WTO services negotiations move up a gear
28 February, 2006
Richard Waddington
The United States and the European Union announced that they were asking their WTO partners to lower barriers to business in around a dozen areas ranging from telecommunications to computer services, financial services and construction.
The EU in particular has made it clear that it needs greater access to services' markets, notably in developing countries, as a trade-off for agreeing to slash its massive farm subsidies and tariffs as demanded by Brazil and others.
"We need ambition across the Doha (round), including an ambitious result for services," U.S. ambassador to the WTO, Peter Allgeier, said in a statement.In a bid to give new momentum to a part of the round that has lagged badly, trade ministers from the WTO's 149 member states agreed last December in Hong Kong that requests for services' liberalisation should be presented by February 28 "or as soon as possible thereafter".
"It is something the services negotiations have needed. It is kind of a kick in the pants," said Bob Vastine, president of the Coalition of Service Industries.
Replies from those targeted -- mainly leading developing countries such as Brazil, India, Indonesia, Malaysia, the Philippines and South Africa -- are sought by the end of July.
However, diplomats say Brussels will be looking for earlier indications of where new service market access will be on offer if it is to move in agriculture, where it is under heavy pressure to make more concessions.
Receiving end
But developing countries are not just on the receiving end in the services' negotiations.
Led by India, they demand greater access to the rich nations for their professional people -- computer experts, doctors and others -- who want to work abroad, a request which Washington and Brussels find politically difficult.
Some, including Chile, are also making requests in other areas, including computer services.
In its statement, the United States said that it would be looking for an end to a number of business restrictions.
These included no more limits on foreign investment, restrictions on opening branch offices, curbs on cross-border supply, including via the Internet, nationality requirements, discriminatory practices and other restrictions on competition.
Underlining the importance of services' liberalisation, the U.S. statement noted that the United States had a $56 billion trade surplus in services in 2005 and that eight out of 10 U.S. jobs are in the services sector.
The EU and U.S. requests are part of a so-called "plurilateral" approach to the services' talks under which a group of countries can jointly put requests for liberalisation to individual members.
This was also agreed in Hong Kong to speed negotiations which had previously been conducted bilaterally between WTO members.
The U.S. and EU coincided in many requests, but not in all, according to their statements, which did not detail which WTO states were the targets of which particular demands.
Diplomats said that the United States would be a target of an EU demand for maritime liberalisation, while Washington had Brussels in its sights with a similar call in audiovisuals.
The WTO trade round, launched in 2001 and well behind schedule, faces a deadline this year or in early 2007 because the U.S. Congress is not expected to further extend presidential powers to negotiate trade treaties.
(Additional reporting by Doug Palmer in Washington)