LDCs assess high-level meeting on LDC services waiver

27 March 2015
Third World Network
Published in SUNS #7988 dated 24 March 2015

Geneva, 23 Mar (Kanaga Raja) -- A cluster of meetings of the regular services bodies at the World Trade Organisation (WTO) last week heard, amongst others, an assessment by the Least Developed Countries (LDCs) group of the outcome of a recent high-level meeting on the operationalisation of the LDC services waiver.
 
According to trade officials, at the regular meeting of the Council for Trade in Services on 18 March, the LDCs, in their presentation, assessed the high-level meeting that was held on 5 February.
 
The Council for Trade in Services had convened the high-level meeting on 5 February where a number of developed country members and developing country members in a position to do so had indicated the services sectors and modes of supply where they intend to provide preferential treatment to the LDCs.
 
Under the Bali Ministerial Decision of 7 December 2013, the Council for Trade in Services was instructed to initiate a process aimed at promoting the expeditious and effective operationalisation of the LDC services waiver.
 
According to the Decision: "With a view to accelerating the process of securing meaningful preferences for LDCs' services and service suppliers, the Council for Trade in Services shall convene a High level meeting six months after the submission of an LDC collective request identifying the sectors and modes of supply of particular export interest to them. At that meeting, developed and developing Members, in a position to do so, shall indicate sectors and modes of supply where they intend to provide preferential treatment to LDC services and service suppliers."
 
"Members, in their individual capacities, are encouraged at any time to extend preferences to LDCs' services and service suppliers, consistent with the waiver Decision, which have commercial value and promote economic benefits to LDCs. These preferences may accord, inter alia, improved market access, including through the elimination of economic needs tests and other quantitative limitations," the Decision further said.
 
The non-LDC members on 5 February had made their announcements based on the collective request that the LDCs had submitted in July 2014 (S/C/W/356) indicating the services sectors and modes of supply of key interest to the LDC group. (See SUNS #7958 dated 10 February 2015.)
 
According to trade officials, in its assessment at the Council meeting on 18 March, the LDC group reflected on the success of the high-level meeting, saying that it was overall satisfied with the indications that had come from the members.
 
The LDC group reported that 25 members had expressed their intentions, among which 18 had announced specific proposals.
 
The group is now waiting to see the notifications from the members on how they will be granting their preferences to the LDCs.
 
The LDC group further reported that approximately 10 members had referred to technical assistance initiatives.
 
It urged members to make concrete proposals now on how to utilise those proposals. It made a special call with respect to mode 4 (movement of natural persons).
 
The LDC group also called on members to reduce administrative barriers to trade when this does not require changing laws. It is currently holding some bilateral meetings with members.
 
(A deadline of 31 July 2015 has been indicated for the official notification by members of preferences for the LDCs.)
 
According to trade officials, the first submission was made by Canada at the Council meeting (S/C/N/792).
 
Uganda asked Canada to explain more clearly how it will be granting preferential treatment to the LDCs. It also asked to revert to this item at the next meeting of the Council.
 
According to trade officials, the US gave an update on the negotiations on the Trade in Services Agreement (TISA, which is taking place outside the WTO).
 
It said that Uruguay has officially joined the TISA talks, making it 24 members who are now taking part in the negotiations (counting the European Union as one).
 
The US reported that the eleventh round of negotiations took place in early February and that there were developments in telecommunications, financial services, mode 4, domestic regulation and on the issue of transparency. Some additional topics were also covered.
 
The market access offers are now subject to bilateral discussions between the TISA members, said the US, adding that the engagement was robust and encouraging.
 
The US said that the next round of negotiations will be hosted by the EU in April, and that it hopes to maintain the momentum that was achieved in the first trimester of 2015.
 
Members that supported the TISA talks including Australia, Canada, Japan, the EU and Chile asked for their previous unchanged positions on this issue to be recorded in the minutes of this Council meeting.
 
According to trade officials, those that were opposed to the TISA talks including Venezuela, Argentina, India, Egypt and Brazil reiterated that TISA is undermining the multilateral trading system, and that the WTO should be the only forum to discuss services trade at the multilateral level.
 
India said that TISA members should not be lobbying for TISA in the Council, trade officials added.
 
The issue of E-commerce was also discussed in the Council, with the US having submitted a paper on cloud computing and privacy protection at the last meeting in November, namely on the question of how to achieve a balance between liberalisation in cloud computing and at the same time protecting the privacy of consumers.
 
According to trade officials, the US said that its paper is not a negotiating text, and that it is only a paper to stimulate an exchange of views on the issue of E-commerce.
 
Some members welcomed the idea of an exchange of views and that there could be a seminar organised on this soon.
 
According to trade officials, Ecuador proposed the holding of a seminar on E-commerce.
 
China said that the US imposes barriers on the international flows of information data, particularly on technical data. The use of local infrastructure enables national information security protection, it added.
 
Canada said that the liberalisation of E-commerce trade is important to the country, while Uruguay asked for consumer protection in general to also be included in the talks.
 
The EU agreed on the need to strike a balance between facilitating digital trade and protection of privacy. National security should not be used for protectionist reasons, it added.
 
Brazil said that it cannot endorse any prescriptive language pointing to particular policy directives but it is open to the idea of having an exchange of views. It however called for the US paper to be more neutral.
 
According to trade officials, India reiterated what it had said in the Committee on Specific Commitments (CSC) that the inclusion of new services in members' commitments could undermine the flexibilities provided to developing countries under the GATS.
 
To determine whether a services is new, there is need to look at whether it existed in the classification at the time of scheduling, it added.
 
At the meeting, the Russian Federation raised the matter of reform of the unified gas transportation system of Ukraine, alleging that Ukraine's law (of August 2014) reportedly grants preferential treatment to investors from, amongst others, the EU and the US.
 
According to Russia, it violates both the MFN obligations and Ukraine's market access and national treatment commitments on pipeline transportation services.
 
Argentina also voiced its concern and asked for Ukraine's measures to be notified.
 
Ukraine said that it was being transparent and that its law had been developed under severe challenges facing the country, in particular the threat to its national interests.
 
According to trade officials, earlier in the Working Party on Domestic Regulation, with respect to future work, members agreed that the services part of the (post-Bali) work programme should contain domestic regulation disciplines.
 
But a number of them including Ecuador, India, Bolivia, Brazil, South Africa, Venezuela and Zimbabwe said that until there is more clarity in agriculture and non-agricultural market access (NAMA), the services negotiations won't be able to begin.
 
According to trade officials, there was also a divergence among members on which text should be used, if a text-based negotiation were to begin. Most developing countries were in favour of using the text that was prepared by the Chair in 2009, which according to them contains a stronger development dimension.
 
In the Committee on Specific Commitments (CSC), there was a discussion on new services which reflected the complexity of this item, as constantly evolving technologies have made it challenging for members to determine the nature of some services.
 
According to trade officials, these have implications on how these services should first be classified and then scheduled, as well as how the scope of existing commitments should be defined.
 
The US said that E-books and E-music are not services, even though some services are involved. It added that cloud computing uses telecoms services but that does not mean that it must be classified as a telecoms service per se.
 
According to trade officials, India and China said that new services have emerged since the UN classification system (the Central Product Classification) was introduced. Search engines, for example, was cited by China as being a new service.
 
A proposal was made to have a presentation by UN statisticians who are responsible for the CPC.
 
The Working Party on GATS Rules continued its work on subsidies, government procurement and emergency safeguard measures as mandated by the GATS. According to trade officials, Members called for these discussions to advance first in the Special Session of the Council for Trade in Services.
 
Meanwhile, in the Committee on Trade in Financial Services, members decided to hold a presentation by the Global Forum on Transparency and Exchange of Information for Tax Purposes at the next meeting. +