South nixes US, EU call for binding autonomous services liberalisation

Original Publication Date: 
15 May, 2015

TWN Info Service on WTO and Trade Issues (May15/07)
15 May 2015
Third World Network

Published in SUNS #8019 dated 11 May 2015
Geneva, 8 May (D. Ravi Kanth) - A large majority of developing countries on Thursday (7 May) firmly rejected demands from the United States, the European Union, and other developed countries for binding the autonomous liberalisation measures taken by them in the services sectors after the Uruguay Round of commitments.
The developing countries made clear that they are not willing to undertake "commitments for free" in the Doha services negotiations, several services negotiators told SUNS.
The developing countries, especially Brazil, South Africa, India, and Argentina among others, made it clear that agriculture remains the yardstick, and at the core of the sequencing framework.
They said that without clarity in agriculture, it would be futile to discuss elements in the services negotiations at this juncture.
Around 61 members also rejected a demand from Canada which wanted the World Trade Organisation (WTO) Secretariat to circulate the offers made by developing countries at the signaling conference in 2008.
The developing countries made clear that it is inappropriate to discuss those offers when the level of ambition was already being lowered in agriculture and industrial goods.
The developing countries - Brazil, South Africa, India, Ecuador, Barbados on behalf of the ACP (African, Caribbean, and Pacific) group - also chided the chair for the Doha services negotiations, Ambassador Gabriel Duque of Colombia, for issuing a one-sided summary in favour of developed countries.
The developing countries asked the chair to issue a corrigendum or revision to the summary he had circulated last week, as the summary he had circulated had failed to reflect their views on the sequencing and the request-and- offer-based framework of the services negotiations.
At a volatile meeting of the Doha services negotiating body, the differences over the chair's summary and the demands made by developed countries resulted in an all-out confrontation which has been rarely seen at recent meetings of the World Trade Organisation, several services negotiators told SUNS.
The chair's five-page, non-attributable summary (see SUNS #8014 dated 4 May 2015 for details) had suggested "benchmarking" the services market access negotiations instead of creating a platform to discuss the possible elements that would go into the services work programme by end-July, a developing country services negotiator told SUNS.
During Thursday's meeting, the US said that Washington would settle for market access in services if members are willing to "bind" their current autonomous liberalisation measures of services in sectors, according to participants familiar with the meeting.
The demand of the US was reflected in the chair's summary: "the starting point could be existing GATS [General Agreement on Trade in Services] commitments, taking into account RTAs and autonomous liberalization to assess how much water could be bound."
The chair's summary had also maintained that "one delegation proposed a minimum binding of sectors in existing GATS commitments at the level applied domestically or in its RTAs, followed by a request/offer process for sectors currently outside the schedule with a view to achieve bindings at the applied level."
Several industrialised and a few developing countries such as Singapore supported the US demand for binding autonomous liberalisation of services on the ground that it would lead to binding of significant portion of "water" in the GATS (General Agreement on Trade in Services) commitments as "a realistic and doable outcome."
The European Union called for "transparency" and "predictability" in the services commitments on par with the tariff reduction formula for market access in agriculture and industrial goods.
The demands made by the US and EU provoked a sharp response from Brazil, South Africa, and India along with Barbados, the coordinator for the African, Caribbean, and Pacific Group.
Brazil posed some sharp questions to industrialised countries on the 2008 revised draft modalities in agriculture as well as on the bound and applied farm subsidies by the US and other industrialised countries.
Brazil asked whether the major industrialised countries are ready to accept the 2008 revised draft modalities to reduce their domestic farm subsidies in line with their demands in services. Brazil emphasised that agriculture is the key to determine the level of ambition for the entire Doha talks, arguing that without clarity in agriculture it would be difficult to move in the services negotiations.
South Africa said while no meetings are being held in market access for industrial goods which is an area of critical concern, an attempt is being made to determine what members ought to do in services through the binding of autonomous levels of liberalisation.
India said while members want removal of "water" between bound and applied commitments in services, they are not prepared to remove "water" in their aggregate measurement of support (AMS) for the trade-distorting domestic subsidies.
India also asked whether major industrialised countries are ready to provide reciprocal concessions in services by removing the visa restrictions on short-term services providers in Mode 4 in return for binding commitments at the current applied level for services.
Canada demanded that the World Trade Organisation Secretariat circulate a paper indicating the commitments made in different sectors at the 2008 signaling conference.
Around 61 developing countries rejected Canada's demand, saying that those commitments have no relevance in the context of the reduced level of ambition for "cutting water" in farm subsidies.
Hong Kong-China asked the WTO Secretariat to convene a workshop on domestic regulation but the US opposed Hong Kong's demand.