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Services Negotiations

The Current State of Play:

       The demanders in Services (Australia, Canada, EC, Japan, Korea, New Zealand, Norway, Chinese Taipei, Switzerland and the United States) requested the Chair of the Council for Trade in Services (Special Session) to start a consultation process on the elements needed to conclude the services negotiations in the context of the DDA single undertaking, which could be reflected in a possible multilateral text for adoption by Members. The demanders also say that they would need a 'Services Signalling Meeting' at the Ministerial level to be chaired by the WTO Director General, in April 2008. They declare that 'Services negotiations' are of paramount importance to them and they need a sufficient understanding at Ministerial level of what their major trading partners final services offers content will be to agree upon the Agriculture and NAMA modalities.

      The Chair has consequently been holding consultations since November 2007. The developing countries insist that the Hong Kong Ministerial Decision, Annex-C was a very comprehensive document and no new multilateral text was required. They however agreed to negotiate such a text provided it recognized all the GATS flexibilities and adhered to Annex-C. Four groups of Members submitted room documents listing the elements they felt should form a part of such a text. The developed countries see 'services negotiations' as the third pillar of market access in the Doha round. Developing countries, SVEs, ACP say that 'services negotiations' are not market access alone; they are 'Rules and Domestic Regulations' negotiations too. Bolivia, Venezuela and Cuba say that they felt that there was no need for a services text and the Annex-C was a multilateral document that was sufficient. They were unwilling to add to it.

      The developed countries seek commitments as per current regimes in terms of ambition while recognizing all flexibilities in GATS and other documents like negotiating guidelines. However they stress that such flexibilities be only resorted to where genuine sensitivity is involved in making commitments. They say that many Members are comfortable in recording commitments in regional arrangements but are reluctant to do so in their WTO offers in the same areas. They want a 'comparable level' of ambition in Agriculture, NAMA and Services. They wish to annex the '22' plurilateral requests to the proposed text. They also propose to annex a summary of the current state of play in the market access negotiations. The developing countries largely are against both annexes and mentioning 'comparability' in ambition as well as mentioning endeavours to make offers based upon the current state of liberalization. From the 10 of March 2008 onwards bilateral meetings will be held in Geneva.

      Chile, Hong Kong China, Singapore, Peru in their contribution did not stress on comparability etc. They tried to have a workable text that would be largely acceptable. They stressed that the objective was to get an ambitious outcome in services. As such the means (the text) should not eclipse the objective. Brazil, India, China, Argentina, Pakistan and South Africa came up with a text that 'made Annex-C operational' while subscribing to all existing GATS elements like positive listing and maintaining other developing country flexibilities. The SVEs reiterated their demand for keeping Annex-C as the basis. The Chair has come up with a report (attached) and negotiations are being held to convert its paragraphs 4 and 5 into a 'text'.

Brief Back ground:

      In services negotiations have been going on in the areas of Market Access and Rules. For getting meaningful commitments for businesses to access trading partners markets Members engaged in the bilateral request offer process and tabled their initial and in many cases revised offers on the basis of trading partner's requests during 2003-06. Pakistan tabled its initial offer on 24 May 2005.

      Earlier the bilateral request offer process found to be slow and not showing tangible results was supplemented with the plurilateral request offer method where Members sharing common interests in certain services sectors sent joint requests to another group of Members in whose markets they were interested. Two such rounds were held in 2006 which were generally thought to have been helpful in involving Capital officials in the process and in apprising requested and requesting members of each others positions. The break in negotiations in July 2006 led to the deadline of 31 July 2006 agreed upon in Hong Kong for tabling revised or the re-revised offers passing unfulfilled.

The soft resumption of negotiations in November 2006 led to some informal exchanges between Members which culminated in the acknowledgement that services negotiations would only take off after some tangible breakthrough is made in Agriculture and NAMA negotiations. Members encouraged each other to continue with preparing revised offers in Capitals. The full fledged resumption of negotiations began with the cluster of services meetings held in end of January-February 2007. Officials from the financial sector representing the Ministry of Finance and State Bank of Pakistan participated in the bilateral meetings held with trading partners. In April 2007 a round of plurilateral meetings was held in which delegations exchanged views on the progress made in domestic processes and their inability to meet certain requests and the reasons thereof. Since the Hong Kong Ministerial four rounds of plurilateral and six rounds of bilateral meetings have been held.

In rules the only area where progress has been made is Article 6.4, negotiations for disciplines in domestic regulations. Members seek disciplines which ensure transparency of regulations and a balance between regulatory autonomy and needlessly excessive regulations that may nullify the market access recorded in Members schedules. Members feel that, qualification requirements and procedures, licensing requirements and procedures and international standards should not be used as disguised protection. See rules section for details