Bridges Weekly Trade News Digest • Volume 10 • Number 19 • 31st May 2006
Services Negotiations Waiting For Movement On AG, NAMA
Many developing countries are waiting to see what comes out of the ongoing talks on agriculture and non-agricultural market access (NAMA) before committing themselves to anything on services, said trade diplomats after a ten day-long ‘cluster’ of services meetings primarily dedicated to market access negotiations.
The cluster, which concluded with a Council on Trade in Services Special Session (CTS-SS) on 24 May, had not originally been scheduled at the start of the year, but was subsequently added at the behest of Members ostensibly keen on having more time devoted to negotiations on the relatively new plurilateral requests for liberalisation.
Plurilateral process ineffective?
A number of delegates, however, observed that rather than having more plurilateral meetings, some of the demandeurs in the services talks, such as the US and the EU, simply ended up conducting more bilateral negotiations. This has led some to conclude that even the sponsors of collective requests have come to accept that the plurilateral approach to negotiations has largely been ineffective in furthering the market access negotiations in services trade.
Nevertheless, countries which remain earnest in the use of the plurilateral approach, such as Canada, Hong Kong, Chile and Mexico, though apparently disappointed in their fellow demandeurs’ bilateral focus, maintain that the plurilateral approach still leads to more focused discussions on specific services sectors, as well as the opportunity for increased clarity, certainty, coherence and comparability in the classification and scheduling of commitments, as mandated by Annex C of the Hong Kong Ministerial Declaration.
Still, trade observers noted that the relatively short interval between this cluster and the first series of plurilateral meetings in April may have doomed the recent negotiations from the start. The turn-around time failed to provide recipients of plurilateral requests sufficient time to study more closely the various elements and implications of the liberalisation commitments being sought.
Similarly, conspicuously fewer sectoral experts and regulators were able to attend these plurilateral negotiations than those in April. Consequently, plurilateral meetings did not even take place on a few services sectors which were the subject of collective requests, such as legal services. Most delegates concurred that the plurilateral discussions were less substantive than had earlier been hoped for, with a number of meetings in fact lasting barely an hour.
June deadline could provide boost to talks
Sources indicate that due to broader considerations, many Members are reluctant to engage in intensive services talks, whether plurilaterally or bilaterally. They appear to prefer a wait-and-see attitude, particularly in relation to the agriculture and NAMA negotiations. A delegate from a major developing country said that "unquestionably, unless there is some movement in the agriculture and NAMA discussions, the outcome in services will be meaningless." The same source emphasised that "there is simply no motivation for Members, especially developing countries, to broaden and deepen their offers of liberalisation commitments given the absence of meaningful progress in the more critical areas of negotiations."
Trade analysts say that this negotiating dynamic may change should concrete results emerge from WTO Director-General Pascal Lamy’s call for a renewed push towards modalities on agriculture and NAMA by the third week of June, coupled with a ministerial-level meeting at the end of the month to finalise a deal (see related story, this issue).
In fact, services Chair Ambassador Fernando de Mateo (Mexico) is scheduled to hold consultations on 1 June to ascertain whether the next round of market access negotiations, which normally would take place during the second week of the services cluster scheduled for 19-30 June, ought to be deferred beyond the new deadline for agriculture and NAMA modalities suggested by Lamy. Sources believe that de Mateo is apparently anticipating that enough headway on those modalities would be made by the end of June to prod Members to engage more seriously in the request-offer negotiations, and to consider substantially improving their next round of revised offers. The new revised offers are due to be submitted by 31 July, according to the Hong Kong Declaration.
In a bid to boost the political profile of the services negotiations, sources say that the EU may seek to link them to the ministerial-level meeting slated for the last week of June, by asking ministers to conduct a stock-taking of the progress on services as well. Trade observers opine however that while this may accomplish the objective of highlighting the importance of making progress in services, it may not necessarily hasten substantial changes to Members’ liberalisation commitments.
For now, the only area of the services talks which appears to have a distinct momentum of its own is the negotiation on possible disciplines on domestic regulation. In the last few weeks, Members have tabled several papers, new and revised, with a view to providing the chair of the Working Party on Domestic Regulation with a palette of elements for preparing a consolidated draft text at the end of June.
ICTSD reporting.