SERVICES CLUSTER UNDERWAY WITH PLURILATERAL MARKET ACCESS TALKS
Two weeks of intensive market access negotiations in services trade started at the WTO this week. These mark the first services meetings to be conducted in formal negotiating mode since the Doha Round talks broke down last July, although there have been informal talks in the interim.
This first week is dedicated to plurilateral meetings between groups of ‘demandeur’ countries seeking new market-opening commitments and the predominantly developing countries to which they submitted collective requests in February 2006. The second week is reserved for bilateral negotiations between individual countries.
The re-emergence of plurilateral negotiations surprised some observers of the talks, who thought that the approach had proved relatively unsuccessful in encouraging targeted countries to consider making new market access concessions. The lack of substantive results from plurilateral talks in the first half of 2006 had prompted the US, a key demandeur, to refocus on the bilateral approach, where it could more effectively apply its stronger negotiating leverage against developing country trading partners. A delegate said that the combination of bilateral and plurilateral negotiations during the ongoing ‘cluster’ of services meetings responds to the differing approaches favoured by various Members.
In another notable break from standard practice, the services negotiating body, the Council for Trade in Services - Special Session, did not meet at the beginning of the ongoing cluster. The CTS-SS normally meets to start and end each cluster as a sort of ‘book-end’. This time, the CTS-SS will meet only at the end of the two weeks to afford Members the opportunity to assess progress and plan the next steps for the negotiations. One expert saw this as a sign that Members are now according less importance to ‘context-setting’, during which delegates state their objectives for a cluster in light of developments in other Doha negotiating areas.
In the meantime, services Chair Ambassador Fernando de Mateo (Mexico) is expected to continue with his series of informal ‘enchilada talks’ with a group of about two dozen ambassadors. According to some delegates, he may try to take advantage of the presence of capital-based services negotiators in Geneva during the cluster to deepen the substantive discussions in his consultations.
ICTSD reporting.
WORLD TRADE GREW 8 PERCENT IN 2006, BUT FACES RISKS AHEAD
World merchandise trade expanded by a ‘robust’ 8 percent in 2006 despite repeated setbacks in the Doha Round negotiations, according to preliminary numbers released by the WTO on 12 April.
The figure represented the second highest increase in real terms since 2000 and outstripped the 3.7 percent growth in world output, pointing to continued integration in the world economy. In dollar terms, commercial services trade, which is harder to count, was estimated to have risen by 11 percent.
WTO economists said that gross domestic product (GDP) growth was stronger than expected in the EU and Japan. China and India continued to show record levels of economic expansion. The US increased merchandise exports, slowing the growth of its ever-widening trade deficit in the second half of the year. China surpassed the US in exports in the last two quarters of the year.
Although all regions enjoyed trade growth in 2006, it was particularly strong in oil and metals exporters in the Middle East, the Commonwealth of Independent States (CIS), South and Central America, which benefited from higher world prices.
Least developed countries (LDCs) increased trade by nearly 30 percent, also boosted by foreign earnings from higher oil and other commodity prices. In a record high for the poorest countries, they accounted for 0.9 percent of global goods trade.
Foreign direct investment (FDI) increased in 2006 to its second highest level ever, which the WTO secretariat attributed to high investor confidence resulting from strong economic fundamentals and increased mergers and acquisitions.
When the data was released, WTO Chief Economist Patrick Low warned that despite the strong growth, some risks lay ahead in 2007. Housing price and financial market corrections in several countries, increasing inflation, and rising interest rates led the WTO to forecast a moderate slowdown in global economic growth in 2007 to about 3 percent.
WTO Director-General Pascal Lamy welcomed the positive data, but cautioned countries "not to lose sight of the need to continue to reform the world economy." He used the opportunity to stress the importance of reaching a successful conclusion to the Doha talks, because of their potential to boost growth, alleviate poverty, and "establish a more stable and certain foundation for today’s dynamic global marketplace."
ICTSD reporting; "World trade up 8% despite market jitters," FINANCIAL TIMES, 13 April 2007; "Risks lie ahead following stronger trade in 2006, WTO reports," WTO PRESS RELEASE, 12 April 2007.