Bridges Weekly Trade News Digest • Volume 6 • Number 25 • 3rd July 2002
US Submits Gats Requests To WTO Trading Partners
The US on 1 July formally submitted to the WTO its requests for further services trade liberalisation under the General Agreement on Trade in Services (GATS), setting out its positions tailored for each of its 142 fellow WTO Members states on how to bring down barriers in international services trade sectors such as telecoms, banking, energy, environment, education, professional and audiovisual services. Despite this “full range” of covered issues, Deputy US Trade Representative (USTR) Peter Allgeier declared that the US was not making any requests in areas such as water supply, public health, and primary and secondary education, as it was “up to governments to decide what they want to do” in those sectors. He further added that while rich countries and advanced developing countries such as Brazil, the Philippines and India would be asked to make most concessions, the poorest nations would only be asked to “start a dialogue on the role of services” and the “value of openness”.
Both sectoral and ‘horizontal’ issues addressed
While the actual requests remains confidential, the US made public an executive summary of the its proposals, according to which the USTR has proposed new market access commitments in all 12 services sectors: telecommunication; financial services; express delivery services; energy; environmental services; distribution services; education and training; lodging and other tourism services; professional services; computer and related services; advertising; and audiovisual services. In addition to these sectoral requests, the US addressed several ‘horizontal’ issues such as removing investment barriers (economic needs-tests, investment approval procedures) in mode three (commercial presence) and increasing access for temporary entry and stay of professional employees under mode four (movement of natural persons). On domestic regulation in “all relevant services industries,” the summary states that the US has requested all WTO Members to make their national licensing procedures more transparent as well as to notify all new and changed regulation prior to their final adoption and entry into force.
In terms of detail, Allgeier said the US had tabled a “comprehensive” request to WTO newcomer China asking for further commitments in areas such as banking, telecoms and retail services. He further pointed out that the US was asking the EC to bind — on a most-favoured nation (MFN) basis — their current levels of liberalisation in areas such as cinema, video, radio, television and music. Commenting on some EC member states’ concerns about further dominance of the US film and TV industry over the (largely subsidised) European audiovisual sector, Allgeier said that US request would leave room for Members to “provide support for their culture.” He also said that the US is asking Latin American countries such as Argentina and Brazil to further liberalise their financial sectors, despite the current financial instability in these countries. “This is certainly not a time to step back from liberalisation in Latin America,” Allgeier commented.
Asking for the moon…
Anticipating Members’ tabling requests on the liberalisation of public services such as health, education and water distribution, WTO Director- General Mike Moore and Chairman of the Special Session of the WTO Council for Trade in Services (CTS), Ambassador Alejandro Jara of Chile, defended recent criticisms of services negotiations in a 28 June press release, saying that the current request/offer phase would not pose any threat on government services as these were in fact excluded from the scope of the GATS — “and there is no question of changing those rules,” Jara added. Moore also stressed that “people can and will ask for the moon” during the request stage, which, however, wouldn’t “mean that they’ll get it.” In their address, the WTO chief and the Services Council Chair responded to fears recently voiced by various non-governmental organisations (NGOs) about weaker WTO Members being pushed by their stronger trading partners to privatise and deregulate their public services sectors (see BRIDGES Weekly, 23 April 2002).
GATS Article I.3 (b) provides that “services supplied in the exercise of governmental authority” are excluded from the definition of “services”. Article I.3 (c) defines such governmental services as “any service, which is supplied neither on a commercial basis nor in competition with one or more service suppliers.”
Some NGOs warn of adverse consequences stemming from the lack of definition of critical terms in the GATS I.3 exclusion. According to Scott Sinclair from the Canadian Centre for Policy Alternatives, the exclusion renders the provision “at best, unclear and subject to conflicting interpretations. At worst, if narrowly interpreted by dispute panels, [...] of little or no practical effect.” Concerned groups are worried that this is insufficient to protect governments from domestic and international pressures to liberalise lucrative public service sectors, as well as to protect them when undertaking experiments in mixed public-private delivery for said services.
Responding to civil society concerns which came up after a set of draft EC proposals was leaked in April (viewable at http://gatswatch.org, also see BRIDGES Weekly link, above), EC Trade Commissioner Pascal Lamy announced in an open letter on 1 July (at http://europa.eu.int/comm/trade/services/plreply.htm) that the European Commission, “given the strong public interest in the GATS negotiations,” would publish a summary of the EC’s initial requests which would be released when the requests are submitted to the WTO. Previously, NGOs have been pushing for making the bilateral request/offer negotiating mode more transparent by making the requests publicly available.
All WTO Members agreed last November in Doha to table their initial requests by end-June, which, however, is only an indicative deadline. In return, addressees of the requests are required to respond with their initial offers by 31 March 2003.
The executive summary of the US requests can be viewed at: http://www.ustr.gov/sectors/services/2002-07-01-proposal-execsumm.PDF.
ICTSD reporting; “Services: US Proposes Broad Opening Of Services Sector In WTO Trade Talks,” WTO REPORTER, 2 July 2002; “US Submits Request For Opening International Trade In Services To WTO,” AP WORLDSTREAM via COMTEX, 1 July 2002; “Director-General Of WTO And Chairman Of WTO Services Negotiations Reject Misguided Claims That Public Services Are Under Threat,” WTO PRESS RELEASE, 28 June 2002; “Australia Files Its Targets For Services Trade Reform,” DOW JONES, 2 July 2002; “Deregulation Of Labour In Developed Mkts Crucial To India,” DOW JONES, 2 July 2002.