Bridges Weekly Trade News DigestVolume 10Number 13 • 12th April 2006

Services: Demandeurs, Requested Members Both Content With Initial Plurilaterals

The recently-concluded ‘cluster’ of services meetings at the WTO, which featured the start of ‘plurilateral’ market access negotiations among groups of countries, was hailed as "extremely positive" by Hamid Abdel-Mamdouh, the director of the WTO’s services division. The cluster, which ran from 27 March - 7 April, saw negotiations on the more than 20 plurilateral requests that had been made in virtually every sector covered by WTO services rules. Mamdouh told journalists on 10 April that the talks had "exceeded our expectations." "I think there is definitely new momentum in the services’ negotiations," he said.

Delegates from both sides — Members making plurilateral requests as well as those on the receiving end — do not seem to disagree with this assessment, albeit for different reasons.

Demandeurs appear pleased — and relieved — that the negotiations on the collective requests were not as contentious as many had feared. Members they had invited for plurilateral negotiations duly came to the meetings along with their sectoral experts. Brazil, for instance, reportedly brought in over a dozen capital-based experts, its largest delegation for services negotiations to date.

Several Members that were the target of requests felt that they had been able to take advantage of the plurilateral approach to strengthen defensive stances in areas where they were reluctant to increase liberalisation commitments.

Many meetings follow similar pattern

Sources indicate that plurilateral meetings in a number of sectors followed a similar pattern. After demandeurs presented their requests, requested Members would start their interventions by emphasising the voluntary nature of their participation, and follow this with a series of technical questions regarding the collective request they had received. After the demandeurs responded and clarified these technical issues, the requested Members would point to the relatively liberal nature of their own existing regimes and offered commitments, sometimes saying that they were unable to move beyond their present offers in the absence of favourable movement in other aspects of the services talks or other negotiating issues such as agriculture.

One delegate remarked that the plurilateral discussions resembled a Committee on Specific Commitments meeting merged with a Special Session of the Council for Trade in Services: Members had technical discussions on the proposed classifications and entries of commitments, and subsequently engaged in a ‘beauty contest’ where they praised the quality of their own offers and commitments in the sector under discussion. This is not uncommon practice in bilateral market access negotiations either.

It appears that even the plurilateral negotiations in sectors such as computer-related services, where a wide range of Members believe that new liberalisation commitments could be beneficial and the demandeurs were thought to have significantly refined their shared approach, were not spared from these negotiating dynamics. The sponsors of the collective request were confronted with a series of substantive and technical questions. For instance, the EU was asked why it was seeking commitments that the other demandeurs were not.

Some trade negotiators from Members that had been the target of several requests said that the plurilateral process had forced a level of restraint upon demandeurs, because they had to agree on the common elements in each sectoral request. Nevertheless, sources say that a number of the requests remained unwieldy in the face of questioning because they were overly ambitious — an example cited was legal services — or not specific enough. One delegate noted that India, the coordinator for the collective request on liberalisation of services supplied across national borders (mode 1), might do well to focus the request more on professional services.

Demandeurs to seek more bilaterals in future?

Sources report that some of the plurilateral requests may henceforth be discussed jointly during future clusters. The requests on architectural, engineering and integrated engineering services may, for instance, be discussed together with that on construction and related engineering services. The requests seeking the elimination or reduction of exemptions from the obligation to accord most-favoured-nation (MFN) treatment in financial services and in audio-visual services might be folded into the plurilateral discussions on financial services and audio-visual services, respectively.

A delegate from a country which received plurilateral requests in practically every sector observed that while Members engaged substantively in the negotiations, there did not appear to be any concrete forward movement which could be attributed to the two week-long series of negotiations. If anything, many requested Members were left with the impression that they were able to maximise a defensive approach, if they so chose, much more in the plurilateral negotiations than in bilateral ones — prompting one observer to call the plurilateral approach a ‘toothless process.’

This does not seem to have been lost on the demandeurs, who, apart from seeking a series of meetings in May in addition to the previously scheduled June negotiations, have already started asking Members to devote more time to bilateral meetings in subsequent clusters.

ICTSD reporting; "WTO services’ talks appear to be getting into gear," REUTERS, 10 April 2006.