Bridges Weekly Trade News Digest • Volume 13 • Number 35 • 14th October 2009

Services Talks Gear Up for November Sessions

Discuss this articleShare your views with other visitors, and read what they have to say

While some negotiators in last week’s services talks at the WTO showed a degree of enthusiasm for re-energising the process, in particular the negotiations on market access, others were more sceptical. Ultimately, however, the week-long talks resulted in little forward movement, sources said, as members largely repeated their long-standing positions.

But the latest cluster of services meetings, held at the WTO’s Geneva headquarters the week of 5 October, was largely meant to lay a foundation for more substantive meetings next month, according to sources close to the talks. The director of the WTO Secretariat’s Trade in Services Division, Hamid Mamdouh, said that last week delegates were focused on preparing “substantively, politically and mentally” for the next set of meetings, which are slated to take place over two weeks, beginning on 2 November. WTO members will hold ‘regular’ talks during the first week of the cluster before diving into intensive negotiations covering a full range of services issues during the second week. Several delegates said that they expect that WTO members will hold a range of bilateral and plurilateral meetings on the sidelines of those intensive multilateral talks.

But officials indicated that the services talks could go nowhere in the absence of significant progress in other areas of the Doha Round trade talks - namely the negotiations on agriculture and industrial goods. Several services negotiators said they remain frustrated with the overall pace of the talks and the low levels of political support that have been given to their segment of the Doha Round negotiations. Services negotiators stress that the strong focus that has traditionally been placed on the negotiations on agriculture and industrial goods puts the services talks at a disadvantage. Unless political leaders signal a change in priorities, countries’ commitments to open their markets to trade in services are unlikely to increase, officials said.

Discussions on the rule-making aspect of negotiations, specifically the negotiations on disciplines on domestic regulation remain complicated. During last week’s talks a group of countries that included Australia, Chile, India and New Zealand expressed enthusiasm for resuming talks on rules before engaging further in market access negotiations. But the so-called ‘demandeurs’- those countries looking to secure significant new market opportunities for their service providers - are in “no hurry” to conclude negotiations on said disciplines, one official said. Washington seemed particularly hesitant on that front. “The US said that discussions on that can be moved to next year,” one delegate reported.

“We know that the biggest gains to the global economy are likely to derive from multilateral services liberalisation, but the offers on the table right now fail to deliver on that promise,” US Trade Representative Ron Kirk said in a speech in Washington on Tuesday. “We have said flat-out that there will be no deal without a solid result on services which would result in new market opportunities, but we believe that a positive outcome is still achievable. So we will continue to put forth new ideas that may help us to build a better outcome,” he added.

But many developing country delegates say that if the domestic regulation talks get pushed back, they will not be ready to engage in the talks on market access, a key area of interest for most rich countries. In response to Washington’s statement, a delegate suggested that the group “push the market access negotiations also to the next year.”

Since the onset of the financial crisis last year, many countries - developed and developing alike - have become more sensitive with regard to domestic regulation as well as broader issues covered by the Committee on Trade in Financial Services. Pakistan, for instance, has submitted a proposal for a closer examination of e-banking and respective regulatory mechanisms in the light of insufficient regulatory frameworks in developing countries.

During the G20 meetings in London and Pittsburgh earlier this year, convened in response to the economic crisis, political leaders reiterated their commitment to conclude the ongoing WTO Doha negotiations by 2010 to “maintain openness and move toward more sustainable growth.” While the trade community appreciated these statements in the light of the stalling negotiations, negotiators now face to challenge to translate these statements into concrete processes and commitments.

But the services talks face at least two major barriers - a lack of political support for market access commitments and a dearth of enthusiasm among certain developed countries for the talks on domestic regulation. If delegates remain stuck on either of those fronts, next month’s services meeting may fail to produce any tangible results, despite urgent calls for progress from even the highest levels.

ICTSD reporting.