TRADE NO PRIORITY FOR MULTILATERAL TREATMENT OF SERVICES

Jun 21, 1986

TRADE NO PRIORITY FOR MULTILATERAL TREATMENT OF SERVICES - SELA.

GENEVA, JUNE 19 (IFDA) -- Multilateral Treatment of Services in the framework of GATT "is not a priority for the countries in the region", a high-level meeting of Latin American and Caribbean countries have concluded.

"There is need to broaden and deepen understanding about the dynamics of the service sector nationally, regionally and in international transactions in order to consider whether any multilateral action in these matters is appropriate and desirable", the meeting organised by SELA, the Latin American Economic System, has further concluded.

Hosted by the government of Brazil, the high-level coordination meeting on services was held in Brasilia in the last week of may, and its conclusions and recommendations have now been made available to third world delegations by the permanent mission of Brazil.

The report of the meeting, as well as of a second SELA meeting on multilateral trade negotiations held in Montevideo, Uruguay, are shortly to be circulated as UNCTAD and GATT documents, at the instance of the Latin American Group here.

Services, the Brasilia meeting concluded, play a fundamental role in the development process, and the linkages between services and other production activities "are a dynamic element capable of promoting the modernization, of Latin American and Caribbean economies.

"The impact of services is not merely confined to economics but extends to the political, social and cultural areas", the meeting underlined.

The adoption of policies relating to services is an essential part of the development strategies of countries in the region.

"Such policies should be geared to achieving autonomous and efficient service sector development, strengthening the links between the sector and other economic activities, and improving and increasing participation of countries of the region in international trade".

Regional cooperation efforts in services, the high level meeting agreed, constitute "a dynamic complement" to actions at the national level in stimulating the creation and development of service industries, particularly those requiring large markets.

The economic interlinkages from regional cooperation would contribute significantly to regional and subregional economic integration efforts.

Regional cooperation, the meeting added, could be promoted through mechanisms such as regional and subregional preferential agreements, establishment of Latin American multinational service enterprises (joint public enterprises of several countries) and strengthening of existing ones, and the designing of common policies regarding government procurement.

Regional cooperation could also be promoted by harmonizing policies and laws regulating specific services.

Any actions nationally on services and regional cooperation and coordination efforts in this field "must be complemented by strategies aimed at reversing the region's significant deficit in international service transactions", the meeting said.

"Any international discussion of the subject of services, whatever its scope, must be geared to preserving integrally the development objectives being pursued by countries of the region".

"In this regard, bilateral or multilateral commitments should not be adopted if they constrain the development and expansion of the services industries of our countries".

On the move of U.S. and other industrial nations to establish "a juridical framework" to regulate trade in services, investments and intellectual property question, the meeting concluded that "owing to nature of these proposals, the negotiations would treat not merely trade aspects but also policies, legislations and mechanisms which regulate such activities in developing countries".

"Such policies and legislation fall within the jurisdiction of sovereign states, and have been defined in keeping with development objectives and with regard to public order and national security considerations", the meeting underlined.

"In this respect, the region cannot accept any demands by industrialised countries for concessions from developing countries regarding aforementioned policies in exchange for increased security of access for their goods exports.

"The countries in the region would find themselves in the situation of having concessions extracted in areas of vital importance for their development strategy in exchange for industrialised countries", the meeting further warned, "complying with the commitments already undertaken in the past".

"The proposals of the industrialised countries could eventually legitimize within GATT the application of trade retaliation whenever it is considered that certain policies or practices of developing countries are (...) to trade in services or are "harmed" to intellectual property rights or (...) the presence of foreign investment in particular sectors".

Referring to the various options for multilateral treatment of services being considered in the framework of GATT, the Brasilia meeting underlined that "this is not a priority" for the countries of the region".

"In this regard, the efforts of the international community ought to be aimed at eliminating the numerous obstacles limiting the expansion of exports of commodities, agriculture and manufactures of Latin American and Caribbean countries and other developing countries, as well as strengthening the multilateral trading system in such a way that it will be more propitious for achieving the developmental goals identified by the region".