28 Nov, 2005
As WTO Talks Approach, Warnings Grow Over Text on Services
With the World Trade Organization ministerial talks set to go into session on 13 December 2005, civil society groups are stepping up warnings about the implications of new references to “plurilateral” negotiations in the draft text on services, and urging developing countries not to sign anything until they understand all its implications in full.
The WTO session is of extreme importance to the travel & tourism industry because of the stress to be placed on the “services” component, which covers tourism plus other sectors like finance, telecommunications, health and insurance.
A draft ministerial text prepared by WTO Director General Pascal Lamy and circulated by the WTO would, if approved by the summit, commit countries to undertake negotiations “on a plurilateral basis” in addition to the bilateral “request-offer negotiations, which shall remain the main method of negotiation.”
According to the draft, these plurilateral negotiations will be pursued “in accordance with the principles of the GATS and the Guidelines and Procedures for the Negotiations on Trade in Services.”
The language that worries civil society groups is the subsequent comment (“The results of such negotiations shall be extended on a Most Favoured Nation basis”) and the procedures outlined for conducting the talks, which are as follows:
“Any Member or group of Members may present requests or collective requests to other Members in any specific sector or mode of supply, identifying their objectives for the negotiations in that sector or mode of supply.
“Any Member or group of Members who have made such requests in a specific sector or mode of supply, together with Members to whom such requests have been made, and any other interested Member, shall enter into plurilateral negotiations to consider such requests.
“Plurilateral negotiations should be organised with a view to facilitating the participation of all Members, taking into account the limited capacity of smaller delegations to participate in such negotiations.”
WTO-watchdog civil society groups say this would effectively change the structure of the GATS for the worse, and “effectively eliminate and at best reduce existing flexibilities accorded to developing countries.”
Said one statement circulated last week, “Many developing countries have rejected the mandatory nature of the plurilateral approach being proposed, including by raising numerous questions and uncertainties as to how this “plurilateral” approach would work.
“Unlike other plurilaterals in the WTO, the plurilateral approach proposed means that the offers of a country have to be on an MFN basis and the country requested MUST enter into this plurilateral negotiation.”
The statement cited four problems with this approach.
“First, it would force developing countries to negotiate commitments based on collective requests by groups of developed countries and hence exacerbate existing power imbalances.
“Second, it would set a high benchmark and force other members to commit to that level. This happened with the sectorals on financial services and telecommunications.
“Third, it would be a highly resource intensive, complex and unrealistic way to negotiate given that those requested would be forced to enter into negotiations.
“Fourth, it would undermine all of the current flexibilities given to developing countries as set out in the GATS preamble and Article IV.”
The statement added, “Combined with the ambitious liberalisation proposed under ‘qualitative parameters’, this text fundamentally changes everything about the “bottom up approach” and flexibilities that GATS proponents have been boasting about for years (and which campaigners have denounced).”
The statement warns developing countries to recognise that “the true intentions” of the GATS agreement is to serve the ‘interests of the EU and the US and their aggressive services trade lobbies’ and that the notion of ‘progressive’ liberalisation is a guise for pressurising them into aggressively liberalising and deregulating their services sectors.
One example of this is cited by researcher Aileen Kwa of Focus on the Global South who says that a primary objective of the European Commission is to remove limits on foreign ownership by companies and hence pave the way for personnel to be moved to developing countries.
As for movement of people from developing countries to the developed countries, the EC is “completely defensive” and wants “to make no new commitments except what they currently allow in the categories of ICT (intra-corporate transferees), BV (business visitors), CSS (contractual service suppliers) and IP (independent professionals).”
Says the statement, “We believe that countries are severely, dangerously and inexcusably misguided in actively giving up their [and everyone else’s] rights to preserve existing policy space in the GATS by supporting new language on a ‘plurilateral’ approach and ‘qualitative parameters’ that ramp up the ambition and expectations from all members to make commitments in the GATS.
“Once these rights are gone, they are gone forever — unless our government is willing to pay a monetary and political price on our behalf.
“Too many questions remain about this so-called ‘plurilateral approach’ to be put in a ministerial text for agreement. Without understanding the implications of these new approaches, delegations must not sign onto any new language on GATS negotiations..
The civil society statement says that there is already a fair degree of opposition by Argentina, Brazil, Malaysia, Thailand, the Philippines, ASEAN (minus Singapore), a group of Caribbean countries, the entire Africa Group and the LDCs, and urges them to hold their ground.
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