Bridges Weekly Trade News Digest • Volume 13 • Number 41 • 25th November 2009

Services Talks Question Status of ‘Signals’ Sent in 2008

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Another round of ‘enchilada talks’ was organised on Tuesday night by the chair of the WTO negotiating group on services trade, Ambassador Fernando de Mateo of Mexico, who brought together a number of senior officials who are in town for the organisation’s ministerial conference next week.

The meeting aimed to resolve several key issues, including questions over the status of the verbal commitments to liberalise selected sectors and modes of supply in services trade that were made during the ‘signalling conference’ held during the mini-ministerial meeting in Geneva in July 2008.

These ‘signals’, or verbal commitments, were made in the context of perceived progress in the other critical areas of the WTO’s Doha Round negotiations, specifically in agriculture and industrial products (NAMA). At the time, WTO Director-General Pascal Lamy had proposed potential parameters for a framework agreement on agriculture and NAMA. But the discussions on Lamy’s proposal fell through, throwing into doubt the status of the signals made in the services talks.

Many developing countries now argue that if the elements contained in Lamy’s proposal are ‘off the table’, the signals they sent at the signalling conference should likewise be deemed as similarly ‘off’. This would mean that the existing offers of commitments in services trade revert back to the modest levels reflected in the offers that WTO members tabled between 2003 and 2006. Many demandeurs - the developed and developing countries that want to see more market access in the services trade - see this as unfortunate and extremely disappointing, given the substantive progress made on offers during the signalling conference.

A fundamental question that must be addressed in the ‘enchilada’ and subsequent services trade talks is the status of Lamy’s proposal on agriculture and NAMA. Obviously, the issue goes beyond what services trade officials are capable of resolving on their own. Hence, as an amused long-time developing country delegate pointed out, the Tuesday enchiladas could only propose to look at “how WTO members can determine the status of the Lamy proposal,” rather than actually ascertaining the nature of the proposal itself.

In parallel, a number of developing country delegates are pushing for re-engagement in the services negotiations through a ‘plurilateral’ approach. This approach was adopted shortly after the Hong Kong ministerial conference in December 2005 and was intended to provide a focused platform for demandeur countries interested in specific sectors or modes of supply to collectively negotiate with trading partners whose markets were being targeted for increased liberalisation and access.

Initially, some trade observers, particularly in the NGO community, criticised the plurilateral approach on the grounds that the combined strength of the demandeurs would overwhelm the negotiating capacities of developing countries. In practice, however, it appeared that developing countries benefited more from the plurilateral approach, as it allowed them to band together and develop co-operative negotiating positions and arguments vis-à-vis the demandeurs. A Central American delegate noted that many of the initial proponents of the approach, including the EU, have now turned lukewarm on pursuing further plurilateral talks, insisting instead on bilateral negotiations with trading partners.

ICTSD reporting.