Developing countries object to 'benchmarking' services proposals

Many developing countries have objected to the joint attempt by developed countries to introduce a "benchmarking approach" or "complementary multilateral methods" to the services negotiations in the World Trade Organisation.

They made clear their objections at an informal meeting of the Council for Trade in Services in Special Session on 22 September evening.

Among the developing countries that voiced opposition to, and concerns about, the developed countries' proposals were Brazil, Rwanda (speaking on behalf of the least developed countries), South Africa, Indonesia, the Philippines, Bangladesh, Mexico, Cuba, Venezuela, Trinidad and Tobago, and Antigua and Barbuda (speaking also for Barbados, Jamaica, Dominica, Grenada, St. Kitts and Nevis, and St. Vincent and the Grenadines).

According to trade diplomats, the developed countries maintained or even hardened their position, with the European Union even implying that the flexibilities enjoyed by developing countries in the GATS (General Agreement on Trade in Services) had expired, and that the proposals were in fact offering them new flexibilities.

The divisions among members on this issue are expected to re-surface at the formal meeting of the Council this week, starting Monday.

The issue has generated a new element of uncertainty and controversy in the preparations for the Hong Kong Ministerial.

Some developed countries made clear during last Thursday's meeting that they linked acceptance of their benchmarking proposals to a successful outcome at the WTO's Hong Kong Ministerial in December. But an increasing number of developing countries are insistent that the proposals are unacceptable and would make a mockery of the Doha pledge that the current work programme would put development at the centre of the negotiations.

The proposals had been put forward in six papers (by the EC, Japan, Australia, Switzerland, Korea, and Chinese Taipei) at an informal meeting on services on 13 September. At the 22 September meeting, New Zealand presented a new paper.

The proposals' common theme is that the bilateral request-offer negotiating method has not achieved results in terms of liberalization commitments of developing countries, and that a new multilateral "complementary method" should be introduced that could benchmark the extent of members' commitments.

Members would be required to adhere to a certain "benchmark" or attain a certain score.