SERVICES Negotiations and other work

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The Doha mandate

“The negotiations on trade in services shall be conducted with a view to promoting the economic growth of all trading partners and the development of developing and least-developed countries. We recognize the work already undertaken in the negotiations, initiated in January 2000 under Article XIX of the General Agreement on Trade in Services, and the large number of proposals submitted by Members on a wide range of sectors and several horizontal issues, as well as on movement of natural persons. We reaffirm the Guidelines and Procedures for the Negotiations adopted by the Council for Trade in Services on 28 March 2001 as the basis for continuing the negotiations, with a view to achieving the objectives of the General Agreement on Trade in Services, as stipulated in the Preamble, Article IV and Article XIX of that Agreement. Participants shall submit initial requests for specific commitments by 30 June 2002 and initial offers by 31 March 2003.”

— Para 15 of Doha Ministerial Declaration, 14 November 2001


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What is expected at Cancún?

“The Fifth Session of the Ministerial Conference will take stock of progress in the negotiations, provide any necessary political guidance, and take decisions as necessary.”

— Para 45 of Doha Ministerial Declaration, 14 November 2001


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The WTO’s General Agreement on Trade in Services (GATS) commits member governments to undertake a wide-ranging work programme, some of which had to start immediately after the GATS came into effect in January 1995. As part of this work programme, negotiations on specific market access commitments to further liberalize trade in services were mandated to start five years later. Accordingly, in early 2000, member governments started these negotiations. From the beginning of 2001, the main focus of the discussions was the members’ proposals which helped explain each other’s interests and priorities in the negotiations.

In March 2001, negotiators fulfilled a key element in their mandate by establishing the negotiating guidelines and procedures. By agreeing these guidelines, members set the objectives, scope and method for the negotiations in a clear and balanced manner. The guidelines unequivocally endorsed some of GATS’ fundamental principles — i.e. members’ right to regulate and to introduce new regulations on the supply of services in pursuit of national policy objectives; their right to specify which services they wish to open to foreign suppliers and under which conditions; and the overarching principle of flexibility for developing and least-developed countries. The guidelines are therefore sensitive to public policy concerns in important sectors such as health-care, public education and cultural industries, while stressing the importance of liberalization in general, and ensuring foreign service providers have effective access to domestic markets.

The Doha Ministerial Declaration of 14 November 2001 reaffirmed the negotiating guidelines and established some key elements of the timetable including the deadline of 1 January 2005 for concluding the negotiations as part of a single undertaking.


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Developments since Doha

Negotiations to improve market access commitments

Following the Doha Ministerial Conference in November 2001, negotiators continued discussing members’ proposals to liberalize a wide range of sectors as well as the movement of natural persons (i.e. the entry and temporary stay of people supplying a service, either self-employed or employees of a services company). The proposals raised issues for multilateral discussions such as services classification issues, market access barriers, regulatory and other policy issues. The discussion helped negotiators to exchange views and to inform each other of their respective interests in the negotiations.

More than 150 proposals have been submitted covering sectors such as professional services, telecommunications, tourism, financial services, distribution services, construction services, energy services, maritime transport, postal/courier services and environmental services. There were also several proposals dealing with the movement of natural persons. There were no proposals on health services. On education services, there were four proposals, all of which dealt with private education services, in particular non-academic education such as language training, vocational courses, corporate training and educational testing services.

These discussions helped negotiators to become better prepared for the more focused bilateral market access negotiations (known as the “request/offer” stage), which were due to start in the second half of 2002 as indicated in the Doha Declaration.

Requests Member governments started exchanging initial requests for specific market access commitments from July 2002. (Since the requests are exchanged bilaterally, the Secretariat has no accurate means of verifying the numbers. However, based on informal indications, approximately 30 members have sent off requests to almost all participants.)

Offers In response to these initial requests, the following 27 members (counting the EU as one member) have submitted initial offers so far (by 20 June 2003): Argentina, Australia, Bahrain, Canada, Czech Republic, EU, Fiji, Hong Kong China, Iceland, Israel, Japan, Korea, Liechtenstein, Macao China, Mexico, New Zealand, Norway, Panama, Paraguay, Poland, St Kitts and Nevis, Senegal, Slovenia, Switzerland, Chinese Taipei, US, and Uruguay. Several other members are preparing their initial offers and are expected to submit them in the near future.

The initial offers so far represent improvements relating to 642 specific commitments, 363 of which are improvements to existing commitments and the remaining 279 are new sector-specific commitments.

The bilateral bargaining will continue as members negotiate to get the best possible market access commitments from each other until the deadline of 1 January 2005.

Other elements of the GATS work programme

GATS rules Negotiations started in 1995 and are continuing on the development of possible disciplines that are not yet included in GATS: rules on emergency safeguard measures, government procurement, and subsidies. Work so far has concentrated on safeguards. These are temporary limitations on market access to deal with market disruption, and the negotiations aim to set up procedures and disciplines for governments using these. The negotiations — which have been difficult — are due to end in March 2004, but the results will come into effect at the same time as those of the current services negotiations.

Domestic regulations Work started in 1995 to establish disciplines on domestic regulations — i.e. the requirements foreign service suppliers have to meet in order to operate in a market. The focus is on qualification requirements and procedures, technical standards and licensing requirements. By December 1998, members had agreed disciplines on domestic regulations for the accountancy sector. Since then, members have been engaged in developing general disciplines for all professional services and, where necessary, additional disciplines for specific sectors. All the agreed disciplines will be integrated into GATS and become legally binding by the end of the current services negotiations.

MFN exemptions Work on this subject started in 2000. When GATS came into force in 1995, members were allowed a once-only opportunity to take an exemption from the most-favoured-nation (MFN) principle of non-discrimination between a member’s trading partners. The services trade measure for which the exemption was taken is described in a member’s MFN exemption list, indicating to which member the more favourable treatment applies, and specifying its duration. In principle, these exemptions should not last for more than 10 years. As mandated by GATS, all these exemptions are currently being reviewed, to examine whether the conditions which created the need for these exemptions in the first place still exist. In any case, they are part of the current services negotiations.

Autonomous liberalization Countries that have liberalized on their own initiative since the last multilateral negotiations want that to be taken into account when they negotiate market access in services. The negotiating guidelines and procedures that members agreed in March 2001 for the GATS negotiations also call for criteria for taking this “autonomous” or unilateral liberalization into account. These were agreed on 6 March 2003.

Special treatment for least-developed countries GATS mandates members to establish how to give special treatment to least-developed countries during the negotiations. (These “modalities” cover both the scope of the special treatment, and the methods to be used.) The least-developed countries began the discussions in March 2002 when they submitted an informal paper outlining some of the key elements which they proposed should be included in the modalities. As a result of subsequent discussions, the least-developed countries submitted a formal draft text in early May 2003. Members are continuing to discuss this draft.

Assessment of trade in services Preparatory work on this subject started in early 1999. GATS mandates that members assess trade in services, including the GATS objective of increasing the developing countries’ participation in services trade. The negotiating guidelines reiterate this, requiring the negotiations to be adjusted in response to the assessment. Members generally acknowledge that the shortage of statistical information and other methodological problems make it impossible to conduct an assessment based on full data. However, they are continuing their discussions with the assistance of several papers produced by the Secretariat.

Air transport services At present, most of the air transport sector — traffic rights and services directly related to traffic rights — is excluded from GATS’ coverage. However, GATS mandates a review by members of this situation. The purpose of the review, which started in early 2000, is to decide whether additional air transport services should be covered by GATS. The review could develop into a negotiation in its own right, resulting in an amendment of GATS itself by adding new services to its coverage and by adding specific commitments on these new services to national schedules.

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