RP Officials Urged To Shun Bid in WTO Services Talks

Media release

Independent think-tank IBON Foundation urges Philippine trade negotiators to the World Trade Organization (WTO) not to submit any offer on the services talks without substantially improved Mode 4 offers from developed countries like the US. May 31 is the deadline for the submission of new and revised offers of services sectors up for liberalization.

Mode 4 of the General Agreement on Trade in Services (GATS) is an agreement on the Temporary Movement of Natural Persons. Mode 4 is a key issue among poor countries because it is one of the few areas that could give them gains from opening up their services sector, especially in giving better opportunities for overseas contractual workers.

Mode 4 covers: 1) persons providing services where a foreign service supplier obtains a contract to supply services to the host country company and sends its employees to provide the services; 2) independent service providers abroad: an individual selling services to a host country company or to an individual; 3) persons employed abroad by foreign companies established in the host country (but excluding nationals of the host country).

But many poor countries have registered their disappointment in the GATS talks because, while they are being pressured to submit offers for liberalization on other modes, the US and other rich countries have failed to offer any substantive offers on Mode 4.

The Philippines, which stands to lose from further opening up services like healthcare, education, water, and power to the private sector, has a stake in getting Mode 4 commitments from developed countries. Since there are about eight million overseas Filipino workers (OFWs) in over 140 countries, OFWs are expected to find it easier to offer temporary services abroad when Mode 4 commitments become more liberal.

Thus, given the fact that the Philippines has not much to gain except on Mode 4 and a great deal to suffer from liberalizing its services sector, IBON challenges RP trade negotiators not to respond to liberalization requests and not to submit any offer unless US and other developed country-destinations of OFWs substantially make improved Mode 4 offers. (end)