Sabrina VarmaSabrina VarmaProject on Trade in ServicesProject on Trade in Services

Trade for Development ProgrammeTrade for Development ProgrammeSouth CentreSouth Centre

10-11 April 200610-11 April 2006

Commonwealth Secretariat/TRALAC African Regional Workshop, Cape Town, South Commonwealth Secretariat/TRALAC African Regional Workshop, Cape Town, South AfricaAfrica

OVERVIEW OF WTO SERVICES OVERVIEW OF WTO SERVICES NEGOTIATIONS POST NEGOTIATIONS POST

HONG KONG: Implications for HONG KONG: Implications for African CountriesAfrican Countries

OUTLINE of PRESENTATION Starting point: Cairo Development Benchmarks and Livingston Declaration for African Starting point: Cairo Development Benchmarks and Livingston Declaration for African

Group/LDCs/ACP: preserving existing architecture; assessment; review of progress; progress Group/LDCs/ACP: preserving existing architecture; assessment; review of progress; progress in rules especially ESM; Article IV and LDC Modalities implementation; affirmation of right in rules especially ESM; Article IV and LDC Modalities implementation; affirmation of right to regulate to regulate

G90 position going into HK and at HKG90 position going into HK and at HK Ministerial Declaration (paragraphs 25-27)Ministerial Declaration (paragraphs 25-27) Annex C : (paragraphs 3, 6, 7, 9, 12)Annex C : (paragraphs 3, 6, 7, 9, 12)• Modal, MFN exemptions and scheduling objectives (paragraph 1)Modal, MFN exemptions and scheduling objectives (paragraph 1)• Rules negotiations (paragraph 4)Rules negotiations (paragraph 4)• Domestic regulation negotiations (paragraph 5)Domestic regulation negotiations (paragraph 5)• Timelines (paragraph 11)Timelines (paragraph 11)• Trade-related concerns of small economies (paragraph 8)Trade-related concerns of small economies (paragraph 8)• Technical assistance (paragraph 10)Technical assistance (paragraph 10) Format: Text, Format: Text, Key points, Development and practical implications, Post HK State of Key points, Development and practical implications, Post HK State of

Play (where relevant)Play (where relevant) What is missing?What is missing? Concluding RemarksConcluding Remarks

General CommentsGeneral Comments Essentially CTS SS Chair’s draft elements of the Essentially CTS SS Chair’s draft elements of the

ministerial declaration laid out in Geneva in the lead ministerial declaration laid out in Geneva in the lead up to HK remained intact up to HK remained intact

G90 proposal contributed to tempering HK outcomesG90 proposal contributed to tempering HK outcomes Relationship between contents of Ministerial Relationship between contents of Ministerial

Declaration and Annex C ambigiousDeclaration and Annex C ambigious From Doha mandate to HK outcomes shows a shift in From Doha mandate to HK outcomes shows a shift in

emphasis not necessarily in the interest of emphasis not necessarily in the interest of developmentdevelopment

Developing countries are being asked to pay in Developing countries are being asked to pay in NAMA and services for the pressure being felt in NAMA and services for the pressure being felt in agriculture by particularly the EC and USagriculture by particularly the EC and US

HK Ministerial Declaration: Paragraph 25 (I)HK Ministerial Declaration: Paragraph 25 (I) ““The negotiations on trade in services shall proceed to their The negotiations on trade in services shall proceed to their

conclusion with a view to promoting the economic growth of all conclusion with a view to promoting the economic growth of all trading partners and the development of developing and least-trading partners and the development of developing and least-developed countries, and with due respect for the right of developed countries, and with due respect for the right of Members to regulate. In this regard, we recall and reaffirm the Members to regulate. In this regard, we recall and reaffirm the objectives and principles stipulated in the GATS, the Doha objectives and principles stipulated in the GATS, the Doha Ministerial Declaration, the Guidelines and Procedures for the Ministerial Declaration, the Guidelines and Procedures for the Negotiations on Trade in Services adopted by the Special Session Negotiations on Trade in Services adopted by the Special Session of the Council for Trade in Services on 28 March 2001 and the of the Council for Trade in Services on 28 March 2001 and the Modalities for the Special Treatment for Least-Developed Country Modalities for the Special Treatment for Least-Developed Country Members in the Negotiations on Trade in Services adopted on 3 Members in the Negotiations on Trade in Services adopted on 3 September 2003, as well as Annex C of the Decision adopted by September 2003, as well as Annex C of the Decision adopted by the General Council on 1 August 2004.”the General Council on 1 August 2004.”

HK Ministerial Declaration: Paragraph 25 (II)HK Ministerial Declaration: Paragraph 25 (II) Key points:Key points:

Provides context of negotiations by recalling the objectives of the services Provides context of negotiations by recalling the objectives of the services negotiationsnegotiations

Makes reference to the GATS related principles set out in the Doha Makes reference to the GATS related principles set out in the Doha Ministerial Declaration, Negotiating Guidelines, LDC Modalities and July Ministerial Declaration, Negotiating Guidelines, LDC Modalities and July FrameworkFramework

Development implications:Development implications: Important paragraph for developing countries as a way to ensure that Important paragraph for developing countries as a way to ensure that

negotiations remain accountable to the existing GATS architecture which negotiations remain accountable to the existing GATS architecture which recognises the importance of national policy objectives, individual country recognises the importance of national policy objectives, individual country situations etc situations etc

Practical implications:Practical implications: Provides principles for which negotiations and their outcomes must be Provides principles for which negotiations and their outcomes must be

consistentconsistent Should be used to pursue existing development orientated mandates Should be used to pursue existing development orientated mandates

including assessment, review of progress of negotiations, implementation of including assessment, review of progress of negotiations, implementation of Article IVArticle IV

HK Ministerial Declaration: Paragraph 26HK Ministerial Declaration: Paragraph 26 Key points:Key points:

Recalls the flexibility accorded to developing countries in accordance with Article XIX of the Recalls the flexibility accorded to developing countries in accordance with Article XIX of the GATS. GATS.

Draws on parts of paragraphs 1 and 2 of the Negotiating Guidelines by referring to achieving Draws on parts of paragraphs 1 and 2 of the Negotiating Guidelines by referring to achieving progressively higher levels of liberalisation whilst recognizing appropriate flexibility for individual progressively higher levels of liberalisation whilst recognizing appropriate flexibility for individual developing countries. developing countries.

Reference to negotiations taking into account the size of economies in their own right is taken from Reference to negotiations taking into account the size of economies in their own right is taken from paragraph 3 of the Negotiating Guidelinesparagraph 3 of the Negotiating Guidelines

Special situation of LDCs is recognised consistently with GATS Article IV:3 and paragraph 4 of the Special situation of LDCs is recognised consistently with GATS Article IV:3 and paragraph 4 of the LDC Modalities. LDC Modalities.

LDC are not ‘expected’LDC are not ‘expected’ to undertake new commitments – this is a reformulation of paragraph 4 of to undertake new commitments – this is a reformulation of paragraph 4 of the LDC Modalitiesthe LDC Modalities

Development implication:Development implication: Important provision for developing countries given it recognises the existing flexibilities and should Important provision for developing countries given it recognises the existing flexibilities and should

continue to be used in the plurilateral and bilateral approachcontinue to be used in the plurilateral and bilateral approach Practical implications:Practical implications:

Up to developing countries to ensure this remains the cornerstone of negotiations Up to developing countries to ensure this remains the cornerstone of negotiations Unclear how the reference to size of economies may impact on negotiations in practiseUnclear how the reference to size of economies may impact on negotiations in practise Paragraph 4 of the LDC Modalities refers to Members ‘exercising restraint in seeking commitments Paragraph 4 of the LDC Modalities refers to Members ‘exercising restraint in seeking commitments

from LDCs’ – this implies that LDCs are not expected to undertake commitments – this is made from LDCs’ – this implies that LDCs are not expected to undertake commitments – this is made explicit in the Ministerial Declaration – this does not stop Members from requesting LDCs to explicit in the Ministerial Declaration – this does not stop Members from requesting LDCs to undertake new commitments and LDCs undertake new commitments and LDCs

HK Ministerial Declaration: Paragraph 27HK Ministerial Declaration: Paragraph 27 ““We are determined to intensify the negotiations in accordance with the above principles We are determined to intensify the negotiations in accordance with the above principles

and the Objectives, Approaches and Timelines set out in Annex C to this document with and the Objectives, Approaches and Timelines set out in Annex C to this document with a view to expanding the sectoral and modal coverage of commitments and improving a view to expanding the sectoral and modal coverage of commitments and improving their quality. In this regard, particular attention will be given to sectors and modes of their quality. In this regard, particular attention will be given to sectors and modes of supply of export interest to developing countries.”supply of export interest to developing countries.”

Key points:Key points: Refers to ‘intensifying negotiations in accordance with principles in paragraph 22-Refers to ‘intensifying negotiations in accordance with principles in paragraph 22-

26 and Annex C26 and Annex C Objective is to expand sectoral and modal coverage’ and quality of commitmentsObjective is to expand sectoral and modal coverage’ and quality of commitments ““Particular attention to sectors and modes of supply of export interest to developing Particular attention to sectors and modes of supply of export interest to developing

countries” is recognised countries” is recognised

Practical implications:Practical implications: Gives ambition to the negotiations with use of terms ‘intensify’, ‘expand’ and Gives ambition to the negotiations with use of terms ‘intensify’, ‘expand’ and

‘improve’‘improve’ Developing countries need to ensure this remains consistent with the principles in Developing countries need to ensure this remains consistent with the principles in

paragraphs 25-26paragraphs 25-26 And consider benchmarks for ensuring sectors and modes of export interest are And consider benchmarks for ensuring sectors and modes of export interest are

reflectedreflected

ANNEX C: Paragraph 3 (I)ANNEX C: Paragraph 3 (I) ““Members shall pursue full and effective implementation of the Modalities for the Special Treatment for Least Developed Members shall pursue full and effective implementation of the Modalities for the Special Treatment for Least Developed

Country Members in the Negotiations on Trade in Services (LDC Modalities) adopted by the Special Session of the Council Country Members in the Negotiations on Trade in Services (LDC Modalities) adopted by the Special Session of the Council for Trade in Services on 3 September 2003, with a view to the beneficial and meaningful integration of LDCs into the for Trade in Services on 3 September 2003, with a view to the beneficial and meaningful integration of LDCs into the multilateral trading system.”multilateral trading system.”

Key points:Key points: Presented under ‘Objective’ pillarPresented under ‘Objective’ pillar Commits Members to implement LDC Modalities with a view to their integration in the multilateral trading systemCommits Members to implement LDC Modalities with a view to their integration in the multilateral trading system

Development implications:Development implications: This is the main ‘development’ orientated objective in Annex C and should be taken seriously and to its full This is the main ‘development’ orientated objective in Annex C and should be taken seriously and to its full

advantageadvantage If implemented, would enable LDCs to address various important development issues such as strengthening supply If implemented, would enable LDCs to address various important development issues such as strengthening supply

side capacity, access to distribution channels, targeted market access, training and technology transfer.side capacity, access to distribution channels, targeted market access, training and technology transfer. Practical implications:Practical implications:

Provides a commitment to fully implement the LDC Modalities and therefore broadens ownership at political levelProvides a commitment to fully implement the LDC Modalities and therefore broadens ownership at political level African non LDC countries should consider ways in which to support LDCs in implementing the LDC ModalitiesAfrican non LDC countries should consider ways in which to support LDCs in implementing the LDC Modalities

Other:Other: The operational aspect of this paragraph is set out under paragraph 9, under the ‘Approaches’ pillar of Annex C, The operational aspect of this paragraph is set out under paragraph 9, under the ‘Approaches’ pillar of Annex C,

which is discussed below.which is discussed below. Should also be read with Para 47 in the Ministerial Declaration which reinforces implementation of the LDC Should also be read with Para 47 in the Ministerial Declaration which reinforces implementation of the LDC

Modalities, giving priority to sectors and modes of interest to LDCs, especially mode 4. Modalities, giving priority to sectors and modes of interest to LDCs, especially mode 4.

LDC Modalities Post HK State of PlayLDC Modalities Post HK State of Play

On CTS agenda since 2003On CTS agenda since 2003 Despite active efforts of LDCs in 2005, not much progress had taken place Despite active efforts of LDCs in 2005, not much progress had taken place

to implement the LDC Modalities: in June submitted a broad paper on a to implement the LDC Modalities: in June submitted a broad paper on a possible way forward and September cluster submitted a note on special possible way forward and September cluster submitted a note on special priority and a question-answer document. EC submitted a response to the priority and a question-answer document. EC submitted a response to the questions.questions.

Since Hong Kong, LDCs recently submitted a proposal on a legal Since Hong Kong, LDCs recently submitted a proposal on a legal mechanism for according special priority to LDCs through an mechanism for according special priority to LDCs through an Understanding (to have similar effect as enabling clause under GATT Understanding (to have similar effect as enabling clause under GATT which currently does not exist for GATS)which currently does not exist for GATS)

LDCs are also in preparation to revise their joint request on mode 4 which LDCs are also in preparation to revise their joint request on mode 4 which was initially submitted in 2005was initially submitted in 2005

LDCs need to consider engaging in rules and domestic regulation given LDCs need to consider engaging in rules and domestic regulation given their implicationstheir implications

ANNEX C: Paragraph 9 (I)ANNEX C: Paragraph 9 (I)

““Members in the course of negotiations, shall develop methods for the full and effective Members in the course of negotiations, shall develop methods for the full and effective implementation of the LDC Modalities, including expeditiously:implementation of the LDC Modalities, including expeditiously:- Developing appropriate mechanisms for according special priority including to sectors and modes - Developing appropriate mechanisms for according special priority including to sectors and modes of supply of interest to LDCs in accordance with Article IV:3 of the GATS and paragraph 7 of the of supply of interest to LDCs in accordance with Article IV:3 of the GATS and paragraph 7 of the LDC modalities.LDC modalities.- Undertaking commitments, to the extent possible, in such sectors and modes of supply of - Undertaking commitments, to the extent possible, in such sectors and modes of supply of identified, or to be identified, by LDCs that represent priority in their development policies in identified, or to be identified, by LDCs that represent priority in their development policies in accordance with paragraphs 6 and 9 of the LDC Modalities.accordance with paragraphs 6 and 9 of the LDC Modalities.- Assisting LDCs to enable them to identify sectors and modes of supply that represent development - Assisting LDCs to enable them to identify sectors and modes of supply that represent development priorities.priorities.- Providing targeted and effective technical assistance and capacity building for LDCs in accordance - Providing targeted and effective technical assistance and capacity building for LDCs in accordance with the LDC Modalities, particularly paragraphs 8 and 12.with the LDC Modalities, particularly paragraphs 8 and 12.- Developing a reporting mechanism to facilitate the review requirement in paragraph 13 of the LDC - Developing a reporting mechanism to facilitate the review requirement in paragraph 13 of the LDC Modalities.”Modalities.”

ANNEX C: Paragraph 9 (II)ANNEX C: Paragraph 9 (II) Key points:Key points:

Under ‘Approaches’ pillar – therefore operational aspectUnder ‘Approaches’ pillar – therefore operational aspect Refers to paragraphs 6, 7, 8, 9, 12, 13 for implementationRefers to paragraphs 6, 7, 8, 9, 12, 13 for implementation Calls on Members to assist LDCs in identifying their sectors and Calls on Members to assist LDCs in identifying their sectors and

modes of export interest modes of export interest Members to undertake commitments ‘to the extent possible’ (para 6)Members to undertake commitments ‘to the extent possible’ (para 6) Reporting mechanism for facilitating reporting requirementReporting mechanism for facilitating reporting requirement

Practical implications:Practical implications: Reiterates what is already in the LDC ModalitiesReiterates what is already in the LDC Modalities Does not provide actual way forward, despite LDC proposalsDoes not provide actual way forward, despite LDC proposals LDCs should focus on specific objectives and related strategy (ie. enabling LDCs should focus on specific objectives and related strategy (ie. enabling

clause) clause) Consider how to make technical assistance related to LDC Modality Consider how to make technical assistance related to LDC Modality

implementationimplementation

ANNEX C: Paragraph 6ANNEX C: Paragraph 6 ““Pursuant to the principles and objectives above, we agree to intensify and Pursuant to the principles and objectives above, we agree to intensify and

expedite the request-offer negotiations, which shall remain the main expedite the request-offer negotiations, which shall remain the main method of negotiation, with a view to securing substantial commitments.”method of negotiation, with a view to securing substantial commitments.”

Key Points:Key Points: Under ‘Approaches’ pillarUnder ‘Approaches’ pillar ‘‘Intensify and expedite’ request-offer negotiations Intensify and expedite’ request-offer negotiations Justification is ‘pursuant to principles and objectives’Justification is ‘pursuant to principles and objectives’ Objective to secure ‘substantial commitments’Objective to secure ‘substantial commitments’ Request-offer remains main method of negotiationRequest-offer remains main method of negotiation

Practical implication:Practical implication: Provides the stage for a higher level of ambition in market access negotiationsProvides the stage for a higher level of ambition in market access negotiations

ANNEX C: Paragraph 7 (I)ANNEX C: Paragraph 7 (I) ““In addition to bilateral negotiations, we agree that the request-offer negotiations should also be pursued In addition to bilateral negotiations, we agree that the request-offer negotiations should also be pursued

on a plurilateral basis in accordance with the principles of the GATS and the Guidelines and Procedures on a plurilateral basis in accordance with the principles of the GATS and the Guidelines and Procedures for the Negotiations on Trade in Services. The results of such negotiations shall be extended on an MFN for the Negotiations on Trade in Services. The results of such negotiations shall be extended on an MFN basis. These negotiations would be organized in the following manner:basis. These negotiations would be organized in the following manner:(a) Any Member or group of Members may present requests or collective requests to other Members in (a) Any Member or group of Members may present requests or collective requests to other Members in any specific sector or mode of supply, identifying their objectives for the negotiations in that sector or any specific sector or mode of supply, identifying their objectives for the negotiations in that sector or mode of supply.mode of supply.(b) Members to whom such requests have been made shall consider such requests in accordance with (b) Members to whom such requests have been made shall consider such requests in accordance with paragraphs 2 and 4 of Article XIX of the GATS and paragraph 11 of the Guidelines and Procedures for paragraphs 2 and 4 of Article XIX of the GATS and paragraph 11 of the Guidelines and Procedures for the Negotiations on Trade in Services.the Negotiations on Trade in Services.(c ) Plurilateral negotiations should be organised with a view to facilitating the participation of all (c ) Plurilateral negotiations should be organised with a view to facilitating the participation of all Members, taking into account the limited capacity of developing countries and smaller delegations to Members, taking into account the limited capacity of developing countries and smaller delegations to participate in such negotiations.”participate in such negotiations.”

Key points:Key points: Plurilateral approach would be in addition to bilateral request-offer negotiations Plurilateral approach would be in addition to bilateral request-offer negotiations In accordance with GATS and Negotiating GuidelinesIn accordance with GATS and Negotiating Guidelines Results on MFN basisResults on MFN basis Groups of Members can submit collective requests – identifying objectives for that sector or modeGroups of Members can submit collective requests – identifying objectives for that sector or mode Receiving Members ‘shall consider’ the request in accordance with paragraphs 2 and 4 of Article Receiving Members ‘shall consider’ the request in accordance with paragraphs 2 and 4 of Article

XIX and 11 of the Negotiating GuidelinesXIX and 11 of the Negotiating Guidelines Participation of Members should be facilitated given the limited capacity of developing countries Participation of Members should be facilitated given the limited capacity of developing countries

and smaller delegationsand smaller delegations

ANNEX C: Paragraph 7 (II)ANNEX C: Paragraph 7 (II) Development implications:Development implications:

The plurilateral requests raise important systemic issues related to:The plurilateral requests raise important systemic issues related to:- classification- classification- domestic regulation particularly harmonisation in interests of foreign service suppliers- domestic regulation particularly harmonisation in interests of foreign service suppliers- universal service obligations and meeting public policy objectives- universal service obligations and meeting public policy objectives- flexibility provisions are yet to be tested in this context - flexibility provisions are yet to be tested in this context - it may lead to a benchmark of commitments for all Members- it may lead to a benchmark of commitments for all Members- it does not address Article IV objectives or LDC modalities in terms of providing market access in - it does not address Article IV objectives or LDC modalities in terms of providing market access in

sectors and modes of interest to developing countries and LDCssectors and modes of interest to developing countries and LDCs

Practical implications:Practical implications: Commitments being extended on an MFN basis presents an anomaly if it is a plurilateral approachCommitments being extended on an MFN basis presents an anomaly if it is a plurilateral approach Unclear how it relates to bilateral request-offer negotiations because plurilateral approach will work to create certain Unclear how it relates to bilateral request-offer negotiations because plurilateral approach will work to create certain

expectationsexpectations Entering into plurilateral requests is not mandatory given Members ‘shall consider such requests’– therefore a Member can Entering into plurilateral requests is not mandatory given Members ‘shall consider such requests’– therefore a Member can

consider the request (there is an onus to do so) but can decline based on Article XIX:2 whereby it may not be consistent with consider the request (there is an onus to do so) but can decline based on Article XIX:2 whereby it may not be consistent with the Member’s national policy objectives or development situation, and in any case developing countries can liberalise fewer the Member’s national policy objectives or development situation, and in any case developing countries can liberalise fewer sectors and transactionssectors and transactions

Article XIX:2 will therefore be a critical buffer for developing countries in responding to plurilateral requests which are likely Article XIX:2 will therefore be a critical buffer for developing countries in responding to plurilateral requests which are likely to be ambitious. Developing countries should also refer to paragraphs 2 and 12 of the Negotiating Guidelinesto be ambitious. Developing countries should also refer to paragraphs 2 and 12 of the Negotiating Guidelines

Defensively, the reference to Article XIX:4 and paragraph 11 of the Negotiating Guidelines could be problematic given they Defensively, the reference to Article XIX:4 and paragraph 11 of the Negotiating Guidelines could be problematic given they refer to liberalisation being advanced and directed towards increasing the general level of specific commitments – which may refer to liberalisation being advanced and directed towards increasing the general level of specific commitments – which may place pressure on developing countries place pressure on developing countries

Will place constraints on developing countries involved in plurilateral approach due to need for capital based experts to be Will place constraints on developing countries involved in plurilateral approach due to need for capital based experts to be present present

ANNEX C: Paragraph 7 Post HK State of Play (III)ANNEX C: Paragraph 7 Post HK State of Play (III) 71 initial offers and 31 revised offers as of April 2006: overall not much progress in areas of 71 initial offers and 31 revised offers as of April 2006: overall not much progress in areas of

interest to developing countriesinterest to developing countries End March and early April cluster devoted to plurilateral meetings (only WPDR and formal CTS/SS retained End March and early April cluster devoted to plurilateral meetings (only WPDR and formal CTS/SS retained

in clusters whilst CTS/Regular session and other subsidiary bodies will meet before or after cluster so that in clusters whilst CTS/Regular session and other subsidiary bodies will meet before or after cluster so that more time is allowed for plurilaterals/bilaterals more time is allowed for plurilaterals/bilaterals

So far, meetings have not resulted in any outcome – have been of clarification nature where information is So far, meetings have not resulted in any outcome – have been of clarification nature where information is exchanged on existing commitments and/or relevant domestic regulations, questions askedexchanged on existing commitments and/or relevant domestic regulations, questions asked

To date there are 18 plurilateral requests on:To date there are 18 plurilateral requests on:- telecommunications- telecommunications- financial services- financial services- mode 3- mode 3- MFN exemptions (audiovisual)- MFN exemptions (audiovisual)- construction services- construction services- computer related services- computer related services- legal services- legal services- energy services- energy services- environmental services- environmental services- architectural, engineering and integrated engineering services- architectural, engineering and integrated engineering services- maritime services- maritime services- postal and courier services (including express delivery) - postal and courier services (including express delivery) - audiovisual- audiovisual- logistics- logistics- cross border supply- cross border supply- air transport services- air transport services- private education- private education- distribution- distribution

ANNEX C: Paragraph 7 Post HK State of Play (IV)ANNEX C: Paragraph 7 Post HK State of Play (IV) Developed countries: it tends to be the same core group of main Developed countries: it tends to be the same core group of main

demandeurs in all plurilateral requests – these countries are also deemed demandeurs in all plurilateral requests – these countries are also deemed recipients of their requests – therefore they have to meet the commitments recipients of their requests – therefore they have to meet the commitments they are asking of others which may be sensitive in many cases (eg. in they are asking of others which may be sensitive in many cases (eg. in mode 4 element of requests, US is only deemed a recipient of the requests) mode 4 element of requests, US is only deemed a recipient of the requests)

Developing countries: mainly bigger developing countries have been Developing countries: mainly bigger developing countries have been targeted although there are exceptions (no LDCs). There are some targeted although there are exceptions (no LDCs). There are some developing countries who are also demandeurs with developed countriesdeveloping countries who are also demandeurs with developed countries

Developing countries have submitted 2 plurilateral requests in services Developing countries have submitted 2 plurilateral requests in services related to agriculture and mode 4related to agriculture and mode 4

It is not clear how process will continueIt is not clear how process will continue It is likely that further technical discussion and negotiations will take place It is likely that further technical discussion and negotiations will take place

at bilateral levelat bilateral level It is possible that there will be focus on a short list of sectorsIt is possible that there will be focus on a short list of sectors

ANNEX C: Paragraph 7 Post HK State of Play (V)ANNEX C: Paragraph 7 Post HK State of Play (V)

- Plurilateral requests tend to contain elements of the modal objectives Plurilateral requests tend to contain elements of the modal objectives adopted in Hong Kong under para 1 of Annex Cadopted in Hong Kong under para 1 of Annex C

- Focus on mode 3 market access through removal or reduction of :Focus on mode 3 market access through removal or reduction of :- type of legal entity- type of legal entity- foreign equity participation- foreign equity participation- nationality/residency requirements- nationality/residency requirements- number of foreign service suppliers and firms- number of foreign service suppliers and firms

- Removal of ENTsRemoval of ENTs- Mode 4 requests in possible areas of interest remain unambitious - still Mode 4 requests in possible areas of interest remain unambitious - still

based on professional categories, limited to horizontal based on professional categories, limited to horizontal commitments/limitations commitments/limitations

- In some cases specific flexibility is provided (eg. legal services)In some cases specific flexibility is provided (eg. legal services)- Reference papers, model schedules and particular classifications are Reference papers, model schedules and particular classifications are

examples of tools used to seek liberalisation through the plurilateral examples of tools used to seek liberalisation through the plurilateral requests requests

ANNEX C: Paragraph 12ANNEX C: Paragraph 12 ““The Special Session of the Council for Trade in Services shall review The Special Session of the Council for Trade in Services shall review

progress in the negotiations and monitor the implementation of the Objectives, progress in the negotiations and monitor the implementation of the Objectives, Approaches and Timelines set out in this Annex.”Approaches and Timelines set out in this Annex.”

Development implications:Development implications: Limited review of progress given it is focused on objectives and approaches and Limited review of progress given it is focused on objectives and approaches and

timelines set out in annextimelines set out in annex No mention of having to take into account principles or having to meet existing No mention of having to take into account principles or having to meet existing

GATS objectivesGATS objectives Practical implications:Practical implications:

No reference to existing mandate for review of progress of negotiations under No reference to existing mandate for review of progress of negotiations under paragraph 15 of the Negotiating Guidelinesparagraph 15 of the Negotiating Guidelines

Push for completion of assessmentPush for completion of assessment Ensure mandated review of progress of negotiations are encompassed in this Ensure mandated review of progress of negotiations are encompassed in this

process given it relates to implementation of the development orientated GATS process given it relates to implementation of the development orientated GATS provisionsprovisions

Modal, MFN exemptions and Scheduling Objectives (paragraph 1) IModal, MFN exemptions and Scheduling Objectives (paragraph 1) I ““In order to achieve a progressively higher level of liberalisation of trade in services, with appropriate In order to achieve a progressively higher level of liberalisation of trade in services, with appropriate

flexibility for individual developing country Members, we agree that Members should be guided, to the flexibility for individual developing country Members, we agree that Members should be guided, to the maximum extent possible, by the following objectives in making their new and improved commitments:”maximum extent possible, by the following objectives in making their new and improved commitments:”

Key points Key points (of chapeau): (of chapeau): Calls on Members to be Calls on Members to be guidedguided to the to the maximum extent possible maximum extent possible by modal, MFN exemptions and by modal, MFN exemptions and

scheduling objectives (each objective discussed in detail below) – what does this mean?scheduling objectives (each objective discussed in detail below) – what does this mean? Objectives are guidelines towards a course of action and Members are to follow as much as possibleObjectives are guidelines towards a course of action and Members are to follow as much as possible

Development implicationsDevelopment implications: Do these guidelines promote development?: Do these guidelines promote development? too prescriptive too prescriptive infringes on Article XIX: 2 flexibilities in GATS infringes on Article XIX: 2 flexibilities in GATS focused on liberalisation without development considerationfocused on liberalisation without development consideration Members have their own development objectives that do not match paragraph 1 objectivesMembers have their own development objectives that do not match paragraph 1 objectives Members should be able to determine their own objectives for commitmentsMembers should be able to determine their own objectives for commitments

Example: ensuring GATS commitments strengthens domestic service suppliers and consumersExample: ensuring GATS commitments strengthens domestic service suppliers and consumers Practical implicationsPractical implications::

Do Members have to follow these guidelines? Do Members have to follow these guidelines? Best endeavour language and therefore countries are not bound to follow themBest endeavour language and therefore countries are not bound to follow them However, pressure may exist to follow these guidelines, and in response, recall paragraph 25 of However, pressure may exist to follow these guidelines, and in response, recall paragraph 25 of

the Declaration which reaffirms GATS objectives and principles – so, if objectives goes against the Declaration which reaffirms GATS objectives and principles – so, if objectives goes against these, then do not be guided by these objectivesthese, then do not be guided by these objectives

Modal, MFN exemptions and Scheduling Objectives (paragraph 1) IIModal, MFN exemptions and Scheduling Objectives (paragraph 1) II

Mode 1 objectivesMode 1 objectives ““(i) commitments at existing levels of market access on a non-discriminatroy (i) commitments at existing levels of market access on a non-discriminatroy

basis across sectors of interest to Members”basis across sectors of interest to Members” Development implicationsDevelopment implications::

goes against right of developing countries to liberalise at a pace goes against right of developing countries to liberalise at a pace according to development levels, which can be according to development levels, which can be below below existing levels of existing levels of market accessmarket access

Many developing countries’ mode 1 service suppliers are nascent Many developing countries’ mode 1 service suppliers are nascent and therefore should have policy space to become competitive and therefore should have policy space to become competitive globallyglobally

““Sectors of interest to Members” treats developing countries and Sectors of interest to Members” treats developing countries and developed countries’ liberalisation interests on an equal basisdeveloped countries’ liberalisation interests on an equal basis

““(ii) removal of existing requirements of commercial presence”(ii) removal of existing requirements of commercial presence” Development implicationsDevelopment implications::

commercial presence requirements: regulatory mechanism, technology commercial presence requirements: regulatory mechanism, technology and skill transfers, etc.and skill transfers, etc.

Modal, MFN exemptions and Scheduling Objectives (paragraph 1) IIIModal, MFN exemptions and Scheduling Objectives (paragraph 1) III

Mode 2 objectivesMode 2 objectives ““(i) commitments at existing levels of market access on a non-discriminatroy basis across (i) commitments at existing levels of market access on a non-discriminatroy basis across

sectors of interest to Members”sectors of interest to Members” Development implicationsDevelopment implications::

Same as for mode 1Same as for mode 1

““(ii) commitments on mode 2 where commitments on mode 1 exist”(ii) commitments on mode 2 where commitments on mode 1 exist” This is to ensure commitments allow services providers who can deliver This is to ensure commitments allow services providers who can deliver

services both for mode 1 and 2 to do so services both for mode 1 and 2 to do so e.g. a bank in Country A can deliver financial services to a foreign e.g. a bank in Country A can deliver financial services to a foreign

customer who is physically present in Country A (mode 2) or customer who is physically present in Country A (mode 2) or electronically to a customer abroad (mode 1)electronically to a customer abroad (mode 1)

Development implicationsDevelopment implications:: Could be positive for developing country service providers who have Could be positive for developing country service providers who have

the capacity to supply services through modes 1 and 2the capacity to supply services through modes 1 and 2 Defensively, a Member may want to limit foreign customers for the Defensively, a Member may want to limit foreign customers for the

benefit of domestic customers in mode 2benefit of domestic customers in mode 2

Modal, MFN exemptions and Scheduling Objectives (paragraph 1) IVModal, MFN exemptions and Scheduling Objectives (paragraph 1) IV

Mode 3 objectivesMode 3 objectives ““(i) commitments on (i) commitments on enhanced levels of foreign equity participation”enhanced levels of foreign equity participation”

Development implicationsDevelopment implications:: Threatens ability of domestic providers from developing and Threatens ability of domestic providers from developing and

increases risk of take-overs and loss of domestic entitiesincreases risk of take-overs and loss of domestic entities Foreign ownerships may remove full ability to regulate depending on Foreign ownerships may remove full ability to regulate depending on

domestic regulationsdomestic regulations

““(ii) removal or substantial reduction of economic needs tests”(ii) removal or substantial reduction of economic needs tests” Development implicationsDevelopment implications::

Controversial because some developing countries have requested Controversial because some developing countries have requested removal of removal of discriminatory discriminatory ENTs in mode 4 and other areas from ENTs in mode 4 and other areas from developed countries’ schedulesdeveloped countries’ schedules

However, ENTs are development policiesHowever, ENTs are development policies e.g. applying and ENT to assess whether additional foreign e.g. applying and ENT to assess whether additional foreign

services suppliers will crowd out domestic service suppliersservices suppliers will crowd out domestic service suppliers

Modal, MFN exemptions and Scheduling Objectives (paragraph 1) VModal, MFN exemptions and Scheduling Objectives (paragraph 1) V

Mode 3 objectives (continued)Mode 3 objectives (continued) ““(iii) commitments allowing greater flexibility on the types of legal entity permitted”(iii) commitments allowing greater flexibility on the types of legal entity permitted”

Development implicationsDevelopment implications:: Removes policy space to adopt development policy options, e.g. requirements for cooperation with Removes policy space to adopt development policy options, e.g. requirements for cooperation with

domestic entitydomestic entity Seeks to increase liberalisation commitments that allow for greater benefits by foreign Seeks to increase liberalisation commitments that allow for greater benefits by foreign

suppliers/investors relative to nationalssuppliers/investors relative to nationals For example: expand commitments beyond joint ventures and partnerships (which provide for For example: expand commitments beyond joint ventures and partnerships (which provide for

benefits of nationals) to 100% foreign owned commercial presencebenefits of nationals) to 100% foreign owned commercial presence

Mode 4 objectivesMode 4 objectives ““(i) and (ii) new or improved commitments on the categories CSS, IP, Others, de-linked from commercial (i) and (ii) new or improved commitments on the categories CSS, IP, Others, de-linked from commercial

presence, and ICT and BV...”presence, and ICT and BV...” New or improved commitments are to be done to reflect New or improved commitments are to be done to reflect inter alia:inter alia:

Removal or substantial reduction of ENTsRemoval or substantial reduction of ENTs indication of duration of stay and possibility of renewalindication of duration of stay and possibility of renewal

Weak objective and most developed countries have this in their schedulesWeak objective and most developed countries have this in their schedules Development implicationsDevelopment implications::

Weak objectives compared to other modesWeak objectives compared to other modes Same points on ENT from mode 3Same points on ENT from mode 3 No mention of broader coverage of sectors and skills, however, inclusion of “No mention of broader coverage of sectors and skills, however, inclusion of “ inter aliainter alia” may allow ” may allow

for such an objective in negotiationsfor such an objective in negotiations Mode 4 category discussion in CTS not concludedMode 4 category discussion in CTS not concluded If categories based on EC proposal on categories, then it would not allow for low skilled coverageIf categories based on EC proposal on categories, then it would not allow for low skilled coverage

Modal, MFN exemptions and Scheduling Objectives (paragraph 1) VIModal, MFN exemptions and Scheduling Objectives (paragraph 1) VI

MFN exemptionsMFN exemptions ““(i) removal or substantial reduction of exemptions from MFN treatment” - response to the lack of (i) removal or substantial reduction of exemptions from MFN treatment” - response to the lack of

reduction in MFN exemptions from the CTS Reviewreduction in MFN exemptions from the CTS Review ““(ii) clarification of remaining MFN exemptions in terms of scope of application and duration”(ii) clarification of remaining MFN exemptions in terms of scope of application and duration”

Development implicationDevelopment implication:: Does not consider development aspects of MFN exemptions of developing countries Does not consider development aspects of MFN exemptions of developing countries

Practical implicationPractical implication:: Reduction of exemptions and clarification are subject to CTS review of MFN exemptions Reduction of exemptions and clarification are subject to CTS review of MFN exemptions

Scheduling commitmentsScheduling commitments ““(i) ... clarity, certainty, comparability and coherence in scheduling and classification ... Through (i) ... clarity, certainty, comparability and coherence in scheduling and classification ... Through

adherence to adherence to inter alia inter alia Scheduling Guidelines...”Scheduling Guidelines...” Practical implicationsPractical implications::

No value addedNo value added ““inter alia” inter alia” could mean that other types of guidelines could be utilisedcould mean that other types of guidelines could be utilised

May allow for the use of model schedules, new/revised classifications proposed by Members May allow for the use of model schedules, new/revised classifications proposed by Members that have not been multilaterally agreed, etc.that have not been multilaterally agreed, etc.

““(ii) ... scheduling of any remaining ENTs adheres to the Scheduling Guidelines...”(ii) ... scheduling of any remaining ENTs adheres to the Scheduling Guidelines...” Practical implicationsPractical implications::

Scheduling Guidelines states: “regarding ENTs the entry should indicate the main criteria Scheduling Guidelines states: “regarding ENTs the entry should indicate the main criteria on which the test is based, e.g. if the authority to establish a facility is based on a on which the test is based, e.g. if the authority to establish a facility is based on a population criterion, the criterion should be described concisely” – this is vaguepopulation criterion, the criterion should be described concisely” – this is vague

Reiterating this has no value added in the DeclarationReiterating this has no value added in the Declaration

Modal, MFN exemptions and Scheduling Objectives (paragraph 1) VIIModal, MFN exemptions and Scheduling Objectives (paragraph 1) VII

ConclusionsConclusions

These objectives fail to reflect the development considerations unique to These objectives fail to reflect the development considerations unique to developing countries in negotiationsdeveloping countries in negotiations

Modal objectives should be subject to negotiation, i.e. they should be Modal objectives should be subject to negotiation, i.e. they should be requested of a Member through the request-offer processrequested of a Member through the request-offer process

How far Members can be guided by these objectives should be based on How far Members can be guided by these objectives should be based on national development objectivesnational development objectives

Most importantly, paragraph 1 does not force Members to adopt its Most importantly, paragraph 1 does not force Members to adopt its objectivesobjectives

Chair Report on sectoral and modal objectives (paragraph 2) ““As a reference for the request-offer negotiations, the sectoral and modal objectives as As a reference for the request-offer negotiations, the sectoral and modal objectives as

identified by Members may be considered (footnote: Chair Report to TNC (TN/S/23) identified by Members may be considered (footnote: Chair Report to TNC (TN/S/23) without legal standing”without legal standing”

Key pointsKey points:: Chair Report is controversial because written on “Chair’s own responsibility” based Chair Report is controversial because written on “Chair’s own responsibility” based

on some consultations and not agreed by all Memberson some consultations and not agreed by all Members Some Members wanted reference to this document for legitimacy in use in Some Members wanted reference to this document for legitimacy in use in

negotiationsnegotiations Addition of footnote does not have an impact on the legality of the Chair ReportAddition of footnote does not have an impact on the legality of the Chair Report

Development implicationsDevelopment implications:: Does not consider concerns and interests of many developing countriesDoes not consider concerns and interests of many developing countries No development objectives in the Chair ReportNo development objectives in the Chair Report Objectives strictly on liberalising without development considerationObjectives strictly on liberalising without development consideration

Practical implicationsPractical implications:: Chair Report “may be considered” and therefore Members can consider them in Chair Report “may be considered” and therefore Members can consider them in

their requeststheir requests Members are not obligated to consider these objectives in their response to requestsMembers are not obligated to consider these objectives in their response to requests Does not rule out other forms in which sectoral and modal objectives may be Does not rule out other forms in which sectoral and modal objectives may be

communicated to Members, e.g. supplementing the Chair Reportcommunicated to Members, e.g. supplementing the Chair Report

Rules Negotiations (paragraph 4) I ““Members must intensify their efforts to conclude the negotiations on rule-Members must intensify their efforts to conclude the negotiations on rule-

making under GATS Articles X, XIII and XV in accordance with their making under GATS Articles X, XIII and XV in accordance with their respective mandates and timelines:”respective mandates and timelines:”

Key PointsKey Points (on chapeau): (on chapeau): Chapeau: “Members must Chapeau: “Members must intensify effortsintensify efforts to conclude negotiations with to conclude negotiations with

respective mandate and timelines”respective mandate and timelines” ““Intensifying efforts” does not oblige Members to conclude Intensifying efforts” does not oblige Members to conclude

negotiations before the end of this roundnegotiations before the end of this round

Development implicationsDevelopment implications:: Important rules disciplines, e.g. for ESM and subsidies, that can serve as Important rules disciplines, e.g. for ESM and subsidies, that can serve as

important development policies, may not be concluded by the end of this important development policies, may not be concluded by the end of this roundround

According to the Guidelines and Procedures for Negotiations, rules According to the Guidelines and Procedures for Negotiations, rules negotiations should conclude before market access negotiationsnegotiations should conclude before market access negotiations

Rules Negotiations (paragraph 4) IIEmergency Safeguard Measures (ESM)Emergency Safeguard Measures (ESM) ““(a): ... engage in more focused discussion ... with the technical and procedural questions (a): ... engage in more focused discussion ... with the technical and procedural questions

relating to the operation and application of relating to the operation and application of any possibleany possible ESM in services.” ESM in services.” Key PointsKey Points::

Positive because it presumes to settle the “feasibility” questionPositive because it presumes to settle the “feasibility” question Negative because it leaves unanswered the “desirability” questionNegative because it leaves unanswered the “desirability” question Does not refer to Members proposals as is for government procurement and Does not refer to Members proposals as is for government procurement and

subsidiessubsidies Development implicationsDevelopment implications::

Without a clear mandate to conclude negotiations Members may not have in place Without a clear mandate to conclude negotiations Members may not have in place an ESM for their liberalisation commitmentsan ESM for their liberalisation commitments

An ESM is key to ensuring GATS liberalisation does not cause irrecoverable An ESM is key to ensuring GATS liberalisation does not cause irrecoverable damage to domestic service suppliersdamage to domestic service suppliers

Article XIX:2 and Article XXI procedures are not adequateArticle XIX:2 and Article XXI procedures are not adequate Practical implicationsPractical implications::

Members are to Members are to discussdiscuss ESM technically this year – continuation of the status quo ESM technically this year – continuation of the status quo

Rules Negotiations (paragraph 4) III: ESM Post HK State of Play

Little overall progress in rules Little overall progress in rules Last formal meeting of WPGR in February 2006Last formal meeting of WPGR in February 2006 Little headway on ESM despite 10 years of Little headway on ESM despite 10 years of

discussiondiscussion ASEAN minus main proponentsASEAN minus main proponents Moral support provided by some other developing Moral support provided by some other developing

countries countries February 2006 room document by ASEAN minus February 2006 room document by ASEAN minus

addressing various issues raised in prior discussions addressing various issues raised in prior discussions related to feasibility and S&D issuesrelated to feasibility and S&D issues

Rules Negotiations (paragraph 4) IVGovernment procurement (GP)Government procurement (GP) ““(b): ... engage in more focussed discussion and... put greater emphasis on (b): ... engage in more focussed discussion and... put greater emphasis on

proposals by Members, in accordance with Article XIII of the GATS.”proposals by Members, in accordance with Article XIII of the GATS.” Article XIII: 1 states that MFN, market access and national treatment does Article XIII: 1 states that MFN, market access and national treatment does

not apply to GPnot apply to GP Current proposals on the table are mainly from the EC for a market access Current proposals on the table are mainly from the EC for a market access

framework for GP in servicesframework for GP in services Development implicationsDevelopment implications::

Government procurement is an important development tool for developing Government procurement is an important development tool for developing countries, e.g. allows governments to provide equitable and sustainable countries, e.g. allows governments to provide equitable and sustainable services to people and support important and necessary domestic service services to people and support important and necessary domestic service suppliers, etc.suppliers, etc.

Practical implicationsPractical implications:: Developing countries must maintain their rejection of market access in GP Developing countries must maintain their rejection of market access in GP

based on Article XIII: 1based on Article XIII: 1 If the EC pushes their proposals on market access, then developing If the EC pushes their proposals on market access, then developing

country Members may have to submit counter proposalscountry Members may have to submit counter proposals

Rules Negotiations (paragraph 4) V:GP Post HK State of Play

Discussions focused on EC proposal for Discussions focused on EC proposal for framework on GPframework on GP

S&D, thresholds, procedural rules and non-S&D, thresholds, procedural rules and non-discrimination raised discrimination raised

Rules Negotiations (paragraph 4) VISubsidiesSubsidies ““(c): ... intensify their efforts to expedite and fulfil the information (c): ... intensify their efforts to expedite and fulfil the information

exchange... engage in more focused discussions on proposals by Members, exchange... engage in more focused discussions on proposals by Members, including a possible working definition of subsidies in services”including a possible working definition of subsidies in services”

Key pointsKey points:: Declaration mandates continuation of early stages of discussion in Declaration mandates continuation of early stages of discussion in

negotiationsnegotiations Unclear message on whether a definition of subsidies is possibleUnclear message on whether a definition of subsidies is possible

Development implicationsDevelopment implications:: Disciplines on subsidies, which can ensure developing countries Disciplines on subsidies, which can ensure developing countries

maintain subsidies for development purposes and fair competition with maintain subsidies for development purposes and fair competition with developed countries, may not be concluded by the end of this rounddeveloped countries, may not be concluded by the end of this round

Practical implicationsPractical implications:: Continues status quo in negotiationsContinues status quo in negotiations

Rules Negotiations (paragraph 4) VII: Subsidies Post HK State of Play

Switzerland presented response to a Switzerland presented response to a questionnaire on information exchangequestionnaire on information exchange

Issues related to public services, working Issues related to public services, working definition of a subsidy and geographical definition of a subsidy and geographical coverage were raisedcoverage were raised

Members agreed for the WTO Secrétariat to Members agreed for the WTO Secrétariat to update a previous note on a compilation of update a previous note on a compilation of views relating to the definition of a subsidy views relating to the definition of a subsidy

Domestic Regulation negotiations (paragraph 5)Domestic Regulation negotiations (paragraph 5) ““Members shall develop disciplines on domestic regulation pursuant to the mandate Members shall develop disciplines on domestic regulation pursuant to the mandate

under Article VI:4 ... before the end of the current round of negotiations. We call upon under Article VI:4 ... before the end of the current round of negotiations. We call upon Members to develop text for adoption. In so doing, Members shall consider proposals Members to develop text for adoption. In so doing, Members shall consider proposals and the illustrative list of possible elements for Article VI:4 disciplines (reference to and the illustrative list of possible elements for Article VI:4 disciplines (reference to JOB(05)/280)JOB(05)/280)

Key pointKey point:: Clear mandate to conclude negotiations before the end of this roundClear mandate to conclude negotiations before the end of this round

Development implicationsDevelopment implications:: Need to ensure strong development objectives are maintained, Need to ensure strong development objectives are maintained, enhanced in enhanced in

disciplines and the right to regulate is upheld (defensively) and balancing this with disciplines and the right to regulate is upheld (defensively) and balancing this with offensive interests such as disciplines for qualification requirements which impact offensive interests such as disciplines for qualification requirements which impact mode 4mode 4

Critical question is scope of these negotiations in light of necessity testCritical question is scope of these negotiations in light of necessity test How to ensure disciplines not too burdensome for developing countries?How to ensure disciplines not too burdensome for developing countries?

Practical implicationsPractical implications:: Negotiations will move quicklyNegotiations will move quickly Developing countries with interest in strengthening current proposals, e.g. SDT, Developing countries with interest in strengthening current proposals, e.g. SDT,

must submit proposals as soon as possible and engage in negotiationsmust submit proposals as soon as possible and engage in negotiations

Domestic Regulation negotiations (paragraph 5): Domestic Regulation negotiations (paragraph 5): Post HK State of PlayPost HK State of Play

WPDR has met 3 times in 2006 so far in both WPDR has met 3 times in 2006 so far in both informal and formal modes (next informal planned informal and formal modes (next informal planned for May) for May)

Recent proposals by Mexico and Switzerland on Recent proposals by Mexico and Switzerland on technical standards, proposals by Brazil et al and technical standards, proposals by Brazil et al and Small EconomiesSmall Economies

Under own responsibility WPDR Chair provided a Under own responsibility WPDR Chair provided a road map, state of play and calender of meetings with road map, state of play and calender of meetings with focus on issues to address such as Licensing/ focus on issues to address such as Licensing/ qualification requirements and procedures; Technical qualification requirements and procedures; Technical standards; transparency, Objectives; Scope and standards; transparency, Objectives; Scope and application; definitions; Development considerations application; definitions; Development considerations

Timelines (paragraph 11) I (a) and (e): (a) and (e): ShallShall submit outstanding initial offers as soon as possible and submit outstanding initial offers as soon as possible and

strivestrive to do so before 31 July to do so before 31 July

Development implicationsDevelopment implications:: Initial offers must be submitted only after developing countries have Initial offers must be submitted only after developing countries have

undertaken domestic assessments of GATS liberalisation and national undertaken domestic assessments of GATS liberalisation and national development objectivesdevelopment objectives

Developing initial offers must consider Article XIX: 2 flexibilitiesDeveloping initial offers must consider Article XIX: 2 flexibilities Practical implicationsPractical implications::

““As soon as possible” – if there is no possibility for developing countries As soon as possible” – if there is no possibility for developing countries to submit an initial offer, then they are not forced to do soto submit an initial offer, then they are not forced to do so

““Strive” means to try and does not oblige definite initial offer submission Strive” means to try and does not oblige definite initial offer submission before the end of this roundbefore the end of this round

Developing countries should insist on an assessment and review to Developing countries should insist on an assessment and review to understand the development implications of GATS liberalisation and understand the development implications of GATS liberalisation and how to ensure implementation of Articles XIX: 2 and IVhow to ensure implementation of Articles XIX: 2 and IV

Timelines (paragraph 11) II (b): Plurilateral requests by 28 February (b): Plurilateral requests by 28 February

Already discussed aboveAlready discussed above Development implicationsDevelopment implications::

Plurilateral requests must be considered in the same way bilateral Plurilateral requests must be considered in the same way bilateral requests have been considering, by utilising:requests have been considering, by utilising:

Article XIX: 2 flexibilities Article XIX: 2 flexibilities Article IV objectives and Article IV objectives and recognition of development objectives of GATSrecognition of development objectives of GATS

Requests should be met only if they are in line with national Requests should be met only if they are in line with national development objectivesdevelopment objectives

Practical implicationsPractical implications:: Members should not have to submit new requests if their earlier Members should not have to submit new requests if their earlier

requests remain outstanding, however, earlier requests could be requests remain outstanding, however, earlier requests could be submitted again plurilaterally submitted again plurilaterally

Timelines (paragraph 11) III

(c) second round of revised offers by 31 July (c) second round of revised offers by 31 July Aiming to receive revised offers before the summer breakAiming to receive revised offers before the summer break

Development implicationDevelopment implication:: Same implications as for initial offersSame implications as for initial offers

Practical implicationPractical implication:: Only need to submit a revised offer if there is something new to offerOnly need to submit a revised offer if there is something new to offer Will be linked to progress in other areas such as NAMA and Will be linked to progress in other areas such as NAMA and

agricultureagriculture

Timelines (paragraph 11) IV (d) Final draft schedules of commitments by 31 October(d) Final draft schedules of commitments by 31 October

May not only be a formality – Members may use this as another opportunity to May not only be a formality – Members may use this as another opportunity to offer something and to “correct” earlier offers, which could include removing offer something and to “correct” earlier offers, which could include removing previous offers for commitmentsprevious offers for commitments

Development implicationsDevelopment implications:: Assessment and review, which hold important development objectives, are missing Assessment and review, which hold important development objectives, are missing

in timelinesin timelines Practical implicationsPractical implications::

Because initial and revised offers are not binding developing countries can modify Because initial and revised offers are not binding developing countries can modify their previous offers in any way they choose their previous offers in any way they choose

i.e. it may be necessary to go back on previous offers if it is in line with i.e. it may be necessary to go back on previous offers if it is in line with development objectives, reduce previous liberalisation offers if now deemed development objectives, reduce previous liberalisation offers if now deemed too ambitious, or match offers with concessions received from trading partners too ambitious, or match offers with concessions received from trading partners in services and/or other areasin services and/or other areas

Developing countries should insist on an assessment and review to understand the Developing countries should insist on an assessment and review to understand the development implications of GATS liberalisation and how to ensure development implications of GATS liberalisation and how to ensure implementation of Articles XIX: 2 and IV before the end of the roundimplementation of Articles XIX: 2 and IV before the end of the round

Technical Assistance (paragraph 10) (I) ““Targeted technical assistance should be provided through, Targeted technical assistance should be provided through,

inter aliainter alia, the WTO Secretariat, with a view to enabling , the WTO Secretariat, with a view to enabling developing and least-developed countries to participate developing and least-developed countries to participate effectively in negotiations. In particular and in accordance effectively in negotiations. In particular and in accordance with paragraph 51 on Technical Cooperation of this with paragraph 51 on Technical Cooperation of this Declaration, targeted technical assistance should be given to Declaration, targeted technical assistance should be given to all developing countries allowing them to fully engage in the all developing countries allowing them to fully engage in the negotiation. In addition, such assistance should be provided negotiation. In addition, such assistance should be provided on, on, inter alia, inter alia, compiling and analyzing statistical data on trade compiling and analyzing statistical data on trade in services, assessing interests in and gains from services in services, assessing interests in and gains from services trade, building regulatory capacity, particularly on those trade, building regulatory capacity, particularly on those services sectors where liberalisation is being undertaken by services sectors where liberalisation is being undertaken by developing countries.”developing countries.”

Technical Assistance (paragraph 10) (II) Key pointsKey points::

Calls on the WTO Secretariat and others to provide technical assistance to enhance developing Calls on the WTO Secretariat and others to provide technical assistance to enhance developing countries and LDCs’ participation in negotiationscountries and LDCs’ participation in negotiations

Assistance to take place through:Assistance to take place through: Compiling and analysing statistical dataCompiling and analysing statistical data Assessing interests and gains from services tradeAssessing interests and gains from services trade Building regulatory capacity especially for sectors developing countries liberaliseBuilding regulatory capacity especially for sectors developing countries liberalise

Part of assistance to occur through the Integrated FrameworkPart of assistance to occur through the Integrated Framework Development implicationsDevelopment implications::

Text lacks language on development objectives although Members could insist on incorporating Text lacks language on development objectives although Members could insist on incorporating development objectives in the different areas of technical assistance development objectives in the different areas of technical assistance

Enhancing participation in negotiations should not be limited to increasing liberalisation but ensuring Enhancing participation in negotiations should not be limited to increasing liberalisation but ensuring development objectives are met development objectives are met

Practical implicationsPractical implications: : Members should ensure development aspects are considered in technical assistance by for example:Members should ensure development aspects are considered in technical assistance by for example:

Statistical data could include the way in which key sectors are related to development gains in Statistical data could include the way in which key sectors are related to development gains in developing countriesdeveloping countries

Assessment could include objectives from paragraph 14 of the Guidelines and Procedures for Assessment could include objectives from paragraph 14 of the Guidelines and Procedures for Negotiations, e.g. objectives of Article IV, and qualifying gains as “development” gains for Negotiations, e.g. objectives of Article IV, and qualifying gains as “development” gains for developing countriesdeveloping countries

Building regulatory capacity could be conducted with the primary objective of carrying out Building regulatory capacity could be conducted with the primary objective of carrying out development policies and regulations especially with regards to foreign service suppliersdevelopment policies and regulations especially with regards to foreign service suppliers

WHAT IS MISSING?WHAT IS MISSING?

Implementation of Article IV: especially mode Implementation of Article IV: especially mode 44

AssessmentAssessment Review of Progress of Negotiations Review of Progress of Negotiations

(negotiating guidelines)(negotiating guidelines) Rules first Rules first LDC Modalities?LDC Modalities?

CONCLUDING REMARKSCONCLUDING REMARKS From Doha to HK shows increasing shift towards market access From Doha to HK shows increasing shift towards market access Developing countries and LDCs should focus on those elements of the negotiations Developing countries and LDCs should focus on those elements of the negotiations

which will support and strengthen domestic supply side capacity and assist in which will support and strengthen domestic supply side capacity and assist in obtaining important human development objectives given the level of development obtaining important human development objectives given the level of development of their services sectors of their services sectors

Negotiation based development benchmarks in GATS should comprise: Negotiation based development benchmarks in GATS should comprise: assessment; review of progress; LDC modalities and Article IV implementation; assessment; review of progress; LDC modalities and Article IV implementation; conclusion of an ESM and further progress in subsidies vis-à-vis market access; conclusion of an ESM and further progress in subsidies vis-à-vis market access; and right to regulate and policy space remain based on individual country and right to regulate and policy space remain based on individual country requirements for the present and future requirements for the present and future

Developing countries should have comprehensive/consistent positions on how Developing countries should have comprehensive/consistent positions on how negotiations are pursued in all areas of GATS and be based on national negotiations are pursued in all areas of GATS and be based on national requirements requirements

All flexibilities and existing GATS architecture remains intact and should be All flexibilities and existing GATS architecture remains intact and should be preserved and exercisedpreserved and exercised

In a broader context need to learn lessons from agriculture and avoid a ‘race to the In a broader context need to learn lessons from agriculture and avoid a ‘race to the bottom’ in services bottom’ in services

Unity remains key for developing countries and LDCsUnity remains key for developing countries and LDCs

Thank youThank you

South CentreSouth CentreChemin du Champ d’Anier 17Chemin du Champ d’Anier 17

Case Postale 228Case Postale 2281211 Geneva 191211 Geneva 19

SwitzerlandSwitzerland

+41 227918050+41 227918050varma@southcentre.orgvarma@southcentre.org

www.southcentre.orgwww.southcentre.org