SERVICES CHAIR TO CONSULT WITH MEMBERS ON WHETHER TO DRAFT A TEXT

The chair of the Doha Round services negotiations is set to start meeting with WTO Members to determine whether to issue a draft text setting out parameters to guide the process of liberalisation, as well as what might go into such a document.

Chair Ambassador Fernando de Mateo (Mexico) was expected to start these informal consultations as early as this week, after most delegations, with the notable exception of Venezuela, indicated they were open to such inquiries.

In light of the deadlock in the talks on agriculture and non-agricultural market access, many developing countries are keeping their cards close their chest with regard to future market-opening on services. This has been met by frustration from industrialised countries that they are seeing no signs of achieving their goals on services trade. Some developing nations, notably India, have complained that developed countries have done little to respond to their demands for certain kinds of services liberalisation.

Unlike draft agreements on agricultural and industrial goods, the nature of the services talks means that a draft text - at least, one based on terms that have not already been ruled out by Members - would not indicate the depth of liberalisation expected of countries. The extent to which each country opens up its services markets to foreign competition will be determined through a process of bilateral and plurilateral requests and offers.

Nevertheless, some believe that a new text might give a boost to the lagging talks.

Sources say that at a 28 September meeting of the services negotiating committee that closed a two-week 'cluster' of discussions, the US was particularly vocal in supporting the idea, noting that the services talks had not received a new text-based focus for discussions since the Hong Kong Ministerial Conference in 2005. Some US politicians, as well as industry groups, have been lobbying heavily for US negotiators to demand services liberalisation abroad.

Brazil and Indonesia said that they did not see the need for another document to provide guidance to the negotiations, pointing to the services provisions in Annex C of the Hong Kong Ministerial Declaration as well as the negotiating guidelines for services negotiations that Members agreed to in 2001. However, noting that some countries needed to show signs of progress to their domestic constituents, they agreed to take part in de Mateo's consultations on a potential text.

Delegates report that little was said at the gathering about precisely what might go into a new services text. The Hong Kong Ministerial Declaration's Annex C exhorted Members to make new binding market access commitments across the four modes of services supply, and to give up existing restrictions on granting equal treatment to services providers from all countries. It also paved the way for plurilateral market access negotiations.

A new text, negotiators suggest, might include a new deadline for submitting revised market access offers (this may be of limited value: the Hong Kong text called for this to happen at the end of July 2006). Sources say that in the chair's so-called 'enchilada talks' among a few dozen delegations, developing countries have stressed that any new text must not be limited to market access, and should reflect developments in the rule-making aspect of the talks, as well as domestic regulation.

Members have already asked the chair of the working party on domestic regulation to table a revised text for a potential agreement by the end of October. Developing countries have been trying to use the rule-making negotiations to secure new disciplines on subsidies to the services industry, as well as a new services safeguard. In terms of tradeoffs, limited progress on rules would provide them justification for scaling back potential market access concessions.

One trade diplomat said that the outcome of the services negotiations would depend very heavily on other areas of the negotiations. If Members agree to "something substantial on agriculture and non-agricultural market access," then countries are likely to table significant market access offers. "If not, all the deadlines in the world won't matter," said the official.

ICTSD reporting.