The December 2005 Hong Kong Ministerial Declaration's services provisions specifically emphasise that developing country capacity constraints should be taken into account in the plurilateral negotiation process. Some developing country delegates are particularly worried that three weeks of meetings, with two weeks exclusively allocated to plurilateral meetings, would pose a tremendous drain on their time and resources, given that they often have to handle other negotiating issues.

Although plurilateral market access negotiations have long been permissible under various sets of rules for WTO services negotiations, they were explicitly mentioned in the Hong Kong Declaration, which set out a 28 February target date for the submission of plurilateral requests.

Plurilateral requests still taking shape

Some issues about the forthcoming plurilateral requests proved tricky -- notably whether all countries presenting a collective request will be expected, formally or informally, to make the same liberalisation commitments they are seeking. As things stand, it appears that countries will be presumed to receive the same plurilateral requests that they table. Members demanding concessions that they themselves are unwilling to make would in any event be unlikely to have a strong hand in subsequent market access negotiations.

Sources suggest that the liberalisation asked for in collective requests will be specifically linked to the standard flexibilities with regard to making market-opening commitments present in the General Agreement on Trade in Services (GATS), which allow countries to choose the subsectors in which they make commitments and specify the terms under which foreign services providers operate. This would apply to demandeurs as well -- this may allow collective requests to seek a deeper level of liberalisation than would have been possible if each country backing the request had to worry about whether its domestic legal constraints allowed it to make commitments comparable to those sought.

Washington could, for instance, use these flexibilities to try to justify not making politically controversial commitments on Mode 4 or ending the monopoly of US-manufactured and owned ships on merchandise transport between US ports.

The plurilateral requests are also likely to reaffirm the special and differential treatment for developing countries present in GATS Article XIX, which accords them "appropriate flexibility" for opening fewer sectors and "progressively extending market access in line with their developmental situation." This may provide developing countries with a basis for refusing to make commitments that they deem to be inconsistent with their developmental priorities.

One trade diplomat suggested that plurilateral negotiations might be more conducive to producing new liberalisation commitments than the standard bilateral process, since Members would have a broad idea of what several countries are both seeking and willing to give. Furthermore, the plurilateral requests are said to be more specific than bilateral ones tend to be, for example with regard to spelling out the particular market access restrictions that they want removed.

Plurilateral requests will also be structured in different ways. Some will be in the form of model commitment schedules, with demandees asked to comply as closely as possible, though they would at least in principle be able to use the flexibilities to refrain from making commitments with which they are uncomfortable. Others may ask countries to remove a list of reservations, i.e., restrictions on foreign services providers. Alternately, they may be asked to sign on to a 'reference paper,' such as the one on telecommunications, which would entail adhering to the series of regulatory disciplines laid out within.

Plurilateral negotiations to be group-on-group?

Some trade observers suggest that the negotiations on the plurilateral requests will pit the group of demandeurs against the group of demandees, and not allow the demandeurs to 'gang up' on individual Members as some civil society groups and developing countries had feared. This could mean that a certain basic level of liberalisation commitments will be agreed upon plurilaterally, after which demandeurs will make deeper requests bilaterally to key target markets.

At the 16 February CTS-SS meeting, several developing countries including Brazil and Malaysia stressed the voluntary nature of the plurilateral process, emphasising that the language in the Hong Kong Declaration simply states that Members receiving plurilateral requests "shall consider such requests." These countries pointed out that this approach was only meant to complement the bilateral request-offer approach. During the recent cluster, Members also continued to meet bilaterally to discuss existing requests and offers.

ICTSD reporting.