Bridges Weekly Trade News Digest • Volume 5 • Number 42 • 12th December 2001

Services Week: Members Rehash Old Stances

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With new communications tabled on so-called ‘horizontal issues’, Members on 6 December concluded the year’s final ’services week’ (see BRIDGES Weekly, 4 December 2001), which most of them characterised as ‘repetitive’ with little new developments on the sectoral front.

Substantively, discussions focused on assessment, autonomous liberalisation and the organisation of future work in relation to new trade talks as mandated by the Doha Ministerial Decision (available on the ICTSD website).

Horizontal issues

A group of developing countries — namely Cuba, Senegal, Tanzania, Uganda, Zimbabwe and Zambia — issued a comprehensive paper on assessment (S/CSS/W/132, available at the WTO website) building on an earlier communication tabled at the October special session (S/ CSS/W/114). While the new submission, introduced orally, was received rather ‘coolly’, a heated debate emerged on points raised in the October paper, which several developed countries, in particular Switzerland, severely criticised as being incoherent and contradictory. The EC, the US and Switzerland in particular questioned an allegation of the October paper that the GATS had negative impacts on developing countries, since the group, at the same time, contended that an assessment was a prerequisite to obtaining the information necessary to make such an assertion. "How can they know that liberalisation of services trade hurts their interest, if they don’t possess that kind of information?", one trade source said.

Continuing what one developing country trade official called "spraying a fly with a machine gun", some developed countries further criticised the paper for basing arguments on outdated information.

The new 6 December communication on assessment points to some outstanding problems developing countries are facing, such as the large discrepancies between developed and developing countries’ export capacities, the difficulties in competing with multinational corporations, as well as other evidence of negative experiences with services liberalisation. The paper concludes with a series of recommendations to be taken into account when conducting the assessment, including the involvement of other bodies such as the UN Conference on Trade and Development (UNCTAD) and other relevant fora.

In this context it should be noted that the Worldwide Fund for Nature (WWF) and the Centre for International Environmental Law (CIEL) have recently issued a "Call for Capacity Building & Technical Assistance for Services Trade Assessment", which advocates a cost-benefit analysis to be conducted prior to the next phase of market access negotiations.

Members further agreed to hold a symposium on assessment in March 2002.

Autonomous liberalisation

A group mainly consisting of Latin American and Asian Members put forward a paper on autonomous liberalisation (S/CSS/W/130) that fed into the ongoing debate on the subject. According to trade sources, discussions on granting credit for services liberalisation outside the negotiating process had revealed a new flexibility to overcome the present impasse as to whether credit should only be given to developing countries, or also, to a certain extent, to developed country Members. Commenting on developments in the session, a developing country delegate said he felt that "Members agreed to stop acting as if they were at university, and start working on coming up with something useful." Members requested the Secretariat a new paper on the issue.

Moreover, Pakistan et al. orally introduced a paper on the implementation of GATS Article IV [increased participation of developing countries in services trade], which underscored the importance of the provision as an integral part of special and differential treatment (S&D) for developing countries. Notably, the communication concludes that although the GATS contains several S&D tools, Members were to be held responsible for the lack of their implementation due to "the disregard shown by some" of them.

Other developments

Although Members also had the opportunity to further elaborate on their sectoral proposals tabled so far, the related discussions had reportedly been qualified as mainly a repetition of well-known positions and involving no new developments.

Members also devoted, as predicted, a large amount of time to the organisation of future work, which was the subject of intense consultations amongst delegates so as to avoid mushrooming of negotiating groups in relation to the new round of trade talks recently agreed in Doha, Qatar. It was agreed, however, to postpone a decision on the future work programme until March 2002, when Members are scheduled to hold a stocktaking exercise on the results of the GATS negotiations.

Members will now focus on preparing their initial requests, which, as provided by the Doha Ministerial Decision, must be tabled by June 2002.

ICTSD Internal Files.