Bridges Weekly Trade News Digest • Volume 9 • Number 23 • 29th June 2005
Services Cluster Underway, Talks On Benchmarks Forthcoming
A two-week ‘cluster’ of services meetings got underway at the WTO on 20 June with the regular meetings of the Council for Trade in Services and its subsidiary bodies. Sources report that despite many developing countries’ continued advocacy for more emphasis on the rule-making aspect of the services negotiations — which are the primary focus of at least two of the subsidiary bodies — little was achieved in the course of the formal meetings.
Safeguard discussions fail to make progress
At the Working Party on General Agreement on Trade in Services (GATS) Rules (WPGR), UNCTAD presented a paper that suggested that a safeguard mechanismfor services was both desirable and feasible. The UNCTAD paper was premised on, among other things, the systemic need for symmetry between goods trade, where a safeguards agreement exists, and services trade, where none presently exists. In response to the paper, however, many delegations raised questions similar to the ones they had posed to the sponsors of an earlier Association of Southeast Asian Nations (ASEAN) proposal on such a mechanism — notably, on the definition of domestic industry, acquired rights, compensation, and the feasibility of restrictions on modes 1 and 2. Developed countries opposed to a services safeguard did not demur from highlighting these concerns at the 20 June meeting, leaving the debate largely in the same position as where it started.
The discussion of possible disciplines on services subsidies, while far less evolved than safeguards, received some renewed basis for debate. An informal submission from Chile; Hong Kong, China; Mexico; Peru; and Switzerland (JOB(05)/95) put forward a provisional definition of ’subsidy’ and suggested subsequent steps, including timelines, for the exchange of information mandated under Article XV of the GATS. Members offered preliminary comments and questions on the proposed definition and diverging views on the proposal relating to the information exchange including on sectoral coverage, timelines and relevance of concepts present in the WTO Agreement on Subsidies and Countervailing Measures.
Informal meetings may take precedence on domestic regulation
In the 22 June meeting of the Working Party on Domestic Regulation (WPDR), Members discussed a matrix prepared by the WTO Secretariat that outlined how the various negotiating proposals stacked up in relation to each of the elements that could be present in possible disciplines on domestic regulation. While intended to provide Members with a tool for reviewing and comparing the various proposals in one document, one delegation expressed some concerns about how this matrix should or should not be used in further discussions of disciplines. Sources suggested that procedural issues might once again end up distracting the WPDR from resolving the substantive issues presented in an otherwise useful document.
Delegates indicate that if the strong push for some form of results in the negotiations on domestic regulation is to yield anything by the WTO’s Hong Kong Ministerial Conference in December, informal consultations and dialogue among the major proponents will inevitably have to take precedence over the formal meetings in finding the areas of convergence and compromise. As things stand, many Members appear to remain keen on having at least a checklist, if not a framework, of possible elements to be contained in disciplines by year’s end.
Financial services: Members discuss developed country ‘benchmarks’
The 23 June meeting of the Committee on Trade in Financial Services (CTFS) gave Members a preview of the kind of discussions that are anticipated regarding the controversial issue of ‘benchmarks’ in the market access talks, when it tackled the joint statement of several developed countries regarding their objectives in the financial services negotiations. They had first presented the statement to the Council for Trade in Services-Special Session (CTS-SS) during the previous services cluster.
At the CTFS meeting, however, some developing countries questioned the appropriateness of discussing these objectives given their view that the CTFS is a technical committee intended to further Members’ understanding of issues relating to financial services trade, rather than a forum for negotiations. Furthermore, these countries argued that these benchmarks run counter to the modalities enshrined in the GATS and agreed upon in the 28 March 2001 Negotiating Guidelines and Procedures for the services talks. Moreover, some developing country delegations pointed out that if the CTFS is indeed mandated to serve as a negotiating forum, including settingbenchmarks for market access negotiations, then developed countries were contradicting themselves by preventing another technical committee, i.e., the Committee on Specific Commitments, from benchmarking negotiations by discussing offers to obtain clearer, less ambiguous entries in schedules of commitments.
The benchmark issue is likely to feature prominently during the CTS-SS meetings on 30 June and 1 July.
ICTSD will conclude coverage of the cluster in upcoming issues of BRIDGES Weekly.
ICTSD reporting.