AMIDST INCREASED FOCUS, SERVICES TALKS TO INTENSIFY

A two week-long 'informal' cluster of services meetings concluded on 2 February, with an informal session convened by negotiations Chair Ambassador Fernando de Mateo of Mexico (see BRIDGES Weekly, 24 January 2007).

The discussions came at a time of increased focus on the services negotiations. In remarks to an informal heads-of-delegation meeting on 31 January, WTO Director-General Pascal underscored the need to ensure that the negotiations in the services sector "do not lag behind agriculture and NAMA [non-agricultural market access]."

The US and the EU had made precisely this point to Lamy in limited-attendance 'green room' consultations prior to the 27 January 'mini-ministerial' meeting in Davos where representatives from close to 30 leading Members called for intensifying the Doha Round negotiations. The two economic superpowers led other services demandeurs in emphasising the importance of substantial services liberalisation as an integral part of an overall market access package in the multilateral talks. In anticipation of the extent of work required in the event of a breakthrough in agriculture and NAMA negotiations, they called upon other Members to put more effort in fleshing out commitments in services trade.

However, one observer of the talks noted that the US and the EU did not appear to have given Members a clear idea of what would be entailed by the substantial outcome they referred to. On the other hand, developing country demandeurs like Mexico and India were far more explicit in identifying the improved liberalisation commitments they seek as key ingredients to a services deal, specifically referring to the cross-border supply of services (mode 1 under the GATS), labour mobility (mode 4) and disciplines on domestic regulation. Some developing countries led by Argentina however cautioned against trying to move the services talks forward too quickly, without any indications about the parameters of a possible agreement on agriculture and NAMA.

At the 2 February informal meeting, which was open to all Member delegations, de Mateo announced his plan of holding 'high-level' substantive discussions involving ambassadors and deputies of key developed and developing countries in the next few weeks, with a view to establishing the possible contours of an eventual services package. These discussions are intended to lead to a 'high-level' meeting of the Council for Trade in Services - Special Session (CTS-SS), which will be the highlight of a 'mini-cluster' of services meetings the chair has scheduled for the week of 26 February. Some delegates expect that the process leading up to that meeting will provide a sense of direction on the timing for the submission of revised liberalisation offers, which Lamy has suggested would be helpful.

Unlike previous clusters, the 'mini-cluster' will focus primarily on the non-market access aspect of the negotiations, i.e., disciplines on domestic regulation and GATS rules relating to an emergency safeguard mechanism, subsidies disciplines and government procurement in services. There will also be an informal meeting dedicated to finding ways to effectively operationalise the modalities for the special treatment of least-developed countries (LDCs) in the services negotiations.

Some trade experts opine that this focus on the rules-based component of the negotiations is meant simply to appease those developing countries that have expressed concern about the increasing political momentum of the market access discussions. Nevertheless, they suggest that it is highly unlikely that the rules-based talks, with the exception of new disciplines on domestic regulation, will make progress, much less produce a new agreement, in the Doha Round.

While the mini-cluster is not intended to cater to request-and-offer negotiations on market access commitments, some delegates say that is almost certain that interest-specific 'friends groups' will hold informal meetings. Sources say that some of these groups have been meeting even outside scheduled clusters.

A more conventional two-week cluster of services meetings has also been scheduled for the second half of March.

ICTSD reporting.