Services Programme • Volume 12 • Number 1 • February 2008

Services Chair’s Report Reflects Large Gaps in Positions

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A new report on the state of play of the services negotiations shows that Members agree on little else than the need for new deadlines for the submission of revised market opening offers and updated schedules of concessions. A number of (mostly developed) countries had pushed for an ambitious text on services that could be formally adopted more or less in parallel with the results of the modalities negotiations on agriculture and industrial marker access.

Instead, Ambassador Fernando de Mateo issued on 12 February a factual progress report on his consultations on the elements that should be addressed in order to conclude the services negotiations. Most of those elements – listed in paragraph 4 of his report – have been already agreed in other documents, such as the services annexes of the July 2004 Framework Agreement and the 2005 Hong Kong Ministerial Declaration. Bolivia, Cuba and Venezuela have argued throughout that this fact makes the issuance of a services text unnecessary.

Since there is no substantive disagreement on any of the provisions, paragraph 4 – with possible slight changes in wording – could conceivably be adopted by Members as a ‘services text’. It does not, however, add anything to previous commitments.

Non-controversial Elements

Members agree that new deadlines should be set for the submission of revised offers and final draft market access schedules in services. No dates are proposed.

Other (near) consensual elements reiterate previous calls for the conclusion of mandated negotiations on domestic regulation disciplines, as well as emergency safeguard measures, government procurement in services and services-related subsidies. All of these rules-related negotiations were originally meant to conclude before the submission of final market access offers.

Paragraph 4 also suggests that Members shall strive to develop ‘appropriate mechanisms for according special priority’ to sectors and modes of services supply of interest to least-developed countries, as well as complete the consideration on special and differential treatment provisions for developing countries in the Committee on Trade and Development. It further confirms that the concerns of small economies and recently acceded WTO Members shall be taken into account in the negotiations.

With regard to the bilateral and plurilateral request-offer market opening negotiations, the chair noted that some Members considered progress achieved so far satisfactory compared to other areas of the Doha Round, while “others took the view that so far progress fell well short of responding adequately to their requests.” Nevertheless, he stressed the membership’s ‘shared view’ that major strides were needed to reach a successful conclusion of the negotiations.

Elements of Significant Divergence

Prudently, the chair refrained from suggesting compromise language on any of the additional proposals put forward by Members. He noted that ‘significant divergences’ existed on some these, and listed the suggestions as presented by delegations without commenting on their potential to eventually command consensus.

Among those least likely to do so, is the suggestion that the “same level of ambition and political will as reflected in the Ag and NAMA modalities is required for services.”1 The proponents also said that new offers should (i) reflect current levels market access and national treatment, and (ii) provide new market access where market impediments remain.

Many developing countries have repeatedly stressed that there is no mandate for an equivalent level of ambition in agriculture, NAMA and services in any of the texts that form the basis for the services negotiations. Brazil warned in November that the services negotiations could face ‘complete collapse’ should the approach suggested by the developed country group prevail.

The chair’s report also contains a ‘middle-ground’ proposal from Chile, Hong Kong, Peru, Singapore and Turkey, which asks Members to include in their next offers: (i) a broader range of sectors and modes of supply, and (ii) deeper commitments for these sectors, taking into account special and differential treatment provisions for developing countries.

A third non-agreed proposal refers the provision of market access “to sectors and modes of supply or export interest to developing Members, such as Modes 1 and 4 (cross-border supply and temporary access for services suppliers to foreign markets).”

Initial Reactions

European and US officials expressed disappointment that the chair’s report did not go beyond suggesting what was already agreed in Hong Kong. In particular, they called for a ‘signalling conference’ – preferably before the ministerial meeting on agriculture and NAMA modalities tentatively planned for March-April – where WTO Members would indicate their willingness to improve the market access commitments in services that they had offered so far.

Australia’s trade minister Simon Crean cautioned that his country “could not support a Doha package that doesn’t include an ambitious outcome on services. Our starting point must be locking in most of the market openness that is currently available to Australian services exporters, but we also need to build new market access in international markets and sectors. This is the core political message that is needed to move the services negotiations forward. The final services text needs to provide strong and clear guidance on the level of ambition we can expect in revised services offers.”