SERVICES TALKS PICK UP MOMENTUM

WTO discussions on liberalising trade in services have picked up the pace over the past two weeks, although precisely how to move ahead with the negotiations remains a source of contention.

At a 6 December meeting of the Council for Trade in Services Special Session, the ongoing development of a text by the chair of the talks resulted in some heated discussions.

Sources report that Brazil, India, the African Group and the Association of Southeast Asian Nations (ASEAN) acknowledged that they had initially questioned the utility of a text to provide guidance to the services talks. However, they said that they were now willing to participate in the development of a text, provided that their concerns were adequately addressed.

Unlike agriculture and industrial goods, where mathematical formulae in the draft deals will define Members' future market access levels, countries negotiate services market opening through a process of requests and offers. Thus, a services text would simply set out guidelines for the market access talks. It might also describe potential rules governing services trade. Nevertheless, some of the so-called 'demandeurs' that have been pushing for greater services liberalisation - mostly industrialised Members such as the EU - want a new text since they think it could give a boost to the talks.

On the other hand, Cuba, Bolivia and Venezuela made a joint statement rejecting the idea of having a text for services negotiations. The services negotiations are very different from those on agriculture and industrial goods (principally because no formulae and figures for liberalisation need to be developed), they noted, arguing that Annex C of the 2005 Hong Kong Ministerial Declaration - itself a feat to negotiate - suffices to set out the way forward. They added that the work, time and effort that went into developing that annex should not be undone by starting a similar process, albeit less transparently within the so-called 'enchilada talks', which are invitation-only meetings of a few dozen delegations convened by Chair Ambassador Fernando de Mateo (Mexico).

De Mateo is still going ahead with formulating a text, and apart from these three countries, many Members are working on proposals to submit to him as input.

Another issue taking centre stage in the talks is a potential 'signalling' or 'pledging' conference in which the key players - essentially the industrialised and large developing countries that have either sponsored or been the target of collective requests for market access - would indicate the market opening commitments they would ultimately offer. This conference could in theory take place alongside a framework agreement on subsidy and tariff cuts in the agriculture and industrial goods negotiations.

The very need for such a conference has proved contentious, as has the issue of what legal implications it might have. Suggestions that developed countries would like to see Members commit to bind their existing levels of market opening with respect to foreign service providers at the conference have raised the ire of developing countries. They argue that this would go against the core GATS principle of allowing developing countries flexibility in determining their liberalisation commitments.

The status of written reports from the coordinators of plurilateral market access requests submitted for inclusion in the chair's text was also the subject of disagreement. The documents are so-called 'JOB' documents, which are not publicly available. Some countries said that including them was inappropriate, since the reports were subjective - with personal opinions, assessments, conclusions and recommendations - and thus should not be submitted either as JOB documents or included in the text.

Temporary cross-border labour movement - 'Mode 4' in WTO services parlance - also made an appearance in recent discussions in Geneva. The issue, though important to developing countries, had been relegated to the periphery of the services talks.

Sources report that India had asked to have a symposium on Mode 4 issue around February or March 2008. The US alone opposed the notion at the Council on Trade in Services Session on 6 December. The WTO Secretariat, however, said that the absence of consensus meant that no symposium could be arranged.

South Africa, supported by other developing countries, questioned this interpretation of consensus, given that a services text seemed to be in the offing despite the express opposition of three countries. Several said that movement on Mode 4 would be essential to progress in the negotiations.

At an informal CTS meeting on 17 December, the Secretariat suggested that a Mode 4 symposium might be held in April, time permitting, as positions had softened.

ICTSD reporting.