Bridges Weekly Trade News Digest • Volume 7 • Number 1 • 15th January 2003

Services: WTO Members Closer To Agreement On Autonomous Liberalisation

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An informal Special Session of the WTO Council for Trade in Services (CTS) meeting on 13 January made progress on modalities for granting ‘credits’ for Members’ autonomous liberalisation (AL) — an issue that had been left unresolved at the last CTS meeting in December 2002 (see BRIDGES Weekly, 11 December 2002). The 13 January meeting followed a set of informal consultations, and comprised an open- ended informal meeting to continue negotiations based on some new drafting suggestions circulated by the Chair, Ambassador Jara (Chile). Sources reported a commitment of the Special Session to finalise the AL modalities negotiations by February 2003. Overall, the Chair’s suggestions were viewed as a "good basis for continuing the discussions" on how to seek credits for Members’ unilateral liberalisation measures since the conclusion of the Uruguay Round. Further, Members reportedly moved forward on several issues previously raised by a group of 24 developing countries, including questions related to the treatment of developing country Members. How to resolve the treatment of newly acceded WTO Members such as China and Chinese Taipei remains an outstanding issue.

‘Graduation’ taken out in Chair’s new suggestion

Chair Jara’s revisions to the current modalities draft (JOB (02)/35/Rev.2) were made in response to the fact that 24 developing countries — including Brazil, Argentina, India, Pakistan, Egypt, Indonesia and Thailand — had been unable to agree to the Chair’s proposal discussed at the 9 December CTS meeting. These countries were of the opinion that the draft did not address the special circumstances of developing countries as a whole in an adequate way, while it unduly took into account the concerns of newly acceded Members. In response to these reservations, the Chair presented a new version of draft paragraphs 13 and 14 of the modalities, clarifying that developing countries as such were granted special consideration in the ‘credit’ process, rather than "individual developing country Members" as provided for in the original modalities document. The group of 24 developing countries had been especially concerned about this wording as they read in it the notion of graduation (i.e. differentiated treatment) within developing countries themselves.

Less of a focus on accession countries

The treatment of newly acceded Members had provided another point of contention in the earlier draft Statement annexed to the Chair’s modalities proposal. Evoking pro-accession country language contained in the Doha Declaration (particularly its paragraph 9 which "note[s] the extensive market access commitments already made by these countries), Chair Jara said it was understood that Members should only direct rather modest credit requests to "most recently acceded Members" while at the same time giving "sympathetic consideration" to requests submitted by the latter. In his revised draft Statement discussed on 13 January, this second element had been deleted, with language highlighting ‘credits’ as an "important and sensitive issue" for recently acceded countries. However, sources reported that on the issue of accession countries, agreement was still not near, and further consultations will be needed to find language that strikes a balance between the concerns of newly acceding countries and developing country Members as such.

Addressing the overall ‘credit’ process, the Chair added a new passage to his draft Statement clarifying that "in fact, irrespective of the level of development of individual Members, the modalities do not, by themselves, create any legal obligation nor do they establish any automatic right to credit or recognition." At the end of the day, according to the Chair, "anything that participants may agree on bilaterally" would prevail. Nevertheless, the new suggestion for the modalities draft itself now provides that the "application of the modalities may be advanced bilaterally, plurilaterally, and multilaterally," whereas the original passage only spoke of "bilateral negotiations."

ICTSD reporting.