Other Services Negotiation

(GATS, COMESA and EPA)

Mauritius National Consultation Workshop on

SADC Services NegotiationPort Louis, 16th July, 2012

Prepared By:Mrs Viola S. NanyaroSADC Secretariat

outline Introduction GATS Negotiation

o Introduction (basic GATS information)o State of play in main areas of negotiations

COMESA Services negotiations EPA Services Negotiation

o SADCo ESA (Mauritius)

General Agreement on Trade in Services

GATS Introduction (Basic info.)

Services negotiation started during Uruguay round resulting to General Agreement on Trade in Services – GATS

Basic principles of GATSo All services are covered by GATS o Most-favoured-nation treatment (MFN) applies to all

services, except the one-off temporary exemptions o National treatment (NT) applies in the areas where

commitments are made o Transparency in regulations, inquiry points o Regulations have to be objective and reasonable o International payments: normally unrestrictedo Individual countries’ commitments: negotiated and boundo Progressive liberalization: through further negotiations

GATS Introduction (Basics Info.) Ctd.

Modes of supply o Mode 1- services supplied from one country to another (e.g.

international telephone calls) = Cross-border

o Mode 2 - consumers or firms making use of a service in another country (e.g. tourism)= Consumption abroad

o Mode 3 - a foreign company setting up subsidiaries or branches to provide services in another country (e.g. foreign banks setting up operations in a country)= commercial presence

o Mode 4 - individuals travelling from their own country to supply services in another (e.g. fashion models or consultants) = presence of Natural persons

Liberalization Commitments ( Market Access & National Treatment) o Specific Sector through Schedules of commitment o list limitations such as quantitative limitations (suppliers, operations, transactions,

natural persons); legal entity requirements; and capital requirements. Article V: Economic integration (e.g. SADC, COMESA, etc.)

GATS Negotiation Area There are four major areas of services

negotiations: • market access (bilateral, plurilateral & multilateral)• domestic regulation• GATS rules on emergency safeguard measures,

government procurement and subsidies• Implementation of LDC modalities (i.e. special treatment

for least-developed countries under GATS Article IV.3)

Market Access

Negotiations under article XIX: Negotiations on Specific commitment (successive rounds)

Negotiation in each round through bilateral, plurilateral or multilateral o Phase I: started in 2000 by developing guidelines and

procedures for Negotiationso In 2001: Doha Ministerial Declaration incorporate

negotiations under Art. XIX as single undertaking of the Doha Development Agenda (DDA)

o Bilateral negotiations has been underway since 2002o Plurilateral negotiations started during Hong Kong

Ministerial meeting in 2005

Market Access cont.

Bilateral negotiationso Started in 2001 and adopted as part of DDA

single undertaking o DMC established June 2003 as deadline for

submission of offers and conclusion of negotiation January 2005

o Cancun revised the dates to May 2005 then Hon Kong to July 2006 due to stalemate in NAMA postponed to July 2007, Since then no new timelines

o April 2011, 71 initial offers and 31 revised offers had been submitted Members are considering plulateral

negotiations

GATS Neg. Cont. (Plurilateral)

Plurilateral negotiations started during Hong Kong ministerial meeting 2005 (voluntary participation, direct engagement among MS) o About 21 collective requests submitted by early 2006

(2 rounds of negotiation) from 2007 cluster discussion to allow for Capital experts to attend

o By July 2012 : 19 participating member (engage in technical talks on the legal structure)

o The approach receives a lot of challenges • Closed Article V sessions?? Non-MFN?? Negative List? Future

incorporation into GATS! Dispute settlement mechanism! • seen as ill-founded on the current stalemate of DDA

o Actual negotiations on the services liberalization to likely start in 2013

Domestic Regulation(art. VI:4)

Working party on DR established in 1999 Negotiations continues as part of regular work

o Developed discipline in the accountancy sector o On-going work on horizontal disciplines (will apply to all

measures affecting trade in services within the scope of the GATS)

o So me progress has been registered on horizontal disciplines

o Last meeting held June 2012 • Technical issues related to draft discipline (applications)• Reflected on the implication of draft discipline • Secretariat Background Note (regulatory practice and

issues in various sectors )

Negotiations on GATS rules

Covers rules on emergency safeguard measures, government procurement and subsidies

Working Party on GATS Rules was established in March 1995

focused discussions as mandated in the Hong Kong Ministerial Declaration

Not able to move to a text-based processo fundamental divergences over the objectives and

expected outcome of the negotiations Engaged in substantive technical discussions to

better understand the proposals and the options available

Implementation of LDC modalities (Art. IV.3)

a set of LDC modalities establishedo Urge members in making specific commitments, to give

special priority to providing “effective market access” in sectors and modes of supply of export interest to LDCs and develop “appropriate mechanisms” with a view to achieving full implementation

o to the extent possible, to consider making commitments providing access in Mode 4 (in the categories of M4 identified by LDCs in their requests

o In 2008, the ministerial meeting it was decided for a waiver which was adopted during MC8 • allows WTO members to deviate from their most-favoured

nation obligation of non-discrimination in order to grant preferential treatment to service suppliers (including under Mode 4) from LDC members

COMESA Services

COMESA Services Negotiations

Framework for liberalizing trade in services in COMESA adopted by Council in June 2009 o The Regulations on Trade in services (provides for

Committee on Trade in Services) o Annex on the temporary movement of persons

1st meeting of the Committee in Sept. 2009 o Services negotiating guidelines developed o Identified 7 priority sectors (business, communication,

construction, energy, financial, tourism and transport) for initiating negotiations

COMESA Services Neg. Ctd.

2nd meeting in May 2010 o Agreed on 4 priority sectors (communication, financial,

tourism and transport) as point of start for negotiationso The other 3 sectors to be included once schedules of

commitments are done in the 4 priority sectors 3rd meeting of the Committee was held in May

2011 o States initiated the process of exchange of information

based on their draft schedules of commitments o Member States agreed to finalize their schedules of

commitments and submit to the COMESA Secretariat o 9 validated schedules in the four priority sectors by July

2012 (DRC, Djibout, Egypt, Kenya, Mauritius, Swaziland and Rwanda)

4th Meeting in July, 2012

COMESA services Neg. Ctd.

Complimentary process o Sector meetings for consideration of the

specificities of each sector/sub-sector • started with insurance sub-sector in Nov. 2011• Next sector????

o Services statistics collection in the 4 sectors • pilot project covering Kenya, Mauritius, Uganda and

Zambia• Roll out in the other Member States and sectors???

EPA Negotiations

SADC EPA Services Negotiation

Four SADC EPA Participating Countries (SEPC) o Botswana, Lesotho, Swaziland and Mozambique (Angola,

Namibia + South Africa as observers)

Negotiations started in May/June 2008 in Brussels o EC submitted a Draft Text on Services for consideration by

SADC EPA Groupo Clarification on the text was made in Sept. 2011

SADC EPA countries developed a text in reaction to EU text o considered during a Joint technical meeting Nov. 2011

SADC EPA Services Negotiation Ctd.

SADC TWG on services and Investment in May 2012 o Considered points of divergence from the JTWG

For convergence of the two text, agreed as followo SADC Texts:

• improve some articles (Definitions, Right to Regulate, Transparency, Regional Integration, Other Agreements, Subsidies, Business Visitors, and Intra-Corporate Transfers)

• Rationalizes provisions on Domestic Regulations and Economic integration through technical edits and deleting duplicative and unnecessary language

• Modality for MR to be negotiated in tandem with liberalisation commitments and

• Disciplines on DR to await for finalisation under WTO on the same and the determine whether there is need to supplement the same in the sectors of interest to SEPC

SADC EPA Services ctd. From EU’s text the agreement was:

o Adopt EC’s position on : • Emergency Safeguards Measures; Modification of Schedules; Electronic Commerce;

and Administration of Measures of General Application

o It EU’s proposal to exclude subsidies from the scope , and MFN obligation is unacceptable • Subsides and Mode 4

o Issues to be addressed in drafting the comprehensive agreement • preamble, MFN, RI and Confidential information

o Provisions to be finalised towards the end of negotiation in the final text including • scheduling commitments; Asymmetric Development; and Timeframes for categories

of natural persons)

o Seek further clarification from EU on• Security Exceptions; Progressive and Asymmetric liberalization; and the definition of

Direct Taxes in the EU text

EPA Negotiations

EPA Negotiation: ESA .• Services negotiations (a chapter under

Comprehensive EPA) • Substantive progress made in developing the

text • Principle: emphasize on the need to have coherence between

regional TIS framework and liberalization with the EC party) o Although provisions under RI provides that EPA shall guide

ESA’s regional services integration In developing the text a number of agreement have

bee reached on several articles dealing with o Principles, Market access, other agreements and o Sectoral tourism and travel, Postal, maritime and computer

services (expect development aspects)o Capital movement

ESA Services Cont. No agreement articles on

o MFN, MFN exceptions and review, anti-competitive practices and safeguard measures

o New financial services Both parties to consult on these

Consultation by EU on o new positions or proposals, (GATS based proposal for DR

and more information on MR) Consultation by ESA on

o new proposals by EU on telecommunications and e-commerce

o Transparency and

EPA Negotiations: ESA Mauritius

o Participate in EPA negotiation under ESA group (Madagascar, Seychelles, and Zimbabwe)

o Signed the interim agreement in 2009 entry into force May 2012

o Currently negotiating Comprehensive EPA which including services chapter

o Prepared a draft offer already in 10 sectors • Recreational, Sporting and Cultural services• Excluded sub-sectors include: postal and courier, primary

and secondary educational services; Transport (road, rail, pipeline and internal water ways)

Updates from Division of International Trade

WTO Negotiation o A signatory to Telecommunication

reference paper?o Revised offers and new offer (which

sectors)?o Plurilateral discussions?

COMESAo Progress by the Trade in Services

Committee?o Progress on the EPA consultations?

Q &A